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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 401-v House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE OFFICE OF THE DEPUTY PRIME MINISTER: HOUSING, PLANNING, LOCAL GOVERNMENT AND THE REGIONS COMMITTEE
The Role and effectiveness of the Housing Corporation
Monday 14 June 2004 MS MARGARET FORD and MR DAVID HIGGINS Evidence heard in Public Questions 465 - 488
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions (Urban Affairs Sub-Committee) on Monday 14 June 2004 Members present Mr Clive Betts, in the Chair Sir Paul Beresford Andrew Bennett Mr Bill O'Brien Christine Russell ________________ Witnesses: Ms Margaret Ford, Chairman, and Mr David Higgins, Chief Executive, English Partnerships, examined. Q465 Chairman: Good afternoon and welcome to the Committee and what is a slightly strange construction of an inquiry but the first part, as I think you are aware, is to do with our inquiry into the Housing Corporation, so we will deal with questions about that, and then we will move on to a one-off evidence session about English Partnerships. For the sake of the record, would you introduce yourselves, please. Ms Ford: My name is Margaret Ford and I am the Chairman of English Partnerships. Mr Higgins: I am David Higgins, Chief Executive of English Partnerships. Chairman: I understand that you do want to make a statement but that you want to make that at the beginning of the second session which is about the general work of English Partnerships. So, we will begin with questions on the Housing Corporation now. Q466 Christine Russell: Some of the submissions we have received for our inquiry into the Housing Corporation have suggested that there is perhaps some confusion between the Corporation's role and your role in housing. Would you like to clarify how you see your role. Ms Ford: I think that, on the face of it, the Housing Corporation and English Partnerships may look like similar bodies: we are both NDPBs; we are both engaged in the provision of social housing; we are both interested in developing sustainable communities. I think the similarities between the organisations are mostly superficial. I worked for the Corporation many years again as an executive director and indeed, the new Chief Executive of the Corporation, John Rouse, has worked for English Partnerships and we were discussing just recently the areas where we could legitimately work together and the areas where it did not actually make much sense and I guess that if you think of the Corporation primarily as an investor, a funder and a regulator of housing, very much about securing outputs in the short term year by year, and English Partnerships as a developer and a catalyst for regeneration and much of our investment that goes in this year and next year will not be a fruit until six, seven, eight, nine, ten years out because of the nature of regeneration, then the kind of value for money models and the way in which our organisations operate are actually quite different. So, although we look on the face of it like quite similar bodies, I think what we do is complementary but quite distinctive. We have worked quite hard over the last few years to try and make plain to our partners in the regional development agencies and the local authorities and particularly with the private sector who often feel that confusion when they come to English Partnerships and when they come to the Corporation and I think that the joint unit that we set up with the Corporation, the Housing Partnership, has done a reasonably good job so far - we have only been going for just over a year - at looking at those areas where there is genuine overlap and making sure that we are getting the value of the organisations working together. So, I think there is some scope for confusion but we are working hard at explaining why our bodies are actually quite distinctive. Q467 Christine Russell: Whose role do you see it as to actually provide the strategy for something like affordable housing because you just mentioned that you are engaged in the process of trying to provide affordable housing? Ms Ford: In a sense, English Partnerships, as a delivery agency, tends to work to other people's strategies, notably either Government's, for example, in the growth areas or the regional development agencies economic strategies. We are much more focused on particular usually large-scale projects within an area in terms of the contributions of affordable housing, but we do not tend to go in and dream up those strategies. We very much work with the grain of either Central Government plans or regional plans and sometimes at the level of individual local authorities as well. The regional housing boards - and David might want to say a word or two more about that - are a big improvement in terms of making the priorities in particular regions much more explicit. Mr Higgins: Our members of all the regional housing boards and those are very important forums now where we look at the combination of those three major issues: the economic strategies driven by the RDAs, the housing strategy which the Housing Corporation takes the prime role in and then the special development plan which Government offices are very importantly involved in. We work to make sure that projects we act on as land procurers or master planners are consistent with those three plans. Q468 Christine Russell: Do you see a role greater than that perhaps in areas where maybe the Housing Corporation or in particular the housing associations in the locality just do not have the capacity to deliver? Ms Ford: If you take the nine pathfinder areas as an example, they were set up specifically to address that very point: how do you get good quality master planning and design into areas which need to be in some cases quite radically reshaped? English Partnerships, in terms of our role in the pathfinders, see our role as helping with that whole process of master planning but, to be honest, our organisation was heavily criticised at the time of our five-year review and indeed the last time that I was here at the Select Committee for its paternalism and its previous history of dictating to local communities what was right and what was not right. We have changed that attitude to still be very heavily involved in those first stages and to work and bring professionalism into that master planning but to try and do it very much with the grain of local communities rather than the kind of paternalism that characterised some of the work we had done in the past. Q469 Christine Russell: But you still find it necessary to do a little bit of handholding in certain instances? Ms Ford: It is not so much handholding as bringing a lot of experience and expertise around what has worked in other places into those particular instances of master planning because what we desperately do not want to do is repeat some of the mistakes that were made in the fifties and sixties in particular and we are trying very hard not to do that. Q470 Chairman: You say in your submission that one of your core tasks is to create sustainable communities and you have a major role in delivering the Government's Sustainable Communities Plan, but that is also a core objective of the Housing Corporation as well. Ms Ford: Yes. Q471 Chairman: Do you think there is concern about the potential for overlap in the fact that you are both doing the same job? Mr Higgins: I think it is a case of complementary skills. I will answer it with an example. There is a major project in Sheffield, the Park Hill Estate, a 1,000 house estate. It has been there for many years; it is listed by English Heritage - complexities of structure and cost. The council have looked to rework that site for many, many years and nothing has happened. It is a real social problem. We have worked with the Housing Corporation now and with Sheffield City Council to come up with a solution where we are going to the private sector at a very advanced stage, a very early stage now in the concept of developing this as well as inviting RSLs housing associations to put in proposals as well. The method that we have brought forward on this particular proposal is to engage in the private sector, underwriting the market risk for a substantial part of that site which will be put up for private housing as well as looking at underwriting the actual structural and construction risks. So, it is a really interesting example of where, together with the Housing Corporation, they have used their skills in understanding what the housing associations would need and we have used our skills on the OJEC process bringing in private developers to look at finding a solution for that very complex site. Q472 Chairman: And there is no overlap at all? It is all harmony? Mr Higgins: It is working very well. Like in all things, it is a matter of relationships and complementary skills. The skills are reasonably different. We do not try and teach the Housing Corporation how to regulate RSLs or to understand the funding of that, but we need to know enough of that and then work with them. Q473 Chairman: Who actually owns the overall plan for that? Mr Higgins: That overall site? Q474 Chairman: Yes. Mr Higgins: Interestingly enough, Sheffield City Council own the whole site but what they really want back from it is around one third of that site back as social housing fully refurbished at no cost to themselves and they are prepared to pass on the rest of it to private developers to develop in the open market using the profits to pay for the refurbishment. Q475 Mr O'Brien: Housing funding and land assembly. The Housing Corporation is responsible for funding and you have the land; is there a proposition to combine the two for EP to take over the funding responsibility? Mr Higgins: The Housing Corporation funds the social housing component of projects going forward and EP purchase the land. So, if you look at the example of the Greenwich Peninsula site, there English Partnerships purchased the site originally over a period of time and the Housing Corporation are making grant available to the housing associations that have been nominated to deliver the social housing on the site but they are not actually putting money into the land or into taking the development risk on delivering the large component of over 10,000 houses. Q476 Mr O'Brien: Do you think there is any value in English Partnerships taking over funding for social housing? Mr Higgins: 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. Q477 Mr O'Brien: The Audit Commission suggested that the collaboration with the Housing Corporation and English Partnerships can only bring limited benefits and therefore they are suggesting that perhaps this should be looked at with a view of one organisation being responsible for all the issues involving social housing. Have you given any thought to this? Ms Ford: Was that the Audit Commission evidence you were quoting? Q478 Mr O'Brien: Yes. Ms Ford: I was puzzled by the Audit Commission evidence because we have never had any conversation ever with anyone from the Audit Commission around what we do in English Partnerships. They do not audit us; they do not have any locus in our work and, before they gave that evidence, they never had a conversation with anyone in my organisation as far as I am aware about our powers or how we go about our business. So, with respect to the Audit Commission, I think the picture they painted was not the full picture and I do not understand the conclusion they drew from what I see day in and day out is the guts of our work and the guts of the Corporation's work. When we are planning land acquisitions and projects, as I said earlier, anything from five to ten years out, we make it very, very clear with the Corporation that, in terms of the plan for the approved development programme, they know when there will be a call on social housing grant for those components of our developments that are going to require that grant. So, I think we can achieve exactly what is intended by Government by working cooperatively together and I really do not pretend to understand how the Audit Commission drew that conclusion because I do not see the case myself for it. Q479 Mr O'Brien: The Housing Partnership, which is a partnership between yourself and the Housing Corporation, is a joint initiative that has brought together the skills and assets of English Partnerships and Housing Corporation. Ms Ford: Exactly. Q480 Mr O'Brien: Do you think that should be mirrored on other sites of development in which you are involved? Ms Ford: It is being but that element of what we do that the Housing Partnership is focused on is about particular aspects of our business and I do not think all of the mainstream aspects of our business. Where we can put land and funding together sensibly, we do that. We do it anyway; we do it across all the programmes. You do not need a particular vehicle to do that. What the Housing Partnership is doing 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. Q481 Andrew Bennett: But you are actually pre-empting the allocation of the Housing Corporation's funds, are you not? If you set up a programme that is going to do this in each of the next five or six years, then you are actually deciding how the Housing Corporation spends its money, are you not? Ms Ford: I do not know if we are deciding how the Corporation spends its money. I think what we are doing is alerting the Corporation to major and significant developments that are down the line and giving them the opportunity, in their allocation process, to keep those in mind. I just think that is commonsense. Q482 Andrew Bennett: What happens if they do not allocate the money? Can you find it from other sources? Mr Higgins: In some cases, they do not. In significant parts of our work at Milton Keynes for example, there is very minimal, if any, Housing Corporation grant on those sites because there is sufficient value in the land to deliver the social housing without any grant. However, 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. Q483 Christine Russell: Mr Higgins, would you elaborate a little more on how you see the role of your representatives on the regional housing boards. For instance, how does that person pursue what are the priorities, if you like, of that particular region? Mr Higgins: We have five regional directors who are all at the most senior level within our organisation who report to myself. They all individually sit on the regional housing boards. They are the most important coordinating body in the regions for our executives. They are only a year old, of course. There is also work coming within the Department looking at merging those from the planning as well. It is very important now, particularly with the relationships with the regional representatives from the Housing Corporation and the regional development authorities work with our regional directors on local issues because, ultimately, all policies are implemented at that regional level. So, what do we contribute? We have existing landholdings, our existing strategic sites, so we can utilise those; we also provide funding, gap funding or work with local authorities and pathfinders and the biggest thing we can do is ensure that where we prioritise our corporate plan, it is consistent with the objectives of the regional housing boards. Q484 Christine Russell: You say that you have regional directors but there are more than five regions. Mr Higgins: Yes, there are and we do not exactly mirror each individual RDA. Q485 Christine Russell: So, how do you organise English Partnerships? Do you have an organisation that mirrors each of the English regions? Mr Higgins: Yes, we have an organisation structure that is regionally based: we have five major regions and they do in total tie into the RDA boundaries. We then have four central areas within our organisation which cover policy, finance, human resources and strategic partnerships. Ms Ford: To specifically get to the point as to whether we mirror them exactly, no, we do not and there is a reason for that when we set up the new organisation structure last year. As English Partnerships is a successor body to CNT and to the Urban Regeneration Agency, a lot of our business is dictated by where that legacy business is actually located. So, to have simply set up regions that mirrored the RDAs would have meant that, in certain parts of the country, there was not a huge amount of business to be done there. We do not think that is desirable and we are working hard to look at balancing our programme across the country because we think that is appropriate, but actually we thought that, for the next few years whilst we have huge amounts of business in certain parts of the country, we had to resource up to do that. Q486 Christine Russell: I suppose what I am really trying to say to you is, in those areas where, to quote you, you do not have much business but you do have a representative on the regional housing board, how does that individual actually know what the housing aspirations/priorities of that region are? How do you ensure that that happens? Ms Ford: Partly we took account of that when we went through our recruitment process in the last year. Something like 60 per cent of our senior management group now are new to our organisation and we deliberately went out to recruit people who had a very good track record in the geographical areas where we knew that we needed to increase our business, as it were. So, that was one way in which we did it. Secondly, by actually sitting on the regional housing boards; that is the best place to get real intelligence about what the economic priorities are for those regions. So, we have tried to do it in those two ways. Q487 Andrew Bennett: Really, what you are saying is that you benefit by being on the regional housing boards rather than the housing boards benefiting by having your staff on them. Ms Ford: No, I did not say that. I said that we went out to the market to look for people and I take an example of someone like Paul Spooner who is our regional director for the West Midlands. He is extremely well known and extremely well respected and has a very good track record in that area. I think if you asked the regional housing board there, they would say that they benefited just as much from having Paul on that board as the other way round. Q488 Andrew Bennett: You just told that people went to the regional housing boards to find out information. Ms Ford: I think I said they would learn more there and I think that is just the truth of the matter. Chairman: Thank you. That is the end of the first part of the session on the Housing Corporation. |