Examination of Witnesses (Question Numbers
WEDNESDAY 5 DECEMBER 2001
409. Can I welcome you to the second session
this morning. Could I ask you to identify yourselves for the record.
(Mr Coulter) Good morning, Chairman. I am Jim Coulter,
Chief Executive of the National Housing Federation, on my left
is Liz Potter who is our Policy Director, and on my right is Aaron
Cahill who is one of the policy officers in Liz's department.
410. Thank you very much. Do you want to say
anything by way of introduction?
(Mr Coulter) I am conscious of the time constraints,
but may I say very briefly that critical to our understanding
of what needs to be done is a series of policy interventions and
resources to back them which deal with strategies at regional,
sub-regional, local authority and neighbourhood level because
it is very clear from all the evidence that you have had that
problems vary at each of those levels. So, on the one hand, we
have spent a significant amount of time concentrating on the problems
of failing markets and the need for market renewal, largely in
the Midlands and the North, and on the other we need to be more
efficient on stock use, particularly empty stock in London, for
example, where the demands of homeless people are greatest. So
there are very big contrasts and we want to work through those.
We have made a significant submission to government in partnership
with the Local Government Association and the Chartered Institute
for Housing for the Comprehensive Spending Review next year and
we would like to hand that to your Clerk as part of the supplementary
briefing for you.
Chairman: Thank you. Christine Russell?
411. Your evidence seems to suggest that every
effort should be made to maintain existing stock rather than demolish
and replace. Is that your view?
(Mr Coulter) I t is a combination of things that we
are saying. Clearly there is a requirement to get best practice
and efficiency into the use of stock. In the social sector the
evidence at the moment is that short-term voids are declining
in their proportion, and longer-term voids are increasing. I think
that points up to the problem I alluded to in the opening remarks
that we see in significant parts of the country, particularly
the North East, North West, Yorkshire and Humberside and the West
Midlands, where there are growing problems of market failure.
The Government has set a detailed programme with a decent homes
standard for the social sector, which can be delivered with the
resource base coming in if that is sustained in the spending review,
but if we have a continued market failure across tenure then that
is at risk in the social sector on the one hand and, on the other,
hearing some of the evidence you have just had, you have got the
problems of failing markets in some of those Northern and Midland
cities and towns. There is a combination of policy actions required
to maximise existing stock use but also, we think, to rationalise
stock through the creation of what we have called a Market Renewal
Fund, which does require new resources and new structures to get
policy and resource interventions to balance the market and create
more housing markets with positive value rather than negative
412. In some areas properties are being demolished.
In your view are the right properties being demolished?
(Mr Coulter) There is a mixture there. Perhaps my
colleague could add some more detail to what we have been talking
about this issue.
(Ms Potter) It is quite difficult to set the right
balance between clearance, new build and refurbishment, and it
will crucially depend on the needs of a particular area. It is
also important that the area is not too small because otherwise
if you have intervention in one area you can cause problems in
other areas. The Market Renewal Fund proposals specifically talk
about working across local authority boundaries looking at areas
where there is a critical mass population of upwards of 100,000
and then looking at what the particular needs are that are appropriate
for that area. That will partly depend on the level of economic
activity in an area and it will depend on particular characteristics
of the type of housing and review quite strategically what is
sustainable and what is not. If I can give you an example of a
Northern Metropolitan area. There is an inner core of about 75,000
properties which are particularly at risk, there is an outer ring
also at risk but slightly less so, there are suburbs around that
which have got very good prospects, and then there is some low
demand peripheral areas where there are concentrations of social
housing. For an area like that, it is important that there is
a strategic review of what needs to be done with those different
types of housing. The work that has been done in that area suggests
that about 120,000 of those properties out of 150,000 are sustainable
but about 30,000 would need to be cleared. It is important in
clearing properties that you are clearing the right ones and also
that you sequence how you do that clearance because you do not
want to send an area into free fall, you do not want to clear
it and then find that there are new build properties put in which
then make the problem worse in other areas. It is about strategic
intervention that is planned and agreed with stakeholders in the
areas with regard to whatever business activity is possible, thereby
providing sources of jobs and working with residents and stakeholders
to agree a broader strategic plan before deciding where clearance
is appropriate, where refurbishment may work and where new build
may follow. Significantly it should follow rather than come ahead
of refurbishment because that would accelerate decline.
413. Do you have a definition of what is a sustainable
(Mr Coulter) I do not think anybody has that. That
is the holy grail. We are not quite at the Monty Python stage.
I think we are a bit beyond that with some of our policy proposals,
but we will never take out absolutely all risk from those areas
because the housing and economic market relationships will fluctuate.
414. Do you feel RSLs should have more scope
to withdraw from an area where it is pretty obvious that the area
is heading for housing market failure which is obviously putting
that particular RSL's business at risk? At the moment it is quite
difficult, is it not, for social landlords to pull themselves
(Mr Coulter) There are conflicting pressures here.
Clearly as independent organisations which face risks, it is one
set of issues which boards and senior executives have to consider.
On the other hand, housing associations are part of a community's
fabric in the same way local authority housing is part of a community's
fabric. The difficulty of unco-ordinated action is that you may
resolve the business problem for one organisation but you will
not necessarily resolve the fundamental area problem so there
is a need for a strategic approach and joint activity and action.
In Manchester, for example, the Federation, the Housing Corporation
and local authority are seeking to establish a framework where
we look at the impact of neighbourhood management policies and
work together on how investment decisions or re-investment decisions
are taken by the local authority and by the housing associations
in the area, how new activity may be brought on stream to replace
housing that has no longer got any use and also how services might
be better co-ordinated. I would certainly, as the Chief Executive
of the trade body, discourage our membership from taking individual
decisions because they may solve their own problem but simply
ripple out the problems to other organisations.
415. Have you examples of associations within
your Federation where the board has taken a decision that their
continued operation in a particular area is not available and
then found that that has led them into financial difficulties?
(Mr Coulter) No. I think there are examples of organisations
who are rationalising their stock in two separate ways. Some of
the larger national organisations which work across the countryand
I can give you the example of the English Churches Housing Group
which works across two-thirds of local authoritiesthey
are looking at a programme of consolidation of their stock into
more effective management units and disposal helping to consolidate
in some local areas the stock of other RSLs.
416. Is that an excuse for them to get out of
some of the more difficult bits of the market?
(Mr Coulter) Their strategic approach is about making
sure organisations on the ground whose property portfolios may
not be large enough to manage those risks have a more consolidated
portfolio. These are willing exchanges, they are not organisations
who are dumping their problem elsewhere. The Regulator, the Housing
Corporation, is involved with the technicalities of disposal consent
to do that.
417. You refer to a strategic approach for areas
of deprivation and the question of revitalising a housing market
in areas is another issue that has to be addressed. Is there an
effective body, either regionally or nationally, with responsibilities
for ensuring revitalisation of areas either in the private sector
or areas where the neighbourhood is in decline?
(Mr Coulter) In our view this is the major policy
gapthat there are different initiativesbut we are
slipping down the middle of the different parts of local government
and governance and national policy initiatives delivered on the
ground. The evidence is that housing regeneration spending has
been declining because the regeneration costs of capital and revenue
funding have become more specialist and the creation of the single
regeneration budget transferred to the RDAs has led to less housing
spend through the SRB. You heard the evidence of the New Deal
for Communities and the Neighbourhood Renewal Fund and how the
housing connection for the neighbourhood is not being strongly
made, so there are disconnections there, and the point which my
colleague Liz Potter was making about the cross-boundary problems
of markets is also something where there is not an established
institutional framework to deal with that. So part of the thinking
behind the market renewal approach is as the regional governance
involves responsibilities at regional level to co-ordinate either
through the local government offices in the regions or, where
they become established, the elected regional assemblies, there
should be a framework for strategic decision taking to co-ordinate
these different activities and investment streams in order that
we do not have these gaps.
418. What does your research show the amount
of money that would be needed at this moment in time to carry
(Mr Coulter) We have estimated figures over a ten-year
period of up to £5 billion for this proposed fund.
419. There is a statement by the Government
on 16th November about the Generalised Needs Index. Does this
show any indication as to the introduction of low demand areas
and the problems that go with it?
(Ms Potter) It helps a bit. It is not sufficient to
deal with the sort of issues that we are talking about in terms
of renewing a whole market. What it does is to increase resources
towards the north by about two per cent, which is a redistribution
factor of about £15 million, which helps a bit. It is slightly
offset by the fact that the Housing Needs Index has gone the other
way, resources for housing associations have gone the other way,
so that there is a factor pushing investment for new build housing
to the south. What we would like to see is the way resources are
resolved for regeneration should be separated from how resources
are agreed for new housing need.
1 Note by witness: Available on the National
Housing Federation website: www.housing.org.uk Back