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The Minister for Local Government (Mr. Phil Woolas): I congratulate the hon. Member for North Dorset (Mr. Walter) on raising an important issue for his constituency in such a logical and professional manner. I will use the time at my disposal to try to answer the points that he made and to explain our policy and how we may move forward.

The hon. Gentleman's concern about housing is shared by others who have written to the Office of the Deputy Prime Minister and raised questions about housing in North Dorset. Several have questioned the Secretary of State's decision last October to call in planning applications for residential development at Shaftesbury, which I know to be one of the most beautiful parts of our country.

Although I welcome the opportunity to discuss housing provision in North Dorset, I cannot comment, as the hon. Gentleman will understand, on the merits or otherwise of the specific proposals, which will, as he says, be the subject of a public local inquiry later this year, and I cannot prejudice the Secretary of State's impartiality. However, the debate is timely, as last December the Government gave their response to the Barker review.

We announced a commitment to increase the rate of house building from 150,000 per year at present to 200,000 by 2016, and to increase affordable housing for ownership and rent by a new partnership with the private sector to promote shared equity. The Government have just consulted, as has been mentioned, on new planning policy for housing—draft planning policy statement 3—on delivering infrastructure using a planning gain supplement and on a new draft code for sustainable homes to improve the energy efficiency of new homes.

Draft planning policy statement 3 sets out the Government's key objectives for planning for housing to ensure that everyone has the opportunity of living in a decent home that they can afford, in a community where they want to live. To achieve this objective, the Government are seeking to ensure that a wide choice of housing types is available for both affordable and market housing to meet the needs of all members of the community. We are seeking a better balance between housing demand and supply in every housing market, and to improve affordability where necessary and create sustainable, inclusive and mixed communities in all areas.

As well as being attractive, safe and designed to a high quality, developments should be located in areas with good access to jobs, key services and infrastructure. Now we start to understand the problem. The Office of
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the Deputy Prime Minister has as its key objective sustainable communities in all regions of the country, and this debate is an excellent opportunity to reinforce that commitment. The current regional spatial strategy for the south-west, RPG10, focuses development on the region's principal urban areas, with some growth at other designated centres for growth, which includes the region's main towns and cities. RPG10 advises that development outside those areas should be on a smaller scale to meet local needs. The emerging review of the regional spatial strategy, which the South West regional assembly is considering, seeks to continue and reinforce this direction while increasing overall levels of housing delivery across the region in order to meet growth needs and address the affordability problems that I have described.

I know that there is an important question about what rate of housing development is appropriate in North Dorset to meet local needs. The Dorset structure plan set a rate some time ago of approximately 335 dwellings a year. That requirement is long overdue for review, and I understand that the emerging regional spatial strategy currently anticipates a much lower rate of 220 dwellings a year by 2026. Some say that that represents a major slow-down of development, limits the scope for affordable housing and threatens to put market towns in the district into recession. Others say that maintaining such high rates of housing development only sustains high rates of car commuting and provides limited benefits to local people.

What are the possible solutions to that dilemma? I believe it important to look at bespoke solutions to issues and problems in rural communities rather than treating growth as a one-size-fits-all solution, be it North Dorset or North Cornwall. The issue is about understanding our communities' needs and how our communities work. As the hon. Gentleman has acknowledged, inward migration is a main component of population growth in North Dorset, as it is in the south-west as a whole. Gathering evidence and understanding local housing markets is a key step in ensuring that there is an appropriate mix of housing to meet local needs, including the important issue of affordable housing. As far as rates of housing development are concerned, there clearly needs to be a proper judgment in relation to demand and supply within the housing market area consistent with our desire to promote a sustainable pattern development for the region.

The regional spatial strategy will set that balance with a planning framework for a sustainable pattern of development for the south-west, and in so doing it will set rates of housing development for North Dorset looking forward to 2026. The Government's commitment to tackling housing supply, to the provision of more affordable housing and to reforms to the planning system equips local communities with the tools to focus on solutions tailored to local needs.

What are the Government doing? We are keen to increase the supply of housing and to address the problems of affordability. It is clear that there still needs to be substantial housing in the small towns and villages of the region with a focus on delivering more affordable housing. However, it is also important that the south-west owns the agenda—if I can put it that way, Mr. Deputy Speaker—and seeks its own solutions. Once a
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draft of the regional spatial strategy is submitted to the Secretary of State, an examination in public before an independent panel will examine the evidence around housing provision in North Dorset and the rural areas of the region.

The regional spatial strategy will provide rates of housing development for each planning authority in the region. Most importantly, the strategy will be prepared in harness with strategies for housing investment, the environment and the region's economic growth. Together, those measures will provide local communities with a clear strategic context.

I welcome the way in which North Dorset district council is helping to lead a housing market assessment for the wider housing market area in partnership with other local authorities in Dorset, and I am sure that that will go a long way to providing a robust and comprehensive evidence base on which to understand local needs.

Draft PPS3 suggests how local planning authorities might use their local development frameworks to set the balance of different household types to be provided across the plan area. Those measures, along with others, are intended to strengthen the ability of North Dorset, and of every local community, better to meet its housing needs.

Turning to our package of investment in housing, I am extremely proud of the increased resources that the Government have provided for more affordable housing. We have increased spending on new affordable homes to £2 billion in 2007–08—more than double the 1997 level. The region's No. 1 priority is the provision of more affordable housing to help to improve the balance of its housing markets.
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I look forward to the report this spring by the affordable rural housing commission, which the Government have set up to investigate the issues surrounding the provision of affordable housing in rural areas. However, in recognition of the increasingly acute affordable housing issues in the south-west following the 2004 spending review, we have already allocated the south-west the largest increase of the English regions—up from £137 million in 2005–06 to £203 million in 2007–08. That is a 48 per cent. increase.

Final details of the Housing Corporation's 2006 to 2008 programme will be announced shortly, but I can say that in the market area that includes the hon. Gentleman's constituency, it proposes to allocate more than £30 million in 2006 to 2008. Moreover, the south-west housing body has set a target to provide at least 800 homes in the smallest rural settlements, taking an estimated 11 per cent. of the total programme, with a further £85 million intended to be invested in other settlements in rural areas such as market and county towns.

My Department has as its key objective sustainable communities in all regions. The hon. Gentleman, with obvious commitment to his constituency, has rightly provided an opportunity to reinforce the Government's commitment to a better future for the south-west. I recognise the problem that he describes and hope that I have been able to explain the Government's policy, which recognises the dilemma that exists. I commend that policy to the House and look forward to further debates on the important issues that the hon. Gentleman raised.

Question put and agreed to.

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