Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Memoranda

Memorandum by Bolton Metropolitan Borough Council (HOU 04)

A.  Whether the funds in the Comprehensive Spending Review will achieve the Government's target of a decent home for everyone by 2010

  The Comprehensive Spending Review provides a starting point for moving towards a decent home for everyone by 2010. The fact that the creation of decent homes is a stated government priority is a significant move forward in national housing policy and as such needs to be celebrated. However the resources required to reverse decades of under-investment in housing may exceed those quoted in the CRS. Bolton is confident that by following the ALMO route (and by obtaining the necessary Best Value service quality standards required) we will have secured sufficient resources to meet the decency standards on all our stock by the deadline.

  The major problem Bolton will face is achieving the same level of success in the private sector, where the problems are far greater. It is estimated that around £600 million is required to eradicate all the private sector housing problems in the Borough through a mixture of community focused refurbishment, demolition and (selective) new build. Unlike in the public sector, where the re-organisation to the ALMO should unlock sufficient resources, the CRS gives no financial assurances to ensure the provision for decent homes for the everybody, irrespective of the tenure or housing sector they live in.

  Solely the provision of decent homes is not the solution, rather the same level of investment has to go into local infrastructures to ensure that the public sector investment into stock is safeguarded and that robust sustainable communities are created. Bolton would argue that it is of primary importance to get the processes right first and then make assessments over whether or not the levels of investment is sufficient.

B.  How spending of the new resources should be balanced between social housing and options for owner-occupation for those who cannot afford to buy (including shared ownership) and the mechanisms to be used for their distribution

  Emphasising the dichotomy between social housing and owner-occupation is sometimes unhelpful. The blurring of tenures or easing mobility between tenures acts to forge social cohesion, remove stigma, increase positive perceptions of status and drive regeneration. It can do this by re-interpreting the relationship between the resident and the overall property market, creating a continuum of ownership rather than a sharp divide between social and other forms of housing.

  Owner-occupation is generally considered the preferred housing option for most people, with around 70 per cent of householders exercising this choice. It is presumed that this percentage would increase if the right to buy was extended to RSLs and if people could afford the option. So a comprehensive approach to the provision of affordable housing needs to take into account that most people want to have a stake in their homes and that an increased stake should lead to greater market stability.

  The consideration of introducing some form of equity sharing for customers is a step forward towards broadening the interpretation of ownership. Similarly, in Bolton, the introduction of a Housing Regeneration ALMO is a means by which we can increase customers "ownership" of their estates through democratising the basis through which the stock is managed. Whilst this is initially a communal ownership it is possible that a more individually customised incentive scheme may emerge within the dynamic of this new tenant/landlord relationship.

  The balance of funding has to be governed largely by need and towards targeted regeneration. The areas with greatest deprivation should receive the highest proportion of resources. However it is wrong to be prescriptive at the start of the process, to apportion crudely between social housing (rented) or low cost home ownership. Rather apportionment should emerge only after the community has been engaged with the regeneration process and are contributing fully to decisions over how resources should be spent to greatest effect.

  This means that we would have to re-visit the way public resources are at present allocated so as to loosen some of the rigid bureaucratic elements and provide much more flexibility to switch/team and ladle or re-mould funding. For instance, at present ADP is directed through a series of different funding "boxes" which draw a sharp dichotomy between sale and rent or new-build and refurbishment—with the numbers of dwellings prescribed indelibly at the start of the process. Following a more flexible approach a less precise allocation would be given for a targeted regeneration area and the detail would only be filled in as a product of the consultation process with full resident involvement.

C.  The role of planning obligations in providing affordable housing

  There are a number of problems with the current arrangements for planning obligations that can be summarised as:

    —  ill-defined linkage between development impacts and the need for affordable housing;

    —  negotiation of agreements is complex, time consuming and costly;

    —  lack of transparency and accountability in the process;

    —  difficulties in deciding on what is needed and what the developer can afford to provide; and lack of a clear policy framework set by central government which is relevant and responsive to changing housing markets.

  The imposition of planning obligations for affordable housing at present relies on the implementation of Circular 6/98, Planning Policy Guidance Note 3, and development plan policy. The circular concentrates on the relationship between incomes and house prices and requires authorities to prescribe how many affordable homes need to be provided and where, with the added constraint of a threshold for the imposition of the policy based on the size of the development. This could be considered as somewhat an inflexible approach.

  The level of prescription to be expressed in development plan policy, expected by the circular, presents problems for local authorities in meeting housing needs at the right time and in the right place. The housing market is complex, dynamic and constantly changing. It is therefore less than helpful for affordable housing needs to be set out in a plan, which may reflect circumstances prevailing at the time of drafting but may change significantly over the lifetime of the plan.

  Further the emphasis is placed too much on housing need rather than aspiration or choice. For instance, it has been calculated that Bolton's additional housing requirement of around 4,250 homes by 2011 is based largely upon the predicted increase in smaller households. The prescription, in housing need terms, would be for an increase in smaller dwelling types to meet this expansion in the market. In reality people are expressing a housing choice for larger properties than their actual need would indicate, not least a growing aversion to the traditional two up, two down terraced housing so widespread in the region and sub-region. It also indicates that people are making more sophisticated housing choices based not on short term contingency but longer term lifestyle planning. This aspirational element is not factored into the present rigid planning framework, which relies too much on crude assumptions of supply requirements and not enough on demand projections.

  There are also problems of detail in achieving affordable housing through Section 106 agreements. It is difficult to determine the level of provision or financial contribution developers should be expected to make because nowhere in the guidance is there an indication of how this should be calculated. Estimating what the developer can afford to provide from a particular site relies on disclosure of financial costs and expected revenue, which the developer is unlikely to provide because it is commercially sensitive information. Also it can be presumed that the developer would prefer to dampen down any social housing requirement because of the perceived likely effect this would have on profit margins and on the saleability of the market value stock. Often a developer can ease their way through the social housing obligations by persistent challenges of the local authority housing needs surveys, which as they are based upon a snapshot and a wide range of data, can be open to interpretation on finer points of detail. Ultimately this could lead to a situation where the local authority is faced with refusing a planning application solely on the grounds of a perceived lack of affordable housing or because the developer's view of discharging their obligations on affordability does not coincide with the local authority's view. As a refusal would almost certainly lead to a hotly contested and expensive public inquiry, (the risk element intensified by the present lack of clarity in planning legislation) it is most likely that the local authority would choose not to pursue the challenge.

  Circular 6/98 does not represent a suitable framework to inform the decision making process in respect of the delivery of affordable housing through the planning system. The Government should allow local authorities to be much more creative in finding ways of delivering affordable housing without being constrained by a policy framework that relies too heavily on the outcome of housing needs assessments to dictate requirements, which only provide a snapshot in time.

  Local authorities have an obligation to produce much more accurate, up to date and robust information on housing need and demand that takes into account the dynamic nature of the housing market. Bolton is moving some way towards this by perfecting its own predictive housing model and working with others to develop a sub-regional version. However, there needs to a shift whereby the responsibility should fall more on the developer to make an incontrovertible case that they have met fully their obligations to provide an element of affordable housing.

  Planning decisions need to be based on clear policy. Whilst there is good practice guidance available on affordable housing this is not a substitute for policy and it does not carry the same weight in development control.

D.  The effectiveness of the Housing Market Renewal Fund in tackling housing needs in low demand areas.

  The Housing Market Renewal Fund is of immense importance to areas of the country where the introduction of more houses for sale increases and enriches the housing and social mix of an area. Here the affordable sale option can be used as a regeneration tool to transform low demand areas by reducing the density of deprivation and eroding mono-tenures.

  Whilst the MRF can help resource capital works schemes through directing public investment into these areas it is important that private sector investment is maximised. The re-direction of major investment by private sector developers and lending institutions away from safer suburban development towards the inner urban areas of deprivation has to be a primary aim of the MRF. In many ways this would call for sub-regional co-operation in creating sufficient economies of scale to attract this type of investment. Inevitably to meet this critical mass would mean extending the MRF beyond the Pathfinder areas.

  Quite rightly the first tranché of resources is going into areas where the housing market has actually collapsed. The levels of MRF investment here would have to be proportionally high as to match the size of the problem. However a strong case can be made to have a second phase of MRF Pathfinders that would concentrate more on prevention rather than recovery. On regeneration rather than massive reconstruction. These are areas, more commonly found than those in total market collapse, where there is a need for a more limited level of strategic investment to ensure that market collapse does not take place. It is areas like these that it would be easier to introduce more sale options as a regeneration tool as there is still a modicum of market buoyancy. Further it is in these areas of limited collapse that there would be better opportunity to test out new models of home-ownership, such as equity release schemes.

E.  How the quality of new affordable housing can be ensured and the poor design of previous house building programmes avoided

  Poor quality does not really appear to be a major issue in Bolton at present as those RSL schemes, produced through the Bolton Community Homes (BCH)Partnership, represent design solutions tailored to the specific needs of future occupiers and are innovative and modern. They have to comply with stringent Housing Corporation design standards and have been given environmental additionality through Egan compliance. This ensures that they will remain attractive to buyers in the future.

  It may have been the case in the past that affordable housing provided as part of a private development was not as well designed and of poorer quality than the units sold at full market value. However, recent evidence from private developments in Bolton suggests that affordable units have been incorporated seamlessly into the overall scheme with no evident difference in quality. This can be largely due to the fact that most of the new build affordable homes are created as a result of a private developer—RSL (BCH) partnership.

  The poor design of some previous affordable house building programmes was, in part, the consequence of flawed design concepts that only emerge as flawed with the benefit of hindsight.

  The introduction of Parker Morris standards within public sector housing provided for a whole generation of dwellings that reached new heights in council housing design and quality. These properties provide the source of much quality council built housing stock to the present day, either for tenants or for those people who have bought their homes through the right to buy. The re-introduction and extension to all affordable new-build of a revised form of minimum standards, which are updated to reflect contemporary living standards, could provide a solution. Perhaps by first introducing the revised Parker Morris model as a voluntary pilot scheme so that its credibility as a quality benchmark could be established with the public and developers in general.

  Whilst assuring that all new affordable housing meets quality design standards is important the actual sustainability of this type accommodation is as much about concentrating on addressing housing-related issues relating to wider social, economic and environmental factors. Ensuring that a holistic approach to creating a quality living environment is taken.

  Also one aspect that could be addressed in terms of the layout of a development is whether affordable housing should be more fully integrated in terms of distribution across a site. In most cases affordable units are located together which could hinder social inclusion and effect the social dynamic of these newly created communities.

  An aspect to housing design that has yet to be fully addressed is the need to provide flexible living spaces that can respond to an individual's changing circumstances. A dwelling designed to accommodate a single person or couple will cease to be suitable if the household expands and the occupants may be forced to move. A space that can be readily adapted to serve changing needs is an attractive concept in helping to achieve market stability and promote sustainable communities. This would also take into account the point made previously about customer preference and aspiration governing housing choice.

  There is a plethora of design guidance available, but what is lacking is design expertise amongst planning officers which is difficult to address without investment in training or the employment of specialists. Unless planning departments are better resourced it will not be possible to give enough attention to design issues because of time constraints and a lack of experienced staff.

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Prepared 22 October 2002