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Housing and Regeneration Bill

I apologise, but I have not got much time, so I shall not give way. My hon. Friends the Members for Islington, North, for Islington, South and Finsbury, for Denton and Reddish, for Luton, South, for Ealing, Acton and Shepherd's Bush (Mr. Slaughter) and for Hayes and Harlington (John McDonnell) brought home to the House their experiences in their advice surgeries. They made important and emotional contributions to the debate. They confirmed what I experience in my constituency surgery: the biggest issue that affects hon. Members—certainly Labour Members—is the provision of affordable and social housing and the need to tackle overcrowding. They re-emphasised the key point that we need more homes. We have already said that the overcrowding standards are out of date and need to be changed. However, it is not enough simply to change the definition. We need to build more and larger homes and we are already investing £35 million in pilots in London to help those who want to move out of large properties into smaller ones to help relieve overcrowding. Further work is needed and I hope that we can explore that in Committee. Another major theme of the debate has been councils' ability to build new homes. Let me make it clear: there has been nothing to stop councils building homes, but there have been disincentives. For example, no provision is made in the housing revenue account subsidy allowance for financing the capital costs of new council housing. Operating surpluses from any new homes after allowances are made for management, maintenance and major repairs are redistributed nationally in the HRA subsidy system. That means that, on average, 25 per cent. of the rental income from any new home built by a council is redistributed nationally in that way. So what we will do is use the new powers in the Bill to exempt new supply from the HRA subsidy system. That will allow councils to keep the rental operating surpluses from those homes, which are currently redistributed nationally. We want councils to come forward and build more homes. We have set challenging targets for building more new social homes. Councils have an important role to play in meeting those challenges. We want to enable them to build more new social housing where this offers value for money. My hon. Friend the Member for Islington, North made a fantastic point about the governance and accountability of ALMOs. Let me point out to him that the local authority still retains ultimate responsibility for the functions that it asks the ALMO to carry out as its agent. Ultimately, local authorities must manage their ALMO contracts, and although ALMOs are at arm's length, they are still part of the body, so it is important that there is local accountability and democratic engagement. My right hon. Friend the Member for Greenwich and Woolwich and the right hon. Member for North-West Hampshire (Sir George Young) both brought skills and expertise as former Housing Ministers and made detailed, important speeches. Both mentioned the importance of tenants. I hope that they will therefore both welcome the provisions in the Bill that will place a stronger requirement on local authorities to co-operate with tenants who want to explore a change of ownership of their homes. They will mean that a local authority will not be able unnecessarily to block a transfer where tenants wish to explore that and have developed a robust case for it, and where it does not hinder the local authority's ability to deliver a satisfactory landlord service. Let me come to a major part of the Bill, the establishment of the Homes and Communities Agency. The hon. Member for Welwyn Hatfield failed to welcome the new agency. He saw its creation in a simplistic way, as abolishing one organisation and creating another. He should recognise, as did my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) and my right hon. Friend the Member for Greenwich and Woolwich among others, that although the current system provides some progress, it shows a degree of fragmentation and complexity, with funding streams delivered in silos, overlapping remits and objectives, and—this relates to the point about the system being top-down—the over-involvement of central Departments in delivery, which limits capacity. The hon. Member for Welwyn Hatfield should know that the agency's true strength will come from adopting a holistic approach, bringing together the land, investment and skills required to facilitate the building of more homes. A number of hon. Members correctly mentioned the relationship between the Homes and Communities Agency and local authorities, which is key. This relationship will be crucial in delivering new homes. Far from being a top-down organisation, the agency will help local authorities, by suggesting, by challenging and yes, by funding, in order to increase councils' capacities. It can second staff or provide the infrastructure necessary to build homes.