Examination of Witnesses(Questions 380-399)
DR NORMAN
PERRY AND
MR NEIL
HADDEN
WEDNESDAY 30 OCTOBER 2002
380. And then you would be adding on service
charges as well, so you are beginning to ask people to part with
a very significant proportion of their income for housing, are
you not?
(Dr Perry) I think it is inevitable, certainly in
London and the South East, that people are going to pay a higher
proportion of their income in housing costs than they would in
other parts of the country. Social rents less so, but certainly
for any form of owner occupation, it will be relatively high.
(Mr Hadden) And this is the reason why we have brought
in the intermediate rent aspect of the programme where we are
targeting rents at around 80 per cent of market rents for a lower
level of social housing grant, so therefore trying to bridge the
gap between ownership and social renting.
Mr O'Brien
381. You have started allocated housing funds
on the basis of priorities set by regional organisations rather
than basic indicators of housing need. How does this work?
(Dr Perry) We have regional housing statements. Our
colleagues in our field offices around the country work with the
Government offices, with the regional assemblies and with the
regional development agencies to try and sort out housing need
in that area in relation to the economic strategy and other strategies,
and then they come up with a series of requirements and then we
do our best to fund them to the extent that we have the resources.
So, the thing is built up from a regional base.
382. As a northern MP, I am suspicious that
you will be transferring funds from the North to the South. Is
this right?
(Dr Perry) Not transferring. There was controversy
last year when we did, midway through the year at ministerial
request, transfer £15 million from northern allocations down
to London and the South East, but—
383. It is a fact then.
(Dr Perry) We restored it fully this year.
384. You restored it fully?
(Dr Perry) Yes.
385. So what about the pressure on the South
East then? Does that not impact upon the resources?
(Dr Perry) That was a temporary transfer that we made
in order to try and stimulate more starts in the South East. It
succeeded in doing that. So, for 2003-04, we have been able to
completely restore the allocations to the northern areas.
386. Any pressures from the Government to transfer
resources from the North to the South?
(Dr Perry) We work very closely with the ODPM and—
387. Any pressure from the Government to transfer
resources from the North to the South? Was that a "yes"?
(Dr Perry) Ye . . .
Chairman
388. We need to get something on the record.
It is quite difficult for the Shorthand Writer to get down that
sort of comment.
(Dr Perry) The short answer is "yes".
Mr O'Brien
389. So what is the percentage then? What are
we losing from the North?
(Dr Perry) You are not losing anything at the moment.
390. We are if you are transferring resources!
(Dr Perry) There was an event last year which we have
restored and the Challenge Fund, which is top-sliced from the
whole programme, relates to London and the South East, but the
rest of the £1 billion is being allocated in terms of regional
strategies.
Mr Clelland
391. When you say that there was an event last
year which has been restored and you referred to "fully restored"
earlier, do you mean that nothing has been lost or have we just
gone back to where we were two years ago?
(Dr Perry) That is correct.
392. So we have lost a year in that sense. The
transfer that you discussed earlier did take place and that has
now been restored, we have just got back to where we were before.
(Dr Perry) That is right. Even that transfer was actually
quite a technical thing, it was called cash backing. It was not
an actual transfer of allocations, it was a transfer of something
called cash backing.
393. Available funds for the North were diminished?
(Dr Perry) Temporarily.
Chairman
394. Let us put it into units. Actually, the
number of starts in the North was reduced so that more starts
could be made in the South; is that right?
(Mr Hadden) Not necessarily.
(Dr Perry) No. That is why I said that it was quite
a highly technical thing. It did cause some political controversy,
but it did not actually affect the allocations to the North. It
was about the amount of the programme which had cash backing in
a particular year.
Mr Betts
395. It seems to me that there are two main
ways of funding social housing: one is the spin-off from planning
agreements and the other is the funding from yourselves. Are those
two processes really brought together in any meaningful way to
provide a coherent approach to new social housing in the country?
(Dr Perry) Can I say that there are other ways of
funding social housing because there is the local authority social
housing grant which is quite substantial and also it is not often
noticed that housing associations build about 4,000 homes a year
entirely from their own resources without subsidy. So, if you
take those three things together, that adds to the pot.
Chairman
396. If you got to grips with the housing associations,
you could squeeze them to use a lot more of their funds to actually
build themselves, could you not? You are fairly generous at letting
them carry pretty large funds, are you not?
(Dr Perry) That could be another debate, Chairman.
We do not think that the sector as a whole has a level of reserves
which is anything more than prudent. The planning system, section
106—
Mr Betts
397. We have different sources of funding. Is
there really any overview taken? You will find that the spin-off
from planning agreements is generally that perhaps a large one
provides more units in (a) where there is development taking place
and (b) whether that development will achieve a high value. Therefore,
the process might very well restrict the number of units that
are being built in poorer areas. Have you balanced that and given
greater weight to the poorer areas when you come to do your allocations
and looking at local authority allocations as well?
(Mr Hadden) No, that is not a consideration that we
take into account. The allocations for each of the regions are
set by reference to the housing need index.
398. You take no account of what has been produced
from planning agreements?
(Mr Hadden) Not in setting the allocation in the first
place, no.
399. That is simply seen as a bonus and not
part of any overall strategy?
(Mr Hadden) Yes—
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