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


Examination of Witnesses (Questions 340-354)

DR HUGH ELLIS AND MR SIMON BULLOCK

12 DECEMBER 2005

  Q340 Martin Horwood: It is a question of stimulating the market.

  Mr Bullock: Exactly.

  Q341 Chair: Effectively you were saying you would be prepared to agree to 200,000 extra houses a year in England if they were environmentally sustainable. Those 200,000 houses would be about 1% of the housing stock, so presumably you are even keener that the existing housing stock should be made more environmentally stable, that would really help meet our Kyoto targets.

  Mr Bullock: Absolutely, it is both.

  Q342 Anne Main: Sorry, I did not get an answer to the second part of my question. Are you happy that the Barker report pushes purchasing houses to buy rather than houses for rent?

  Dr Ellis: I do not think we are. We are not very happy with very much that is contained in the Barker report. Friends of the Earth is not a housing charity but our overview of it is that we have a fixation on owner-occupation when there are other needs and other tenure types. What Barker does is to focus very much on creating increased owner-occupation. Also, at its heart it has a notion of trickle down, that somehow by creating large numbers of new housing in owner-occupation this will trickle through the process and help those in greater social housing need. What we are worried about is we do not accept that linkage at all. Also, we do not fundamentally accept necessarily that price is need. That is something that underlies the Barker report and is fundamental.

  Q343 Alison Seabeck: You are generally sceptical that provision for social housing should be dependent on securing private development. Why is it inefficient to use the planning system to secure contributions from private housebuilders to build affordable homes?

  Dr Ellis: The reasons for that centre around what is wrong with the planning gain system. We note in the new proposals on the planning gain supplement that we were very disappointed to see that affordable housing remains inside the planning game ambit. Originally, planning gain had its function for dealing with onsite remediation. The reason for that is because planning gain is fundamentally regressive as a way of producing social goods, that is to say it produces more where development values are high. It is also complex, as the Government has recognised, non-transparent and often treated with suspicion by local people. It is not the right way to deliver social housing. Let me give you one direct example of that, which is a site we are working on in a coalfield in North Derbyshire. We can lever in eight% affordable housing from the development, and yet in the South maybe around 30% in London, maybe up to 50%. The reason for that is there is a viability issue and PPS3 makes it absolutely clear that local authorities should not place onerous requirements on developers where that threatens the viability of the site. That means that where viability is thin, in areas perhaps undergoing restructuring, you can create less provision for social housing. That seems to us to be fundamentally inefficient in the way that we should deliver it and it covers up a much more central question, which is if you want to deliver social housing efficiently then you should provide that funding centrally. It is inefficient environmentally because it is a cross-subsidy, so to get some social housing you have to produce a lot of general housing to go with the cross-subsidy issue. Where there are limits and where there are constraints that is not an effective way of doing it. I would just conclude that at the end of the day the debate about the provision of social housing over the last 60 years has been fundamentally around this balance between private and public sector. Certainly Nye Bevan concluded that you cannot create and deliver social housing unless you do it with plannable instruments, the private sector's needs—

  Q344 Chair: Can we try not to keep having these speeches and just answer the questions. Members want to come back to you.

  Dr Ellis: I will say only this: if the Government had examined issues of principle three years ago we would not be in this position now. The principle is the private sector is not a plannable instrument, it has its own business needs and they are not always in social housing.

  Alison Seabeck: Fine in that case, but if you are not using private builders to build social housing, whether it is part-ownership social housing or to rent social housing, finance is going to be much more difficult to raise. I genuinely do not see how you can get the levels of investment that you need in order to build the quality of homes you are demanding from the social housing sector and homes which look tenure blind, ie the same whether owning or renting. What is your view on that?

  Chair: Can we have a brief view.

  Q345 Alison Seabeck: How do we fund it?

  Dr Ellis: The brief view is Central Government must fund it to a much greater degree, not solely perhaps but to a much greater degree than they do at the moment.

  Q346 Alison Seabeck: Do you have a figure?

  Dr Ellis: I cannot help you with a figure. We do not have that.

  Q347 Chair: How do you achieve the mixed neighbourhoods, mixed private and social?

  Dr Ellis: That is much more straightforward. The planning system is a very sophisticated instrument and it can deliver that kind of mix through the new reformed planning process; that is what it is there for.

  Mr Betts: Can I pick up on the issue about section 106 and planning in the private sector. It was not absolutely completely fair what you said, was it? It may not be a completely accurate system but by and large the reason why you can get a higher percentage of social housing on sites in London or other parts of the South East is the value of the homes that have been sold on those sites is much higher, they probably are not affordable. If you go to North Derbyshire, the actual sale price of the properties that are being sold, and built for sale by the commercial builders, are much lower, they are probably more affordable there. In that sense, is there not a bit of redress by the system? You will get more social housing which is affordable in areas where the houses that are sold are not affordable.

  Dr Ellis: I see the point but the creation of that 8% or that 50% is in a specific social market. I take the point that the other houses are relatively cheaper but the incomes are relatively lower.

  Q348 Mr Betts: They are more affordable.

  Dr Ellis: They are but there is still an issue and there has to be a progressive taxation system. That is why we are so determined that the planning gain supplement has to be very heavily redistributive, because otherwise you end up with those problems.

  Q349 Mr Olner: Can I ask your views on what we need to redistribute housing demand pressures away from the south east to other regions in the UK? You mentioned south east Derbyshire. How do we take some of the pressure off the south east?

  Dr Ellis: We have argued for a national spatial framework like many other organisations have. There are two purposes for that. The national spatial framework allows the current situation where you have competing regions to be played out in a much more strategic way but, to cut to the real issue, a national spatial framework has to deal with the pressures that have led to the demand side pressures in the south east. That is about decentralisation and controlling growth. We should not mythologise about regional policy. Regional policy is much more sophisticated and more successful than is generally considered. If you turn that regional policy off somewhere round 1983 just like that, which is what happened, you end up with the problems we face today. In terms of what you do, you probably do not have industrial location certificates brought back. You probably do incentivise development in the north in a much more sophisticated way.

  Q350 Mr Olner: There is a school of thought that says that is a possibility but by and large the private companies will relocate abroad sooner than relocating in different regions in the UK. Do you think that is a real threat or not?

  Dr Ellis: It is always a real threat but it was a real threat as well 30 or 40 years ago. They will relocate abroad if the south east goes on being developed in the way that it is because there are economic inefficiencies in that as well. It is something that government has to grapple with though. Whether we like it or not, regional policy will return. Barker is the most comprehensive regional policy laid on the table that we have had in 30 years. It is just a market led regional policy. The situation we are in about regional equality is not a natural situation for us to be in. It is made by free market mechanisms. Barker is saying there is nothing we can do about that; let us reinforce the process. That ultimately will be a disaster for the overall development of England.

  Q351 Chair: I do not want you to elaborate now but you mentioned that you were deeply disappointed in the code for sustainable building. Could you put in a brief additional written note on your objections to it?

  Dr Ellis: Yes.

  Anne Main: Do you believe there has been enough demographic assessment of the sort of houses that we are building?

  Chair: Size-wise rather than tenure.

  Q352 Anne Main: Yes. We have had other people saying, "We are getting lots of one and two bedroom boxes". How do you feel in terms of sustainable communities? Are we building the right sort of houses?

  Dr Ellis: We have not done any detailed work. Our discussion on the way in is that high density should not be a complete mantra from the environment sector. We need to build houses regardless. You can do that at high density but it still needs to happen. I think the government is right that different areas need different circumstances. The issue of density is not such an issue if you have a more even development across England.

  Q353 Mr Olner: The high density was brought in to make brown field sites more attractive.

  Dr Ellis: Yes. Where there are needs for it, it should happen but there is need beyond two bedroom apartments right in the centre of cities. There is also need for family housing.

  Q354 Anne Main: With gardens.

  Dr Ellis: With gardens.

  Chair: Thank you very much indeed.


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2006
Prepared 20 March 2006