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Lord Williams of Elvel: I am grateful to the noble Earl. It is the first time that I have heard a Select Committee of another place being prayed in aid by the Government. Normally, Select Committees of another place are critical of governments. Nevertheless, if the Government rely on that evidence, we note it. In future cases where Select Committees of another place are critical of the Government, no doubt the Government will also rely on their opinion on other matters.

The Government must pay attention to the problem. Whatever the Select Committee of another place says, there is substantial disaffection in local authorities about the SRB on the lines that the noble Baroness, Lady Hamwee, and I have mentioned. I believe that it is not such a bad system, others take a different view and think that it is terrible. It is not such a bad system, bar the fact that it does not encourage assistance to go where it is needed, it goes where there is reasonable presentation. That is my experience and that of others.

I do not wish to press the amendment at this hour of the night, but the Government would be sensible to pay serious attention to the points made this evening. In the light of the noble Earl's response, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 228 not moved.]

Clause 124 agreed to.

[Amendment No. 229 not moved.]

Clause 125 agreed to.

Clause 126 [Resolution by local housing authority to pay relocation grants]:

10 p.m.

Lord Williams of Elvel moved Amendment No. 230:

Page 73, line 36, leave out ("are") and insert ("will be").

The noble Lord said: In moving Amendment No. 230, it may be for the convenience of the Committee if I speak also to Amendments Nos. 231, 232 and 250. We are now dealing with relocation grants. The purpose of Amendments Nos. 230 and 231 is to allow a local housing authority to seek confirmation from the Secretary of State that contributions towards relocation grants will be payable by him in respect of a specific proposed clearance area before passing a resolution to pay such grants.

The Bill introduces relocation grants which may be used by local housing authorities to assist people who lose their homes as a result of clearance activity. As I understand it, the grants will supplement existing compensation provisions to enable people affected by clearance to purchase a replacement dwelling and can be paid after a clearance area has been made. The decision to make relocation grants available must be made before making the clearance area. That is the ground on which the amendments are based.

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Local housing authorities will be required by Clause 126 to do a number of things before deciding. Clause 134 merely says that the Secretary of State may make contributions towards relocation grants paid. In the Explanatory and Financial Memorandum to the Bill, it is suggested that relocation grants will be financed from public expenditure released by the change from mandatory to discretionary renovation grants. That comes as something of a surprise because it is contrary to the suggestion made in the Explanatory and Financial Memorandum. Savings will not, in our view, be made by the change from mandatory to discretionary renovation grants. As we have argued over Part I time and time again, the same number of unfit houses will remain to be dealt with the day after the change is made as the day before the change was made.

So there can be no changes as a result of a change in the scheme from mandatory to discretionary provision. Furthermore, local housing authorities are likely to have to divert more of their limited resources to fund mandatory disabled facilities grants after the change. There can be no extra money for relocation grants. My amendment is designed to seek confirmation that the Secretary of State will pay whatever is necessary in respect of proposed clearance areas before local housing authorities pass a resolution to pay those grants.

I turn to Amendment No. 250, which is designed to ensure that subsidy is made available for relocation grant in the same way that renovation grants at present receive subsidy. The Secretary of State already has powers to make contributions towards the cost of renovation and disabled facilities grants, currently at the rate of 60 per cent. of expenditure. As we know, those powers are repeated in Part I of the Bill.

It is important for all grants to be dealt with in a similar way in order to ensure a proper balance between the different options for renewal. That is particularly important in relation to the balance of action between repair and replacement, which is what we are talking about when discussing relocation grants. I beg to move.

Baroness Hamwee: My amendment No. 232 is grouped with these amendments. I can understand that there may be a knee-jerk reaction to the notion that capital receipts may be released to be used for the purposes that I suggest. However, I do not feel that those purposes are so very wide.

The amendment refers to Section 290 of the Housing Act 1985. That section refers to local authorities' acquisition of land after they have declared an area to be a clearance area. Under Section 289(2):

    "The local housing authority shall declare an area to be a clearance area if they are satisfied ... that the houses in the area are unfit for human habitation or are by reason of their bad arrangement"--
the reference is to the arrangement of streets--

    "dangerous or injurious to the health of the inhabitants ... and that the other buildings ... in the area are [similarly] dangerous or injurious to ... health".
Further, it states that the most satisfactory way of dealing with the matter is the demolition of buildings in the area.

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That is not a decision which is taken every day of the week by every local housing authority up and down the country. The amendment proposes that capital receipts received from the disposal of land previously subject to that type of action can be used by the local housing authority toward further investment. I use the term "investment" quite deliberately--not random, profligate spending.

I am well aware that restrictions on the spending of capital receipts are intended to reduce the local authorities' debt but they have the effect of reducing the local authorities' capital bases and, I suggest, their power. One of the reasons underlying the controls on the use of capital receipts is a wish to reduce local authorities' capital bases. But it also means that local authorities are restricted in their ability to invest; and coupled with other restrictions on capital expenditure, as I said earlier this evening, their hands are very much tied.

This is not therefore an extensive amendment. I do not believe that it will have huge implications. However, it could be extremely important and useful in the limited number of places where such actions are taken.

Lord Lucas: These amendments are all about the resources which will be available to local authorities to enable them to give relocation grants. Amendments Nos. 230 and 231 concern the resources condition in Clause 126(3), the purpose of which is to ensure that authorities do not commit themselves to future expenditure on relocation grants recklessly. In our view, it requires each authority to be generally satisfied, on the basis of its current level of resources, that it would be able to meet the sort of expenditure that such a commitment would imply.

The wording follows that in Section 289 of the Housing Act 1985 which requires authorities to be satisfied that their resources are adequate before declaring a clearance area. Although this, like the decision to pay relocation grants, implies a long-term commitment of resources, the wording seems to be generally understood and has not caused any problems.

In relation to the specific questions raised by the noble Lord, Lord Williams, the point is that if authorities have discretion they can allocate resources according to their own priorities. They will therefore be able to pay relocation grants if they wish from within the overall level of their resources.

Amendments Nos. 230 and 231 are unacceptable because they would require local housing authorities to be satisfied about the future availability of resources and for the Secretary of State to give them cast-iron guarantees on that. No government can give any such assurance because public spending decisions have to be taken afresh each year taking account of the amount the country can reasonably afford to pay. The Secretary of State could therefore not give the absolute confirmation about resources which Amendment No. 231 appears to require. Authorities would therefore be unable to satisfy themselves on this and so would never be able to exercise their power to give grants. I am sure that that is not what the noble Lord intends.

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I can, however, assure the noble Lord that it is certainly our intention to pay contributions towards the cost of relocation grants for the foreseeable future. We would expect to do so at the same rate as for slum clearance subsidy; that is to say, 60 per cent. Amendment No. 250 seeks to relate the amount paid to the level of contributions towards the cost of renovation grants under Part I, but we see no merit in that. Nor is it clear to us that a requirement on the Secretary of State to have regard to that level would establish a clear link in any event.

Amendment No. 232 seeks to enable local authorities to fund the provision of relocation grants using capital receipts from their slum clearance activities. If we wished to do that, we could do so under our existing powers in Section 59 of the Local Government and Housing Act 1989. However, allowing authorities to use receipts which they would otherwise have to set aside to meet credit liabilities would, if unchecked, add to public expenditure. Furthermore, such a change might also affect different authorities in different ways. Some authorities may not have sufficient receipts to meet the demand for relocation grants at the time the demand arose.

In conclusion, we believe that funding for relocation grants should be met from within the overall level of resources allocated for private sector renewal, with a 60 per cent. Exchequer subsidy as already mentioned. I hope that, on the basis of those explanations, the noble Lord will be prepared to withdraw the amendment.

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