Select Committee on Transport, Local Government and the Regions Sixth Report


The need for a new strategy

101. The Minister responsible for housing, planning and regeneration told us that the Government's commitment to turn around the incidence of low demand by 2010 was realistic.[229] On the other hand, we heard serious concerns from the Government's own agency, the Housing Corporation, which said that "with current resources we could not solve the problem."[230] On the basis of the evidence that we have received, the Department will not be able to meet its commitment to turn around the incidence of low demand by 2010. We recommend that it develop a realistic programme for the period between 2002 and 2010, including interim milestones so that progress towards the target to turn around the incidence of low demand by 2010 can be monitored.

102. Government Department's agree performance measures with the Treasury, known as Public Service Agreement (PSA) targets. The DTLR has a PSA target to "ensure that all social housing meets set standards of decency by 2010." We have heard concerns that this target does not reflect the multi-tenure nature of failing markets and that the DTLR has tended to prioritise social housing issues as a result of having such a PSA target. Riverside Housing Association commented, "The Government has set a decency standard for the public sector but they have not followed it up with a decency standard for the private sector and private sector renewal has fallen through the gap."[231] We agree with Burnley Council's recommendation that "the Public Service Agreement national targets should be amended to include provision for [decency standards in] private sector housing."[232]

103. Overall, the problems with the Neighbourhood Renewal Strategy are such that there is now a body of evidence that the existing framework created by the Social Exclusion Unit, is inadequate to bring about the change required to low demand housing markets. The National Housing Federation said

    "In our view this is the major policy gap-that there are different initiatives-but we are slipping down the middle of the different parts of local government and governance and national policy initiatives delivered on the ground."[233]

104. The evidence we received was supported by the team preparing the Community Cohesion report who visited Burnley and were "particularly struck by the low demand for private housing."[234] They called for a strategic approach, specifically directed at this problem:

    "Whilst the problem of low demand housing is largely outside our remit, the social and economic conditions that this problem is creating is such that it will overwhelm the capacity of all agencies to be able to respond to other aspects of regeneration. Housing is clearly capital intensive and firmly related to particular areas, whereas many other aspects of regeneration are more 'people led' and will be shorter term programmes of support. This seems to imply the need to develop some separation within neighbourhood renewal, to ensure that such different approaches are not in competition with each other and that the capital required in areas like the North West can be identified."[235]


105. To address the concerns raised about the existing policies, many of the submissions that we received called for a housing market renewal approach. Through Housing Market Renewal Areas, local authorities, housing associations and other partners should agree a plan for the renewal of the conurbation, to maximise private sector involvement and to develop a more appropriate mix of types, tenures and sizes of houses in the area over a long period of time to encourage people to move back to inner urban areas.[236] Such an approach needs to be based on an understanding of the economic viability of an area and a recognition that demographic and economic pressures vary from place to place. It needs to consider how change can be managed and how the needs of new and existing residents can be taken into account.

Creating areas where people want to live

106. The Neighbourhood Renewal Strategy tries to save the most deprived neighbourhoods. To bring about housing market renewal we need to find ways to create cities or conurbations where people want to live. This will include people who already live there and those who might be attracted there. As a lack of choice of tenure, type and size of property is one of the causes of housing market decline, proposals for housing market renewal need to be predicated on making inner urban areas more attractive, including increasing choice, by the creation of new housing in which people want to live. This might be in high density mixed flats or the "decent family homes with gardens"[237] which a Durham resident requested. In some areas, the vibrant city centre economy means that there is potential demand for a mix of housing that meets modern aspirations, if the areas can be presented more attractively. Both Birmingham[238] and Manchester[239] Councils described the need to build different styles and sizes of houses, that would attract and retain affluent families to inner urban areas within their growing city economies. Bill Stevenson, Chairman of Bellway Urban Partnership explained,

    "These are areas we generally refer to as the 'doughnut' and the only way we can do it is by radically changing them. One of the papers you have referred to the Hulme estate in Manchester, which was radically changed. That did draw back people in considerable numbers and that was part of a doughnut that succeeded, so it can be done but the scale and quality of what has to be done is considerable."[240]

We visited Hulme in Manchester. We saw how a low density, social housing area had been replaced by a mix of private sector and housing association stock, at much higher density, with better transport links to the employment opportunities in the city centre.[241] Similarly in Glasgow:

    "The Greater Glasgow Housing Choice Survey (1994-96), sponsored by the council and its partners confirmed that many people currently working within the city but living outside would potentially purchase houses in Glasgow if there was a better supply of low rise, family housing, situated in quality neighbourhoods. Planning for area renewal can therefore proceed on the assumption that there will be no difficulty in selling new private housing of the right type and quality."[242]

107. In other areas we visited, with very different local economies, such confidence would be misplaced. These areas report a surplus of housing, not all of which is expected to be replaced. During our visit to Bootle we heard how as many as 4,000 properties will need to be cleared over the next 20 years and many may not be replaced.[243] Similarly in Burnley, "After allowing for normal vacancy rates, it is estimated that there are more than 2,000 privately owned houses in excess of the existing and foreseeable number of households."[244]

108. A policy of selective demolition and in some places replacement with a greater choice of more desirable properties, requires considerable planning. The National Housing Federation argued that significant demolition and replacement schemes should not be undertaken without a clear strategy:

    "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 that are 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 area 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."[245]

The processes involved in developing such strategies must be quick and transparent and a short timetable must be set to try to avoid communities being blighted by demolition proposals.[246]

109. Strategies for demolition should be mindful of the opportunity to retain some older houses, where they are in good condition, as part of the development of mixed areas. For example,

    "Many of Birmingham's pre-1919, 'front of pavement' terraced houses, they have reached the end of their life... structurally, in terms of condition, in terms of the maintenance costs to keep them in that form. Pre-1919 villas, larger three and four-bed homes, do have a future, tend to be built later and to a better standard. So within that terraced owner occupation stock lie a number of communities and a number of solutions."[247]

110. Alongside changes to the housing stock, changes in tenure are required, particularly an increase in owner occupation:

    "If people have a continuing stake in their communities they may well be more likely to participate in community life more generally and an area that has a continuing succession of transient families has precious little wherewithal to turn around the problems that it faces, I would always say that communities that have families which have a continuing stake in the quality of life, the vibrancy of local institutions there, will have a better prospect of fighting their way out of decline."[248]

111. Increased choice in tenure, sizes and types of home is essential to bring about change in inner urban areas. The changes required will however vary from place to place, reflecting the economic viability of areas. We recommend that a clear conurbation-wide strategy and masterplan for the redevelopment of the area should be in place before any significant demolition begins. Strategies must be developed swiftly and sensitively to try to minimise blight. Where proposals are developed to reduce the number of houses in an area, particular attention needs to be paid to creating sustainable future uses for the sites. Demolition strategies should also take account of the value of retaining some older buildings in creating housing choice.

Intervention across the conurbation

112. Birmingham City Council described how local authority boundaries do not reflect coherent housing markets and how this new approach should be based on the geography of urban housing markets and not administrative boundaries.[249] Such an area might be a conurbation such as Greater Manchester or Merseyside or a sub-region, such as East Lancashire. The Housing Corporation's Director of Investment and Regeneration (North) said, "We have to create conurbational strategies"[250] and we have used the word 'conurbation' to describe the large area necessary for housing market renewal, in the remainder of this report.

113. A conurbation-wide approach allows planned, strategic interventions across working, at risk and failing housing markets, in order to ensure that the interventions do not simply undermine housing markets in neighbouring areas. The National Housing Federation described their proposals for a Housing Market Renewal Fund which, work "across local authority boundaries, looking at areas where there is a critical mass of population of upwards of 100,000 and then looking at what the particular needs are that are appropriate for the area."[251] Bellway Urban Partnership's memorandum confirmed the need for intervention to be on a large scale, to enable viable private sector involvement,

    "Developers cannot function where the cost of development greatly exceeds the revenue it will deliver. Such redevelopment needs to take place on a macro scale for the change of neighbourhood to be significant... However, experience has shown that if we redevelop on a very large scale over a long period of time then revenue will in time rise to a level that supports the cost (Manchester City Council experience in areas such as Hulme supports this view)."[252]

Greater co-operation between local authorities is essential to enable a successful conurbation-wide approach to be implemented. The Report of the Unpopular Housing Action Team placed great importance on the role of local authorities[253] but the Minister agreed that the issue needs to be dealt with "by a much wider body and "to be looked at on a sub-regional basis rather than just a local authority basis."[254] A new approach to housing market renewal must be based on the whole conurbation or sub-region, which will have within it working, at risk and failing housing markets. We support the view that proposals for housing market renewal areas should be based on close co-operation between neighbouring local authorities and housing associations, supported by much better integration of planning and housing policies, with close monitoring of outcomes.


114. Manchester City Council's memorandum suggested that a period of 10-20 years would be needed to bring about housing market renewal: for analysis of the local housing market, planning, consultation, site assembly and development of housing.[255] The National Housing Federation agreed that 20 years would be needed. In the early years significant public investment would be required to restore values and confidence in the housing market. Once that was achieved private finance could be attracted.[256] It is clear that housing market renewal will take a long time and that new interventions will be required to start soon to prevent the problem of failing housing markets from getting worse.


115. Turning around large areas with failing housing markets to make them attractive to potential residents will be expensive but the social, financial and community costs of not investing might be even bigger. The Government Office for the North West told us:

Continuing the recent small scale, piecemeal investment in houses and neighbourhoods without a large, long-term strategic approach, will result in more money being wasted, as we saw in Lightbowne in Manchester, where houses were renovated but nobody wanted to live there.

116. Much can be achieved through preventative action such as insurance and guarantees but significant additional funding is needed to address the problems of areas where demand has completely collapsed. Funding is required for compulsory purchase of privately owned properties, compensation for home owners in negative equity, demolition, gap funding for private sector developers, community consultation and new build in the social sector. The redevelopment of Hulme in the 1990s, for example, received a public sector investment of £200 million and did not require the purchase of privately owned houses.[258] The North West Housing Forum's memorandum stressed the additional costs that arise from working in a mixed tenure area and reported that clearance of privately owned houses costs over £20,000 per unit compared to £2,300 per unit for local authority properties.[259] At the end of our visit to the North West, the Housing Corporation said,

    "I do not think we have sufficient resources in place to tackle some of the things you have seen in the last 48 hours."[260]

This was confirmed by Sefton Council, which argued that there was insufficient funding available through existing programmes:

    "The projected costs of intervention are staggering... The potential costs of undertaking this strategy cannot be met by current funding streams of Housing Investment Programme, Approved Development Programme or Neighbourhood Renewal Fund."[261]

117. The National Housing Federation, the Chartered Institute of Housing and the Local Government Association have therefore made a submission to the Comprehensive Spending Review for a Housing Market Renewal Fund. The submission estimates that additional resources of at least £6-8 billion would be required over a 10 year period.[262] The Secretary of State, Stephen Byers, MP, told the Committee that

    "We will do something about it in terms of the Spending Review for 2002. It is no secret to say that one of the main submissions that the Department will be making will be to get additional funding to address these particular concerns and the market renewal aspect is, I think one of the interesting parts of the proposal that we will be putting forward."[263]

118. As some inner urban areas become increasingly unattractive and residents continue to leave, the social and financial cost to the remaining residents, businesses and public services increases. Without Government investment in housing market renewal, these areas will become increasingly difficult and expensive to manage. We welcome the Department's commitment to make a submission for a Housing Market Renewal Fund as part of the Comprehensive Spending review. This must be treated as a priority by Government as a whole. Significant additional funding is needed alongside new strategies and powers, so that the target to turn around the incidence of low demand can be met. The urgent need for preventative measures to stop more neighbourhoods slipping into decline and the associated increase in costs, is considered in greater detail below.

229   Q 618 Back

230   Q 526 Back

231   Q 145 Back

232   EMP28 Back

233   Q 417 Back

234   Op cit, Paragraph 5.12.4 Back

235   Op cit, Paragraph 5.12.5 Back

236   See for example, Manchester City Council, EMP23 Back

237   Letter from the public, 7 Back

238   EMP64 Back

239   EMP23 Back

240   Q 468 Back

241   Note of visit to the North West Back

242   EMP89A Back

243   Note of visit to the North West Back

244   EMP28 Back

245   Q 412 Back

246   Q 310 Back

247   Qq 85-6 Back

248   Neighbourhood Renewal Unit, Q 569 Back

249   EMP64 Back

250   Q 198 Back

251   Q 412 Back

252   EMP84 Back

253   Op cit, Paragraph 1.13 Back

254   Q 620 Back

255   EMP23 Back

256   Q 422 Back

257   Government Office for the North West, Q 200 Back

258   Note of visit to the North West Back

259   EMP33 Back

260   Q 180 Back

261   EMP75 Back

262   Paragraph VI, Securing Housing Market Renewal, A Submission to the Comprehensive Spending Review, Produced for the National Housing Federation in collaboration with the Key Cities Housing Group and the Northern Housing Forums, November 2001 Back

263   HC373-iv, 16 January 2002, Q 668 Back

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