Select Committee on Environmental Audit Written Evidence


Memorandum submitted by the Housing Corporation

INTRODUCTION

  1.  The Housing Corporation welcomes the opportunity to give evidence to the Committee's Inquiry on "Housing: Building a Sustainable Future".

  2.  The Housing Corporation is the Government's affordable housing agency. We are a non-departmental public body, sponsored by the Office of the Deputy Prime Minister. Our three functions are:

    —  to invest public subsidy in order to provide affordable housing. We do this through our Annual Development Programme which distributes Social Housing Grant to registered social landlords (often known as housing associations);

    —  to regulate the activities of registered social landlords; and

    —  to provide housing policy advice and expertise to Government and others.

  3.  The level of new house building by registered social landlords over the last few years is given in the following table. Not all of our investment results in new building: our grant also helps purchase (and if necessary refurbish) existing buildings for use as affordable housing.

DWELLINGS PROVIDED BY RSLS AND NEW DWELLINGS BUILT IN ENGLAND 1998-99 TO 2002-03
YearDwellings
provided by RSLs
[22]
New dwellings completed by RSLs [23] All new
dwellings completed
% of all new dwellings by RSLs
2000-0122,92016,610 133,68912%
2001-0223,63414,326 130,05011%
2002-0324,97513,330 137,89110%
2003-04[24] 23,02716,710141,680 12%
2004-0528,75620,176 154,60013%


  4.  Our investment objectives are not confined to the provision of additional affordable housing. Our programme reflects the Government's other housing and public policy priorities. For example, we support the use of modern methods of construction, and our grant is used to procure affordable housing in the context of broader urban regeneration projects.

THE HOUSING MARKET AND SUSTAINABLE DEVELOPMENT

  5.  We subscribe to the Government's definition of Sustainable Development objectives:

    —  social progress that meets the needs of everyone;

    —  effective protection of the environment;

    —  prudent use of natural resources; and

    —  maintenance of high and stable levels of economic growth and development.

  6.  In addition, we are convinced of the importance of good building and urban design, and good management, in creating homes and places that people want to live in now and in the future, and that adapt themselves to changing circumstances. Finally, it is clear to us that a diverse community (in terms of people of different incomes, ages, cultural and ethnic backgrounds, including those who are vulnerable or have special needs) is a pre-requisite of sustainability.

  7.  There is considerable evidence that in recent years the operation of the housing market has hindered the achievement of the sustainable development goals of social equity and economic growth. Some of this evidence is in Kate Barker's Interim and Final report, and it includes:

    —  rising use of temporary accommodation to house homeless households, because of a shortage of permanent and affordable housing;

    —  levels of overcrowding in social housing that are 3.5 times those found in the owner-occupied sector;

    —  recruitment and retention problems in public services, because key skilled workers are unable to afford what they consider to be reasonable housing for themselves and their families. In turn this undermines the Government's public service improvement objectives; and

    —  pressure on transport and other infrastructure as an increasing number of people commute over extended distances from home to work.

  8.  Our view is therefore that a sufficient level of housing provision must be provided in order to meet sustainable development objectives, but that this must and can be done in ways that minimise its environmental impact. At best, this development can actually bring back into productive use land that is currently standing derelict and unused. Indeed the Office of the Deputy Prime Minister's Sustainable Communities Plan, which guides current housing policy, states that:

    "it will be essential for all development, especially of new housing developments, to respect the principles of sustainable development and address the potential impacts on the environment alongside social and economic goals".

THE HOUSING CORPORATION'S RESPONSE TO ENVIRONMENTAL ISSUES

  9.  At the Housing Corporation we are proud of the strength of our policy focus on environmental issues, and the real impact that this has on what gets built with our funding. In the introduction to the recent report of the Sustainable Buildings Task Group, the Housing Corporation is identified as an excellent example for

    "looking beyond lowest initial costs and demanding that development goes beyond the minimum standard required by Building Regulations."

Policy framework

  10.  It is important to understand the context within the Corporation works. Regional housing bodies and local planning authorities prepare development plans, which aim to provide sufficient housing to meet the housing requirements of areas. The areas the Corporation can develop in and the speed at which the Corporation can encourage the construction of new homes is significantly determined by Planning Policy Guidance Note number three.

  11.  Our policy framework requires us to consider sustainable development principles in how we conduct our business, in our investment strategy and procedures, in our actions as regulator, and by developing and disseminating good practice and practical tools.

Investment requirements

  12.  This policy framework is translated into the following practical impacts on the housing in which we invest our subsidy:

Sustainability toolkit

  13.  We require registered social landlords to assess the environmental performance of proposed developments in accordance with our "Sustainability Toolkit". This is designed to ensure that new developments are and will remain attractive to tenants, and continue to attract demand over their lifetime.

Scheme Development Standards

  14.  We also require all new build housing to meet our `Scheme Development Standards'. These standards include achieving the "Good Practice Standard" of the Housing and Energy Efficiency Best Practice Programme (and we recommend that it achieves "Best Practice Standard").

  15.  To illustrate what this means, the Good Practice Standard requires that housing is built to achieve specified minimum carbon emissions, has U-values no greater than the elemental U-values of the Building Regulations, and that at least 50% of rooms should be lit by energy efficient lights. The Best Practice standard raises the minimum carbon emission threshold, reduces the elemental U-value threshold, and requires 80% of rooms lit by energy efficient lights.

Eco-Homes Standards

  16.  Our Scheme Development Standards require the achievement of Eco-Homes "Very Good" standard. Currently approximately 180,000 homes are built each year. At present only 2% of these are built to the "very good" standard. The Corporation funds the construction of 35,000 homes. The Corporation's "very good" requirement will is expected to raise the total number of homes built to EcoHomes levels to 15% of the total number of homes built each year.

  17.  The Eco-Homes standard assesses the performance of homes according to a range of environmental impacts, grouped together under the headings of Energy Use, Transport, Pollution, Materials, Water, Land Use and Ecology, and Health and Well Being. To give two practical examples, credits are achieved if the home is located within 1km of a bus route and local amenities, and if ozone-friendly insulation and efficient boilers are installed.

Brownfield land

  18.  The Housing Corporation has not set a specific target for the proportion of our investment that we wish to see on "brownfield" developments. Instead we have had a target for investment in "regeneration" projects which includes brownfield sites as well as renewal and refurbishment of existing stock. Our target has been 65% and we have comfortably exceeded this for a number of years: in 2002-03 we achieved 83%.

Flooding

  19.  The Government has taken a risk based approach to flooding. This approach is set out in Planning Policy Guidance 25 (PPG25). PPG25 does not prohibit construction on all sites with a risk of flooding. Instead it uses a risk based approach to determine what type of development is suitable for a given site. There are two decision making tools in this process.

  20.  The first is the flood risk assessment which estimates the probability of a risk event occurring and the vulnerability of sites if the event occurs (number and type of properties at risk). The second is the sequential test, which considers the suitability of a particular site for a specified development ranging from no flood risk, therefore suitable for development, to high risk, where only conservation areas such as parks would be allowed. PPG25 also recommends the use of Sustainable Urban Drainage Systems (SUDS) as a means of allowing a place for water to go, reducing run off building up down stream.

  21.  PPG25 requires that flood risk are assessed and ameliorated to the satisfaction of the Environment Agency and Planning Authority. As a Government funded body the Corporation will be working to ensure developers work to best practice standards and the Environment Agency are engaged at an early stage when development receive Corporation funding.

Housing Quality Indicators

  22.  Since 1996, we have been developing a Housing Quality Indicator (HQI) system, which assesses the quality of key features of housing developments under three main headings: location, design and performance. Registered social landlords are required to assess new developments against these indicators and submit the information to a national database. To receive funds during 2006-08 grant recipients will need to meet minimum HQI scores. These include minimum scores to be achieved for unit size, unit layout, accessibility and energy use.

Prioritising our investment

  23.  In practice, we do not have sufficient funds to invest Social Housing Grant in all the schemes that are proposed to us and that meet our basic requirements. As we prioritise those schemes that will be funded, we give greater weight to those that perform better in terms of sustainability and quality. Of course we also take other factors into account, such as the amount of grant required, and the evidence of the housing need that the scheme will meet.

Specific initiatives

  24.  During 2005 the Corporation funded Sustainable Homes to provide regional seminars to associations, developers, architects and Corporation on how to move from "good" to "very good" Eco-Homes levels cost effectively. A guide will also be released in December to best inform how to move to obtain more points (do the less damage to the environment).

  25.  In 2004-05 the Corporation also funded the development of a sustainable products buying group (One Planet Products). The bulk buying of products, which will start early 2006, is expected to reduce prices of Eco-Homes related products by up to 40%.

  26.  The Corporation also funded research into a zero emissions and zero waste to landfill community of 2,000 homes (Z-squared) to develop a viable plan which a development organisation could take to developers and landholders. This project is now being taken forward by Bioregional Development Group, sustainable development specialists.

Good practice

  27.  As well as setting clear minimum standards in terms of outputs and process, the Housing Corporation has supported an extensive good practice programme to develop appropriate evaluation frameworks, and to publicise the importance of sustainable development practices to registered social landlords and other developers. The outcome of this includes funding for:

    —  the Sustainable Homes project, run by Hastoe Housing Association, which provides advice and support to registered social landlords to improve their sustainability and environmental performance;

    —  the development of "Green Street", a web-based tool to help identify environmentally friendly ways of refurbishing existing dwellings;

    —  work by the Building Research Establishment to develop a method of assessing existing homes, which will allow landlords to target improvements to their stock in a way that will gain most environmental benefit;

  28.  A number of associations are also doing a significant amount of work reducing fuel poverty which can drastically reduce fuel consumption. Warm Zones is a project many Newcastle, Gateshead, Stockton and Hull associations are contributing to. Warm Zone identifies fuel-poor households and delivers energy efficiency improvements the most cost effective way.

ISSUES OF CONCERN TO THE COMMITTEE

  29.  The remainder of this submission draws on our experience in order to respond to the specific questions set out in the terms of reference of the Committee's Enquiry.

(A)  THE CODE FOR SUSTAINABLE BUILDINGS

Can a voluntary code possibly deliver the degree of change needed in the building industry to achieve well designed homes?

  30.  The development of a code is useful in several ways. It will develop a standard requirement for Government funded buildings. It may also usefully pilot changes to the building regulations.

  31.  On its own a voluntary code may not be sufficient to encourage the wider building industry to build to a higher standard. Incentives are needed. These could everything from lower stamp duty, as recommended by the Energy Savings Trust (EST), or quicker planning consents for homes built to higher standards. In order to drive consumer demand for more sustainable homes, it is important the public recognise that the higher of the code bands (gold, silver and bronze) equate to cheaper bills and an even lower impact on the environment.

Is the Government doing enough to promote the code?

  32.  It is well known that the code will be in place from early 2006 and that it is setting standards for water, waste, materials and energy in new build properties. Further promotion of the code would be helpful once the minimum requirements of the code and how it interacts with the Eco-Homes standard is decided.

Should the Government be introducing fiscal measures to reward higher building quality and greater environmental performance?

  33.  The wider housing sector appears to be reluctant to develop sustainable homes to a measurable standard. A well respected brand for environmentally friendly houses (Eco-Homes) has been available for four years. There has been negligible take up (less than 1%) from the private house builders.

  34.  Two years worth of research by the Energy Savings Trust including, in depth interviews with householders and a survey of 2,000 households, reveals that financial incentive could shift the market. The Housing Corporation support the recommendations of the Energy Savings Trust "Changing Climate, Changing Behaviour" report, which recommends "two linked measures:

    —  the introduction of a Stamp Duty Land tax rebate of £1,000 for the first sale of new properties built to a high energy performance; and

    —  the Barker proposed tax on `planning gain' should be modified to reward developers who build to a high energy performance standard by an average of £1,000 per property.

  35.  It is expected that these twin measures for new build would address the key barriers to building beyond current regulations, and could save up to 8,400tC per year in 2010". Other benefits to Government from homes built to a higher standard include a reduction in fuel poverty, less pressure energy resources and improved health of occupants.

  36.  While this measure focuses initially on energy efficiency other elements such as water could be added at a later date.

(B)  SUSTAINABLE COMMUNITIES: HOMES FOR ALL

Does the ODPM Five Year Plan, Sustainable Communities: Homes for All demonstrate a greater recognition of, and greater commitment to tackling, the impact of increased house building on the environment or does it merely pay lip service to it?

  37.  The Five Year Plan notes work on going and future work on a number of important environmental issues including using brownfield land, increasing density and increasing green belts.

  38.  There is an opportunity to link some of the statements to more measurable outputs. For instance the statement on sustainable construction "we want all developers to reach the standards of the best" could be strengthened to "we will contract with those that comply or are looking to comply with best practice site management and monitor reduction in site impacts on energy, waste, water and timber".

  39.  On the standards that will be set for Government funded homes it is not yet clear what level the Code for Sustainable Buildings will set for water, energy, waste and materials.

To what extent does the Five Year Plan address the environmental implications of the geographical distribution of demolition versus new build?

  40.  The Five Year Plan focuses on building more homes in London and the South East because this is where there is the greatest increase in number of new households. Between 1997 and 2001, an additional 130,000 households were created in the South of England. This is substantially less than the 300,000 new homes that were completed in the same period. Over the same period approximately 210,000 homes were completed for 130,000 households in the North.

  41.  The publication of Sustainable Communities: building for the future in 2003 emphasised the importance of partnerships and strategic approaches in dealing with low demand and market renewal, in particular stressing the need for radical and sustained, but flexible action. It acknowledged that derelict and obsolete housing needs to be replaced in dealing with the renewal of neighbourhoods. The changes to Compulsory Purchase procedures are seen by Government as part of developing effective long term strategies. The emphasis in the Communities Plan on liveability, the importance of space and effective design in regeneration complements the other actions.

  42.  Regional Housing Boards in the North and Midlands have recognised in their strategies that it is necessary to demolish some houses which are obsolete, abandoned, in excess supply or no longer capable of providing decent homes.

  43.  The Corporation occasionally funds demolition in market renewal areas or other regeneration areas usually as an overall approach to replacement. National, regional, local spatial strategies and market renewal strategies drive the regeneration of these sites. Option appraisal, which includes public consultation and an evaluation of the whole life costs/benefits of a home precede demolition. Housing associations can demolish homes for asset management reasons without funding from the Corporation.

(C) LPS2020

Will the new standard LPS2020 have a positive force for change and add value to the construction process?

  44.  The LPS 2020 standard was developed by BRE Certification to provide an effective method of assessing the performance and design of new methods of construction that do not have an adequate track record in service in the UK.

  45.  Its introduction is particularly significant in light of the current pressure from Government and others to increase the use of so-called modern methods of construction in dwellings. The standard is expected to reduce the overall costs of certification and approvals for manufacturers, because it should cut the number of certification / approval processes required to demonstrate that they perform as required.

(D)  INFRASTUCTURE

Is Government doing enough to secure funds for the timely provision of infrastructure, such as transport links, schools and hospitals in the four Growth Areas?

  46.  The question of infrastructure, and in particular the provision of public transport links, is very important in the preparation of plans for growth areas. As the major funder of affordable housing we are concerned that appropriate infrastructure is in place, or at a minimum there are absolute commitments to provision before we agree to funding.

  47.  Many major sites for development have been identified and there are good examples of Local Development Vehicles working to agree infrastructure provision (for example, the "tariff" arrangement in Milton Keynes) and ODPM have committed funding. In addition local authorities are preparing the necessary planning and development control frameworks. Despite this there is still considerable uncertainty surrounding the question of transport links and other infrastructure provision in a number of key growth areas. Should this not be rectified it will impact on our ability to deliver our programme.

November 2005








22   New dwellings plus acquisition & rehabilitation of existing dwellings for use as affordable housing. Back

23   This column includes some dwellings built by registered social landlords without grant funding from the Housing Corporation. Back

24   From 2003-04 these figures includes home produced for Key Workers. Back


 
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