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

Memorandum by Billingham and Kite Ltd (AH 45)


  1.1  This document represents the written evidence to the Committee on behalf of Billingham and Kite Ltd to the Inquiry by the UK Parliament Committee on the Office of the Deputy Prime Minister.

  1.2  The scope of the new Inquiry is wide and the evidence on behalf of the company is restricted to four of the topics referred to in the press notice. These are dealt with under the same headings used in the Press Release. Before considering these topics background information concerning the company is set out


  2.1  Billingham and Kite Ltd are a company whose business is that of house building. They have been established for about 50 years and during that time have built over 900 houses. The average production is thus about 18 dwellings per annum.

  2.2  The company build using traditional house building technology, which involves labour intensive production. They have a directly employed labour force of over 20 persons including apprentices in the craft industries involved in the company's business. It is the company's experience that many of these apprentices stay with the firm for long periods, some until retirement. Additionally about the same number of persons are employed indirectly as a result of the company's activities.

  2.3  The company seeks to provide a wide spectrum of house sizes built to a high quality of craftsmanship in the northern part of Worcestershire and the adjoining parts of the Black Country. In order to ensure the security of its trained workforce, in which it invests from the outset of the careers of the individual employees, the company seeks a continuity of output. This in turn needs a reliable flow of housing land to be made available through the planning system.

  2.4  The company have adversely experienced in the past two and a half years the effects of a Local Planning Authority placing an embargo on housing land. A Senior Inspector appointed by the ODPM described the embargo in an appeal decision as "draconian" as follows:

        "| in its currently adopted form, the policy is both crude and draconian, and the Council does not intend to incorporate it into the emerging Local Plan or to quickly review the Local Plan in the light of the current housing supply position. Although subject to publicity and consultation, the policy has not been subject to independent scrutiny, and there is at least some doubt about the current housing land supply position."

Planning Inspectorate decision letter dated October 2003 ref APP/P1805/A/03/1113038).

  2.5  Such experience, and that of planning delay generally, has resulted in considerable concern regarding the supply of land for housing. The importance which the company attach to this matter can be measured by the fact that this is the first time in five decades of its existence that the company has felt moved to representations on emerging Government policy earlier this year, and to submit evidence to a Parliamentary Committee.


  3.1  It is considered axiomatic that the overall scale of housing supply in the UK should be rooted in the calculations of total numerical need. A roof over each households head, and the ability to be part of a household of one's own choosing (rather than sharing because of lack of choice) are, it is submitted, unquestionable rights. How the numbers are delivered is a matter of practicality and political will.

  3.2  It is submitted that in relation to scale the starting point should be the ODPM forecasts of housing need. These are a function of population numbers, age, household formation rates, international migration and redundancy of the existing housing stock. Within the UK inter regional and intra regional migration, and sub regional differences in house condition, play upon these other factors to influence the distribution of the figure for total housing need.

  3.3  The emerging preference of the ODPM is to table a trajectory of need for a minimum of 15 years and then review and roll this forward at least every five years. Such an approach is to be applauded.

  3.4  Firstly it considers the long view, and thus all those involved in investment decisions relating to housing (house builders together with infrastructure and service providers) have a 15 year horizon for the articulation of their investment aspirations.

  3.5  Secondly it allows short term fine tuning every five years. This is necessary because although much of the data for housing need forecasts is relatively fixed material dimensions are not. Thus a baby borne tomorrow will need a dwelling in 20 to 25 years time and this (save for minuscule mortality rates for that age range) is relatively fixed. What is less fixed is the propensity to migrate and the propensity to marry/cohabit or head a household.

  3.6  Even survival rates which hitherto have been considered to be only slow moving have changed markedly in the last decade, with a concomitant impact on housing need figures. If people live longer the house they occupy does not become vacant as early as previously anticipated and the expected availability of a space for another household is delayed, on recent figures by several years. Life expectancy has increased very noticeably, due largely to messages from Government concerning healthier lifestyle kicking in, and these can reasonably be expected to be compounded as the number of people whose life expectancy can be enhanced through the adopted lifestyle changes increases.

  3.7  Population and housing forecasting is articulated on the basis of indices which have varying degrees of uncertainty. For this reason the emerging view of the ODPM for a 15 year plus trajectory with quinquennial review and roll forward is considered to be right. The target supply over the long period provides the context for strategic planning by all interested parties, but the regular fine tuning keeps that long view in concert with actual as opposed to expected trends.

  3.8  The provision of numbers of dwellings to meet need unfettered by any social or political engineering or colouring is considered to be a fundamental requirement. It is considered that the land use planning system should be likened to a library which has on its shelves a full range of resources to meet a full range of demand for differing tastes.

  3.9  In planning, the total numerical housing need should not be questioned as it represents a social phenomena, of a kind that should not be interfered with. Where and how the dwellings are provided is an appropriate activity for the body politic to influence, but it is considered that there is a compelling Human Rights dimension to facilitating the total numbers that are determined by social trends.

  3.10  Aside from this philosophy it seems that recent experience is that a failure to meet the full demand introduces distortions, such as price variation, which themselves further undermine the achievement by all of a roof over their own head.


  4.1  Examination of the data in the joint Treasury/ODPM document ("Housing Policy: An Overview" July 2005) suggests a correlation between the decline of total new housing provision and the reduction in subsidised (mainly local authority) housing provision. It is not a direct correlation as a material proportion of public housing several decades ago was addressing the replacement of redundant stock, which was more naturally a task for the public sector.

  4.2  However the data in that document indicates that supply of housing by the private sector has remained relatively constant over the long period, and that the marked decline appears to be related to the decline in public sector subsidised housing.

  4.3  It flows that unless that supply source is rekindled, which seems unlikely, then in order to achieve the total supply required, and avoid the distortions which may arise through failure to do so, then the quantity delivered by the private sector should be increased.

  4.4  In order to achieve this end the need is for the nurturing of conditions which safeguard retention and enhancement of the capacity of the house building industry. Ingredients of such capacity include the fostering of craft skills within a long view. A continuing and reliable flow of housing land is a condition precedent to the fostering of those skills.

  4.5  In considering this it should be borne in mind that many house builders are parts of conglomerates who will switch in and out of markets according to global trends. They are therefore an unreliable device for the sustenance of a skills base.

  4.6  One of the by-products of nurturing capacity in the house building industry of a type furnished by Billingham and Kite Ltd is that it safeguards skilled and unskilled jobs which can only be undertaken at the point of production rather than in some distant continent. This would seem a happy coincidence of meeting social needs and economic ends also.


  5.1  The ODPM's consultation paper ("Planning for Housing" July 2005) suggests an approach based on the 15 year trajectory related to housing market areas. The Regional Spatial Strategy for the South East has already included the concept of housing market areas in its work.

  5.2  It is considered that the essence of this approach is to be supported. It has the benefit of securing total numbers to meet the social requirements of the population, but guiding a distribution in a sophisticated way such that distortions due to a mismatch between supply and demand are minimised.

  5.3  A significant proportion of total private supply is delivered by companies such as Billingham and Kite Ltd. Like Billingham and Kite Ltd, some 3,000 of the 12,000 members of the Federation of Master Builders are also registered with the National House Building Council and are therefore involved in building new homes. Such companies individually build relatively low volumes, and are serving localised markets that they understand well. Whilst individually modest, in total these organisations have a significant contribution to make to the overall supply of housing.

  5.4  It is important to the sustenance of this source of supply that the planning system facilitates land suitable for this type of company. Whilst large tracts of land allocations such as regional growth centres can meet the needs of volume house builders those companies building at a smaller scale and meeting the needs of localised markets have resources which only allow them to deliver housing on smaller parcels of land. The Planning system should ensure a variety of sizes of site to nurture this sector of the industry and thus facilitate satisfying the demand for houses for sale.


  6.1  As is noted in the Barker Report there are two features of the housing market which affect the ability of strategies for change to succeed. The first is that 90% of transactions relate to the second hand market, and the second is that the new supply adds only 1% to the total stock. The scope for tempering what may be described as "natural" trends is therefore very limited.

  6.2  A further feature is that transactions are relatively limited in their geographical range. The writer undertook analysis of the 1991 Census some time ago, in several English Regions, which indicated that the significant majority of people who moved did so within a limited distance of a handful of kilometres. This further tempers what can be achieved regionally by adjusting supply.

  6.3  In this context where there is a "natural" migration trend in a particular region or sub region this trend can largely be satisfied within the existing housing stock. Retarding or accelerating the trend by altering the supply of new housing is unlikely to have the effect of altering the trend but will more than likely just exacerbate the distortions of failing to meet the trend.

  6.4  Efforts at altering trends such as the renaissance of urban areas may well succeed but a brake on "natural" trends is not in itself going to achieve this. It is submitted that until the "natural" trend has changed any interference in extraneous devices such as the supply of housing outside metropolitan areas will simply distort the supply and demand balance. This would appear to be the experience of the past few years in the UK .

  6.5  In this context it is considered that the generality of providing for new housing in relation to housing market areas on the basis of regional and sub regional migration trends that presently subsist is the most appropriate approach. If a change to the trends is considered desirable for the purpose of urban renaissance then other instruments of change will be preferable to the crude and draconian housing supply switch.

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