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

Examination of Witnesses (Questions 213-237)



  Q213 Chair: Welcome, Mr Jones. Thank you for coming.

  Mr Jones: Thank you. Good afternoon.

  Q214 Mr Betts: Thank you for your submission. Do you agree that actually more housing is needed in Barking and Dagenham? Are you comfortable with the sorts of projections that we are seeing for future house-building?

  Mr Jones: Yes; and the revised figures from the London Housing Capacity Study for Barking and Dagenham we are perfectly content with. In fact, we feel probably slightly more unusual than many of our neighbours, we feel that, in fact, the number is perhaps rather low, but that would be totally dependent upon the social infrastructure and the infrastructure for public transport being in place. We are very comfortable with the numbers.

  Q215 Mr Betts: You are sending a message out to the rest of the South East that you do not want them to come to bother you in Dagenham, is that right?

  Mr Jones: We are saying a number of things. Firstly, we need to attend to the needs of the existing community, so we are looking at a balance between social rented, intermediate forms of home-ownership and also aspirational housing, because currently there is a shortage of that sector of housing in Barking and Dagenham. Barking and Dagenham has, I think it is, the second highest percentage of social rented homes in outer London. Again, we are quite atypical of a number of our neighbouring boroughs.

  Q216 Mr Betts: Despite this, you are still after more socially-rented housing. Would you not be looking more at affordable housing for people to get on the first ladder to buy?

  Mr Jones: Our experience is that there is a considerable demand. I was interested to see the Joseph Rowntree Foundation Study recently in terms of that intermediate sector of housing. We do believe that there is a considerable appetite and demand for that form of housing. The issue for us is ensuring that actually it is affordable, because we have the lowest income levels in London, so we have to get the equity share pitched at the right kind of level. We have done that with our housing association partners on a number of developments, where we have gone down to something like the person purchases just 25% initially and then staircases up as their careers progress.

  Q217 Mr Betts: In terms of that, given that can help with initially getting to home-ownership, but eventually those people can move on subsequently and often make quite a nice profit, sometimes, out of the initial benefits to enable them to get on the housing ladder. Have you looked at any methods of locking in any initial assistance to first-time buyers, so that when they eventually sell on the property the next buyer of that property also gets some sort of benefit?

  Mr Jones: Yes. This a very interesting point. We have done that on a number of our developments where the Council actually own the land, so that we retain the part of the value we called, I think, in this particular instance "community bonus" so that share of the property was always retained by the Council. It ensured that, irrespective of the staircasing effect that you point out, a proportion of the value of the property will always be retained, so you are retaining the affordability in perpetuity. We have done that in one instance. We are also extremely interested in doing that on some of our larger developments that are to come in the years ahead.

  Q218 Mr Betts: You are not experiencing any problems with mortgage lenders or others on that?

  Mr Jones: On that particular development, we did have extensive discussions with the developer, but they agreed to that in the end. I must say that, in that particular development, which we are trying to cement in with all of our developments, there was a breakdown between approximately a third for social rent with a housing association partner, about a third then for intermediate and then a proportion of that specifically on the term "community bonus".

  Q219 Mr Betts: In terms of "buy to let", you have expressed concerns about that. What would you want to see for that particular issue to be tackled in a proper way?

  Mr Jones: It is a major issue for us and, in fact, it is thwarting a number of our attempts to try to facilitate more balanced communities, because what has happened in many instances is that, the proportion for market sale, investment companies come in, purchase large sections of that property and then it goes to "buy to let". I think there are two things really. Firstly, clearly, when the land is publicly owned we have considerable control over that. I think, as well, at the moment it is about negotiations with developers, we are trying to forge long-term relationships with developers, so it is not just come in, do a development and out, it is long-term relationships with developers and partnerships with the Council. In those instances, it is not really in anyone's interests to have an excessive amount of "buy to let", it is not good for the reputation of the development, quite frankly, so it is that kind of discussion that we are trying to pursue.

  Q220 Chair: Why exactly is "buy to let" not good?

  Mr Jones: I think there are two points really, I would say. Firstly, as I mentioned before, we have high concentrations of social rented accommodation within the Borough. We have some estates, 2,400-flatted estates, all owned by the Council, with some "right to buy" on there. If you are trying then to get a more balanced community, some outright market sale, sure summary provision of rented and some intermediate, you are losing that impact if a high %age of the outright market sale then is to let. A second point I would make on that is it can have quite a destabilising effect on a community in terms of transience, a high turnover really it is not good for the local community.

  Q221 Anne Main: Really this could follow on from that, because you say it is transient, are you not creating the right sorts of homes for families to live in, do you feel that you have enough family housing in your area, or is there too much focus on high-density housing?

  Mr Jones: I think the point about larger homes for families is a very important one to us and indeed to London generally and the sub-region of east London of which we are a part. Certainly the London Housing Strategy looks at something like 40%, I think, of new developments being three-bedroom and above and our view is maybe that is slightly too high but it is about right. You have this tension with developers because obviously they are looking to maximise their profit, that is fine, and to pursue that they want to create developments which are populated largely by one- and two-bedroom apartments. Again, what we want to try to create are balanced communities, places where people will stay, we do not want people not to have the opportunity then to move on in the Borough.

  Q222 Anne Main: Do you think that 30 to 50 per hectare as a minimum is actually working against you, because you are having to deliver very small, high-density units, rather than founding homes which you feel would give a more mixed community?

  Mr Jones: I am sorry to keep using the word `balanced' but I think it is about balance, actually. I think, for example, in some of our town centre settings high density is right and maybe there are ways imaginatively with design to create opportunities in town centres at pretty high density to have homes, three- or four-bedroom homes, at the lower levels perhaps, for families. You want a variegated approach: town centres, where you have the infrastructure there, you have the close links into central London from Barking town centre, you want high density, but I do not think that argues necessarily against some family homes.

  Q223 Anne Main: Do you think enough assessment has been made of the demographic in your area, of the sort of people who want to live in the units that have been built, or units being built speculatively, or whatever, without a lot of thought of the sort of people that want to live in them, families or groups?

  Mr Jones: It is an issue that certainly we consider quite a bit and certainly it is an issue that our neighbouring boroughs in east London consider, because if we take the point of social rented accommodation, we know that we have protocols across London for sharing the nomination rights to those properties, and there is an issue about choice. Will people from Hounslow, for example, want to move to Barking Riverside development, where there is a planning application currently before the Council for something like 11,000 new homes, will people want to move there; I think that is a question that really we do not have an answer to at the moment.

  Dr Pugh: Barking Reach, it says in my notes here you are planning to build 26,000 new homes and to generate 15,000 new jobs—actually it says in my notes 260,000 new homes but that is probably a tad optimistic, I think—and this is to take place over the next 20 years.

  Chair: I am incredibly sorry. There is a vote and I will adjourn the Committee.

The Committee suspended from 5.45 pm to 5.51 pm for a division in the House.

  Chair: Can we restart. John, can you remember what you were asking?

  Q224 Dr Pugh: I was asking about working with all the new homes and all the new jobs and I was sceptical as to whether it was all going to happen. What do you think?

  Mr Jones: Two hundred and sixty thousand homes are not going to happen. There is an application at the moment for almost 11,000 homes in Barking Riverside. It will happen only if the infrastructure is in place, particularly the Docklands Light Railway Extension through the site. If that is not there and some other infrastructure, for example, there needs to be on the A13 a new gyratory or junction, and of course it is the investment in terms of the schools, the PCT facilities and the rest, if that is not there and on time then, firstly, the development in that number I do not believe will happen. If it did happen, by any strange chance, then I think it would be a place where people just would not choose to live. I think it is as blunt as that.

  Q225 Anne Main: Are you saying that the infrastructure has to be there beforehand?

  Mr Jones: The infrastructure has got to be timely, it has got to be there or phased so that there is a very, very clear commitment that it comes in at an early stage.

  Q226 Dr Pugh: You will appreciate, you are on the horns of a dilemma, are you not, because a light railway is very, very expensive, in many respects, as infrastructure goes, and nobody is going to invest in very expensive infrastructure if there is not a real purpose behind it and a large community to serve. Yet, at the same time, what you are saying is, until you get the transport there you are not going to get that community?

  Mr Jones: There is somewhat of a community there at the moment. There are something like 1,000 homes there. There is also an existing estate, built by the Council in the 1950s, of something like 2,000 homes adjacent to the main development. There is something to be built upon. I think there is another point that I would want to make though, in terms of the Council's overall approach, and that is, which I hope came through in the submission, that we actually maximise and build out from existing centres, because that seems to us to be the correct approach, in terms of maximising the usage of the existing infrastructure. There is a town centre there, let us develop that.

  Q227 Dr Pugh: What you are saying is that you want to develop Barking Reach so it is compatible with the evolution of the town centre rather than the alternative?

  Mr Jones: Yes.

  Q228 Dr Pugh: In terms of how this new community is to be envisaged, is there any sort of premium put on environmentally-efficient housing and sustainable lifestyles? I think it is an attractive feature of any new community really.

  Mr Jones: Yes, and I think it is a very important point. In fact, I think it swims with the tide in terms of modern methods of construction as well, because, in terms of trying to do something about build costs and also in terms of capacity in the construction industry, which we have not considered so far this afternoon, there really does need to be a drive towards the modern methods of construction, of site manufacturing, which is going to deal with some of the overheating in the industry. Also you can get very high, or much higher, environmental sustainability standards from that kind of development.

  Q229 Chair: Before I pass on to Martin to start on Thames Gateway, can I press you, you said that you did not think, even if the Docklands Light Railway went to Barking Reach, that anybody much would want to live there.

  Mr Jones: No; no.

  Q230 Chair: That was what we thought you said.

  Mr Jones: Oh dear; oh no.

  Q231 Chair: Let me try again, for the record.

  Mr Jones: For the record, yes, indeed; if we have the infrastructure in place, DLR and the other social infrastructure, then, yes.

  Q232 Chair: People would want to live there?

  Mr Jones: Indeed, yes.

  Q233 Chair: Why was the bid turned down, the bid for the Docklands Light Railway Extension, was there not a sufficiently convincing case presented?

  Mr Jones: No, it is a current submission, I think it will be within the next Spending Round, the Comprehensive Spending Assessment period, and certainly there are negotiations ongoing with the Mayor of London to get that as a line within the TfL. Certainly the Mayor has given commitments in the past; now we just need to see a very firm commitment, but it is a desired programme of the Mayor.

  Chair: Thank you for clarifying that.

  Q234 Martin Horwood: We heard earlier on from the West Midlands Regional Assembly that they thought greenfield development in shire counties was actually undermining their attempts to try to regenerate the central urban areas in Birmingham, in their case, and elsewhere. Do you think that is a problem for you, too?

  Mr Jones: No. I think we are looking at a different set of circumstances. If you look at the proposals from the Mayor within the London Plan, we are three miles from the Olympics. I really do not think that the problem you have presented is an issue for us. Perhaps the issue for us, I suppose going back to the point before, is the relationship of the developments, and I do believe that town centre developments, intensifying development there, increasing density, improving design, getting the kind of mix right, and then allied to the brownfield developments, like Barking Riverside and others within the Borough and indeed within the sub-region, is the right way forward.

  Q235 Chair: How can you be sure you are going to get the jobs as well as the houses, or is it suggested that many people will be working in central London?

  Mr Jones: It is probably the expansion of the Isle of Dogs, Canary Wharf, that area, in actual fact, to which many people will be commuting, and we are very close, it is literally two or three miles. Again, Barking and Dagenham is very unusual, in the sense that we do have a higher percentage of working population actually in manufacturing. It is declining, obviously, but it is still reasonably high, compared with the rest of London anyway, and we think that there is certainly opportunity, again around town centres, to increase commercial activity. There will be displacement of industry from the lower Lee Valley as well for local jobs.

  Q236 Chair: There seem to be a very large number of different development agencies in the Thames Gateway. Do you think that the numbers should be reduced and, if so, how?

  Mr Jones: The life of the UDC, it is very early as yet. We have established relationships with that and I think we have come to understandings, certainly about the planning protocol. I think they need the confidence that we are actually going to bring forward developments; we are. I think they are acting in a co-operative way with us. We have had very good involvement, very good co-operation with English Partnerships, extremely helpful, around site assembly issues, again in town centre development. I think at the moment we are reasonably comfortable with the arrangements. The GLA family, LDA, again have had considerable involvement in the Borough and we have some tensions in relation to targets that are set by the GLA in terms of mix, for example, between affordable homes and market-price homes.

  Q237 Chair: Can you be more specific; are they requiring more affordable homes than you want, or fewer?

  Mr Jones: I am absolutely signed up, as is the Borough, to a London-wide target of 50% of new development being affordable homes, I think that is absolutely correct, and within that something like 70% being social rented. I think that is fine as a target across London then you have to look though at individual circumstances of local boroughs. Whereas that may be perfectly correct for some boroughs, for Barking and Dagenham, as I mentioned before, we have the lowest house prices in London, we have the lowest income levels in London, we have got the second highest social rented, is that the right prescription for Barking and Dagenham; I think not. We have had discussions with GLA and they have been very fruitful discussions and there appears to be understanding, but the proof will come when we get major planning applications coming through and discussion then takes place with the Mayor.

  Chair: Thank you very much indeed. I am sorry that your session got (a) delayed and (b) then interrupted. Thank you.

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