Examination of Witnesses (Question 140-159)
RT HON
HAZEL BLEARS
MP, RT HON
YVETTE COOPER
MP AND JOHN
HEALEY MP
29 OCTOBER 2007
Q140 Mr Hands: At the same time my
council, not dissimilar from its neighbouring council, Wandsworth
and nearby Westminster, has just been upgraded from being a three-star
to a four-star local authority, yet you still insist on --- if
I were to run a search on which councils have been most attacked
by government ministers in the last year I could almost guarantee
that Hammersmith and Fulham would be number one and that Wandsworth
would be number two, despite the fact they are both four-star
rated authorities and both keeping a lid on council tax. Surely
you have to wake up and see that this is something that you should
be applauding, their ability to produce better services at a lower
cost, and should be something that is exactly in accordance with
what the Government says it wants?
Hazel Blears: Mr Hands, I can
assure you that it is nothing personal to yourself in terms of
highlighting the issues that—
Q141 Mr Hands: I am not saying that.
What I am saying is that you are picking on councils which you
should be applauding.
Hazel Blears: But I think it is
important that we get the balance right between keeping reasonable
levels of council tax, because that is in the interests of the
taxpayer, providing good and excellent services, and at the same
time making sure that we make the efficiencies local government
needs to make. I do not think that that is beyond an awful lot
of councils to achieve, and what is very encouraging is that we
have now got over 70 per cent of councils which are either three
or four stars—you could not have said that ten years ago
without the kind of financial support that this Government has
put into local authorities—39 per cent real terms increase
in the last ten years, together with a performance framework which
has actually driven that kind of improvement. I think the introduction
of the common performance assessment is something that has concentrated
local authorities' minds quite dramatically and I am delighted
that local authorities are now really improving their ability
to serve their local communities. It is because of that improvement
that we are able to do the relaxation around the targets to free
up local government to have more control in their areas, and that
is the deal.
Q142 Mr Hands: So are you willing
to congratulate Hammersmith and Fulham Council and Wandsworth
Council, for example, on being rated as four-star authorities
and keeping a lid on council tax?
Hazel Blears: I am always pleased—
Q143 Mr Hands: Yes or no?
Hazel Blears: I am always pleased—
Q144 Mr Hands: So you are not willing
to congratulate them?
Hazel Blears: Mr Hands, I am always
pleased to congratulate local authorities when they do well. I
believe that you get more out of people when you praise them and
you motivate them and you occasionally inspire them, and where
local authorities are doing well I am on record in many circumstances
as saying, "Well done. Keep it up. Keep making your efficiencies",
but at the same time let us make sure that we look after the most
vulnerable people in our country, who very often do not have a
loud enough voice to shout up and speak for themselves.
Q145 Martin Horwood: We have obviously
still got a lot of work going on at regional level and a lot of
policies being developed, regional spatial strategies being taken
forward. How are we going to cope with the democratic deficit
which in our view already exists but which is going to exist in
an even greater form once the regional assemblies are abolished?
Hazel Blears: Obviously, the programme
of work that we have got now in order to implement the sub-national
review is considerable, and one of our driving forces behind that
is to try and make sure that in drawing up the single regional
strategy, which will bring together the regional spatial strategy
and the regional economic strategy, we get a larger voice and
influence for local government as a democratically elected body
in this process. Clearly it is going to be a matter for the RDAs
to draw up the strategy. Then we have to make sure that local
authorities in that region have a big say about scrutinising and
being involved in that strategy, and then we have to manage the
migration from the regional assemblies at the moment into the
new architecture that we want to deliver. That migration will,
I have no doubt, be different in different places. Again, there
will not be a one-size-fits-all necessary solution. We want to
have discussion with those local authorities and the regional
development agencies over the next 18 months or so about how we
get to a place whereby the regional assemblies will need to carry
on doing some of the planning until we have got the new architecture
in place, but we absolutely want to give a bigger democratic voice
to the local authorities in that region.
Q146 Martin Horwood: So you are going
to abolish the assemblies before what you call your new architecture
is in place?
Hazel Blears: No. What we have
said is that we want to absolutely have a managed transition to
that new architecture and that is why we are in detailed discussions
with those parties now, because we will need their capacity to
carry on with the planning responsibilities that they have got
before we are able to be in a position where the regional assemblies
no longer are functioning in the way they did before.
Q147 Martin Horwood: Are you going
to take this opportunity to decentralise any power back down to
elected local authorities, given that, whatever your new architecture
and however the RDAs run this, they are losing a very important
voice at regional level?
Hazel Blears: This is an important
point and I will bring in John in a moment because he is going
to be dealing with the implementation. One of the priorities that
I set for my Department is about devolution. It is not just to
local authorities; it is also to communities, but this part at
regional level in terms of negotiating the multi-area agreements
that we want to do, again, to give people in their region, particularly
in city regions which already have good working relationships,
the power to make a significant difference, particularly on economic
development in their regions, is going to be key. For example,
in Greater Manchester, people have had that kind of joint working
for the last ten years or so. We now need to see, in negotiating
those agreements, are there more powers, are there more things
that they want to see happen, and then for there to be a negotiation
about those powers in the best interests of that region.
Q148 Martin Horwood: But that again
sounds as though you may be potentially bypassing local authorities
if you want to devolve power to communities as well as local authorities.
I am not quite sure how they are supposed to do that.
Hazel Blears: You have misunderstood
me, Mr Horwood. What I was saying was that devolution as a principle
in our Department for all of us is really important. That devolution
is to make sure that at the right level people are making the
right decisions because that includes local authorities but it
also then goes beyond local authorities to communities.
Q149 Martin Horwood: So where, for
instance, in a regional spatial strategy at the moment there is
an extraordinary level of detail about housing planning, there
are very specific numbers laid down, maps almost down to field
level, certainly around my constituency, specifying where that
housing is going to go—and I have to say I support a certain
degree of new housing in my constituency before you accuse me
of NIMBYism—is that level of detail something that could
now be decentralised back to elected local authorities and taken
out of the regional tier altogether?
John Healey: First of all, regional
assemblies, by pretty widespread view, have not directly dealt
with the democratic deficit of regional level activity. The arrangements
that we are proposing and set out in the sub-national review take
a couple of important steps to try and reinforce the scrutiny
and accountability, the challenge at regional level: first, bring
local authority leaders together at the heart in the region through
what one might call a local authority leaders board, not just
to scrutinise and challenge and keep a check on the RDA in their
executive role of producing the single strategy, but also to sign
it off, and, secondly, in Parliament, which you can see is the
other pool of elected representation in this country, if you like,
by setting up a system of regional select committees to oversee—
Q150 Martin Horwood: Forgive me,
but instead of this great machinery of scrutiny and checks and
balances would it not be simpler to decentralise the power again
on something like the example I gave?
John Healey: You will be aware
that the move to have directly elected regional assemblies came
to a full stop in the north east, at least for the next decade.
Q151 Martin Horwood: No, I was thinking
devolve the power, not add—
John Healey: Therefore, it is
important, particularly if we want to see more activity decentralised
from the centre, that we increase the scrutiny and accountability
as well.
Q152 Martin Horwood: I am sorry;
you are not understanding me now. I am not talking about decentralising
from the centre. I am talking about decentralising from the region
back down to the local elected authorities and allowing them to
take back some of the detail that is now in the regional spatial
strategies, for instance.
John Healey: Quite, and you will
see in the sub-national review, Mr Horwood, and when we publish
consultation for how we manage this transition that there is an
important principle that some of the things that RDAs do at the
regional level at the moment should be devolved to local authorities
or groups of local authorities collaborating. They will become
more strategic, less project-based. The second thing is that in
building up the regional spatial strategy, which was the other
example you put to us, you will see again in the sub-national
review—and it is paragraph 6.101—that we anticipate,
quite rightly because of the point you make, that when you look
at the process for developing a single unified regional strategy
that deals with development, particularly sustainable development,
that has to be built up from the local authority level individually
using the planning expertise and the interests of local communities
there, and often local authorities acting in sub-regional groups
as they do at the moment. It is not something that will be prepared
by the RDA, foisted on the region and then subject to the sort
of scrutiny and consultation that people might imagine.
Q153 Martin Horwood: I apologise
for using a constituency example, but everybody locally has accepted
8,500 new houses for the Cheltenham area. At the moment it looks
like it is going to be 12,500. Potentially that is going to be
increasing to 14,500. If our local authorities of all party colours
thought that was a simply unsustainable level, or if it was going
to cause too much environmental damage, if it was going to put
too much demand on infrastructure, could they refuse it under
this new decentralised architecture?
Yvette Cooper: You have to have
a planning process in which disagreements are resolved, and if
you have got an individual council that thinks no, it does not
want to have a level of housing growth, then either other local
council areas around them are going to have to take more homes
or some process is going to have to be gone through in which there
is a rigorous public testing process which says, well, actually,
yes, you can support more homes in that area, and so I do not
think housing is an area where an individual council can simply
operate alone where there are disagreements about the level of
housing growth that is needed. You are always going to need, whether
it is sub-regional or regional, planning arrangements to look
at those kinds of issues. Where there are different levels of
detail currently in the regional planning process it is often
because there are disagreements, so in areas where there is broad
agreement and everybody says, "Yes, this particular area
can support a particular level of housing growth", there
is often not very much detail because there is a lot of consensus.
In the areas where there is disagreement and people are having
disputes about quite what level of housing growth an area can
support, they tend to be the areas in the regional planning process
where a lot of detailed evidence is gathered and tested as part
of that process.
Martin Horwood: But you understand that
local authorities—
Chair: Martin, can I just stop you? This
is an issue we did explore incredibly fully with Ms Cooper on
the Green Paper.
Q154 Martin Horwood: Okay. The broader
issue, to take it off that specific point, though it is a related
one, was a recommendation we made in our report on housing supply
last year, which pointed out that there were many factors other
than supply which affected the affordability of housing and we
said the Government needed to examine a range of strategies which
might influence demand, such as interest rates, the availability
of credit and taxation. With the Northern Rock situation and with
a housing market that now seems to be stabilising or potentially
even falling, that seems to be even more relevant and even more
focused, and Professor Wilcox for CPRE has reinforced that kind
of view. Have you asked other government departments to look at
other strategies to tackle affordability, and, if so, what are
they?
Yvette Cooper: Sure, and there
is a wide range of issues which always affect the position of
the housing market at any one time, and obviously the Bank of
England has a responsibility in terms of setting interest rates
and also considering the long term stability in the housing market
as part of the wider economy, which obviously has an impact on
affordability over the longer term as well. What we specifically
look at around housing supply is long term housing supply needs
and how that impacts on affordability, and that clearly is a very
important factor, and you will have seen the recent report from
the NHPAU, the National Housing and Planning Advice Unit, which
is looking at long term supply issues, but it is also the case
that issues around shared equity mortgages, for example, and those
sorts of things can also have a significant impact on affordability.
So too can having measures to bring empty homes back into use,
so we do look at a wide range of things but none of that gets
away from the long term need for more homes as well.
Q155 Martin Horwood: But it qualifies
it, because something like the availability of credit historically
has probably inflated house prices and the fact that credit is
now perhaps less available is clearly a factor in bringing down
the rate of increase. Have you talked to any other government
departments about trying to tackle irresponsible lending in the
mortgage market?
Yvette Cooper: Certainly, and
there are issues, obviously, and we appreciate that as part of
all of the work that has gone on around Northern Rock and so on
there has been a whole series of work with the Treasury, with
the FSA and so on, looking at issues around credit and looking
at it across the market.
Q156 Martin Horwood: Have you had
any conversations with them?
Yvette Cooper: We certainly have
been involved in looking at what the implications are for the
wider housing market.
Q157 Martin Horwood: This was last
June. This was us recommending that you explore other strategies.
Have you actually had any conversations with other government
departments about other strategies to reduce affordability?
Yvette Cooper: We have a whole
range of work that has been under way with the Treasury as a long
term programme which has included the shared equity task force
that reported as part of the Pre-Budget Report last year. We have
further work that has been under way with the Treasury as part
of that work around—
Q158 Martin Horwood: Anything at
all on the mortgage lending market?
Yvette Cooper: That includes mortgage
lending, and, for example, we currently have the Brian Pomeroy
review which was set up as part of the housing Green Paper work,
which is looking exactly at access to different kinds of equity
loans as part of the mortgage lending process. It is important
that there are proper checks on that, that people do not find
themselves taking out loans that they cannot afford and cannot
sustain, and that is why we also have independent financial advisers
as part of that process for any kind of shared equity mortgage.
Q159 Martin Horwood: That still does
not sound like anything at all to tackle irresponsible lending
policies. Was anything brought forward pre-Northern Rock?
Yvette Cooper: As you know, the
FSA obviously has a responsibility to make sure that mortgage
companies and others are operating responsibly.
Martin Horwood: That sounds like a no.
| 
