Greater London Authority Bill

This good debate suddenly came to a stirring end with the call from my noble friend. The noble Baroness, Lady Hamwee, invited me to go further in response to some of her questions. I will go further; I have a long speaking note, I am afraid, because this is a long list of amendments raising different issues on this topic. I hope that the Committee will bear with me. I will deal with them in some detail because it is important to be clear about what powers we are talking about, their limits and implications. Some noble Lords’ comments indicate a misunderstanding or misreading. I hope that I can provide reassurances on several points. We have had an interesting encounter with some of the significant problems of London and what sets it apart as regards the scale of the housing challenge, both in terms of homelessness, overcrowding and the number of people in temporary accommodation. As my noble friends Lady Ford and Lord Campbell-Savours said, it is clear that London is in a class of its own in that respect. Whatever strategy we adopt for London will have to be different and very robust. One need only consider that, between 2006 and 2016, the number of households in London will increase by 40,000 a year. Noble Lords have given examples of the impact of house prices. People on the lowest incomes are hit very hard, because lower-quartile house prices were more than 8.5 times lower-quartile incomes across London. The situations that my noble friend Lady Turner described are hardly unique; we could all find similar examples. The housing challenge in London is significantly different because it cannot be met on a London borough-by-borough basis. It is a cross-borough issue, if for no other reason than that the 2001 census recorded that more than 2 million London workers travel more than 5 kilometres to work. London boroughs already participate in cross-boundary nomination arrangements for the use of social housing. We have touched in this debate on the challenges of providing social and affordable housing, which will run through what I say. Major developments in London, such as the Thames Gateway, Barking riverside, the Greenwich peninsula, or Barnet and Walthamstow, which connect with the Cambridge-London growth area, are designed to respond to needs across London not simply within boroughs. Such developments have not only to span and integrate policies across the boroughs but also to integrate with wider policies across the south-east. That is what the Mayor has already developed in successive London plans, which is his job. He is uniquely placed to take a strategic view of housing needs and to make the most of synergies with transport, infrastructure and planning. A clearer and more strategic understanding of housing need and provision is crucial. My colleagues in DCLG have been working to develop a better notion of green planning, taking account of land and housing together, and to look at how we assess the needs of communities and plan for them, be it by age, condition or family size. We are all committed to developing better policies for providing affordable housing. The Mayor can already provide a London housing strategy. The Bill will make it a statutory strategy. It simply strengthens the influence of the housing strategy and puts it on the same footing as other statutory strategies prepared by the Mayor. It does not create an exceptional power. The proposal that London boroughs’ housing strategies should be in general conformity with the Mayor’s strategy reinforces the impact of these provisions. The Mayor can already advise on housing spending priorities. The draft provisions in the Bill strengthen the impact of that advice by setting it out in primary legislation and requiring the Housing Corporation, which is the agency responsible for delivering affordable housing, for the first time to have regard to the Mayor’s recommendations. The Bill therefore achieves the right balance of powers between all the players in the housing field. It is not the whole story, but it is a vital part of what we have to do. The provision of affordable housing in London is of national importance: it cannot even be contained within London. Planned investment of £1.5 billion in 2006-08 is equal to almost half the whole programme across England. Investment in London has an impact across the wider south-east and beyond. That is why it is right that the Bill contains reserve powers, particularly in new Section 333B, but also in new Sections 333A(6) and 333C, for the Secretary of State to safeguard both national interests and those of regions adjoining London. I welcome the cross-party support for the Bill today. The noble Baroness spoke about the need for housing strategies, but what arguments have been made against the proposals? Concern has been expressed that the Bill will somehow make it possible for the Mayor to direct spending on housing in individual boroughs and therefore ride roughshod over local housing policies. Let me lay that to rest now. The clause does not provide any powers to direct the money to the boroughs. It enables the Mayor to give advice but the Secretary of State will make the final decisions. Frankly, whether we are talking about recommendations or anything else, it is still an advisory power. In order to make that clear, perhaps I may unpack what we are achieving in the nature of funding. The funding affected by the proposals in the Bill falls within the regional housing pot. That pot is made up of three elements: first, funding for affordable housing that goes to the Housing Corporation; secondly, funding for decent homes that goes directly to local authorities, because their own stock and activities are affected; and, thirdly, funding primarily for decent homes and regeneration initiatives in the private sector. We have to distinguish between those three funding streams in the Bill. In London, funding for both decent homes and private regeneration initiatives is already allocated directly to boroughs by the Secretary of State on advice from the Mayor. The Bill simply codifies the current arrangements. For the affordable housing funding that goes to the Housing Corporation, the proposed clause introduces a more influential role for the Mayor, which we believe is entirely appropriate. I hope that I can reassure noble Lords by explaining how those powers are contained. The amendments set out two alternative approaches to the housing funding arrangements in London. Both would undermine the key strategy, especially affordable housing, because they would inhibit the Mayor’s ability to drive forward its implementation alongside the wider national priorities. I am sure that noble Lords do not want to do that. Amendments Nos. 76 and 78 would remove the fundamental structure provided in the current draft clause for the Mayor to make recommendations, through the London housing strategy, about spending on housing in London. In its place, the amendment proposes the direct allocation of all funding to individual London boroughs following negotiations, which also involve London councils. The problem is that that simply overturns any notion of a strategic housing policy and the need for one. As I said, supply and demand for housing is unequally spread across London. The boroughs with the available sites are not necessarily those with the highest housing need. Therefore, we need a strategic approach. The amendments would also give the Secretary of State direct responsibility. He or she would have to ““have regard”” to the London housing strategy. That model falls a long way short of our proposals to give the Mayor a clearly defined role but, by abolishing the regional tier and replacing it with the Secretary of State, the policy would also become entirely regressive. It would contradict the notion on which regional housing policies are being successfully developed; that is, the regions know what they need and what local authorities informing the regions tell us they need. It would put in place arrangements in London which are entirely at odds with those in other regions. We do not think that negotiations led by central government—however brilliant we are—with individual boroughs are likely to deliver the sort of step-change needed, particularly in providing affordable housing. The Mayor has a key and clearly defined involvement. There is also the risk that boroughs with more resources to devote to negotiations will be able to influence the process unduly. I cannot think of any greater recipe for—perhaps the word is not ““chaos””—battling between the boroughs. For the reasons that I have given, that, in turn, would make it much more difficult for us to deliver against demanding targets for national affordable housing. Funding is currently passed to the Housing Corporation, which comes back within a framework set by Ministers on advice from the regions, including the Mayor. It allows the Housing Corporation the scope easily to move funding from one development to another on an in-year basis in response to delays, and that happens often in individual developments. Allowing for that flexibility maximises outputs. It means that you can move to where the need is; you can put the money there and keep moving. Under the approach proposed in Amendment No. 78, affordable housing allocations would be owned territorially by London boroughs. It would be next to impossible to move funding between developments and would seriously inhibit what could be achieved. The alternative approach in Amendments Nos. 77 and 79 to 86 presents another set of problems. They would leave in place the provisions removed by Amendment No. 76 and replaced by Amendment No. 78 but would weaken the impact of the existing provisions. They would require the Mayor to provide guidance rather than recommendations on housing funding in London. We do not think that guidance is right in that context. Let me explain why. The use of the term ““recommendations”” codifies existing practice. As I have said, the Mayor can already offer advice and make recommendations to the Secretary of State on housing funding priorities for London. For decent homes and regeneration funding that goes directly to London boroughs, our proposals reinforce the existing position by putting the procedure in the Bill. The Secretary of State will continue to make allocations, on the advice of the Mayor. It will be for the Secretary of State to accept that advice—it can be rejected. She would consider the views of interested parties, which would obviously include individual boroughs. The change would also apply to policies for affordable housing. In this critical area, the existing ability of the Mayor to make recommendations about the size, type and location of affordable housing in the capital will be strengthened by the requirement, which our proposals introduce, for the Housing Corporation to have regard to those recommendations. I hope that my noble friend Lord Campbell-Savours will take some comfort from that important new requirement. It has been welcomed by the Housing Corporation as bringing together its work of delivery with the Mayor’s London plan and all that that implies. The plans to increase affordable housing in London, set out in that plan, is now linked more clearly and specifically with the Housing Corporation’s responsibilities. We welcome that; it reflects a very serious intent. Substituting guidance for recommendations would weaken the link, the role and the delivery system. There is another problem with the notion of guidance: the funding on which the Mayor would be advising is, and remains, government funding. For any outside body or individual to offer guidance is simply not appropriate. It would be particularly problematic in the case of that part of the regional housing pot which is allocated straight to the London boroughs without being ring-fenced. It could be taken to mean that conditions had been set for the use of that funding where that was not intended. I welcome the explanation given by my noble friend Lady Ford about why that would weaken a situation which is clearly quite progressive regarding where the developers find themselves in terms of policy-making. The amendment weakens the overall strategy by requiring the boroughs not to, "““be in general conformity with””," the housing strategy but to have regard to it. The London boroughs are key partners in helping to design and deliver the London housing strategy. It would be absurd if their strategies were to undermine or contradict that. The requirement to be in general conformity with the London housing strategy gives more assurance that the Mayor and the boroughs will work more closely together. That does not mean a slavish adherence to what is in the London plan. The boroughs do not have to mirror the detail of the plan. It is not intended to override the legitimate discretion of each housing authority to take into account its local circumstances. When they are not in general conformity with the strategy, that means that there is an inconsistency or omission in them which would cause significant harm to the implementation of the Mayor’s strategy. It is quite right that local housing strategies reflect the different make-up and needs of the individual borough. Amendment No. 89A, in the name of the noble Baroness, Lady Hamwee, envisages a situation in which the Mayor’s strategy would adversely impact on the ability of London boroughs to carry out housing functions which are their responsibility but fall outside the scope of the London housing strategy. I understand where the noble Baroness is coming from but it is difficult to think of something which would be impacted by the London housing strategy yet would fall outside its scope. Therefore, Amendments Nos. 86B and 87ZA are not necessary. If the noble Baroness would provide me with examples that we could think about, I would be happy to look at them. In any case, the amendments are covered by the existing requirement on the Mayor to consult the London boroughs and the Corporation of London on the London housing strategy and revisions to it. I have a more fundamental difficulty, because that is a very general requirement. Amendment No 89A would encourage the sort of nit-picking that we would hope to discourage. It would have the overall impact of undermining the ability of the Mayor to work constructively with London boroughs. Amendments Nos. 86A and 87A, tabled by the noble Lord, Lord Jenkin, would require the Mayor to ““have regard”” to the impact of his housing strategy on the Corporation of London. I was interested to hear the figure of 9,000 residents in the City, which I did not know. We entirely agree that it is important that the Mayor consults the corporation, alongside all London boroughs, on his housing strategy before it becomes a statutory document. The fact that that is not in the Bill is not an omission, because it already exists. Subsection (2) of draft Clause 28 already amends the GLA Act 1999 to ensure that the Mayor must consult the Common Council of the Corporation of London on his strategy before it is published. I would be happy to confirm in writing to the noble Lord that the amendments are covered by existing provisions. Amendments Nos. 76, 88 and 90 take a different direction again. They seek to remove the Secretary of State’s powers of direction which ensure that national priorities are reflected in the housing strategy, that it responds swiftly to changes and that it is produced in a timely manner. Amendment No. 76 would remove her ability to specify what the London housing strategy should contain; Amendment No. 88 would remove the requirement that the London housing strategy should be submitted to the Secretary of State and remove her ability to require changes that she would feel necessary; and Amendment No. 90 would make it impossible to ensure that the strategy was produced in a timely fashion. I have explained the relationship between housing in London and national housing in general, and the fact that half of the Housing Corporation’s funding is invested in the capital. Therefore, a power to intervene, should proposals look likely to undermine national policy or adversely affect regions adjoining Greater London, is important. For those reasons, I cannot accept the amendments. However, I have some good news, which I have left until last. Amendment No. 87 seeks to add specific consultees to the face of the Bill. It already contains provisions requiring the Mayor to consult on the London housing strategy in line with arrangements for other London strategies provided for in the GLA Act 1999. Amendment No. 87 adds specific references to the Housing Corporation and, "““the body representative of the views of registered social landlords””." We have sympathy with that amendment. It makes sense to consult practitioners on the practicality and delivery of the contents of the London housing strategy. Indeed, it is difficult to see how the Mayor could develop such a strategy without advice of that sort. Without making a commitment to take these proposals on board and without prejudice to similar proposals for other parts of the Bill, we are prepared to consider this amendment. With that good news, which I suspect may be outweighed by the less good news in the rest of my speaking note, I hope noble Lords will feel able to withdraw their other amendments.