Examination of Witnesses (Questions 240-259)
RT HON
KEITH HILL
MP, RT HON
NICK RAYNSFORD
MP, MR JOE
MONTGOMERY AND
MR ANDREW
WELLS
19 OCTOBER 2004
Q240 Mr Sanders: The Kate Barker review
recommended that the regional housing boards should be merged
with regional planning bodies, but do you think this will lead
to a potentially damaging loss of prominence in those regions
for housing policies?
Mr Hill: No, we do not. As you
know, frankly we accepted that recommendation and now we are consulting
on our proposals for that merger. I think, on the contrary, we
accept Kate Barker's logic, which is that by combining those functions
actually we facilitate the delivery of housing and as part and
parcel, of course, of our facilitating the delivery of housing.
You have a combined expertise and combined commitment, so certainly
it seems to us that it will lead to a more efficient delivery
of new housing in the regions.
Q241 Mr Sanders: Do you see any change
in the constitution of the regional housing boards?
Mr Hill: Yes, there will be, and
I think we have made it clear that, for example, in those mergers
the more obviously elective and representative element, namely
the regional planning board, takes priority, but we would expect
the chair of the regional planning board to be the chair of the
merged housing and planning body.
Q242 Mr Clelland: As one who is normally
a great admirer of the Deputy Prime Minister and his Ministers
and the work of his Department, I regret to say that there are
exceptions to that. One is this plan to build thousands and thousands
of new homes in the South East, which I believe will do nothing
to assist in the better distribution of wealth and power in this
country and actually will be detrimental to regions like mine.
However, having said that, this is a policy which the Government
appears determined to pursue. There has been some criticism, however,
that there is not sufficient, if any, detail as to how the infrastructure
for the substantial, new numbers of houses will be achieved. Can
you say something about the thinking behind how this infrastructure
is going to be provided? Can you ensure that it will be done?
Mr Hill: I hear and recognise
the issue which you raised as a trailer to your question, Mr Clelland.
The only thing I would say is that I think you have to recognise
that our economies across the regions are absolutely interlocked.
The London economy generates four million jobs outside London
and around the country and the fact of the matter is that at the
present time the dynamism in the national economy is located primarily
in the South East. Of course, there are massively changing trends
elsewhere in the country and obviously we have to accommodate
that and seek to spread the benefits of that economic growth nationally.
As far as the infrastructure is concerned, yes, it is a commonly-raised
issue, but let me avert to what I was saying about the packages
for growth, the infrastructure investment that we have in the
growth areas, a total of £610 million under the present Spending
Review and to be sustained into the next spending round. Investment
in infrastructure in the growth areas increases by an annual real
13.7%. So we have a commitment to delivering on that physical
infrastructure, which is about land remediation, it is about flood
defence, it is about investment in transport, it is about investment
in essential public services. Remember as well that, again, in
support of the growth areas and in the wider South East, earlier
this year the Secretary of State for Transport, in response to
the multimodal studies in the South East, announced a massive
£2.7 billion programme of investment in transport and transport
development. We have talked also about the Community Infrastructure
Fund, which is geared primarily to investment in the growth areas.
Q243 Chairman: We understand this, but
we want something a bit more specific. Let us take the Thames
Gateway for which you are responsible. Could you provide us with
a flow chart which actually shows us when the key elements in
that are going to be put into place, the transport links, the
flood schemes, the water supply, the electricity scheme? It is
at least two years, is it not, since this grand scheme was announced,
so have you got or could you provide to the Committee a flow chart,
setting out when each of the key decisions has to be made in order
to get this infrastructure into place?
Mr Hill: Certainly I can do that,
Chairman, with pleasure, but let me assure you, and if you like
I will give you some examples right now, of the actual investments
which are going into the growth areas. You will want me to stop
after a very short time, I dare say, but £10.6 million for
a major new road and bridge at Wellingborough, the A206 Thames
Road in Bexley. I could go on and on and on with examples of actual
investments.
Q244 Chairman: Let us have the Wellingborough
one and tell me exactly when it is going to be built?
Mr Hill: We will let you have
that.
Q245 Chairman: No. You have got a list
there. Surely you have got the money and you have got the dates?
Mr Hill: It is going in, I tell
you, Chairman, it is going in. A major new road and bridge at
Wellingborough and £5 million towards progressing the Bedford
Western Bypass, with the intention of potentially unlocking a
combined total of nearly 7,000 new homes. That is actual investment
which is going forward right now.
Q246 Chairman: When?
Mr Hill: The announcement has
been made. You know that it takes some time to develop these programmes
in detail and that is not an unreasonable proposition, but of
course we have to announce agreement in principle before the detailed
work can go forward. I will give you a practical example, if you
would like, of investment. On Thursday of last week I had the
pleasure of announcing the nearly £50 million that we are
investing in the so-called Universities at Medway project at Chatham
Maritime in Gillingham. This is a very significant project for
an area which is lacking in skills and educational attainment,
combining HE and FE functions on the same campus, and I literally
saw the JCBs on site, in fact I sat in one. The work is progressing
already, I assure you, Chairman.
Q247 Mr Clelland: What about water supplies?
We have had some concern, particularly at Ashford in Kent, about
the management of water supplies, given this new development.
Are you satisfied that is going to be able to be provided, and
where will the money come from, who is going to fund the new infrastructure?
Mr Hill: On water, it is an issue
which personally I am extremely conscious of, and let me assure
you that the Department as well as the local delivery vehicles
are in very close co-operation with the Environment Agency and
with the water utilities on these issues. It is perfectly clear
that there is a challenge here. It is worth bearing in mind, of
course, that if you build sustainably then that in itself is a
way of using water in a highly efficient way. For example, the
Greenwich Millennium Village has excellent recycling facilities
of so-called grey water and the homes there use 30% less water
than the average. You will know as well that recently we received
the report of the Sustainable Buildings Task Force, chaired by
Sir John Harman, and we have announced that out of that we will
develop a Sustainable Buildings Code with sustainable buildings
projects to be built in specifically the Thames Gateway.
Q248 Mr Clelland: The matters you have
raised obviously are welcome but, having said that, substantial
new water supplies will still need to be provided for this extra
housing. Are you satisfied that can be done on time and who is
going to pay for the work?
Mr Hill: We are satisfied that
we can deliver the housing growth on a sustainable basis in relation
to water supplies. We will expect the utilities to be the primary
investors and deliverers of that water supply.
Q249 Chairman: Has Ofwat approved the
suggestion from Southern Water that it might have to put up its
bills by 45% to pay for all this expansion?
Mr Hill: I cannot comment on that.
I have not even seen that report.
Q250 Sir Paul Beresford: Can I just follow
on David Clelland's opening remarks, a couple of questions back,
expressing concern over the effect of all this development in
the South East on some of the northern areas. There is an argument,
which obviously you are aware of, that, by stoking the fire of
demand by putting lots and lots of properties in the South East,
actually we are accentuating the difficulties drawing from the
North and pumping it into the South. Is it possible, however,
that this huge investment going into the Thames Gateway, which
actually I support and think is a very good idea, and in fact
we started it a little before you arrived on the scene, actually
therefore is going to be able to ease some of the demands on other
areas in the South East where there are few, if any, brownfield
sites and where the demand, if the numbers continue, is going
to impinge on many greenfield sites in other areas in the South
East?
Mr Raynsford: We will split this
answer between us. The first thing to say is, going back to David
Clelland's earlier question, that we are absolutely committed
to encouraging economic development in the northern regions. There
is a whole series of programmes in place, I will not outline them
in detail, whether that is to do with the Lyons Review, in terms
of relocation of jobs in the Civil Service to locations outside
London and the South East, whether it is to do with the work of
the Regional Development Agencies, a significant proportion of
whose budgets is going into the northern regions, whether it is
to do with the Northern Way, the growth corridor proposals which
were launched by the Deputy Prime Minister only a few months ago,
whether it is to do with the encouragement of more effective regional
planning in order to boost the economies in the northern regions.
All of that is very much part of our commitment. I do have to
say that the view that somehow you can boost the North simply
by restraining growth artificially in areas of the South, where
clearly there is a thriving economy, is a very simplistic and
dangerous argument because the investment might well not go north,
it might go to North Rhein-Westphalia or the Pas de Calais instead,
which would not be to this country's advantage. We have to take
a balanced view, and, I must say, I am very much of Paul Beresford's
view that concentrating development in those areas which can accommodate
it with good planning, such as Thames Gateway, does make sense
to avoid some of the problems of indiscriminate sprawl which characterised
some past development in the South East.
Mr Hill: Having said that, of
course, I accept absolutely that we are fundamentally opposed
to indiscriminate sprawl because of our commitments around density,
amongst other things, which are also moving in the right direction,
and of course we are seeking to secure major development in the
growth areas. Nevertheless, the fact of the matter is that there
are indigenous housing pressures all over the South East which
need to be responded to. If you look at the Kent Structure Plan
of two or three years ago, you find that Kent recognises that
something in the order of 70% of the anticipated housing growth
in Kent will arise from household formation amongst its existing
residents. It is a matter of necessity to accommodate the sons
and daughters of families already existing in the wider South
East that we will have to see growth outside the growth areas,
but we expect that growth to be carried out in a sensible and
sensitive way, maintaining our commitment to brownfield development
and our fierce resistance to encroachments on the green belt.
Q251 Sir Paul Beresford: An interesting
answer. The difficulty for some counties is that when their figures
for allocation of housing were put forward the basis of them was
the growth rate of previous years. The difficulty with that is
that the more houses you build the less land you have available,
and in some of the South East counties there are few or no brownfield
sites available. Consequently, there was hope, and you did not
quite answer this, the splurge of housing that will be available
in the Thames Gateway region could take the pressure off some
of the other regions which at present are having difficulty if
not finding it impossible to meet the demands without encroaching
on the green belt?
Mr Hill: I am grateful to you,
Sir Paul, for not descending, and I would not expect you to do
so, into the vulgarisms of some of the phraseology that we hear
about the relationship between concrete and the countryside. Nevertheless,
I think we need to be clear that even if you look at the total
programme up to 2016 for the RPG9 area, which let us remember
envisages growth in the growth areas of an extra 200,000 homes,
but in the rest of the area and including the growth areas an
additional growth of 930,000, that will see something of the order
of a take from greenfields of about only 2%. The land take implied
in these growth programmes ought not to be exaggerated.
Q252 Christine Russell: Recently the
Prime Minister described Crossrail as the investment we cannot
afford not to make. What is your Department doing to make it happen?
Mr Hill: To be brief, following
the discussion with sympathetic interest.
Q253 Mr Betts: The Northern Way. I think
most of us would say, great idea, good bit of vision, ODPM clearly
is very committed, but is anyone else in Government really interested?
Mr Hill: Now you have got us basically
on a Lord Rooker issue. I wonder if either of our colleagues would
like to say something on the issue of the Northern Way: Andrew?
Mr Wells: I think the Northern
Way definitely fits within the second PSA target we have got,
which looks at trying to close the gap in growth rates with the
North. So, yes, that is a joint target between the Treasury, the
DTI and the ODPM and those departments certainly have bought into
the Northern Way.
Q254 Chairman: It is not a successful
target, is it?
Mr Wells: The Northern Way is
a large part of making it successful, I think.
Q255 Chairman: In the last 12 months
actually we slipped back, did we not, in the northern regions?
Mr Wells: It has always been a
long-term target and the action programme is to understand the
drivers behind the relative economic decline of the North over
a very large number of years, indeed decades, and the Northern
Way is an innovative and exciting way of trying to make a reality
of that target. The Deputy Prime Minister asked the northern RDAs
to come together to try to produce a vision for the Northern Way
and they have done that. It covers a lot of issues from a range
of government departments. They are engaged but, you are quite
right, the job now is to make sure they are even more engaged
and engaged in making that a reality.
Q256 Mr Betts: Can I draw a comparison.
It was interesting a few minutes ago that we talked about the
Community Infrastructure Fund and the fact this was shared between
ODPM and the Department for Transport to make things happen in
the growth areas in the South East. When we are looking to try
to regenerate and rejuvenate and grow some of the key areas in
the North, I do not see one penny of Department for Transport
money being committed to any schemes to make that happen. Can
you name one?
Mr Wells: There is investment
from the Department for Transport in the North as well.
Q257 Mr Betts: I am talking about schemes
which have been developed specifically to make the Northern Way
happen?
Mr Wells: It is a very new programme,
and so far the Government have just taken delivery of that RDA
programme.
Q258 Mr Betts: The Department for Transport
has got a 10-year plan, has it not?
Mr Wells: We have put some money
into making it a reality, a relatively small sum of money, £50
million, for the RDAs.
Q259 Mr Betts: The Department for Transport
has got a 10-year transport plan for infrastructure improvements.
Apart from the West Coast Main Line, which is about connecting
London with the North West, virtually all the rest of the funding
is in the South East. There is nothing to connect Sheffield with
Manchester, Sheffield with Leeds, the train times still take an
hour, the passes between Sheffield and Manchester close when it
snows, this is the age we are living in. I just do not see that
there is any redirection of funding and a commitment by the Department
for Transport, in particular, to make this happen?
Mr Wells: It is a very new programme.
Some of the things we have been describing in the South East we
have gone and negotiated since the communities plan produced those
proposals, and they themselves had a very long life before that,
arising out of the last RPG9 process which identified them as
growth areas you could look at. They go back at least five years
now, in concept. The Northern Way is a new prospect, actually
it was announced only in February in the document the Deputy Prime
Minister published called "Making it Happen: the Northern
Way". We have got the RDA proposals, now we need to move
forward into implementation and we have made some money available
to help that process, a bit like we did with the growth areas
in providing seed-corn funding.
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