Social Homes for Rent

Wera Hobhouse Excerpts

Wednesday 6th December 2017 Commons Chamber

[Wera Hobhouse (Bath) (LD)]

I asked for this Adjournment debate for two reasons: first, because the Minister for Housing and Planning declined to call in a planning decision in my constituency under which 99 social homes for rent will be lost in a big regeneration scheme; and secondly, because in the recent Budget, which was meant to be the housing Budget, the Chancellor did not once mention social homes for rent. The two are linked.

The social housing association that will deliver the regeneration at Foxhill in my constituency is being forced to act like a private developer because no public subsidies have been given and the regeneration must be self-funding. Some 70% of the new homes built on the site will be sold privately, and the remaining 30% will be split between social homes for rent and a shared ownership scheme, which is where it becomes non-transparent. The Government put the two together, yet there is a world of difference between them. Thousands of families will never be able to put down a deposit even for a shared ownership home. All they can afford is a decent home for rent, yet the number of homes built for social rent has fallen dramatically.

Government statistics show that nearly 40,000 social homes for rent were built in 2010-11, and the figure for 2016-17 was just 5,380. In the 2016-17 financial year, 12,383 council homes were sold under the right-to-buy scheme. Year in, year out, the number of social homes for rent is being reduced.

[Dr David Drew (Stroud) (Lab/Co-op)]

Does the hon. Lady agree that one of the problems with the way in which the Government currently deal with authorities such as mine in Stroud that actually own the stock is that there is an artificial cap on borrowing and, worse, for every house sold 70% still goes back to the Treasury? That cannot be fair, can it?

[Wera Hobhouse]

The hon. Gentleman makes a valid point. The Budget also announced that the cap on local authorities’ housing revenue accounts will finally be lifted, but only in high-demand areas. It has not been clarified how authorities will apply, which makes it difficult for local councils.

People on low incomes, people working on zero-hours contracts and people on universal credit increasingly have nowhere to go except into social housing, which exists as a safety net provided by the state for people who are just about managing.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Lady agree that every constituency has a real need for social housing that is available for decent rent and that is fit for purpose? The need for appropriate housing has been magnified by the implementation of the bedroom tax, which sees families being penalised because their local authority has no available housing to fit them. Does she further agree that major steps must be taken either to meet that need or to lift this tax from those who are unable to move to a smaller house due to the lack of appropriate housing in their area?

--- Later in debate ---

[Wera Hobhouse]

I completely agree with the hon. Gentleman. The coalition Government started the bedroom tax when I was a councillor in a local authority where the unfairness of the tax became obvious, particularly because the local authority did not have the houses to rehouse people in smaller accommodation. The bedroom tax is just a penalty for people who are already struggling.

If the Government think this safety net of social homes is working just fine, Grenfell Tower stands as a tragic example to show that it is not. Today, the homelessness charity Shelter has given the facts and figures on homelessness and those in temporary accommodation as of now. Its report reveals a trend that is getting worse each year. A shocking 128,000 children in Britain will wake up homeless and in temporary accommodation this Christmas. That is one in every 111 children in this country and their parents, living in emergency bed and breakfasts and hostels, which are widely considered by experts in this field to be the worst type of temporary accommodation. Let us be clear: one in every 111 children in Britain would not be living in emergency B&Bs or hostels this Christmas if there were more social housing. All the Government’s talk about affordable homes does not house a single one of these children and their parents.

We know that this Government believe in the private sector and in home ownership, but that is an unattainable dream for millions and millions of people. We need an effective supply of homes to rent in this country. The private sector can be part of the solution, but it is staggering that this Government resist proposals and fail effectively to support new social homes for rent. Why is that? I ask the Minister whether it is an ideological position he and his Government are taking. If it is not, why not give local authorities and social housing associations the tools and the finance to provide what their communities are asking for?

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

One problem we have in Scotland, as my hon. Friend will know, is the housing debt that Scottish local authorities are landed with—it is like a colossus. We spend our time trying to service this debt, which gets in the way of building houses for people who need them, as she says. I hope that at some stage Her Majesty’s Government will look at getting rid of this housing debt, which is crippling and is standing in the way of homes being built for people who need them.

[Wera Hobhouse]

My hon. Friend is making a good point. That is the reason why 50% of local authorities no longer own their social housing stock; they were encouraged to give it over to social housing associations in order to write off that historical debt. That has created other problems, and this is exactly what I am talking about tonight.

Let me talk briefly about Foxhill, in my constituency, as an example. My housing association tells me that what it needs from Government in order to increase the numbers of social homes is non-recoverable grant funding—recoverable loans will not serve this purpose. The Homes and Communities Agency’s grant funding under the national affordable housing programme does not provide funding for new social homes to rent over and above those required by a section 106 agreement. However, funding is available for affordable rent and shared ownership. In a high-value area such as Bath, where affordability is a particular issue for local residents, converting homes to social rent which would otherwise be sold on the open market requires a significant level of grant—it is in the region of around £200,000 for a house that would be worth £350,000 if it were sold on the private market. As I have already said, my housing association cannot get this grant funding. What is the result for the people who live on Foxhill? There are of course some who are set to benefit from the replacement of their post-war units by modern units, but residents who have been encouraged to buy their own home under the right to buy and have done so now face the prospect of having their home and their neighbourhood destroyed. That is something they never asked for and never expected to happen.

What about the 99 most vulnerable families, who will now simply be moved out of their home city of Bath? They cannot stay because there will be 99 fewer social homes for rent under the current plans. This sort of social cleansing is unacceptable and it gives the Government the reputation of being uncaring. The Minister will know that I requested him to call in the planning decision that reduced the number of social homes for rent by 99, but he refused to do so. The implication is that this reduction in social homes for rent is in line with Government policy, but on Monday the Secretary of State, in a quick reply, said it was not Government policy to reduce the number of social homes to rent. It cannot be both things in this specific instance, so what is the answer?

Let me return to the Budget. The Chancellor announced a reduction in stamp duty for first-time buyers. That might help the few, but not the many. The Government announced a lifting of the borrowing cap on local authorities in high-demand areas, which is of no use in most areas. In my high-demand constituency of Bath, the local authority has long since transferred its social housing stock to the housing association, to which the lifting of the borrowing cap does not apply.

Will the Government come clean on their plans for social homes? On Monday, the Secretary of State confirmed that, as I had suspected, the Government have no plan for social housing. There is no strategy and there are no policies; rather, they have walked away from their responsibility to the poorest and most vulnerable, handing it all back to cash-strapped local authorities. To cover their failure, they conflate social housing with affordable housing and hope that no one will notice. We need to be perfectly clear that affordable housing and social homes for rent are two very different things. It is time to change policy, to get building tens of thousands of new social homes for rent, and to deliver a regeneration scheme for my Foxhill constituents that meets their needs.

[The Minister for Housing and Planning (Alok Sharma)]

I congratulate the hon. Member for Bath (Wera Hobhouse) on securing this important debate on social housing. I am extremely pleased that she did, because it is important to set out what the Government are doing to fix the broken housing market. She is also keen to talk about social housing.

Let me be clear that providing safe, secure and affordable homes for those who need them most is an absolute priority for the Government. The hon. Lady talked about some statistics; let me give her some more. Since 2010, more than 357,000 new affordable homes have been delivered, including around 128,000 homes for social rent. Our recent announcement of an extra £2 billion for the affordable homes programme takes the total budget to £9 billion over 2016-21. That will help to deliver a wide range of affordable housing, including social-rent homes.

I say gently to the hon. Lady that it is not fair to say that the Government somehow do not care about social housing or the people who live in it. I shall talk a bit more about that, but she should not take my word for it. Listen to what people in the social housing sector have been saying. David Orr, the chief executive of the National Housing Federation, described the extra funding that has been announced as

“a watershed moment for the nation.”

[Wera Hobhouse]

In that case, I encourage the Minister to explain to local authorities and social housing associations in clear terms how this mechanism to deliver social homes in local authorities is going to work—and will he do it quickly, please?

[Alok Sharma]

I shall address those issues in my speech. We have a constant dialogue with housing associations and, of course, local councils.

Let me set out some of the recent announcements that will help to make sure that more affordable and social homes are built. Another announcement in recent weeks has been the one on rent certainty for social housing providers. From the conversations that I have had with the sector, including many people who run housing associations and, indeed, councils, I know that they are clear that it was an extremely welcome announcement. It will help to deliver more social homes, faster, while also providing funding to maintain the current stock of homes.

The Budget was the biggest for housing in decades, with an extra £15 billion of support. That means there will be at least £44 billion of support for housing over the next five years. That is going to provide a big boost for housing throughout the country. Of course, the Chancellor also announced the decision to increase the local authority housing revenue account borrowing caps by a total of £1 billion, targeted at areas of high affordability pressure. Collectively, these decisions herald a boost for the building of social homes. But, of course, we know there is more to do.

[Alok Sharma]

Obviously, the hon. Gentleman represents a Scottish seat, and housing is a devolved matter. As we are talking about housing revenue accounts, I can inform Members that there is headroom, as at the end of 2016-17, of £3.5 billion across the country in housing revenue accounts. I know that councils are looking to build more homes. They are also working with housing associations, and this extra money will make a difference.

The hon. Lady talked about Grenfell Tower, which was an absolute tragedy for the country. Following that tragedy, the Prime Minister asked me to meet social housing tenants across the country to hear their views on social housing. I have now met more than 600 tenants from across the country and undertaken seven events, the latest being last week in Bridgwater, which is not too far from the hon. Lady’s constituency. By the end of January, I will have undertaken a further five such engagement events. The views of social housing tenants will inform the national approach that we will set out in the social housing Green Paper, which we aim to publish in spring next year.

I just want to record my grateful thanks to all the tenants I have met for sharing their experiences. This engagement tour has undoubtedly been one of the best things that I have ever done in my time as a Minister. It is very clear to me from these visits that, when it comes to fixing our broken housing market, it is not just about building more homes, but about improving the housing that we already have.

The Budget committed £400 million in loans for estate regeneration on top of the £322 million that has already been made available. The current programme is supporting more than 100 estates around the country. I am pleased to see that the Foxhill estate, which is in the hon. Lady’s constituency, is among them and has received £650,000 in capacity grant funding.

[Wera Hobhouse]

I thank the Minister for giving way again. What will he say to the 99 families who will not be housed in Bath and who will, basically, have to move outside the area because that is the only way that they can find a home to rent? That is what we call social cleansing. What will he say to those families?

[Alok Sharma]

Let me come on to talk about several issues around the Foxhill estate redevelopment. I want to be clear that the Government are committed to putting councils and communities in the driving seat when it comes to their housing needs. That was reinforced by the estate regeneration national strategy, published last year, which emphasised the need to engage residents and give council and housing association tenants the choice to return to their estate or other suitable housing options.

There are currently 414 affordable homes on the Foxhill estate. I understand that the proposed redevelopment, taken together with affordable homes proposed at the adjoining Mulberry Park development, will provide a total of 420 affordable homes. Bath and North East Somerset Council has said that the quantum of affordable homes proposed across the two sites will ensure that all existing residents of the Foxhill estate can be accommodated in the immediate area. I know that I will be meeting the hon. Lady before the recess, and I am sure that we can discuss social housing issues in more detail then as well.

These communities know their local area better than anyone and it therefore makes sense that planning decisions are made at a local level wherever possible. It was on that basis that the Secretary of State, after careful consideration, decided not to call in the application at the Foxhill estate. What is clear is that, ultimately, the only way of fixing the broken housing market is to build more homes, cross tenure, and to encourage a more diverse range of players into the market. That is why we are doing the following: backing small and medium-sized builders to grow, and there was more money for that in the Budget; supporting housing associations and local authorities to get building; encouraging more builders into the build-to-rent sector; and championing high standards in quality and design.

One of the biggest concerns for our constituents when it comes to new homes being built is that they will often feel that there is not accompanying infrastructure to support the new housing. That is why the Chancellor, in the Budget, committed a further £2.7 billion to the Housing Infrastructure Fund, taking the total to £5 billion. This will help local areas to unlock development through the provision of vital infrastructure. Of course, we want to see local authorities working together to champion new housing. It is therefore encouraging to hear that the four local planning authorities in the west of England, where the hon. Lady’s constituency is based, are working together to produce a joint plan to deliver the homes needed in the area. I hope that more authorities will take their lead and co-operate to meet their housing needs.

In conclusion, we are taking action on all fronts to get Britain building as never before, with a focus on social housing, action that has been welcomed by the sector and is delivering real results, more families in safe secure homes of their own, and more people who can put down roots and build stronger communities. I know that that is what the hon. Lady wants to see. It is also what I want to see, and I am pleased to say that we are on our way to delivering it.

Question put and agreed to.