Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Eighth Report


4 The Housing Corporation and Sustainable Communities

25. The Government's new sustainable communities agenda and its emphasis on creating viable neighbourhoods has spawned a new set of regeneration agencies and extended English Partnerships' role. Councillor Kemp from the Local Government Association highlighted the new complex environment in which the Housing Corporation now operated and the need for clarification:

"It (the Housing Corporation) has had a traditional role because ten years ago it was there with the government and local authorities, but so many new bodies have come in - Pathfinder, English Partnership and a whole series of new bodies - and we really need to seek that clarification."[14]

26. The Sustainable Communities Plan published in February 2003 is a major programme developed by the Government over the last two years. It is supporting new housing developments in the South East and seeking to tackle the problems of low housing demand in the Midlands and the North. Across the areas covered by the Communities Plan, there are a range of agencies which are expected to assemble sites and promote housing development. English Partnerships has a supervisory role but there are a large number of agencies below it. In the areas covered by the low demand pathfinder initiatives, new partnerships are being set up to take over sites with abandoned homes which they will seek to redevelop with a mix of housing tenures. In the Growth Areas, new Urban Development Corporations and development agencies are emerging in Thurrock, East London, Milton Keynes, Ashford and the Stansted-Cambridge corridor.

27. The Corporation has not set up coherent relationships with these agencies to assist with delivery of the affordable housing as part of the developments. There is also confusion about the roles which each agency should play.

28. The Chartered Institute of Housing pointed out that

"Whilst the Corporation has increasingly seen its role as a delivery vehicle for the Communities Plan, there seems to be a lack of any clear articulation of its relationship with the various players, both in relation to specific functions and over time. This lack of clarity may lead to confusion and uncertainty particularly at a local level and the danger of undermining the confidence that stakeholders, particularly associations, have in the Housing Corporation."[15]

The Local Government Association argued:

"There is a need to integrate the work of the Housing Corporation with all other major national housing regeneration agencies. In particular the role and work of English Partnerships and Urban Development Corporations needs to be better integrated with the work of the Corporation and the ODPM must decide and make clear how the integration will work."[16]

29. David Thompson from the LGA argued that the Housing Corporation's

"investment strategy could be relaxed in terms of letting go to the implementation vehicles, be it in the growth areas - the emerging urban development corporations - where the Corporation should see that there is a prospectus for the next 15 years being developed, like the Pathfinders, with outcomes they improve and letting go levels of accountability to those accountable development organisations that are going to be running for the next 15 years."[17]

Relationships with English Partnerships

30. English Partnerships (EP) is to play an increasing role in promoting housing particularly in delivering the Government's Sustainable Communities Plan. As part of its core business it says:

English Partnerships will play a major role in delivering the government's Sustainable Communities Plan to ensure that high-quality, low cost and affordable housing is available in areas of market pressure and to tackle the problems associated with housing abandonment and decay.

We will invest in development and regeneration across the four growth areas identified in the Sustainable Communities plan: Thames Gateway, Milton Keynes/South Midlands, Ashford and London-Stansted-Cambridge.

Working in partnership with The Housing Corporation through a new joint unit, The Housing Partnership, we will rapidly bring forward sites for housing development, particularly affordable and key worker housing.

We will work alongside the Regional Development Agencies (RDAs), The Housing Corporation and Local Strategic Partnerships to develop strategies to bring about market renewal in the nine Pathfinder areas (areas suffering from low housing demand and abandonment), tailoring solutions to the requirements of the area.

Working with the Office of the Deputy Prime Minister and the RDAs, we have created a new housing gap-funding scheme, currently at consultation stage, to help deliver housing projects in deprived areas where there is a gap between the cost of development and likely sale values.

We will participate on each of the new Regional Housing Boards led by Government Offices, alongside the Housing Corporation and the RDAs."[18]

31. The Housing Corporation argued that it was working closely with EP but that they had distinct roles. EP owned land and prepared it for development, while the Corporation helped fund the social housing built on it. It said the Chairmen and Chief Executives sit on each other's boards. Under the Housing Partnership, EP delivers housing on surplus land it owns in the Growth Areas jointly with the Housing Corporation. Jon Rouse, the Corporation's Chief Executive told the Committee:

"At first glance some people say that English Partnerships and the Housing Corporation look like similar organisations. The reality is that if you actually look at them closely, we have substantially different functions, substantially different stakeholders. The important thing is that we work very closely together. The Corporation is, first of all, a regulatory body; English Partnerships is not and does not purport to be. In terms of our investment function, we have a very specific and large investment role in respect of funding housing, affordable homes, bricks and mortar. English Partnerships' responsibility is to facilitate the delivery of sites so that things can then be built on those sites or, indeed, public space can be provided, and that includes commercial, industrial, retail and new homes."[19]

32. There are concerns about confusion between the roles and functions of the two organisations. The Chartered Institute of Housing said:

"The ability of housing associations to access available land is a key issue, and English Partnerships have a clear role in site assembly and land preparation. However there is discussion about English Partnerships being more involved in actually commissioning and providing homes, which steps over into the functions of the Corporation."[20]

33. The Housing Bill proposes to give the Housing Corporation powers to fund private developers to provide affordable housing. English Partnerships itself pointed to the potential confusion between its role in working with and funding private developers and the Housing Corporation's operations that might arise if these proposals to change the Corporation's funding regime are taken forward. David Higgins, EP's chief executive said:

"The new Housing Act that is coming into force now provides flexibility for the Housing Corporation to provide funding to private developers as well as housing associations to deliver affordable housing. It is very important that we work with the Housing Corporation because we have gap-funding powers to ensure that we do not confuse the market, so we are working closely with them to how we use both of those mechanisms."[21]

We have raised our concerns in previous reports about this proposal, urging the Government to consider way to streamline and improve the effectiveness of housing associations before introducing any measures to pay Social Housing Grant to private developers.[22] We consider how housing associations could be made more efficient in a later section of this report.

34. The Audit Commission argued that the current co-operation between the Housing Corporation and EP would only achieve limited benefits and that greater collaboration was required. It argued that grant funds could be better used if EP's landownership and the Housing Corporation's social housing funds were more integrated. The Audit Commission commented:

"EP works closely with local government and has a similar role to that of the Corporation in promoting sustainable communities and tackling the imbalance between supply and demand for housing. The Commission supports, and has been impressed by the impact of, the approach to its remit taken by EP in recent years. This appears to have generated a more thoughtful, inclusive and purposeful agenda for the utilisation of land in its ownership. We are nevertheless aware of, and to an extent share, doubts that the present institutional arrangements may limit the potential for further progress. We consider that an alternative approach, bringing together the land holdings of EP and the funding of the Corporation, could hold out the prospect of enhancing delivery and increasing efficiency in the development process. But we recognise that there are arguments both for and against changes of this kind. We therefore remain focused at present on improving collaboration and securing greater clarification of the roles and responsibilities of the different bodies involved in the housing sector."[23]

35. David Higgins, the chief executive of English Partnerships accepted that:

"there is some logic in publicly owned land and publicly owned grant and coordinating the decisions on those prior to putting land out to tender."[24]

The Housing Partnership between English Partnerships and the Housing Corporation is securing affordable housing on EP-owned sites in the four Growth Areas in the South East. Margaret Ford, the chairman of EP, said:

"The Housing Partnership is trying new models and trying different things and the things that are seen to work within mainstream into both programmes and that was really the purpose of setting up the Housing Partnership."[25]

EP has a large landholding across England and is acquiring large numbers of surplus sites from Government agencies including the Department of Health and the Ministry of Defence. There is potential for greater collaboration between English Partnerships, the Housing Corporation and the Department of Health and Ministry of Defence to maximise the potential for affordable housing in the redevelopment of their surplus operational land.

36. There are a large number of new regeneration agencies charged with delivering the Sustainable Communities Plan. The Housing Corporation needs to consider its role in securing considerable amounts of social housing as part of the mixed tenure developments being proposed.

37. English Partnerships' role in promoting housing development must be clarified as there seems to be an overlap with the role of the Housing Corporation. The Government needs to reconsider its proposal in the Housing Bill to allow the Housing Corporation to fund private developers. It would cause confusion as EP and other agencies already have the remit to fund developers and giving an additional remit to the Housing Corporation could cause confusion and duplication.

38. The relationship between the Housing Corporation and English Partnerships and the other new agencies delivering the Sustainable Communities Plan must be put on a firmer footing. Reciprocal membership of the boards of the agencies is not sufficient. Greater integration of social housing funds and landownership in the areas covered by the Sustainable Communities Plan is required to maximise the amount of affordable housing in the private developments.


14   Q85 Back

15   THC 14 Back

16   THC 13 Back

17   Q98 Back

18   http://www.englishpartnerships.co.uk/creatingsustainablecommunities.htm Back

19   Q335 Back

20   THC 14 Back

21   Q476 Back

22   ODPM: Housing, Planning, Local Government and the Regions Committee The Draft Housing Bill Tenth Report of Session 2002-03 para 208 Back

23   THC18 Back

24   Q482 Back

25   Q480 Back


 
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