Examination of Witnesses (Questions 70-79)
NEALE COLEMAN AND DEBBIE MCMULLEN
WEDNESDAY 12 JUNE 2002
Chairman
70. Can I welcome you to the final session this morning. I am sorry we are overrunning a little bit. Could you identify yourselves for the record, please?
(Neale Coleman) I am Neale Coleman. I am the Mayor of London's Senior Policy Adviser on housing.
(Debbie McMullen) I am Debbie McMullen. I am Principal Planner and Strategy Adviser for the GLA.
71. Thank you very much. Do either of you wish to say anything by way of introduction or are you happy for us to go to questions?
(Neale Coleman) I think we are happy for you to go straight to questions.
Mr Cummings
72. Can you briefly outline to the Committee the policies which you expect to be included in your London Plan to achieve affordable housing in London?
(Neale Coleman) I think it is important to start from the point that Richard Best was making that we will want to see policies that increase the overall supply of housing in London. I think that is a critical underpinning for getting more affordable housing. That is partly about encouraging high densities, but there is a range of other issues there. To turn directly to the point you ask, I think the Mayor has made it clear in a number of statements that his aspirations and his target is to see 50 per cent of all the new housing that is built in London to be affordable and to have a broad split that 35 per cent should be traditional social rented housing and 15 per cent should be—what has come to be called by some—intermediate housing, that is housing for people on low to moderate incomes. Essentially we will be asking the boroughs in the Plan to use a range of targets that, when they negotiate on individual sites, we believe will make such a target possible, subject to a number of other important conditions about the availability of public subsidy and other planning policies. So the broad thrust of what we will be doing will be to press the boroughs to maximise as far as they reasonably can, the provision of affordable housing through their planning policies. We will want to leave a lot of room for manoeuvre and flexibility around individual sites. We believe that given the right conditions in the areas I have described our research indicates that it should be possible to produce 50 per cent affordable housing from the total quantity of new build in London.
73. You estimate that there is a need for 25,700 new affordable homes a year in London. Would you tell the Committee on what basis you reach that assumption and, perhaps more importantly, how it can be achieved?
(Neale Coleman) I think the assumption is based primarily on the work that the Mayor's Housing Commission did over a three or four month period shortly after his election when they carried out as detailed an assessment as they could of the need for affordable housing in London based on the data we have and trying to follow, as far as possible, the Government guidance on assessment of housing need. We have slightly modified the assessment in the Housing Commission's Report because there was some additional work—very detailed work—which has been done looking at household growth in London since then. Our current planning assumption is that household growth in London over the next period to 2016 will be 20,700 households a year. That is a reduction on some of the previous estimates. The Housing Commission built up an estimate—based on looking at income data and housing need surveys in the boroughs—that just under a quarter of new future houses would be likely to be affordable housing. So you have 5,000-odd extra units a year to accommodate new household growth. We also looked in some detail at existing housing need in London, that is people who are in temporary accommodation, who are concealed households, who are sharing amenities, and the calculation there was that there were 112,000 households in London at the moment who were either homeless effectively, in temporary accommodation or badly housed to the extent that they needed a new home. It is the Mayor's objective to try to clear that backlog of existing need within a ten year period. So that gives you another 11,200. You add that to the 5000 that you had. You have a need to replace stock lost from Right to Buy—where we have a Housing Commission estimate we have used of 2,000. Because prices are rising you have a further number of households who, over the period, will be priced out of being able to buy. We add another 2,500 for that. The Housing Commission also included an initial target of 5,000 for intermediate housing, for workers on low or moderate incomes. If you add all those numbers I have gone through together you come to the 25,700. How far it will be possible to achieve a number as high as that depends on quite a range of other matters. Plainly we are looking, from the planning system, to get 10,000 a year. We would be delighted if we were able to achieve that. There is a lot of work that needs to be done by a lot of people in order to get to that level. That is not getting you near the 25,700 and I think what the Housing Commission and others have recognised is that you have to have a very broad range of other measures. You have to deal with empty properties, you have to look to the private rented sector (and I very much agree with what Richard Best said about the need to get more out of the private rented sector). We need to look at more mobility opportunities for tenants that want to move—
Chairman: We have to watch the time a little bit.
Mr Cummings
74. You have mentioned that the Commission suggests 7,500 of the requirements should be intermediate homes. How did the Commission arrive at that figure? Do you believe it to be consistent with all the evidence of problems in housing key workers in London?
(Neale Coleman) I have to say that that figure of 5,000 is not exactly completely a finger in the air, but it is not frankly a great deal more. There is not much research which has been done in this area. We know, as you say, there is enormous pressure for housing for key workers. One of the things we are doing at the moment is trying to build up very substantially the evidence base for this. We have two or three very big pieces of research going on, one being carried out under an SRB Partnership led by Peabody Trust, and another one being carried out for us by Llewelyn Davies. We also have a very large household survey of London, a survey of 10,000 households, where we are just getting preliminary results in. I think these three pieces of work will enable us, over the next six to nine months, to come up with some very much more soundly based figures. I have no doubt that the 5,000 figure is justifiable as a minimum aspiration, but I have to admit to the Committee that we are still at this stage in the process of building up the evidence base for what the real needs are.
Mrs Ellman
75. Is there enough physical capacity within Greater London to build the houses needed?
(Neale Coleman) I think we believe that there is. We have carried out a detailed housing capacity study which demonstrated that we could produce 23,000 homes a year. That was signed up to by all the boroughs. That was one of the best capacity studies we have done. We think we can build on that. We want to do another capacity study immediately after we have the London plan adopted. We are already seeing that we are performing better than that in parts of London where we are getting higher densities. There has been quite a lot of work done both by the Government and ourselves on the potential for air space to produce new homes. We believe we can actually lift that target and we do not believe that there is a fundamental problem with the availability and capacity in London.
76. What about the capacity of the construction industry? Is that ready to meet the needs?
(Neale Coleman) I think that that may be an issue. I would not want to say anything too definitive about that. There is evidence that build costs have been rising pretty sharply in London over the last couple of years which is causing difficulties; we have certainly found that in some of the recent work we have done. There are a lot of other major commercial developments and some big infrastructure projects going on in London which are also placing big demands on the construction industry.
77. Are the building skills available?
(Neale Coleman) I think there is a real problem here. Part of the problem is the problem of availability of housing to house the construction workers. There is a real problem around skills training, the level of apprenticeships and all these issues.
78. How serious a problem is that in relation to meeting housing needs?
(Neale Coleman) I think it is a problem at the moment and it is reflected in build cost inflation over the last two years. How far it is actually holding back supply at the moment I would not like to say. I think that if we are going to get supply up further it is likely to be a constraint.
79. What can the Government do to improve the creation of affordable housing?
(Neale Coleman) The biggest single issue from our point of view in London obviously is the overall availability of public subsidy. This is absolutely critical and plainly we agree—and the Mayor would agree with the comments Richard Best made about the fact—that we really need to see alternative sources of supply coming in to the private house-builders at a much higher level. But even to produce the sort of stuff we want to get out of Planning Gain we have estimated that we need at least another £150 million a year for the Housing Corporation in order to underpin the achievement of the 50 per cent figure. That is by far the most important single thing that the Government can do. There are other issues around threshold policies, particularly around looking at getting contributions for affordable housing from commercial developments. But the public subsidy issue is fundamental.
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