Examination of Witnesses (Questions 119-139)
MR ROY
IRWIN, MR
MIKE MAUNDER,
MS SARAH
WEBB AND
MR IAN
RICHARDSON
28 FEBRUARY 2005
Q119 Mr Cummings: The Government is claiming
major progress in tackling the problems of low demand. Do you
agree with such a broad and bold statement?
Ms Webb: I think they are making
significant progress. I think the Pathfinders have been a very
important initiative; lots of extremely positive work is being
done under the Pathfinder initiative. It has not been going very
long. We need to give it more time to bed down. Our only real
concern is about areas outside the Pathfinder, where it is harder
to make progress.
Q120 Mr Cummings: Are you all in agreement
with that particular statement?
Mr Irwin: I think that the Government
have responded quickly to a problem that was identified relatively
recently in public policy terms, and responded by creating a framework
in which Pathfinders can operate and, in the context of a 15,
possibly 20-year programme of work, I think you could say it is
a good beginning, but the evidence as to whether it is successful
will not be capable of being addressed at this early stage in
such a long period of time. So I think it would be a good start
but not necessarily at this stage something you could actually
guarantee will be successful in the long run.
Q121 Mr Cummings: How effective can the
Pathfinders' housing programmes be unless the loss of the original
economic base is tackled or perhaps a new economic base established?
Mr Irwin: Clearly, what the Pathfinders
are trying to tackle is the physical manifestation of whether
places actually have a future or not, and people have decided
in some consequences, because of economic downturns and crime,
perceptions of crime, to move on. The key issue that faces both
Pathfinders and their local authorities is to establish a longer
term future for both the locality in general and the areas which
have suffered from decline. So you cannot disconnect one from
the other because, if there is not an economic prospect, there
is no purpose for people just living in what would otherwise be
a dormitory.
Q122 Mr Cummings: Are you saying that
the HMR fund is not too constrained, or should Pathfinder initiatives
spend more time, effort and resources on economic development?
Mr Irwin: I think that is where
the work of the Pathfinders and the authorities links with the
efforts of the regional development agencies, which have been
set up specifically for the purpose of generating outcomes in
economic terms. If they do not connect, then they will just undermine
each other. If they do connect, the fact that they are in different
agencies should not make a difference if they work well together.
Q123 Mr Cummings: So you are not finding
the HMR too constrained?
Mr Irwin: Not in the context of
the work of the RDAs at this stage, no.
Q124 Chairman: Do you think the RDAs
are giving them the backing that they should be giving them?
Mr Irwin: The position of RDAs
is not exactly the same across the three northern regions nor
in the West Midlands.
Q125 Chairman: Some thumbs up, some thumbs
down? You are giving some of them a seal of approval, and you
are saying that others are not getting engaged enough?
Mr Irwin: They are all at different
stages, and they have all now engaged further than a year ago.
If we go back a year, what were they trying to engage with? It
would not have been clear at that stage, but clearly, the link
between economic regeneration and housing markets is direct, and
they cannot afford to go off in different directions.
Q126 Mr Cummings: Surely, that is not
brand new rocket science.
Mr Irwin: No, it is not rocket
science, but it is a reflection on how government and local and
regional agencies are organised.
Q127 Mr Cummings: So they have not been
well organised in the past?
Mr Irwin: They have not always
seen the connection between one programme run by one outfit and
a programme run by another outfit. I think what market renewal
needs to address is seeing how those two things, economic and
human regeneration issues, need to sit side by side.
Q128 Mr O'Brien: Can I press you a bit
further on that, Mr Irwin? The Audit Commission have criticised
the early projects funded by the Pathfinders because they are
saying they are just projects that have been taken off the shelves
of local government, with no new initiatives and no new priorities.
Could you give us an example of any projects you think they should
be pursuing?
Mr Irwin: In terms of what we
were saying in our best practice report, we said that too many
of the projects were projects that had been developed not for
market renewal purposes; in other words, they were projects that
local authorities had wished to finance but they had not got the
finance so they were on the shelf. We are also saying that, because
of the availability of resources for market renewal and the pressure
to make a difference locally, some of those have been brought
off the shelf and are being financed. Some would be projects that
were around rehabilitation of existing stock without being clear
how that fitted into an overall perspective on the market. So
we were not saying that these projects should never proceed. We
were just cautious about whether they were going to make a real
difference.
Q129 Mr O'Brien: What should be put in
their place? Have you any suggestions?
Mr Irwin: I think some of the
proposals of the market renewal Pathfinders relatively shortly
after they made the original funding decisions would be better
placed because they have now taken a strategic view of their marketplace
and could actually choose based on some rationale as to that project
and not that project.
Q130 Mr O'Brien: If the local authority
has done research into a project, and it is only lack of funding
that prevents them from doing it, and funding comes along, surely
that is a sensible approach? Why do you criticise it?
Mr Irwin: It depends on the quality
of the research and how wide-ranging their view is.
Q131 Mr O'Brien: Have you questioned
them before you criticised them?
Mr Irwin: We have looked at what
the Pathfinders have done and their level of market research,
which is improving and increasing, and even that is not yet sufficient.
So I think it is not unreasonable to deduce that local authorities
have not seen in isolation the consequences of some of their projects
and how it affects the overall market.
Q132 Sir Paul Beresford: You mentioned
lack of co-ordination. We are looking at areas where the economy,
to put it mildly, has had a savage downturn. Down in the South
East we have exactly the opposite problem. We have a very hot
economy, we have not enough houses, we have Mr Prescott shoving
little boxes into little corners, concreting over the South East.
Should there not be a co-ordination by government departments
to try to take the steam, perhaps using the planning system, out
of the South East, to try and encourage more movement to these
sorts of areas?
Mr Irwin: I think there has been
quite a long history of governments of various persuasions trying
to in effect influence the economic prospects of different parts
of the country with intermediate areas in the 1960s and subsequently.
My understanding is that the regional development agencies have
been given a brief to make sure that their regions, and the economic
growth in their regions, actually try to establish the best possible
level playing field. I do not think RDAs are necessarily within
ODPM's gift; they may well be part of the DTI as well, but simultaneously
with the idea of trying to make the market work is trying to make
the economic fortunes work and, as I said earlier, if you do not
try and do that, then just trying to stimulate the housing market
will be insignificant.
Q133 Mr O'Brien: So the Government has
a role that they are not using fully.
Mr Irwin: The Government has a
role. Whether they are using it fully is not something that I
have knowledge about.
Q134 Mr O'Brien: Last week we had the
chairmen of Pathfinders before the Committee and they told us
that the projects were chosen, those local government projects,
to get initiatives going. Is it your opinion that the funding
timetable is too tight and are their initiatives under too much
pressure to spend the money?
Mr Irwin: I think on such a significant
programme the availability of significant resources means that
inevitably everybody within the programme feels under pressure
to do the right thing and to do it quickly. Inevitably, early
schemes, whether off the shelf or new ones specifically, are under
pressure to spend, given the amount of resources which are available
under the Comprehensive Spending Review, so I can understand chairmen
and executives of the Pathfinders feeling they have to deliver
quickly. I think the issue that the Commission would want people
to think about is that getting it right first time is also important,
as well as spending the money.
Q135 Mr O'Brien: When will you revisit
the programmes you have been looking at?
Mr Irwin: We are revisiting them
now. We are into monitoring the impact now, so having looked at
the prospectuses, we are now actually seeing what is happening
on the ground.
Q136 Chairman: Is it not clear that in
some areas, just getting off to a good start, psychologically
changing people's attitude to a neighbourhood, and therefore you
got feedback which was worth a lot more than the money spent because
people suddenly had confidence themselves to invest in the area?
Mr Irwin: Clearly, confidence
in an area is what makes a market work, whichever market you are
looking at. What I think everybody is trying to establish is whether
that confidence is long-term and sustainable confidence around
a place or whether it is a mixture of that and some short-term
opportunism around trying to make a fast rate of return. There
is a clear difference between the two.
Q137 Christine Russell: Perhaps I could
continue on that theme, because there do seem to be conflicting
views about what really is happening to housing markets in the
Pathfinder areas, because ODPM in their evidence has told us that
the tide has turned and the markets are recovering, but you seem
to question that a little in your submission.
Mr Irwin: Although the speed of
the decline in housing markets took a lot of people by surprise
relatively quickly, that things that had been seen as sustainable
over perhaps three or four years had become less sustainable,
and I think confidence and perception of confidence is quite important,
but I am not sure that confidence in a long-term kind of way has
returned so quickly. I find that counter-intuitive at this stage,
and it may be just the confidence that comes from labelling the
programme of intervention but that is different from saying that
the areas in Pathfinders will feel like the ones outside, and
that is where you have sustainable communities. So I think it
is too early to tell that and I would think there needs to be
more positive conclusive trend signs about house price sales going
to owner occupiers rather than just house price sales going to
not anybody in particular.
Ms Webb: Even if house price sales
have gone up, which they have in some of the areas that previously
have been characterised as low demand, that does not mean that
you have solved the underlying problem. It means that there was
another problem that came along and, just because you can pay
£60,000 for a house that might previously have been identified
in a low demand area or even obsolete does not mean that that
housing market is not still in need of some kind of restructuring
and that individual property might actually still be in need of
a considerable amount of work. But the initiative is still important,
I think. It is still important that house prices are going up
in those areas and that confidence is coming back. As Roy said,
it is about making sure that that is sustained confidence, not
just a short-term blip.
Mr Richardson: If I can, what
I think it highlights is the complexity in the scale of the task
and the need for a long-term programme rather than to expect quick
fixes. The questioning so far has given us the opportunity to
highlight that, in the sense that it is not just about addressing
housing conditions; it is about also addressing the economic base,
because the housing market restructuring on its own will not be
sufficient to contribute effectively to the sustainability agenda.
The questioning of support earlier suggested that perhaps there
needed to be some regional restructuring of markets to take some
of the heat off the growth areas in the South East for example.
That is not something that is going to be easily achieved overnight.
It takes a long period of time to achieve that. I think what it
highlights is a number of things. Firstly, that the programme
has to be seen as long term and sustained. It is not something
that can be a relatively short life policy objective. Secondly,
that the Pathfinders were determined as best they could at the
time but there are plenty of non-Pathfinder areas which display
almost exactly the same characteristics that still need to be
addressed, and we need to find a way of rolling out the benefits
of Pathfinders to those, which again, points to the need for long-term
investment. We need to ensure that there is the will and the commitment
to properly integrate the various policy streams of economic,
social and housing regeneration.
Q138 Christine Russell: How confident
are you that the people who are running the Pathfinders really
do have the knowledge and the experience of housing markets?
Mr Richardson: I think we need
to be fair to the people who are doing that job at the moment.
It is a very difficult and very complex job, and a lot is being
expected of them quite quickly. If it is to be effective, I would
much rather we were patient with the responses than expected too
much too quickly, because that is likely not to give us the best
long-term benefits. I know there is some frustration in some of
the Pathfinder areas that things are not perhaps happening on
the ground more quickly but it is quite a slow process dealing
with things like land assembly if we are going to achieve the
critical mass investments from the private sector, for example,
that will bring about the mixed neighbourhoods and sustainable
tenancies and the investment in areas that will enable us to support
local communities in the longer term, that make those places the
sort of places people want to live in and choose to stay in.
Q139 Chairman: If you take East Manchester,
they have this mortgage guarantee scheme in place, and that is
a long-term commitment by the people putting in the mortgage money.
Mr Richardson: It is, and I think
that is a useful example of how the commitment does need to be
long-term and it also gives us a useful opportunity to remind
ourselves that the dissemination of good practice is something
that we should be featuring. The Chartered Institute of Housing
is proposing later this year to run a regeneration masterclass
trying to bring together and disseminate best practice in so far
as that has been learned so far in the Pathfinders. That is something
I would like to see us learn from and develop from.
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