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

Memorandum by Manchester City Council (THC 27)

  Manchester City Council has enjoyed very constructive working relationships with the Housing Corporation in the North West and, latterly, through its northern division.

  The City Council has a strong history of partnership working with the Corporation including the development of the comprehensive regeneration strategy for Hulme and the implementation of new and innovative means of delivery of investment in housing such as the Manchester Regeneration Partnership which has played an important role in bringing the private sector in to properties back in to productive use.

  The Corporation in the North West has played a very active role in supporting the development of the Manchester and Salford Housing Market Renewal Pathfinder and are represented at Pathfinder Board level in overseeing the delivery of this very important regeneration programme. We welcome the opportunity to submit evidence to this Committee. It is very timely to review the role and effectiveness of a range of organisations, including the Housing Corporation as we move forward and try and mobilise action in respect of the Communities Plan. The emergence of the Communities Plan and, latterly, of the concept of the Northern Growth Corridors places into stark focus the need for a fundamental review of strategic priorities for public agencies such as the Housing Corporation in order to enable them to respond effectively and directly to the need for greater spatial awareness in the way in which they plan and deliver investment.

  The Housing Corporation clearly has the aim of being a strategic investment partner and a key enabler of the delivery of regeneration and new housing provision.

  It is seeking to influence and direct new regionally focused strategies through regional housing boards and is well placed to contribute significantly to these processes.

  However there are a number of obstacles that stand in the way of the Housing Corporation achieving some of these strategic aims. These include:


    The continued inflexibility of funding regimes applied by the Housing Corporation in respect of individual tenures, costs and funding yard sticks and the treatment of Approved Development Programme resources in the context of significant market driven interventions such as CPO in housing market pathfinders areas.


    The subsequent difficulty that this creates for the Corporation to respond to a view of housing which is market driven. The existing funding framework for the Housing Corporation is still very much focused around an analysis based on housing need and investment interventions measured by unit cost. This prohibits an effective overview of strategic options and does not adequately reflect the changing nature of housing markets across the UK as a whole.


    The pace of response, arising from the above, is too slow and the ability of the Corporation to develop new strategic interventions to meet the circumstances arising in various regions is inadequate.


    At present processes of innovation are hampered by the fact that there is inadequate connection between the strategies being promoted by Regional Housing Boards and effective sub-regional arrangements for the delivery of economic and physical investment.

  There are a number of key challenges which must be addressed if the Corporation is to continue to develop its role and make the contribution that it is capable of to the wider strategic agenda. These include:


    The adoption of a market driven approach to housing provision particularly in areas where pathfinder or similar activity is being undertaken. Areas need to find more sophisticated ways of prioritising investment than crude measurements of housing need which are reflective of a view of the marketplace that is now out moded.


    There is a real challenge around quality and cost. The Housing Corporation has not, partly as a result of the rigidity of its cost yard sticks and development guidance, promoted excellence in design and this is a critical weakness. The design failure is not merely one of aesthetics. There are still serious examples of development funded by the Housing Corporation not achieving effective urban integration, security by design or optimum accessibility for people with disability. These are serious weaknesses and must be addressed. It is essential that the Housing Corporation adopt a more pro-active and assertive stance in respect of design.


    There is a need for the Housing Corporation to adopt more flexible procurement mechanisms that can be more effectively integrated into spatially defined regeneration programmes. The need for greater imagination in the way in which RSLs are allowed to procure products, particularly as part of public private partnerships, needs to be explored.


    Perhaps the most fundamental issue relates to the social housing "tag". The Housing Corporation, as a distinct social housing entity, suffers from the disadvantage that the social housing label brings. The key issue, as we move forward, is about the provision of accessible and affordable homes not, necessarily, about the perpetration of distinct tenures that carry stigma and which, by their very nature and separation, may limit mobility and flexibility for people, particularly those on lower incomes.

        This is not an argument against social investment in housing. Far from it. However our focus ought to be on how we can use public resources in a flexible way to procure projects that are appropriate to the needs and aspirations of people in particular market places. An example of this would be the use of Housing Corporation funds to invest in the creation of social equity through equity stakeholdings in new development rather than the procurement of social housing units. Such an approach would sit well with aspirations that are frequently expressed for the achievement of fully integrated communities where the differentiation between tenure is obscured. It is difficult for the Corporation, within its current funding strictures, to respond effectively to challenges such as this. It is our view that, without this flexibility to afford such engagement, we will continue to place communities at a disadvantage and fail to achieve that maximum level of integration that we might aspire to.


    Looking to the future it is also essential that the Housing Corporation invest in its strategic capacity. While the move toward strategic engagement at a regional level is very welcome there is also a need for the Corporation to develop the capacity to enable it to engage more effectively at a sub-regional level. The development of strategic frameworks for sub-regions, based on a clear analysis of market supply and demand within those areas, is a pre-requisite for the delivery of the sustainable communities plan and the Corporation must ensure that it has the capacity to enable it to contribute fully to these debates.


    The final point relates to regulation. Clearly this is a changing environment with the increase in the role of the Audit Commission in respect of performance being very significant.

  Feedback from local RSL partners is that the Corporation are getting their regulatory role, insofar as Housing Association business management is concerned, roughly right. Local colleagues are of the view that the regulatory activities are appropriate and proportional to the level of business and risk.

  Notwithstanding this I think there is a broader question which we need to consider in terms of the regulatory framework which the Housing Corporation and its partners can and should promote.

  The emphasis at present is very much on the regulation of business risk and routine process management within RSLs. This is critical and should not be devalued. However there is a need for regulation to focus much more on the spatial and local performance of RSLs in respect of the contribution which they are making towards the delivery of local strategic objectives in the provision of quality neighbourhoods. There are examples, in Manchester, where RSLs business management practices have led to adverse impact not only on their own stock but on the broader housing markets within which their stock has been located. They has contributed, in some areas, to the acceleration of market failures and to the need for costly further publicly funded interventions.

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