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

Memorandum by the 9 English Regional Development Agencies (HOU 27)

A decent home for everyone by 2010

  Availability of affordable housing in many of the English regions is the pre-requisite to a decent home for all by 2010. Some English regions, such as the South East and South West do not have large areas of housing requiring renewal although the overall number of sub-standard homes is very high, whilst the North West, North East, Yorkshire and Humber and parts of the North Midlands have large areas of low demand housing in need of urgent renewal. Ironically, even parts of these regions are also subject to affordable housing problems in their more attractive rural areas.

  A significant increase in funding to greatly increase the rate of supply of social housing is the only real option if these needs are to be met by 2010. The current rate of new homes being completed through the Approved Development Programme (ADP) and Local Authorities Social Housing Grant (LASHG) is barely keeping pace with the erosion of social housing stock as a result of Right to Buy.

  However, achieving the Government's target of a decent home for all by 2010 will not be achieved simply by increased financial resource, although this, of course, is critical and very welcome, there are serious doubts as to whether even this will be sufficient to fully resource the activity required.

  The provision of new homes, at market prices and with public subsidy, along with the improvement of below standard existing stock requires other resources. New housing particularly requires land and it is evident that planning policy, interpretation of that policy and other government targets may, albeit unwittingly, be conspiring against the "decent home for all" objective. For example, it is becoming clearer that the government's target of achieving 60 per cent of new housing on brownfield land is probably one factor contributing to the lowest housing completions for many years. As Local Planning Authorities apply the sequential test, release of sites is delayed. It is an acknowledged fact that brownfield sites are harder and take longer to bring to market.

  Addressing the wider requirements for affordable accommodation in the regions is critical and there needs to be a greater supply of affordable "below market" rented and low cost home ownership options. However, treating this as purely a supply issue is unlikely to solve the problem. For example in some regions, the level of public sector pay, and the fact that it does not allow workers to purchase on the open market, is a contributory factor. Therefore there is a need to look wider than the much needed additional funding and to look at pay levels in the public sector, land availability for housing and new mechanisms for bringing forward sites. Measures aimed at addressing current regulations for disposal of land held by public sector landowners such as the MoD, working with landholding employers, and addressing skills needs must all be looked at.

  The improvement of existing unfit stock is a significant challenge for this country. It is accepted that the majority of the unfit stock is in private ownership. Without simple, effective tools to either encourage, or force, the improvement of unfit stock, we will make little progress in this respect.

  There are still large numbers of council owned homes in need of repair and updating. Many homes in poor condition are in the private sector. We need effective fiscal measures to provide incentives to private owners/landlords to undertake the necessary improvements. We need simplified Compulsory Purchase Powers to gain control of unfit stock with unco-operative owners.

Balancing new resources between social housing and options for owner occupation for those who cannot afford to buy on the open market, and the mechanisms for their distribution.

  The achievement of the balance between social housing and owner-occupation for those who cannot afford to buy is best determined at local level through a detailed assessment of local housing market areas.

  There is a pressing need in many of the regions to reduce the number of homeless households and particularly those in bed and breakfast accommodation. New resources should be prioritised to tackle homelessness through the provision of social housing. There is also an urgent need for key worker accommodation, the shortage of which affects the ability, particularly of the public sector to recruit. Many key workers such as nurses and other medical professionals such as therapists, and police early on in their careers are unwilling to commit to home ownership and therefore need affordable rents. However, there is also a need to provide low cost ownership options for the next stage of their lives in order to be able to retain them. The supply of small/family homes to purchase on the open market is not adequate, and often beyond financial reach, and there is an insufficient supply of low cost (subsidised) ownership options. Recent research commissioned by SEEDA, by Roger Tym and Partners with Three Dragons, identifies that the problem of affordable homes is particularly acute in the public sector. However it is not only the well publicised sectors such as nurses, police etc, but the problem exists across the whole of the public services sector, as well as those in the private sector who provide public services (eg transport providers, catering, retail). Early indications are that if left unchecked, public services are likely to deteriorate.

  As a priority, adequate resources should be targeted in those areas of greatest pressure. Local circumstances will dictate appropriate balance between social housing at below market rental, or low cost ownership. Overall, it is important that there is a diversity of product and that funding is available where it is most needed. We must seek to build well balanced communities as it would be dangerous to build a disproportionate number of social homes in certain areas. Growth should be managed to ensure that the supporting infrastructure of jobs, services, schools etc is put in place in order to avoid future problems. Definitions of key workers should be flexible to respond to local needs and not restricted to crime, health and education.

Role of planning obligations

  We do not believe that planning obligations have so far proved effective in delivering value for money affordable housing. The role of a planning obligation should be to provide both the land and the financial subsidy by discounting the value of the land attributable to the planning permission for open market housing. Too often, obligations for affordable housing are agreed and attached to specific consents, only for Registered Social Landlords(RSL) to outbid each other for the social housing element. The private sector developer, and more importantly, the landowner can then demand a high value for this element of their permission as well. The Housing Corporation then allocates resource to subsidise the housing. Effectively, therefore, the government is paying the landowner/developer for the privilege of building the social housing.

  Where, on larger sites, a social housing planning obligation is imposed, this should be a genuine cost to the developer properly reflected in what they pay for the site. The Housing Corporation should not provide any further subsidy. Local Authorities could pre-determine which RSL will develop/manage the social housing units to avoid any element of competition in that respect.

  Affordable housing coming forward as a result of planning obligations is not adequate to meet the scale of demand and is likely to remain a marginal mechanism for dealing with the affordable housing problem. However, improvements to the present arrangements can always be made. For example, simplified, quicker and more transparent processes for section 106 agreements are needed to secure implementation once the planning permissions are granted. Local authorities often lack negotiation skills and knowledge of development economics. Clear and streamlined procedures are required, based on an improved skills base (planning/housing policy and practices, funding law, development economics etc), together with clear targets linked to robust and up-to-date assessments of local housing need. These assessments of need must go beyond social rental housing and take into account key workers and a mix of affordable housing "products" that is required locally.

The effectiveness of the Housing Market Renewal Fund (HMRF)

  It is still too early to judge whether the HMRF will be effective in tackling the huge housing needs in areas of low demand and greater clarity is needed surrounding the Government's intentions and the levels of resource to be applied.

  In introducing the HMRF it is critical that it must not provide resources for housing alone if the objective is, as it must be, to achieve integrated and holistic neighbourhood renewal. HMR areas must be the subject of a comprehensive analysis of their economic strengths and weaknesses so that actions to address these can be taken by the RDAs and others before investment takes place in bricks and mortar. Otherwise, the problems of low demand will not be removed and sustainable development not achieved.

Ensuring the quality or affordable housing

  It is important that future house building programmes are well planned and designed. New housing should be directed to town centres where possible. New developments should be sustainable, be close to jobs and services. Housing should be a mix of market and affordable to promote mixed communities. A long-term vision including design, sustainability, regeneration and maintenance should be developed. Higher levels of skills in design, planning, regeneration, and community and urban management are needed. The Regional Centres of Excellence being developed in the regions will address these issues.

  Public attitudes are a barrier to the provision of affordable housing. This is based on a perception that affordable housing comprises large single tenancy estates, poor quality design, environments that are out of keeping with surrounding areas and with high levels of unemployment and crime. This must be addressed through good planning and design if these perceptions are to be challenged.

  There are two control mechanisms over the design of new affordable housing. The first is the planning system, which is the primary means of control over the design of all new development.

  In order for the planning system to deliver higher quality design it needs the powers and authority to demand quality. Local Planning Authorities need the skills and experience, or easy access to the skills, to know what better design is and how to promote and procure it. It is expected that Regional Centres of Excellence being established by the RDAs will address this latter issue.

  The second control mechanism is the government agencies that provide the funding for social and affordable housing. The Housing Corporation's Total Cost Indicators set cost parameters according to location and can act to minimise cost per unit, rather than encourage higher quality design, which will often cost more. By refining procedures the Corporation needs to encourage good design rather than discourage it. Appraisal systems need to reflect the importance of good quality design and housebuilders required to follow the EP/CABE/Housing Corporation Design manuals such as the Design Compendium and Better by Design and other initiatives such as the Northwest Development Agency's plans to introduce a North West Design Code.

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