Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witness (Questions 1-19)




  1. Good morning. Can I welcome you to the first session of our Inquiry into Empty Homes. Before I ask you to identify yourself, can I just draw to people's attention that the evidence has now been published and it is available at £16.30 from the Stationery Office, or much cheaper, in fact you can get it on the web, to see what people have got to say. Would you like to start by telling us who you are, and do you want to say a few words, in introduction, or are you happy for us to go straight to questions?

  (Mr Cowans) I am happy to go straight into questions, Chairman.

  2. If you will just tell us who you are, for the record, please?
  (Mr Cowans) My name is David Cowans and I am the Group Chief Executive of the Places for People Group, which owns and manages something like 52,000 properties throughout England and Scotland and Wales, and we have five housing associations in the Group and have companies that deal with community regeneration, market renting, outright sales, so we have a full range of activities, and we work in about 200 local authorities.

  Chairman: Thank you very much.

Ms King

  3. I will get the ball rolling with a very basic but important question. What do you think are the causes of empty homes?
  (Mr Cowans) There are lots of them, and one of the key issues is about trying to find a process to identify the reasons for decline in housing demand, and they can range, anything, from someone holding onto a building for investment value, and that may well need a change in the Compulsory Purchase Order Regulations; my view is that they radically need overhauling. The presumption is in favour of the developer, and not in favour of the state wanting to see the developer prove they are going to use that dwelling for a useful purpose, whatever it is; that needs changing. Right through to major market collapse; and I do not think that is necessarily just a northern problem either. We work in some of the southern port towns, where there is evidence of neighbourhood collapse there, in places like Dover, bits of Eastbourne; but these examples are more marked in many of the northern cities, especially the likes of Newcastle, north Sheffield, certainly many of the Greater Manchester towns, where whole areas have collapsed. And I see Brendan Nevin at the back, and I would commend the research that he and his colleagues did at CURS, in Birmingham, on the M62 study of housing demand; some important lessons came out of that work about how whole neighbourhoods can decline, leading to huge numbers of empty properties. And there are some early warning signs we ought to be aware of, like stock turnover in many sectors, where we could take some action to address those before the properties become empty. In a sense, dealing with empty properties is shutting the door after the horse has bolted, to be honest.

  4. So how much do the causes of empty homes vary according to the region?
  (Mr Cowans) Enormously. Areas of economic decline tend to drive large-scale market collapse, it is not the only factor but it is one of the major ones. Areas of homogeneous housing supply, so there are lots and lots of two- and three-bedroom properties, will tend to drive out bigger families, tend to drive out younger people, and if that area has a stigma or a poor reputation, that would tend to go along with large concentrations of either lower-priced private rented sector properties or lots of social housing, then that would also tend to drive out those people who might have an entrepreneurial skill or some economic power and those areas will decline over time. There is lots of evidence of that.

  5. My last question on this point will be, presumably then you would think that Government policy should vary accordingly between regions?
  (Mr Cowans) Yes. The way I like to think about it is to have a process within planning guidance where the local authority takes a key role in understanding some of the core reasons for empty property, or turnover, or emerging signs of decline, and puts together a tool kit of appropriate responses, which may well be a revamped and harder hitting CPO system, in the case of an individual dwelling, and it may well need multi local authority market renewal type approaches in places of large-scale neighbourhood collapse.

Mrs Ellman

  6. Can you anticipate when a neighbourhood is going to go into decline; can you anticipate it?
  (Mr Cowans) There are lots of things. There is anecdotal evidence. A lot of my colleagues, who work in the front line of our organisation, tell me that when the local pub closes then there are serious worries about the neighbourhood. There is more quantifiable evidence. There is evidence, and it is different in different regions, that if turnover rates get to about 16 or 20 per cent then the area starts rapidly to decline. The example that we are aware of most in the west end of Newcastle, where the neighbourhood decline happened rapidly, it went from a reasonably okay, large council estate to absolute disaster in about three years; the speed of the neighbourhood decline was so quick that it was outwith the development process. So people were still building properties in the belief that the property would be let, because they had started the development process four years ago, and when the houses came out of the stocks nobody wanted them. The speed of neighbourhood decline is so fast that our traditional development processes cannot cope with it. So that would argue for market intelligence well before anybody builds anything, so we build things that people are going to live in. There are lots of other examples, like the shops go dead first, you can tell that there is tenure change, so people move out of the `right to buy' properties if they can, the market rental sector move in, they let it to people on high rents for housing benefit.

  7. Can anything be done, once that process has started?
  (Mr Cowans) Yes. I think one of the quick things we can do is reduce supply immediately; and, secondly, try to understand where the decline has started, because it has never just started right across the whole neighbourhood at once, it tends to start in particular pockets and then spread. If you can identify where those things start, you can often try to stop them. And the other issue is that an overemphasis on a housing issue often misses the prime cause. Often the cause is anti-social behaviour, or crime, or a rapid increase in unemployment in a particular area; so we have to have a much broader view to understand what is happening and then put the right tools in place to deliver a response.

  8. Who should be identifying that?
  (Mr Cowans) I think the local authority has a key role to play, as the people, frankly, much closest to the ground. In my previous incarnation I was Director of Housing for Birmingham, and we had a process of housing requirement studies, we did not call them need and we did not call them demand, we tried to get a sense of total housing requirement. It was a corporate initiative, so planning, economic development and housing departments, all collaborated in trying to understand what the City's housing requirements were now and were likely to be in the future. If there is going to be a statutory requirement on the local authority, my view is that they should be required to do that,[1] not necessarily just have an empty homes strategy, because an empty homes strategy, by definition, would be driven by that broader understanding of the housing market.

  9. Should the Registered Social Landlords be conducting regeneration themselves, or should that be done by other agencies?
  (Mr Cowans) I take a very strong horses for courses approach to that. We decided, just to use an example of my own organisation, that if we were in a neighbourhood and that neighbourhood looked like it was exhibiting decline, we could not wait for maybe two or three years to put together a very complicated consortium of agencies, we needed to do something quickly; so we set up our own community regeneration company, and that works quite well. But I would not suggest that it can do everything and I would not suggest it can do anything on a very large scale. So it would depend what the problem was and it would depend on the skills and the capacity of the local agencies, whoever they might be, to deliver it.

  10. But who should be responsible for deciding who does what?
  (Mr Cowans) I think the local authority should have a strong role to create neighbourhood plans, very much along the lines of the local strategic partnership approach. My own view is that there is some strength in contracting out the delivery of that, because one of the issues that is not addressed in your terms of reference is the role of the private house-building industry, and they will not thank me for saying this but they take 10 to 20 per cent gross profit on every property they sell; that then goes out of the neighbourhood. There must be processes of capturing some of that, and I think Section 106 planning agreements try to do that but in a very pepper-potted, site-based way; there must be a way of capturing that in a more larger-scale, strategic way, to bring that cash back in to help cross-subsidise some of the market restructuring work that is necessary in declining neighbourhoods.

Mr Cummings

  11. I was very interested to hear what you had to say about the local authorities taking the initiative, and I happen to subscribe to that idea. We are also well aware that one of the associations which you are involved with has extensive properties in the area which I represent, and it is as if everyone has to take initiatives apart from that particular housing association. Now I remember the housing association and many years ago it was progressive, it was tenacious in the way in which it looked after its properties and its tenants; now, it is a matter of filling properties at any cost. But where does the responsibility of the housing associations lie within the overall context of empty homes, homes which, to all intents and purposes, should be demolished, along with the many hundreds in the Easington district which are being demolished by the district council? It is a bit of a background as well, because it is coming across here, you see, as if you are whiter than white.
  (Mr Cowans) That is not my intention. I think there are lots of markets where my organisation currently operates where there are severe difficulties, and I think I know where you are talking about. And we have already demolished properties in Newcastle. I completely agree with you.

  12. It was not Newcastle I was talking about, it was Easington.
  (Mr Cowans) I know that, I know all about it. But it is difficult really to respond to individual cases. I am more than happy, if you were to communicate that to me, we would pick it up.[2]

  13. It is just that you made very little reference to this, you see, in response to the questions asked by my colleague?
  (Mr Cowans) If we are doing what you say then that is wrong.


  14. How far is there pressure on the housing associations to fill properties because of the lack of income if they do not; so getting someone in to meet the requirements of bringing in income, how important is that?
  (Mr Cowans) There is a pressure there, it would be nonsense to say there is not. One of the issues we tried to raise in our memorandum was, to be honest, we invested in areas when a grant regime where 100 per cent of capital costs was in place and there were revenue grants for management. To be honest, that equation looks considerably different now and may well have led to us not investing in those areas; but, nonetheless, we and lots of other RSLs did invest there, and there is obviously a pressure for us to try to get people into properties in order to generate rent. There is also a countervailing pressure to make sure that we do not actually, as your colleague described, just put anyone in that property, because that does not build a sustainable neighbourhood. So there is that balance always to be made, that tension is there, yes.

Chris Grayling

  15. A couple of points, taking you on from a couple of things you have mentioned. Do you therefore think, we have urban planning in this country that plans for the growth of towns, should we have urban planning that plans for the reduction of towns in a systematic way; so, instead of designating an area of land for future development, designate an area of existing development for return to Green Belt, or whatever, so you manage it? If you take a city like Liverpool, which has declined over the years as people have poured out and started to live in places like Warrington, should there be a very clear city plan for a place like Liverpool that manages its reduction into a smaller community?
  (Mr Cowans) The answer to that is, definitely, yes. It is an inevitable consequence of social and economic change, and forms of market intervention may well do that, to completely reduce supply of housing in all tenures or in particular ones in a planned way.

Dr Pugh

  16. Just pressing you on the role of the local government, which you seem to give a primary and very, very important role to. Can I express just a little bit of scepticism, in the sense that the local government do not control the housing market totally, they are not responsible for primary legislation, and the tools they have got are often very feeble to actually do the job. When you see the sign of, when the local pub actually closes down, the town clerk does not have the capacity to reopen it, or get the brewery to do anything about it. Taking that sort of scepticism on board, can you think of any instances where you have seen the danger signs, you have seen the local government intervene, and with current tools that they have got they have managed to arrest the development; is there any empirical evidence that it actually works?
  (Mr Cowans) There are some examples of urban renewal type approaches in the private rented sector and the low-cost home ownership areas where that has happened. Parts of Manchester and Birmingham can exhibit good examples of that; but it required massive state intervention, in terms of cash, to arrest those areas.

  17. So the resuscitation process took place but it did require a massive effort?
  (Mr Cowans) Exactly. Those resources are there, and there is a degree to which we try to illustrate this in our memorandum, that even where we are able to deal with massive turnover it is not sustainable, because, fundamentally, there is an oversupply in those particular areas that we need to do something about demolition is an obvious solution, so is a change of tenure of some of those properties. But a good example that we are currently working with is Newcastle City Council's `Going for Growth' strategy, where, right across the City, they have put a very clear vision together of the sort of city they would like to see, some areas in decline, some areas in growth, and they are trying to manage those. The interesting thing is the way they are trying to deliver it; so they will take a sector plan, covering a whole part of the City, and then they will go out to competition, but the bidders have to demonstrate how they are going to bring resources in. Because it tackles this issue, of course local government does not have all the resources it needs, but there are lots of other people who do, and in consortia they can come together, so the local authority take the role of community advocate, does work with local communities, understands what is required in an area, and then it advertises for master planners and deliverers to come in and do it. Now that is an interesting model.

  18. In your view, the local authorities currently have the existing tools to resuscitate neighbourhoods, they do not need any further powers?
  (Mr Cowans) No. They have substantial planning powers, they have substantial clout, in a local area, and they have a tremendous capacity to draw together the correct range of consortia to deliver things. Where I think they have weak powers is in compulsory purchase orders, and I think they should be strengthened.

Christine Russell

  19. A few moments ago, David, you mentioned anti-social behaviour in unpopular areas. Obviously, there are a number of Government initiatives around at the moment, designed to tackle crime and anti-social behaviour. Can I ask you your opinion as to whether you feel those initiatives are going any way towards meeting the concerns of residents living in unpopular areas; and if the answer is not enough then what more could be done?
  (Mr Cowans) This is one of the most difficult areas to talk about, because the answer is, it is a bit like the curate's egg, it is good in parts. Some of the changes that have been introduced have been good; anti-social behaviour orders have been a good thing, not that they are taken up in anywhere near the level that they need to be. There is enormous pressure on local communities from particularly anti-social individuals, and you can often trace two or three individual households who can blight a whole neighbourhood by their activities. Going through the process of actually dealing with them is long-winded, it is difficult, it requires evidence that often people are too frightened to give, and it costs a lot of money. And I can only give examples from my own organisation; we are now spending something like £100,000 a year on legal costs just in dealing with cases of anti-social behaviour. So actually the pressure is on the landlord, in a sense, together with a range of other agencies, like social services and the police; but it is long-winded, it is complex and there is always a balance about protecting the rights of the individual being complained about as well as the rights of those who complain. So it is a very difficult area. So, yes, it is moving in the right direction; but if you were to ask local communities, and they tell me often, it is too long-winded, they do not see a result quickly, and it seems, from their point of view, like there have to be hundreds of them complaining before anything happens.

1   Note by witness: Create a model of the local housing strategy. Back

2   Note by witness: Following the evidence session I wrote to Mr Cummings in connection with the properties in the Easington Constituency. (This letter will be published as a supplementary memorandum). Back

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