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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 709-iii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE ENVIRONMENTAL AUDIT COMMITTEE
HOUSING: BUILDING A SUSTAINABLE FUTURE?
Wednesday 7 July 2004 KEITH HILL, MP and RT HON LORD ROOKER MS TRISHA GUPTA and MR JOHN OLDHAM MR JOHN SLAUGHTER, MR ANDREW WHITAKER and MR IAN HORNBY Evidence heard in Public Questions 187 - 355
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Environmental Audit Committee on Wednesday 7 July 2004 Members present Mr Peter Ainsworth, in the Chair Mr David Chaytor Sue Doughty Paul Flynn Mr Mark Francois Mr Malcolm Savidge Mr Simon Thomas Joan Walley ________________
Examination of Witnesses
Witnesses: Keith Hill, a Member of the House, Minister for Housing and Planning, and Lord Rooker, a Member of the House of Lords, Minister for Regeneration and Regional Development, Office of the Deputy Prime Minister, examined. Q187 Chairman: Thank you, Ministers, for joining us this afternoon. It is a great pleasure to see two of you and not just one. We hope that your evidence will be twice as effective as a result. We are obviously looking today at the Barker Review. The final Barker report was published by the Treasury on the Treasury's website and announced by the Chancellor of the Exchequer, although it was originally commissioned jointly by your Department and the Treasury. Could you just explain what role the ODPM had in commissioning the Barker report and in setting its terms of reference? Lord Rooker: Well, it was a joint operation. I would not fuss about which website it was published on, the main thing was it was published. It was a joint operation, jointly commissioned between John and Gordon when we had been having lots of ongoing discussions since the publication of the Sustainable Communities Plan in February last year and I suppose there had been constant, almost daily discussions between ourselves and the Treasury since ODPM was formed two years ago, evidenced in some ways by the result of the Spending Review in 2002, where we realised we needed a step change in housing production. One of the consequences of this was the production of the Sustainable Communities Plan but while that is a road map for the Department, it was thought the economics of housing and the supply of housing ought to be looked at by a specialist and that is why it was commissioned with Kate Barker in the lead. She had access to ODPM and probably spent as much time with ODPM officials as she did with Treasury officials. I was personally present when she met John Prescott on a couple of occasions. So it was a joint operation. Q188 Chairman: So you are satisfied that the whole issue of planning, as well as the issue of house prices, was properly reflected in the terms of reference she was originally given, are you? Lord Rooker: To the best of my knowledge. Of course Keith and I have swapped briefs slightly, but at that time I had got the brief on planning. What I was surprised about, I do not mind admitting that, was when the final report was published early this year, at Budget time, to see Kate Barker quoted as saying she did not realise when she took the commission that the Planning Bill had been introduced into your House four months beforehand. There was no secret about the Planning Bill. In other words, we were doing things in government that were part of her recommendations, to try and change the planning culture, hence what is now the Planning and Compulsory Purchase Act. It took a while to go through because it was a Bill which transferred over from one session to another. So yes, we were satisfied about that; no problem at all. Q189 Chairman: You say you were surprised that she did not know about it. Did anyone make any effort to point this out to her, because it might have been relevant to what she was working on? Lord Rooker: Well, I personally was not present when she was given the brief, but the brief included the planning and the hurdles and the barriers to the supply of housing, which is something we have been very concerned about in any event. We have to cut through some of the bull, of course, you have heard about planning from the developers. It is not quite sometimes what you see in the headlines in the newspapers. But it does not devalue her report because the fact is she was making recommendations that fortuitously we were already under way with. So I see that as a plus, not as a negative. Keith Hill: Although you will be aware that her report does contain some proposals in the planning area, nevertheless she has indicated publicly that she believes that the Planning Act, as it now is, the Planning and Compulsory Purchase Act, does represent a very useful move forward in terms of achieving the planning reform that she is sympathetic to. Q190 Chairman: Okay. We have got the report now, so how are you going to take this forward? Lord Rooker: I freely admit - and this is not to fudge it - it will be at least eighteen months before there is a definitive - I do not suppose there will ever be a final Government pronouncement on it. It is being taken forward by a task force to consider the multitude of recommendations. At the same time, I have to say that we are proceeding with the operation of the Communities Plan via the growth areas and other issues with the market with Pathfinders in the North, so what we do not want is any hiatus and stop there. What we take is the Communities Plan objective of the extra 200,000 dwellings over that which was already planned for the next sixteen years. That is the baseline on which Barker starts, in other words. So we have got a big operation under way for the Communities Plan to deliver an extra 200,000. Barker is on top of that; in other words, we have got to work hard to get to that plan, to the baseline of Barker, which is why it is very important that we give some serious consideration to the issues she has raised. So it will be at least twelve months before there will be major Government pronouncements on the way forward. Some may require legislation, some may not. Q191 Chairman: Has the task force been set a deadline? Lord Rooker: A good question! I certainly hope so, because I keep seeing it in my briefs that we will be pronouncing in about twelve to eighteen months. Q192 Chairman: You might like to set them a deadline if they have not got one. Lord Rooker: Yes, but I will check. There probably has been, but there are one or two task forces on at the moment and we have got some imminently due to report. This is an ongoing process for us. This is part of the process, it is not a one-off. It is not as though it is happening in isolation. There is the Egan task force also which is working in parallel. We will have that report fairly soon. In other words, we are not waiting to stop to find out about what the overall scenario is as a result of Barker, which may require some changes in legislation, not least financial legislation. Keith Hill: As Lord Rooker said, there is a multitude of recommendations in Barker and it is, therefore, unlikely that there will be, as it were, a single response on the part of Government to Barker. Nonetheless, it is clear and I think now well-known that there are work streams going ahead in relation to some of the specific recommendations in Barker, for example you will be aware that in place of the traditional section 106 planning gain proposals Kate Barker recommends a planning gain supplement and we have made it clear that we will consult on that, with the expectation of announcing a conclusion towards the end of 2005. You will also be aware that in the planning domain she recommended a merger of the regional housing and the regional planning boards. We have accepted that and we expect to go out to consultation on that proposal in the very near future. Q193 Chairman: Is there anything that you have explicitly rejected at this stage? Lord Rooker: A quick knee-jerk reaction to Barker is what we explicitly rejected. No, that is serious, because it would be very seductive to get a report like that. Q194 Chairman: Well, we have just heard you have accepted two. Keith Hill: No, no, we have not accepted two. No, we accepted the proposal on the merger of the housing and the planning boards, but we are consulting on the planning gain supplement. Q195 Mr Francois: Minister, when was that decision taken to merge the housing and planning boards at regional level? Keith Hill: My recollection is that that was announced by the Chancellor when he reported to the House in, of course, his Budget statement on the Barker report. Mr Francois: Thank you. Q196 Chairman: Just going back to the task force, who is actually on it? Lord Rooker: A good question. If we have got a list of names, we will give you a list of names. Q197 Chairman: If you could write to us with the list of names and parties, that would be interesting. Lord Rooker: Yes, sure. Q198 Chairman: Are you aware of whether or not there is a planner actually on the task force? Lord Rooker: Well, you could argue planners are the root cause of the problem! That is what some people will say, but we take advice from a wide range of people. Whether there is a planner on it or not, you can be assured that the planning issue will be taken. I am going to be in trouble here! Keith Hill: You are sitting next to the nation's Planning Minister! I have an industry and a profession to protect here, so I want to distance myself from the observations of my beloved colleague! Q199 Chairman: I thought there would be trouble having both of you here this afternoon! But seriously, there are huge implications, as Keith Hill as said, for the whole planning regime and for local authorities, and so on, and it seems to me a little odd that you cannot tell us whether or not there is in fact a planner represented on the task force which is taking all this forward. Lord Rooker: Well, at the moment, I know it is July but it is still early days post-Budget. There has been a lot of internal discussion across the two Departments at official level. We have got, of course, professional planners in ODPM, as opposed to local authority planners and private sector planners. They have taken advice on this from a range of people. As Keith says, we will not be going out to consult on Barker per se. The different aspects of the recommendations will be including different people, so planners in some meetings, developers in others; it is going to vary. We will provide you with what information we can about named people and their professional qualifications, and it may not just be on a task force, it may be people they have already consulted or set up in particular working groups. This is the way of the world. But it would not be one pronouncement in totality on Barker. As Keith has said, it is much more complicated than that. Q200 Chairman: But the Government has somehow given the impression - and I think the Chancellor began this process when he announced the publication of the report initially - that they have basically accepted pretty well all the recommendations, are very positive about it and are pressing ahead. Lord Rooker: I have no doubt we will see some effect of that when the Chancellor announces the result of the Spending Review next week, but as I repeat, Barker is on top of what we are already planning to do, which of course we only announced a short time ago. Two years is a short time in the scale of these things. Q201 Chairman: Do you think it is regrettable that she either was not given the freedom to look at the environmental consequences of her recommendations or chose not to? Lord Rooker: Well, that is a matter you will have to ask Kate Barker. Q202 Chairman: But you set the brief. Lord Rooker: No, but hang on, the way you asked the question it is for Kate Barker to answer that. We take account in our decisions of environmental effects, whether it is on planning, house building or the growth areas, as Ministers and as people responsible for the delivery of vehicles we are setting up. So we have no problem about us being accountable for environmental aspects of either new house building, refurbished house building or the planning decisions. That is what we are accountable for and that is what we are doing, so I am quite happy about that. Q203 Chairman: So the whole question of the relationship between sustainable development, which I know the Government takes very seriously, and the housing supply issue will be looked at by Ministers? Lord Rooker: Well, it is not going to be looked at, it is done - and I genuinely mean this - on a daily basis, either at meetings and visits that Keith and I both do and appointments we make. Q204 Chairman: Is this part of the task force's remit? Lord Rooker: No. People will come back having mulled over the views about the Barker Review. As I say, the Government will not give a pronouncement on this for some considerable time, at least twelve months away. In the meantime, there is a huge operation going on quite separate, underneath the Barker numbers, if you like, (a) to get a step increase in the change of housing production in this country, both replacement and growth, and to manage the growth in a sustainable way, whether it is in the growth areas of the South East or in the market with North Pathfinders in the Midlands and the North. The same criteria that is all set out in the Sustainable Communities Plan from last year is what is being operated on a daily basis, I can assure you of that. Q205 Chairman: Yes, but as you yourself have said, the whole Barker agenda is over and above the Sustainable Communities Plan. Lord Rooker: Well, that is correct, because we will be looking for - Q206 Chairman: What many people have said to us is that they are concerned in relation to Barker, not the Sustainable Communities Plan, which is separate and we may come on to it in a minute. In relation to Barker, they are very concerned that she only really mentioned the environment at all in order to dismiss it as a factor. That would not matter if the Government had not given the impression that it had accepted Barker in whole. Lord Rooker: Well, no. I ask you to judge us by what we are doing and the decisions we are taking now. We will implement the bits of Barker that we agree with after consultation in the future and that will build in what we are actually doing now the last year and the next two to three years under the forthcoming spending round, and those who want to comment on the fact that Barker might be missing some paragraphs on the environment or aspects of the environment, or the economics of the environment, I ask those people to judge what we are doing now in creating a step change in housing production and rebuilding and creating new sustainable communities. Judge us by what we are doing now on that because that is the way we will implement Barker on top of what we are doing. Q207 Chairman: It sounds as though you are distancing yourself slightly from Barker. Lord Rooker: No, I am not. I am just answering honestly your question and I am not bulling because I cannot say what will happen about Barker. It is twelve months away and we are going to have to move heaven and earth to get to the starting point, if you like, base one on which Barker will be built. That in itself is the most major operation that we are engaged in at the moment to get those extra 200,000 dwellings locked in over and above the 900,000 already planned. That in itself is a major task and that is our central daily task, if you like. Q208 Mr Francois: Minister, the Sustainable Communities Plan, as it were, is confirmed and in the public domain. The merger of the regional housing boards and the regional planning boards is confirmed and in the public domain and you are saying now that the Government's response to Barker is likely to be - you have used the words several times - approximately twelve months away. Now, I am not asking you to tell us when the General Election is, but most of the spread betting is that it is in May of next year, in which case the announcements of the response to Barker would fall probably just after a General Election. Is it possible then that when you, as it were, respond to Barker there will be further announcements about house building above and beyond the Sustainable Communities Plan contingent upon whatever view the Government takes of the Barker report, i.e. there will be even more? Lord Rooker: Yes. Q209 Mr Francois: Right. And it is possible - you have used the words "twelve months" a number of times - that if the Election were in May you would announce even more houses, were you still to be in Government, shortly after the General Election was out of the way, yes? Lord Rooker: Well, you are presupposing the date of the General Election. It could be next May, it could be May 2006. We are not operating on an electoral cycle here, by the way. The Communities Plan is a 2016/2021 plan. The house building programmes that I am referring to are 2016/2021, the kind of figures I am referring to, the 900,000 plus the 200,000. This is not a quick fix for next year. Q210 Mr Francois: All right, without pinning you down to when the General Election is, it is likely there will be further announcements about house building in relation to Barker in around about the early summer of next year? You did say yes before. Lord Rooker: I did say yes before, but on the basis that every home in this country currently has to last 1,200 years we have got to do something about improving our housing production. We cannot carry on as we are. There is not enough affordable housing, there are not houses in the right place. We do not replace at anywhere near the rate of our continental partners. It is 0.1% a year; it is 1% in France and Germany. So every dwelling in this country on average at the current figures of replacement and new build has to last 1,200 years. That is not sustainable for any government or anybody charged with making sure we have got a decent civilised society. So, yes is the answer to your question, even with that little caveat. Chairman: Thank you, Minister. Q211 Joan Walley: I just really wanted to follow up what you were saying just now and to ask you whether you feel that the Barker report is somehow or another fudging the whole issue because it is taking attention away from what the task of Government is to deal with now. I just wonder whether or not you are really suggesting to us that our inquiry should be concentrating as much on the Sustainable Communities Plan as it should be looking into the future in terms of Barker, because presumably what you are saying is that this whole issue needs to be looked at now in terms of the current delivery and perhaps it is a bit too early to start looking at what the implications of Barker could be further down the line? Lord Rooker: I could not have put it better myself. I genuinely mean that. I do not think there has been enough parliamentary scrutiny about the Sustainable Communities Plan. There is next to no interest where I come from, down the corridor. I would have thought there would be more interest in this House. I mean, we are engaged on a big operation that is a national operation. It is not urban, it is not rural, it is not south and it is not north, it is national, and it was all set out eighteen months ago and lots of decisions are flowing from that, whether it is new forest, next to green belt new housing production. There is next to no inquiry, there is next to no scrutiny about it. So the answer to your question, Joan, is yes. Q212 Chairman: I thought the Office of the Deputy Prime Minister Select Committee had conducted an inquiry into the Sustainable Communities Plan? Lord Rooker: Yes. Well, somewhat inadequately. Q213 Chairman: Well, you may wish to convey that sentiment to them. Lord Rooker: We did at the time, Chairman. Chairman: That is not a problem for us. Q214 Sue Doughty: I would like to look a little bit at the allocation of land for development because obviously it is a bit of a fraught area and I know both Ministers will be fully familiar with the problems we have in the South East with affordability of housing and limited green belt area, and the tensions that there are between trying to get people into houses and retain the countryside. There is a recommendation which is causing a lot of concern about the requirement to allocate between 20 to 40% of land for development as a buffer which would be released automatically to development if certain trigger levels were reached, including house price rises. Is this one of the recommendations you are thinking of taking forward? Lord Rooker: This is back to Barker? Q215 Sue Doughty: Yes. Lord Rooker: Well, there is a big debate going on, of course, about the connection she made between housing production and prices, but all I can do, I am sorry about this, is to repeat the current situation that we are in at the moment. Ninety per cent of England is green field; 90% is green field. That is the reality at the present time. Green belt is 14%, national parks are 8%, areas of outstanding natural beauty are 16%. Even if we achieve the growth, the 200,000 on top of the 900,000, the urban will go from 10% to 11% and the green fields will go down from 90% to 89%. So one could argue this is not an issue about concreting over the countryside. You did not use those words, I know, but people do and I am not putting words in your mouth. In other words, the amount of land-take is incredibly small. It varies area to area. Our policy anyway is brown field first, higher densities - Q216 Chairman: I beg your pardon. I do not wish to be rude, but perhaps the Planning Minister would like to answer Ms Doughty's question about this over-provision which Barker recommends, the 40% buffer. Is it one of the recommendations that you will be taking forward and have you considered the implications of the almost wholesale marketisation of the current planning system which this represents? Keith Hill: I am not entirely sure what you mean by that phrase "wholesale marketisation of the planning system", but on the issue of allocations policy that is one of the proposals in Barker that we are looking at and commissioning work on. It is not a proposal that we have accepted, but it is one of the package of proposals that we want to examine. But no decision has certainly been taken on that so far. Q217 Chairman: Let me explain what I mean by "marketisation". That particular recommendation, if implemented, would effectively place decisions for future development in the hands of the property market rather than in the hands of planning authorities. Is that a principle that you are happy to concede? Keith Hill: I think it is one of the issues that we will want to examine as we take forward our consideration of this proposal, but we have not made any decision on that matter and I certainly would not want to pre-empt any decision, or indeed any judgment on that matter at this point either. Q218 Sue Doughty: Well, I still remain concerned about this because having listened to the answers on that, we still have particular concerns. In some parts of the country where the heat is highest there is an implication very heavily about building on the green belt as proportions of green belt are not quite as high as the rest of the countryside. So I am concerned about how much work is going to be done on this whole issue about buffer land and I fully take on board what Lord Rooker is saying about the need for housing. That is not an issue. But there are other aspects as well about how you deal with the housing market, how you damp down prices, as well as taking in this buffer land, using up this buffer land. What I want to know is how much study is going to go into not only whether we just do a land grab for marketisation and just say, "Yes, here's a trigger. Let's get hold of this next bit of land here, which may be green belt, may be not," but what else we could do to take the heat out of the housing market, what other strategies are there, including looking at whole areas which are already over-heated, such as we have in some spots in the south-east of England? Keith Hill: Well, if I could perhaps comment on that before Lord Rooker makes a response. I think you should not set hares running and possibly scaremonger on this issue of green belt. Let us be entirely clear that the Government's record on green belt is clear and impressive. We have increased the green belt by something in the order of 19,000 hectares since 1997 and there are 12,000 hectares in the pipeline to come from local authorities as they develop their local plans. We have made it absolutely clear that where there should be any green belt take, we would expect on a regional basis the replacement of that green belt take. We have also been absolutely clear about our principle of brown field first and green field where necessary - and I mean green field and not green belt. Let me remind the Committee that currently new build in London and the South East is proceeding at the rate of 66% on brown field, which exceeds the Government's target of 60% new build in brown field. So we are absolutely moving in the right direction. If I might speak for the Thames Gateway, for which I have specific responsibility and which is, of course, the largest of the growth area projects, there we expect up to 80% of the new build to occur on brown field. So I think we can reasonably say that we have a major programme moving ahead and actually it conforms entirely to this Government's commitment to brown field first and very little take on the green belt. That is the reality now and that is the reality for the foreseeable future. Lord Rooker, I do not know if you want to add anything? Lord Rooker: No, I agree. That will not change. That will not change post-Barker. That is a policy objective, one we are operating and one we intend to see operated as well. We are also building at higher densities, so we are taking less land to get more dwellings. Keith Hill: If I might throw a further statistic into the debate, if you take what you might describe as almost the middle range of the Barker proposals, which is for a further 220,000 to 350,000, and look at 300,000 new homes over the next ten years in London and the South East, you are actually looking at building on 0.79% of total land area and at building on 1.79%, I think the statistic is, of developable land. So, you know, I think we need to keep these things in some perspective, and that of course is at a much higher level of build than we are currently committed to. Q219 Mr Francois: Minister, you have said in response to an earlier question that you were still considering whether or not to accept Barker's proposal for what we describe as "wholesale marketisation of the planning system". I think you said that no decision had been taken on that yet. You will be very aware, as we all are as Members of Parliament, that planning can often be extremely controversial and it is one of those things particularly that people look to their local councillors sometimes to defend them from controversial planning applications within the bounds of planning law and the Government has gone to a great deal of time and trouble to update planning law with the new Act. If you were to accept wholesale marketisation as proposed by Barker, what then is the point in having local elections? Keith Hill: Personally, I am simply not prepared to go down the path of this speculation about so-called "marketisation". It is not an expression that I personally recognise. We have certainly not committed ourselves to it but we have, as I have indicated, undertaken to work on the proposal for the so-called over-allocations policy. That is the precise position. But let me also remind you as a former and, if I might say so, distinguished member of the Standing Committee on the Planning and Compulsory Purchase Bill that absolutely central to the Bill is our commitment to engage with local communities. Indeed, as you will well recall, the very first step in the evolution of the local development framework is the requirement for local authorities to come forward with a statement of community involvement which explains exactly how they propose to involve the local community at every stage and every aspect of the development of the plan at local level. What is more, of course, we are placing in general terms an emphasis on front-loading of plan making and of pre-application negotiation. All of these things are designed to ensure the greatest possible involvement of local communities and the greatest transparency in the planning process. All of these ought to give local people reassurances about the extent to which the process will be an open and proper process. Q220 Mr Francois: Minister, you are quite right. Thank you for your sweet words, but we did debate this at some length on the Bill and I do not think it is appropriate now to go over all of that again. But will you accept that there is a danger that if the local powers to resist inappropriate or unwelcome planning applications are weakened a lot of people will say, when we are all trying to boost turnout in local elections, "What is the point of electing local councillors of any particular political colour because when we really need them they do not have the power to stand up for us any more anyway?" Keith Hill: But you see, if I might say so, that is the reality of the situation now. Ultimately, it is within the powers of the First Secretary to override such local planning decisions. It is there already and I do not consider that we are looking at a major change in the way the planning system operates arising out of the new legislation. Q221 Mr Chaytor: Ministers, we have talked about 900,000 new houses a year, plus 200,000 from Barker. What is viable annual rate of construction? Lord Rooker: That is a good question. If I can give you the figures. We had already planned to build about 160,000 a year to the year 2016. The fact is, the building industry has been quite complacent. If you look at their total production over the last years, going right across the last twenty years, it is more or less the same. Whatever the economic situation, they have found a comfortable steady figure to build at. It is not enough for even replacement. So we want a step change. We had planned to build 180,000. The Communities Plan on average, with the extra 200,000, would give England an annual rate of about 180,000. The Barker scenarios take us up beyond those figures, of course, to indicative levels of 220,000. So I do not know what the figure would be. The fact is, we have got to look at skills and capacity. First of all, that is one of the reasons why modern methods of construction will be used. Firstly, they are more efficient in any event, but secondly they use different kinds of skills and we do have these skill shortages. So I could give you a figure and then you could say, "Well, you won't be able to build them because we haven't got the skills," and that would probably be correct as we are here today. Q222 Mr Chaytor: That is my next question, because Barker talks about a shortfall of 70,000 construction workers, I think. Lord Rooker: That is right. Anyone who trains to be a plasterer, a plumber and a brickie can make a fortune. Q223 Mr Chaytor: So the issue is, if you are looking at over 200,000 a year, what are you doing about training the construction workers? Keith Hill: Well, if I might say so, the obvious answer is the work done by Sir John Egan and his report on the skills requirements of the Sustainable Communities Plan. He has produced a very detailed report with, my recollection is, again something like sixty recommendations for equipping the planning, construction and architecture industries with appropriate skills, and of course he has also proposed the establishment of a national college which will be dedicated to developing the skills required for the Sustainable Communities Plan. The Government has of course said that it accepts that proposal. Q224 Mr Chaytor: Can you guarantee that the acceptance of the Egan recommendations will deliver the skilled workforce to meet the target of 200,000 plus new houses a year without a massive import of plasterers, plumbers and electricians from Eastern Europe? Lord Rooker: That is the plan, but coupled with the fact of changing techniques as well. We want to give a big boost to modern off-site manufacture, modern methods of construction. We have done that party to kick-start what is a very small industry in this country, it is about 1%. If we could get it up to 3, 4 or 5% over the next six or seven years, and home grown as well rather than imported. A lot of it is imported. The kinds of skills are different. They are not lower skills, they are different skills. There is a factory alongside the M6 motorway near Birmingham, as you go past it, just before you see the empty Ford Dunlop site, that used to produce UVPC windows. Inside that factory they have the capacity to build 5,000 houses a year. A private sector company. It has only just started, it is only two years old, and I think there are well over 1500 or so like that now. I have been in the factory and on the sites. It is a totally different kind of skills. In fact some of the former car workers are actually in the factory. So we are looking at different methods of construction, more modern methods of construction, coupled with what Keith has said about the Egan agenda. Hopefully we can get a match of skills and change of technology to actually service the output of the dwellings we want without massive imports of labour necessarily, or massive imports of the products, because there is a home grown industry here to actually create jobs and assets and economic growth in our own country. Keith Hill: I think the short answer is that we cannot guarantee that it will not be necessary to import skills. I do not think we have foreseen a massive importation of such skills. But on the issue of modern methods of manufacture, the Government is putting its money where its mouth is and it is very interesting that in the Housing Corporation's new building programme of social housing over the next couple of years, which will see a 50% increase in delivery of social housing, that 49% of those homes will be built on the basis of modern methods of manufacture. Q225 Mr Chaytor: On Monday this week I spend a day in Parkhurst and Albany Prisons on the Isle of Wight talking to inmates about schools and training and without exception every long-term inmate I spoke to wanted on their release date to work on a building site and they wanted to be bricklayers. Now, you will appreciate that this raises issues about standards and quality in the construction industry and yet in the Barker report on the question of regulating quality the recommendation she comes up with is fairly flimsy, is it not? Keith Hill: Well, if I might say so, the answer to all of these things is training, is it not? I read a wonderful story - Q226 Mr Chaytor: But, if I could just raise the point, it is also to do with regulation, is it not? All that Barker is saying here is that the House Builders Federation should develop a strategy to increase the proportion of house buyers who would recommend their house builder to somebody else from 46% to 75%. If you accept this, a quarter of purchasers of new houses are still going to be dissatisfied because they would not recommend their house builder to somebody else. So this is fairly lax regulation, is it not? My question is, what are you doing to drive up quality? Given we are going to have huge numbers of serial rapists and murderers coming out of Parkhurst and Albany seeking jobs on building sites to build the homes you want, what are you actually doing to drive up the quality? Keith Hill: Well, can I just say that I do not really want to go there with regard to who exactly is going to be building these things, but I would have thought there is absolutely nothing wrong in prisoners actually being trained in these skills. I was going to say that I read a wonderful story this week about training for pipeline layers, of which there is a national shortage, and apparently significant numbers of prisoners have been trained in these skills and the rate of recidivism amongst these pipeline layers is absolutely minimal. Actually, is this not a way forward for us all? On the question of the quality of the building, however - Chairman: I think we are straying somewhat and time is short. Q227 Joan Walley: I would just like to continue the whole debate about sustainable construction and take you to a different place, to Burslam, and maybe help you out there because on Friday I am going to be cutting the sod of a new construction college which has got £5 million worth of funding. But I think what we really want to explore with you in terms of the sustainable communities that are taking place now and Barker in terms of the training shortage and the construction skill shortage that there is and the lack of research that there is. What research is specifically taking place about construction methods for sustainable development? The Committee was in Aberdeen last week and we have also had BRE giving evidence to our Committee and it has been said to us that the funding that the Government is making available for research into sustainable construction has declined and what we really are interested in is to make sure that these new properties that will be going up have got the proper sustainable energy and everything else in terms of construction skills embedded into them. What research funding is available for this? Lord Rooker: Off the top of my head, I can tell you in some ways in construction, we do not want to pass the buck on this because we are speaking for the Government, but the DTI are involved in that. But if you have evidence from BRE, I would suggest that if you have not been there, go there. I was at BRE just over a year ago where they had got an exhibition, a symposium, the largest operation they had done in fifteen years for off-site manufacture, both the symposium for the week and the examples they had got there in their yard, because there is obviously a large space there, of the varieties and forms of modern methods of manufacture where the quality is vastly superior because it is basically quality controlled in factories. The big problem is to make sure on the site when it is put together you have got top quality control. That is absolutely fundamental because it ruins the whole work that has been done inside the factories if it is not put together properly. It is put together with precision rather than with a sledgehammer. So there is a lot of work going on on that and I would not argue about the money. It is not research, it is people we want and, as Keith said, training. Q228 Joan Walley: I think that point has been made very clearly to us, that if you do not have the workers on site actually knowing what they do and how they are doing it, you can lose all the gains you have got. Lord Rooker: Sure. Q229 Joan Walley: Just returning to the funding for research, one of the issues we were concerned about is the whole life impact of different construction methods and materials, including modern methods of construction and given the fact that the Housing Corporation already has, I think, quite a significant target to meet, are you satisfied that there is sufficient research into the kinds of new methods that we need to be looking at and how are you evaluating that because we would not want to be in the situation where we were building for the future but we were not using the best possible practical means of construction methods to do with sustainable development that we need? Lord Rooker: Well, the answer I would give to that comes from another exhibition I went to at the National Exhibition Centre, the big building exhibition. I was only able to go to one hall and I wanted to go to the offsite manufacturing hall. There were probably twenty companies on display and the key is this. You are looking at house building. Virtually any other building that goes up in this country, school, hospital, community centre, is not built with wet trades, traditional methods, it is built with modern methods of manufacture; probably even the prisons are as well. So it is not as if we do not have experience. The term "modern methods", by the way, I stole on behalf of ODPM from Manchester because when I was being shown some properties around there about what was being done with new build and refurbished, I remember saying to the developer, Tom Blockson(?), "Tom, how do you describe what you are doing?" He said, "Well, I'm using modern methods of manufacture rather than traditional methods." As I say, we do this in other buildings. Go and have a look at them. There is nothing new. Q230 Joan Walley: But are we doing the research to check, because some of the evidence that we had in Aberdeen was that modern methods might not actually in the long term be as sustainable as traditional methods and it is about whether or not we are monitoring whether the research that we are doing is adequate or not. Keith Hill: Well, on the question of research, I was tempted to quote a very great man, who of course, as we know, said, "Why look into the crystal ball when you can read it in the book?" The truth is that modern methods of construction, offsite manufacture, are the norm in a number of countries, certainly in North America and very extensively in Germany, for example. So the technologies are there. They are well-tried and they are importable. But inspiration has winged its way to me on the question of investment and research and I can inform the Committee that we have a significant programme to support our building regulations development. That is approximately £5 million. It is the case that the DTI has the remit for construction and performance and I am also delighted to inform the Committee that the BRE has carried out a huge range of studies on technical performances. Q231 Joan Walley: They told us that the research money has been cut. You do not disagree with that? Keith Hill: I do not think we can comment on that. Lord Rooker: No. I do not know a body in the country, whether a quango or a research body, that does not say, "We need more money." But I cannot comment on the particular item. Q232 Joan Walley: Just turning to the Sustainable Buildings Task Group, which you mentioned just now, do you think it is likely that you will be going ahead with all the recommendations that were there, and if so what timescale are you working to? That includes the national centre as well that you talked about. Lord Rooker: On this Review the remaining recommendations were expected late this month. We are taking forward the key recommendation, which is the national centre, which Keith referred to, and there is a list of the great and the good, including ODPM staff, Rawten(?) Institute, Kaye, Commissioner for Architecture and Built Environment, chartered surveyors CITB, English Partnerships, English Heritage and one or two others. Q233 Chairman: This is not just a minute, Minister! Lord Rooker: There is a whole list of people on that looking at how we would operate this national centre and to locating it. Q234 Joan Walley: Have you got any shortlist for the location? Lord Rooker: No. Keith Hill: It is great doing these double acts because it does give you time to scrabble through your notes on it! Q235 Chairman: I think we should have you in separately next time! Keith Hill: On the question of the Sustainable Buildings Task Group, I can inform the Committee that we welcome the report of the Sustainable Buildings Task Group; indeed, I was present to launch its report, I seem to recall! We support the principles of their recommendations and will be responding formally on the recommendations by the end of this month! Q236 Joan Walley: Could you just tell us finally why BRE were not on that task force? Keith Hill: I do not know the answer to that. Q237 Chairman: Could you write and let us know, please? Keith Hill: Yes. Chairman: Thank you. Q238 Mr Francois: Looking at the Sustainable Communities Plan - and I declare an interest, Chairman, because my constituency is not actually within the Thames Gateway but it abuts it, so I know a little about it - the plan is often talked about, including by yourselves, as if it is synonymous with sustainable development. There is a lot of people who hold the view that it is seriously lacking in a significant environmental dimension. How would you defend yourselves against that charge? Lord Rooker: Well, look at page 5 of the Sustainable Communities Plan, where we set out there, if you like, a twelve point plan of what makes a sustainable community. I am not going to read them all out, it is there. That is what we are operating to. There are people, of course, who are against growth at any price and it takes longer to explain the reasons for the growth and what we are doing than it does to oppose, but we can quote example after example where since the plan was operated and since the policies were enunciated we get higher density, better quality developments, people want to go and live there rather than flee from there, and where we try and get it jobs-led. It is not a house building programme. We have only talked about numbers. We are not engaged in the Communities Plan on a house building programme. It is not about that. Q239 Mr Francois: Minister, just briefly, there were twelve points but, as I understand it, just one of them referred to the environment. The Energy Savings Trust looked at this directly and they criticised the plan as trying to build houses "as quickly and cheaply as possible, overriding environmental commitments", those are their words, not the Committee's. The plan was called by them "at best a missed opportunity and at worst reckless." What would you say to the Energy Savings Trust? Lord Rooker: That does not sound like a very professional analysis of what we are actually doing, as opposed to what they may have read. I can take you to examples of dwellings (both new and refurbished) where work is going on to try and find new techniques, because we do not want to go around demolishing things we do not need to demolish - there is one in particular in Smethwick where there is a group going on there - where we try to show that 100 year old dwellings can actually be upgraded so that they have got better environmental standards than even modern buildings I have been in with what we have been able to do to use these techniques. Elsewhere in the same area, I was in refurbished dwellings last week, blocks of flats where we are doing that, whether it is through grey water, energy conservation, a whole range of issues, and of course energy supply as well through the sun rather than through burning carbon fuels. So there is plenty of work going on. I am not saying it is perfect and every site is like that, it is not, but that is the direction in which we are going. Keith Hill: Do bear in mind, for example, that the last set of building regulations were designed to improve thermal efficiency by 25% on new build and if you look at the exemplar new build that we are developing through the so-called Millennium Villages, if you look particularly at the Greenwich Millennium Village, with which I am very familiar, as a result of recycling of water and as a result of improved fittings you are looking at water savings of something in the order of 30% in those developments. That is the sort of standard that we are obviously looking towards in these new developments. Q240 Mr Francois: Minister, you will be delighted to hear that the Committee has actually looked at precisely that example. Keith Hill: I am delighted. Q241 Mr Francois: I am delighted at how pleased you are. Can you tell us if the rest of the houses in the Gateway will be built to the same standard? Keith Hill: I do not think we can give that specific undertaking, and let me say as well that it is not our intention to apply or impose a separate standard for new build in the Gateway. The truth of the matter is that the view of the building industry is that they would much sooner operate on the basis of, let us quote the phrase, "a level playing field" so that you have the same standards across the generality of the industry for all the reasons of economies of scale, and you can understand why that should be the case. I think that is the right principle anyway. Why should we impose a higher standard in Thurrock than we would want to see applied in Rayleigh, or for that matter in Aberdeen, or for that matter in Aberystwyth. Q242 Mr Francois: I take your point, Minister, but you did imply in your earlier remark that you were very pleased with what was going on in the developments at Greenwich and then when we said, "Oh, that is a good thing. Can you guarantee that will happen everywhere else," you then wrote back - Keith Hill: Oh, you do get your digs in, do you not? Q243 Mr Francois: Forgive me, Minister, but that is what you did. PPS1. Is it your intention under PPS1 that planners will be allowed to specify the materials, quality of design, etc., in order to argue for more sustainable homes? Will you provide that power under the aegis of PPS1 to local planners? Keith Hill: Well, there are two things. Again, I refer to your distinguished role on the Standing Committee at the Planning and Compulsory Purchase Bill, and you will recall that of course we have introduced a sustainability clause into the Bill. So sustainability now lies at the heart of the planning process. In addition to that, we have laid a further requirement for a much more explicit statement of the components of a plan application as part and parcel of the outline planning permission procedure. Briefly, we would certainly expect those sorts of material considerations to be taken into account Chairman: That certainly is a fascinating dialogue, but there is one other important issue which I hope we will have time to cover. Q244 Sue Doughty: What we need to move forward to now is looking at housing, energy and climate change because we have got a huge opportunity to either fail to achieve something or to make a real difference in the quality of housing and reduce our contribution to CO2 emissions. As we all know, there are going to be 200,000 new homes being built a year as these proposals are being taken up. We have got a significant environmental impact, not only in terms of land use, resource use and water use but climate change, but in fact the driver for addressing these issues has not been your Department but DEFRA and it came out rather suddenly after Barker had come out and where it was clear that there was not so much in sustainability as we would like to see. Is sustainability really at the heart of the housing programme or did you actually just sneak it in afterwards? Lord Rooker: No, honestly. That is a very pejorative question. I just invite you to read - it is free, it is in the Vote Office - the Communities Plan published 5 February last year, where we set out the road map of how we are operating. So it is not an afterthought. I genuinely ask you to believe it is not an afterthought. We made that quite clear. We published statements, I think in the summer of 2002, after ODPM was formed about the way we would operate, that if it was not sustainable we were not having it because we have got enough dwellings in this country that have not lasted. If it is not sustainable, it will not work, it costs more, peoples' lives are ruined by it, and therefore we genuinely have to look at communities and not a house building programme to make the whole thing work, whether it is the social infrastructure, the road infrastructure, rail, the hospitals and everything else, it has got to be sustainable, and to look then at the quality of the products used in those dwellings. If we can recycle, fine; if we cannot, we shall then use low energy and low water supplies, as Keith said, were possible. Chairman: As you know, a division has been called. Joan Walley wants to slip in a quick question. Q245 Joan Walley: I just want to follow that up and ask that even if you cannot answer it now could you write to the Committee in respect of the new regulations that are coming out in terms of ODPM, in terms of energy efficiency standards as well and the level at which we will be getting the energy efficiency standards in. Lord Rooker: Yes, sure. Chairman: Indeed, there may be other issues, because I am afraid we have not covered all the ground we wanted to (no pun intended), which we might invite you to give written evidence on. But thank you both very much indeed. It has been an interesting session. The Committee suspended from 4.22 pm to 4.32 pm for a division in the House. Memorandum submitted by Countryside Properties plc Examination of Witnesses
Witnesses: Ms Trisha Gupta, Director and Group Chief Architect, and Mr John Oldham, Director of Countryside Properties (Special Projects) Limited and Group Town Planner, Countryside Properties, examined. Q246 Chairman: Thank you very much indeed and thank you for your patience. I am sorry that previous session overran a bit so we are starting a little bit later than we wanted to. We are very grateful to you for coming in and for giving evidence to us. Could you just give us a brief sort of thumbnail sketch of your view of the Barker report? Mr Oldham: If I may start, Chairman. There is much to commend the report and one of the areas we are particularly keen on are some of the recommendations for trying to speed up the planning system. One of the things we feel at times we are engaged with is the planning process not actually delivering. Barker in her report suggests the idea of a design code process through local development orders. If that process could be moved on, I am sure it actually may speed up the particular process. Why we are particularly keen on that is, for example, recently we moved a scheme for about 400 homes in Cambridge and it took us two years, on a brown field site on government land, to go through the community engagement process because local people did not like the idea of traffic generation. So it is trying to actually introduce quality. I think that is one area. One area I think we are particularly concerned about though is this idea of some form of supplemental planning charge. In the report there is an idea of reducing contributions with section 106 and making it up through the supplemental planning charge. It seems to us that on three separate occasions this has been tried since the Second World War in some form of development land tax and this is a new idea coming in. But our experience in building new sustainable communities is that the section 106 mechanism has worked exceedingly well, albeit today it may be refined, and it may be refined, again drawing on the Cambridge experience, in terms of looking at strategic 106 contributions so you are looking at a wider contribution maybe towards wider transportation elements, and then site-specific 106 contributions which may relate directly to affordable housing by way of example on the site. So there are two examples. As you know, there are many, many recommendations. For example, we are very interested in what will happen with revisions to PPG3, for example, on housing, which Barker puts out in her report as well, but we are going to have to wait some time for that. Those are the two years. There is a Ying and Yang approach to it really. Q247 Chairman: Could you comment on her opinion that the use of land banks by developers has a minimal impact on housing supply. Mr Oldham: I think it is how you understand land banking. We identify as a company the land that we have under control, which is controlled by option agreements, and I think in her interim review she goes through the house building process and looks at how industry tries to secure control of land. That may be the case, but the way we land bank is to secure planning permission and the land often is without planning permission. We are actually going through the planning process to secure planning permission. So land banking is a process in which in terms of large schemes for sustainable new communities it is an essential process for us because we have to identify land often before the local authorities identify that land. So we go through the process. Previously we went through the structure plan process and then local plans. These days we will be going through regional planning guidance or RSSs and then through the LDF process. So it is long term identification of land. Q248 Chairman: You have got, I think I am right in saying, 5,400 homes' worth of land in your land bank. How does that compare with the industry generally? Mr Oldham: I think it depends on the size of the organisation. We are not one of the top ten housing firms, but I think we are probably one of the leaders in that, mainly because of the way we as a company have focussed in particular on large mixed use communities, whether on green field or brown field land, and it is having a long term view about development. Sometimes the long term view is maybe ten plus years to secure planning consent and then another ten plus years to build that development. So that is a particular viewpoint, I suppose, of our company in that we have focussed in particular on building sustainable new communities, which means that we have to go through that land banking process. Q249 Chairman: Does the fact that you have been given, I think, some recognition for the sustainable approach that you incorporate into your work reflect the nature of the work you are doing to some extent, i.e. that you are building mainly in growth areas and in higher density situations? Ms Gupta: Eight-four per cent of our development last year was on brown field sites, which is far in excess of the guidelines, obviously, and I think in terms of looking at areas of land where we want to be developing the sustainability issues are very much in the forefront. Mr Oldham: Just to add to that, I suppose it is a cultural thing within the business in the sense that we are trying to think about where we think development is going in the future at times. So, for example, back in the late 80s, early 90s, we were looking towards trying to create, for example, twenty miles an hour speed limitations within our residential developments. At the time it was seen as quite revolutionary and we had a devil of a debate with the Department for Transport, the local county council, etcetera. Today it is common place. So it is trying to actually bring forward sensible commercial decisions but also, I suppose, trying to sort of enhance the quality of the place that we are making and the quality of the environment we are creating. Ms Gupta: That is an important point, because what we are doing is actually adding to the overall quality of the development, looking at the quality of life of the people who will be living there and making attractive places for people to live and work. Q250 Chairman: So you are driven partly by altruism, partly presumably by planning controls and partly by the fact that building well is good for your bottom line? Ms Gupta: It adds value to everything we are doing. Q251 Chairman: Who within this area actually drives it on any given site? Is it the planners, the developers or the architects? You are going to say all three are you? Ms Gupta: Within the business or as a whole? Within our business or - Q252 Chairman: Obviously I am talking about the relationship between your business and outside people like planning authorities. Ms Gupta: I think it is driven by us because that is our philosophy and that is the way we like to bring forward developments because we know that that is good for our bottom line, to use the words that you used. We also find that because we have such a good track record of bringing through developments through the planning process then land owners are far more likely to want to work with us, so we get introduced to far more possibilities for future development than we might be. Also because of our reputation we find that local authorities are quite happy or very happy to work with us because they know that we are willing to work with them in partnership, particularly on large-scale developments, to work to bring the whole thing to fruition. So it is a partnership. Mr Oldham: Just to supplement that, an increasing problem though is actually finding anybody out there in local government because of the skills and resources shortage in local government and finding enough people with the skills, because often I think to a certain extent we concern local government when we come in and suggest a proposal and often there are tensions within local government. Ideally, as Tricia said, it is good to try and create partnerships, but sometimes, though, obviously we are in conflict with local government and some of those things may not be for professional or technical reasons, they may be for local political reasons with local communities in terms of their own particular views about development. So we plough through the process and just audit-trail and go all the way through the process to an inspectorate if need be, but what we would like to say at the end of the day is to try to be best of friends because I think at the end of the day if communities fight you it is still part of their community and if we are successful we want to go back and try to actually work with them. That is one of the things we always try to do and it is really difficult and it is quite a hard process really to go through that. It is also in our business trying to actually, I suppose, train our own people in this sort of philosophy and this culture basically because we are not necessarily here today and gone tomorrow, it is a long process. Q253 Chairman: Am I right in thinking that you were involved in the Greenwich Millennium Village that we heard about earlier? Mr Oldham: Yes. Ms Gupta: Yes. Q254 Chairman: Did I not hear somewhere that there had been some debate between yourselves and an independent architect whose original plans were somewhat more radical than those which were eventually put into construction? Mr Oldham: Actually, that was a debate between the overarching master planner, who was Ralph Erskine, a marvellous octogenarian architect whom we employed, and the project architect. There was a debate about who was running the show, basically, and it ended in sort of minor tears in that there was a debate between the project architect, ourselves and the master planner. That was resolved with us actually settling with those and actually getting on with new projects and architects, still employing the original master planner. It goes back to what I was saying to you earlier on about design codes. The master planner will set the overall framework for the scheme and the design code - we have got a design code for Greenwich Millennium Village as well, so we use that - to which then individual architects will respond on individual phases of development so it fits in with the design code and the master plan. Q255 Chairman: Was the result of all this that some of the environmental measures originally envisaged were watered down? Ms Gupta: Not at all. Chairman: Okay. Thank you. Q256 Mr Francois: I declare an interest in that I am Essex MP and you have built and are building a number of houses in my constituency. If I might say, your evidence is fascinating because you are kind of getting right to the nub of the matter. You talked about strategic section 106 contributions. Can I illustrate with an example. In my constituency all of my secondary schools are effectively full up, it is very difficult to register with an NHS GP, it is practically impossible to register with an NHS dentist, we have got all sorts of traffic problems and they are getting worse. The more and more house building that takes place, the more those problems are likely to be exacerbated unless there is significant compensatory infrastructure in investment, and what I say could apply to a number of other constituencies around the country; I am by no means unique. What contribution can developers like you really make to that situation? Ms Gupta: Well, if you take an example in Essex, which is Great Notley Garden Village, we negotiated with the local authority a whole package of community infrastructure items and we were able to plan for a proper sustainable community where it was not just going to be 2,000 houses but we were going to be providing community facilities, recreation facilities, a new school, business park, shopping, all the things you really need - the doctor, the dentist, the vet - and these were all part of the section 106 agreement and were embodied in the concept plan and master plan which we got outline planning permission for, and then we worked through that on detailed phases. What we actually did to ensure the whole thing worked was we provided up front temporary facilities. So when we had got a couple of hundred houses we were providing a doctor's surgery in a glamorous version of a portakabin but it was basically a portakabin and the local doctors did a surgery twice a week. What we did by doing that was to create a pattern of the people living there when they first moved there that they would start using the local facilities, that they would get into the habit of it. So instead of travelling into Braintree, which was the nearest place, by car or bus, or whatever, they actually knew that those facilities were going to be on their doorstep, and we did exactly the same with a church, a crèche, a vet. Having established these patterns, when all these facilities came on line as proper buildings then people were using those and so it was properly established as a self-sustaining community. Q257 Mr Francois: I appreciate this matter might be in some senses commercially confidential, so I realise you cannot give a complete answer, but can you give us at least some feel for what proportion of your profit on the deal all of that was? The classic criticism is that the house builders come in, they build the houses, they get away with the smallest possible section 106 commitment they can make and then they are off to the next site. That is the classic criticism of the industry. By the sound of it you went beyond that and you did something more substantial and in a sense I am trying to give you credit for it, but I would just like to get some feel for what it cost you to do that. Ms Gupta: I have not got an exact figure, but the section 106 agreement was negotiated before we owned the land. We had an option on it. The land was originally agricultural land and obviously the package of community benefits came off the land value. Q258 Mr Francois: If you do not want to say in public, could you possibly write to us and let us know? It would just be helpful to see that. Do you see what I am driving at? It is important to understand where someone is doing it the right way, as it were, what it has cost them to do that because that might be an example for others. Ms Gupta: That is an example of a section 106 agreement acting in the way it should, is it not? Q259 Mr Francois: Yes, but what I am trying to establish is what it really cost you to do that. If you could write to us on that. Mr Oldham: If I could just add to that, though, because I think one of the things to understand is that it is different measures as well in terms of the overall business, in terms of borrowing money from banks, the phasing and the vending. We often get asked by the communities for the environmental and social benefits of the scheme without any regard to the economic benefits of the scheme. So often, for example, a community maybe wants a local by-pass at a very early stage and to actually make these things work you have to have money in for money out, so there is a huge debate about phasing and how you make these things happen. Can I also say, I think there is going to be a gradual step change. I think to a certain extent it happened after Bruden(?) in 1987. I remember writing a note to our company saying, "Watch this space, guys, there's going to be a significant change in terms of our industry and how we to address this." I think local government now with the next round of LDDs is really trying to get on the case, as you discussed earlier with the Ministers, regarding sustainable construction and sustainable communities. So that measure is going to be very interesting. Mr Francois: Thank you very much. Q260 Joan Walley: Just pursuing how you in a way have added value in terms of the approach that you had towards all of this, could I just pursue the reply you gave to the Chairman earlier about what drives this agenda, whether it is local authorities or architects, and you talked about the concern about planners. How much do you think the new special delivery vehicles in areas where there is a huge focus on regeneration can help to drive the agenda? Mr Oldham: Well, we are working with one in particular at the moment. One of the issues in the introduction to this was this debate between the planning process and actual delivery and the first time in my memory in southern Britain I am now getting one or two local authorities in southern Britain actually asking me, "When are you going to build houses?" I say, "It is over to you guys," and what we are trying to do with the delivery vehicles is speak with them in terms of this issue not only about quality of development but quantity of development and how we can work informal or formal partnerships together to actually make things happen. So, for example, on one particular scheme at the moment there is a delivery organisation looking towards some form of guided public transport, there is a county council looking at a planning application for a major highway for access and we are looking forward to working out master plans for planning applications. So we are trying to coordinate the work together and sharing the information. We may be sharing information on archaeology and ecology as we go through the process. So there is beginning to be, very, very slowly, some working together, which we are slightly encouraged by. Q261 Joan Walley: In respect of your approach and the added value to your own company, is that just added value financially? Is there an extra return for shareholders, or is it in terms of other measurements, in terms of perhaps the standing that you have? How would you define the added value that you have to your company as a result of your approach? Mr Oldham: I think added value comes in many ways. For example, we want to add value to the reputation of our company by attracting graduate recruits to our company. We want to retain people in our company. So that is a very important consideration because the better your team is, the more you will be able to do as a business. We also want to actually try to act as responsibly as we can because there are commercial and corporate requirements for us to do that, but it also adds value in terms of again word of mouth reputation. So in terms of the business, it is not just the financial bottom line, there is a wealth of other measures. I do not think the word is altruism either, as I think the Chairman said earlier on. It is commercial and it is common sense and sustainability will add to our business, and you have got to go with the flow. Q262 Joan Walley: How does the fit in then with the contractors that you have? Mr Oldham: Well, that is an absolute fundamental question because it is how we can spread our message out to the supply industry, to the people who construct our homes and that is something we are working very, very hard to try to do, but it is a huge industry out there. Q263 Joan Walley: Do you find they are queuing up to work with you or would they rather not touch you with a barge pole? Mr Oldham: There are various responses. We are tough. Q264 Joan Walley: How do you see reaching out and providing more information and more education about the benefits from working in this different kind of way? How do you feel that you can help get sustainable development on the agenda of contractors or those people going through construction colleges, hopefully the one in Burslam that I referred to just now? How is this approach being rolled out? Ms Gupta: Well, we issue an environmental, social and ethical report every year along with our report and accounts and this describes our approach to corporate responsibility generally, not just environmental issues. Q265 Joan Walley: What about the people you are actually employing? Do you go through training with them? Mr Oldham: Yes, we do. We have regular environmental forums. We employ a group sustainability manager, who holds forums with all parts of the business. We also have an environmental management system which is being rolled out throughout the business and that runs in line with our quality management system. We have an information centre which is called the Hub, which is an Intranet, which gives people details about environmental issues, sustainability issues, the latest schemes, the latest materials that we have been using. So all that information is accessible and there is continuous training. Q266 Joan Walley: So when you take people on, when you recruit people, are they easy to find or do you find that there is a large gap that you have to plug in terms of their understanding of this agenda? Ms Gupta: We describe our environmental agenda right from the very start, so when everybody has an induction training - Q267 Joan Walley: No, what I mean is when you are recruiting people, when you are interviewing people for jobs, have people got the skills or do you accept that you then have to train them into it? Ms Gupta: A lot of people are attracted to the company because of our approach to corporate social responsibility issues, so they come along with that understanding. Those who could do with training receive the appropriate training. Q268 Joan Walley: So there is no skills shortage? That is what I am really getting at. Ms Gupta: No. What I was moving on to is that we recognise that there is a skills shortage throughout the construction industry and what we have done is set up a Countryside academy and this deals with training and recruitment on various levels. So we take on apprentices on site and train them. We take people on day release who are going to college and train them in that way or support them through college. We sponsor people through university and then we have a graduate training programme where new graduates do a three year course through the company in various departments, various subsidiaries, so that they become rounded people and hopefully they are our high-flyers of the future. So we are tackling training at all levels. Mr Oldham: There is a skills shortage. It is hard finding people. Q269 Joan Walley: That is really what we were concerned about. Just one last question. You are not a member of the House Builders Federation, are you? Ms Gupta: No. Mr Oldham: I think we re-focussed our emphasis, again just thinking about the planning system, to be absolutely fair, towards the CBI because lots of things that we were interested in were about job growth and employment. Q270 Joan Walley: So it is not a question of no confidence in the House Builders Federation? Mr Oldham: No. We have just actually refocused ourselves on to employment because the planning system was looking towards jobs. Housing people is bizarrely the sort of thing that we do not want to do as a nation. Joan Walley: Thank you. Q271 Mr Savidge: In your view, is the Sustainable Communities Plan really about sustainable development or do you feel that sustainability and environmental aims are being compromised by the wish to have quick, cheap homes? Ms Gupta: I think it is about sustainable development. Obviously with the number of houses that need to be built, I think we could not carry on building new housing in the way that we were and that sustainable development deserves to be much higher up the agenda. Mr Oldham: It is clear to us again, going through from central government down to local government, there is a process and that the process is starting off again with PPS1 and this drive on the path to sustainable development. So it is being led from the government and it is coming down through local government, and it is a much wider thing. This home building is about building communities and it is all those attributes that make communities safe and great places to live in. Q272 Mr Savidge: We have had comments from several witnesses expressing concern about the way in which infrastructure and facilities are being developed alongside all the new housing. From your experience, would that be a cause for concern or not? Does it mean that there is not necessarily going to be cross-planning? Mr Oldham: Well, there are lots of responses to that. It is some strange, bizarre middle-class thing in that sometimes if we want to do a neighbourhood centre sometimes we have problems actually building a neighbourhood centre in a housing area even though there is this idea about reducing the need for trips and journeys and providing local services. Often people reject having a neighbourhood centre. They would rather have no shops or services and would rather drive to the town. So we have those sort of tensions which we find quite perverse at times. In terms of infrastructure, one of the interesting things at the moment we are trying to experiment with is to persuade people to use public transport more and we need to actually work far closer with local government about car parking provision because that is another issue, car parking. If you are doing an urban extension, what happens with the management of car parks in the town centres? So there are those issues in the infrastructure. Again, there are issues with the Chamber of Trade and Commerce and reactions to a lot of car parking. There are lots of little tensions within local politics on these issues and car parks are huge revenue generators and often it is the local government which is in control of the car parks as well. Q273 Paul Flynn: You use EcoHomes and BREEAM. Is this a nationally recognised standard and are you entirely happy with it, or would you like to see it improved in any way? Have you any criticisms to make of this standard? Ms Gupta: We have been very happy using the EcoHomes system, which was developed by the Building Research Establishment, and it is very easy to understand. So we chose to use that as one of our objectives to improve the standards of our new homes. So if you equate the latest building regulations, they are probably "pass" on the standard; it is "pass", "good", "very good" and "excellent". At the moment our objective and what we are achieving is that all our new homes are built to at least "good" standard, so that is another point up, but we have achieved "very good" on some sites and at Greenwich Millennium Village it was the first development to achieve "excellent", so that is as high as you can get. Mr Oldham: Could I just add to this, though, that one concern we have got, and again it is to do with the comment I made earlier on, is about local government moving on the path through planning documentation for sustainable development. On the comment earlier on, when the Ministers were speaking about the level playing field, one thing which we would welcome is that local government now from boroughs, cities or district councils are all coming out with sustainable construction documents, their supplementary planning documents. Every place is different and if we had a national standard using BREEAM it would be a lot easier for our industry to actually work through that, because everywhere you go people have got different measures on how we can actually move on this path and it is getting quite complex now trying to move this forward. Q274 Chairman: The fact that you are achieving "good" in a hundred per cent of your plans can mean one of two things, can it not? It could mean that you are outstanding and good, or it could mean that the tests are not very demanding? Ms Gupta: Well, obviously they get more demanding as you go up the scale, but if you actually understand how it works and know how to approach it, it is not unachievable obviously. Q275 Chairman: It is probably too easily achievable? Ms Gupta: It is not purely based on things like the thermal qualities of the materials that you are using, it is also things like the proximity of the local services and orientation and things like that. It is a package of things. Mr Oldham: One of the things that again we are trying to do - and you obviously cannot build Rome in a day - year on year is set targets and improve our targets. So we have got objectives across a whole range of issues and "good" is to move more into "very good", so it is plodding on through the process really. Q276 Paul Flynn: What would you like to see of the new code recommended by the Sustainable Buildings Task Group, which I believe is based on the recommendations of the BRE standard? Mr Oldham: We are not aware of that, I am afraid. Ms Gupta: No. Q277 Chairman: That does suggest that somebody is not communicating properly because if there is a Sustainable Buildings Task Group which has produced a new code, companies like you should be aware of it. Mr Oldham: My apologies. I actually misheard. I thought you said new co like a new company. Q278 Chairman: No, it is a code of practice. Mr Oldham: Well, again that will come out through our own technical managers. Within the company there are different departments with different responsibilities and they will be reporting to our environmental committee about that. I have not seen a report on that so I cannot comment, but if you would like us to write back on that we certainly would. Q279 Paul Flynn: If you would, please, and we would like you view on what is the best way forward, whether the existing standards or going into new areas. As a final question, what policy changes would you like to see in the next five years to ensure that we build more sustainable homes? Ms Gupta: I think I would like to see sustainability issues embodied in the Building Regulations because if you take the case of something like accessibility, when accessibility was introduced as a requirement it was introduced as part of planning, people had it as planning guidance and it varied throughout the country. So you would have some local authorities who were looking for 5% accessible housing, 10%, 15%, and also the description of what accessible housing was varied. In some instances it was for wheelchair standard, in other instances it was just flush thresholds and minor items like that and it was very confusing. But now it is part of Building Regulations and everybody knows exactly what the standard is and everybody knows where they are and what they have got to do and there is no argument about it. It is the same with sustainability issues. If those issues were embodied in the Building Regulations then there would be no argument, no confusion. Chairman: Thank you. I am afraid we are out of time, but we are most grateful to you for your evidence and we look forward to hearing from you on the couple of points that I think we agreed you would follow up for us. Thank you very much indeed. Memorandum submitted by House Builders Federation Examination of Witnesses
Witnesses: Mr John Slaughter, Director of External Affairs, Mr Andrew Whittaker, National Planning Advisor, and Mr Ian Hornby, National Technical Advisor, House Builders Federation, examined. Q280 Chairman: Welcome. Thank you very much indeed for patiently listening through what has been rather a lengthy session and thank you for coming along. Not surprisingly, you welcome the Barker Review conclusions. I say "not surprisingly" because she is suggesting that we need to build lots more houses, which is your business, although I thought the object of the exercise was actually to reduce house prices so it seems slightly strange and anomalous that you welcomed a measure which ostensibly set out to reduce the price of the things that you sell. Is there anything in the Barker Review that you do not like? Mr Slaughter: I do not think there is anything that we do not like. Chairman: Nothing at all, not even a smidgeon of anything? Q281 Mr Francois: The colour of the cover, or anything? Mr Slaughter: I think we regard it as a very fair assessment of the issues and very important in recognising the housing supply shortfall the country faces and the need to tackle issues on the planning system. You ask is there anything we do not like. It would be tempting to give a flip answer, but I will try and avoid that by saying that there are industry issues that are addressed in the report as well. It is not a report that only deals with one audience. We are being asked to address a number of quite significant issues. There may not be as many recommendations numerically facing house builders as the Government, planners or other groups, but they are still significant issues. I would not say that we do not like them, but we recognise that there are issues that we have to pick up as an industry and respond to as well. Q282 Chairman: What about the issue of land banks, which we touched on with the previous witnesses? Do you have ideas on that? Mr Slaughter: In the sense of do we agree with what Kate Barker says? Q283 Chairman: Yes. Mr Slaughter: Yes, I think we feel that is a reasonable assessment. She has essentially pointed out, as we would see it, the business need for there to be a certain level of land banks and that the level of land banks, taking into consideration the timescale for development and the uncertainties of the planning system, is not unreasonable. Q284 Chairman: She also made a number of recommendations for you, did she not? Mr Slaughter: Yes. Q285 Chairman: A strategy to improve customer satisfaction; a code of conduct for your members requiring fair contracts; a new strategy to remove barriers to modern methods of construction; a strategy to improve the uptake of apprenticeships; a code on the external design of new homes; a best practice guide for compensating householders for development. A very long list. Are you happy with that list? Mr Slaughter: We think it is a reasonable list. We recognise there are issues in these areas. Q286 Chairman: Surely there must be things you are already doing? Mr Slaughter: Well, we are, yes. We are addressing these issues, but I think the way that we see Kate Barker's report is picking up the fact that there is work going on in these areas already, that it has been recognised - and some of the discussion earlier this afternoon has touched on some of these issues - that there are real issues to be tackled, not just in terms of delivering more houses but in actually delivering sustainable development and sustainable communities. We recognise all that and we welcome that. We are willing to respond positively to it and we have already said that that is what we are doing. Q287 Chairman: What would you say to the thought that you are being handed a long list of codes and strategies to get on with but given absolutely no new obligations at all? Mr Slaughter: Well, in a sense they are obligations. Perhaps I may make an observation to explain my comment. We perhaps regard the Barker report in a sense as a package This was not explicitly discussed earlier, but the Ministers have said that they will need to come back and look at how the whole Barker agenda is being worked through, not just how they have responded to the issues that they were discussing earlier on but how the industry has responded to these challenges late in 2005. So if we look at this as a package situation then we feel that is a reasonable thing for us to look at and pick up these issues. Q288 Chairman: Do you think if implemented in full the Barker recommendations would actually reduce house prices? Mr Slaughter: I think we have to be very careful what we are saying here. Q289 Chairman: Well, reduce the rate of increase in house prices I should say. Mr Slaughter: Barker does not suggest there should be any particular outcome, perhaps I should first say that, in terms of a level of price increases in the future. What she points to above all else in her analysis is that if you look back over thirty years there has been a consistently higher real increase in house prices in the UK market than in other European countries and that this is the sign of a significant undersupply of housing, and her objective is to reduce that real level of increases. I do not think she has actually said that we should be looking for falling prices or any particular outcome, but rather a better balanced market, and I think that is what we would also suggest is the right focus. Q290 Mr Francois: Is it true that if, for argument's sake, the Bank of England were to put up interest rates by 2% that is going to have a much more fundamental effect on house prices than anything that is in Barker? Mr Slaughter: Well, I think you have got to distinguish the short term from the longer term position. That is why I specifically referred to the thirty year perspective in my previous answer. The Barker analysis does talk about both the short term and long term. I think one of the most interesting things she fids in her analysis is that the undersupply in itself contributes to short term volatility in the market. So I think our view would certainly be that what we are really looking at is the long term trend movement in house prices, not the short term factors, which can always be influenced by other factors, including interest rates. Q291 Mr Francois: Just on that point, what are you calling long and short term, because the market goes up and down, but you are talking about four or five year movements in that market as opposed to something that lasts six months? Mr Slaughter: Yes. Q292 Mr Francois: If you have got a four or five year trend of falling prices in a housing market, are you calling that short term? Mr Slaughter: I think we are for the purposes of Barker's analysis, yes. We are looking at house building programmes that are stretching over twenty or thirty years and that is how that analysis goes, and I think given the scale of the issues that Barker is addressing we have to look at those kinds of timescales. Q293 Joan Walley: Good afternoon. I think most people accept that especially in the South East there is a dire need for more affordable houses and I think that the Kate Barker report identified something like 77% of the private dwellings that are being built by your members were three bedroom properties. Is there a general consensus about that figure? Mr Slaughter: Well, if you look at the latest figures, I do not know how many bedrooms they necessarily are but the latest statistics for the first quarter of 2004 show that about 40% of new housing starts off for flats and apartments. I would imagine many of those are not three bedrooms, but I do not actually have the precise figures on that to hand. Q294 Joan Walley: If you do have information on that which is more up to date than what was in the Barker report, or if you disagree with that figure that was in the Barker report it would be helpful for the Committee to have that. The real underlying point of my question is to ask you what your members are doing about building affordable houses and what are you doing to tackle the need for more affordable houses? Is it a question of just building apartments and flats rather than three bedroom houses? Mr Whitaker: I think you have to separate the argument about the overall quantum of housing from any specific ten year pattern or subsidy for housing in that even if you are building social rented housing you still need land on which to build it. I think our members are responding very well to the affordable housing agenda, as indeed they would do. If you are building a product that people cannot afford then you have to realign your product to something that people can afford and it is the very fact that we do not build enough houses that allows companies to, if you like, go for the top of the market. If we were building enough houses some people would want medium priced houses, some people would want expensive houses and some people would want cheap houses, rather like motor cars. Some motor car companies build cheap motor cars, some motor car companies build expensive motor cars, but because we have enough motor cars generally there is a huge choice out there. We do not have enough housing in this country and that is what is leading to the affordability problems. Q295 Joan Walley: Okay. Could I just move on in terms of the lack of skills, which we have covered with other witnesses earlier on. I think the Barker report concluded that something like 70,000 new workers would be needed in the industry and if more were built then obviously it could rise a lot more than that. Do you think that is achievable, that we would actually get the construction skill workers? Mr Slaughter: That is my area. Yes. The 70,000 is for the construction sector as a whole, so the number for house building is considerably less. It is quite interesting, having listened to the skills sections of the earlier evidence. The latest figures from the CITB that I am aware of certainly showed, to take apprenticeships, for example, that the level of applications for apprenticeships has increased enormously in the last year or so. Q296 Joan Walley: Could I just ask you about that, because the level of applications for apprenticeships might be increasing but those can really only be progressed provided you have got employers and contractors prepared to take those on and my experience, certainly from a constituency level, is that the colleges which are seeking to set up new courses and new apprenticeship courses are finding that the employers are not willing to take on apprenticeships on the scale that is needed, to such an extent that I think we should be looking at procurement and getting it conditional upon tenders and so on that that is linked into it. What more could your organisation be doing. Mr Slaughter: As a trade association? Q297 Joan Walley: Yes. What is your policy on apprenticeships? It is a bigger responsibility than just having applications for them. Mr Slaughter: Our policy is to increase the take-up of apprenticeships but not just apprenticeships. One point I would make in this area of the discussion is that we regard the skills issue as crossing a lot of areas. It is not just about traditional craft skills, it is about management skills, it is about new professional skills to meet the sustainable development, sustainable communities agenda. So I do not want to just talk about apprenticeships. What we are trying to do as a trade association is to work with our members. We have a careers and skills committee where we are positively discussing at the moment how to take forward the kinds of issues you are raising. Obviously in terms of Barker there is a specific recommendation skills which identifies us and CITB in particular to develop a strategy for working on the skills agenda and that is what we have started to do. As a trade association we have set up a specific working group in order to discuss with our members and with the CITB and other stakeholders how we can put together a strategy to meet the skills issue. I would not deny that there are some questions out there like the ones that you have raised about placements. If you look at apprenticeships, there are other potential constraints on the number of apprenticeships that can come through the system because it also relies on the funding provision and there are issues about just how many apprenticeship you can process in a particular period, but we are looking at all those issues. We are very constructively engaged and I think it is fair to say that in the work we have done on Barker so far we would certainly agree that the skills area is one of the key things and it is a linking issue from the industry perspective. We need skills not just in their own right but to deliver designs, to delivery modern methods of construction and arguably customer care objectives as well. So we are taking all this very, very seriously. Q298 Joan Walley: I am sure it will be interesting for the Committee to have details of how that is going forward at your committee level at CITB, particularly in view of the earlier comments from Countryside about this being more a skills issue possibly than a housing issue. Just finally on a constituency level, I cannot help but flag up an interest that I would be very interested on a constituency basis to know how those discussions would have an impact locally as well, but that is not for this Committee now. Mr Slaughter: Yes, okay. Mr Whitaker: Can I lead the skills debate to a wider issue of certainty of the system. The industry at the moment is outputting about 160,000 a year - you have got the figures in front of you - from various people and it is geared up to produce that. Without certainty that we are going to be allowed to build an increase in output, the training needed to bring people into the industry to produce that output is uncertain. Q299 Joan Walley: So why have you not got that certainty, given the Sustainable Communities Plan that the Minister referred to earlier and given the progress that has been made further through the Barker report? What makes you think you have not got that certainty? Mr Whitaker: Well, because, with respect, the Communities Plan is quite a young plan. It is only recently that we have seen commitment from the Government to an increased house building - Q300 Joan Walley: But you have got commitments? Mr Whitaker: Yes, we have. Q301 Joan Walley: You have got money that has been allocated, have you not? Mr Whitaker: Yes, we have, and we are very pleased with that. We want commitment to the numbers now, to say, "Well, actually we are going to facilitate output of more housing in this country," and therefore as an industry we can invest in the training and skills that we need to deliver that, however that is, whether it is through traditional skills or through modern methods of construction. But if somebody says, "Well, actually things might change next year. We might turn round and we will reduce the numbers all over again," and we as an industry have just skilled up to produce more housing, and somebody says, "Well, actually we don't need more housing" - Q302 Joan Walley: So if the Minister was sat where you are sat now and you were saying what was needed, what would you say to Government is needed to give you that trigger to go ahead and to keep the apprentices and the training and the skills coming through? Mr Whitaker: A long term commitment to a strategy to increase the output of housing in this country. Chairman: Well, it might help to cancel the General Election then as well! Joan Walley: I think that is unfair, Chairman. Q303 Mr Chaytor: Your industry produces vast quantities of CO2 emissions because we build poorly insulated homes and you use up huge quantities of finite resources, you generate vast traffic movement, so you have not exactly been in the vanguard of sustainable development. My question is, what are you doing as a trade association to turn that around? Have you given specific leadership, specific guidance to your member companies to start operating in a more sustainable way? Mr Slaughter: Across that range of issues, I think that is very wide-ranging indeed. I would have to say that we would not entirely accept the premise of your question. Q304 Mr Chaytor: The housing sector produces 27% of the nation's carbon dioxide. Mr Slaughter: That is the entire housing stock. Q305 Mr Chaytor: If the Barker recommendations go ahead it will increase it by a further 20%. Mr Slaughter: That is referring to the DEFRA report, which I will perhaps come back to, but if you take the 27% figure, that is for the entire housing stock and, as I think is well known, the new build housing today is far more energy efficient than its predecessors and in fact we would maintain that approached in the right way a new house building programme that also allows for replacement where appropriate of the older, less energy efficient housing stock could be a good thing environmentally rather than a problem. But to come back to your question, we are looking seriously as a trade association at sustainability. We are engaged in dialogue with organisations like WWF. We have begun to look at what we can do in promoting our own sustainability strategy. We are at a fairly early stage of that, so we do not have a public position that I can share with you today, but I can give you an undertaking that we are looking seriously at those issues and that is likely to involve a range of interactions with other parties, not just the builders themselves but with the supply chain and other parts of the picture. On the 20% figure in the DEFRA commissioned study, I would make the remark that that was one possible outcome that was highlighted, but the report also indicated that if housing was built to higher environmental standards in the future you could in fact have an increase in house building levels above what is allowed for in existing regional planning guidance for probably a lower environmental impact than continuing on existing standards. There are obviously issues about how you get to that higher level of standards, but I do not think it is necessarily the case that having this new house building means it is an environmental bad; quite the opposite. Q306 Mr Chaytor: But are you proactive in arguing the case for zero emission housing, for example? Mr Slaughter: I do not think we can say that we are proactively arguing for that at the moment. Q307 Mr Chaytor: Surely this is key? There is no point in just issuing warm words about sustainability, you have got to come to the crunch point where you put your position on the line and say, "It is possible to build a zero emission house and this is what we should be aiming for and this is what the Government should do in terms of Building Regulations." Mr Slaughter: I think what I should perhaps say is that we could not make that commitment now from where we are because that is a big jump. Ian may want to come in on this. Q308 Mr Chaytor: But it could be done over a timescale? We are talking long timescales here, are we? Are we talking twenty year timescales here, for example? Mr Hornby: It is over a large timescale. To actually try to achieve that immediately is virtually impossible and there is a major risk factor there. We heard from our friends, Countryside, that the current Building Regulations achieve in terms of thermal performance the "pass" of the EcoHomes. The next consultation is out at the end of this month, which should take us to "good" to "excellent" possibly, so I think in terms of performance on energy conservation the industry is developing systems to achieve that. It has been through evolution rather than revolution but I think there are probably about thirty examples where members of the industry are actually promoting off-site manufacture, prefabrications, to try and address these issues even further and they obviously have their own internal drivers which are pushing them towards this. Q309 Mr Chaytor: At the current rate of progress in updating the Building Regulations, how many years before we build zero emission housing as a norm? Mr Slaughter: I cannot answer that question. Q310 Mr Chaytor: But is this not crucial for your role as a trade association and is it not crucial for government housing policy? We are talking about planning for the building of homes twenty years ahead but you cannot tell us that we could ramp up our energy efficiency? Mr Slaughter: To be constructive about this, I think the point we would have to make is that we can have this discussion but the discussion has not taken place and maybe this is an issue about how processes have worked and the way the Sustainable Buildings Task Group was referred to in the last session is relevant here. The ideas that have been put forward by that task group are, I think, a move in the direction that perhaps you are interested in, but we have not had the debate about that. The code has not been set up yet. We have not been able to be involved in an active discussion about it. I think we would like to be involved in those discussions and it is entirely reasonable to suggest that you can work towards a long term goal on emissions or anything else, but we have not had the right structures perhaps to facilitate that dialogue. Q311 Mr Chaytor: Just one final thing. You mentioned your work with the WWF, who have conducted a survey of FTSE listed companies. How many of our members are in the top end of that survey? Mr Slaughter: Well, I think probably only one of the companies surveyed is not a member of the trade association. Q312 Mr Chaytor: Only one is not a member? Mr Slaughter: Yes. Q313 Mr Chaytor: Okay, but how do your members perform? If only one company is not a member then inevitably all the rest of the companies surveyed are members? Mr Slaughter: Well, it depends how you want to draw it. Q314 Joan Walley: I just wanted to press you a bit further on the point that Mr Chaytor was making in respect of energy efficiency. Am I right in thinking that there has just been the consultation about the new regulations in respect of energy efficiency in terms of insulation of houses? Mr Hornby: It is to be issued for consultation at the end of this month. Q315 Joan Walley: Right. Presumably this is something that you have discussed and have got some view on. What is your bottom line on that? It would be very interesting as well, I think, for the Committee to have a copy of that response to ODPM. Mr Hornby: There are some unknowns in there at the moment. The actual calculation methodology I believe will change from a table of minimum new values to actually a calculation which predicts the amount of carbon emissions to achieve a pass - Q316 Joan Walley: Well, never mind the technicalities of it, as a trade association what would you like the Government to be doing in respect of those regulations? If you were briefing Government in terms of the way forward you would like to be going, where are you pitching it at in terms of energy efficiency and insulation? Mr Hornby: Well, it is a constant improvement of the energy efficiency of homes, which we appreciate the Government is ---- Q317 Joan Walley: But do you want it? Are you willing to go down that route, quicker rather than later? I do not get the feeling that you do. I feel that you are trying to slow it down. The Committee visited Aberdeen last week and the one message that we were given was, "Whatever you do, if you can influence anything, get better insulation in terms of the construction of buildings." Why are you not shouting that from the roof tops? Mr Whitaker: Well, because there are lots of practical issues. Q318 Joan Walley: So it cannot be done? Mr Whitaker: No, we are not saying it cannot be done, we are saying that there are practical issues that ---- Q319 Mr Francois: That are affecting profits? Mr Whitaker: Yes, it affects the way that we build. It affects the building techniques that we use, it affects the skills that we have got, it affects the type of housing that we build. Q320 Joan Walley: Does it affect profits as well? Mr Whitaker: Well, inevitably our members are there to make profit. That is what they do. That is their business reason for being there. Q321 Chairman: But it also affects whether or not building the homes which the Government has in mind is acceptable at all, because in order for those homes to be acceptable they will need to comply with the UK's commitments on climate change, to give you one example? Mr Whitaker: Absolutely. Q322 Chairman: Nobody is saying it is desperately easy, though in Aberdeen we did see a house which had been built for £45,000, which had 70% better insulation than a normal home, certainly a darn sight better than many homes which were built on a private estate in the same city in the mid-nineties that apparently complied with all the requirements but in fact in terms of thermal loss were as bad as an uninsulated Victorian property. So obviously it is about how you do it as well as complying with various regulations. All right, I am rambling on, but the thing that depresses me about meeting you, if you do not mind my saying so, is the lack of vision, the lack of energy behind all of this and the way that you are needing to be led the whole time, you are needing to be driven by regulation and are not actually taking a lead in an industry which has a reputation to maintain and has enormous opportunities actually in terms of developing cutting edge technologies that will be good for the environment as well as good places to live. Mr Slaughter: Well, I do not think that is an entirely fair comment, if I may say so. The industry is investing substantially in modern methods of construction. For example, most if not all of the major companies are involved in that area. We have to come back to the fact that we are dealing with an amazingly complex industry as well and the industry is being asked to deliver many things, not just environmental objectives. The industry is having to piece this together with the social and economic aspects of the Communities Plan for sustainable development together with the very difficult debates that have been touched on this afternoon about the section 106 and how you deliver things that way, about making urban regeneration work, a whole stack of major policy issues of which, important though it is, this is only one aspect. I do not think we would accept that we are lacking vision across all these areas because we are having to deal with all those agendas and to try and make sense of that while delivering our product. Of course, we can do more and in terms of accepting the challenges that have been addressed to us by Barker we are implicitly recognising that we need to do more. Chairman: Maybe we are being very naïve, but when we are shown around a house which cost £45,000 to build, which is not a huge amount of money, I think you would agree, and does have a 70% better energy efficiency rating than your average home, it seems to us to be quite a simple thing to do. Q323 Joan Walley: And that would be driven by the regulations and therefore in the interests of business have regulations driving that agenda. I just would have thought you would have come here today saying you are going to push the boat out as far as you possibly can? Mr Slaughter: We are quite happy to do that and we are doing that through a process of active engagement with the Government and other parties in discussing Building Regulations changes. Q324 Joan Walley: Right. So what is the process that you are going through on that, if I could just press you? Mr Slaughter: On the Building Regulations? Q325 Joan Walley: Yes. Mr Slaughter: Well, I am not the expert on that. Mr Hornby: The consultation will be issued, as I say, at the end of this month on part L of the Building Regulations. We will have a three month response period. We will obviously work closely with our membership but also with ODPM as well in how best we can achieve those without risk or eliminating the risk of some of the details, because it is not just a matter of throwing more insulation into a wall or a roof, there are details which have to have a risk assessment attached to them, which is becoming more sensitive as more insulation is put into the fabric. Joan Walley: I think it would be very helpful to have any further progress you make on those discussions. Chairman: Yes, it would. Now, having delivered myself of a rant, I am going to ask everybody else to be extremely brief. Q326 Mr Francois: We are the Environmental Audit Committee, so it is not particularly surprising that we want to press you on environmental matters, energy efficiency and all those sorts of things. I would not have thought there would be anything surprising in that. I think before you came here today perhaps a number of us were expecting you to want to sort of get on the front foot for your industry and to try and be positive and say, "Look, we are environmentally aware and here are lots of things that we are trying to do," but to be honest with you, you have been more defensive than the 24th Foot at Rourke's Drift! Is there anything you can possibly say to us to convince us that you really take the environment seriously? We are listening. Mr Slaughter: Fine. I am sorry we have appeared to give that impression. We certainly do take the environment very seriously and we are dealing with that across the board. I have mentioned that we are working on a sustainability strategy for the industry, for the trade association, which I think is a very positive step in the right direction. We are actively engaged and seeking to take forward in the right way all the policy debates with Government, whether it is through Building Regulations, whether it is on PPS1 or anything else. We want to be involved and I am pressing to be involved in the right way with the follow up to the Egan report and the follow up to the Sustainable Buildings Task Group. These are all very positive indications of our - Q327 Mr Francois: But you did say, did you not, in response to my colleague Mr Chaytor's question that there is work going on in the Sustainable Buildings Task Group but that you were not involved in it, did you not, that you were not actually part of the Task Group, you were not represented? Mr Slaughter: In the Sustainable Buildings Task Group? Q328 Mr Francois: Yes. Mr Slaughter: We were not invited to be part of it. It is not that we did not want to be. There was a developer who was a member of that group but we as a trade association were not invited to be part of it, though we might have well wished to be. Q329 Mr Francois: We have been told that the industry is closely involved in all of that and the whole thing is very positive and everyone is talking to each other. You are telling us that is not quite right? Mr Slaughter: We were not a member of the Task Group. That does not mean to say we are not talking to people about what it has done and what the follow up to it will be, but it was not our choice. It was not within our gift to say that we would sit on the Task Group itself. Q330 Mr Francois: Lastly, what is the official HBF definition of an affordable home? Mr Whitaker: The HBF does not have a definition of an affordable home. There are lots of other people trying to come to a definition of an affordable home and I can give you any one of those. I do not think it is very helpful for us to throw our two penny worth into the pot. Q331 Mr Francois: Well, you are after all the House Builders Federation, so presumably you would know something about it? Mr Whitaker: Yes, we are, and we do know - Q332 Mr Francois: But you do not have a definition? Mr Whitaker: No, we do not have a definition. There is no standard definition of an affordable home. It beggars belief that we even use the term because that implies that there is an unaffordable home and quite clearly all homes are unaffordable to some people if you cannot afford them. So I cannot answer your question with a swift glib response that this is the definition. I can give you other people's definitions of subsidy that is not - Q333 Mr Francois: But you do not have one of your own? Mr Whitaker: No, we do not. Chairman: Perhaps you should set up a task force to find out! Mr Francois: And argue who is going to be on it! Q334 Paul Flynn: Just briefly, I think you will appreciate that the Committee is now giving evidence to you rather than you to the Committee! We look forward to your report in due course! But we do share an impression that you have not been as progressive as you might be as an industry so far as sustainable practice is concerned. Is this because you are making enough money out of the business anyway to consider innovative practices or to go into sustainable issues? Mr Slaughter: Well, you are touching on a set of issues that we have not commented on so far. Innovation, new techniques and other aspects of this carry risks as well as benefits and for a commercial industry we have to say that our members work within a risk-taking environment. That is partly a matter of the consumer context and there is a lot of evidence that consumers are not necessarily willing to pay at least a large price premium for - Q335 Paul Flynn: Where is your evidence for that? Mr Slaughter: I cannot tell you a specific source but I think there has been a lot of consumer---- Q336 Paul Flynn: Has a major study been done on this? My impression is that people are very aware of the need for sustainability in their homes and might well be prepared to pay a premium for it? Mr Slaughter: To my knowledge, there is not a well-recognised body of evidence to say that. Q337 Paul Flynn: There is not a well-recognised body of evidence to prove the opposite either, is there? Mr Slaughter: Well, in which case we obviously need a better body of evidence! I cannot immediately produce that, but I think other people have recognised this. WWF themselves have recognised this in their 1 million sustainable homes campaign, that one of the areas that needs to be looked at in terms of promoting sustainable characteristics in housing is to have a better educated consumer market. If you are in a risk-taking industry where margins may actually be quite tight given the high price of land due to the constraint on land supply, you are not necessarily incentivised to provide product specifications that there is not a clear consumer demand for. That is quite an important issue. Q338 Paul Flynn: Barker made the comment that the biggest competition within the industry was the point that you have just mentioned, that it was all about land holdings rather than the quality of housing. Is this right? Mr Slaughter: That may be sort of over-painting it, but I think what she is really saying is that if you look at it as a market then what you face is an artificially constrained supply of land, as she would see it, and certainly our members would feel that was the case with the problems and uncertainties of the planning system. If you have a constrained supply of your principal input to the industry then clearly that is going to promote a competitive focus in terms of acquiring that input to the industry. You can turn that around and say that if you manage to remove that artificial constraint then I think the incentives to compete on other issues will become stronger than they are now. So one of the positive merits of Barker is actually that if we follow up on her recommendations I think we will see other benefits in terms of the product. Q339 Paul Flynn: What percentage of your homes reach the EcoHomes "pass" standard? Mr Slaughter: We do not have any information on that particular question. I could not tell you. Q340 Chairman: Do you not think that you should? Mr Whitaker: Well, given that the Building Regulations meet the minimum of the EcoHomes "pass" then 100% of our houses are built in accordance with the minimum Building Regulations. Mr Slaughter: I do not think that covers the whole of the EcoHomes standard, does it? Q341 Paul Flynn: What do you think of the EcoHomes standard, having the various grades of "good" and "pass" and so forth? Are they of any value, or are you just building to a minimum standards? Mr Slaughter: I think they are of value and obviously they have been used in a number of high profile projects, different levels of these standards, and that has been an interesting experience for all those who have been involved. Q342 Paul Flynn: Do you want to see the standards changed, improved? Do you agree with Countryside about incorporating the standards into the Building Regulations? Mr Slaughter: Yes. Q343 Paul Flynn: What do you think of the prospect of a code for sustainable buildings? Mr Slaughter: We certainly agree with Countryside on the issue of Building Regulations building better standards into those progressively. Q344 Paul Flynn: How would that change the way the industry works if that did happen? Mr Slaughter: Well, you are raising the minimum standards essentially because that is the regulatory requirement and we have no problem with that. To be positive, we have absolutely not problem with progressive improvements in Building Regulations, but there are obviously issues about how far and fast you can take it given other considerations. Another point that is worth making is that Building Regulations in one area can potentially conflict with Building Regulation requirements in other areas, so there are not necessarily straightforward processes here. You have to look at the interactions between one area of regulation and another area of regulation. Q345 Paul Flynn: We had some figure from Countryside about how many of their houses reached the "good" and the "pass" standards. I presume that would be superior to the standards reached by your members? Mr Slaughter: Well, I could not comment either way because we just do not have the information. Mr Whitaker: Certainly Countryside could be seen as leaders, but that is not to say that the rest of the industry are not followers and that they will get there, if they are not already there. You could have picked any number of our members and had them at this table and they would have given you a similar story about how they are addressing sustainable communities, building more sustainable homes. So I would want to defend the industry quite vigorously on that. Q346 Mr Chaytor: Just pursuing that point, are there any of your members who have identified a real niche in the market for EcoHomes and have decided that their market will pay a small premium to get a low emission home or a home that will have far reduced energy costs over a twenty year period? Are there any companies positively branding themselves in this way or not? Mr Slaughter: I do not think necessarily across the board. Certainly a number of companies are doing this on maybe a smaller scale basis, testing the market if you like. Q347 Mr Chaytor: Just one other point, if I may, on the question of the Building Regulations and the compliance with the minimum Building Regulations, are you confident that all new developments do comply with Building Regulations, because there is a difference between the existence of Building Regulations and the compliance with Building Regulations and given there is virtually a zero inspection regime - Mr Hornby: We are as confident as we can be. Q348 Mr Chaytor: What does that mean? Mr Hornby: It is down to building control on site, the inspection. Q349 Mr Chaytor: Broadly, what would your estimate be of the percentage accuracy of compliance with Building Regulations in new developments? Are we talking 80, 90%? Mr Hornby: I would have to say 100. Q350 Mr Chaytor: You would have to say 100? Mr Hornby: Yes. Q351 Mr Chaytor: But you would not really believe it? Mr Hornby: I think I would, knowing the site system, the approving inspectors, yes. Well, that is my opinion anyway. Q352 Joan Walley: I would be interested to know what kinds of discussions, debates you have with your members on the issue that Mr Chaytor has just raised, because whatever the standards are that are being met some of the evidence that has been given to us is that if you have workers on site who are not trained then you can have all the standards but if they are not building adequately then you have not got those standards embedded in the house. Is that something you have discussed? Is that something that you have reviewed, that you are researching, that you are monitoring? Mr Hornby: Well, as I say, we have the approved inspector inspecting the properties generally for compliance with Building Regulations and more often than not the NHBC and Zurich are doing their inspections for the warranty provision as well. So there are several pairs of eyes on site looking at what is being built. Q353 Joan Walley: But you deal with it just through your ordinary compliance? It is not something that you have discussions about, saying, "Goodness, you know, even though we are supposed to be meeting these standards it's been brought to our attention that that's not being done"? Is it not something that you are discussing? Mr Slaughter: No, because the evidence is not coming back to us and we are not an inspector ---- Q354 Joan Walley: How would you get that evidence? Mr Slaughter: It would come from the other bodies that my colleague just mentioned. We are not an inspection body, so we would be reliant upon those other bodies telling us if there was a problem and then of course we would discuss it. But they are not telling us that there is a problem. Q355 Joan Walley: So you wait to be told if there is a problem and then you would discuss it? Mr Slaughter: Well, we talk to the other bodies anyway, but we have to assume that if there was a problem they would tell us. Mr Whitaker: We are not the regulatory body for the inspecting of new homes. Joan Walley: No, I understand that. Chairman: All right. Thank you very much indeed for your time. |