Examination of Witnesses (Questions 180
- 199)
TUESDAY 25 OCTOBER 2005
RT HON
DAVID MILIBAND
MP, MR PHIL
WOOLAS MP, YVETTE
COOPER MP AND
JIM FITZPATRICK
MP
Q180 Anne Main: Infrastructure within
a region.
Mr Miliband: Our commitment is
to make sure that the infrastructure is there to support the housing,
social and economic growth that is needed, and the statistic that
Yvette quoted really does deserve dwelling on. Over the last 30
years there has been a 30% increase in the number of households
and a 50% drop in the amount of new building. That is the dramatic
challenge that we have to confront, because you do not have to
be an economist to know that this is the fundamental cause of
the anxiety of literally millions of people about whether their
kids are going to be able to get on the housing ladder.
Q181 Anne Main: You do not believe
that they should dwell on the statistics of infrastructure deficit
then.
Yvette Cooper: Let us be clear,
we are already putting a lot of funding into infrastructure, so
if you look at the transport infrastructure there is about £3.5
billion going in through the local authorities and Highways Agency
major transport projects, we have £3.5 billion across the
Thames Gateway and the other areas; we have got additional investment
going in through health; additional investment going in through
education, and in addition to that we have specific programmes
that the ODPM is involved in, including the Growth Areas Fund
which is £400 million to the three growth areas, in addition
to a further £850 million for the Thames Gateway and on top
of that we have the Communities Infrastructure Fund, so there
is a lot of investment going into the growth areas and into the
Thames Gateway. We do think that there is an issue about needing
to support more infrastructure into the future; that is why we
have been looking at the Barker Review recommendations around
things like planning gain supplements and it is also why English
Partnerships have been involved in the Milton Keynes example of
looking at other ways through a tariff process to be able to get
more money up front into needed infrastructure in order to speed
up the process. There is a lot of infrastructure already being
provided in order to support housing growth and there will continue
to be a debate between different local areas involving the Government
and local government about what the infrastructure needs are for
the future, and we have made very clear our commitment to supporting
that.
Q182 John Cummings: There is certainly
an imbalance and a mismatch in the timetable for development of
new housing and the infrastructure that supports it.
Yvette Cooper: No, I do not think
so.
Q183 John Cummings: Let me give you
an example: that is the development in the Thames Gateway to which
you have just referred and the delay of Crossrail. Is there a
risk that we will not be able to maximise development because
of a lack of infrastructure and should we not be delaying it if
the necessary infrastructure is not in place?
Yvette Cooper: As you know, there
are already checks in the planning system—for example, the
Highways Agency can block developments going ahead if the roads
infrastructure is not adequate or there has not been a proper
solution to the roads problems that an area may face when a new
development is proposed, so there are already those checks in
the system. There will always be demands for new infrastructure
from different local communities and it is the local authority
representatives' jobs to make sure they articulate those demands,
and we always recognise that. There are equally demands that come
from other parts of the country where they do not have new housing
growth but where they also want new and improved infrastructure,
and we have to take that on board as well. Where I would disagree
is the idea that we are simply not going to have housing growth,
or that we will have inappropriate housing growth without the
infrastructure. We are providing the infrastructure. There is
a debate about how we fund greater infrastructure provision over
the next few years, which is exactly why we are looking at this
as part of the Barker Review.
Q184 John Cummings: That is extremely
useful, but I am not quite sure how it will work out in practice.
It will be interesting to see what happens in the future.
Yvette Cooper: We will be able
to say a bit more about this when we publish our response to the
Barker Review before the end of the year.
Q185 John Cummings: How much should
the housing market renewal pathfinder bodies be focusing on managing
the decline of their areas, as opposed to trying to attract new
populations and new businesses?
Yvette Cooper: The housing market
renewal pathfinders face very different challenges in different
places and there are some areas where they have seen very big
population declines. Look at Liverpool, they have had a 50% population
decline since the Second World War and a 15% population decline
just in the last 20 years, so there is inevitably an issue about
how you deal with population decline. Big cities are starting
to attract people back in. Economic regeneration of our northern
cities, of our industrial towns, is starting to see people move
back—we have population growth in the northern regions,
and where we have seen population decline for many years, in the
last three or four years we have seen a population increase now.
I think the issue for the housing market renewal pathfinders,
in terms of responding to your question, is that firstly they
have to work out what is the pace of population growth that they
can realistically sustain and, secondly, how actually do they
attract people back in because sometimes it might be an economic
answer and not simply a housing answer. Sometimes they may need
to change the way in which houses are provided in an area in order
to address the aspirations of people who might move into the area.
Q186 John Cummings: The Committee
has received evidence that house prices have certainly taken off
in the housing market renewal areas. Does this have an effect
upon the renewal programme and are targets having to be cut back
because the funding that is available will not stretch that far?
Yvette Cooper: We certainly expect
them to take account of house price growth, so there are some
areas where actually the housing market seems to be recovering
very well. What we do not know in some of those areas yet is whether
it is a temporary recovery or whether this is a long term sustained
recovery, but there are certainly areas where house prices are
growing. There are some areas however where, although the house
prices have grown, they are still falling even further behind
the average or the nearby areas, so the growth in the average
area has been even higher. They have got funding through for the
next year and we are looking at the moment at their proposals
for the next wave of funding after that, and we do expect them
to take account of the changes in the market as part of their
future plans.
Q187 John Cummings: Are you saying
that there is certainly a greater emphasis now on refurbishment
rather than demolition?
Yvette Cooper: That is an issue
for local areas to decide, what is the right balance in their
area? They always have a much greater emphasis on refurbishment
than demolition, the numbers have always been far higher.
Q188 John Cummings: Do you have any
views on this?
Yvette Cooper: It is right that
there should be overall higher returns on refurbishment than demolition,
but individual areas have got to come up with their own solutions
rather than us saying "in this area you have to do this,
in this area you have to do that." They have got to come
up with that and certainly there are lots of areas where refurbishment
is much cheaper, so you would expect them to look at that, but
they have to take account of all the options and decide what is
actually going to work in those areas.
Mr Miliband: Would it be helpful
to have a practical example? I was in the North-West yesterday
and there is one situation in Blackburn and a different situation
in Birmingham. I was in Blackburn yesterday where the refurbishment
was being priced at about £25,000 and for new build it would
be £60,000; they are focusing on refurbishment. However,
there is some demolition going on as well and they are trying
to balance that to create a buoyant housing market, but more than
that they are trying to create a stronger community, and maybe
the exchange that we had about developing the infrastructure is
an important debate that we can have, because it is those communities
as well that need a strong infrastructure, in the widest sense
of the term. The housing market renewal pathfinders are a brave
attempt to say that we are not actually going to write-off any
part of the country, but if we are going to make them attractive
for people to live in, we have to address housing as well as other
issues.
Q189 Dr Pugh: Can I make a point
about the pathfinders? I am very familiar with a pathfinder project
in the North-West and I am largely supportive of its overall objectives.
I recognise that the Government has had something of a small success
in encouraging better use of brown field sites and higher densities,
all that sort of thing, but is there a need, on a regional basis,
for plans to be a little more fine-grained, because if a local
authority draws lines for building development too narrowly, too
closely around a pathfinder area and nowhere else, people who
can get jobs elsewhere, but not very well-paid jobs, often find
it extraordinarily difficult to get affordable housing—and
I obviously speak here as the representative of a seaside resort
where precisely that problem occurs. How do we get that kind of
fine-graining in housing planning which does not appear to be
there at the moment; a recognition in a sense that the North-West
is far more varied—it is not wall-to-wall Burnley, if I
can put it like that—there are real housing hotspots and
housing needs to be provided in those areas as well as in the
pathfinder areas, but due to housing limits in planning guidance
it has not been possible to do that.
Yvette Cooper: A lot of people
have talked about high demand in the south and low demand in the
north, but it is just not the case; right across the north there
are areas where there is very strong demand for housing or rising
house prices. You are completely right to say that within the
North-West or within Yorkshire and Humberside in the North-East,
there are actually very wide variations in terms of the local
housing market and in terms of the local labour market as well.
One thing we are interested in is how to get more flexibility
around different sub-regional housing markets so that we can actually
look at what is the right sub-regional housing market, which probably
matches the sub-regional labour market as well, and within that
area what is the appropriate response to housing need as well,
rather than simply treating the entire region as a single entity
in terms of the different pressures, just assuming that the entire
region is affected in the same way, which it is clearly not. The
planning system does attempt to do this and the housing system
does attempt to do this, but we hope that linking the regional
housing boards and the regional planning bodies together will
allow them to look more at the variations within regions.
Dr Pugh: That is helpful, thank you.
Q190 Mr Olner: It is slightly connected,
Minister, but one of the things that concerns me a little, particularly
in some of the regeneration areas—whether they are pathfinders
or not—is that the scheme is grandly put up and everybody
signs into it, but sometimes by the time you get to enact the
latter part of the scheme prices have risen so much that you know
there is then a battle for money between, say, English Partnerships
or the Regional Development Agency. Some of these schemes do stand
a chance of not being completed because of this overrun, and I
have to say that unless you get a mechanism to answer this, all
of the excellent and good work that has probably gone on over
three or four years on regeneration and revamping, will be wasted
if the final package cannot be delivered.
Yvette Cooper: The approach to
the housing market pathfinders is to try to anticipate changes
in the market, so changes in the housing market into the future
as well. Clearly, all the programmes are under pressure to keep
their costs down and not to end up with overruns, and we cannot
just guarantee that there will be overruns for the end of programmes
as well.
Q191 Mr Olner: The policeman for
these things is the RDA and English Partnerships and they are
under pressure by you, quite rightly I suppose, to be careful
how they spend their money. All I am saying is that the schemes
were all approved and everything and through no fault the scheme
had been delayed a little and had now increased in price. Where
do they get that sort of money from so the scheme is completed?
Mr Woolas: On the regeneration,
particularly the neighbourhood regeneration side, one has of course
a number of other factors that come about in addition to rising
prices—the cost of materials, for example, the concrete,
steel and cost of labour. That is a factor that we try to deal
with through stronger planning across agencies; for example, the
efforts of the Learning and Skills Council and funding of FE colleges
to direct and predict what skills are required, but certainly
there has been a number of schemes where the point has been made
that these are real world impacts. Of course, part of the purpose
of the private public partnership is to share the risk in that,
and that would be, on the whole, our experience in these schemes.
Q192 Mr Olner: I do not want to labour
it, Chairman, but it would be useful if you take on board the
fact that you should be looking at schemes that are not able to
be completed because of lack of money at the end of them. Sometimes
a lot of people have had to make really hard, tough decisions
to get these regeneration schemes off the plan because not everybody
is happy at having their house demolished and the area regenerated,
so all I am saying is that having taken those decisions probably
four or five years ago, there needs to be money there so that
they are finally delivered. All I am asking, Chairman, is that
that be taken back.
Mr Woolas: If we are talking about
regeneration here as opposed to housing schemes in particular
I recognise the point has been made across both. One of the prime
goals is having financial stability and predictability in the
settlements both on local government and on neighbourhood renewal,
and in the local Government case we intend to put capital allowances
as well as revenue allowances on a three year cycle. In respect
of neighbourhood renewal, of course, we have announced provisional
figures for a two year financial cycle, partly in order that capital
allocations can be better planned and predicted, and indeed to
avoid some of the risk that inevitably occurs if it is publicly
known that a funding stream has an end point.
Mr Miliband: Maybe it is worth
saying that often on these occasions we end up having to write
letters to you to explain ourselves, but Bill has obviously got
some important issue in mind, so if you drop us a line about it
we will look into it. It is obviously a sensible point that has
been made and we must make sure that we do not miss it.
Q193 Martin Horwood: Just on the
use of trends and statistics, the Treasury gave you the Barker
Review which relies heavily on what you call the dramatic challenge
of democratic changes, but it seems to me that the pathfinders
are one example of you actually not just accepting that trend,
and indeed there should really be acceptable trends in every set
of statistics—we do not accept the number of par divisions,
we do not accept them on crime or anything else. Sometimes if
there are negative impacts—and I would point to the negative
environmental impact of this, explicitly outside London's remit—you
should look at policies that will challenge the trend and not
just accept it. I am sure you are doing so, but what I specifically
want to ask about is the cross-departmental issue, are you actually
sending any messages back to the Treasury that they should use
fiscal means to challenge health inequality.
Mr Miliband: It is time to challenge
health inequality, but it is easier to do that than to persuade
people not to live longer. That is the fundamental trend that
is driving this.
Martin Horwood: I am not sure that that
is fair.
Q194 Chairman: Could you just clarify?
Mr Miliband: What are the three
trends that are going on? One, people are living longer; two,
they are getting divorced; three, young people are living on their
own, away from their parents, before they get married and set
up home.
Q195 Dr Pugh: They are not any more.
Mr Miliband: They go to university.
Q196 Dr Pugh: They come home again.
Mr Miliband: We have seen those
trends and they are of a different nature to the fact that you
have got health inequalities, and they are different again from
the housing market issue because it is not about the total demand
across the country, it is about specific places where there is
massive loss of demand. The housing market is not too hot, it
is far too cold and we have to try and sort it out. That is what
we are trying to do, but that does not obviate the need to sort
out the basic supply point, that unless we get more housing units
for people to live in, we are going to have a massive problem.
Q197 Martin Horwood: My question
actually was, are you encouraging any other ways to address the
issue such as fiscal measures from the Treasury?
Mr Miliband: To do what?
Anne Main: Stamp Duty.
Q198 Martin Horwood: To release empty
property for use, to share houses more, student finances.
Mr Miliband: On empty homes, we
have half as many empty homes as comparable European countries.
We of course want to get it down, but of the total number of empty
homes, half of them are empty for less than six months which is
really a sort of frictional event, but of course anything we can
do to get more houses into circulation the better, and the best
thing we can do is to make sure they are up to decent standards.
That is what we are trying to do. There is a lead-in to the next
question.
Chairman: Mr Olner, and then Alison Seabeck.
Q199 Mr Olner: Let me move on to
the point on decent homes. Richard McCarthy last week told us
that the Government may not meet its target for refurbishment
of non-decent homes because of a small number of cases where people
were not happy with the options that were put before them. I have
three quick questions really. He did say that a ministerial decision
would have to be made on how to pursue these outstanding matters,
but what he did not say was what options are you considering on
this little lump of non-decent homes that need to be looked at
and he certainly did not say when your decision will be made.
Will you make additional resources available to meet those targets?
Yvette Cooper: If I could clarify
what Richard was saying, he was saying that 90% of homes that
previously failed the decent homes standard are now covered by
the newly approved programmes to raise the standards—to
sort out the kitchens, the bathrooms, the roofs, whatever it might
be. What we are looking at now is the remaining 10%. Most of those
are the ones where they had delays in doing their option appraisals
or where they have only just come forward, so they are not covered
by any existing programmes at the moment, but they have been through
the options appraisal process and the issue now is how we take
those forward. That is actually what we are looking at, at the
moment.
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