Written evidence submitted by the London
Borough of Waltham Forest
SUMMARY OF
KEY MESSAGE
— We
are working hard to ensure we can respond effectively to changes
in government policy, particularly in housing, to ensure the continued
support for our key regeneration areas where we will prioritise
investment and development.
— There
is not a coherent policy approach in place and there needs to
be a refreshed definition from the Government of what a sustainable
community is.
— The
Affordable Rent product will be detrimental to housing supply,
affordability and estate renewal.
— The
funding of infrastructure and enabling works is critical to successful
regeneration.
— The
New Homes Bonus is not a sufficient tool to support development
in an inner city environment, and estate regeneration projects
should be excluded from calculations when determining the bonus
to be paid.
— The
Government's approach to Localism is undermined by the shelving
of Devolved Delivery and the potential flaw that new powers for
neighbourhood planning exercises will only be utilised to prevent
development.
— In
order to support development the Government should review the
Universal Credit, work with lenders to support Housing Associations
and pilot Tax Increment Financing.
BACKGROUND
The London Borough of Waltham Forest is situated
in North-East London and is one of the Olympics host boroughs
While we are an outer London borough much of the borough has the
character of an inner city area.
The resident population of the borough is growing
and is expected to reach 248,236 by 2031, although there are indications
that our population is already near that level now. We have both
a young and a diverse population. In the 2001 Census 36% of the
population were BAME (Black, Asian and Minority Ethnic). The BAME
population is growing and is projected to reach 47% by 2031. Health
in the borough is much worse than the average for London and England.
This reflects the level of deprivation in the Borough which ranks
27th most deprived local authority area of 354 in England. Waltham
Forest currently has the smallest economy of all the London boroughs
with a low number of total jobs and a high proportion of low value
jobs. The local economy is currently heavily reliant on public
sector employment which in the current economic climate presents
a major challenge to the borough.
There is a shortage of family sized housing in the
borough and over 40% of households in the borough are in rented
accommodation. At present, Waltham Forest has nearly 18,000 households
on its social housing waiting list.
The delivery of both new housing and appropriate
new social infrastructure is a major priority for the Borough
and the provision of educational facilities remains a particular
problem in our borough.
The case for regeneration in the borough is overwhelming.
We currently have four regeneration areas. These are Blackhorse
Lane, Walthamstow Town Centre, Northern Olympic Fringe and Wood
Street. Accompanying Area Action Plans are being prepared in partnership
with the local community for each of these areas to guide future
regeneration and development, demonstrating our commitment to
deliver real long lasting change for our residents. We have also
identified a priority estates intervention programme. The Council
considers that continued targeted intervention in these key areas
will bring the opportunity to transform places and communities
which should have a ripple effect throughout the whole borough.
We welcome the regeneration benefits that the Olympics and Stratford
City will bring to East London.
We acknowledge that the existing models for regeneration
may no longer work in this economic climate however we believe
that the Government needs to reconsider much of its approach to
regeneration otherwise projects are unlikely to proceed.
TERMS OF
REFERENCE
1. How effective is the Government's approach
to regeneration likely to be? What benefits is the new approach
likely to bring?
The new approach is likely to bring greater devolution
of power to local communities as established through the Localism
Bill and power for referenda. This is seen on the whole as a positive
step, however, our ability to transform our priority estates though
housing regeneration initiatives is likely to be particularly
challenging given the new affordable rent framework and the introduction
of flexible tenancies, Furthermore, the decision by the Homes
and Communities Agency (HCA) in London not to devolve funding
and powers to local authorities will mean that the over-arching
aspiration of enabling local decision making will not become a
reality.
The Government's new approach to regeneration is
likely to be limited due to the absence of funding for infrastructure
and wider public realm improvements which are a vital form of
intervention in order to kick-start regeneration. The rationalisation
of funding streams by the Department for Communities and Local
Government (CLG) and the HCA in recent years has led to a position
whereby the only form of substantive funding to support regeneration
and housing projects is the National Affordable Housing Programme,
which has been limited in its ability to fund wider infrastructure
works.
In Waltham Forest, we have begun to undertake a review
of Council owned housing estates and are at the stage of short-listing
those priority estates for intervention. We fear that, as a result
of way that the new affordable rent framework operates, with payment
of grant on completions, reduced grant to support development,
higher rents and the potential for shorter tenancies, the future
of our estate regeneration programme will be jeopardised.
The Affordable Rent model will allow Registered Providers
to charge up to 80% of market rent under new fixed term flexible
tenancies. Indicative research undertaken by East London Housing
Partnership and POD consultants has revealed that in some parts
of our borough, rents could increase on average by 94%. We therefore
anticipate that in approaching estate regeneration projects where
comprehensive demolition and redevelopment is required, existing
tenants will be not be prepared to move into new properties with
higher rents and shorter tenancies without guarantees of preserved
rights; consequently this will increase the costs of these regeneration
projects. LBWF will need to seek additional grant funding assistance
to transform its estates in order to provide guarantees to tenants
which will help to get regeneration off the ground.
Viewed nationally, the New Homes Bonus could be an
effective tool to encourage development in areas which have capacity
and the ability to commence quickly. We are pleased that there
is a bonus for the development of affordable homes, though we
would like there to be recognition that development of affordable
homes in London is more challenging than in other parts of England
because of the availability of land, high land values and the
demand for affordable housing.
In Waltham Forest as at March 2011 there were 17,932
households on the Housing Register and, as rents for affordable
housing increase, this number is likely to increase. In London
the implementation of the Affordable Rent model is likely to make
development of affordable homes to meet this demand more challenging,
and in turn this will limit the ability of our borough to benefit
from the New Homes Bonus than in other parts of England. We therefore
advocate a higher reward per home for development of affordable
homes in London boroughs than for the rest of England, in recognition
of these issues.
In London, demolitions often occur in areas of estate
regeneration. Our consultation response stated that the New Homes
Bonus should ensure that demolitions of estates in need of regeneration
are excluded from calculations in determining the level of grant
payable to a local authority, since it is likely that these homes
will be re-provided in the future, potentially with a net increase
in housing provision which we would argue is rewarded upon separately.
2. In particular:
— Will it ensure that the progress made
by past regeneration projects is not lost and can, where appropriate,
be built on?
— Will it ensure that sufficient public
funds are made available for future major town and city regeneration
projects as well as for more localised projects?
In Waltham Forest we have four key regeneration areas:
Walthamstow Town Centre, Northern Olympic Fringe, Blackhorse Lane
and Wood Street. These projects are identified within our Borough
Investment Plan which was approved by the HCA London Board in
November 2010.
A good example of a project that has benefitted from
grant funding for enabling works is the Blackhorse Lane Regeneration
Project, which has received grant funding including £7 million
of Growth Area Fund and £300,000 from the LDA. This has enabled
us to buy assets in the area in order to support the regeneration
process and to fund the master planning exercise to form the basis
for planning policy for the area, and bring about real long lasting
change. In the absence of further funding from Government to enable
the regeneration of the area, the scale and pace of change anticipated
by the Council will now not be possible. An estimated 1,000 new
homes are forecast to be constructed at Blackhorse Lane, and several
hundred jobs to be created, but these will not be realised until
development is kick started. It is recognised that wider market
conditions will play a significant part in this, but progress
is also reliant on funding being available to support enabling
works to bring development forward.
Our Decent Homes programme will also suffer as a
direct result of cuts in funding. The Comprehensive Spending Review
has allocated HCA £2 billion to deal with backlog of 150,000
homes nationally, of which 46% of homes are in London. In Waltham
Forest we submitted a bid of £11.4 million to make the remainder
of our 1,300 homes decent by 2012. However, the Council's bid
was unsuccessful and as a result of this we anticipate that our
stock will not be made decent until 2017 at the earliest. We will
continue our dialogue with the HCA as the majority of homes affected
by the withdrawal of Decent Homes funding are in the Friday Hill
area of Waltham Forest. This will have a significant impact on
this neighbourhood and will not help to realise any further regeneration
of the area.
At the request of HCA, we prepared a Borough Investment
Plan (BIP) which was approved by the HCA London Board in November
2010. The document brings together the spatial and thematic priorities
for regeneration and housing in Waltham Forest and as we face
greater pressure upon resources and the BIP is already proving
to be a very valuable document in terms of prioritising future
opportunities for investment. We will update this document to
take account of emerging priorities arising from, for example,
the introduction of the affordable rent model.
However, we have concerns that the Government's vision
of devolving local decision making powers is being undermined
on a number of counts. This was recently illustrated in the HCA
Affordable Homes Programme Framework document which stated that
local authorities are now no longer required to prepare a BIP
and we are concerned that this will undermine the status of our
document. Furthermore, we also understand that the proposals for
"Devolved Delivery" have now been shelved, which would
have offered us a real ability to more effectively prioritise
and manage funding for housing and regeneration locally and help
to realise the Government's aspirations for localism.
3. What lessons should be learnt from past
and existing regeneration projects to apply to the Government's
new approach?
From a period between 2000 and late 2008 there was
unprecedented growth within Britain. This was reflected in the
growth of the development sector and a model of regeneration which
relied upon cross subsidy from private sales and government grant.
There were huge advances in construction techniques (for example
the English Partnerships £60k Home Competition) and the sustainability
of house building (notably the introduction of the Code for Sustainable
Homes) and a coherent effort to involve local people in the regeneration
of their communities.
Whilst economic growth enabled regeneration to happen,
it was also accompanied by a policy approach that provided a robust
basis for the regeneration of our communities, and the key objectives
that regeneration sought to achieve. The Sustainable Communities
Plan (2003) provided this basis for regeneration, the objective
being to create sustainable communities.
It is noted that the Localism Bill and reform of
the planning system will allow local communities to determine
their own priorities and objectives for regeneration, however
there is a notable lack of direction from Government on a coherent
policy approach to regeneration, what it understands as sustainable
community, and the objectives needed to achieve the creation of
such communities.
We believe that there is a clear rationale for the
Government to redefine what it understands a sustainable community
to be in order to provide to local communities a basis upon which
to pursue their individual objectives for their area through devolved
decision making. Given cuts in spending, reform to social housing,
introduction of the Affordable Rent model, and a lack of funding
for infrastructure there is a clear need for this definition to
be refreshed within policy. We look forward to Government providing
a coherent policy approach to regeneration.
Lessons can be learned from Housing Action Trusts
(HATs) which were established to tackle not only the physical
regeneration of housing areas in most need, but to address the
lack of opportunities in these area by funding associated social
and economic regeneration projects that were required to support
long lasting change.
Community consultation has been a key facet of regeneration
over the past decade, and has allowed communities to effectively
influence regeneration projects in their neighbourhoods. Whilst
the Localism Bill and reform of the planning system will give
communities greater power to plan for their future, we are concerned
that the most vocal and eloquent members of the community may
have a disproportionate ability to determine and influence local
decisions, often utilising these new freedoms to oppose rather
than positively influence development. This ultimately may act
as a barrier to regeneration, and may not reflect the views of
the wider community who, in straightened times may not have the
time or inclination to engage in a local neighbourhood planning
process.
It is imperative that advances in sustainability,
the creation of mixed communities and building standards should
not be compromised. However, the repeal of building standards
by the Housing Minister on public land will potentially jeopardise
the progress made in recent years to build quality housing.
4. What action should the Government be taking
to attract money from (a) public and (b) private sources into
regeneration schemes?
In recognition of the fact that funding is required
for enabling works and infrastructure in order to unlock the development
potential of projects, we believe the Government should implement
pilot Tax Increment Financing (TIF) areas in a range of areas
across England with differing economic characteristics, including
an outer East London borough in order to evaluate the potential
to raise finance for regeneration from such a mechanism, as well
as evaluating the impact on neighbouring communities outside of
the TIF boundary where the impact of a TIF could be detrimental.
The Government could also give greater assistance
through expert support to local authorities who wish to take a
more creative approach to the use of their landholdings in order
to subsidise development and regeneration directly. Setting up
a Local Asset Backed Vehicle or joint venture requires significant
and specialist resource in the short term, but in the longer term
could generate significant income to support development.
We also believe that in order to prevent homelessness
and encourage affordable housing development the Government should
review the decision to cap housing benefit under the Universal
Credit in London boroughs. Indicative research undertaken by ELHP
and POD reveals that a five person family who is not earning under
Universal Credit will only have a surplus of £1.99 per week
to pay their rent under the new Affordable Rent model. This provokes
particular issues around compounding housing need and homelessness,
but also makes the development of affordable family housing very
challenging. We understand that the basic premise of the Affordable
Rent model is to allow Registered Providers to fund development
by borrowing against future rental revenue streams. However, if
no revenue stream exists for a particular product, for example
family homes, then it is likely that they will not be developed.
The Government should be working with lenders to
ensure that Registered Providers (specifically Housing Associations)
can raise finance in order to fund development under the Affordable
Rent model. Since the model is untried and untested we anticipate
that Housing Associations may face considerable difficulties raising
finance upon which to undertake development of affordable homes.
Since Housing Associations will no longer receive the majority
of their funding to finance development through grant, which has
traditionally been paid in two tranches at the start and completion
of development, it is a possibility that in considering funding
future scheme their lenders may choose to re-price existing loans,
which would be detrimental to the business of a housing association.
In our view the imposition of the Community Infrastructure
Levy (CIL) will be challenging and will make development less
likely to come forward. In more detail it will impact as follows:
Economic Viability—CIL:
regulations require the Mayor to strike an appropriate balance
between the desirability of funding infrastructure from CIL and
the potential effects of the imposition of CIL on the economic
viability of development across its area. However, it is not clear
what effect the proposed CIL rates will have on the economic viability
of development across London boroughs.
The Mayoral CIL & Borough CILs—the
Mayoral CIL is only one part of the CIL equation—the other
part being the combination of borough CILs and planning obligations.
Although the borough CILs legislation specifically requires the
boroughs to have regard to the Mayoral CIL, it is hard to understand
how a true picture of the likely consequences of the Mayoral CIL
can be assessed unless the Mayor has given some thought to the
levels of borough CILs that boroughs will seek.
Property Markets—the
impact of the Mayoral CIL on the London development market given
the present economic situation, may have a negative effect in
the short term.
Local focus—it is
unclear how any of the Mayoral CIL monies generated would be able
to be allocated back to the specific neighbourhoods that they
have been raised from, as the Government's latest guidance makes
clear is required. In many respects, Crossrail is an exceptional
project that requires an exceptional funding package. Nevertheless,
the Mayor is planning to use a mechanism that has been specifically
adapted to fit in with the Government's wider localism agenda,
and it would be interesting to see if the Mayor comes under pressure
to make local concessions from the money raised.
Mayoral CIL represents an additional tax—Mayoral
CIL is, like the Business Rate Supplement, a new tax on development.
The impact of the Mayoral CIL on the London development market
given the present economic situation may have a negative effect
in the short term.
Pressures on affordable housing are growing—it
is not sensible to examine Mayoral CIL in isolation from wider
demands that the Greater London Authority and London Boroughs
is placing on development. The most pressing of these is for the
provision of new affordable housing in London. Given recent changes
in housing benefit, and a wider "benefit cap", the need
to subsidise social and intermediate tenures in London is likely
to increase. Given that it is drawn from the same development
surpluses required to make contributions towards affordable housing
provision, the implementation of the Mayoral CIL, may make this
more difficult to achieve.
5. How should the success of the Government's
approach be assessed in future?
The success of regeneration should not simply be
measured in the number of homes or jobs created. Whilst these
indicators play an important part is tracking investment, they
are not the only form of indicators that should be monitored and
we believe that monitoring, for example, such factors as educational
attainment, improvements in the health of residents and deprivation
are equally as important.
In considering the approach by which outcomes should
be monitored in the future, we would like to see an approach which
allows progress to be monitored against outcomes determined locally
in addition to a core set of national indicators. We would like
further guidance from Government on how this approach can be implemented.
March 2011
| 
