| Previous Section | Index | Home Page |
4 Feb 2009 : Column 234WH—continued
There is a growing body of evidence showing the success of co-operatives and of other forms of mutual ownership. It is a common form of ownership in other countries, such as Sweden, Norway, Germany, Austria, Canada and elsewhere around the globe. In addition, research commissioned by the recently established Commission on Co-operative and Mutual Housing, which is independently chaired by Adrian Coles, the director general of the Building Societies Association, has shown how co-operatives and mutual forms of tenure promote social, environmental and sustainable communities, which is just what my hon. Friend the Minister, who is responsible for the Homes and Communities Agency, is looking for.
I urge the Minister to look at the evidence from the Commission on Co-operative and Mutual Housing and to consider the case made by the Co-operative party in its new pamphlet. I ask that he responds positively to the representations made to his consultation paper on community land trusts by the experts working with local communities, to remove the barriers to the development of community land trusts. In particular, there is a need to reform the leasehold enfranchisement provisions in the Leasehold Reform Act 1967, so that homes built on land owned by community land trusts can remain affordable in perpetuity, putting those vital rungs back at the bottom of the housing ladder.
I also ask the Minister to proceed as a matter of urgency with the exemplar community land trust and mutual home ownership pilot projects, to demonstrate their potential. Finding ways of assessing the value for money of permanently affordable housing in the intermediate housing market would be helpful, if it were done on the basis of cost per affordable housing year rather than the crude capital subsidy cost per unit. That would reflect the value to Her Majesty’s Government of having such a stock of permanently affordable housing. I also ask him to ensure that Government policies for community land trusts empower local communities to use them as a means of meeting their needs for affordable housing and other needs.
Finally, I ask the Minister to work with the co-operative movement to put in place arrangements that will encourage long-term institutional investors to invest in mutual home ownership and, in particular, to consider underwriting a national insurance fund to guarantee such long-term investment in affordable homes, which would be controlled and owned by the communities that they serve.
In the time that we are privileged to serve our constituents in this place, many ideas come to our attention and demand our advocacy. Of all the things that have come to my attention in the 12 years that I have been the MP for Plymouth, Sutton that might change my constituents’ lives for the better, community land trusts must be one of the most significant. We desperately need something that will halt the slow-down in house building that was set in train by the credit crunch, which was inspired by the American sub-prime crisis. We need the homes and also the work that is associated with building homes, selling them, moving into them and furnishing them. We need the money that was speculative and created a bubble—a bubble that was bound to burst and has now gone forever—to be replaced, at least in part, by new,
different and more trustworthy sources of money that can flow into the housing market, particularly into the affordable housing sector, which will be competing for loans in a more crowded space and from more risk-adverse lenders. Similarly, pension funds and insurance funds are looking for safe and sustainable places to invest their funds, which will guarantee steady yields.
Community land trusts have a unique role to play in putting those two pieces of the jigsaw together, in a way that would begin to build the picture that people are crying out to see. It would be a picture that shows that there are new ways out of this nosedive, led by trustworthy sources, and that shows there is a bit of ethically-based competition to the banks in some of their traditional stamping grounds.
Just as we are looking to innovation to create the jobs of the future, I urge the Minister and the other Ministers in the Department for Communities and Local Government not to be risk-adverse but to be innovative, and to make those two needs match up to address one of the greatest challenges that we face in constituencies the length and breadth of the United Kingdom and, indeed, further afield too.
9.57 am
Mr. Oliver Letwin (West Dorset) (Con): I congratulate the hon. Member for Plymouth, Sutton (Linda Gilroy) on securing this debate. I agreed with much of what she had to say. I want to add a number of points. The first is that in my constituency, in the village of Buckland Newton, where we have had experience for some years now of trying to develop a community land trust, some features of the scene have emerged. Some of those features have been alluded to in the debate so far, and we all need to attend to them.
The first of those features of community land trusts is the difficulty of ensuring that there is sufficient professional help to take these projects from conception to realisation. The great virtue of the community land trust is that it is a community idea; it springs from the bottom up. However, the great difficulty when things spring from the bottom up is that a cadre of professionals are not necessarily available to help turn the very good ideas into reality. The experience of Buckland Newton clearly shows that we need to work on that.
The second feature that has emerged is the contrast between that small village in my constituency and the towns in my constituency; no doubt that contrast also exists between that village and cities in other constituencies, although I do not have any cities in my constituency. Buckland Newton benefits from having a development boundary and therefore from having the potential for exception sites that lie outside the development boundary, which can be exploited by a community land trust to provide cheap land and to make the housing built on that land intrinsically more affordable. Not very far from that village in my constituency is the town of Lyme Regis. Because Lyme Regis happens to exceed a certain size, it does not have the potential for an exception site and therefore the same economic dynamics do not work there. So, as I say, the second feature that has emerged for me is that we need to attend to the question of how we enable community land trusts from lower land values than are charged to private developers.
A third feature has become evident, to which I referred in my intervention, and on which I think the hon. Lady and I agree. My attention was engaged by a remarkable phenomenon some years back, and since then I have been besieged by people asking me to represent them in their efforts to prevent housing from being built in their areas. I am sure that a poll of all Members who represent rural and suburban constituencies, and perhaps even urban ones, would show that they have had a similar experience, so my situation is not unique.
I suspect that local councillors all over the country have been elected on the presumption that they will help to prevent new housing in their areas. However, those local councillors, as well as we Members of Parliament and successive Ministers and Administrations, have all accepted that there is a huge need for housing in the UK on a trend basis. I accept that there is not a huge demand for housing at the moment, other than social rented housing, for obvious reasons, but we will get through this situation eventually, and then we will be back to the trend of having an excess of demand over supply.
We all recognise the bizarre tension between what we know in the aggregate and what we experience in the microcosm. What was remarkable about Buckland Newton was that, because it sprang from the bottom up, the village came together and the very same people who I am pretty sure would otherwise have been at a large meeting objecting to the houses in prospect, were demanding that they be built. That offers the potential to unlock something that the present and previous Governments have desperately sought to unlock—as, no doubt, will future Governments: the ability actually to build houses, rather than merely have targets but find that no more houses are built. I know that the hon. Member for Truro and St. Austell (Matthew Taylor), who produced the recent report, has focused on that issue.
I really believe that a bottom-up approach can liberate us from the ghastly tension of local feeling versus national need, because people in villages, towns and city neighbourhoods, who feel that a community land trust will be useful to their relatives, children and grandchildren, will have a different feeling about the houses that are then built. They will see the social utility of those homes directly, and will therefore vote for them.
The last point I want to make about the Buckland Newton experience is one that the hon. Member for North-West Leicestershire (David Taylor) made in an intervention on the hon. Lady about the connection between community land trusts and parish councils in villages, or the new urban parish councils in urban settings. It is absolutely vital that there should not be the tension that he described, but a coalescence of the two sides. Unless the democratically elected representatives of a location are in tune with the efforts of the CLT, we will not unlock the potential of this movement. This approach should bring people together, not force them apart.
Those of us who represent rural constituencies will have come across cases in which the village hall committee is locked in mortal combat with the parish council, which is unproductive. It is when the two come together that the village hall is renewed. The same is bound to be true of CLTs. We have to bring them into some kind of symbiosis with locally elected representatives. My hon. Friend the Member for Welwyn Hatfield (Grant Shapps), who speaks for the Conservative party on this issue, has
had discussions with me and others about this issue for some time, and I suspect that it will be one of the main subjects that his admirable taskforce will cover. We need to find a way of putting those things together, and I am sure that this can also become a matter of political consensus.
I should also like to approach this issue from the national point of view, rather than in relation to my Buckland Newton experience. It is absolutely clear that as a result of the amendment that was accepted in what became the Housing and Regeneration Act 2008—as a small dose of partisanship, I must say that my hon. Friend and the Conservative party in the House of Commons probably had quite a lot to do with that, although the hon. Lady very skilfully put it in a different way—the Homes and Communities Agency is starting to take on board the idea of community land trusts. I welcome that enormously.
It is also clear that this issue is to some degree counter-cultural, by which I do not mean that Ministers are anything other than enthusiastic about it. I suspect that down there, through the spreading bureaucracies over which Ministers preside from an Olympian height, there is still quite a lot of doubt and hesitation about this newfangled idea. They are sort of used to registered social landlords, and it is inevitably the case under any Administration that large bureaucracies will like to deal with large bureaucracies because they are used to large things. These small, bottom-up enterprises pose certain difficulties for bureaucracy, and it will require a certain amount of political will—in the sense not of party politics but of elected politicians—to get the bureaucracy as a whole to recognise that CLTs are not a marginal, interesting and rather terrifying development, but part of the wave of the future.
My last point is that we are not just being nice when we talk about community land trusts, which are of the essence and are not a point of dispute between the three major parties. CLTs will not survive, prosper and multiply, or become an enormous feature on the scene, if they are like the nationalisation and privatisation of steelworks, coming and going with Administrations as they favour or disfavour them; the approach has to be persistent across time. We have a wonderful opportunity to put together something that will last, although it will no doubt vary over time, and that can be sustained because it has combined political will on both sides of the House.
However, a danger of which we all need to be aware lurks in that magnificent consensus. The two worst pieces of legislation for which a previous Conservative Administration were responsible are the Child Support Act 1991 and the Dangerous Dogs Act 1991, which were passed without opposition, and there is an uncanny connection here. If everyone is enthusiastic about the idea, as we all are, no one adopts the position of sceptic, and there is then a danger that we will move in directions that have not been sufficiently inquired into. I hope that while we exhibit all the enthusiasm that we need to exhibit, we will also retain our sense of proportion and accept that there will be all sorts of difficulties on the way. We need to maintain our critical faculties and ensure that we develop this idea in a way that is robust and that allows for the possibility of objections and changes rather than simply assuming that it will be plain sailing because we all agree on the essence of the idea.
It is perfectly possible to combine consensus and appropriate, constructive scepticism, but it requires an effort of will. That is one reason why I welcome so strongly the taskforce that my hon. Friend has set up, and the pilots in which the Government are engaging. Pilots, taskforces and inquiries—and, indeed, the reports of the hon. Lady and the hon. Member for Truro and St. Austell—are very useful devices. We need to open this subject up and get people to comment on it. This must not become a private event inside the House of Commons that gets steamrollered through because we all agree on it. We need to do things in a way that is open, debated and discussed. There will then be a real prospect that in 20 years’ time we shall regard this as the moment when we began a process that transformed the housing landscape of Britain.
10.7 am
Mr. David Drew (Stroud) (Lab/Co-op): It is a delight to take part in this debate. I am aware that the hon. Member for Truro and St. Austell (Matthew Taylor) wants to speak, so I shall keep my remarks as brief as possible, particularly as he was very helpful to me when he listened to my plaintive pleas on behalf of community land trusts in rural Britain.
Let me pay my respects to my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy), a fellow “Co-operator” who is a doughty campaigner in this area. It is important to give credit for the work that she does locally and nationally. We could argue about who tried to get CLTs into law, but they are now in the law, and we welcome the fact that that definition of them now exists. I pay due regard to the hon. Member for Welwyn Hatfield (Grant Shapps), who has visited Cashes Green, which, without making any understatement, I intend to speak largely about. My hon. Friend the Minister has also been, and remains, very helpful. He keeps a weather eye on that site, which I shall not describe as bedevilled, although there are some problems with it. I hope that my comments will help to take the debate forward. I do not demur from what my hon. Friend the Member for Plymouth, Sutton has said about the wider context of CLTs, and I pay particular respect to David Rodgers, who has been so helpful to me in trying to get the Cashes Green community land trust under way.
Why do I spend so much time on the Cashes Green site? Not only is it in my constituency, but it is an important model that we have to deliver because of all the ramifications that there will be if we do not. I am pleased that the hon. Gentleman has visited the site and has spoken to Gloucestershire Land for People. I pay due regard to those who have driven GLP forward: the two Martins—Martin Large and Martin Alder—Max Comfort and Jan Bayley. However, others have also played a part.
Why is it so important that we are able to deliver the Cashes Green community land trust? As the Minister knows better than me, there are 14 community land trusts, including at least one in his constituency. He therefore has a practical handle on what is going on. I believe that Cashes Green is still the largest initiative being introduced, and I have seen it from its infancy. When the then Minister for Housing, my right hon. Friend the Member for Streatham (Keith Hill), was
looking for sites to move from the NHS to English Partnerships, which was the ownership body, I persuaded him to include Cashes Green—I, among others, claim ownership of that idea.
Cashes Green was a classic site. It was disused and difficult to develop and it therefore seemed sensible to consider its being used in this new form. From the outset, I stress that Cashes Green is in the more urban part of my constituency, so it is not a truly village concept. However, if the initiative can work in Cashes Green, it can work in many of the villages across the country, as the right hon. Member for West Dorset (Mr. Letwin) rightly alluded to.
I shall quickly go through some of the issues that the Cashes Green initiative has unearthed, and hopefully the Minister will consider them—even if he does not do so today. There are ongoing problems that have to be resolved. As I said, it was pleasing that Cashes Green was considered to become one of the community land trust pilots. In 2006, we completed the project feasibility study on behalf of GLP and submitted it to English Partnerships, which is, of course, now part of the Homes and Communities Agency. After initial support for Cashes Green being a pilot CLT on the mutual home ownership model—to which my hon. Friend the Member for Plymouth, Sutton has alluded—sadly, in mid-2007 English Partnerships advised GLP that it could not proceed with the project as planned because it did not offer value for money. The way in which that has been measured is debatable and, as land prices have crashed, has become even more so.
The problem has been that although there are those of us who see the scheme as an excellent form of intermediate housing market provision, English Partnerships compared it with other forms of low-cost home ownership, principally New Build HomeBuy. It measured value for money according to the full site value. That was about £3 million, as opposed to what English Partnerships paid to the NHS, which was £1 million. Site values have of course fallen and that might be helpful, but the value for money calculation currently being used is very simplistic, if not crude.
In comparison with the open market value of the site, which would deliver 30 per cent. of the units as affordable under a section 106 planning agreement, the GLP proposals would produce an additional 27 affordable homes. English Partnerships calculated the cost for the additional affordable homes provided by dividing the site value—some £3 million—by the 27 units. Surprisingly, it came up with the figure of £111,111 as being the cost of this form of model. Both David Rodgers and I feel that that is highly simplistic and has been a pall over this site. It has made it difficult to deliver the mutual home ownership model for our community land trust.
We believe that a real cost assessment has not been made and that the real cost should be nearer to £60,000, which was in the original proposal. No one was pretending that this site was going to be given for free; that would be illogical and would not help future community land trusts. We know that there has to be a land subsidy, because that is the way in which we bring community land trusts forward, and that is what we are asking of the private sector. We are asking private landowners to accept that these sites would not necessarily come forward otherwise. They should therefore bring them forward on the basis that they would take something of a hit on
the site value that they are helping to deliver. That is the nature of our criticism and so far we have not been able to resolve the matter.
Linda Gilroy: In my speech, I referred to the concept, which has come out of a recent conversation with some people in housing finance and David Rodgers, of looking at a cost per affordable housing year. Does my hon. Friend think that that might help to resolve the dilemma that he is describing?
Mr. Drew: That is helpful because, of course, the proposal from David Rodgers in his pamphlet will go some way toward looking at how we can bridge the gap between public and other forms of finance.
I return to the key point. We are looking at a false comparison: one that has derived a value for money calculation that we think is unfair. In addition, CLTs have been compared with other forms of affordable housing, principally the grant-giving process regarding housing associations. To do so is at best illusory.
Matthew Taylor (Truro and St. Austell) (LD): My report was obviously about rural areas, where exception sites can, in principle, allow the bringing forward of land at low value because that is the only use it might have. In the urban setting, particularly where there is a form of public sector land, I wonder whether there might not be a reverse exception process whereby the exception is that the land is only available for certain kinds of uses and therefore does not carry an open-market use. That is not available in planning at the moment, but it might be a useful reversal of the rural situation.
Mr. Drew: I am sure that the hon. Gentleman will talk more about that when I shut up shortly, when he will have a chance to build on his argument. His point is exactly right. I will not use the word “subsidise”, but this is a lower-cost form of land access. That is the way in which we are able to kick the process off.
The case I am really making is that mutual home ownership has many benefits, the best of which is that the ownership of the land is locked in perpetuity. That is what makes it distinct both from other models that the Government are continuing to pilot and from a housing association, through which the grant is invested initially and there may be subsequent problems. This is an exciting opportunity, but it has been somewhat curtailed because of the way in which the calculations have been done.
As the Minister knows, we have argued this case for about 18 months. I hope that we can resolve the situation because, rather than the whole site being made available, we are now talking about between a third and half of the site. I understand why GLP is looking at a twin-track approach. It is talking to the HCA about the proposal that it is putting forward, which is being worked on by the consultancy firm ikon. I would like the whole site to be made available so that we can look at larger developments, which are different from the other pilots that are mostly smaller developments in rural areas. However, I am not sure whether I can talk about the Minister’s area. I hope that we will look again at what is being proposed by the original mutual home ownership model; we are talking about a 77-unit development in totality being derived, according to the mutual home ownership form of community land trust.
| Next Section | Index | Home Page |