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Mr David Ward (Bradford East) (LD)
I do not think that our paths have crossed, Mr Streeter, but I am pleased to serve under your chairmanship and to face my colleague the Minister. This is a wonderful opportunity to highlight an important issue, and I hope that I do it justice.
A famous statistic alleges that Bradford once had more Rolls-Royces per head of population than anywhere else in the world. If that were ever true, I am sad to say that it must have been a long time ago. I remember being a young councillor during the recession of the 1980s—that really was a recession—and one council estate I represented had 70% male unemployment. Most of the unemployed men on that estate walked out of school in the ‘50s, ‘60s or even the ‘70s, and went straight into jobs. Sadly, when made redundant, many never worked again. Sadder still, their children went on to have children who have never worked.
Believe it or not, two thirds of the entire Bradford district is rural, and it is one of the most diverse areas in the country. It ranges from the prosperous Ilkley, where house prices are, surprisingly, at their highest ever level at present, to areas such as two wards in my constituency where, in some parts, 68% of children are categorised as living in poverty.
Bradford has gone from being one of the wealthiest cities in the world to being a city with deep economic and social problems. Over 30 years, Bradford has had millions of pounds of regeneration funding from every scheme that was on offer. The schemes were not without success, but the fundamental weakness of the economy has led to deep-rooted problems of poverty, high unemployment, low educational attainment, dire health outcomes in many areas, a decaying housing stock and, at times, as we know, frightening social tensions.
The housing problem stands out as one of the many consequences of economic failure in Bradford. I started this speech on housing by referring to the declining economic history of Bradford because, in addition to the contribution that housing policy can obviously make to meeting housing needs, it can make a contribution as a fundamental element of the regeneration of the community’s economy.
I must admit that there are many concerns about some of the proposals that the Government are considering. Those include changes to the shared room rate and paying the rent element of universal credit directly to tenants. That may have severe consequences: 80% of the tenants of the largest social landlord are on benefits. The changes include flexible tenancies, restricting housing benefit for tenants who are under-occupying and capping local housing allowance at the four-room rate. Many of those changes will potentially have adverse effects on people in Bradford. I will continue to campaign on those issues on other occasions. Today, in the limited time available, I want to focus on the most crucial aspect of housing policy—its contribution to economic regeneration.
The Government’s housing policy as it affects Bradford can at worst impair economic regeneration, or, if delivered with consideration of and adaptation to local circumstances, play an integral part in fulfilling the deep need for economic regeneration. I am sure that the Minister is well briefed and is well aware of the scale of the difficulties that we face. On current projections, Bradford’s population will increase by 150,000 in the next 20 years. To meet the projected growth, we need at least 2,700 homes each year. Currently, we are missing that target by a long way.
Philip Davies (Shipley) (Con)
I commend the hon. Gentleman for bringing this debate to the House. As he knows, there are two proposals for big building developments in Micklethwaite and Menston, in my constituency, on beautiful, picturesque green fields. Does he agree that building houses on the outskirts of the district does nothing to alleviate the housing need in the centre of Bradford and that at a time when the council and all of us are trying to regenerate the centre of Bradford, it is rather counter-productive to build houses in that part of the district, the residents of which will shop in Leeds, regenerating Leeds even more, rather than Bradford?
Mr Ward
That is a massive issue. I am sure that the hon. Gentleman is well aware of the fact that, as people progress up the housing chain, they move out of the inner-city areas. There is a long history of that happening in Bradford. The simple answer is that the housing must come from somewhere. We are missing the targets on new houses: at the peak of the housing boom in 2008, just over 2,000 houses were completed, but by last year the number had fallen to just 700.
Bradford’s low-wage economy and high unemployment in the areas where housing demand is strongest mean that about half the homes required will have to be in the social rented sector. There, the gap in delivery is even greater. Currently, fewer than 300 affordable homes are built each year—it is little wonder that there are 20,000 people on the social housing waiting list.
Added to the high demand for new homes is the fact that much of Bradford’s private sector accommodation is not fit for people to live in: 40% of Bradford’s private sector accommodation currently fails the Decent Homes standards; 10% is overcrowded; and across the district more than 7,000 properties stand empty and, often, derelict.
How could a national housing policy contribute to the economic regeneration of the Bradford district? Bradford has the youngest, fastest growing population outside London. That could be a great opportunity for Bradford’s economy, but only if there is somewhere for those people to live. Meeting the demand for new housing and stock improvement would provide much needed jobs in the construction industry. The Home Builders Federation has calculated that, for every £1 of public money spent on social housing, a further £3 of private sector investment is generated. Tackling poor-quality housing could change the image of Bradford. Our housing is critical to the way in which we are perceived as a district and to the confidence that investors require to put money into the district. In addition, improving basic housing conditions would remove many of the factors that contribute to the poor health and low educational attainment that perpetuate cycles of deprivation.
My concern is that the array of housing measures proposed by the Government will fail the test of delivering the quantity and quality of housing that we need to underpin the economic revival. Bradford’s ability to meet its targets for affordable housing will inevitably be hit by the halving of national capital funding. The Government’s much lauded affordable rent model is seen as a way forward in terms of replacing direct Government funding. We are told that it will generate 150,000 new affordable homes. It may well offer a viable replacement for lost grant funding in many parts of the country where market rents are high, but it is unlikely to be the answer in Bradford.
There is very little difference in Bradford between target rents and 80% of the market rent. I know that the Minister is aware of that. Taking into account the fact that the areas with the highest turnovers also have the lowest rents—of course, this measure will apply only to re-lets—Incommunities, the largest social housing provider in the district, which manages two thirds of the social housing, has projected that using affordable rents alone would generate for the whole of the Bradford district only an additional £120,000 a year. That would be almost but not quite enough to build two or three houses.
I am sure that the Minister will be keen to mention the new homes bonus—a key plank in the Government’s housing policy and one that in principle we have to support. The danger is that the policy simply gives more to those who already have, where land values are higher. Because of the distribution of funding being based on council tax bands rather than the grant formula of the Department for Communities and Local Government, which is based on levels of deprivation, Bradford will again lose out.
My fear is that funding will be skewed to areas with healthy housing markets at the expense of more deprived grant-dependent local authorities such as Bradford. Certain areas will gain additional homes because the affordable rents model will work, but on top of that, they will get the new homes bonus. I stress that the new homes bonus and the affordable rent model, as the two key policy levers for increasing housing supply, will not work sufficiently in areas such as Bradford and that broader consideration of other policy mechanisms is needed. It is not enough to say, “It cannot be expected to work everywhere.” We need measures that will work in a place such as Bradford.
It is not as if we are not trying as best we can with the limited resources available. The council has been attempting to tackle poor-quality housing through equity share and home appreciation loans, which in the long term would provide a small but self-sustaining pot of funding. However, the loss of the private sector renewal grant means that when the scheme comes to an end, there will be no provision to help vulnerable people to fund improvements to their properties.
The role of the private sector in realising economic benefits is crucial, and I am sure that the Minister welcomes the good cross-sector work that is going on through initiatives such as the Bradford Together procurement partnership, a public-private sector partnership that links construction contracts with the development of skills and jobs, which will benefit local communities. Over the last five years, Incommunities, the largest registered social landlord in the district, has built 400 homes, which has created jobs and provided 30 apprenticeship places. There are successes—they do exist—but they have to be set against the context of complex and large-scale housing needs.
What am I asking for? I seek a commitment from the Minister that he will speak in Bradford to those engaged in the challenge of increasing the quantity and improving the quality of housing in the district; they know far more about the subject than I ever will. I would welcome a response from the Minister about the possibility of the large surpluses generated in some parts of the country through the affordable rents model being redistributed to areas such as Bradford, that gain so little from the scheme. In a recent case, a registered provider, Affinity Sutton, considered investing in affordable housing in Bradford, using a surplus generated in the south, but it was unable to take that forward because the Homes and Communities Agency was unwilling to allow it to reallocate surpluses between regions.
The Minister may also like to say whether he believes that it would be sensible to take account of the difference in additional revenues generated through the affordable rents model, and to see whether they can be taken into account when calculating the allocation of grants through the HCA. Should not the remaining grants be targeted at those areas that have an acute need for affordable housing but are without the conditions required to benefit from the affordable rents premium?
I welcome the £100 million of additional funding to bring empty homes back into use—I have already mentioned the 7,000 empty properties in our district—but that amounts to only £338 per empty private home in the country. When considering the scale of the problem in places such as Bradford, I question the adequacy of the amount being made available. I ask that it be reconsidered. My plea is that the Government should resist the temptation to micro-manage and centrally control how the money is used—avoiding that is localism at its best. We have creative and innovative people working in the housing sector in Bradford, and I would welcome the Minister’s assurance that the Government will trust them to do what works best in our area.
The challenges that Bradford faces can at times appear daunting, but they are not insurmountable. Housing can be part of the solution to unlocking Bradford’s economic potential, but only if we get the policy levers right. Conversely, if we are not able to tackle housing effectively, Bradford’s problems will be compounded by the growing cost of homelessness, overcrowding and squalid conditions. As these problems escalate, households’ basic needs will not be met, and the search for a job will take a back seat for those affected as they try to deal with their living conditions.
If the Government are to be judged a success, they need to understand places such as Bradford when considering legislation. To take the time to understand places such as Bradford and to respond accordingly would be a much more critical test of the Government, and would be evidence of the extent to which they actually care about them. We await the outcome of that test with desperately keen interest.
The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)
It is a pleasure, Mr Streeter, to serve under your chairmanship. I am pleased to have the opportunity to have the opportunity to respond to my hon. Friend the Member for Bradford East (Mr Ward).
My hon. Friend said that he was a councillor as a young man; those in the Chamber can see that it can only have been a year or two ago. He has a long history of serving his constituents with great diligence as a member of the council and, since last year, as a Member of Parliament. He painted a clear if at times rather bleak picture of Bradford, and of the extremes of poverty and riches there and the problems for his constituents in respect of education, health and, as he rightly said, housing.
The Government certainly share my hon. Friend’s view that housing is an important component of building a growing economy. That is why we are continuing to invest in housing, through the Decent Homes programme, to bring social housing up to an acceptable standard, and through a new-build programme. We are not simply rolling forward the programmes that we inherited, although we are continuing with them, but developing a new programme using the affordable rent model. I hope that I can give my hon. Friend some comfort that the Government appreciate the problems that Bradford faces—and other places, too, but my hon. Friend highlights Bradford—at a time when, of necessity, the UK economy is in a period of stress.
My hon. Friend asked a number of specific questions. One is easier to answer than most. I think that he has invited me to speak in Bradford. I am happy to speak in Bradford—and, indeed, more or less wherever I am invited—and to say something about the Government’s policies.
Andrew Stunell
That was a very proper correction, from a most diligent constituency MP. I would be even happier to go to Bradford to listen than to have to give any kind of response or speech. I am sure that we can come to a way of operating that provides both of us with what we need.
My hon. Friend asked whether the affordable rent model might work to Bradford’s benefit. I shall say something about that in a moment or two. He also put in a plea that the Government should not try to micro-manage how Bradford chooses to operate. I hope that he will take some comfort from the actions of the Government so far; in particular, I draw his attention to the fact that we have de-ring-fenced—a new phrase—many of the specific grants that were the bane of local government when budgeting and making policy. That gives Bradford far more flexibility to decide its priorities and how it should spend its money for the benefit of its citizens. Further measures will assist, under the local government resource review, details of which are likely to be published next month. I can promise to visit Bradford, and I can promise that there will be ever less micro-management, although we doubtless need to keep prudence thoroughly in mind.
The Government are committed to increasing housing supply across the country. We have an investment programme designed to achieve that—in fact, we will add 150,000 affordable and social homes during the life of this Parliament. Included in that is bringing back into use 5,000 extra empty homes, which I hope will be some consolation to my hon. Friend. However, I cannot guarantee that they will all be in Bradford. Clearly, we are also looking at ways in which we can bring empty homes back into use, stimulate action and promote good practice without necessarily requiring money to be spent either by us or by Bradford. We are investing in new homes and in getting empty homes back into action.
My hon. Friend mentioned the new homes bonus. Let me remind him that Bradford has benefited from the new homes bonus to the tune of £2.8 million this year, and that was without Bradford even trying. The figures that were used in allocating that money were simply based on the number of additional homes that became available in Bradford during last year, before the council or anybody else knew that that was how we were measuring things. In future years, there is the opportunity for Bradford and its partners to work harder and more diligently to bring empty homes into use, for which the new homes bonus is payable, and also to bring new homes into use.
The growth that my hon. Friend has reported for Bradford is part of a general growth across the whole country. More households are being formed each year. They are being formed at their highest level since the 1940s, and yet the number of homes being built is at its lowest level since the 1920s. The previous Government left the country in a position in which house building was at its lowest peacetime level since 1924. We inherited social housing waiting lists at record levels. There are currently 250,000 families living in overcrowded conditions. The reality is that the number of social homes in the country has gone down by a significant number. We have seen a reduction of more than 400,000 social homes available for rent since 1997. Of course that frustrates people. It frustrates my hon. Friend, and it certainly frustrates his constituents who are left on the waiting list. We have a clear intention to address that situation.
Let me pick up on my hon. Friend’s point about how our new policy of affordable rents might benefit Bradford. I want to make it clear to him and to the partners who deliver housing in Bradford that there is no ring-fence on funding from the conversion of re-lets to prevent money being generated in Sutton by Affinity Sutton and used to fund development and build in Bradford. It is true that the affordable homes framework document encourages partners to reinvest the capacity generated from affordable rent in the area from which it was generated, but that is all that it does. It encourages such practice; it does not place a ban on doing something else. My hon. Friend has it in mind that there was a scheme for Affinity Sutton to build 200 homes in Bradford, but because it offered us a reason for not going ahead with it, a rule was passed that prevented it transferring the benefits of affordable rent elsewhere to use the money to invest in Bradford. That is not the case. Perhaps we can discuss that separately. If he needs me to reinforce that point, I would be happy to join him in meeting the Homes and Communities Agency .
The affordable rent model allows the Government to build more social and affordable homes than they would have been able to do if they had kept in place the model that they inherited. That model required more than £80,000 of subsidy per home in order to produce a home for someone to occupy. The model that we have will require less than half that money per home. We are stretching the resources so that we can build the largest number of affordable homes possible. There is nothing in that model that prevents money being spent in Bradford to deliver the homes that my hon. Friend wants.
I have spent a long time dealing with some of those points, but I hope that my hon. Friend gets some sense that the Government take seriously the kind of situation that he has so eloquently outlined.
I also want to make it clear that among the other things that are available is the green deal, which will allow many homes, especially in the private sector but not exclusively so, to have investment to bring them up to a more acceptable standard and to make real inroads into fuel poverty for my hon. Friend’s poorest constituents. That plus the energy company obligation, the money that we are investing in empty homes and the other work that we are doing to make more efficient use of the social housing stock will, I hope, give my hon. Friend some comfort that we are making a good attempt to deal with the problems that he has identified.
My hon. Friend said that the test for this Government would be whether we took seriously the towns, the cities and the communities, such as his constituency in Bradford. I say to him that we are taking all parts of the country extremely seriously. That is reflected in the way in which we amended our grant-making formula at the start of this year to increase the amount of stress that we place on poverty and the way in which money should be distributed. It is why we introduced the transitional payments and why we have the regional growth fund. Areas such as Bradford could bid for RGF funds which could then be matched by European regional development funding.
My understanding is that Bradford did not submit a bid to the first round of regional growth fund applications. I do not know whether it has bid for the second round, but a route exists for investment to be made in Bradford, using the Government’s regional growth fund.
I look forward to my visit to Bradford and to listening to my hon. Friend’s constituents very carefully. I hope that I can reassure him that Bradford will be free to deliver as it sees fit with the money that it has available. I look forward to working with him over the next few years to make absolutely sure that at the end of this Parliament he has the satisfaction of knowing that he has improved Bradford with the help of the Government.