Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by South East England Development Agency (AFH 51)


  1.  The purpose of this submission is to provide an overview of the actions being taken by the South East England Development Agency to facilitate the delivery of affordable housing in the South East region. It includes current SEEDA initiatives, identifies areas where there is scope for better joined-up working between public bodies, and suggests procedural changes that could increase the overall supply of affordable housing.

  2.  SEEDA is one of the eight Regional Development Agencies established in 1999. The Agency does not have a specific housing remit, but works closely with the main regional bodies, such as the Housing Corporation and the Government Office, for example in the preparation of the Regional Housing Statement.

  3.  SEEDA's role is to implement potential project solutions to the affordable housing requirements in the region, and this paper is therefore offered to the Committee on this basis.


  4.  In the South East affordable housing includes the need for low cost home ownership, social rented accommodation, shared ownership and privately rented accommodation managed by housing associations.

  5.  There is a significant shortage of social rented housing and the levels of income required to purchase a home in the region are beyond the means of many. Key Worker initiatives which target health workers, the police and teachers etc are welcome but there are many other employee groups on lower incomes such as transport and shop workers etc, that are essential to the economy of the region who are also experiencing real difficulties in securing accommodation. Therefore resources need to be balanced to provide a range of lower cost options including social housing and initiatives to assist those on lower incomes to become owner-occupiers.


  6.  The Regional Housing Statement identifies the provision of affordable housing as the "single most important housing priority in the South East". The Regional economic Strategy Review Consultation document issued by SEEDA in April this year identifies it as a significant problem for the region.

  7.  The lack of affordable housing affects the ability of business to attract and retain workers. Key workers in both the public and private sectors have difficulty in securing affordable accommodation. This is not only an issue for the more successful parts of the region such as the Thames Valley, but increasingly for less prosperous and rural areas.

  Current available public resources will not be sufficient to achieve the pace and scale of change in supply that is needed. For example, applications to the Housing Corporation was four times higher than the amount of available funding, many of the unsuccessful applications containing deliverable proposals for affordable housing. Increasing resources to the Housing Corporation in the SE so that it could provide a greater supply of social rented and shared ownership accommodation to support key worker initiatives would therefore make a contribution to the supply of affordable housing in perpetuity.

  8.  If these existing trends continue, and without intervention, pressure will build up in the housing market, further increasing costs, prices and rents relative to the rest of the UK which will impact on the region's competitiveness, and in turn the national, economy.


  9.  Despite the Government's clearly stated aims of directing housing investment to brownfield sites and increasing the density of development, this is proving difficult to achieve in practice in the South East. Traditionally, the private sector housebuilders have focussed on providing homes at low density on larger greenfield sites given the significantly high profits available and the totally elastic demand as people move out of London seeking high quality larger "family" homes.

  10.  In contrast, urban brownfield sites in the South East are often small (typically <0.4ha) with development constraints or complex or fragmented ownerships. Even where landownership is more straightforward, the landowners often have unrealistic expectations of value or are unwilling to sell. The net effect is that the potential contribution of smaller brownfield sites in the urban areas is not being realised.

  11.  At present, public bodies are compounding the problem by disposing of surplus sites to the private sector—on a "best consideration", rather than a "best value" approach which has the impact of increasing the subsidy already required to secure affordable housing.

  12.  In SEEDA's view, a substantial supply of affordable housing in the South East within the government's target for 60 per cent of all dwellings to be built on brownfield land cannot be achieved without a pro-active approach aimed at firstly tackling market failure to bring the small sites forward, and secondly, and most particularly, the limitations of existing policy relating to land disposals of major public sector landowners.

  13.  In this context, the proposals in the Planning Green Paper to remove the minimum size of site on which Local Authorities can insist on a percentage of affordable units is vitally important.

  14.  The Urban White Paper specifically identifies the need for RDAs and Local Authorities to assemble brownfield land to enable and accelerate an Urban Renaissance and using CPO powers where appropriate.

  15.  Unless brownfield land continues to be assembled, there is no prospect of the region being able to maintain a 50 per cent accommodation of homes on recycled land, let alone 60 per cent, or SEEDA's aspiration, as reflected in the Regional Economic Strategy and endorsed by the Regional Assembly, to exceed 65 per cent.

  16.  The type of housing required—ie substantially for smaller homes for couples, single parents or single person households—is not suited to traditional housing "estate" development. To establish sustainable communities, as noted in the Rogers Task Force, it is essential that these homes be retro-fitted into a presently active community.


  17.  SEEDA has therefore looked for practical solutions to the assembly of small sites, and also by bringing together all publicly owned assets—to be used in a way to accommodate these pressures.

  18.  SEEDA's main activities to facilitate the delivery of affordable housing in the South East region have been through:

    —  developing the concept of a Brownfield Land Assembly Trust (BLAT);

    —  research into the optimal/"best value" use of surplus public land assets including:

      —  opportunities to accommodate affordable/key worker housing on surplus land within schools (the Wokingham Schools' Project);

      —  whether a "best value" approach to the disposal of surplus NHS sites can make a positive contribution to provide key worker/affordable housing;

      —  the needs of the private sector for affordable/key worker housing;

      —  demonstration projects on SEEDA's own sites at Chatham Maritime, and at Ropetackle, Shoreham.

  19.  Looking to the future SEEDA will be seeking to influence the agenda through a number of initiatives, including:

    —  assisted development/gap funding—including support for RSLs larger demonstration schemes to drive up quality in planning, design technology and built form;

    —  promoting the BREEAM rated benchmark—the Housing Corporation and SEEDA have both announced that they will only support larger schemes if they are rated;

    —  supporting technology research to promote the increased sustainability of housing;

    —  establishing the first Regional Design panel in 2002 to promote best practice;

    —  promoting and enabling the Building for Nature initiative—launched in 2001 by SEEDA—to provide advice to housebuilders on how to incorporate best practice in bio-diversity and environmental enhancements.


  20.  The BLAT proposal is to establish a special purpose vehicle (company), that will acquire, remediate and masterplan packages of small brownfield sites (<0.4 ha) in the South East. It will then work in partnership with local authorities; housing associations; contractors and private sector developers to procure new homes to meet identified local housing needs—principally affordable and key worker housing.

  21.  The establishment of the BLAT is included in SEEDA's 2002-03 Corporate Plan with a specific request for funding of £15 million from the SR2002 to progress this proposal as a mainstream project. SEEDA is taking the steps to establish the BLAT in 2002 from within the existing budget of the agency, but the research commissioned shows that to make the proposal fully operational will require an initial endowment of about £15 million.

  22.  The proposal evolves directly from the work of the Egan and Rogers Task Forces, culminating in the policy framework provided by the Urban and Rural White Papers. It will address a specific shortcoming/failure within the housing market and make a small, but nonetheless significant, contribution to the Government's target of providing over 60 per cent of new homes on recycled land and/or buildings.

  23.  An Inter-Departmental Whitehall Group, chaired by SEEDA's Chief Executive, has now been established involving the DTLR, HM Treasury, DTI, Housing Corp, Housing Associations, Reading and Medway Councils, Government Office and the SE Regional Assembly.

  24.  Three pilot studies were commissioned in August 2001 to assess the potential contribution BLAT could make in three very different areas with the South East, in selected wards within Reading (Katesgrove), Wealden (Forest Row) and Hastings (Central St Leonards and Gensing).

  25.  It is evident from these pilot studies that there are potential housing sites which have been overlooked by developers and fall outside the net of local plan allocations. These additional sites provide clear evidence to support the creation of a BLAT.

  26.  Intervention by the public sector, rather than leaving this to private sector market forces, is required because:

    —  present market dynamics are compounding the problem, delivering large unit, low density development rather than increasing the limited supply of urban brownfield sites;

    —  brings—The market is not bringing forward sufficient opportunities at present—the cost, planning efficiency and value of the smaller sites in prohibitive to private sector;

    —  need to bring forward smaller infill sites—foster an urban renaissance and more cohesive, integrated and mixed society;

    —  reducing cost to Government—chiefly from SEEDA (reclamation/servicing) or Housing Corporation (SHG) due to programme/critical mass/economies of scale;

    —  providing public sector key worker housing on presently public sector held land (procurement via BLAT avoids the developers profit that would arise if private sector initially purchased land and then "sold" back to public sector);

    —  the need to provide for affordable homes especially in the areas of high land values;

    —  enable the public sector to capture the market "upside" that arises from the confidence and improved market risk as a direct result of the regeneration of an area subsequent to public sector investment (assuming private sector unwilling to take the initial risk);

    —  more efficient exit strategies, retaining the ability to sell/securitise packages of key worker housing when optimal land value (and grant recovery/claw-back) have been achieved; and

    —  promoting construction and design best practice in line with the Egan and Rogers agendas.

  27.  The BLAT special purpose vehicle provides:

    —  an efficient and effective mechanism to acquire, remediate and masterplan packages of small brownfield sites in the South East;

    —  an opportunity to work in partnership with local authorities, housing associations and private sector developers to procure better quality (in terms of construction and planning) new homes to meet identified local housing needs;

    —  opportunities to improve master planning to provide cohesive, quality, mixed use and mixed tenure urban environments and townscape;

    —  private sector funding to be levered to minimise the investment of scarce public sector resources; and

    —  value for money.


  28.  SEEDA has been keen to examine the extent to which the disposal of surplus public land, using a "best value" approach, can make a positive contribution towards meeting the Government targets to provide key worker/affordable housing and to develop brownfield land.

  29.  The agency is funding two projects: first, working with Wokingham Council, looking at their schools portfolio, and secondly the South East Regional Office of NHS. The NHS project is to consider opportunities presented by the land disposal programme in the region to meet regional objectives, such as key worker housing. With regional partners, GOSE and SEERA, SEEDA has also initiated a regional framework with MoD, in an effort to ensure a more co-ordinated approach by the public bodies.

  30.  SEEDA is acutely aware of the need for a "best value" rather than "best consideration" approach to ensure the optimum disposal and use of public sector land interests. This needs to meet more than just the capital financing requirements of individual organisations and must recognise the relationship with broader regional economic and social objectives. Surplus sites owned by one part of the public sector often hold the key to address other government public bodies' agendas which require subsidy or other forms of direct support—eg affordable housing, community facilities etc. The failure to identify complementary public uses or interact in there increases the inefficiency of and ultimately the total cost to Government.

  31.  This issue has become more sharply articulated during the preparation of RDA corporate plans, and particularly the discussions with Government over the summer of 2001 about the establishment of regional outcome targets.

  32.  In the South East, these have embraced the consideration of targets for brownfield land reclamation, now agreed at 75 hectares per annum, of which SEEDA will seek to achieve 40 hectares on its own account. This means that the balance needs to be provided from other public sector bodies, and the assumptions which SEEDA has built into the corporate planning process specifically draw attention to the contribution of major public sector landholders such as NHS, MoD and surplus Railtrack property.

  33.  At a national level, English Partnerships has begun a dialogue with public sector landholders for the transfer of surplus public assets to a specially qualified public body on a portfolio basis, starting with Ministry of Defence and NHS. A useful model exists in the Coalfields Regeneration Programme, whereby the transfer of coalfield assets to EP has been followed by detailed implementation by each appropriate RDA. A transfer from MoD, NHS and DFES of sites suitable for housing should be contemplated in the South East to the BLAT.


  34.  This project originated from discussions between SEEDA and Wokingham District Council to pilot a scheme to provide key worker accommodation in particular for teachers, on school sites within the district. The objective, similar to the BLAT approach was to identify small pockets of under-utilised land and buildings within the curtilage of operational schools. It was not the intention to target school playing fields—most, if not all of the property in question is likely to be covered by playing field legislation as set out in the planning and education acts.

  35.  The planning policy framework is set out within draft PPG 17, the Town and Country Planning (Playing Fields) England direction, which contains a presumption against losing playing fields to development, and for the Secretary of State the opportunity to call in applications where Sport England object.

  36.  In addition to the planning legislation, the Schools Standards and Frameworks Act 1998, new framework for maintained schools, sets down legislation whereby changes of use to, or disposal of playing fields must be referred to the Secretary of State (Education).

  37.  The study sought to identify sites with a capacity to provide key worker housing. It was demonstrated that sites selected are non-essential to the current provision of recreation and physical education at the selected schools, and further, the development for teachers could be catalytic in improving existing facilities. A total of 138 units were identified as a potential outcome of the pilot, subject to securing planning permission. The Brownfield sites contribution was approximately 100 of those 138 units.

  38.  The pilot study could therefore be used to demonstrate how key worker housing need can be met.


  39.  There is a unique opportunity for the public sector to make an important contribution to solving the affordable housing problems. SEEDA, as the Regional Development Agency of the South East, is well placed to do this by undertaking the traditional role of facilitating the assembly of small sites whether by agreement or compulsory purchase, reclaiming and servicing land and by bringing together all publicly owned assets to be used in a way to accommodate these pressures.

  40.  In the South East, which has particular housing pressures and land shortages, there is a specific need for a high proportion of affordable housing provision to remain so designated in perpetuity. If new provision is lost to the market, then the problem will remain or recur.

  41.  The RDA is well placed to provide the necessary skills but its ability to do so is dependant on Ministerial guidance to the landowners and having a sufficient level of available resources. Without a significant increase in the funding and/or the ability to defer receipts until best value has been achieved, many of the opportunities identified will not be realised.

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