TUESDAY 20 NOVEMBER 2001
Andrew F Bennett, in the Chair
Mr John Cummings
LORD FALCONER OF THOROTON QC, a Member of the House of Lords, Minister for Housing, Planning and Regeneration, MIKE GAHAGAN, Director of Housing Directorate, JOYCE BRIDGES, Acting Director of Urban Policy Unit and MIKE ASH, Acting Director of Planning Directorate, examined.
(Lord Falconer of Thoroton) I am Charles Falconer; I am the Minister for Housing, Planning and Regeneration. Mike Ash is in charge of the planning part of the Department of Transport, local government for the regions; Joyce Bridges is in charge of the Urban Policy Unit and Mike Gahagan is in charge of the housing part of the DTLR.
(Lord Falconer of Thoroton) No, I will be more than happy to go straight into questions.
(Lord Falconer of Thoroton) I will keep my answers fairly short as well.
(Lord Falconer of Thoroton) I think in principle it is a strength of the system that there is a plan-led system for two reasons: (1) it allows the community to participate in making decisions for the future about what will happen in terms of land use in their area and (2) it provides some degree of certainty for those who want to make decisions about whether to invest in development of various sorts. I think that in delivery the system has failed in a number of respects. For example, it takes too long for a local development plan to get prepared. For example, because there are so many other layers of guidance - national, regional, etc - those local development plans quite frequently, when they are produced, are out of date and therefore they do not provide the certainty that they are required to. Equally, because the process takes so long, frequently local residents and members of the community will find it quite difficult to remain engaged in the process because they do not have the time or the energy to devote to something that is not perhaps absolutely critical to the centre of their lives.
(Lord Falconer of Thoroton) I was saying two things at the Summer School. First of all, you do need a local development plan. The local development plan should set out the principles that should apply for planning in that particular area. One of the complaints about local development plans at the moment is that they are much too detailed and much too prescriptive. Detail and prescription may well be sensible for particular parts of an area, for example where you need a regeneration scheme for the centre of a city or a part of extreme deprivation, but it will not be appropriate for all of the area covered by the local development plan. So, what I was saying at the Summer School was to have a local development plan that sets out the basic principles and, for areas of change which will not be every part of the area, have a more detailed implementation plan. Where you need a more detailed implementation plan, then and only then go into the greater detail.
(Lord Falconer of Thoroton) Yes. I do not think it is right that you should be too site specific when it is not necessary. The reasons why it takes so long to get local development plans together is because what you have are site owners, developers, individual members of the community fighting about individual places in the local development plan. Why have that long drawn out battle when it may well not matter except in certain specified places?
(Lord Falconer of Thoroton) In some cases it will, in other cases it would hopefully focus in on, for example, the implementation plan which would be the more detailed areas of change that I have specified in the earlier answer that I gave but, in terms of a local development plan, if you want principles to be established which inform the way that planning goes on, it is much better that it be done, as it were, at a level of criteria rather than simply going through each site and saying what should happen to it. You are right, you are never going to avoid arguments about particular sites from time to time. What I am saying is that if you want a local development plan which would inform the way that planning takes place in a particular place, it should set out what the principles are rather than seek to deal with every issue because it is the seeking to deal with every issue that has led to the delays, the contradictions and the exclusion of community engagement because it takes so long and it is so complicated.
(Lord Falconer of Thoroton) No, I do not think that would be right. I think you would find that the principles that apply to the particular area will be sufficiently clear to ensure that there would not be the sense that everything was up for grabs. There has to be some degree of specificity in the local development plan, sufficient to ensure that it is not, as you say, a free-for-all with every site up for grabs. So, the balance has to be struck in every place. It will not involve zoning every site, as you put it, but it has to be sufficeintly clear and sufficiently detailed so that people will know what would be likely to happen if they applied for planning permission in a particular place for a particular site.
(Lord Falconer of Thoroton) It would be wrong for me to say everything that is going to be in the Green Paper.
(Lord Falconer of Thoroton) One of the problems in the system is that there are too many layers of plans and obviously one of the things we are considering at the moment is how one reduces the number of layers of plans that there are.
(Lord Falconer of Thoroton) Being neutral on whether or not we are getting rid of structure plans, if you had local development plans that set out sufficient degree in principle, that would be a point where the community was involved. If you also had implementation plans which are setting out the detail of what should happen in particular areas where change is expected, there again it is an area where the local community would be intimately involved in the process.
(Lord Falconer of Thoroton) We already have regional policy guidance and that sets out issues that should be dealt with at a reasonable level, for example infrastructure issues and for example levels of housing for the whole region, and those sorts of things would probably still continue to be dealt with at a regional policy guidance level and processes would be set up as they already exist whereby the community can be involved. Our experience of community involvement obviously is that the closer to the community the particular issue is, the more the community wishes to get engaged and the more the community does get engaged, so the higher up in terms of national, regional, district and neighbourhood the particular plan, the less the community do get engaged, but that does not mean that you do not set up as many inclusive particpatory structures that you can.
(Lord Falconer of Thoroton) First of all, as far as certainty is concerned, you need to know from the quality of the plans that are being produced, which is the point Clive was making earlier on ... If you have a clear, uncomplicated structure of plans and guidance that give you a clear indication of what the likely result is going to be, then you get much greater certainty. As far as quality is concerned, we think that one of the things that is vital is quality and that business, when they make an application, start to involve the community and the local authority at as early a stage as posible, that is before the specific application is made but at a much earlier stage so that they engage with the people who are most going to be affected by that, and we need to take steps to encourage the earliest possible participation of the community and the local authority in individual application. As far as quality is concerned, quality involves in part raising the status of the planning profession, raising the importance of planning both at local authority level and at central government level. The quality of the people attracted should be much, much greater than it is at present and that is a vital element in the process. As far as transparency is concerned, which is the last matter to which you referred, central government and local government have to set out much more clearly what they do, why they do it and also who can participate and when. So, for example, at central government level, we should be setting out much more clearly not just why we call in planning applications but why we do not call in particular planning applications. At local authority level, the community and the applicants should be clear that they have a right to speak, for example, to the planning committee before it makes its decision and that is a right that they have. For example, in relation to planning gain issues, there should be publication as to what planning gain is obtained and what then happened to it. So, on the four - that is speed, transparency, certainty and quality - I hope that our proposals will not just address speed but will address all those four issues.
(Lord Falconer of Thoroton) I cannot be absolutely confident about what will happen in relation to any particular proposals, but the process at the moment does not encourage particularly effectively community engagement. One very loud message I get when speaking about planning is that members of the community say, "The first we heard about this particular application was when we saw the local authority sticking up signs advertising the proposal." Why is that? We have specific consultation proposals that take a large amount of time, but there is no incentive in the system at the moment for, for example, the developer to actually engage with the community before they make a formal application. That is something that we would like to see because that reduces suspicion, reduces worry about what may happen and probably increases the speed at which the actual formal process then takes.
(Lord Falconer of Thoroton) In relation to the more streamlined local development plan of the sort that I have been talking about, the issue would be to what extent should it go into detail. I am making it clear that it should not go into zoning every major site in the area, but I am saying that it should give sufficient detail to indicate the sort of approach that the local authority would take. In addition, where there are areas where change is expected, regeneration areas for example, then there should be a much more detailed implementation plan. So, at both those stages, the commmunity would have an opportunity and this time a real opportunity, not one that involved a formal public inquiry which is much more lawyer driven than it should be, to participate in the making of decisions. In addition to that, if the measures we put into place are to encourage developers to talk to the community before an application is made, then the community will be engaged at that stage as well. What we are trying to is to make the process not one where there is "a formal consultation", which is very difficult for individual members of the community to participate in, but to really engage the community in making decisions about the future of land use in their area. Although one would have thought that a long process would engage people and make it easier, in fact the experience seems to be that it does not because the process is so drawn out, it is so complicated and people do not quite know what is happening at every stage in relation to it.
(Lord Falconer of Thoroton) We have done some work in relation to that and, interestingly enough, the amount of resources and the amount of people in the planning department does not lead to the conclusion that the more you have, the quicker you do it. It varies from place to place and it depends upon a whole range of issues such as the attitude of the local authority, the way the consultation takes place and the engagement with both the household applications and the developer. Surprisingly, there does not seem to be that correlation between resources and results.
(Lord Falconer of Thoroton) I hope not because I think one of the things you notice about local development plan inquiries at the moment is that the people who engage in them primarily are developers and they are arguing among themselves as to what should happen at particular sites, so developers will go to one local development plan inquiry to object to a retail proposal in one place saying that it damages the city centre in another place because they already own land there which they can develop. The judicial reviews tend to be as a result of what conclusions are reached in relation to the local development plans. What I hope our proposals will do will be to make it much harder for the lawyers to become involved and seek to upset conclusions that are reached because the process will be much fairer to the community and much clearer than it is at the present time. There is lack of clarity that really is the landscape in which lawyers thrive.
(Lord Falconer of Thoroton) I would like to put a few lawyers out of work in relation to planning, yes. I would like to make it clear that some of my best friends are lawyers.
(Lord Falconer of Thoroton) Again, I cannot say precisely what will be in the Green Paper which will indicate what the Government favours in relation to it, but I think what we should aim for in relation to planning gain is certainty so that developers know where they stand and local authorities will find it easy in those circumstances to have clear and robust negotiations with the developers. I believe that it is not possible to have a 'one size fits all' approach. Therefore there will always need to be some element of negotiations which are site specific. So, I think there should be a combination of certainty with a recognition that you need some site specific powers in order to deliver. I think the position at the present time is that some local authorities ask for too little and therefore do not get enough planning gain, but there are some local authorities which ask for much too much and, as a result, shake off a development that would have been beneficial to the community as a whole. That suggests to me that there is insufficient clarity about what they should be going for and therefore I think clarity is quite important. There is another element which I touched on in answer to Christine's questions about transparency. One of the big complaints that I get at the moment is that communities do not know what deals have been done on their behalf and they do not know what happened to the deal after they had done it. Did the developer deliver on what he promised? If he did deliver on what he promised, where can I see it now? I think we need as well to look at the issue of transparency on planning gain issues.
(Lord Falconer of Thoroton) No, if impact fees were introduced, I think you would still need to have some sort of legal agreement whereby the developer would then commit itself to whatever the particular amount was.
(Lord Falconer of Thoroton) I could envisage that there might be circumstances in which the nature of the development would lead to whatever the standard rate is - I am not saying it might be impact fee - being reduced, but it seems to me that that would be covered in the site specific issues rather than saying, "If you do this, you do not have to pay."
(Lord Falconer of Thoroton) No, I think the right course is that planning fees should be paid by applicants for planning permission. I think it is right that, if you want planning permission, then you should broadly pay a fee in relation to it. I do not think anyone has any serious proposals that we abolish planning fees, quite the reverse.
(Lord Falconer of Thoroton) I think that we need to look at the issue of whether or not you increase planning fees. At the moment, there is no publication by local authorities of what is actually done with the planning fees. If you increased planning fees, for example, I think people would be entitled to say, "What have you done with the extra money that local authorities can now raise in relation to planning fees?" and I think people would also like to see whether or not it was actually spent on planning. I do not for one moment think it would be right to ring-fence planning fees, but it may well be that the appropriate course is to see if one can make local authorities actually publish accounts in relation to what happens to planning fees.
(Lord Falconer of Thoroton) I think the position already is that fees are different for planning applications depending on the scale, in financial terms, of the application that is made, so there is already a distinction between the domestic application and the commercial application, so I think there is scope already in the system and the question is, should one be increasing the upper limit of what those planning fees should be?
(Lord Falconer of Thoroton) Yes.
(Lord Falconer of Thoroton) I think you would always need that three-stream of documents coming out of central government. I think you need to look very carefully - as I said on the last occasion I was here - to reducing the quantity of material that comes from central government because one of the great problems about the planning system is its complication and part of its complication comes from the great raft of material coming down from central government, and I think we want to see whether or not one can actually reduce the burden of that primarily by, as it were, reducing the amount of PPGs there are, not in terms of the areas they cover necessarily, but try to actually focus them on the critical policy issues.
(Lord Falconer of Thoroton) What I have said about the sale of the Dome was that we did some market testing and, on the advice of the people who advised us in relation to that, we are now talking to a smaller number of serious bidders. The way to promote a sensible deal that is value for money, delivers a sustainable future for the Dome and provides regeneration benefits for North Greenwich is if those negotiations continue without there being great publicity or me giving a running commentary on those negotiations. So, it seems to me that the right course is not to speak about the detail of those negotiations.
(Lord Falconer of Thoroton) I am trying to be sensible about the way negotiations are conducted with the small number of bidders with whom we are engaged at the moment.
(Lord Falconer of Thoroton) Thank you.
(Lord Falconer of Thoroton) Yes, it has and value for money is one of the elements that we have always made clear has to play a part in making a decision about the future of the Dome and no value for money calculation can be done without considering what the site would be like without the Dome on it.
(Lord Falconer of Thoroton) NMEC was not a company set up to make a profit ... I wondered how long it would take for there to be a reaction to that.
(Lord Falconer of Thoroton) The NMEC was always going to be funded by a combination of Millennium Commission money and receipts from people who went to the Dome and spent money there and associated marketing activities. NMEC is unlikely to require all of the money that was ultimately set aside by the Millennium Commission to fund it, so what will happen is that the Millennium Commission will simply pay less grant down than was otherwise expected to be required.
(Lord Falconer of Thoroton) No, it has not. There will be no surplus because, as I say, the money ultimately comes from the Millennium Commission and it will pay less down than is required. I cannot tell you at the moment what that amount will be because the books are not yet closed as far as NMEC is concerned, but NMEC will not hold on to any money other than that necessary to meet any outstanding liabilities.
(Lord Falconer of Thoroton) The proceeds of whatever arrangements are made with the Dome and the North Greenwich Peninsula will be divided as between those arms of government or the Lottery as reflect their contribution to what has been sold.
(Lord Falconer of Thoroton) It depends what you mean by the Treasury.
(Lord Falconer of Thoroton) English Partnerships, for example, are the people who presently own both the land and the Dome and the land of the North Greenwich Peninsula. Plainly, they will get a substantial part of the sale of the Dome and the North Greenwich Peninsula. I do not know if that fits into the rubric of the Treasury in Mrs Dunwoody's mind, but that is central government obviously.
(Lord Falconer of Thoroton) Yes.
(Lord Falconer of Thoroton) The way you divide the proceeds has to reflect what has been sold to whoever buys the Dome and the North Greenwich Peninsula or participates in the development of it.
(Lord Falconer of Thoroton) I think it would be inappropriate for me to give any estimate in relation to time. It will happen sooner rather than later, but I do not want to commit myself to a timetable.
(Lord Falconer of Thoroton) No, I think it would be unhelpful for me to start speculating about time.
(Lord Falconer of Thoroton) As I say, I think it would be unhelpful for me to give an estimate of time.
(Lord Falconer of Thoroton) We are working as hard as we can towards it and I think we will just have to wait and see how the negotiations go on.
(Lord Falconer of Thoroton) As I said at the outset to Mr Grayling's questions, I am not keen to, in a sense, throw light on the detail of the negotiations because I think it is unhelpful to the negotiations.
(Lord Falconer of Thoroton) I think the right course is just to get on with the negotiations. These are complicated and difficult negotiations. It is quite a wide-ranging series of aspects to deal with and I think the right course is just to get on with those and not to, as it were, seek to give indications of how they are going at a particular time.
(Lord Falconer of Thoroton) It was.
(Lord Falconer of Thoroton) I do not think that there will need to be further decontamination but the precise answer to that will depend upon the particular uses in particular places in the North Greenwich Peninsula.
(Lord Falconer of Thoroton) No, I do not envisage English Partnerships being wound up. I envisage a long-term future for English Partnerships.
(Lord Falconer of Thoroton) When the land and property portfolios were given to the various regional development agencies, it was always recognised that there was a place for a national regeneration agency, English Partnerships. I think there is still such a place for a national regeneration agency and that is why we have started a review of what English Partnerships' role should be, as you know.
(Lord Falconer of Thoroton) Yes.
(Lord Falconer of Thoroton) Yes. It is incredibly difficult in relation to particular areas to identify precisely what level of detail there should be. PPG25 may well have been appropriate for there to be that level of detail. The principle that I am seeking to enunciate in relation to local development plans is that they should have a much lesser level of detail than they have at the moment and, in particular, picking up Clive Betts's point, they should not be as site specific as they are at the present time. Precisely what the right level of detail in a particular place is will have to be worked out in the particular place, it seems to me.
(Lord Falconer of Thoroton) I think there are something like 40 local authorities that do not have a local development plan when the requirement came into effect on them in about 1992. When you say "complain", my complaint is very frequently not against the local authority but just that the system is such that it can take that long.
(Lord Falconer of Thoroton) They will and one cannot be sure as to when one would be able to implement primary legislation because I do not know when we will get a slot in relation to it, but that does not mean that one should not have as one's goal a much simpler process which is shorter and less complicated in producing local development plans because if you do not seek to change the system which has led to 10 years going by and 40 local authorities still not having a local development plan, you just go on forever with the problem.
(Lord Falconer of Thoroton) We have to be clear, once the consultation on the Green Paper has taken place, as to what -
(Lord Falconer of Thoroton) We will be clear as to what we want local authorities to do in the transitional period. For example, would we want local authorities to continue to try to update the old style local development plan or would we wish them to start to try to put in place a new style simpler development plan which is less complicated and which is likely to be more helpful because there will not be all those questions about whether it contradicts national or regional policy guidance.
(Lord Falconer of Thoroton) What we want to do is to be in a position to make announcements about what conclusions we reach on reform of the planning system at such a date that we would be able, if we got a slot in the legislative programme, to legislate in the legislative session that starts in about November 2002. That means that we need to be reaching conclusions in late spring/early summer of 2002, so it is quite a short consultation period.
(Lord Falconer of Thoroton) Absolutely right.
(Lord Falconer of Thoroton) That is what I would like to do if it were possible and whether it were possible would depend upon the time of the legislation and also advice that we would need to get on precisely when you could implement it. John Cummings's point was, "What do you do in the meantime?" and "We need detailed arrangements about what you do in the meantime." You can do quite a lot in the meantime by guidance about, for example, what sort of development plans should local authorities produce if, for example, there is legislation going through the House which makes it quite clear that a different sort of local development plan is required.
(Lord Falconer of Thoroton) Most of the changes that we are talking about are systems changes, not policy changes. So if, for example, what you are trying to do is speed up the process, have consultation by developers with communities before they actually make applications, improve the quality or introduce some sort of timetable, that sort of thing, there is no reason why those sorts of system changes should not be taking place before legislation takes place.
(Lord Falconer of Thoroton) They are.
(Lord Falconer of Thoroton) That is right, but the point I am trying to make is that what we are not dealing with here is changes in policy. We are not changing our policy, for example, on out of town shopping centres or PPG3 housing or on flood defences. What we are trying to do is improve the way the system deals with the resolution of issues about the plan or particular control applications and I think that can be done without the need for primary legislation. The critical primary legislation issue is probably going to be about the form of the plan and its connection with other things that local and central government do such as community strategies.
(Lord Falconer of Thoroton) I am in favour of wholesale reform. I do not think it means that you have to pull up the whole of the roots of the planning system. I think that much of the wholesale reform to which we are referring can be delivered without primary legislation.
(Lord Falconer of Thoroton) I think that you did need pretty wholesale reform. If and insofar as they are saying that improvements can come without primary legislation, I agree with that. I think that we do need to focus as quickly as possible on delivering that.
(Lord Falconer of Thoroton) The Secretary of State, Stephen Byers, has already indicated in a statement in July the broad parameters of what is envisaged in relation to major infrastructure projects. First of all, there should be more policy statements by government on infrastructure issues so that there cannot be a debate about what national government policy is in, for example, issues such as where should a major railway line go or where should a major new airport go. Secondly, we want to develop a process whereby, in respect of major national infrastructure projects, of which there will be very, very few in any particular period, Parliament should make the decision in principle as to whether or not that major infrastructure project should go ahead. Thirdly, one needs to, connected with the second, develop parliamentary procedures and that is for Parliament not for the executive to work out as to how the public could be engaged in making the decision in principle about whether or not the major infrastructure project should go ahead.
(Lord Falconer of Thoroton) I am very loath to express a view about what the correct process is. The purpose of the process must be to ensure that the particular local community that is affected by major national infrastructure project has an opportunity to express its views to Parliament before Parliament debates and forms a view about whether or not in principle the proposal should go ahead. The community will obviously have an opportunity at a subsequent public inquiry on how you actually implement the decision in detail, but I think there also needs to be a process whereby they have an opportunity to express their views before the decision in principle is debated and voted on in Parliament. How that should be done is a matter for Parliament to resolve rather that for the executive, but that seems to me to be the way the principle should work.
(Lord Falconer of Thoroton) No and that is what a lot of people have said. It takes a long time and it is a lawyer driven process and it is quite variable in its outcome.
(Lord Falconer of Thoroton) No, we do not want to go back to that, we want some other process whereby the views of the community affected were taken into account. The views of the community are taken into account but everybody's views have to be taken into account as well. I think this would lead to conclusions more quickly and more engagedly than recent experiences of major infrastructure projects. A significant period of time in the T5 inquiry, for example, was spent in hearing evidence about what government policy was on airports.
(Lord Falconer of Thoroton) Indeed, that is right. That is why the first part of the reform is that there should be more -
(Lord Falconer of Thoroton) Not in generalised terms, but there should be more statements - this was in answer to Christine's question - setting out what government policy on those major infrastructure issues is so that any inquiry does not have to take a long time trying to work out what central government's policy is.
(Lord Falconer of Thoroton) I do not want to comment on the timing of it but before an application is made by a public body like the BAA to, for example build a new airport or whatever, there should be a clear statement of what government policy is overall because that obviously clarifies the landscape in which the decision has to be made.
(Lord Falconer of Thoroton) I think that the most important aspect of the Urban White Paper is the commitment to effect an urban renaissance, to make our towns and cities much better places to live in. I think that the specifics in relation to delivery of that are a whole wide-ranging number of things. I think particularly important aspects are the urban regeneration companies, which are very important, the remediation proposals, ie focussing on making sure that as many brown field sites are brought back into use and also the planning policy of ensuring that you have to use brown field land first before you use green field land in order to develop housing.
(Lord Falconer of Thoroton) How are we going to ensure the brown field policy?
(Lord Falconer of Thoroton) I think in three particular ways. One is the planning system. We have introduced -
(Lord Falconer of Thoroton) I think it is robust enough. I think it depends on national government making it absolutely clear that it will enforce PPG3, by which I mean that where there are indications that local authorities are not following the principles of brown field first, green field only if there is not enough brown field available -
(Lord Falconer of Thoroton) One way we are going to demonstrate that is by reaching the figure of 60 per cent brown field development by the year 2008. We are at 57 per cent now and we have been at 57 per cent for a considerable period of time. The way you demonstrate progress is by seeing that figure going up and that is what we would aim to try and do.
(Lord Falconer of Thoroton) The purpose of the Urban Affairs Cabinet Committee is to make sure that the issue of urban regeneration and the issue of urban renaissance are approached on a cross-government wide basis. I do not know how many times the Urban Affairs Cabinet Subcommittee has met; I will let you know what the precise figure is.
(Lord Falconer of Thoroton) I think we are talking more about a couple of times than 10 or 12, though I may have the figure here. I am told that it has met twice.
Chairman: Twice in how many months?
(Lord Falconer of Thoroton) That is over a period of time of 12 months ... That is twice since the election. The purpose of having a cross-government Cabinet Committee is that it means that it is not just the meetings, it also means that the members of the committee circulate to each of the departments any issues that reflect or are important in relation to urban issues. It means that government looks at it in an across the board way.
(Lord Falconer of Thoroton) Sometimes it does and sometimes it does not, but it means that -
(Lord Falconer of Thoroton) I could give you some examples of that. Could I write to you about what the specific agreements were?
(Lord Falconer of Thoroton) I might not do that, but can I write about the specific agreements in relation to that? I think that the critical point is that it indicates an importance being attached to urban issues in government.
(Lord Falconer of Thoroton) No. I think the importance of it is that people come together at ministerial level, which means that, before they come together, each of the departments have to discuss with each other about the specific issues that are going to be agreed -
(Lord Falconer of Thoroton) Yes.
(Lord Falconer of Thoroton) Yes.
(Lord Falconer of Thoroton) I do not think that the critical thing is necessarily the number of meetings that the Cabinet Subcommittee has. I think the critical thing is the extent to which there is real engagement across -
(Lord Falconer of Thoroton) No, I was going to write and tell you what had been discussed at the two meetings, that was the question that you -
(Lord Falconer of Thoroton) Just the conclusions in relation to it, yes, because it seems to me that the critical thing is, is government really working across the piece to try to deliver better results in urban areas and I think that they are. I think, for example, that there are lots and lots of things like local government governance issues, like better public space, like regeneration, like urban regeneration companies. There is a whole range of things that have been introduced which are designed to try and improve the environment in urban areas and they do connect because, if they do not connect, then they will not get the results that we are after.
(Lord Falconer of Thoroton) The purpose of the urban sounding board is to provide people who are not members of government or are officials in the Civil Service with whom one can have a completely open discussion about what we should be doing in relation to improving urban areas. We had a meeting yesterday of the urban sounding board and we discussed in effect two things, one of which was what steps should be taken in relation to improving public space and a Professor Gyles(?) from Holland spoke to us about what he had achieved in the work that he had done and then there was a wide-ranging discussion about how you could seek to translate the successes he had had into our experience here, and then we had a discussion, two outsiders started the discussion off, about how you improve community engagement in people looking at what they want to do with their urban areas.
(Lord Falconer of Thoroton) Nobody is forcing them.
(Lord Falconer of Thoroton) They very frequently do not materialise, you are absolutely right; they very frequently find the whole process tedious, off-putting and, what is more, they find that their involvement in the process had no effect on the result. People will engage in trying to influence decisions if they think that what they do does influence decisions. The message that was coming across loud and clear from the urban sounding board and is one that should be reflected in the planning reforms is that the earlier that you engage people in the process, the more they feel that their voice is heard.
Mrs Dunwoody: Sounds like the Labour party policy!
(Lord Falconer of Thoroton) I think we need to discuss with the urban sounding board what is the right way for it to express its view. The main purpose of the urban sounding board is for there to be a dialogue between government and outside advisers and people who know and have experience of the particular issues, so that can inform government policy. It is in effect to try and widen the range of views that get reflected. I think that we do need a process whereby the urban sounding board expresses its views from time to time in a public way so that people know what the advice is.
(Lord Falconer of Thoroton) I can see force in relation to that but I think the right thing to do, whether it be in relation to planning, whether it be in relation to trying to reach decisions about what happens in an urban area, the processes by which the public are engaged are ones that are easy for them to participate in and demonstrably produce results, ie their engagement comes out with some result. There is a great debate going on at the moment in the Aylesbury Estate down in North Peckham about what the Aylesbury Estate should now look like and there is a long process going on in which the community are engaged in looking at plans, deciding what it is like, deciding what it should be like. It is a difficult process but, if you went down there, you would see real engagement on the part of the people involved in reaching decisions about what they want their environment to look like. That really works because it is right at the earliest possible stage in what is going on and they can see the people who will be involved, it is a new deal for communities area and there is a stock transfer proposed. Both the New Deal for Communities board and the Shadow Stock Transfer Board are engaged in the process, so what is happening is that the residents are talking to people a long time before the actual changes occur, they are seeing plans being produced, and then they are saying, "We do not like that" or "We do like that" and then they are seeing new plans coming at the next meeting or some months later, so they are actually seeing their voice being reflected in what happens.
(Lord Falconer of Thoroton) I have been at meetings where stock transfer has been discussed with members of the public.
(Lord Falconer of Thoroton) It depends. Very, very few sometimes but sometimes there are quite a lot.
(Lord Falconer of Thoroton) Yes, I am having one in the middle of January.
(Lord Falconer of Thoroton) Yes, it is.
(Lord Falconer of Thoroton) The purpose of the urban summit in the autumn of next year is to identify what progress has been made since the Urban White Paper was produced, to bring good practice to the attention of those who are attending the urban summit, to identify international experience where we can benefit from it and to seek to agree proposals for the way forward. So, it will monitor or express views on what has been done since the Urban White Paper at the end of 2000.
(Lord Falconer of Thoroton) The people who will be coming to the urban summit will not just be officials or ministers, they will be both representatives of government but outsiders as well and we will be seeking people to give their views on what has happened, not just subjective views but also, as it were, views based upon detailed research and what has happened since the Urban White Paper.
(Lord Falconer of Thoroton) I am sorry, just picking up Clive's point, Joyce Bridges from the urban policy unit has just passed me a note saying that we have just let an independent research contract which will assess progress in the 24 towns and cities with which we have established a particular relationship to see how the ideas of the Urban White Paper are going on. We identified a month or two ago 24 towns and cities that we would work with because it is helpful to have actual places where one can see what progress has actually been made.
(Lord Falconer of Thoroton) The Urban Policy Unit was set up after the Urban White Paper. It is a very well equipped unit. It is in the DTLR but it has responsibility for urban policy right across the piece. Its obligation is in effect to deliver the vision in the Urban White Paper.
(Lord Falconer of Thoroton) 120.
(Ms Bridges) We have one team dedicated to the Thames Gateway, the Thames Gateway Strategic Partnership, which is a small team of four people. Apart from the head of the unit, it is staffed by secondees from participating local authorities. That reflects the long term government commitment to the future of the Thames Gateway as an important part of regional planning policy and regional economic development for London and the south east. The Thames Gateway is an important resource in dealing with growth in the area and accommodation of future housing.
(Lord Falconer of Thoroton) The purpose of the Policy Unit is to drive the headline areas identified in the Urban White Paper. All urban areas will benefit from better use of land, better places for buildings, better quality of life in towns and cities.
(Lord Falconer of Thoroton) The public spaces cross cutting review is trying to identify policy that will improve the quality of public spaces. It will address the issue of whether or not additional resources are required. It will then inform the comprehensive spending review that will decide in 2002 what the right conclusions are.
(Lord Falconer of Thoroton) It will tell you what you can get if you spend extra money. It will also identify the sorts of practices that would improve public spaces. It will also encourage individual departments to make proposals in their own spending review bids to improve public space.
(Lord Falconer of Thoroton) It is involving all parts of government and in particular transport, local government and the regions and the housing, urban policy and planning bits of our department. It is also involving DEFRA; it is also involving the Home Office and DCMS.
(Lord Falconer of Thoroton) I think it did help that discussion considerably. I think we responded yesterday to your report on walking.
(Lord Falconer of Thoroton) I apologise.
(Lord Falconer of Thoroton) This is in response to the power of place document?
(Lord Falconer of Thoroton) That statement will come in the next few weeks.
(Lord Falconer of Thoroton) Yes.
(Lord Falconer of Thoroton) I agree with the last sentence, namely that historic buildings do play a vital role in regeneration, and that we should take active steps to preserve our historic heritage. It would be wrong for me to go further when the Secretary of State for Culture, Media and Sport and the Secretary of State for Transport, Local Government and the Regions are going to issue a detailed statement.
(Lord Falconer of Thoroton) Yes.
(Lord Falconer of Thoroton) I do not think there is any disagreement between them. I do not know why it has taken so long to produce the response to it. I suspect that there have been other things that got in the way before it was produced.
(Lord Falconer of Thoroton) It depends what you mean by government. If you cover every initiative, including things like education action zones, health action zones, the single regeneration budget, new deal for communities, there are very, very many.
(Lord Falconer of Thoroton) I was going to say more but it may well be that you are more accurate than I am.
(Lord Falconer of Thoroton) It is plainly time that there was a much more streamlined approach to how you deal with particular initiatives. I do not agree with your characterisation at the beginning. It is plain that if you went to certain communities you would see that those area based regeneration schemes have saved certain communities from completely falling over the edge. If you look, for example, at the 39 new deal for communities areas they are regarded as doing well in particular areas. It is early days yet and I think it was right for us to do them. It would be wrong to write off huge tranches of regeneration because there are too many schemes in existence. There are too many schemes; they do need to be streamlined. The Regional Coordination Unit in government is presently working on trying to reduce the number and streamline them. We in government are very aware of the fact that initiatives bring with them application burdens, monitoring burdens, complication burdens which are not welcomed on the ground. What is more, they do not join up with each other adequately. We need to ensure that is the position as well.
(Lord Falconer of Thoroton) I agree.
(Lord Falconer of Thoroton) Yes. We would see local authorities as very much the community leaders in relation to all of that, but there are other people who need to be engaged in the process, other statutory providers - for example, the National Health Service - and the community and the business sector. Local strategic partnerships do represent a real way of bringing those people together. Local authorities have to take the lead in setting them up because they are the community leaders, but you do need to engage these other players in order for there to be focused regeneration. I do not think local authorities are being bypassed in money terms. The neighbourhood renewal fund, which goes to the 88 most deprived areas, goes straight to the local authorities for them to decide how they spend money on regeneration or fighting deprivation in their areas.
(Lord Falconer of Thoroton) RDAs have responsibility for single regeneration budget money. Most of the money is allocated but the distribution of the money to the particular schemes they will get advice on from government offices. The responsibility in relation to it rests with the RDAs now.
(Lord Falconer of Thoroton) No. The 39 are the end of selected areas but those 39 go on for a period of around ten years so there will be more money as the years go on for those 39 areas.
(Lord Falconer of Thoroton) I do not think it has adequately changed, but the programme set out in the national strategy for neighbourhood renewal was for a change that would take 10 to 20 years to make the progress described in that national strategy. It is early days. £900 million for the neighbourhood renewal fund is designed to give local authorities the means whereby they can adjust their mainstream programmes to make sure more money is targeted at deprived areas.
(Lord Falconer of Thoroton) I have seen some evidence that they are using it, for example, in main stream social services budgets. I do not know how widespread that is. At the end of last month, we sent out to each local authority with neighbourhood renewal fund money something called a statement of use document in which they were going to tell us precisely what they had been doing with the money over the last six months, so we will have a better idea then, but it is critical that the decisions that are made on that money are made by local authorities. It is not for us to ring fence the money or give specific directions about how the money is used. We have made it clear we want it used in neighbourhood renewal but the decisions in relation to that have to be with the local authorities.
Christine Russell: Can I ask you about the general principle of neighbourhood renewal? Do you believe that every neighbourhood can be renewed? I say that in the light of the experience that Members of this Committee have had who have been working on the empty homes inquiry.
(Lord Falconer of Thoroton) I went to east Lancashire. I did not get to Birmingham.
(Lord Falconer of Thoroton) I went to Pendle, Rossendale and Accrington. That is a very difficult question. I am not sure that every single neighbourhood can be renewed. The national strategy at the beginning identified the fact that there are thousands and thousands of deprived neighbourhoods in the country. Are you going to renew all of them? No, you are not. Those that you will renew you will renew by improving the quality of services that goes to those and it will be dealt with in a coordinated way, by connecting them with some form of economic prosperity.
(Lord Falconer of Thoroton) I think that is an impossible question to answer. It depends on the particular place and the particular community. The national strategy is saying let the relevant local authorities decide what their strategy should be. Let them identify which of the neighbourhoods in their area they want to really work with. Reach agreement with central government, the private sector, the other statutory providers, so they can work together to deliver whatever the aims for the particular neighbourhoods decided locally to be helped are. I do not think it is for central government to decide which should be particularly helped and which not.
(Lord Falconer of Thoroton) That may be right but if the relevant players in the area, the local authorities and statutory providers, the business community and voluntary community sector, having got together and addressed the issue, conclude the right course is to go for that deprived area which is much worse than another because they think there is good reason for doing so, is that not a sensible course. I think the Committee has been to Hulme. It was Hulme that was an area that was very low down the scale. It was not an area simply on the turn. It was in much worse shape than that. There is widespread agreement that Hulme is an area which has been substantially turned round as a result of the various measures that were taken there, in part, because Hulme was quite close to the centre of Manchester, and therefore Hulme could be connected to economic prosperity. I do not think it is right to say areas on the turn are the areas one has to focus on. It will vary from place to place and local decisions have to be taken about what the right strategy is in a particular place.
(Lord Falconer of Thoroton) All the work that has been done suggests hat large, single tenure areas are ones that are most vulnerable to market failure and deprivation. They are very difficult to help, more difficult than areas in mixed tenure. That does not mean that they are all remotely beyond help. I think some can be helped but it is a difficulty.
(Ms Bridges) City Challenge did have some pretty dramatic outputs.
(Lord Falconer of Thoroton) Hulme started as a City Challenge.
(Ms Bridges) I do not think any went wrong. Hulme is the one everybody talks about because there is such a visual success.
(Ms Bridges) No, I do not think so. I think one of Hulme's big successes is that it has created a mixed community with mixed tenure and a wide variety of different people who have a stake in the future of their area. That is why it is an important one.
(Ms Bridges) There were 31 City Challenge partnerships and they operated between 1992 and 1998, as you probably know. They did spend well over 200 million in each of their targeted areas, so they were big programmes.
(Ms Bridges) The round one ones were Bethnal Green, Bradford, Derner Valley, Deptford, Hulme, Liverpool, Middlesbrough, Newcastle, Wirral and Wolverhampton. They all led to a step change in ----
(Ms Bridges) It depends what you mean by a success. Yes, they all were.
(Lord Falconer of Thoroton) One of the most striking things about visiting places is you go and the local authority will make a presentation to you. They will have a map on the wall and it will have the city broken down into wards with various coloured dots on the wards. Most of the coloured dots are in the same place. They represent City Challenge money, single regeneration budget money, HAT money. Then you are taken usually to the place with the most dots in it which remains broadly untouched in two senses. One, the housing remains just as bad and, two, there is no connection with economic prosperity that might provide what you are saying, which is a sustainable future for the community.
(Lord Falconer of Thoroton) You need, in looking to see how you spend regeneration money, to make sure that there is a joined up plan, but also a plan that connects the area to some sort of economic prosperity.
(Lord Falconer of Thoroton) Yes.
(Lord Falconer of Thoroton) I am not in a position to say that. I do not know.
(Lord Falconer of Thoroton) The programme was subject to an evaluation by KMPG Consulting.
(Lord Falconer of Thoroton) I do not know but it is published on our website.
(Lord Falconer of Thoroton) I did not look at it before I came here today and indeed I have never looked at that particular one.
(Lord Falconer of Thoroton) Of course.
(Lord Falconer of Thoroton) City Challenge is but one of a line of investments in particular areas which have not worked. One question that we constantly address is why will our regeneration proposals work when others have not in the past.
(Lord Falconer of Thoroton) Why will the urban regeneration companies or the national urban strategy work? Answer: because they seek to address the issue of regeneration in an across the board way, not just dealing with bricks and mortar; not just dealing with skills, health and community safety. Secondly, because they bring a strategic approach to regeneration and thirdly because they seek to engage the community in determining what the future of that particular place is.
(Lord Falconer of Thoroton) You mean the planning privileges or the compulsory purchase privileges?
(Lord Falconer of Thoroton) They are not going to be given those privileges that you identify in relation to enterprise zones but in order to work they have to work closely with the local authority. It may have other privileges in mind but the planning/compulsory purchase type privileges they will not have; the local authority will have. In every place that ones have been set up, there are good relations with the local authorities who are trying to work together to make the URCs work.
(Lord Falconer of Thoroton) At the moment we are not minded to do that. We think the right course is to allow them to bring all the players together to give a serious message that everybody is going to work together to try and regenerate that particular area.
(Lord Falconer of Thoroton) In principle there is no difference in the sense that they are both an entity that gets together all the people in a particular area and has responsibility for regenerating that particular area.
(Ms Bridges) An urban development corporation like London Docklands, for example, had powers of land acquisition with compulsory purchase. It also had considerable streams of government funding. There is a significant difference. URCs are essentially not for profit companies that bring together the private sector, the public sector and other people to deal with a particular part of a city, for example. The Sheffield one is dealing with Sheffield city centre. The idea is that you focus effort on that area. The first three pilot URCs which we set up last year in Liverpool, Sheffield and Manchester, according to the evaluation that has been done, show that they have had quite considerable success in focusing investment into the particular area of concern. The Regional Development Agencies are important partners, so by agreeing to have an urban regeneration company they are also focusing their efforts on this particular geographical area.
(Ms Bridges) I agree with that, but urban regeneration companies are completely different animals. The local authority, for example, is a major player in all the urban regeneration companies which they were not in the UDCs. It is not meant to be an area that has just special machinery with some sort of special administration. This is a focus on a particular part of the city that everybody is agreed should take place, including the local authority.
(Lord Falconer of Thoroton) There have been discussions with the European Commission about it. We have some support from other Member States in relation to the problem. Five new sorts of schemes have been approved by the European Commission. They do not solve the problem completely. We are continuing to discuss with the European Commission how we seek to resolve the problem. It is a real problem for which a solution requires to be found but in reaching that solution we need to reach agreement with the European Commission.
(Lord Falconer of Thoroton) We have these five schemes that to some extent seek to get round the gap funding problem identified by the European Commission. They do not unlock the door to the extent that the door was unlocked before the gap funding problem had been identified by the European Commission, but we are working on it.
(Lord Falconer of Thoroton) You can operate under these particular schemes. The problem that the European Commission identified was that public private partnerships, where the private sector is making up the gap, are broadly state aids which are unlawful. There are various ways that you can try to get round it, but getting round it in one or other of the five schemes does not deliver a solution for the vast majority of schemes. What is happening at the moment is that we are in negotiations, along with other Member States, with the European Commission for seeking to establish a single regeneration framework that would unlock the door much more than it is unlocked at the moment. The five particular schemes I have referred to might help in a particular situation and we will provide all the help that we can to individual schemes to see whether they do, but I am not saying that is the answer. It is not the answer. There needs to be a much more profound agreement reached with the European Commission about a regeneration framework that will allow more gap funding of the sort that was going on before the end of last year.
(Lord Falconer of Thoroton) Is that the five?
(Lord Falconer of Thoroton) We have found the five. They do not meet the full problem.
(Lord Falconer of Thoroton) Yes. They have, apparently. They allow for gap funding for bespoke and speculative development so they can fit particular sorts.
(Lord Falconer of Thoroton) As I understand it, they have, but can I confirm that in a note to the Committee?
(Lord Falconer of Thoroton) No, because I have a note here: they are working towards a conference with the Commission and Member States in March to discuss state aid, urban generation, especially the use of PPPs and physical regeneration. It sounds like the critical meeting will take place in March. Therefore, the answer is we will not be in a position to produce the sort of headway you are looking for before then.
(Lord Falconer of Thoroton) On the basis of what the position appears to be, we are not going to make progress in reaching a solution before March. We are pressing as hard as we can in relation to a solution but it depends upon the Commission and other nations reaching an agreement in relation to it.
(Lord Falconer of Thoroton) We are not making progress as fast as we would like in relation to it. Your point about there having been a pause for well over a year is right. It is extremely difficult. What we are working to is to try to reach agreement with the European Commission in a way that will actually produce a result.
(Lord Falconer of Thoroton) If the Commission say you are not allowed to do it, you cannot go on doing it. We could challenge it in court - i.e., in the European Court of Justice - but that would take years to get to a conclusion.
(Lord Falconer of Thoroton) My understanding was the reverse, but can I check that? My understanding was that, once they had ruled, we could not unless we went to court but let me find out what the right answer to that is.
(Lord Falconer of Thoroton) No. They have a statutory responsibility for promoting regeneration in their regions. They also have a statutory responsibility to produce a plan for economic regeneration for the area. They will still have an obligation to regenerate. Indeed, at meetings that they have had with the Deputy Prime Minister and the Chancellor, they have reaffirmed their commitment to regeneration. Does the moving of sponsorship for the RDAs from the DTLR to the DTI which occurred immediately after the last election make a difference? I do not think it does, because I think everybody would accept that economic prosperity is a vital element in regeneration.
(Lord Falconer of Thoroton) We will be issuing a consultation document about compulsory purchase at about the same time as we will be producing documents in relation to the planning report.
(Lord Falconer of Thoroton) You are absolutely right. We have been consulting for years about compulsory purchase.
(Lord Falconer of Thoroton) No. What we are going to put forward in the consultation document is specific proposals in three areas. One, you need to simplify the powers that people have to make compulsory purchase decisions. That means the bodies that have them at the moment need to know much more clearly when they can use them and that, in particular, means local authorities. Secondly, you need to make the process by which compulsory purchase decisions are made much quicker. Thirdly, you need to address the issue of whether or not the levels of compensation are correct for people who are affected by compulsory purchase orders.
(Lord Falconer of Thoroton) That is my point one, because they have powers under the Town and Country Planning Act at the moment, which are quite complicated; whereas RDAs have much simpler powers. We need to look at ways of simplifying the position for local authorities.
(Lord Falconer of Thoroton) I think licensing of private landlords in areas of low demand is the answer. You have to have a means by which you can prevent landlords in areas of low demand in effect not giving a damn as to what the quality of the tenant is, not giving a damn about the quality of the house, getting housing benefit money and, in some cases, I was told - in quite a large number of places, not just in the north west but the north east as well - waiting for the government to move in as voids appear and the area is abandoned and ultimately compulsory purchasing. The final, glorious pay-off for the man in the pub is he gets a great wadge of capital to repay the amount he paid at the start. Stephen Byers has already produced a consultation document approximately two weeks ago with proposals for allowing local authorities to introduce a scheme for licensing private landlords in areas of low demand, where the sanction would be, if they do not deliver reasonable standards, they can be deprived of either the right to be landlords or certainly the right to receive housing benefit money.
(Lord Falconer of Thoroton) We will not be able to legislate before November 2002 because we do not have a slot at the moment. I do not know whether or not we would get a slot in the next legislative programme. It would depend upon what other pressures there were.
(Lord Falconer of Thoroton) We have set up the Rent Service to try and focus people on accurately assessing what the rents are. Accurate assessment of the rent is very important. We are also trying to encourage local authorities to engage private landlords in voluntary schemes where minimum standards are set, but we are told that those sorts of landlords who engage in those sorts of voluntary schemes are not the sort of landlords you are trying to reach with your private landlords licensing schemes. One makes some progress with the voluntary schemes but they do not reach the parts that licences have to reach.
(Lord Falconer of Thoroton) You mean the state should give a guarantee that the property will not drop below a certain value?
(Lord Falconer of Thoroton) I think that would be incredibly expensive and untargeted. If you look around the country, there are some schemes where local authorities in particular have addressed this problem. In Salford, there is that very problem. What the local authority has been doing in quite imaginative ways is addressing with individual owners who have gone into negative equity in areas where the market has completely collapsed, there are great voids and the area is irrecoverable and they are seeking to agree with them arrangements whereby they give them the compulsory purchase money, which is quite low because the property value is quite low, also they give them disturbance money and find another property in an area where the local authority is seeking to regenerate and transfer the mortgage there. I do not think guaranteed, limited, minimum values is the way forward but imaginative ways whereby you can, with the consent of the people, move people from one place to another, transfer their mortgage, ensure that the compensation that is given is adequate to allow that to happen is probably a more productive way forward than minimum guarantees.
(Lord Falconer of Thoroton) It is. The landlord in the pub should not be compensated in the way I have described and the licensing of private landlords will hopefully deal with that. How you deal with the problem of property markets dropping because areas have totally lost confidence is much more difficult. I do not think that guaranteed, minimum prices is the way forward. I do not think that will be affordable or deliverable. One has to target more how one helps individuals in particular areas where there are regeneration schemes going on.
(Lord Falconer of Thoroton) That is a local government issue, I think. Delegating it from the RDAs to parish councils?
(Lord Falconer of Thoroton) The DTLR is responsible for all local government. RDAs are now sponsored by the Department of Trade and Industry. The RDA is responsible for the economic strategy for a region. I do not think there is any inconsistency between the RDAs being with the DTI where economic prosperity is an important issue for RDAs and it is at the core of the business of the DTI.
(Lord Falconer of Thoroton) I will.
(Lord Falconer of Thoroton) The Finance Act 2001 contains a provision which allows exemptions to be applied in support of regeneration in deprived areas. Discussions are going on about precisely where you target it and how within government.
(Lord Falconer of Thoroton) I hope the discussions will be completed very soon.
(Lord Falconer of Thoroton) I would like to but I think it would be unwise to.
(Lord Falconer of Thoroton) The Sellers' Pack only applies where the thing is put up for sale in the market. The transactions in the pub are so fast that there has not been a substantial marketing exercise for them.
(Lord Falconer of Thoroton) We need to look to see, in houses below a particular value, whether or not the Sellers' Packs should apply to them.
(Lord Falconer of Thoroton) We need to address these issues in good time for when the legislation comes back before Parliament. The principle of the Sellers' Packs we believe is a good one. Yes, there are issues about that and there are issues as well about whether or not criminal sanction is the appropriate sanction for not having a Sellers' Pack. The principle of having an obligatory requirement on people to provide basic information, including information about the condition of a house that they are seeking to sell, is a good one because it will reduce the possibility of people in the middle of a transaction, with lots of other transactions dependent upon, having that transaction fall through, causing great distress to people in the process of buying and selling their house.
(Lord Falconer of Thoroton) Key workers are people who are working in the private sector, in important and critical jobs. There is no hard and fast definition but the people who have bee helped in the scheme that we have proposed have been teachers, social workers, policemen and nurses.
(Lord Falconer of Thoroton) I do not think we have had much of a backlash. Prison officers have suggested they should be included in the scheme.
(Lord Falconer of Thoroton) We have always shied away from saying what is the precise number of affordable houses that need to be provided.
(Lord Falconer of Thoroton) I think because it is very difficult to predict. The moment that you give a particular figure, it will change. Circumstances repeatedly change in relation to what demands are.
(Lord Falconer of Thoroton) I am not saying the material is not there to make an estimate. It is not just about what local authorities say the number of houses is; it is also about, for example, how many new households are being created in a year. The number of affordable houses required is greatly in excess of the numbers that have been built. There is absolutely no doubt about that. One needs to increase as much as one can the number of affordable houses that are available. To some extent, we have sought to do that by increasing considerably the expenditure made through the housing corporation on new builds. In terms of how many affordable houses will be built by the Housing Corporation MEP programme, it is 100,000 over the next three years. I am not saying for one moment that that matches what the demand will be for affordable housing. On the issue about using the planing system to get as many possible, I think that is very important. We have to construct a planning gain system which produces as many affordable houses as possible but that means a system that is not choking off development. You have to pitch it at a level whereby you get the maximum housing gain.
(Lord Falconer of Thoroton) It will vary from place to place. In the draft of the document Heading Towards London's Spacial Development Strategy it proposes a target of 50 per cent affordable housing throughout the whole of London, by way of example. There has been some research done by a group called The Three Dragons for London which they shared with us which showed certain London boroughs could easily sustain 50 per cent affordable housing: City, Westminster, Kensington, Chelsea, because the gains for the developer are so great that they will have no trouble in doing that but, if you go to other areas - Barking, Dagenham, Tower Hamlets - they could not remotely sustain a 50 per cent affordable housing target unless there was 100 per cent subsidy from people like the Housing Corporation. It will vary from place to place as to what the target is. I would have thought we were totally agreed that you have to get the level at the level which will produce the most affordable houses in the particular area without choking off the supply of development.
(Lord Falconer of Thoroton) I think it is because sometimes it will indicate that we have not spent properly. Other times, it will indicate that we have under estimated the amount of money that can be spent in a particular time. There is one area which I am responsible for where there has been a significant underspend, which is the new deal for communities. The reason why there was a significant underspend at the start was because it took longer to identify how best to spend the money in deprived areas. Looking at that experience, it was probably right to delay the allocation and distribution of the money because if one had spent it all at the speed that originally been envisaged some of it may not have been as effective as it otherwise might have been. It is sad, but we have to be quite sensible about how we spend money.
(Lord Falconer of Thoroton) Certainly we will only bid for the money that we think we can spend. Whether we will be right in that assessment or not is a critical question.
(Lord Falconer of Thoroton) It is impossible to tell. We plainly have to learn from what happened in the past and we have plainly to pitch our bids in the spending review at a level that we believe we can spend at. It is incredibly difficult from time to time to identify the precise timing of expenditure.
(Lord Falconer of Thoroton) Since I have been in the DTLR, I have on two occasions since June been told what the level of expenditure has been which gives you a monthly clear picture of where the underspends are.
(Lord Falconer of Thoroton) Not in every case, no, because the one thing you cannot do when you are underspending is simply shovel money out of the door. You have to identify precisely what is the reason for the underspend and whether or not there are means for making the expenditure occur.
(Lord Falconer of Thoroton) I think the problem that you are identifying is about judgments made in a spending round, about what is the right phasing of the expenditure of money. Hopefully, the new budgetary controls will make it easier to identify what is possible, but I do not think it is ever going to be got completely right.
Chairman: On that note, can I thank you very much for your evidence?