Examination of Witnesses (Questions 60-79)
DEPARTMENT FOR
COMMUNITIES AND
LOCAL GOVERNMENT,
TRANSFORM SOUTH
YORKSHIRE & LIVERPOL
CITY COUNCIL
19 NOVEMBER 2007
Q60 Mr Mitchell: Can you not tell
us what the Liverpool housing scrutiny committee is?
Siobhan McCoy: If it is the housing
market renewal initiative scrutiny committee that has been established
by the City Council, it consists of a number of elected members
from each political party, and it looks at the rationale for the
housing market renewal.
Q61 Mr Mitchell: So it is party political.
Siobhan McCoy: Yes, the scrutiny
panel has representation from each of the political parties. It
is part of the council's governance structures.
Q62 Mr Mitchell: Let us take up some
of its points—I shall put them to Mr Housden in a moment.
It says that the demolition is reducing the supply of affordable
housing and pushing thousands on to the public authorities waiting
lists. Older people who own their own houses are being turned
out and do not have the money to buy another house. Effectively,
elderly home owners who may have paid off their mortgages are
being put on the housing benefit list.
Siobhan McCoy: We engage very
early in the process with every single person who is affected
by any demolition proposals, so that we understand their rehousing
needs—that is after determining that demolition will proceed
for that area. We fund a home owners support package, so we have
officers who engage with those residents on a one-to-one basis.
Q63 Mr Mitchell: Yes, but whatever
engagement those officers made—I am sure that it is nice
and obliging, and interesting—you cannot fill the gap between
the £35,000 that would be obtained if the house were the
subject of a compulsory clearance order and the cost of buying
a new property. That is an enormous gap.
Siobhan McCoy: Let me clarify.
An owner occupier receives the market value of their property.
That is not necessarily £35,000. That is whatever the market
value of the property is. If they have been in the property for
more than a year, they also receive a statutory home loss payment
which is equivalent to 10%. of the property value, plus a disturbance
payment to cover their removal costs. They are also eligible to
receive a relocation equity share loan of up to £35,000 to
bridge any affordability gap between the value of their existing
property and a replacement property.
Michael Gahagan: I think that
£35,000 is for a new house and an awful lot of people move
to another house in the neighbourhood. We have certainly found
that the vast majority of people have sorted themselves out with
our help. By "our help" I mean our advice.
Q64 Mr Mitchell: The Report says
in paragraph 4.9 that there is a gap of £35,000 in the compensation
scheme. Let me turn to Mr Housden on this point. Are not you really
converting old owner-occupiers into recipients of housing benefit,
because with that degree of compensation they cannot afford to
buy again?
Peter Housden: As colleagues have
been indicating, a range of support measures are available to
people who are affected by demolition in the way we have described.
Q65 Mr Mitchell: I have to rush through
my remaining questions. What is the degree of refurbishment that
is necessary? I have had comments from some of the pathfinder
areas that all that has been done is to put in new windows and
doors. That is counted as refurbishment. When houses are refurbished
are they being brought up to the decent homes standard that applies
to rented accommodation?
Michael Gahagan: On private housing,
no. On the whole, we do external works on private housing because
we are trying to improve the value of the whole neighbourhood.
We provide equity loans for people to improve their own housing,
but generally we do not give grants to people who own their own
home or to private landlords.
Q66 Mr Mitchell: In other words,
they are being tarted up.
I have a couple of final questions. I see that
two of the chairs of the pathfinders are from the Audit Commission.
That is extraordinary, is it not? Is that a good principle? This
is Newcastle and Birmingham.
Michael Gahagan: No, they are
not. Newcastle is chaired by Jim Coulter, who is an ex-chief executive
of the National Housing Federation. He is on the board of the
Audit Commission. The other one is Peter Latchford in Birmingham-Sandwell.
He has only recently joined. I do not know what his background
is, to be honest.
Q67 Mr Mitchell: My information was
that the two chairs were members of the Audit Commission.
Peter Housden: They are not employees.
They are members of the board.
Q68 Mr Touhig: Mr Housden, you have
a budget of £2.2 billion. You have demolished 10,000 houses.
You have managed in five years to build just 1,000 houses to replace
them. You have put at risk some of Britain's housing heritage.
You have ignored the views of local people. You have provided
a bonanza for property speculators and left the people you are
supposed to help unable to buy houses because of rising prices.
Did your department deliberately plan a cock-up on this scale
or are you just incompetent?
Peter Housden: The Report indicates
that the problems that housing market renewal was designed to
solve are being addressed in a positive fashion. You exemplify
all the key elements of a successful approach. You do need to
engage residents. You do need to assess heritage implications
and so on and so forth. The Report indicates on each of the points
that you touched on that we are making appropriate progress, moving
in the right direction and learning the right lessons.
Q69 Mr Touhig: Your objective is
to provide is to provide new homes? Yes?
Peter Housden: It is a broader
question. There is a crying need for new homes in the country
as a whole. Our specific objectives here were to take the nine
most severe areas of low demand in England and to reconnect the
families and the assets that they bought with regional housing
markets, and to do something about empty and derelict properties,
which we have not talked about.
Q70 Mr Touhig: But you are driving
up house prices and reducing the supply. How on earth does that
help anyone?
Peter Housden: If the price of
your house has become completely disconnected from the rising
tide of house prices in the local authority area in the region
then you are into the consequences of negative equity. You are
effectively trapped in those areas. That looks to me like a good
objective for a Government to pursue.
Q71 Mr Touhig: But you have demolished
10,000 houses. There are fewer houses now than when you started,
and the prices are rising. I just do not understand how that helps
anyone trying to get a house. Okay, you have a view on that. Your
Department's website, under the heading "What we do",
says, "Communities should be able to influence and protect
their own future. Communities and Local Government has a vision
of confident, vibrant, sustainable communities where everyone
has a say in shaping their environment." However, the Report,
which you have signed up to, says your approach compromises the
scope for local people to have their say about the changes which
affect them. You have tried to drive all this from the centre,
with insufficient engagement and support of local people. This
is on a par with one of Joe Stalin's five-year plans, whereby
hundreds of thousands of tractors were built to help to overcome
the agricultural crisis, but there were no ploughs to go behind
them.
Peter Housden: I have not had
the benefit of reading the notes that you have had from Liverpool
residents, but I have visited them.
Mr Touhig: I do not have any notes from
Liverpool residents.
Peter Housden: Sorry, I thought
they had submitted a note to the Committee. It was clear that
these were individuals and groups of people who were organised
and motivated and took completely different views about the merits
of the scheme in their area, which they could argue and evidence.
That is the nature of the beast. It is what will happen in any
of the areas.
Q72 Mr Touhig: I have been a councillor
myself for 20 years and I understand the difficulties. However,
you signed up to the Report, and the Report says that your approach
compromises the scope for local people to have a say in matters
that affect their lives.
Peter Housden: The evidence from
the Audit Commission—independent of the Department—is
that the strategies to engage local people have always been a
key part of the programme and are improving in their effectiveness.
To me, the involvement of local authorities, which are democratically
accountable, and the way in which individual residents' rights
are protected through a number of statutory procedures add up
to something that does not compromise—
Q73 Mr Touhig: I am looking only
at the diagram on page 12, which shows the representatives of
a number of stakeholders that are on pathfinder boards, and I
cannot see very much local involvement there. The local authority
is represented, as are the Housing Corporation and the private
sector. The Department, the Government office and the Audit Commission
have an observer each. The police are members, as are strategic
health authorities, the National Housing Federation, new deal
for communities, the regional development agency and local strategic
partnerships. I do not see very many local people whose homes
are affected represented on your pathfinder boards.
Michael Gahagan: On my board,
we cover 140,000 houses. Now, who are local people there?
Q74 Mr Touhig: Housing associations,
community groups?
Michael Gahagan: The housing association
is represented.
Q75 Mr Touhig: Neighbourhood associations?
Michael Gahagan: When we identify
our priority areas, there is a lot of local involvement, but at
the broad strategic level of the board, no, there is not.
Q76 Mr Touhig: This is a throwback.
We are surely now in a time when we strive to empower people by
getting them involved and they take the decisions for themselves.
You are driving all this from the centre. Indeed, the Report also
says that your approach is driven by theoretical analysis of wider
housing markets rather than consultation with local people in
localities affected. Do you think that theoretical analysis is
more important than the wishes of people in the community, who
you are trying to sort some problems out with?
Peter Housden: The Audit Commission
is quite clear that the quality of analysis of housing markets
that the pathfinders are undertaking in the regions is very powerful,
very effective and increasingly sophisticated, so I do not think
it deserves the epithet "theoretical". Again, the evidence
is that consultation strategies have always been a key part of
the programme and are effective.
You make some important points about the governance
of the programmes. It is clearly important that decisions are
not being made by people who have significant vested interests.
Q77 Mr Touhig: Like the people who
live there? We want to keep those out, for God's sake. We must
not let people have a say in their own lives. Comrade Stalin would
turn in his grave at that, would he not?
Peter Housden: That is why the
consultation strategies with all the people affected at local
level are powerful and effective and feed into decisions. They
do, of course, have different perspectives.
Q78 Mr Touhig: Your website also
says, about housing, "Everyone should have the opportunity
to rent or buy a decent home at a price they can afford, in a
place where they want to live and work. But more homes are needed
to meet the rising demands of a population that is both increasing
and ageing. The Government has set a target to provide three million
more homes in England by 2020 which will include more affordable
homes to rent or buy." However, as the Report points out,
whereas you have refurbished 40,000 homes—good; I am sure
that is a very important step to take—you have demolished
10,600 homes and replaced them with 1,122. How are you trying
to ensure that people get a home? Your Department has some responsibility
for housing in Britain, does it not?
Peter Housden: It is important
to recognise that these areas of low demand were places where
the existing housing stock did not meet people's needs. They were
voting with their feet and buying properties in other parts of
their region. That is what was causing large-scale abandonment
and then dereliction. The people who were least able to move out
were then faced with the unenviable circumstance of being forced
to live in the area.
Housing market renewal has in many cases enabled
people who have a devotion to the area to continue to live in
it, but this time in a more modern, appropriate house and in an
area with less antisocial behaviour, rising house prices and all
the benefits that other communities take for granted. That is
the position.
Q79 Mr Touhig: Your pathfinders have
central, regional and local stakeholders involved. Where are the
local stakeholders? Where are the local community association
and the local neighbourhood watch—the people who live in
the communities? I understand your point about the need for refurbishment
and people voting with their feet and so on, but when do the local
people get a chance to express their views? Who consults them?
Richard McCarthy: They are consulted
at the local level and they have a significant influence. The
programme has many examples now; we are talking about its early
years. The involvement of community groups and individuals has
changed.
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