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Local Government and Environment, Food and Rural Affairs

I am grateful to my hon. Friend for that point, and I was about to deal with the role of the RSLs. The building drive can be pushed forward only with the co-operation and good will of councils. The RSLs are not a naturally entrepreneurial sector. For obvious reasons, they are cautious, preferring to build up balances and reserves rather than expand and improve. Moreover, they are merging together into bigger and bigger RSLs that cover the whole country rather than a specific area. The RSLs are also sluggish. Some of the problems with the Thames Gateway seem to have arisen because the RSLs are not putting the drive into new building that is needed, and there is no one to bash heads together and force them forward. The Government are going to have to energise and drive forward the RSLs in a way that they seem reluctant to do at the moment. Another criticism is that there is no firm basis for local authority finance. For three years running, the Labour party conference has demanded the so-called ““fourth option””—that is, that the Government should stop taking money out of housing revenue accounts. At the moment, about £1.5 billion a year is taken out of those accounts to pay off historic debt, but why should we pay that debt? People do not pay off historic debt if they go into hospital, so why should they if they go into council accommodation? Another half a billion pounds of right-to-buy proceeds is also lost in the same way. Local authorities cannot compete on the same basis as RSLs in terms of loans, because—as the Department's own research states—the management and maintenance grants that could provide a finance stream to borrow against are kept deliberately low to prevent them from being used for that purpose.