Examination of Witnesses (Questions 371
- 379)
MONDAY 5 FEBRUARY 2007
MR JOHN
WALKER, MR
PETER DIXON
AND MR
RICHARD HILL
Q371 Chair: Apologies
for keeping you waiting but, as you see, we had some interesting
topics coming up which we wanted to explore. Again, can you introduce
yourselves starting from the right?
Mr Hill: My name is Richard Hill.
I am the Director of Investment and Programmes at the Housing
Corporation.
Mr Dixon: My name is Peter Dixon.
I have been Chairman of the Housing Corporation for the last three
and a half years.
Mr Walker: My name is John Walker.
I am the Chief Executive of English Partnerships.
Q372 David Wright:
It is quite an opportune time for you to appear before us, is
it not, following the announcement on 17 January by the Secretary
of State about the future structure of your teams in Communities
England? It would be helpful if you could, perhaps, begin by outlining
what you see are the major benefits of Communities England in
terms of structure and what positive synergy will be drawn from
a merger?
Mr Walker: I think this is a welcome
opportunity. For a number of years now English Partnerships and
the Housing Corporation have been working together jointly on
a number of projects and, also, we have been working very closely
with the Department with a number of their initiatives, Decent
Homes, Pathfinder areas, and I think the opportunity we have now
is to create a new organisation, and I stress new organisation,
we do not want to end up with just a merger. English Partnerships,
you may well know. We are two legal entities, Commission for New
Towns and Urban Regeneration Agency, which creates problems in
itself; which power do we wear when going on to a site, and two
sets of accounts might be good for accountants but not good for
many other people. Therefore, we welcome the opportunity to have
a new entity which will require primary legislation which will
be down to you people, in a sense, as to how much we can deal
with and where we can go. I also think it creates a great opportunity
in relation to working with local authorities. For instance, from
English Partnerships' point of view we have a lot of good working
relationships with local authorities and I think we then present
a one-stop-shop for local authorities. I also think it gives a
good message to some of the big house builders how we take it
forward and with the RSL market.
Mr Dixon: I am a naturally cautious
individual so I think what I would say is do not hold your breath
in terms of seeing huge benefits very rapidly.
Q373 David Wright:
It is not going to be very rapid because 2009 is the closing date.
Mr Dixon: It takes a while to
get the legislation through and to get the organisation up and
running and then it takes a while, in my experience, to get the
best out of new organisations anyway, so I do not think one should
see this as an instant solution. I agree entirely with John, there
are a number of areas where we already work together, we can cut
out some of the duplication, we can make things work I think more
effectively, but do not hold your breath would be my immediate
reaction because there is an awful lot of hard work that has to
go into this to get an organisation that is effective. Structures
do not do things, it is relationships and people. We have got
to create a new organisation that has the right attitudes, the
right people and does sensible things, and that does not happen
over night. Do not get expectations that we cannot deliver for
you.
Mr Walker: If I can add to that.
Peter is absolutely right about the timescale. A lot of the timescale
is about the parliamentary process, but one of the things that
we can do is take advantage of that timescale and start planning
now. What we have already put in place is a transitional team
with representatives from English Partnerships, the Housing Corporation
and CLG to work together so that we can be up and running and
ready as much as we can be. One of the things that we are very
conscious of is not to take our eye off the current ball and continue
to deliver our programmes and meet our outputs in the meantime.
Q374 David Wright:
So am I. I represent a former new town and clearly there is significant
involvement from EP and the Housing Corporation in that town.
What I think we all do not want to see is a situation where effectively
we have a two-year period where organisations are trying to structure
themselves and not delivering them and there is a real concern.
How are you going to be able to maintain staff morale? How are
you going to be able to maintain an effective approach? Are you
going to be able to regulate the sector in terms of the Housing
Corporation doing its ongoing job in terms of regulation? How
is that going to operate?
Mr Dixon: We are very clear that
the day job does not stop and, in fact, we have got a number of
new ideas and new approaches that we are intending to roll out.
We want to keep going at maximum speed, frankly in order to keep
our staff excited about what we do, keep the sector enthused with
ideas that are going to work and make sure that we do not drop
the ball on the way through and that is fundamental to us. Obviously
we have done the basic things like retention packages for staff,
we do work together very closely already. Frankly, it will be
business as usual for the next 18 months to two years but, if
anything, I think it will be business even more than usual, if
you like, because we have got a whole raft of things that we need
to roll out in order to make sure that we remain effective whether
it is in regulation or in investment. We have already modernised
some of our investment processes, we have got a whole string of
things that we want to do on the regulatory front. Coming out
of the review that we instituted 18 months ago, the Elton Review,
we are implementing that as rapidly as we can basically to make
our regulation more effective and to improve the lives of the
two million tenancies where we have a remit to make sure that
Housing Associations behave themselves and do what they should
do, so no letting up.
Q375 David Wright:
The Housing Corporation are pretty well-known across the UK for
delivering in most areas, EP are not the same really, known largely
because of its focus in former new towns and certain key regeneration
sites. How are you going to change your profile so that people
understand how you can knit together land provision and funding?
How are you going to pick up some of the ideas we have heard this
afternoon because clearly some development work has got to be
done because we have got private sector organisations coming along
and saying they can fund housing, they can fund shared equity
with a minimal level of public subsidy? We have had organisations
coming along saying that they can deliver big regeneration schemes
through gap funding. It is a big agenda, how are we going to keep
pace?
Mr Walker: First of all, I will
pick one thing you said, as far as staff morale is concerned,
I am very concerned about that. In fact, right across the whole
of the organisation in each office we have had presentation seminars
taking things forward and the staff are upbeat, they are looking
forward to the new agenda and in getting there. As far as raising
the profile and involvement of English Partnerships, we operate
across all of England and one of the things that Communities England
will bring, for the first time, is a more rural agenda because
obviously we are the Urban Regeneration Agency, we have operated
in urban areas and we have been operating on a number of programmes
throughout the time. We are involved with our URCs, the Coalfield
Programme which formed a big part of the work of English Partnerships,
we are very much involved in the growth areas. One of the things
that we have got quite a good track record on is working with
the private sector. We have a number of private sector joint ventures
here from priority sites which delivers industrial floor space,
it is a joint venture with the Royal Bank of Scotland set up to
deliver a million square feet, this year we will hit three million
square feet. Network Space, which has delivered managed work space
within the former coalfield areas, said that they could do 740,000
without any further investment from us. English Cities formed
a joint venture between ourselves, AMEC and Legal & General
to look at area wide regeneration. We have a very good track record
of working with the private sector. In addition to that, there
is an initiative from David Miliband. We have talked to a number
of local authorities about utilising their assets, sweating their
assets better through a local asset backed vehicle assisted by
an urban finance initiative which is people who, within English
Partnerships, have corporate finance background, who are talking
to the institutions, and we have quite a good dialogue with a
lot of the institutions. There is a huge appetite from the institutions
for investment. At the moment for every pound of investment there
is £5 chasing it, so what they are looking for is the right
mechanism, the right project, and I think we, in English Partnerships,
have already started to do that in a lot of areas and that is
an even bigger area and opportunity for Communities England.
Mr Hill: Can I pick up on the
shared equity point specifically. We think that is quite an interesting
area where EP and the Housing Corporation with CLG have been working
quite intensively over the last six months and particularly on
the shared equity taskforce report that came out in December that
recognised the contribution that the private sector might play.
I think that is an exciting area where EP, the Department and
the Corporation will be working together where there is a really
good potential opportunity with Communities England to have a
better aligned delivery mechanism to help deliver some of those
changes. I think it goes to the staff morale point, in that that
is an area where there is quite a lot of policy excitement but
whereas delivering it might be difficult in three separate agencies,
Communities England gives us an opportunity to do better over
the next six to 12 months.
Q376 Anne Main:
I would like to take you on to the size of the units that have
been created. There have been concerns expressed to the Committee
about the size of them being small and not being suitable perhaps
for families. How have you addressed these concerns and how do
you see your process developing in terms of your programme size?
Mr Dixon: We have done two things.
I think I agree with you, there have been too many smaller homes
built, whether it is in the private sector or in the social rented
sector. Our most recent programme recognised that particularly
in London, and we have insisted that 34% of our programme is three
bedrooms and above, much higher than previously.
Q377 Anne Main:
How does that work with the density levels that have since gone
through the Government's guidelines? Have you managed to get it
all in?
Mr Dixon: It is within the currently
recognised and accepted density levels. If you start looking at
the costs of a socially rented home per individual rather than
per home you will find that it is actually quite cost-effective
producing three and four bedroomed homes because the cost per
person becomes that much lower. On that measure one and two bedroomed
homes are less cost-effective because you are not housing as many
people. I think we recognised that we were getting it wrong a
few years ago, we have changed that.
Q378 Anne Main:
More family homes.
Mr Dixon: It needs to go further.
We have not moved as far as that outside London. I think there
has been a little bit of an obsession with the numbers of homes
rather than the numbers of people. I think we prefer, if possible,
to move towards the number of people who are given a home rather
than just the number of homes that are built.
Q379 Anne Main:
That is interesting. In which case, do you think the regulation
of housing benefits makes it difficult to meet the needs of families
in overcrowded households? Is there anything that could be done
there, possibly if the Housing Corporation enabled existing stock,
perhaps larger homes, to be repurchased and brought into the fold
so to speak?
Mr Dixon: Housing Benefit is important
to something like 65% of social tenants. There is a trade-off,
if you like, between the level of Housing Benefit and the level
of grant that goes into a new home. If Housing Benefit were able
to meet slightly higher rents, you would need that much less subsidy
so there is a flexibility there. It is a question of whether one
is subsidising the bricks and mortar to start with or the families
and there is a judgment call as to where the best balance is.
I think there are problems around Housing Benefit when you are
looking at very high market rents and you will see Housing Benefit
meeting rents of £250 or £300 a week in London and that
has got nothing to do with the social rent. That is using Housing
Benefit to pay a market rent, which is a totally different kettle
of fish obviously. Our concern is at the lower end where the levels
of benefit are not a problem.
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