UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be
published as HC 349-i
House of COMMONS
MINUTES OF EVIDENCE
TAKEN BEFORE
COMMUNITIES AND LOCAL GOVERNMENT committee
Homes and Communities Agency
Monday 18 February 2008
SIR BOB KERSLAKE
Evidence heard in Public Questions 1 - 71
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Oral Evidence
Taken before the Communities and Local Government Committee
on Monday 18 February 2008
Members present
Dr Phyllis Starkey, in the Chair
Sir Paul Beresford
Mr Clive Betts
John Cummings
Jim Dobbin
Andrew George
Mr Bill Olner
________________
Memorandum submitted by Sir Bob Kerslake
Examination of Witness
Witness: Sir Bob
Kerslake, Chief Executive-designate, Homes and Communities Agency, gave
evidence.
Q1 Chair: Can
I welcome you, Sir Bob, to this hearing and make a start by asking you what
skills and experience you think you have that make you particularly appropriate
to head the Homes and Communities Agency?
Sir Bob Kerslake: Thank you very
much for the question. Can I first say
how much I am genuinely looking forward to this afternoon's discussion and I am
grateful that you have given me a chance to talk to you, really, before
formally starting the job in April. I
think what I bring to this job is a great deal of experience, practical
experience, of housing and regeneration delivery on the ground. I have been the Chief Executive of a local
authority for over 17 years now, firstly in West London, the London Borough of
Hounslow, and secondly for the last decade in Sheffield, in both instances
places that went through a lot of change.
I particularly focus for this afternoon's discussion on Sheffield. You can in many ways in microcosms see many
of the issues that will be the preoccupation of the new Homes and Communities
Agency in how Sheffield as a city has developed and indeed transformed over the
last decade. I think the skills that
that time has given me are, firstly, an understanding of how we develop places,
the so-called place shaping role, which I see as critical to this new agency's
success. The second thing I have
learned from Sheffield in terms of skills is collaborative Partnership. Very few of the things we do, even in a
relatively big place like Sheffield, we do on our own. We have to work collaboratively with others
at regional and indeed national level.
I have had practical experience of working with both the Housing
Corporation and English Partnerships and, of course, the RDAs. A third skill that has come with this job
has been the ability to make things happen.
That sounds a fairly bland thing but the ability to programme-manage effectively,
to ensure that ideas and visions become practical realities, is a tremendously
important part of what I think is essentially a delivery agency, the Homes and
Communities Agency. I would just pick
out perhaps one last thing that I think is critical in the skills, which is
this ability to both do big city things, which has been a key part of the job
in Sheffield, so major transformation of our city centre, but also working with
neighbourhoods and communities to achieve the transformation that they
require. In Sheffield that has been an
important part of the agenda. Yes, the
city centre has been important but the neighbourhoods have been important as
well, and those are the skills that I think I bring.
Q2 Chair: Can
I then start with a more specific question and ask you some questions first on
the progress that you are making, or will be making rather, since you do not
start till March, in establishing the new agency and bringing together at least
three different parts to form the new agency.
What do you think are the main challenges to getting it up and running
by April 2009?
Sir Bob Kerslake: Although I
have not formally started, we have already made some useful progress on a
number of key issues and I will just highlight some of those now. The first thing is to clarify the transfer
of functions from the Department. That was
a critical thing for me and I was delighted that that was done just after
Christmas. That was a critical step
forward. So the clarification of the
things that we are transferring from the Department to the agency was very
important.
Q3 Chair: When
you say the clarification, do you mean there is still some doubt about
precisely which functions are being transferred?
Sir Bob Kerslake: No. At the point I took on the job in December
there was still an announcement to be made, and that announcement was made post
Christmas so I was very pleased that that was resolved. The second thing I have been very pleased to
do is to establish a start-up team with Trevor Beattie, who heads the team
working to me, and that has enabled us to get a sharper focus on the work. The third thing is to look to see if we can
accelerate the process of establishing the agency and see whether it is
possible to bring forward the formal start-up date from April.
Q4 Chair: How
far forward?
Sir Bob Kerslake: We have not
determined that exactly yet; potentially somewhere around November/December,
obviously subject to the Bill and its timing and how fast that goes
through. What I would say is that there
will still be a phase-in period between then and April, so there is still work
to be done between then and April but there are some advantages in moving
early. In terms of the challenges, a key
challenge here is to create a new agency that is more than the sum of its
parts. It needs to have its own
culture, it needs to bring something that the existing agencies do not, to add
more to the mix. It needs to make the best
use of the public resources it has. A
second challenge is that it needs to be very powerful, as I said earlier, about
working in collaborative partnership, particularly with local government. I have described its role as being local
government's best delivery partner and I think it has to be that. It clearly has some very challenging targets
to deliver and that is right and proper, so it will have to be geared up to
delivering those targets. Also, I think
it has to understand the market well.
Chair: Can we put the local
government aspects to one side for a moment because we want to explore them
later.
Q5 Mr Olner:
Can I just say a couple of things, Sir Bob?
You have set a few alarm bells ringing.
I know very well the work of English Partnerships and I know very well
the work of the Housing Corporation - not in cities but in shire towns. There has been regeneration and there has
been a housing impetus as well. It just
concerns me that you will be the worst of both things. You will not be concentrating enough on
housing, you will not be concentrating enough on regeneration, and one of the
things that plagues things like English Partnerships, quite frankly, is the
moneys they have already committed to schemes and whether that is going to eat
up some of the moneys that are going to be available. It is all right having nice words but are you actually going to
be able to deliver it?
Sir Bob Kerslake: I think there
is a lot we can deliver. The first
thing to say is that when the analysis was done to make the case for the new
agency, it found that two-thirds of the activities between the two agencies
were in some ways linked. I do not
think that is a surprise because to make a success of achieving more housing
and more affordable housing you have to regenerate places. The two things go hand in hand. Far from stretching you, I think having the
two things together enables you to deliver powerfully on both agendas. I think it helps enormously; in fact, I
think it would be a problem to achieve these more challenging targets that we
have without having housing and regeneration together. Yes, there are funds committed, and rightly
so, but I think there is still quite a lot of resource going forward in the
agency that is flexible and we can, over time, look at the way we use those
resources and seek to get more from the same.
Q6 Mr Olner:
One of the biggest problems in the past when Partnerships were involved, from
when it was an idea on regeneration and re-housing, was that time had elapsed
so that the funds that were originally earmarked were not enough to complete
the scheme. I just wondered how much of
that bad debt you are going to pick up as a new agency. There will be schemes out there that need a
lot more money than they did when they were first envisaged.
Sir Bob Kerslake: I hope not too
much. Clearly, every scheme goes
through a process of change and development and some end up costing more, some
actually go ahead with less subsidy, and I have had both experiences in my time
as Chief Executive of Sheffield. That,
I think, is the skill of an agency, to be able to adapt and flex the resources
it has according to the needs of a particular scheme. I think both the Housing Corporation and English Partnerships
have good track records of making schemes happen and I think they do have a very
good understanding of where individual schemes currently lie. I do not believe there is a huge hidden
problem there at all but there will be changes on individual schemes that we
will have to respond to.
Q7 Sir Paul Beresford:
You made a comment about "It depends how the Bill goes" or something along
those lines but of course, this is a skeletal Bill. In fact, this one has osteoporosis because the real meat of the Bill
is going to be in the secondary legislation.
When do you expect that to be completed? Are you involved in the development of the secondary
legislation? Will it delay you?
Sir Bob Kerslake: There is a
close discussion going on at the moment and we are looking at the timing for
when the secondary legislation, as you say, would come forward. That is part of the calculations about when
the agency might formally come into being.
We have taken that into account in our thinking on the timetable.
Q8 Sir Paul Beresford:
So when do you think that will be finished?
Sir Bob Kerslake: I cannot give
a precise date at the moment but, clearly, you would want to have the key
elements of that secondary legislation necessary to start the agency in place
by November/December but some of it may well come after that date, moving
forward. It depends on which aspects of
the secondary legislation we are talking about here. I cannot give you a precise date here and now.
Q9 Sir Paul Beresford:
It is like buying a car and developing it with spare parts, is it not?
Sir Bob Kerslake: I do not see
it quite that way. I think the issue
for us with the agency is to try and get it formed and up and running and able
to operate as soon as possible but the reality with the agency - and that is why
I used the phrase "phase-in" - is that it will need to develop things like its
corporate plan and some of its projects over time beyond that and it makes
absolute sense to try and do that in that way.
The key test and the thing we are looking at is whether enough progress
will have been made on the Bill and the secondary legislation to enable it to
be functioning by those dates. We need
to review that in detail. As I said, I
am giving you an indication of what our ambition is. We are very confident we will have it there by April and, if we
can bring it forward, I think that will be worthwhile.
Q10 Chair: I
am having a bit of difficulty with this.
What sort of things would be in the secondary legislation that would
alter the new agency?
Sir Bob Kerslake: I do not think
there is a lot really in terms of its impact.
I was simply saying that that is something we are looking at as part of the
detailed timetable.
Q11 John Cummings:
Can you give the Committee some idea of what budget you are working to?
Sir Bob Kerslake: If you take
the combined budget, we are talking about a budget of over £5 billion a
year, so it is at that scale, if you bring together the different funding streams
that will come into the new agency.
Q12 John Cummings:
So you will be working towards an establishment within £5 million?
Sir Bob Kerslake: Sorry. We are talking about the total budget for
the agency?
Q13 John Cummings:
The total budget for the agency.
Sir Bob Kerslake: That is about,
as I say, in excess of £5 billion, if you add its total investment funding.
Q14 John Cummings:
What size do you anticipate the agency being in terms of manpower?
Sir Bob Kerslake: In terms of
staffing, we calculate of the order of 820.
That is the number we are currently calculating.
Q15 John Cummings:
Would you tell the Committee what your particular salary will be?
Sir Bob Kerslake: Yes. My salary will be a base salary of £220,000
with up to £20,000 on bonus.
Q16 John Cummings:
Which other agencies will you subsume into your particular agency?
Sir Bob Kerslake: What comes
into my agency is the Housing Corporation, English Partnerships, and certain
delivery functions from Communities and Local Government, including, as you
have probably picked up, the Thames Gateway and, of course, the Academy for Sustainable
Communities as well.
Q17 John Cummings:
Will you have lay members sitting on the agency?
Sir Bob Kerslake: There will be
a non-executive board.
Q18 John Cummings:
How many?
Sir Bob Kerslake: The numbers have
not been fixed. The advert is out now
for the Chair of the agency.
Q19 Sir Paul Beresford:
Is the staffing level of the sum of the agencies and organisations you are
absorbing greater or less than 820?
Sir Bob Kerslake: That is the
calculation of the numbers in the current bodies.
Q20 Sir Paul Beresford:
So you are taking the whole lot?
Sir Bob Kerslake: We are taking
all the staff in. The scale of staffing
you will have moving forward clearly will need to be reviewed and assessed but
I am giving you the number based on the current calculation of staff, and it is
an approximate number, in the existing bodies.
Q21 Chair: What
about the £5 billion budget then? Is
that just an aggregation of existing budgets?
Sir Bob Kerslake: That is an
aggregation of existing budgets across the functions that are transferring into
the agency.
Q22 Chair: Before
moving on to staffing issues, can I just pick you up on paragraph 14 of your
supplementary memorandum, which I had a bit of difficulty in understanding, to
be truthful, in particular, the bit about "To deliver better outcomes, we need
to harness the flexibility that combining these activities and functions can
bring. We can make significant headway
in this Spending Review period, but I believe there will be even greater
opportunities in future spending rounds."
Would you like to unpack that and explain what it means? Are you meaning that you are going to make
some savings in future spending rounds, or you are going to ask for more
spending in future spending rounds?
Sir Bob Kerslake: What I am
saying in that paragraph is that clearly, moving forward in the current CSR
round, there are already commitments made, quite rightly so, into next year and
potentially into the years beyond that on existing funding streams, so some of
your flexibility is clearly not there in the current CSR round. When you move forward to subsequent rounds,
clearly, you will have the potential to have more flexibility across the
resources available to the agency. So
what I am saying is we will make as much use as we can of the flexibilities in
the next round but would hope that there could be more in subsequent rounds.
Q23 Chair: But
you should be able to get some advantages both in delivery and use of
resources, presumably, by bringing the agencies together so that where there is
overlap you can economise and you can then do things elsewhere that you were
not---
Sir Bob Kerslake: That is
entirely right. I think there is a
distinction here between two types of efficiencies, if you like. There is the efficiency by being able to use
the investment resources of the new agency more flexibly and respond more
directly to the needs of particular places, and there is obviously an
efficiency that would come from creating a single agency that would have one
set of support services, for example. I
was in this paragraph particularly referring to the flexibility around
investment programmes as opposed to the efficiencies that you might make from
unifying the organisation. There will
be savings from both and both have been built into the business case for the
new agency but, clearly, the big money, as you have got from the numbers I
referred to, is in the investment programme so that is where you would want to
focus your efforts to get greater value out of the resources you have.
Q24 Sir Paul Beresford:
If I were highly suspicious, you have in that paragraph "This is something that
will grow over time." Do you mean the
activities and functions will grow over time?
Sir Bob Kerslake: No, what I am
saying is the ability to use the money flexibly and therefore create savings
will grow over time. It is not a hidden
bid for extra money, if I can put it that way.
Q25 Sir Paul Beresford:
I was not thinking of money. I was
thinking of functions.
Sir Bob Kerslake: Nor is it a
hidden bid for extra functions. What it
is saying is that existing programmes have already committed moving forward,
whereas, as you move forward over time beyond that, they will not be committed
and you will get more flexibility out of it.
Q26 Jim Dobbin:
Sir Bob, the strongest resource you probably have is the staff and the quality
and skills that those staff bring from wherever they are coming from. Always when you get change like this you get
insecurities. People start to feel
insecure when change is taking place.
How are you going to convince those employees who will be transferring,
one, that this is not going to take a long time and two, that their conditions
of employment may continue or may improve but will not deteriorate?
Sir Bob Kerslake: I think that
is a very powerful question and something I have given a lot of thought
to. Your first point about moving with some
speed and pace on it is absolutely right.
The debate on bringing together the two agencies goes back quite a few
years now and staff have had to live with that uncertainty, so one of the
factors that is influencing me on seeing if I can bring forward the date is the
fact that it will help end the uncertainty for staff more quickly than it might
otherwise do. That is the first thing
to say. I think the second thing with
staff is a very clear programme of action that you stick to. The third issue I have given a lot of
thought to is only going for change on things where it makes sense to change,
if you see what I mean. We will make a
virtue of using existing accommodation where that fits the bill. We are not in the business of looking
immediately for brand spanking new offices; we will use the resources that are
there. I think communication is
absolutely critical in this process with staff. I have already instituted a monthly newsletter to staff. I have met all of the English Partnerships
staff through their annual conference and I want to do the same for the Housing
Corporation. So it is all of those
things coming together that make the difference but probably the most important
thing we will have to invest in is bringing together two quite different
cultures, two different organisations, coupled with the CLG staff as well, and
creating a new culture for this organisation that builds on the best but brings
something of its own as well. Those are
the things I will put time and effort into and it is a high priority for me.
Q27 Jim Dobbin:
What about retention? We understand that
a couple of employees, because they were feeling insecure, have already left
the Housing Corporation. How are you
going to retain?
Sir Bob Kerslake: I think you
will see some staff turnover in the period of change. You cannot avoid that.
You reduce that to the minimum necessary by being very open and direct
with people about what you are doing. I
think people can live with change if you are very clear and honest about what
you are planning and what you are not planning and moving, as I said earlier,
with some pace and direction to what you are doing. Inevitably, with this period of change, uncertainties creep in. People form their own views about what is
happening and, in the absence of clarity, they feel the vacuum. I think you deal with retention by being
very clear what you want to do, what kind of agency you are trying to create
and then moving forward in a clear and focused way.
Q28 Jim Dobbin:
During this transitional period you are building a new organisation, a new
agency, but at the same time, you are having an effect on the organisations
that employees are leaving. How can you
retain the stability of those organisations and not be the cause of too much
disruption for them?
Sir Bob Kerslake: It is a
balance here. If you say the absolute
priority is not impacting on the existing organisations, then you are likely to
take too long on the new one and the uncertainty that causes willing to disrupt
the existing organisations. If you see the
only thing that matters is creating the new organisation, then you are going to
damage the existing organisation so there is a balance to be struck here. One of the reasons I moved to create the
dedicated team was to give some clear resources to the process of change. They will not do all the work. They will need to draw others into the
process but we are negotiating that with each of the existing agencies in order
to ensure that it does the minimum harmful impact on their existing programmes. So we are very alert to the issue. There is not one quick answer to that but it
is about a constant conversation between those who currently manage the
existing organisations and the set-up team to get the balance right and, again,
moving relatively quickly on it helps.
I think avoiding big uncertainties and energies being focused on new
locations for headquarters, et cetera, also helps.
Q29 Jim Dobbin:
Those questions were just about efficient transition.
Sir Bob Kerslake: Absolutely
right.
Q30 Mr Betts:
Bob, I think we have probably met somewhere before! Certainly the LGA welcomed your employment personally because of
your background in local government and the feeling that you probably would
want to be sympathetically engaged with local authorities but there must be
some slight concern amongst individual authorities that, when an agency like
yours is established, with a wide national remit, with a very clear goal - the
3 million homes, the Prime Minister has said that is what is going to happen and
it is your job to deliver it - if local authorities are not very clever at
making their bit happen, are you not just going to come in and steamroller
them? That must be a worry.
Sir Bob Kerslake: Yes, I can see
why that might be a concern but actually, having worked in local government,
local government is pretty hard to steamroller, to be honest with you. It has its own strong view about its place
and what it is trying to achieve and how it should achieve it, and you work
much better if you go with the grain of local intentions. That does not mean to say you do not have a
strong conversation about how things can happen but very often my experience of
local authorities - and as well as being Chief Executive of a local authority I
have also done a lot of peer reviews of other local authorities. I have been out and about across the country
doing corporate inspections and peer reviews - is that they are all very
passionate about their places. They
have big ambitions for their places and I think the trick here is to create an
agency that can be a bridge between, if you like, national ambitions and local
ambitions.
Q31 John Cummings:
You could also be accused of being poacher turned gamekeeper.
Sir Bob Kerslake: That is a
possibility. What I do not want to get
into is the situation where we are in a sense going to places and saying "You
must do X, Y and Z." What I think works
best is if we understand what their ambitions are and we find the balance there
about how they can deliver the things they want to do and also help us achieve
the national targets, and every place will be a mix of growth and renewal in
some way or another and it is finding the right combination. That is why I have talked about this single
conversation with individual places. I
think that is how we make this work and how we avoid me being seen as a poacher
turned gamekeeper.
Q32 Mr Betts:
Is that not a view really of an ideal world?
If in the end your success is going to be delivering a headline figure
and if the sum total of the ambitions of local authorities does not add up to
that headline figure, you are going to have to take some action, are you not,
and that is not going to make you terribly popular in some places?
Sir Bob Kerslake: I think we
have to seek first of all to try and achieve this through collaboration,
conversation, challenge, and, as I said at the beginning really, it is very
hard, even if you wanted to, to compel local authorities to do things. That should only ever be absolutely the last
resort in your options. You get much
better results if you can find the right conversation with a local authority
that helps you deliver what you want and what they want. I genuinely believe that it is possible to
do.
Q33 Sir Paul Beresford:
Would you accept the last resort might be something you would have to reach
for?
Sir Bob Kerslake: It would have
to be after exploring every other option, I think is what I would say, and I
would actually say I think it is unlikely I can envisage circumstances where
you would reach that point.
Q34 Sir Paul Beresford:
You are working for an elected local authority and your main experience is
working for elected councillors. You
are not working for anybody that is elected, except diktats of Ministers.
Sir Bob Kerslake: I am working
within the framework of ministerial direction on policy, yes.
Q35 Sir Paul Beresford:
But you are still answerable to them and have to meet them and come up with
your targets.
Sir Bob Kerslake: Absolutely
right, and I am quite comfortable with that.
What I am saying though is I think we will achieve most, if not all of
what we want to achieve through constructive and positive conversation and
dialogue with local authorities. That
is likely to produce the results we want, it seems to me.
Q36 Mr Betts:
There is a feeling coming out of this that if that approach were taken to the
Thames Gateway, we might be having an awful lot of parallel conversations for
an awful long time in the future without any houses getting built, because
there are so many individual authorities, groups of authorities, agencies,
involved in that. Does it not actually
need someone to come and grab hold of it and make it happen?
Sir Bob Kerslake: That is a
different thing. I think you do need to
have clear leadership, clear delivery arrangements, put the expertise in the
right places; all of that is needed.
You need to have strong conversations with individual local authorities
but that is not the same as saying the only way you can achieve results is to
coerce worse local authorities to do what you want to do. They are two very different things. I have, in my view, pretty strong experience
of being able to enable things to happen through strong leadership rather than
through coercion.
Q37 Mr Betts:
In terms of the other extreme, smaller local authorities, one of the things
that has come up to the Committee on a number of occasions which we are going
to have a look at is that regeneration schemes in particular can be quite
complicated, and sometimes small authorities do not necessarily, or when they
have one scheme every so often, have the range of skills necessary to get on
and make that happen, do all the complicated deals with the private
sector. Are you going to be offering an
open door for assistance in those sorts of situations?
Sir Bob Kerslake: Absolutely,
giving support, and your point is very well made. Indeed, resources already exist with things like the Atlas team
to give support to local authorities who need it. What we can say, and indeed it is one of the reasons why you need
the agency, is sometimes the scale of the task and the ambition in some places
is disproportionate to the capacity and size of the local authority in that
area. That is not a criticism of the
local authority; it is just a fact of life, and I think the agency will succeed
if it can give them that practical support, professional resources and support,
to enable them to succeed on what they are trying to achieve and what we are
trying to achieve. So absolutely, the
agency is not just about money; it is about expertise and people.
Q38 Chair: Can
I just press you slightly on the Thames Gateway example? What do you mean by strong leadership? What strong leadership has not been provided
thus far and how are you going to make it stronger?
Sir Bob Kerslake: I was not for
a moment suggesting it has not had strong leadership. That will be for others to judge. The point I am making is that you would not see the natural
response to making progress on the Thames Gateway simply to go in and tell
London boroughs what to do. They have a
great deal of knowledge and expertise about what works in their area. What I am saying is that the overall
programme of the Thames Gateway needs to have strong leadership and I was
distinguishing that from a situation where you were suggesting that the only
way you could make progress was through coercion. I do not think the two things follow at all.
Q39 Chair: So
who would be providing strong leadership on the Thames Gateway?
Sir Bob Kerslake: In relation to
the overall delivery of the regeneration and housing, the HCA has a key role in
providing leadership. That is where
their function transfers but it is going to do that through partnership; it is
going to work collaboratively with other bodies because, in the end, very few,
if any, public bodies can deliver what they have to deliver through
coercion. They have to work
collaboratively.
Q40 Chair: How
is that different from what the Housing Corporation and English Partnerships
have been doing already in relation to the Thames Gateway?
Sir Bob Kerslake: I think the
difference that the agency brings is its ability to look at all of the resources
in the round that are going into the regeneration of an area and get more out
of those resources in the way they operate.
I take it back to an experience as a local authority. What you typically have is a whole series of
conversations: one with the Housing Corporation potentially on affordable housing,
with English Partnerships on site-based regeneration, with the Government Office
and with central government on decent homes, housing market renewal and so
on. I think what the new agency can
bring is an ability to combine those different conversations and resources into
a single conversation that is flexible to the needs of individual places. That, coupled with strong delivery expertise,
I think will be what makes the difference here.
Q41 Andrew George:
Getting the balance right between coercion and the enabling role that you see
the HCA performing, of course, the Secretary of State will have the power to
designate an area in England for the HCA to actually make planning policy or to
become the local planning authority. As
far as Parliament is concerned, any Order going through Parliament which is
subject to negative resolution is one which is relatively easily driven through
Parliament. In what circumstances would
you see wish to override local authorities, given your background? You are saying that you would not want to
use coercion but you always want to take the enabling and supportive role to
actually improve the capacity but it is quite clear that the Government takes
the view that there will be local authorities which need to have their planning
powers removed from them. Can you
envisage any circumstances in which you would want to encourage Ministers to
pass an Order through Parliament in order to have those powers?
Sir Bob Kerslake: I think the first
thing to say obviously is these powers are powers that exist in English Partnerships,
so this is not a new power. As I said
earlier, I think it would be in the most exceptional circumstances that you
would contemplate using it. Let me just
give one example of how you might envisage using it. If you had a situation where a particular initiative straddled a
number of local authorities and one key part of that initiative fell within an
authority; let us say you had five authorities and four were absolutely up for
the initiative and ten per cent of the initiative was in another, fifth,
authority that was not brought into this, then you might envisage in absolute
extremis that you would require to bring in the powers involved here, but you
would only do that if you have been through a whole series of conversations
beforehand. So it may be as part of
securing a wider outcome that you have to go in for that situation but I think,
as I say, it is going to be very, very rare.
Q42 Andrew George:
So it will be very much a last resort.
You only envisage it in circumstances where you have a large scheme
which covers a large number of authorities.
Sir Bob Kerslake: I am giving
that as an example. You asked me
whether I could think of examples. I am
giving you an entirely hypothetical one.
I am not thinking of a particular scheme here but you can hypothetically
think of a situation where a very important initiative, 90 per cent of which is
in four authorities and a critical ten per cent is in a fifth that is not on side
with the change, where you might envisage using the powers. I am giving that as a hypothetical example.
Q43 Sir Paul Beresford:
Every authority is going to be sitting there thinking you have your shotgun in
your bag.
Sir Bob Kerslake: No is the
answer to that because that is not the way the agency is going to work.
Q44 Sir Paul Beresford:
But that is the reality if you are having a conversation: "This is the way we
are going. I hope you like it. If you don't like it..."
Sir Bob Kerslake: I suppose the
question I would ask is, if that were the case, do people now think that
English Partnerships have a shotgun behind their back when they have a
conversation with them? I do not think
they do because of the way EP operates, and I am saying this agency will
operate in very much the same way as EP and HC in terms of working closely in
collaboration. So the fact that you
have these powers potentially available to you in exceptional circumstances I
do not think would mean that people will feel that there is always that shotgun
behind the back.
Q45 Chair: What
about if the local authority does not have the capacity, if there is a huge
amount of regeneration going on and the local authority just does not have the
capacity to deal with things?
Sir Bob Kerslake: One other
circumstance might be that a local authority says or a group of local
authorities say "We would want you to take on a role because of the scale of
the challenge." That is a
possibility. There may be that
situation but in the case of capacity, it may be much more about giving them
support in their authority to enable them to deliver or establishing a joint partnership,
something that Sheffield has done very successfully through the urban
regeneration company. That was a
voluntary partnership with the council, English Partnerships and the RDA,
Yorkshire Forward, an extremely successful partnership, that has made a big
change in the city centre. A key part
of that was bringing capacity in. Even
there, where capacity is an issue for a local authority, there are potentially
other ways of securing that capacity that do not involve you taking the
planning powers.
Q46 Andrew George:
Can I ask you for an example where the targets which have been set by
government may in fact be in conflict with the best interests of what the local
authority are trying to achieve? One of
the targets is the delivery of the 2 million homes by 2016, 3 million by 2020,
and of course, there are a lot of authorities around the country where in fact
simply heaping thousands more homes does not necessarily improve or address
problems of affordability. If you are
trying to enable, through coercion, development in areas which actually
desperately need affordable housing rather than expensive market housing but in
order to meet your targets and to satisfy the targets set by government you
need to use some coercive powers, you are not necessarily responding to the
best interests of what that local authority is trying to achieve.
Sir Bob Kerslake: What I am
saying is that the agency, by virtue of covering a range of funding and
activities, has quite a bit of leverage at local level in its conversation with
them. So a local authority may have
issues about housing growth but it will almost certainly want to be securing
affordable housing, renewing estates, and renewing commercial properties and
sites. What I am saying is in that
single conversation there will be things that a local authority are very
enthusiastic about and there may be some they are not as enthusiastic about but
you can have that rounded conversation about the range of things. I am saying that leverage that comes from
the funding and the expertise that you bring potentially has a lot more
purchase on it than coming in with a big stick and saying "I've got powers of
coercion if you don't co‑operate."
I am only going from my personal experience and, as I said earlier, that
has worked far better than somebody saying "We will use coercion."
Q47 Andrew George:
In paragraph 19, the conclusion of your supplementary memorandum, you say that
the primary focus will be on delivery, yet in the list it talks about
supporting others to deliver, so in fact you are not delivering; your are
enabling others to deliver, so you still have that tension there, even though
the language you use is one of delivery.
In those circumstances, how will the HCA be structured to reflect its
role very much as a facilitator rather than a direct provider of homes? It does seem to me that there is a tension
within the conclusion itself between wanting to meet government targets but on
the other hand merely facilitating. Of
course, that involves lots of local decision-making which may not add up to the
targets which the Government is setting.
Sir Bob Kerslake: You are right
to raise the point of the tension in the system. I am not suggesting the conversation with individual local
authorities is simply a facilitative conversation. It is not just saying "What would you like to do? We will help you do it." It is saying "What would you like to
do? What do we need to achieve? Where is the common point of reference?" So it is an active conversation. I do not know if that comes across clearly
enough but that is exactly what I am trying to describe here. If all we do is help local authorities and
we do not secure the national targets, that is not going to be good news for
me. If I come in and say "The only
thing I'm interested in is national targets.
Do as I say," that is not going to work. It stands to reason that success is going to come here through an
active conversation that tries to marry my ambitions to deliver national
targets and local ambitions to improve their place and secure more housing at a
price people can afford. The skill of
this and the test of success of this agency will be how well it can do that
with authorities and groups of authorities.
This point about delivery: what I was seeking to say here is that this
agency will have delivery expertise about how you do deals, about how you make
financing work, about how you set up joint ventures, all of which, in my view,
is part of the delivery task. That is
what I am trying to say.
Q48 Andrew George:
It may well be that the targets set by government, these broad-brush targets, may
over the next 20 years be proven to be ill-conceived. It may well be that your work at a local authority level, working
with local authorities, may in fact satisfy the needs within each of those
local authority areas without necessarily meeting national targets. In those circumstances, would you feel that
you have done your job well, even though you had not satisfied Ministers that
your national targets had been met?
Sir Bob Kerslake: I would not
want to go down that hypothetical path, I have to say.
Q49 Andrew George:
It may be reality.
Sir Bob Kerslake: What you can
say though is that really, the debate about supply and demand is actually an
issue about a structural imbalance. I
think the evidence is pretty clear from Barker and other sources that there is
an imbalance between supply and demand.
The challenge for the agency is that, obviously, there are government
targets on absolute numbers but it is the rate of build that is the key issue
here over time in order to get a closer balance between growth of demand and
growth of supply.
Q50 Chair: This
Committee, of course, is on record as saying that the Government's targets are
too low, not too high.
Sir Bob Kerslake: Indeed. That is one of the things that comes out of
the national unit's work, as you will know.
I think fundamentally you can argue details on these numbers but I think
the intellectual case about the imbalance between supply and demand now is very
compelling, I have to say.
Q51 Andrew George:
I was not actually making any assumption about whether those numbers were too
high or too low. I was simply making
the point that in fact local need is best met by a proper understanding of need
within that totality rather than applying blanket national figures.
Sir Bob Kerslake: My point is
that I do genuinely believe, otherwise I would not have gone for the job, that
we can secure most, if not all of what we want to achieve by strong delivery
capability and an active conversation with localities about their ambition and
what we are trying to achieve nationally.
I think you can go with the grain of local ambition and also achieve
national targets. Time will tell but I
think we should start with that as our ambition.
Q52 Mr Betts:
If I can just follow through on this issue of trying to get the rate up and
clearly government is interested in getting more social housing. It is interested in local authorities and
others having a role in that. Some of
us are rather concerned that the mechanisms to achieve that may take some time
to put into place, for example, the housing companies which one or two
authorities are looking at are going to take time to actually be created, and
maybe different local authorities are working independently on creating what
may end up being very similar vehicles, or we are relying on local authorities
putting land in for free to make housing development stack up. One or two London boroughs may be able to do
that but it is probably not true outside London on any great scale. How do you see the agency resolving this
conundrum of actually getting in place fairly quickly the wherewithal for local
authorities to actually engage in this process and start the building
programme?
Sir Bob Kerslake: You are right
to say what we are seeking to achieve here and what we should be measured by is
outcomes. If they are achieved through RSLs,
fine, and they are the current largest supplier. If you can achieve more affordable housing through ALMOs, we
should look to that and explore that as well.
If you can secure more affordable housing through local housing
companies, that is another route, so I am open to exploiting every opportunity
and avenue there is to achieve different outcomes. I think the question you are asking though is how we get this
moving with some pace. This is the
point you are raising. For me, that is
about developing strong regional teams with the agency who can work with local
authorities and help those who want to move down this path move down it
quickly. If you can combine that with
sharing across the piece with a national agency, then I think we have some
prospects of success here. My personal
experience of making these things happen is that the way you make them happen
is to apply intense resource and expertise in that early period. You invest the effort and time in that, get
a number up and running, and then you use that learning to share it out across
the place, across other places, if you see what I mean. My personal view is: get a number of these
up and running, learn from them and then rapidly move on.
Q53 Mr Betts:
And we will get them up and running, what, in the next 12 months?
Sir Bob Kerslake: I certainly
think we will see some local housing companies happen and that some of the ALMO
options are going to move forward in that kind of period as well.
Q54 Sir Paul Beresford:
Where do you see the private sector house builders in this?
Sir Bob Kerslake: Clearly, they
are absolutely critical, and this agency needs to have a strong relationship
with the private sector house builders as well, and particularly moving forward
that is going to be a part of the agency's role. I want to have an agency that has as strong an understanding of
the private sector market as it has of the---
Q55 Sir Paul Beresford:
So the link with the private sector is all in the future then?
Sir Bob Kerslake: I think there
are already strong linkages with the private sector with the existing agencies
and I want to make them even stronger in terms of the future.
Q56 Mr Betts:
There is this issue which the Committee explored some time ago that is always
contentious, always hotly denied by the house builders about land banking. Do you see that as a key part of the role of
the agency, to actually unlock the land bank and get houses built on land
rather than it sitting in the reserves of the builders accumulating extra
value?
Sir Bob Kerslake: Yes, the short
answer is we must find ways of encouraging development of sites; private sector
house builders must be part of the issue, and that in turn means we need to
understand the reasons why they are not moving it forward, and therefore
knowing the market and knowing why it is taking the decisions that it is is a
critical part of this agency's success.
Clearly, if there are opportunities that are not being progressed, that
should be a conversation with the developers to understand the reasons why they
have not moved them on.
Q57 Andrew George:
There are many parts of the country, as Clive quite rightly says, where local
authorities have a five-year supply of land but it is land-banked, it is very
much held back by the private sector.
You have the potential coercive powers that you can threaten local
authorities with - I am sure that is not language that you would welcome - but
you do not appear to have commensurate powers to put any pressure on private
land owners or private developers. Is
that something which concerns you?
Sir Bob Kerslake: I think you
have potential leverage with the private sector. Obviously, to some extent they have also got to think about how
long their planning permission lasts.
That is one factor for them.
That is not what we are doing but what the local authorities are
doing. They have to think about
that. They may be seeking some
investment to enable the development t happen, so you have leverage there to
say "Are you going to move it on?" If
it is a piece of land they do not own - of course, we are talking here where
they do - you can put the question back to them, "Are you going to move on this
or not?" and if not then look to others to take the site forward. Sometimes - it does not always work - the
kind of power of a conversation with them makes a difference. What I would say is - and this is
potentially the power of the agency - there may be one place where they are
holding a piece of land and you do not have any levers on them; there may be
somewhere else in the country where you absolutely have a lever in relation to,
say, public investment. Your ability as
a national organisation is to look across a range of sites and say, "You are
looking for our help here but we are not seeing much movement from you there." It is that kind of leverage that makes the
difference, to be honest with you.
Q58 Mr Betts:
You mentioned RSLs and their presumably currently almost total role in the
delivery of social housing apart from 106 agreements, and they clearly will
have a major role in the future. One of
the potentially beneficial aspects of the current regime is that the Housing Corporation
gives out funds for development but also regulates the performance of RSLs as
well. I have been quite critical in the
past that they never seem to connect the two together; a badly performing RSL
management can still get funds to develop.
What is your relationship going to be with Oftenant in terms of ensuring
that when funds are given out to organisations they are not given out to
organisations whose track record in management is somewhat less than desirable?
Sir Bob Kerslake: Although these
are two separate agencies, and I understand the arguments why that has been
done, there has to be a close working relationship between them. I would envisage a clear memorandum of
understanding between the HCA and the regulator, and part of that would be
about understanding the circumstances in which the agency would take a view
about investment decisions guided by concerns and issues by the regulator about
performance. So although they are two
separate bodies, they must work collaboratively. We will need to draw heavily on the knowledge and understanding
that the regulator has about a particular RSL.
Q59 Mr Betts:
So there is a particular clear message going out there to all RSLs or indeed
any organisation involved in managing social housing that if they come to you
for funds in the future, you will be taking a careful look at their past track
record in terms of their management and the way they operate?
Sir Bob Kerslake: Clearly, in
any sense, with any organisation, when you put funding in you look at their
performance across the piece. You do
not just look at, for example, how good their balance sheet is; you are
interested in how they have been managed and how they have delivered. The regulator will be a key source of
information on that.
Q60 Chair: Can
I ask about the relationship between the HCA and Ministers? You seem to be suggesting that there will be
a closer relationship between the new agency and Ministers than there was or is
between the Housing Corporation and EP and Ministers.
Sir Bob Kerslake: I think the
nature of what the agency is going to be responsible for - and it is a broader
range of activity and includes new areas, things like decent homes, the housing
market renewal and so on - does prompt the need to look at how that working
relationship operates. There is a clear
sense in which the agency is about delivery and Ministers are about policy, but
the agency can and should be making an input on the delivery implications and
policy options, and similarly, the delivery of key policies is not something
that should happen without a proper conversation with Ministers about the
impact. What I am saying therefore is
that there can and should be a strong dialogue between the agency and Ministers
in both directions, both on policy and on delivery, but you do that within a
very clear, formal framework that defines the roles and responsibilities. That is really what I am saying. I think the nature of the things that are
transferring do mean that there is likely to be... I think there is already a lot of dialogue that goes on between EP,
the Housing Corporation and Ministers.
I think the agency will want to do all of that and potentially more.
Q61 Sir Paul Beresford:
Have these clear definitions that you talk about been set out or are you wandering
in, hoping?
Sir Bob Kerslake: Part of the
next stage of setting up the agency will be to do things like the tasking
framework and the financial memorandum.
Those are key documents that will define roles and responsibilities
between government and the agency.
Q62 Sir Paul Beresford:
What happens if you do not like them?
Sir Bob Kerslake: There will be
a debate and I am sure we will reach a point of agreement.
Sir Paul Beresford: There is
going to be a lot of talking going on in all directions.
Q63 Jim Dobbin:
You are taking over this role at quite an important time really because issues
of land use, quality land and planning legislation are all very high on the
agenda. How are you going to handle or
build up relationships between all the other agencies other than the ones we
have mentioned - the utilities, the Environment Agency? They are all part of this as well. I am hinting really at the severe flooding
that we have had across the country.
That is why I was talking about the quality of the land. It is a very delicate and very sensitive
area.
Sir Bob Kerslake: I am smiling
because I have practical experience of the issues around flooding. I am not suggesting any of these issues are
simple or easy to resolve. My
experience tells me that if you have strong and respectful dialogue with
people, you can almost always see your way through many of the tensions and
challenges that you have. We have
managed to do that on a lot of things that have happened in Sheffield and I am
sure that can be done elsewhere as well.
What works here is both high-level engagement and strong working
relationships on the ground, which is why I want strong regional teams to be in
place here. Most of these issues, with
good people, with creativity and innovation, you can find ways through
them. Where they break down is where
the dialogue and conversation is not happening properly and people are not
respecting the different roles of the different agencies. That is my personal experience of where you
hit the problems. If you do have that
kind of working relationship with the agencies, then a lot can and will be
resolved and it is part of my job to make sure that that kind of working
relationship is there with all the key partners - RDAs, utilities, Environment Agency
and so on.
Q64 Chair: Can
we move on to the role of the Academy for Sustainable Communities? There is a big issue about planning skills
and other skills amongst those who are actually delivering - or not
delivering. How are you looking to
organise the Academy for Sustainable Communities so that its knowledge and
experience are shared?
Sir Bob Kerslake: There are two
issues around the skills here. One is
around the general availability of key professional skills: are there enough planners,
are there enough engineers, and so on? Then
there is an issue about the skills that those people have, so are they very,
very good in their own particular field but do not understand and, going back
to my previous word, "respect" a wider range of skills and expertise that comes
with effective regeneration? I think
the Academy is focused more on the second than the first and I think that is
very much understandable and right, because you need enough planners and
engineers but you need planners and engineers who can work collaboratively and
understand how you work with communities and get engagement and so on. What I would like to do is to continue with
that focus of the Academy. I do not
intend to make a big shift in its form at this stage in the process but what I
would want to do, and it goes back to an earlier point that was made in the
questioning, is to see whether the Academy can be more strongly focused on the
pressure points where these issues are most acute across the country, so to ask
the question: can they or should they be assisting more directly in places
where there are particular issues, either about the absolute number of people
with the right skills or with the ability to work collaboratively across different
professional disciplines?
Q65 Chair: Whose
role and responsibility is it then to make sure there are enough planners and
engineers, et cetera?
Sir Bob Kerslake: It is probably
not one person's role, is it?
Q66 Chair: Which
Department? Is it part of the agency's
work or not?
Sir Bob Kerslake: It will be a
mix of people. In the first instance, I
guess, there is an issue about individual local authorities having a role to
make sure they have the right set of people and skills to do their functions. There are also issues about the professional
bodies and the Department's role in relation to skills development and sector
skills councils and so on. There are
clearly particular professional areas where we need to make sure there is a
proper supply of skills as well. I
think CLG and the agency will have a role in assessing whether there are
adequate skills across the range of tasks, and then having conversations with
those who provide those skills to say where the gaps are and what is
happening. The Academy will play a part
in that conversation. I do not think
the agency per se will be directly doing the skills training but it can and
should be making an assessment as to whether there is the right range of skills
there and whether the absence of skills is proving a barrier to progress, and
then across government having a dialogue with the relevant Departments.
Q67 Andrew George:
I know that many RSLs are concerned about the power of the HCA in respect of
disposals of land and buildings and other capital items, particularly where it
has to meet, as local authorities normally have to meet, the requirement for
the best return on those capital assets.
In those circumstances where the best financial return perhaps might be
at odds with other objectives of the HCA, like providing housing and
regeneration, how will you balance those two objectives?
Sir Bob Kerslake: My
understanding is that that particular issue is one that has come up in the Bill
and is being considered by the Department at the moment. I would not want to pre-empt the Minister in
his work on that particular issue at this stage.
Q68 Andrew George:
Perhaps another element which comes back to bullet point three of the
concluding comments in your supplementary memorandum, "Ensure that the above
targets are met in a way that are economically, socially and environmentally
sustainable...and provides value for money", and it was the value for money side
I was asking about there but take those other objectives, the socially and
environmentally sustainable. One social
group is of course the disabled. To
what extent will you ensure that future developments are supported by the HCA,
and you will ensure that this is delivered, are in fact future-proof and
adaptable for disabled people? Will that
be something which you can see can be delivered at the same time as simply
meeting government targets on housing numbers?
Sir Bob Kerslake: The short
answer is yes, I do. You are right to
say that quite a common feedback I have had from people since I got the job - and
I have done a lot of talking to people and hearing what they have to say - is a
concern whether this agency will be so numbers-driven that it will lose sight
of the need to create communities, the need for sustainability, the need to
deal with particular groups who have particular needs, such as with
disabilities. The short answer is I do
not think it can or should. It must
continue to both progress the targets and be alert to these issues. My personal experience about understanding
needs is actually to engage with the communities themselves and the groups
themselves about requirements. That is
how you keep on top of changing needs.
Q69 Andrew George:
Is that something which in your annual report you will set yourself, as an
agency, your own expectations and targets, which are not necessarily those of
the Government in terms of the headline numbers?
Sir Bob Kerslake: If you are
talking specifically about issues to do with equalities and sustainability, the
agency must look at how it will measure success there. I cannot say I know exactly yet what those
measures of success will be but they have to be part of the mix.
Q70 Chair: Are
you looking to publish other reports regularly other than the annual report and
the financial accounts?
Sir Bob Kerslake: I would
envisage a similar kind of reporting regime to the terms of the key documents
to the existing agencies' corporate plan.
You would expect to see a corporate plan produced as well as the annual
report on performance, for example.
Q71 Chair: Can
I just ask one final question? I have
been very struck that when you have used examples to illustrate the points you
are making it almost always refers to regeneration, but in the South and in
London you have housing growth areas which do not need any regeneration; they
just need expansion and growth. Do you
see there are different issues there or do you think it is all the same?
Sir Bob Kerslake: No, absolutely
not and if I gave that impression, I apologise. I think I said earlier that the balance between growth and
renewal will vary from place to place.
In my experience in Sheffield the early period has been very much about
renewal and regeneration but we are now entering a period where we will see the
city grow in population and housing. In
other places the balance will be much more towards growth. You will find very few places where there is
not some dimension of renewal involved in what those places are trying to
achieve. That is really what I was
trying to say. I am absolutely alert to
the fact that the emphasis in some places will be very much on growth, with
renewal playing a fairly small part, and in some places we still face an agenda
where the emphasis is very much on renewal and growth plays a very small
part. There are still parts of the
country we know where the renewal task is not complete and I am very alert to
that fact. I think the test of the
agency is whether it will be able to adapt to the different circumstances.
Chair: Thank you very much. I am sure we will be seeing you again and
keeping a close eye on the progress of the agency.
