Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 153-159)



  Q153 Chair: Can I welcome you, to start us off on this afternoon's session, and can I ask if, first of all, you would introduce yourselves, for the benefit of the members of the Committee and for the record?

  Mr Clarke: My name is Alan Clarke. I am Chief Executive of ONE Northeast and the lead officer with respect to the Northern Way project.

  Mr Cruddas: I am James Cruddas, Head of Sustainable Communities at the Northern Way.

  Q154 Chair: Thank you very much. Can I start by picking up from your written evidence, where you suggest, when talking about the supply of housing, that it is not just an issue of numbers but also the distribution of supply. Can I ask you to expand on that but also to say whether you believe there is an overall shortfall of supply across your region?

  Mr Cruddas: I think, Chair, the first thing to say is that, historically, housing has not been planned with a close correlation with economic projections, economic growth. We have seen increasingly, as we have started to prepare the new Regional Spatial Strategies, some recognition of the relationship between planning for housing and economic growth predictions. We need to see more of that and therefore we need to locate our homes in the future much more closely with where economic growth is to occur. We have tended to see in the past that we have located homes at some distance from where new jobs are being created. Why that is important, particularly in the Northern regions, is that we are experiencing people moving out of our urban centres just at a time when our cities are coming back to renaissance, just at a time when we are seeing jobs being created at their hearts. We need to start to locate homes much more closely with the right places for economic growth. You asked also whether we have an undersupply, or an oversupply, I guess, and I think, in the North, historically we have built more homes than we have created households and I would be the first to admit that. In gross terms, we do not have the right supply and so over the coming future years we need to increase the supply, not in net terms but in gross terms.

  Mr Clarke: I think it is to do with the quality and the choice of homes as well as just the quantity, tied in with new Regional Economic Strategies, the new areas of employment, new job opportunities, so I think it is to do with the quality and choice and location as well as the quantity.

  Q155 Chair: Have you quantified the number of new homes that you think you need to create?

  Mr Clarke: First of all, I think the organisation which is responsible for doing that is the Regional Assembly, through the Regional Spatial Strategies, that is where, at this stage, the quantification has taken place. As the Regional Development Agency in the North East, certainly we have worked very closely with the Regional Assembly to get as close an alignment between Regional Spatial and Economic Strategies as possible. Indeed, we will be giving evidence at the examination in public on that. I think we have worked hard to get it very, very close, but we are in more of an influencing role: with respect to housing, we sit on the Regional Housing Board, but we are not responsible for determining the numbers.

  Q156 Anne Main: You have just said that you do not have the right supply of homes and you have mentioned something again about choice. Are you saying there are not enough homes but actually people want bigger houses, or more family houses, or is it that the housing stock is of a poor quality and they want better quality or bigger gardens? Have you thought what it is that is determining the reason for people wanting to not have the homes that are there but to move somewhere else?

  Mr Clarke: I can give a broad answer to that. Probably James can give more details. There is a tradition, and I know the North East best but clearly the same is true to an extent of Yorkshire and the North West as well, of very substantial concentrations of council housing or ex-council housing which at one point was highly popular, with long waiting-lists, and so on. There is far less demand for some of those homes now and therefore there tends to be abandonment in parts of the estates and people who are moving into new jobs, people who are moving into the area, do not wish to live in those sorts of locations, and there is not enough of the alternative choices of maybe family homes.

  Q157 Anne Main: Can you say why they are not wishing to choose those locations; they just get a feel for it really?

  Mr Clarke: The quality of the wider facilities, the schools, the living environment sometimes, might not be of the standard that people are looking for, they might not be close to where the new jobs are that are being created, so that might be an issue as well. It may well be to do with the quality of the homes themselves, in terms of what people are looking for now. I think it is a mixture.

  Mr Cruddas: I think that we are seeing economic change happening in more regions. People's jobs are changing, in terms of type. Many of the homes that we have were built a hundred years ago, or more, for a different economic era, and they are just not the type and quality that people would prefer to choose to live in today. Alan has talked about our locality in the North East, but across the North you can experience quite rapid change. If you take Newcastle, there is a perfect example in an estate called Scotswood, 3,000 houses used to be there, they were there because the shipyards were there; the shipyards are no longer there, people no longer need to live there, they want to live in rather more attractive, quality accommodation. Sixty to 65% of homes in our urban areas across the North are in council tax band A and, if you are trying to grow the economy and attract wealth-creating individuals into 21st century jobs—the knowledge economy employment—you have to provide the kind of accommodation that those people are likely to want to live in.

  Q158 Martin Horwood: In 2.4 and 2.10 of your report, you are fairly rude about some of the rather generalised population and household statistics that Government seem to be using and you point out that is not at all sensitive to some of the micro housing markets that you experience, including some areas of high unaffordability, even in the North, but you do not suggest much in the way of alternatives. Can you suggest more sophisticated models that they might use, or do you want them just to leave it up to you and not interfere?

  Mr Cruddas: No. I do not think we are looking for a laissez-faire approach nationally. The memorandum reflects the stage that we have reached in our own work. It has moved on since we submitted the memorandum to you but is not yet complete. We would be happy to share where we have reached on a confidential basis but we are consulting with our stakeholders on the final work at the moment. I think though I can highlight some key points, and much of this is reflected, to be honest, in the proposals in the draft PPS3 which was published yesterday by Government. What you will be looking for is to start not from the basis that you need to calculate a number of new houses but to start by looking at the spatial areas of influence within the region, so looking at trying to understand the city region logics, sub-regional logics, then starting to work on those to understand at a detailed level what is the economic structure of those functional areas, what does that imply for our future housing, looking also at the existing housing, the current system does not look really at existing stock. The key point then is to manage and monitor what you have planned for as well; at the moment, although we talk about management and monitoring, the system does not really involve much of that. Those are the key steps I think we would want to emphasise.

  Q159 Mr Betts: You have gone to the idea of city regions; is there not a danger that it will get very complicated? You would not have taken the County Structure Plans away to try to remove one extra layer in the planning process. We are now going to end up with a local authority with a Local Development Framework, we are going to involve the city regions in planning of some kind to look at their "travel to work" areas, we are going to have the Regional Strategies and then we are going to have the Northern Way. That is four levels before you get to central government. Is not that going to complicate things?

  Mr Clarke: I think, from my perspective, we have got to do something that will make a much more significant difference to the economic performance of the North across the board than what we have done in the past. The evidence, certainly going through ODPM and also OECD, from European experience, is that those really successful economies and successful regional economies are based on very, very strong city regions and not always are they co-terminus with local authority boundaries as you describe. If you look across the whole of the North, even a city as big as Manchester really does not cover the "journey to work" area, the "journey to learn" area, the cultural attractions that it offers, the transport network and so on. Although you are right to say it is complicated to make arrangements across a group of local authority boundaries, if done properly, I think, based on experience and academic work done through ODPM, it will lead to a greater uplifting economic performance than working to traditional local authority boundaries, which very, very rarely are co-terminus with a local economy, that have any meaning to local business and local people.

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