Written submission from the Homes and
Communities Agency
1. To what extent does the HCA have a role
in regeneration, as opposed to housing? How are the two roles
linked?
The HCA was created in December 2008 by bringing
together regeneration body English Partnerships, the investment
arm of the Housing Corporation, the former Academy for Sustainable
Communities and a number of housing and regeneration programmes
from the Department for Communities and Local Government.
The rationale behind the creation of the HCA was
based on the greater benefits that could be realised by bringing
together a range of housing and regeneration funding programmes
and expertise in a single organisation. This has involved new
ways of working from the bottom up and better decision-making
processes, enabling greater synergies and efficiencies from timely
investment of limited resources in places.
From the start our main business model has been focused
around Local Investment Planning, to ensure that the totality
of housing and regeneration investment is informed by a plan developed
and owned at the local level. This model looks beyond our own
funding streams towards aligning our own expenditure and use of
assets with those from other areas of Government and local authorities
and the private sector to best support local objectives.
Following the 2010 Spending Review, HCA's role going
forward was confirmed as a smaller investment and enabling agency,
working closely with Local Authorities. Our core business continues
to be supporting local partners to achieve their objectives for
housing and regeneration. We do this by:
— Investing
in new housing and the development and regeneration of communities;
— providing
expertise and technical support; and
— utilising
our own and other public sector land assets.
Over the spending review period, we have over £8
billion available for investment. Our investment programmes are
grouped around the following headings, each of which has an important
role to play in regeneration:
— Land
and Regeneration—funding for completion
of existing regeneration commitments of £423 million, which
includes levering in public sector assets to deliver value and
benefits for local communities, (with DCLG) providing a further
£30 million of transitional support to the most challenged
for Housing Market Renewal areas and accelerating disposal of
our land for housing and economic objectives;
— Affordable
Housing—we will continue to deliver
existing commitments under the former National Affordable Housing
Programme and will fund the new Affordable Homes Programme, including
the new Affordable Rent Product, new affordable home ownership
homes, Mortgage Rescue, Empty Homes, Homelessness Change and Travellers
Pitch Funding. The AHP is focused on accelerating the delivery
of affordable homes in England making a significant contribution
to a target of up to 150,000 additional homes by the end of the
period. We shall also be running FirstBuy, a scheme to help over
10,000 first time buyers to purchase a new build property, which
was announced in the 2011 Budget; and
— Existing
stock—Decent Homes investment to
address the outstanding repairs and improvements to the social
housing stock and to reach the point at which a self-financed
programme of ongoing investment is viable and working with local
authorities to help them both develop and deliver housing PFI
projects.
We are working closely with Government and the Regional
Development Agencies (RDAs) to help determine the best future
for the RDAs' assets and liabilities. We are also be preparing
for some substantial changes in spring 2012, dependent on the
outcome of Parliamentary processes:
— We
will cease to act in London, as the Mayor of London will be given
new powers in relation to housing and regeneration, and
— We
will assume responsibility for the regulation of social housing
when the Tenant Services Authority is abolished.
Examples of the interconnectedness of our housing
and regeneration work are set out below.
The HCA and Tower Hamlets Council are leading the
comprehensive regeneration of Blackwall Reach with their
development partner, Swan & Countryside Properties Plc. Local
residents are being consulted on the partners' proposals prior
to the submission of the outline planning application this summer
and their feedback has been very constructive. The new development
will feature over 1,600 mixed-tenure homes, around 700 of which
will be affordable and more than 250 will be family-sized. New
community facilities, shops, parkland, an enhanced school and
improved links to surrounding neighbourhoods are also planned
as part of the transformation of the area. All existing residents
of Robin Hood Gardens, Mackrow Walk, Anderson House and Woolmore
Street will be rehoused, and they have been notified that the
Council intends to remove the buildings in a phased demolition
from 2014 to make way for the improvements.
The HCA has worked closely with Plymouth City Council
and the RDA on the regeneration of Devonport, within the
context of the Devonport Action Plan which sets out a vision "to
re-create Devonport as a distinct modern place, a vibrant self-sustaining
community." Ker Street is formerly Devonport's civic heart,
which was dominated by grey, post-war blocks of flats and listed,
but dilapidated, historic buildings. Residents have been involved
from the outset in the regeneration of Devonport and community
consultation has been vital to this process. The project comprises
the demolition of existing post war buildings and the building
of new homes within a refreshed street scene. The scheme, together
with other important initiatives in the area, plays a key role
in the creation of a new balanced and sustainable community within
Devonport. Delivered by Midas Homes and Westco Joint Venture,
the project will provide 123 homes in a mix of tenures including
affordable rent and Low Cost Home Ownership and complements the
historic buildings in the locale.
The New East Bank (cube) Advent V scheme in
Manchester is a housing scheme that had initially stalled with
the developer going into liquidation. The scheme was developed
as a partnership between Manchester Ship Canal Developments, Manchester
City Council and the HCA. The project is located within the regenerated
Ancoats urban village area of Manchester, a key regeneration priority
for Manchester City Council who provided the land for the development.
The HCA provided funding in the form of a loan with interest payable
on completion of sales—an innovative approach to the stalled
project.
New East Bank provides 108 properties for open market
sale with 33 of these being flats within an apartment block shaped
like a cube (hence the name) with 75 further units being mixture
of two and three bed mew houses. The scheme is now complete and
provides an appealing tenure mix of houses and flats within close
proximity to the city centre, the Manchester/Rochdale canal and
the new tram link improving access to Greater Manchester when
complete. All but 40 units are now sold which reflects the strategic
location, quality and appeal of the scheme. The £5 million
of bank funding has already been repaid with the HCA loan (with
interest) expected to be repaid much earlier than scheduled due
to the earlier than anticipated sales.
2. What are the principal contributions the
HCA can make to regeneration within the decentralised, community-led
approach envisaged by the Government?
All our work is focused on helping local areas to
achieve their objectives, set out in local investment plans. We
believe the HCA is able to provide solution in a difficult environment
for regeneration, making the best use of the resources.
We have described above our investment programmes.
Our enabling role means that through support, advice and expertise
that we have developed from our own project delivery, we can help
local partners unlock and deliver projects and share good practice
nationally. We have particular expertise around regeneration,
land and affordable housing that we share with partners locally.
An integral part of the Affordable Homes Programme
Framework is a commitment to supporting community-led housing
development. We are actively encouraging community-led groups
to seek partnerships with existing providers in order to share
expertise and facilitate access to finance, grant and development
ability. As part of their work with local authorities and the
community sector, our local teams will explore opportunities for
taking schemes forward where they deliver good value for money
and locally agreed priority outcomes. This will include further
work to ensure the associated processes are proportionate to the
projects that come forward.
Examples of specific contributions we have focused
on over the last two years include:
— As
well as working with local partners on community-led regeneration
through local investment plans as core business specific issues
we have assisted with include estate regeneration, new-build,
self-build, empty homes and land reclamation:
— we
have supported a number of community-led housing and regeneration
schemes including those at High Bickington (SW), Lyvennet (NW),
LILAC (Y&H), Bishop's Castle (SW);
— supported
plans to deliver sustainable, community-owned housing and allotments
on the HCA's derelict Cashes Green hospital site in Stroud;
— supported
a number of local authorities with community-led planning initiatives
such as Enquiry by Design; and
— we
also sit on and work closely with a number of other external community-led
development and regeneration networks including the CLT Network
and Mutual Housing Group.
— At
the beginning of June 2011, the HCA released its new spatial analysis
tool—"SIGnet". The release was the culmination
of many months of development and testing with local authority
partners. Since it was launched there has been a huge demand for
access to the service. Together with requests for access to the
Empty Homes mapping toolkit (released in May 2011), well over
200 different public sector organisations have already requested
access to these free tools. The tools provide partners with a
single place to view data that has previously only been available
in different formats, for example allowing them to look at investment
compared with land supply, planning constraints and local infrastructure
when deciding where to build new and affordable homes in their
communities.
3. How can momentum on regeneration best be
sustained in a time of limited resources?
Over the last 12 months our P&R programme has
delivered 3,208 housing completions, 3,587 housing starts on site,
272ha of reclaimed Brownfield land and 125,960 sqm of employment
floorspace, which illustrates that where funding and the right
projects are made to work, significant benefits continue to be
delivered across the country.
For the current Spending Review period 2011-12 to
2014-15, we will be delivering £423 million of commitments
to deliver the completion of 14,000 homes, develop 880ha of previously
developed land and create 400,000 sqm of employment floor space.
In some parts of the country we are reviewing the
projects to see how best to take them forward, given market changes.
In each case we bring our commercial knowledge and experience
alongside an understanding of the local market to work out how
best to unlock projects, including looking at the mix of uses,
balance of risk and timescales.
Land is an increasingly important currency to unlock
development. We work with local authorities through local investment
planning to identify the strategic contribution our land can make.
We are committed to not hold land longer than is necessary and
to dispose of our land on terms where it can contribute to delivery
(including deferred receipts and using building leases) so that
our land contributes to regeneration and economic and housing
growth. In March we announced a number of sites—our own
and some other publicly owned sites—which we are committed
to bring to the market under the new Accelerated Disposal Programme,
to provide at least 3,000 starts on site for new homes within
the next two years as well as further land for employment and
other commercial uses. Our Disposal and Development Strategy was
published on 8 June which explained how this would operate.
Access to a supply of development land is a vital
ingredient in successful economic growth and the HCA is using
our own land and working with government and other public bodies
to unlock and accelerate the release of surplus public land for
the creation of new homes and employment opportunities.
The HCA has been working with local partners and
key stakeholders to promote the regeneration of Gloucester
College and Quays for several years. Strategic to this
approach was the decision to acquire the former Gloscat (Gloucestershire
College of Arts and technology) site at Greyfriars which facilitated
the relocation of the campus to Gloucester Quays and supported
the wider regeneration aspirations for the area including the
college, housing, retail and commercial development.
We are currently working with its development partner
Linden Homes to deliver a major redevelopment of the former campus
at Greyfriars which is also considered to be one of the top three
Local Investment Plan priorities for Gloucestershire. By
adopting an open book approach with appropriate sharing of risk
and reward, the HCA has given the developer the confidence to
continue with the scheme through the recession. Detailed planning
permission is currently being sought and it is anticipated construction
of this exemplar development will mark an important milestone
in the fortunes of the city centre.
4. How important a role does regeneration
play within a wider strategy of economic growth?
Regeneration can create the conditions for economic
growth—Manchester and Sheffield are good examples of this.
Equally, economic growth underpins sustainable regeneration, and
so housing and other interventions need to support the economic
purpose of a place to be sustainable. Targeted regeneration investment
and support can help support Government's ambition of rebalancing
the economy. These themes all come together in HCA's work in each
local place through the Local Investment Plans.
5. What lessons has the HCA learned that can
be applied to future regeneration projects?
The HCA has considerable experience of what works.
Our Property and Regeneration programme covers a wide range of
regeneration projects in different local circumstances including
coalfields, town centre regeneration, rural regeneration, urban
extensions, new communities, exemplar projects, housing and commercial
led regeneration schemes. We also have experience to draw upon
from our work in the HMR pathfinder areas, on the Decent Homes
programme, and on Housing PFI schemes.
A key lesson learnt from our own and earlier regeneration
experience, that regeneration has to be bottom up, is embedded
in HCA's work. The local investment planning process has shown
that while we can offer investment, enabling advice and support,
regeneration happens in places and it is local people and institutions
that can best decide what is needed and what is appropriate at
a local level. The HCA operates through our local operating area
teams who can call upon corporate skills and support as and where
they are needed.
Local Investment Plans ensure that the totality of
housing and regeneration investment is informed by a plan developed
and owned at the local level. This model looks beyond our own
funding streams towards aligning our own expenditure and use of
assets with those from other areas of Government, local authorities
and the private sector. Locally driven decisions on capital investments,
including those on economic development, growth and regeneration
(including RDA projects as a funding partner), ensure that as
well as working towards appropriate job creation, regeneration
and renewal the housing offer for local people is appropriate
for the area's future as well as the wider provision of public
services.
By their very nature the bulk of the projects in
which the HCA is a partner are either complex in nature, in areas
where the private sector won't invest, or both. Often they happen
only because risk is apportioned appropriately between the public
and private sectors.
That said the private sector has invested in "regeneration
areas" with some success/return over the years as has been
shown by past IPD Regeneration Index figures and HCA is continuing
to invest in places alongside the private sector in a variety
of ways:
— through
a variety of a wide range of risk:reward sharing models with private
sector partners including loan and equity investments as well
as formal joint ventures;
— investing
alongside the private sector in HomeBuy Direct and now FirstBuy
to support first time buyers and to help widen the demand for
homes within mixed use schemes—this shared equity is recoverable
over time as first time buyers move on; and
— using
deferred receipts, where appropriate, in our land disposals. The
disposal terms used can make a significant difference to delivery.
Reviewing the timing of payments (so that they might be at completion
rather than upfront) can significantly improve developer's cashflows:
reducing financing costs and allowing limited capital to be targeted
on other upfront (eg infrastructure) costs. Use of deferred payment
can unlock viability on marginal sites and can help the developer
to manage its risk and reduce the amount of capital tied up in
the project prior to homes being sold.
Projects do vary in their complexity and scale but
ensuring the right skills are available can reduce the risk of
failure, from data intelligence/analysis, visioning and design,
financial and contract management, economic appraisal, and performance
management. Innovation and new tools are important. Our Delivery
Partner Panel for instance has improved the speed in which we
and our partners can bring sites forward for development through
access to EU-procured developers.
Creating the right conditions for investment are
key, particularly when market conditions and confidence are low
so an emphasis on reducing risk for private sector partners that
are willing to invest is key, such as addressing site conditions,
accessibility and infrastructure, and planning.
6. With the abolition of RDAs and reductions
in public funding, how can we ensure that important regeneration
knowledge and expertise is not lost?
Our website has recently been updated to provide
easier access to our historic library/knowledge resource providing
access to expertise and lessons learnt with practical advice and
insights about a range of industry priorities. This offers greater
interactivity for users to gain access to and comment upon case
studies, reports, feature stories and statistics.
We work with the Local Government Group on a range
of issues and knowledge sharing, for example, most recently in
the Capital and Assets Pathfinders. In our ongoing support to
BIS and DCLG on the future of RDA assets and liabilities as part
of winding down the RDA's we are discussing how best we can help
with knowledge transfer issues and retaining expertise within
the industry.
June 2011
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