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Council Leaseholders (works Charges)

November 1, 2006

Council Leaseholders (works Charges)

Mr. Mark Field (Cities of London and Westminster) (Con): I congratulate my constituency neighbour, the hon. Member for Regent’s Park and Kensington, North (Ms Buck), on initiating this debate. I stand here as another Westminster Member of Parliament, but not to praise or to bury Westminster city council. More importantly, the debate reflects the breadth of life in central London. It is often assumed that in my constituency I have an enormous number of wealthy people and would not have to deal with any of the social problems that are an integral part of the hon. Lady’s day-to-day case book. The reality, of course, is that there are some wealthy areas in my constituency, as in hers, but that the community is diverse. We all want to protect that diversity.

The hon. Lady and I have played a minor part in an important document produced for the Westminster housing commission to try to acquire a vision for the next 20 or 30 years on housing-related issues, many of which depend on some discretion at local level. I fully appreciate why a cold chill comes into her heart at the thought of discretion being in the hands of Westminster city council, but looking to the future and bearing in mind the past 10 years, there has been great success in much of the work that has been undertaken. I hope that that will continue in the years ahead.

Above all, this debate hinges on the notion of stable communities. The issues that the hon. Lady raised in some constituency cases are replicated in my postbag. It is tragic that long-standing residents?perhaps going back several generations?of a city centre are forced to move or that their children must move. The Government must be more flexible and ensure that we are not forced to put homeless people or asylum seekers into our scarce social housing.

I was glad that the hon. Lady made the important point that a key worker in the context of a city centre is not simply someone working in the public sector. They could be working in the private sector. Postmen, people who work in local supermarkets and stores, and so on are the glue of our communities and ensure that they are maintained.

Ms Buck: For the record, will the hon. Gentleman confirm that asylum seekers are not allocated local authority housing?

Mr. Field: I am entirely happy to do so. My point was simply that if people do not have a long-standing connection with an area, there is a breakdown in an important aspect of a community. That obviously arises with housing association properties, if not local authority housing.

The hon. Lady will be aware that a trend in recent years has been that many people who bought their leasehold flats from Westminster city council and, I suspect, many other London councils and local authorities throughout the United Kingdom, have proceeded to sell them to housing associations, which then turn to local authorities for people to put into those properties. Those people have little direct connection with the area and may not be there for long, so do not play a full part in ensuring that the community that makes up any estate is maintained.

Leaseholders own a share of their property and benefit in part from the investment, but the problems that have been raised today hinge on the Government’s failure to recognise the disproportionate effect that the decent homes programme has had on leaseholders, including right-to-buy leaseholders, many of whom are, as the hon. Lady said, elderly pensioners who are simply not in a position to make any great capital outlay.

I support the underlying aims of the decent homes programme?no one would disagree with what it is trying to achieve?but there is often a problem with unintended consequences. I regret that some of the proposals have been so prescriptive. There seems to be little flexibility to respond to local priorities expressed by residents?for example, lift access and security. As the hon. Lady rightly pointed out, in city centres with many high-rise blocks lift access is much more important for decent homes than in many other parts of the country.

Nowhere in the Government’s original proposals for the decent homes programme do the documents mention the effect on leaseholders specifically. Tenants may have updated kitchens and bathrooms, but for leaseholders it represents a headache of bills running into many tens of thousands of pounds.


In London alone, leaseholders make up a significant proportion of residents in local authority housing. In the city of Westminster, which is partly in my constituency and partly in that of the hon. Lady, there are more than 9,000 leaseholders representing some42 per cent. of the council’s residential stock.

Although leaseholders have always been aware that they are liable to be charged under the terms of their leases for works to improve and maintain their homes, the cost of such works is a major issue because the pace of the Government’s decent homes programme continues to increase. In Westminster, the council has invested more than £200 million in housing stock as part of the programme, with the vast majority of the funds coming from its own resources. To meet the Government’s determination to drive the programme forward, the offer of significant borrowing facilities has been used to incentivise the council to achieve the decent homes target by the end of the year. Again, we support much of that, but Government pressure to achieve the target conflicts directly with the interests of leaseholders, who understandably try to limit the charges. That is particularly true for purpose-built blocks, which are a common feature in London, because the cost of major works is generally higher, and that is the case, for example, in Churchill gardens in Pimlico, in my constituency.

As has been said, the bills run into many tens of thousands of pounds and have the potential to cause significant hardship for those who are unable to pay them. Often, it is the original right-to-buy leaseholders who are unable to pay, and many of them are now elderly and have nothing other than a fixed income.

Ms Buck: The hon. Gentleman claims that much of the upgrade work is being paid for from the council’s own resources, although I do not believe that. If it is indeed the case, however, why is so much of the work needed to catch up on maintenance that was neglected for two decades? If work is paid for from the council’s own resources, why was it not scheduled throughout the 1980s and 1990s? The reason why many of the bills are now so high is that they are for works that have not been done for decades.

Mr. Field: The hon. Lady makes her point, and I cannot judge the situation in her constituency, although she will have a view about the state of some of the estates there. Inevitably there have been mistakes, and relatively little work has been done over the years, although the same will apply in many other parts of the country. I understand why it is in the hon. Lady’s interests to make a slightly partisan political point, but I think that all of us now want to look to the future, and the decent homes programme is obviously an integral part of that. However, it needs to be utilised as flexibly as possible.

Emily Thornberry (Islington, South and Finsbury) (Lab): Would the hon. Gentleman be surprised to learn that the experience of estate dwellers in the Islington area was also that their estates were allowed to rot for 18 years as a result of a lack of investment and interest on the part of the previous Conservative Government?

Mr. Field: Funnily enough, as the hon. Lady knows, I used to be an Islington resident, albeit in the Islington, North constituency, which is so ably looked after by her political soul mate there. I am sure that there is a battle over the issue that she describes and that one reason why she takes an interest in it is that a Liberal Democrat council has emerged in recent years, although it might well be argued that there was a Labour council for much of the time that she is talking about. Again, however, I do not want to make a narrow partisan point. There are issues about redevelopment, particularly on many of the estates that were built in the 1960s and 1970s, which are in urgent need of work. One could argue that there has perhaps not been a consistent maintenance programme over the past 20 or 30 years and that we have therefore reached the Waterloo point at which significant spending must be carried out.

Local authorities have been doing everything that they can to support leaseholders, but the Government’s prescriptive framework for delivery?I understand that it needs to be prescriptive to ensure that works are done?means that many authorities feel that leaseholders are losing out most on many programmes. In that respect, I have been in touch with several of my local tenants’ and leaseholders’ associations, and Richard Beville of the Churchill Gardens Lessees Association kindly prepared some brief notes for me, which I want to put on the record.

Mr. Beville notes that the position of council lessees has not really improved in the past decade, despite many promises from the Government, “as social landlords were exempted from many of the provisions” of the most recent Act. He continues:

“It should be far easier than it is for the residents of socially owned blocks to obtain the rights to manage their homes and the freeholder’s powers to interfere should be reduced and discouraged” to an extent. He feels that the leasehold valuation tribunals have not allowed straightforward “solutions to disputes between landlord and tenant”. As a result, the freeholder frequently employs expensive Queen’s counsel and then appeals
“to the Courts if the decision goes against him.”

Mr. Beville notes, therefore, that the real purpose of the LVTs?to provide a level playing field?has not been properly achieved, and the hon. Member for Regent’s Park and Kensington, North noted that many leaseholders feel that they are up against it because of the professionalism and sheer spending power of the bodies that they face in many of the tribunals.

Mr. Beville goes on to say that leaseholders have faced “huge charges from which no capping or relief is available.” Like the hon. Lady, he notes that the lessees on the Warwick estate in her part of Westminster are currently paying bills to the tune of £58,000 each. In the same way, all the lessees in Churchill gardens, in Pimlico, are expecting bills of around £20,000. I was at their annual general meeting only last week, and it was heart-wrenching to hear the personal stories about genuine concerns from people who live there. It is expected that those bills will need to be paid over the next five years and that the programme of works will amount to£20 million. For many of the people living there, those
costs are simply unaffordable and need to be reduced. The hon. Lady’s innovative thoughts about staircasing up and down are all very important, but the immediate worry for many of the folk who live in such places is the prospect of bills of tens of thousands of pounds.

Inevitably, prices in many bits of central London have reached almost absurd levels. If one goes to any estate agent and looks at former council properties with a couple of bedrooms on estates, one sees that they cost literally £500,000 or more. To that extent, it is perhaps easy to put a charge on a property, particularly for elderly folk who are looking to pass it on to their children or loved ones when they die. At that point, a relatively small charge could be made on the overall value of the property, but that is not really an option for many, and there is a day-to-day worry in people’s minds.

Previously, when large amounts of Government funding were made available to councils through housing action trusts and estate action bids, lessee costs for the work were capped at a maximum of £10,000 as a condition of the funding. Some capping still takes place when PFI funding is used, but there is currently no cap for lessees when the funding is channelled through arm’s length management organisations?hence the understandable demonstrations on the part of many lessees.

There are also one or two serious problems with the Government’s preferred equity release and loan scheme, which has involved just one small building society, the Dudley building society. Despite Government marketing and publicity, the take-up among leaseholders has been low for several reasons. Often, the scheme is geared towards private sector home owners, who want to make home improvements rather than pay decent homes bills. Often the scheme is too complex, and the administration costs have been so high?about £1,200 per applicant?that many households have failed to complete when the true cost of the scheme is revealed.

I am acutely aware that other hon. Members want to speak, so I shall try to keep my remaining comments to a minimum. However, we will obviously be addressing this issue extensively in the many years ahead, because housing is a very important issue in central London. At one level, one can be slightly glib about the issue as a Member of Parliament and say that it is a matter for local authorities and hard-working local councillors, and hon. Members on both sides of the political divide will agree that high-calibre, committed local councillors are involved. We must, however, look at many of the important decisions that have been made in the past. In that respect, some of the blame?this will warm the heart of the hon. Member for Islington, South and Finsbury (Emily Thornberry)?must go to the previous Conservative Government, who made so many of the rules on local housing so prescriptive. Many of the problems that we are identifying go back to the early 1980s, when many decisions became centralised, perhaps understandably, in an effort to keep local government expenditure to a minimum for general economic reasons. That has been a very unhealthy development, which I fear that the current Government have maintained.

Those involved need to use some imagination, particularly in our parts of central London, where we want a much more mixed community. Of course, the reality of living in central London is that we now have a totally polarised community. One has either to be so well off?effectively, that means working in financial services or an industry that is dependent on them?that one can afford to buy a property, or so poorly off that one qualifies for social housing. That group in the middle is increasingly being squeezed.

There are no easy answers. I suspect that a problem that has been known to us in central London in the past 15 to 20 years, and which has now accelerated, is now growing fast in many other parts of suburban London too. I often worry that there are too many unintended consequences of any Government action, which can make such problems somewhat worse. However, this debate is important. I know that the hon. Member for Regent’s Park and Kensington, North will want the Minister to answer some specific questions in good time; but equally I am sure that we shall return to the debate, and I thank the hon. Lady for most of her comments this morning.