Examination of Witnesses(Questions 82-99)
MR PETER
STUDDERT, MR
KEITH DAY
AND MR
DAVID GREGORY
TUESDAY 15 OCTOBER 2002
Christine Russell
82. Mr Studdert, I have three questions, just
to set the picture. In Cambridge how much affordable housing do
you need? What are the constraining factors in providing it? Thirdly,
what will the consequences be if you are not allowed to or cannot
build affordable homes in Cambridge?
(Mr Studdert) We need lots of affordable housing.
I could not put a figure on it, but the demand is huge. We need
all sorts of affordable housing, both social rented housing and
shared ownership and intermediate housing, key worker housing,
as well. The reason for that is because we have a very prosperous
local economy. We are also an increasingly important regional
centre as well—a lot of regional institutions are locating
in Cambridge—yet within the city we have a very constrained
land supply because of our tight Green Belt. The pattern of house
building over the last 20 or 30 years has been a pattern of decentralisation
of housing beyond the Green Belt, to expanded villages and to
the market towns, but a lot of the jobs and other facilities are
still back in Cambridge, which has obviously led to an increase
in long-distance commuting and in traffic congestion, and also
has put a very high premium on property within the city. The key
worker housing study that was carried out for us last year I think
has put a ratio of 1:6 for the average salary to the average house
price. I think that has probably gone up to nearer 1:7, if not
1:8 in the last year, where house prices have gone up by something
like 26 per cent between June 2001 and June 2002. So we have an
increasingly dysfunctional city, and the availability of affordable
housing close to where people need it, which is close to where
the jobs are, is the main issue for us.
83. What is the average cost now in Cambridge
of a starter home, a two bedroomed flat or a small house?
(Mr Studdert) The average house price overall is round
about £150,000 now, so for a starter home it would be somewhat
below that.
84. What are the City Council's views on having
a better national economic strategy, where jobs and employment
opportunities are targeted to areas that do not face the housing
crisis that cities like Cambridge do?
(Mr Studdert) I think it is right for government to
try as hard as it can, but from the work that has been done looking
particularly at the Cambridge economy, a lot of our growth comes
from the cluster effect of high technology businesses in and around
Cambridge, particularly the start-ups and spin-offs from existing
companies, and those companies stick very stubbornly to Cambridge.
A lot of it is to do with having access to the employment pool
of specialised people; a lot of it is just for purely personal
reasons, that that is where people already are and already have
their families. So because of the dynamics of the high-tech sector
and the start-ups—some of which fail, but some of which
grow to be quite large companies—I think the Government
could only influence that at the margins, and there is a danger
that if one squeezes it too much at the Cambridge end, all that
happens is a lot of that economic activity would relocate abroad
rather than to another part of the UK.
Mr Clelland
85. Could I put a question to Keep London Working.
Could you tell us a bit about your role: is it mainly research
or are you moving more into provision? How are things progressing
in terms of what you are doing?
(Mr Gregory) It is both things. We are providing a
number of properties, up to 175 between now and early 2004, and
we are researching them and organising other research programmes
around that. We are about halfway through the research programme.
86. What are you gleaning from the research?
Do different key workers require different kinds of tenure or
different kinds of properties? What sorts of results have you
had from your research?
(Mr Gregory) We have been surprised by the findings
of our own waiting lists and the people we have let properties
to. One thing is that the key workers that we are letting to are
older than we expected. When the SRB programme started, we had
an idea of key workers as being largely professional people—nurses,
teachers, police—at the beginnings of their careers, who
needed initial help with housing. That is certainly the case,
but we have found that almost half of the key workers we are letting
to are over 35, and are looking for more long-term housing solutions,
rented and shared ownership. Secondly, we have not been able to
let to lower income key workers. Again, when we started, we imagined
that key workers were probably earning starting at around £15,000-£18,000
a year and could afford about 35 per cent of their gross income
as rent. What we have found is that we have not been able to let.
We have only been able to let about two flats to bus workers.
Bus workers' incomes start at about £15,000 and they get
about £19,000 if they earn overtime. They cannot afford the
rents we are offering, and they represent, we feel, quite a large
working population of clerical and semi-skilled workers that are
excluded from the housing provision at the moment, partly because
they are not in severe housing need, and partly because the rest
of the housing that is available to them is too expensive. This
particularly affects families.
87. Are they mostly families, if the age group
is as you have described?
(Mr Gregory) A lot of them will be families. Hospitals
have waiting lists. Human Resources departments at hospitals have
waiting lists which have quite large numbers of families in ancillary
work that cannot find housing. We have found that what people
will afford—they will find other ways of coping in the short
term—is about 25 per cent of gross income. That is what
they pay on average as rent. Couples and people that share pay
less, at about 22 per cent, and families pay more, at about 30
per cent on average. What is quite interesting is that we have
found 30 per cent is about the limit to which private insurance
schemes that insure private landlords will indemnify rent, and
our experience has been that you get people defaulting on the
rent much over 30 per cent of gross income.
88. What more does the Government need to be
doing in this area in order to help key workers? More money?
(Mr Gregory) Yes, I am sorry to say. Yes, it is very
important.
Chairman
89. If you have been looking at key workers,
you have presumably also identified a whole series of people who
are not key workers. What scope is there for moving a lot more
jobs out of London, moving jobs which do not have to be done in
London to places like Gateshead or Denton?
(Mr Gregory) One of the characteristics of people
we are calling key workers is that they are employed locally.
They are in service sectors locally.
90. Yes, I understand that, but some local authorities
in London have suddenly realised that things like the Council
Tax administration can be done almost anywhere in the country,
so is there scope for moving some of the people who are not key
workers, in that they do not have to work physically in London,
out to actually improve the housing market?
(Mr Gregory) Yes, there would be scope for some.
91. Can I go on to Addenbrooke's and this question
about how far it is really making the hospital inefficient as
a result of not having the accommodation for people?
(Mr Day) There is very clearly a direct correlation
between our ability to recruit staff and our ability to deliver
the services that we are charged with delivering. In the evidence
we have quoted to you the impact of our inability to recruit staff
and our having to close beds in consequence. Of course, I do not
attribute the whole of our inability to recruit staff to issues
of housing, but I would say to you that it is a very significant
factor in that equation.
92. You are talking about 5,000 bed days lost
as a result of staff shortage.
(Mr Day) Approximately one ward of patient capacity,
yes.
93. What happens? When you advertise, people
just do not come, or they come and then they start looking at
the housing market in Cambridge?
(Mr Day) People frequently want to come to us, because
they generally speaking think Addenbrooke's is a good place to
work at. When they come for interview and start to look around,
you can see the look of disappointment that comes across their
faces as they realise they are either going to have extreme difficulty
or they are just not going to be able to afford to come, and therefore
they will either decline at the time or they may accept and fail
to take up appointments. This depends on the staff groups. The
position varies tremendously across the whole spectrum of people
that we are dealing with. It is a totally different situation
if you are talking about some professional classes at the higher
end of the spectrum as opposed to nurses or indeed ancillary workers.
94. Is Addenbrooke's starting to do things at
Addenbrooke's that could be done in other parts of the country
rather than at Addenbrooke's?
(Mr Day) I find it hard to think that we are doing
things that it is not appropriate for us to be doing in Cambridge.
Clearly, there is some scope amongst specialist services for those
to be provided elsewhere, but then those services can only be
provided where the expertise is, and a lot of our expertise in
specialist areas is associated with our close relationship with
the University of Cambridge. It is not something that can be simply
shifted all round the country. Also, an awful lot of this work
we are talking about is work for our local population, because
as well as being a specialist centre, we do provide the vast majority
of the district general hospital services for Cambridge and the
surrounding area.
95. If you were allowed to pay your nurses more
than the national scales, would that not simply push the housing
market up even further? It would not solve the problem at all.
(Mr Day) Indeed so, and I would not hold that out
to you as being the sole answer. Also, I would say nurses are
an extremely mobile element of the work force, and they will simply
move around depending on where the opportunities and advantages
are. It is very easy to get into a game of tag or catch-up, where
we pay a little bit more, people come to Cambridge, somebody else
then of course suffers from that, and then they up the rates a
little and more people move away. It is not a permanent solution
by a very long chalk.
Dr Pugh
96. The ultimate test, it seems to me, of key
worker problems is the unfilled vacancies, and not just unfilled
vacancies but unfilled vacancies that are particular to the public
sector. Have you collected any comparative data on how unfilled
vacancies compare with the public sector as opposed to the private
sector?
(Mr Hayler) Not at this stage; only broad comparators.
We have taken the particular groups we have to try and get a cross-section
of type of occupation and type of income, so bus workers, hospital
workers through to professionals like teachers. We are conscious
that turnover rates in other industries are not dissimilar in
some questions, but I think it is the case that the extra pressures
you get in London and the South East occur because of the structures
of wage rates.
97. If you do not have that data, you do not
know whether it is a key worker problem or just a worker problem,
a general problem in economic recruitment in London?
(Mr Hayler) Inevitably it is both things. The issue
here is, I suppose, understanding, rather as was suggested by
the hospital trust experience, that there is a range of people
in different housing situations, in different occupations, who
need different sorts of housing solutions. There are pay and conditions
factors impacting on recruitment, but housing, particularly in
London and the South East, is impacting on retention. The types
of solutions and housing interventions you need vary according
to where people are in their life cycle and in their employment
cycle.
98. If I can take you to a specific case, Keep
London Working suggest that 40 per cent of secondary school teachers
are looking for a new job next year—presumably that is 40
per cent of London secondary school teachers—and it goes
on to say that the main reason is to find cheaper accommodation.
I would suspect that a large number of these teachers are looking
for not cheaper accommodation but rather more substantial accommodation,
which they can easily get elsewhere, and that situation will prevail
so long as prices are very high in London. Do you not agree?
(Mr Hayler) I do largely agree with that. I think
it is partly to do with quality, it is partly to do with travel-to-work
arrangements, it is partly to do with being cheaper. Being cheaper
is what they said. This is from the teacher survey.
99. What can be done?
(Mr Hayler) We do know that the majority of teachers
who actually leave London leave predominantly for housing reasons.
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