Examination of Witnesses (Questions 416-419)
MR PETER
DIXON AND
MS MARGARET
FORD
16 JANUARY 2006
Q416 Chair: Can I start the meeting because
we are very short on time this afternoon. I am anxious to use
the time as effectively as possible. Can I welcome both of you
to this evidence session. Can I start by asking each of you, both
of your organisations are stressing the importance of increasing
housing supply. Can I ask you to say briefly what you think is
the greatest constraint on house building, what the Government
should do to unlock supply and whether English Partnerships is
confident that it can double the number of homes that they are
delivering by 2008-09? I do not mind which one of you starts.
Ms Ford: We had indicated each
of us wanted to make a very brief opening statement. Due to the
constraints on time, do you want to move on?
Q417 Chair: I would like to move straight
to the questions. If there are additional things you would have
said in your statement, afterwards we will be happy to get an
additional written briefing from each of you.
Ms Ford: Thank you. I am representing
English Partnerships today because we are currently without a
Chief Executive, David Higgins has gone to run the Olympic Delivery
Authority so I am standing in for him. I think in terms of the
constraints for house building and affordable house building,
certainly from our perspective, I suppose these come down to two
or three key things. The availability of land supply, which of
course English Partnerships is heavily involved in, is one; the
delays in the planning system, which of course Government is trying
to address through a wide range of measures, really is another.
English Partnerships is very actively trying to address both of
these issues. We are working very closely with other government
departments at the moment to broker surplus public sector land
and we are doing that in three ways. We manage the register of
surplus public sector land, which starts now to give much greater
visibility to those assets which previously we did not see before
they came to the open market. Secondly, we are working in an advisory
capacity with organisations like Defence Estates and increasingly
helping those organisations to overlay Government policy on their
surplus assets before they dispose of those. Of course, in terms
of our own programme, as you rightly said, Chair, we are increasing
the amount of housing starts and completions quite considerably
compared with what English Partnerships, for example, was charged
to do five years ago. The availability of land continues to be
a challenge. The price of land across certain parts of England,
particularly in the South East, continues to be a challenge. We
are using all of our efforts to address those challenges at the
moment.
Q418 Chair: Mr Dixon?
Mr Dixon: I think as far as we
are concerned, and I would agree very much with Margaret's view,
the prime constraint is the availability of land, and very particularly
land for affordable homes. We have seen the price of that commodity
go up sharply. It is costing us something like £50,000 per
home in the London area, £30,000 per home across the country.
Land is the main constraint as far as we are concerned. Insofar
as the other constraints that may exist are concerned, one of
them is obviously around the capacity of the industry to build
more homes and again we are taking steps to make sure that more
of our programme is delivered via modern methods of construction.
We have committed to delivering a minimum of 25% of our current
programme through modern methods—we are going to hit something
like 40%—that will help to deal with labour supply problems
and will therefore enable us to build more homes. The other constraint
quite obviously is cash at the end of the day. The more money
there is in the system for us, the more we can develop affordable
homes. We are not throwing money at the problem, we are seeking
to ensure that we procure those homes more effectively. There
was something like a 9% reduction in the cost of each home we
procured in our most recent programme against the one before,
that is despite increased construction costs and despite the rise
in the price of the land. The other issue I would refer to obviously
is the planning system again. It is not just about delays, it
is also about the quality of the processes in which we all engage.
We are working as closely as we can with housing associations,
and with the local authorities, to make sure that we maximise
the outputs from the planning process.
The Committee suspended from 4.39 pm to
4.47 pm for a division in the House.
Chair: Can we restart. Can we move onto
the next question which Mr Olner was going to ask but maybe Lyn
could do it?
Q419 Lyn Brown: You are both promoting
shared ownership schemes. Why is it necessary for English Partnerships
to be involved at all in promoting shared ownership schemes through
the Londonwide Initiative and the First Time Buyers Initiative?
Ms Ford: Yes, I think it was.
You are quite right to say that we are both involved in shared
ownership schemes but using different forms of subsidy, I think
it is good to have comparisons for that. English Partnerships
is able to use its land as equity in these schemes, that is reducing
the price for first time buyers; the Corporation uses more conventional
forms of subsidy, I do not think that is a problem. Over the piece,
it would be useful to compare these and to learn lessons from
each. I think the key thing, from the consumer's point of view,
is we must not look confused to the consumer and that is where
the zone agents are key. Frankly, it does not matter where the
subsidy comes from, from a consumer point of view, as long as
you, as the zone agents, are able to point people in the direction
of the right product but I do not think there is a problem with
it.
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