UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE

UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 677-i

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

OFFICE OF THE DEPUTY PRIME MINISTER: HOUSING, PLANNING, LOCAL GOVERNMENT AND THE REGIONS COMMITTEE

(URBAN AFFAIRS SUB-COMMITTEE)

eNGLISH PARTNERSHIPS

Monday 14 June 2004

MS MARGARET FORD and MR DAVID HIGGINS

Evidence heard in Public Questions 1 - 102

USE OF THE TRANSCRIPT

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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.

Q1 Chairman: We now come on to the general evidence session on English Partnerships and I think it is at this point that you would like to make an introductory statement to us.

Ms Ford: Although the Committee has heard from English Partnerships a couple of times in the last two years specially on the Coalfields Programme and so on, it is a full two years since we had a more general discussion on English Partnerships. A lot has changed in that period now and we would welcome a couple of minutes to bring the Committee up to date. The five year review of English Partnerships concluded in the spring of 2002 and coincided with my own appointment. The review accepted the need for a national agency that could lever a critical mass of landholdings, expertise and finance. Five areas of core business were identified for English Partnerships at that time and that is the agenda that we have been working to. If I could briefly go over those five areas. Firstly, we were charged with the development of a strategic portfolio of our own projects. Typically very large, complex projects, mainly requiring pre-investment in remediation or infrastructure, certainly capable of unlocking development potential and all capable of demonstrating best practice in urban design and sustainability. There are over 40 of these projects across the country and a good example would the Greenwich Peninsula in East London. Secondly, our role as specialist adviser to Government on brownfield land. We have significant expertise and intelligence within our agency on the science and management of brownfield. In the last two years, we have developed the national land use database, a great source of information for other public agencies and developers, we have led the creation of the first ever brownfield strategy for England and set up the Land Restoration Trust, a national endowment-based charity for managing brownfield land into leisure and recreational use. We do not just advise on brownfield, we roll up our sleeves. Many of our own strategic sites are on land that is being transformed and the evidence that we gave to the Committee on the Coalfields Programme I think would be a good example of that. Thirdly, we have a new role as broker of surplus public sector land. Within Government, we have a large, valuable asset base and we now act as a broker with other Government departments who intend to dispose of land or surplus buildings. We hold the Register and disposing organisations post their intention on this Register for 40 days prior to going to the open market. This gives us an opportunity to either influence the type of brief that comes to the market, so marrying the best possible capital receipt with meeting aspirations of housing policy around different areas or putting different Government bodies with mutual interests in touch with each other or, in exceptional cases, we purchase the asset ourselves if it will add significant public value to those developments and the purchase of the RAF Staff College at Bracknell might be a good example of this. Fourthly, our role in housing which we have touched on in the previous session. Simply put, we have a role in increasing supply and in stemming decay and abandonment and, through our own portfolio and the Register I just spoke about, we can identify significant opportunities for new settlements, for urban renewal or for urban extensions, especially in the four growth areas. In the Midlands and the North in contrast, our role is to work with the pathfinders on early intervention. As we said, master planning, selective demolition where that is required, new infrastructure and also encouraging by gap funding private developers to come into areas where previously they would not have been active. We are not confining that investment to the pathfinders though they are a focus for us, we are also active in the new towns and I am glad to be able to say to the Committee that Woodside Estate in Telford is now a good example of where real progress is being made. Finally, we have a whole range of functions that we discharge in support of the urban renaissance. Funding and support to the 16 urban regeneration companies, delivery of the seven millennium communities demonstration projects and general advocacy of the principles of new urbanism. We are piloting inquiry by design and design coding, for example, in much of our sites. We also do a great deal of training and development of the urban regeneration profession and, last but not least, by the demonstration of best practice in all of our projects, we really try to practise what we preach. When we report to Parliament in the next few weeks, I hope to be able to demonstrate a very significant increase in our investment profile and dramatically improved outcomes for Government.

Q2 Mr O'Brien: Regional development agencies - and this follows up with some of the issues arising out of your recent statement - did absorb some of the roles of English Partnerships and the Government emphasis on regional strategies which includes practically all the points you have just raised. Why do we need English Partnerships?

Ms Ford: That question was posed two years ago at the five-year review of English Partnerships and Government concluded that it did want to retain a national agency I think for two or three very clear reasons. Firstly, if you want to be able to recycle capital in Government, then having a national portfolio which is sufficiently large in size and diverse in terms of its spread means that capital receipts which you can raise in one part of the country can be recycled into investment in other parts of the country which badly need that investment. It was always a criticism of the commissions in new towns which did not recycle that in that way and that is one of the things Government decided to do. Secondly, for very large-scale infrastructure projects of the type we were talking about, you need a serious critical mass of expertise and funding. If I say to you that English Partnerships has around 350 professionals from the land disciplines and an RDA on average would have around a dozen people, it follows that, for very large complex projects, you need the kind of critical mass of expertise that our organisation offers and increasingly we work hand in glove with RDAs to work on their behalf on these very large projects like the Omega site at the M56/M6 junction, the old Burtonwood Air Base near Warrington - a massive, massive site, a 25-year life to the project that needs a lot of particular expertise in the north-west development agency and we are very keen that we would take that forward. Also, if you are trying to lever in substantial moneys from the private sector, to have a balance sheet of the strength of English Partnerships and the ability to do that across the country Government determined was very important. So, for those and other reasons, they decided to retain a national agency and that is what we have been doing for the last two years.

Q3 Sir Paul Beresford: Could we turn the question the other way around. If we have your expertise over many years, the relationship with the private sector, a portfolio and we now have these new boys on the paddock, do we actually need them in the regeneration?

Ms Ford: I think there is a case to be made for having a national agency alongside regional and more local delivery vehicles. In the same way that our focus now is much, much better than it was two or three years ago because we are not trying to do everything. We have a focus on very large significant infrastructure sites that unlock development. We are not trying to do every mill conversion everywhere that you can think of. The RDAs are doing much more specific local regeneration in support of regional economic strategies and we support that by the larger projects. So, I think there is room for both of us.

Q4 Sir Paul Beresford: So, in certain areas, they ought to just back away and hand it across to you; are they likely to?

Mr Higgins: I think we do that already. Regeneration is one of eight areas that an RDA focuses on. Primarily, it focuses on economic employment, skills and regeneration is one of those eight. We just focus on regeneration. What we do with all the RDAs now is sit down with them with our business plan two months in advance of it coming to our board and meet with each of the RDAs and say, "Here are our priorities" and we discuss with them their priorities and agree jointly where we are going to work together. So, in some areas like Plymouth, we are working on sites beside each other but we have joint marketing strategies. In other areas, we do entirely separate projects such as in London, the LDA focus on the Lea Valley and we focus on Barking Riverside. So, we clearly understand now who is going to lead on which projects.

Q5 Mr O'Brien: And the duplication of services there?

Mr Higgins: No, it is a matter of priorities and skills. One thing about our industry is that there is a huge shortage of skills. There are just not enough people to go around. So, our issue is making sure that we really limit our activities to those projects where we can make some real difference in terms of sustainability.

Q6 Mr O'Brien: The RDAs acquired a number of staff from English Partnerships when they were set up, so the skills were transferred over there. When you refer to skills in the operations, the RDAs are in a very favourable position. If I could come back to a point that was made about the fact that you could transfer resources from one region to another if you considered that to be a feasible study. Can you give me an example where a regional development agency would agree to transferring resources out of their area into another area.

Mr Higgins: Yes, the Coalfields Programme last year would be a classic example of that. At the start of the year, each of the regions came up with what they forecast they would spend for that year but, for lots of reasons - appraisals, planning, expenditure - it just was not spent in that profile. So, as we were responsible for the single national pot of expenditure for that year, as we tracked it every quarter, we would then transfer money for that year round to other areas which were able to spend it during that year.

Q7 Sir Paul Beresford: You transferred the money?

Ms Ford: With their consent.

Q8 Mr O'Brien: You were referring to raising money in one region to transfer it to another region. My experience of the regional development agencies is that not one has enough resources to meet their demands. So, is it feasible that they would agree? If there is land in their area that is available for development and it raises problems, is transferring that to another region something that you understand will happen?

Ms Ford: Perhaps I could clarify. Maybe I did not explain it terribly well. What I was meaning was that when you have a national programme as we do and you are able to generate capital receipts as we do, those are not allocated into particular regions. Capital receipts to English Partnerships come into a national pot and then, the following year, we would reallocate those, so it is not done on a ring-fence regional basis. What I am saying is that when you regard England as a national proposition in regeneration, you can invest in different parts of the country depending on need and opportunity. So, we do not have ring-fence regional budgets that we have to meet or agree, we have a national programme that happens to be delivered regionally.

Q9 Mr O'Brien: The regional development agencies do have a ring-fenced budget.

Ms Ford: They do but we would have no say over how a regional development agency discharged its budget, we would only have say over our own.

Q10 Mr O'Brien: Exactly and that is the point I am making that, on strategic sites in a region, would the RDAs not be the best organisation to take over those strategic sites and develop them?

Ms Ford: I suppose I just come back to the point that David and I have made earlier. There is a huge skill shortage in our industry. We have a large critical mass of people who can handle big, more complex infrastructure projects and, in those ones, I do not think there is a single RDA that has approached me in the last two years to say, "We would be better doing this." The reverse is much more often the case now.

Q11 Mr O'Brien: How do you address the point in the east of England where you do not have an office? How can you be making a meaningful contribution in that area where you have no presence?

Mr Higgins: We have just appointed a new executive into that area and we are establishing an office there now and we have been working closely with Cambridge, for example, in that area.

Q12 Mr O'Brien: For what purpose was the executive appointed?

Mr Higgins: To focus on the M11 growth corridor and keep our sustainable communities plan where we did not have a big presence. We have historical presences in Harlow; we are doing quite a bit of work in Stevenage and of course historically in Peterborough now, also part of the M11 growth corridor, but there was a strong request from Cambridge for us to become involved in a very complex set of infrastructure developments and surplus Government land release, so we set up an office there.

Q13 Andrew Bennett: Can we turn specifically to London. How many agencies and other organisations are really involved in redevelopment and development generally?

Mr Higgins: In London, really the LDA and ourselves.

Q14 Andrew Bennett: Why should we have two?

Mr Higgins: Should there be more or less?

Q15 Andrew Bennett: I am asking you.

Mr Higgins: Again, it is a matter of priorities. Our historical interest in London comes from the Greenwich Peninsula site and, more recently, Barking Reach. The LDA have much of the land portfolio that was transferred across from English Partnerships and their major areas of focus relate to those but also now increasingly to the Olympic site and Lea Valley. That is taking a large part of their time, plus Wembley. We have a very open and good relationship with the LDA. They have asked us to take the lead on Barking Reach; they do have landholdings in Dagenham but they have asked us to lead on that area there.

Q16 Andrew Bennett: Have they really enthusiastically asked you to do the Dagenham site? Would it not be fairer to say that you carved them up?

Mr Higgins: The Dagenham site?

Q17 Andrew Bennett: Yes.

Mr Higgins: No, absolutely not. In fact, they actually have funded and sit on the steering committee for the Barking Riverside master planning; they pay equally with us for the appointment of the master planners to do that and they sit on a joint committee there with us.

Q18 Sir Paul Beresford: One of the fun things about regeneration in London and other cities is that, just as you have everything right, it seems to be going well and everybody is agreed, along comes some minion from English Heritage and says, "A gasometer, it is listed!" Do you have this sort of problem?

Mr Higgins: We have a gasometer listed on Greenwich, actually.

Q19 Andrew Bennett: So, you think everything is sweetness and light between yourself and the London Development Agency?

Mr Higgins: I think we have a good working relationship. We have prioritised and we will work on that. In fact, the latest example of where we are working with the London Development Agency and indeed the GLA is in our focus on affordable housing across London on an initiative that we call Londonwide which is focusing on 3,500. We have the full cooperation from the GLA and the LDA to work with us on that.

Q20 Sir Paul Beresford: What are you going to with the gasometer?

Mr Higgins: On Greenwich, it remains.

Q21 Sir Paul Beresford: Because of English Heritage?

Mr Higgins: It is part of the site that is integral into the design and it works quite well.

Q22 Sir Paul Beresford: Would you have had it there unless you had to?

Mr Higgins: That is a question that evolved way before my time on the site.

Q23 Sir Paul Beresford: That was well ducked!

Ms Ford: Can I just answer that because one of the things that is interesting about English Heritage is that, in some cases like Park Hill in Sheffield that David spoke about earlier, they have been extraordinarily helpful and pragmatic around trying to get a really good quality use for Park Hill and I find it frustrating that we have that kind of relationship on the one hand and then you look at the listing of a ventilation shaft at the Blackwall Tunnel right under the curtilege of the Dome, for example, and I just do not understand it. I find that more frustrating but, to be honest, in certain other regeneration projects, we are actually finding them very, very pragmatic and helpful.

Q24 Christine Russell: What I was going to ask you about was all these surplus NHS sites that you have recently acquired from the Department of Health. What plans do you have for them?

Mr Higgins: The sites are in the process of a heads of term agreement between the Department of Health and our Department, the Office of the Deputy Prime Minister. In the first week in June, we were asked by our Department to assist the Department of Health in evaluating the sites. So, the prime relationship still remains between our Department and the Department of Health but we are helping them with some of the consulting work and appraisal of those sites and the Department has also consulted with the regional development agencies to ask their advice on which sites within the portfolio they themselves may wish to become involved in.

Q25 Christine Russell: That was going to be my next question. Obviously, some of those sites will probably be disposed of to house builders but what will the criteria be for disposing of sites to the RDAs?

Mr Higgins: Firstly, if you look at roughly 100 sites, a reasonable portion of them, maybe 20 per cent, are still in operational use and would not be available for redevelopment in the short term. Another reasonable proportion are significant greenfield site and have significant restrictions on them. However, there will be an immediate core of sites which will be readily available for development. So, the most important thing that we are looking at first is to overlay policy on those sites that are immediately developable by the private sector, to look at regional housing strategy, to look at planning polices and housing grant, agree what those policy objectives are, put them in the development brief for those particular sites and then take them as quickly as possible back out to the private sector to be delivered by a diverse group of private developers.

Q26 Christine Russell: Can I present you with a conundrum and ask you how you are going to solve it. One of those sites happens to me in my constituency and there is a huge, huge need for affordable housing but my local authority is being told by the county council and Government Office North West, "You cannot build a single additional unit of accommodation in Chester." What are you going to do in that case because the housing need is there and the RDA may well be interested in acquiring that site for purposes other than housing? How are you going to solve that and at what point will you involve the local authority in discussions?

Ms Ford: Could I begin with that and then hand over to David. I had a meeting with all of the RDA chairs last Thursday morning to talk about this very issue and we spoke about how we would do it most effectively and, frankly, how we could get some momentum into the process because this portfolio has now been dormant for two years since the original deal tried to be done. I am quite keen to get on with it. The RDA chairs were very firmly of the view that we should do what we would do with the Coalfields Programme, which is treat it first of all like a national programme and have EP lead with advice and guidance from the RDAs on the regional economic strategies. I made it very clear that the brief I had from ODPM was that this was a key lever in trying to deliver the objectives of the sustainable communities plan and that the first call on those sites would be to look at how they could contribute to the housing agenda in those areas. There was nothing in my mind from that discussion that suggested that the RDA chairs were thinking about that portfolio for anything other than first of all for housing use. So, that is the first thing. The second thing is that, in the situation you describe, what we would be looking at would be to look at the regional housing strategies to see how these sites can contribute to that. I am not familiar with the particular example of Chester but we would want to see what that site can do there to alleviate issues of affordability and key worker housing.

Q27 Christine Russell: How clear a steer have you had from ODPM as to a proportion - and have you been given a proportion - of the amount of affordable housing that can be put on these sites?

Mr Higgins: We have not had a direct steer; we are still working as an adviser to the Department and it is still early days; the heads of terms are still in the process of being finalised with the Department of Health. Clearly, the objective of this major deal between the two departments was to accelerate affordable housing in the area, so that has to be a main objective. Importantly now, the Department is in the perfect position to look at that because of its role with the Housing Corporation and also its role in looking at the whole issue of planning polices.

Q28 Christine Russell: Are there any ongoing negotiations with any other ministries as to you taking over the responsibility for their surplus land? Obviously, I am thinking in particular of the MoD?

Mr Higgins: The Department of Health still has 100 sites and I would suggest that 16,000 hectares of land in and around major cities is probably unique in the size of that portfolio. However, we have an excellent relationship with the Ministry of Defence/Defence Estates. Our first transaction of size was the Bracknell arrangement. We have other work that we are working with them on an advisory basis and working with the Housing Corporation in fact on some other sites they have and we are working on future sites. So, that is a very constructive open relationship where we are working to look at other sites. I doubt, in fact I am sure, that there is not a portfolio of the size of the Department of Health.

Q29 Christine Russell: Can you share with the Committee the details of the discussions you had with the Housing Corporation to ensure that the funding will be available because it is all very well to say, "Yes, the emphasis is going to be on housing and particularly affordable housing on these sites" but then you discover that, in the region, the Housing Corporation does not have the money to fund the developments. Are the discussions over the funding going in tandem?

Mr Higgins: Certainly we are sharing with the Housing Corporation all of our plans on these sites going forward. So, the process of housing associations applying for ADP on particular sites obviously is a separate process. Importantly, more and more Housing Corporation NEP are looking strategically at public sector intervention and, on these particular sites, it would make a lot of sense for the public sector in the form of our Department to agree policy on these sites before releasing them to the private sector.

Q30 Christine Russell: You did not answer the question I asked earlier about the role of the local authorities in these areas and how you are going to negotiate and consult with the local authorities and what role you see the local authorities have in bringing these sites forward and I am talking about the surplus NHS land ones.

Mr Higgins: The Government Offices have been advised and, in the same process of consultations which happened over the last few weeks and have another few weeks to go, the regional development agencies have been briefed as have the Government Offices in the regions of these issues.

Q31 Christine Russell: What about the local authorities who, at the end of the day, will give or not give planning consent?

Mr Higgins: Of course and, at the moment because it is still relatively discrete in terms of confidentiality and in terms of the total arrangement, the final commercial arrangements have not been finally agreed. So, when those are agreed, the local ... What is more important, when the first ---

Q32 Christine Russell: Should the local authorities not be asked, "What do you want? This land is within your area." Should they not have a say in what they want to see the land used for?

Mr Higgins: And they will certainly and the Department will no doubt engage with them in that process.

Q33 Mr O'Brien: In the major cities and in some of the sub-regions of the urban development agencies, urban regeneration companies have been established and the Office of the Deputy Prime Minister is saying that this could be a good thing and that we want to see more of them established. Does this cut across the principle and the work of English Partnerships?

Mr Higgins: No, quite the contrary. Nationally, one of our major programmes is 16 urban regeneration companies in England. We hold national seminars and a national conference annually and we disseminate best practice. These organisations are doing exactly the same thing in each of the different regions, so that there is a lot that they can learn from each other. We are on all the boards except two and we have put application to be on those soon. We are a funder from operating funding and we invest in C-Cap on a number of those URCs, so there is an enormous amount of links between those URCs. We were actively involved in the first three which led to the extension of that in 1999 and the recent stock-take which has just been completed I think set out the satisfactory progress that has been made on the URCs to date.

Q34 Mr O'Brien: When did English Partnerships decide that the urban regeneration companies' development will not undermine your special status?

Mr Higgins: Would not undermine our special status?

Q35 Mr O'Brien: In the past, it has been stated that English Partnerships are concerned over the development of urban regenerations because it could undermine your special status.

Ms Ford: I do not recognise that quote; I hope it is not mine! I certainly do not recognise it and it is not our position. I think we regard them as complementary to what we do.

Q36 Mr O'Brien: We will obviously clear that point because that is the information we have been given. As you have pointed out, you have requested a seat on all of the urban regeneration companies. Is that not stretching your resources a little too far? You are on the Housing Corporation, you are on the regional housing committees, you have a presence on the sub-regions of the regeneration bodies, the RDAs, and now you want to sit on the urban regeneration companies. Is this not going to stretch your resources?

Mr Higgins: What it does need for us to do is to keep a very close focus on it but it has caused us in the last year in particular to reskill our organisation because rather than having a lot more people in our organisation who do individual projects, we have the capacity and the resources now of 16 organisations across the country that, when we interface with those organisations, we need to do it at a much more senior strategic level rather than actually at a doing level. So, we do not need a lot of planners or engineers every day, we need people who can sit on boards and really add value to these urban regeneration companies because remember that urban regeneration companies do not have their own statutory powers, they borrow or use their partners' power, the local authority or ourselves, and equally they have a limited budget. They seek funds from their shareholders essentially. It does mean reskilling and Margaret was referring earlier on to the significant recruitment of very senior people we had into the organisation last year.

Q37 Mr O'Brien: So, we are looking at 16 urban regeneration companies and that could double if these are successful because the Deputy Prime Minister is saying that the programme should continue. How would you go on then if there is this extension/development?

Ms Ford: If there were an extension, we would simply continue to resource those as appropriate because the other reason why it is important for us to be involved in the URCs is that they are very important vehicles for English Partnerships' grant funding and, in terms of following the public pound as it were, it is important that we have senior executives on those boards who can understand how that funding is being spent and advise on that. So, we would welcome the extension of urban regeneration companies where that was deemed appropriate and we would make it a priority to resource those. We are not worried about the extension of urban regeneration companies. We think the ones that are there we have a really good and healthy relationship with and I know that most of our colleagues enjoy being involved with them, so I do not think that we would have any real concern about the numbers accelerating.

Q38 Andrew Bennett: Do the people you have on these boards always turn up?

Ms Ford: I would need to go back and check the records but I would certainly hope so.

Q39 Chairman: Trevor Beattie has said that your role in the URC should be reinforced without elaborating on that. Have you any ideas as to what that might amount to?

Mr Higgins: Only that we have put forward to the Department that we join the remaining two URCs which we are not currently represented on. The reinforcement would apply to the whole issue of skills transfer and best practice and we are putting significant time and resources into that.

Q40 Andrew Bennett: This bit of jargon, "a design code". Can you explain it a little more to the Committee.

Mr Higgins: Design codes are very early days. We used them first in Northampton and Upton. They are particularly applicable to sites where there is a very long timetable of developments and, in the case of Upton, eventually over 15 years, there are probably 6,000 to 7,000 houses. So, on the first 200 houses that we released at Upton, it is important that we have a framework. I have brought a brochure which I can leave with you of a typical design code. So, this is how a design code is prepared and what it does is show in a street how the houses relate to the street, the landscaping principles, the principles of urban planning, and this then becomes a document that is prepared - and this one is actually in Telford, it is a new one - in consultation with the community but then this becomes the document that the private developers work to. It certainly does not restrict taste or style within that but it gives an overall framework to that.

Q41 Andrew Bennett: How does it differ from a master plan for an area?

Mr Higgins: It is done in partnership with the master plan. So, the master plan on this particular diagram here is on page 4 and it shows usages, industrial ... On the next page, it goes one level detail from that which shows the actual type of housing and the layout. So, it gives more of a three-dimensional spatial plan whereas a master plan gives more of a two-dimensional plan.

Q42 Andrew Bennett: So, you have talked to the local community about what they want to be in the design code.

Mr Higgins: Yes.

Q43 Andrew Bennett: But they are not going to live there, are they?

Mr Higgins: Hopefully some of them will live there. We certainly talk to people and engage in the local community.

Q44 Andrew Bennett: The biggest group when you are putting new housing in is the people who are coming into the new housing. How do you find out what they want as opposed to what the people in the original community want who probably do not want the new housing there in the first place?

Mr Higgins: In the case of Upton which is the first one, the whole process of inquiry by design involved up to 100 people. It was run by the Prince's Trust and it involved a wide range of charitable organisations, environmental groups, through to community representatives.

Q45 Andrew Bennett: So, it was not local people, it was experts from outside?

Mr Higgins: That is correct.

Ms Ford: No, there was a lot of local people there and crucially the local authority were a key part of that and the council were very, very supportive of that whole process and it was very important to us that the democratic representatives were completely involved in that as well. A lot of the people in the neighbourhoods adjacent to the urban extension were involved. So, though they might not be moving to the area, they may well be and certainly will be leaving cheek by jowl with that.

Q46 Andrew Bennett: How is that design code going to be enforced?

Mr Higgins: Once the design code is agreed, it forms part of the planning rule and then, as you go for detailed design, the detailed design process is much quicker because it refers to the design coding.

Q47 Andrew Bennett: So, if someone wants to break the design code, what do they do?

Mr Higgins: They have to go back for further planning.

Q48 Mr O'Brien: We took evidence from John Egan on the Egan Review and obviously the advisory board is made up of various organisations including English Partnerships. How do you see English Partnerships assisting and taking forward the recommendations made in the Egan Review?

Ms Ford: We fully support the outcomes of the Egan Review and we had actually started our own piece of work looking at skills and regeneration prior to Sir John Egan's taskforce being set up. There was nothing that came out of our work that was at all inconsistent with what h was doing. We are trying to do four or five practical things in support of the Egan Review. One is that, given that there is so much demand for regeneration professionals now, we are all, in a sense, starting to rob Peter to pay Paul as people move around. What we are trying to do is increase the supply of people with experience in this area. So, we are setting up, for example, a new graduate programme, a fast-track graduate programme, working with the University of Reading, the University of Cambridge and other institutions joining those universities who have a good track record in the land sciences. We are trying to offer opportunities on behalf of ourselves and the RDAs, so that we take several dozen graduates each year. We will put them through a programme that has time with English Partnerships, the RDA, the major local authority in their area, and with the private development company. Frankly, we are trying to sell the public sector to people at the start of their career as a really, really exciting career option, and to create opportunities for them to do that. I have worked with the RDA chairs to see how big we can make this programme, try to bring people in and then create opportunities for them in each of our organisations, proper opportunities after a one-year or two-year programme. We are setting up a continuing professional development programme, again led by English Partnerships but including regeneration specialists from the RDAs, from the local authorities, from some of the big development companies, and from some of the people who ought to be interested in this, like the big legal firms that have property specialists. Again, we are working to a programme that has four or five different programmes each year where these people come together. They share experience and try to crack problems of big complex developments, for example. We have a range of programmes that we are now going to lead to try and do something about that. At the other end of the spectrum, as I said to Sir John Egan, I understand the focus and regeneration of professionals, but what about getting enough skilled tradesmen to do what we want to do as well, because that to me is an even more pressing problem? There is not much we can do as a national agency around that because the skills are not really our remit; but we are looking at modern methods of construction, off-site manufacturing and a range of other ways where we can at the same time build quality into new developments, being less reliant on traditional skills. That is, to my mind, an unsatisfactory part of the equation. I do not think we have the system of apprenticeships and training right yet for craftsmen, but we are trying to do what we can do as a national agency for regeneration of professionals in a very practical way.

Q49 Mr O'Brien: What kind of timescale are you looking at to have these skills available to develop the sustainable communities?

Ms Ford: On the things that are at our own hand, the regeneration skills and experience in graduate programmes and so on, we will open up from September onwards. Those programmes will be ready to start from then, and we will be looking actively to recruit graduates in the next two months.

Q50 Mr O'Brien: What about the plumbers and the -----

Ms Ford: I wish I had an answer to that, but I do not.

Q51 Mr O'Brien: You do not have bar charts or anything that would give us some indication as to what you are thinking about in being able to offer these skills?

Ms Ford: We do not have a locus in that. We are not an employment and skills council; it is not our core brief, so we do not really have any way of influencing that, except our own developments.

Q52 Mr O'Brien: We are talking about undergraduates and other schemes.

Ms Ford: We will do that, yes.

Q53 Mr O'Brien: When do you expect to have people of that calibre in place to help with the development of the sustainable communities?

Ms Ford: We will start those programmes in September, and we will keep those going every year for however long it takes.

Q54 Chairman: Picking up on what you were saying about the modern methods of construction and the fact that you are beginning to look at those, is there an idea around that you might start to give your seal of approval to certain of those rather than others? At the moment, it seems that there is just a general feeling that we have got to get on with modern methods of construction, without anyone taking real ownership of the particular methods that might be used and what consequences might be down the line in terms of failure and who then will be held accountable.

Mr Higgins: Certainly. Clearly, the Housing Corporation has its own standards of modern methods of construction. We do not have a set policy across our entire sites on modern methods of construction; we do, however, have sites in terms of EcoHome standards, in terms of sustainability and energy usage from Eco-Homes to BREEAM standards, and across all of our projects we have had Bream as a minimum requirement and EcoHomes category 9. We escalate that on our best practice sites, so that is a very high standing for a start in terms of the industry. On our main flagship programmes such as Millennium Communities Programme and our key sites in Milton Keynes, we go to "excellent" in terms of BREEAM and 10 in terms of EcoHomes, so we set high standards there. We are particularly interested in the whole issue of supply chain and efficiency, and we are working now in London on a programme where we are combining 16 sites to deliver 3,500 apartments, but we are putting it out to tender through an OJEC process to attract new entrants into the market and new improvements in the supply chain. That is another initiative we are focusing on in looking at this whole issue.

Q55 Chairman: That is all very interesting, and I am not trying to be disparaging in any way, but are you the body that will be held accountable if, in thirty years' time, like so many of these types of developments in the past, the properties are failing; bits are dropping off them; you cannot find anyone to maintain them; the manufacturers have gone out of business; if you want odd jobs doing, there is nobody with the skills to do them because they are completely different skills to the normal run-of-the-mill jobs on homes? Are the bodies going to be accountable for all this, and are you looking at it?

Ms Ford: Frankly, if they were built on schemes that we developed a brief for and managed the process, of course we would have to be kept accountable for those, which is why we have not rushed, as it were, to adopt wholesale anything that says it is a modern method of construction or off-site manufacturing. What David has described is that in each of the strategic projects I spoke about earlier, where we are letting development briefs to the private sector, we are looking very carefully at what kind of methods of off-site manufacture or modern methods of construction would be appropriate. Where that is deemed to be appropriate, we would include that in the development brief and ask people to come to us to describe what components of a scheme they would propose to deliver through modern methods of construction. We would expect our project executives to critically assess that to make sure that it was sustainable and it was a reasonable quality. We certainly will not just be adopting every fad that is going on modern methods of construction for precisely the fear that you have expressed.

Q56 Christine Russell: Can you tell us a little bit more about the advisory panel that you are planning to set up to assist local authorities in processing large-scale development proposals? One is, how big is large-scale? How do you see what you are proposing to do, sitting side by side with this new plumbing advisory service that will be introduced in the autumn?

Ms Ford: Can I take the first part of that question and ask David to speak about the nature of the applications? There are two things going on in tandem here. English Partnerships is in the business of setting up a national consultancy service, which is really a team of urban designers, master planners, people who are regarded as being eminent in their field, and frankly to work with other colleagues in the public sector. We have been approached by a number of local authorities in particular, and other agencies to say that we really do not have the critical mass of expertise to be, as it were, an effective client for some of the large-scale applications that are coming. We would lend those colleagues to local authorities or whoever, to work with them for a fixed period to act on the client's side for particular kinds of developments. That is different from what Keith Hill has announced - the Planning Advisory Service - on large-scale applications, which is a different kind of body. That is an ODPM resource that will happen to be housed within English Partnerships, and it is a group of very, very experienced people who are there to try and unblock developments that are either complex in nature or have been a long time stuck in the planning process, to try and facilitate those to an outcome. It is a slightly different thing that is going on. David might be able to describe the type of application they would look at.

Mr Higgins: It will particularly look at projects in the growth areas.

Q57 Chairman: The Government is considering drawing up a spatial strategy for non-transport infrastructure, such as utilities, within the Thames Gateway. There are a couple of questions arising from that. Is it not a bit late to be considering setting up a spatial strategy? Should this not have come quite some time ago? Secondly, are there some really major problems in there that you are trying to grapple with? For example, the costs of extra electricity supply could be so great that they would take every bit of planning gain away from some developments, which should be used for extra school provision and those sorts of things as well?

Ms Ford: If I could make a couple of points and then hand over to David, who has been very much more involved in this, the issue of the utilities is a particularly important one. I wrote last week to the Chairman of Ofgem, which is in the middle of a price control review for the electricity supply companies, to say that it was very important that when the regulator sets that framework, because included in that tends to be the incentives and penalties for different types of investment, that they take account of the need to enable the utilities to make the kind of investments they need to make in the growth areas, in the Gateway in particular, and to make sure that they are, as it were, credited with that in the price controls. That is a very, very powerful signal that Ofgem could send, and it would be a huge help to us. It is something that came home to me, having been involved with Ofgem in the last couple of years. That is the first thing on the utilities.

Q58 Andrew Bennett: You are saying that low-income families in London will have to pay through their electricity prices for this infrastructure.

Ms Ford: No, that is not how it works. It is a different regime to that. When the regime is set for electricity companies for the next five to seven years, there are capital allowances that are always made explicit in the price control for important things like safety, for example. If it were transport, it would be about maintenance of the gas mains or whatever. In this case, we are saying that we would get some leeway for making sure that that investment was offset against the price control. I am afraid I do not think it is as simple as the way you have just described.

Q59 Andrew Bennett: Someone will have to pay.

Ms Ford: Well, we all pay at the end of the day, and someone is going to have to pay if there is no housing.

Q60 Andrew Bennett: That means that the people on the lowest incomes are the ones that are going to have to pay for this.

Ms Ford: I do not necessarily think that follows; but actually people on the lowest incomes cannot afford houses in London, so I do not think that is the solution either.

Mr Higgins: To finish the question on spatial development, the need for infrastructure is accelerated because of the acceleration of housing requirements and plans, particularly in the Thames Gateway and the growth areas; and so Cabinet Committee MISC 22 has been set to specifically address that issue, and it has been in place for over a year. There is additional funding that has been allocated in both the major growth areas by our department to look at those areas. Those are two examples of it, in addition to the expenditure that is covered by the Department of Transport, rail and various other departments. We are also looking at the whole issue of value capture. There is significant land increase in many of these growth areas, and we are looking at how the public sector can capture some of that value increase to pay for particularly social infrastructure and some physical infrastructure such as schools and housing. Examples of that, where we have become involved, are in Barking. The Barking Reach site sat for decades really with low levels of development and some chronic issues of infrastructure from public transport to schools in particular, and some motorway access; so we are now there as a 50 per cent joint venture partner with Bellway. We are obviously working with the Government on that issue. In Milton Keynes we have set up a special-purpose committee in partnership with the local authority, which will look at long-term investment and infrastructure, and how that is funded and financed both by the public sector but also from the significant land increase that the 22 major land-owners in the growth area of Milton Keynes will benefit from.

Q61 Andrew Bennett: Before taking you on to new towns, there is this question about the Pathfinders in the market renewal areas. Presumably, you will have people on their steering committees and boards, but what else are you doing for these Pathfinders?

Mr Higgins: Obviously, there is a large funding allocation from the Department, and we are not looking to undermine or replace that in any way. In the last 12 months there has been early intervention because what happens in a number of these areas is that speculators move in and frustrate the plans of the Pathfinders and the local authorities. We have worked in particular with the local authorities to target areas where they think they are open to some key early interventions in areas of market failure; so we have obviously worked with a number of the boards that are set up.

Q62 Andrew Bennett: You have bought some land or bought some houses in these areas.

Mr Higgins: We have funded councils that have bought houses in some of those areas, yes.

Q63 Andrew Bennett: Do you still see the new towns as a core part of your activity?

Ms Ford: Yes, we absolutely do. Following the last select committee, I spent three or four months making sure that I had visited every single one of the 21 English new towns. We had a very clear signal to the leaders of those councils and to the chief executives that we were going to attempt to do business in a very different way. At the same time, we worked with ODPM to change the policy around ownership of some of the assets in new towns, as you know from the adjournment debate the following February, when Tony McNulty announced that change. The result has been now that we have been able for the first time in many years to have a clear, quite unequivocal investment programme in a number of the new towns. If you look at the revival of the master plan for Bracknell, the work in Stevenage town centre, the work in Peterborough on the south bank, the work in Woodside and Telford, the work in the Castlefields estate in Runcorn - right across the piece there has been a huge change in terms of the way our organisation is able to re-invest back in the new towns. The relationships have changed out of all recognition. We have invested more in the last year in the new towns than probably in the previous five years put together.

Q64 Andrew Bennett: Can you give us a list?

Ms Ford: Absolutely. We would be very pleased to send the Committee that.

Q65 Andrew Bennett: How much has resulted in transfers of property from yourselves to them?

Ms Ford: We have put in place a new team in our organisation called Asset Transfer, and we set that up straight after the last select committee. The Asset Transfer Team has worked with each new town local authority to agree with them which of the assets which ODPM permit us to transfer that they would like to take, and in what timescale. I have to say to you that the first of those asset transfer plans was put to the Treasury exactly one year ago, and I am still waiting for a reply.

Q66 Andrew Bennett: It would be helpful if you could let us have a note about that. You have put one to the Treasury and it has taken them 12 months.

Ms Ford: I have no reply to date.

Q67 Andrew Bennett: How many more have gone to the Treasury?

Ms Ford: I could not tell you, but I will find out and write to you.

Q68 Andrew Bennett: It might be useful if we could have a list, and then we could find out from the Treasury why it has taken them so long.

Ms Ford: I would like to know that too, because it would be enormously helpful to have clarity over the rules of the game for asset transfer, because we are simply waiting now to do it.

Q69 Andrew Bennett: That is a polite way of expressing disgust at the Treasury's performance.

Ms Ford: No, we are just simply waiting on the guidance.

Q70 Andrew Bennett: On a very minor point, there were a lot of problems with footpaths that new towns built over. Have you got that sorted out now?

Ms Ford: I am going to hand over to my expert in footpaths!

Mr Higgins: We have worked to build new footpaths, certainly in Milton Keynes, and where we are creating new communities such as Greenwich we have created new footpaths there as well. We have done everything that we can within our control, our lands that we have any authority over, to create new footpaths.

Q71 Andrew Bennett: When the new towns were built, you build over a lot of public rights of way, did you not?

Mr Higgins: I have tried following that up in the last few days, trying to get the background, but I have found it difficult to find out where that has happened.

Q72 Andrew Bennett: The only example I have in front of me is Cwmbran 53. A note would be useful on that.

Mr Higgins: You are better briefed than me on that; I could not find that particular example.

Q73 Mr O'Brien: On coalfield communities, the regeneration programme has been extended, but it is due to be completed by 2012. Do you really think it will be completed in that time?

Mr Higgins: Certainly the 86 sites - we extended from the original sites to the 86 and we are confident that those should be completed. We have expanded from the 86 sites to further sites, to make a total of 100 now; and we are looking at further flexibility on the Coalfields Programme and we are working with our partners in the Coalfields Community Programme. We are also looking at additional flexibility within the Coalfields Programme on sites adjacent to that. On the 86 sites, yes.

Q74 Mr O'Brien: The Government has ring-fenced money for this regeneration.

Mr Higgins: That is right.

Q75 Mr O'Brien: How will the continuing programme be resourced?

Mr Higgins: There is the ring-fenced money, and then there are receipts coming in from the programme. Those receipts have allowed us to get Department approval to expand the programme from the original sites and to expand the flexibility on where it can be applied within the individual programme. The simple answer is that increasing land value and the prudent use of new uses of existing sites has brought new revenue in.

Ms Ford: One of the great successes is that on many of the sites the anticipated capital receipt has now been greatly exceeded because of the work that has been done, so that is great news because it puts more into the pot for recycling into other areas.

Q76 Mr O'Brien: How do local authorities feature in identifying sites?

Mr Higgins: They are actively involved. Some of them own the sites, so it is a combination. The majority are owned by the regional development agencies, and some by ourselves. In particular cases we have purchased from the local authorities, but they are always involved in the new planning.

Q77 Mr O'Brien: You are saying that the local authorities are fully involved with identifying the sites for the programme in their area.

Mr Higgins: In terms of new sites, yes. There are particular cases which would not be in the mainstream programme for the coalfields: in Durham, for example, we are working with five local authorities in the Durham coalfields; Selby; and then Meden Valley, where we have three local authorities.

Q78 Christine Russell: When we were doing our inquiry into the coalfields communities, we were told that you were working with ODPM to prepare a housing strategy. Is that right? If it is, how is that being progressed?

Ms Ford: The two examples that David has given of the Durham coalfield and Meden Valley are exactly what we were getting at there. It was evident when we started to look at some of the areas that some of the housing issues were more pressing than even some of the economic development issues. ODPM have been very encouraging of us to go out and try different things and different models, which is precisely what we have done in the Meden Valley, which is now moving well. By looking at the five different settlements in the Durham coalfield we can get a critical mass of interest from developers to come in and work across the piece there. That is the kind of flexibility that we would not have had at the start of the Coalfields Programme because what we were doing was quite ring-fenced, but we have had much more flexibility, as Geoff Rucker announced last year, that has allowed us to do that. Maybe calling it a "housing strategy" is a wee bit grand, but we are certainly doing a number of housing initiatives and trying different models to see what we can do around some of the housing problems.

Q79 Christine Russell: Who is doing the consulting with local people? When we went to some of the former mining villages we were given lots of evidence from local people of how vacant properties were being bought up by absentee landlords who were importing undesirable tenants to the area.

Ms Ford: Absolutely. In the case of the Durham coalfield, we are leading in that; and in the case of the Meden Valley, we did it jointly with the East Midlands Development Agency - but always with the Coalfields Community Campaign, and closely linked to it.

Q80 Chairman: In the Committee's report on the coalfield communities we welcomed your commitment to take on a wider role in promoting economic and social regeneration in the coalfields. Can you indicate what your programme is for achieving that, and are there one or two examples you can give to us which show what you are achieving?

Mr Higgins: The neighbourhood renewal areas are an example of how that will happen in the Coalfields Programme there. The example of it is that each of the Coalfields Programme's 100 individual sites has an appraisal that is set up at the start, before any money is approved to invest there, and it has to cover the whole issue of regeneration. Therefore, social regeneration and employment issues are dealt with at the very start of the appraisal process, before it goes through to be finally approved.

Q81 Chairman: Is this new?

Mr Higgins: No, the two-stage appraisal process has been in place for -----

Q82 Chairman: In our report we welcomed your recent commitment to take on a wider role.

Mr Higgins: Yes.

Q83 Chairman: I was only trying to get at what you meant by a wider role. If you have done this in the past, is there a change going on about how you will approach things in the future?

Ms Ford: I think the report was perhaps getting at the change in the role in housing there, rather than anything else. As with all of our other projects, in the coalfields projects we would aim to bring basic regeneration impact, obviously, and we would aim to do that in a sustainable way, working closely with the whole community. What we were probably referring to there was the fact that we have the flexibility now to work in the housing components of that. We have been able to put community infrastructure back in at Allerton Bywater, for example, which is a Millennium Community but also former coalfield area. A key part of turning local opinion around there was to get the miners' welfare building regenerated and put value back into it and bring it back as a hub in the area. That is probably what we were getting at in what you refer to, if I have understood that properly.

Mr Higgins: We have gone back to the Department on how we would respond to the report from the select committee, and I think the Department is issuing that in the next week or so.

Q84 Chairman: If there is something else you want to add to that, we would be happy to receive it.

Ms Ford: Absolutely.

Q85 Christine Russell: You mentioned Allerton Bywater, so can I move on and ask you about the Millennium Communities? Not wishing to sound too negative, but it is now seven years into the programme and there is very little to see on the ground other than perhaps 50 per cent of Greenwich Village being completed.

Mr Higgins: As you say, construction at Allerton has started. Construction also started at New Islington. Planning has been submitted and is close to approval at the project at Telford. Oakgrove, nearly 2000 houses at Milton Keynes, is out to tender now and about to be awarded a key developer on that project. The first stage of Hastings is starting. A lot of progress has been made in the last 12 months, and in total 7,000 houses on those seven sites - and no doubt probably more as they develop. The most encouraging thing about the whole Millennium Communities Programme is that when it first started it was seen as a real experiment, and there was not a lot of support from the industry. As it has progressed, it is now at the stage where, on the recent tender for Oakgrove in Milton Keynes, the competition to get at the last six was intense. There were thirty organisations vying with each other. These are all major house-builders trying to get in that last six. I asked a number of the senior executives from those housing organisations, particularly those that were very disappointed - major volume house-builders that missed out - getting to the final shortlist of six; and they said: "This is the R&D of the industry now." To get on the Millennium Communities Programme, to understand and learn from it and then apply elements of it to the mainstream of their housing industry is a very important process.

Q86 Christine Russell: I am most familiar with the one in King's Lynn. Last time I was there, nothing much seemed to be happening on the site. What is happening to that one?

Mr Higgins: The site is split between two sites, one owned by a private developer and the other owned by the local authority, and then there is a swathe at the end of it that is a drainage containment area. It is going for planning. There was a major decision on March 30 on a major road interchange, which is essential to freeing up the whole site. That commitment to the investment in infrastructure was made by March 30 this year. The next stage is then the planning approval for that. At the moment, negotiations are underway between the Council and the adjacent land-owner NEP, on the whole issue of value sharing between the sites.

Q87 Christine Russell: Because of all this progress that you have made in the last 12 months, is it too soon to evaluate the programme, do you feel; or have you done any evaluation as to whether or not perhaps some of these sites should ever have been included in the first place?

Ms Ford: I began to get concerned about six months ago about the rate of progress, which is what I think lies behind your question. I asked our organisation to - I did not call it an evaluation because I thought it probably would not be as thorough as that, but I certainly wanted a stock-take in order to come to our board and on to the Department to say: "Given we now have seven years and progress on the ground is pretty well confined - you go to Greenwich and show people what can be done, but what is keeping us? What is taking us so long to get on here?" That study is just about to come to me, and I am very happy to share that with the Committee, if you would like to see that. The gist of it seems to be that because it was a very novel thing to do at the time, and it seemed quite a risky thing to do, people did not think private developers would be prepared to meet these standards for the costs that we were describing. I think it did take quite a while, three or four years, to get the first one up and running and to get the models and protocols right. There has been much better progress in the last 18 months, and over the next two to three years we will see a heck of a lot more progress, but I absolutely share your frustration that after seven years there are lots of things in transit, but not a lot of tangible outcomes to be able to go out and visit and celebrate. I hope that will change in the next little while.

Q88 Christine Russell: I am sure we would appreciate receiving the information.

Ms Ford: I am happy to supply that to the Committee.

Q89 Andrew Bennett: If you can give us some good news there, what about the English Cities Fund?

Mr Higgins: The English Cities Fund has made its first investment at Liverpool, and that has now gone on for planning approval.

Q90 Andrew Bennett: How much?

Mr Higgins: The investment?

Q91 Andrew Bennett: Yes.

Mr Higgins: I will give you the exact amount in a second. The total project itself is about 150 million; the entire site. The site purchase is around £6 million, and they are applying for EODF funding at the moment. It has got to stage one at St Paul's Square, so there is planning approval there. It is also invested in Claytonbrook and NewEast Manchester, which is done in partnership with the URC1 on NewEast, Manchester; and it is close to final negotiations on two other sites that it is working on.

Q92 Andrew Bennett: How does the Claytonbrook one count as a city? It is an old river valley, is it not, quite a long way out of the town centre? The city is going to be defined as the whole of the urban area, is it not?

Mr Higgins: The Claytonbrook site is adjacent to the new stadium there. They would think it is relatively close to town, and it is really when you look at the new metro that is going on; it is fairly adjacent. The regeneration of Claytonbrook, particularly housing, is -----

Q93 Andrew Bennett: I accept that there is a good argument for regeneration there; it just seems a little bit puzzling that it is part of the English Cities Fund rather than one of the other funds that might be available for regeneration.

Mr Higgins: There are not that many funds around that invest in regeneration; there are probably two or three others that I can think of. It requires a lot of patience and perseverance. The site that English Partnerships has identified has been done in partnership with NewEast Manchester and it will take quite a few years to fully consolidate that whole site.

Q94 Andrew Bennett: So you are pleased with the English Cities Fund.

Mr Higgins: I think it took a long time to get established. There were considerable delays as it went through EU procurement issues, but the fund became live in mid-2002, when it really started. The area it is working in it is particularly focused on because of its charter on areas that are difficult to invest in and very difficult sites; it is not a fund that has the flexibility of just choosing the best investment opportunistically across the country. It has a difficult mandate, but I am pleased.

Q95 Andrew Bennett: The Treasury was helpful with that one!

Mr Higgins: I am not sure.

Ms Ford: The Treasury was extremely helpful with it.

Q96 Chairman: Moving to the European Union or European Commission, once upon a time you had something called the Partnership Investment Programme, which was very successful and generally approved by everyone who had any dealings with it. That was obviously stopped by a ruling of the European Commission. Aside from the gap funding for housing, I understand there are now about five different attempts at replacement schemes or funds to do the job that PiP was doing. In truth, most of them are not adding up to much, are they, in terms of delivering schemes?

Ms Ford: The PiP programme was before David and my time, so we can only describe what we understand it to have done; but all of our colleagues tell us it was an extremely helpful programme that was very flexible. It enabled our organisation to do things in areas where it traditionally had been difficult to do things in. There was a great disappointment when it was closed, as it were. Certainly since my time in English Partnerships, the first year we were working on a gap funding regime to replace PiP, and we spent a year getting that developed with the Department, but mainly getting through the European hurdles, so the gap funding regime that we now have in place has been, as it were, approved by the European Commission. We intend to use it to replace what we might have done before with PiP. Again, we are in the early stages of that, and we are seeing different applications coming forward and different models for gap funding. Again, the Park Hill example that David referred to earlier is an example where we have put out, as it were, a negative tender to the private sector to ask how much gap funding it would take to make this stack up from their point of view. There are different ways of using it, but there is no doubt that in my own organisation people greatly miss the old Partnership Investment Programme because they felt it was very helpful. We are doing what we can through the new gap funding regime to try and replace those opportunities.

Q97 Chairman: Aside from the housing gap funding, how much money have you committed to other schemes that have been designed to try and replace what it was doing?

Mr Higgins: Importantly, where our schemes and our partners are going now - and one of the major participants in the PiP programme was Bellway for example - the developers are moving a lot more to joint ventures. We are finding that even where partners - as the other day in Salford - were looking for traditional gap funding, they have come back and are much more attracted to joint ventures. We certainly see those as replacing it. How many of those we are doing? We are doing a lot. Our largest to date has been Barking Reach, which is 10,000 houses, a significant investment for the public sector.

Q98 Andrew Bennett: Are these joint ventures identifying a gap, or is there no gap?

Mr Higgins: There is a gap. In the case of Barking Reach, that sat as a site for 20 years. The gaps are in decisions on infrastructure. In that case in relation to contamination we are working with the local authority on their adjacent site. There is always a reason why these sites have not developed.

Q99 Andrew Bennett: So you are providing the money for the gap.

Mr Higgins: It is sometimes negative, for example Park Hill, which sat there for a decade or more because there is a gap, and therefore there will be some gap funding required. In the case of Barking, it is often the risk component and the need to have a major public sector partner alongside a private sector developer.

Ms Ford: From the point of view of my board, we are not uncomfortable with the move to joint ventures because in the old days government would have put the money in as gap funding as straight grant, and that might have been the last we saw of it. When we are joint venturing with Barking we will put investment in to unlock that development, but we will also share in the upside of that and recycle that capital back into the developments. That has to be good from the value-for-money point of view, so we are not at all uncomfortable at doing joint ventures, rather than always grant funding through gap funding regimes. That is the point we are trying to get across.

Q100 Andrew Bennett: Where are we up to now with the Housing Gap Funding Scheme?

Mr Higgins: Our draft guidance package went out in June of 2003; it became live at the end of last year. We are using it on a number of schemes. There are three that I know of that are going through appraisal at the moment from Norwich to Southwark.

Q101 Andrew Bennett: Appraisal, but not actually building.

Mr Higgins: No, the scheme only came live at the end of last year.

Q102 Andrew Bennett: Your predecessor, or maybe several predecessors back, the chair or English Partnerships, used to measure success by the amount of floor space that was developed or available for industry. How would you rate your success in terms of houses that have been built in the last two years?

Ms Ford: We had our targets changed by ODPM in the course of this year to reflect the new remit that I spoke about, and we have a range of output targets which still contain commercial floor space, housing starts in a year and housing completions a year and so on. We are in the middle of finalising those numbers. They will be audited and laid before Parliament in two or three weeks' time. I do not have the exact figures with me, but I can say to you that my sense so far is that it is a much better performance from English Partnerships than the last two or three years, across all of our targets.

Chairman: Thank you very much indeed for coming along.