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Grand Committee

Tuesday, 3 June 2008.

The Committee met at half-past three.

[The Deputy Chairman of Committees (Lord Brougham and Vaux) in the Chair.]

Housing and Regeneration Bill

(Third Day)

Clause 2 [Objects]:

Earl Cathcart moved Amendment No. 27:

The noble Earl said: I have received many briefings from different non-governmental organisations on the plight of rural communities, not least the Countryside Alliance, of which I am a member. Nineteen per cent—or one in five—of the English population live in rural areas. The Government’s definition of rural areas are those with a population of less than 10,000. This does not, however, include the 3.5 million to 4 million people who live in large market towns and districts that are defined as rural, many of which, in spite of their size, are affected by and susceptible to the same problems as their more rural hinterlands.

This amendment would place the HCA under an obligation to take into account the needs of rural communities when pursuing and taking forward their objectives. At Second Reading, a number of noble Lords raised the issue of rural housing. It was heartening that the noble Baroness, Lady Dean—I am sorry that she is not in her place—said:

When moving the first amendment, I argued that there should be a board member to champion rural housing. It was disappointing that the Minister did not share my view. Maybe we need to come back to this or take up the suggestion of the noble Lord, Lord Best, to require the HCA to consult a number of organisations whose interests should be represented.

I cannot see that the Minister will object to this amendment, as it follows the conclusion of the Government’s own Affordable Rural Housing Commission. This commission was set up by Defra and the Office of the Deputy Prime Minister, which is now the Department of Communities and Local Government. The executive summary of the commission’s report stated:

The commission concluded that,

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That seems to imply that rural housing up until now has been an afterthought. By putting the HCA under an obligation to take into account the needs of the thousands of individual rural communities, with their quite different and disparate housing needs, we can get one step closer to realising the goals of the Government’s own commission.

People in rural areas are finding it increasingly difficult to get on to the housing ladder in the area in which they were brought up or where they wish to work. Many are faced with little option but to move out of their area to obtain a roof over their head. This problem is recognised by the Office of the Deputy Prime Minister in the report of 2003—five years ago. The report, Sustainable Communities: Building for the Future, acknowledged:

Britain’s rural population is growing. Defra’s report on the population trends in rural areas of England from 1991 to 2001 found that the population in rural districts had risen almost eight times faster than the population in urban districts. Pressure on affordable housing is becoming more acute in rural communities than in urban areas. It is therefore imperative that the Bill addresses this new trend of population movement before it escalates into an even worse situation.

Rural areas cannot continue with the position as it is at present. The Affordable Rural Housing Commission reported that only 5 per cent of housing in rural areas is social housing compared with 23 per cent in urban areas. In 2007, the Halifax Rural Housing Review found that the typical house price in rural areas stood at £246,000 compared with £215,000 in urban areas, £30,000 more expensive. The Government’s commission found that average earnings were £17,400 against £22,300 in urban areas; that is, incomes are £5,000 lower in rural areas. Rural purchasers of housing have to find £30,000 more with £5,000 less income than their urban counterparts. Only this year, the Government’s own rural advocate, the Rev Dr Stuart Burgess, stated:

Average weekly wages in rural areas are not only much lower than those in urban areas, but the problems of the low paid are compounded by the lack of affordable housing. There are also concerns about the breakdown of community cohesion in rural areas as people are forced to move to cheaper urban housing, which no doubt exacerbates the urban housing problem. In addition, we must consider the problems that are particular to rural areas: the lack of transport, the distance to essential services—not just to post offices, about which we have heard so much of late, but to schools, GP surgeries, dentists and shops. I would be interested to hear from the Minister exactly how she envisages the HCA will tackle these growing rural problems.

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Now for a little dig at the Minister. On the first day in Grand Committee, I had to remind her when she was summing up the amendment on the composition of the board, that she had forgotten—I repeat, forgotten—my point on rural areas. I do not blame her, but as the noble Baroness, Lady Dean, said at Second Reading, it is of course so easy to forget rural areas. The Minister responded by saying:

She then went on to concede:

That is the very problem. The system up until now has been seamless—so seamless, in fact, that the activity in rural areas has hardly been noticed.

It is all very well having a genuine mix of experience on the board but, for all that experience, unless the agency is required to give specific consideration to rural areas, urban areas may be given priority at the expense of rural areas, as has undoubtedly happened until now. There is also no guarantee that the mix of experience will include those with experience and understanding of rural areas, which is needed if affordable housing solutions are to be found in those areas.

Moreover, while it is welcome that the Minister argues that rural areas must be spoken up for and their interests promoted, it is less clear what she meant when she said that that must be seen as seamless with the work of the HCA. If it is meant that the needs of rural areas will be given equal attention to the needs of urban areas, taking into account the important differences between the areas, and that those on the board will have the necessary expertise to address both urban and rural needs and the impact of urban developments in rural areas, that is welcome.

However, it is equally open to interpretation that although rural needs will be considered, the bulk of the board’s efforts and expertise will be directed towards urban areas, with the occasional nod to rural areas. Far from being seamless, there must be a clear voice on the board and a requirement in the Bill that both urban and rural areas be treated on their own terms and the differences between the two be recognised. That cannot be seamless. Those are two distinct dimensions of the agency's work and that should be made clear in the agency's statutory functions and reflected in the make-up of the board.

If the Minister can accept the amendment, or a similar one, I might just pipe down about representation on the board. To have neither would neglect one in five of the population—one in four if you count market towns. We all know that we like to support minority groups. In the amendment, we do not seek special treatment; we ask for rural areas not be forgotten but to receive their fair share of attention—a fair crack of the whip. The Minister has already rejected the idea of

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a single champion for rural areas on the board; I ask her, before she rejects this amendment as well, to take it away and work out with her advisers how she proposes to address the issue in its own right and with urgency, as recommended by her own department's Affordable Rural Housing Commission. I hope that the Government will listen to their own research advisers. I beg to move.

Lord Best: I have the privilege of going first in support of the sentiments behind the amendment. This is not a new issue. I was secretary to an inquiry chaired by His Royal Highness the Duke of Edinburgh, which reported in 1976. It was called Rural Housing: Problems and Possible Solutionsand it came up with a set of conclusions that are very familiar to us today: there was a gross insufficiency of affordable housing in rural areas and we should do more about it. Since 1976, we have had the right to buy, taking out of the social sector an awful lot of the homes in a lot of villages. There are three obvious facts to anyone who pauses for thought on this. First, the amount of council housing in rural areas is often—nearly always—less as a percentage of the total stock than it is in urban areas, so losing any of that council stock is likely to be more detrimental. Secondly, the percentage of homes bought under the right to buy in rural areas has been higher than in urban areas, so it started worse and ended up worse.

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Thirdly, house prices in rural areas are higher than in comparable urban areas—as we all know, this is because the middle classes have moved there from urban areas—making the affordability gap more difficult. Thirty-two years after the inquiry chaired by Prince Philip produced its report, his daughter, the Princess Royal, speaking in her capacity as patron of the Rural Housing Trust, echoed the words of her father in the report and said that the affordability gap had now become a housing affordability chasm. Can we address the problems faced by second generation rural communities whose parents were council tenants, occupied tied accommodation or agricultural tenancies, and who find themselves unable to stay in those areas? Can the new Homes and Communities Agency make a difference to the lives of those people or are we really saying that we accept that people in rural areas whose parents were not home owners and who do not have high incomes will simply have to move away and over time will all be replaced? If we do not accept that, can the HCA do something positive about it? How can we reinforce and strengthen the work of this agency to ensure that rural housing gets its fair share of resources and effort?

Over the years I have followed the progress of the Housing Corporation’s allocation policies and of its annual approved development programme. There has been an ebbing and flowing of interest in rural housing over those years. I detect that the chair of the Housing Corporation can make a big difference in this area. I remember two who laid special emphasis on rural housing: Sir Hugh Cubitt and Sir Christopher Benson. Under their leadership rural housing targets went up because they took a special interest in it. Under other

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chairs the issue was less significant. From that I deduce that the people on the board of the agency, particularly the chair, can make a difference in this area because you either get a champion of rural housing, with a target which reflects that championing process, or you do not. Therefore, there should be someone on the board with a special interest in rural housing—it may not be their only qualification for being on the board—who can champion that part of the HCA’s new role.

Further, the Homes and Communities Agency can make a significant difference to the amount of rural housing that is available through the use of rural housing enablers. In 1992, the Joseph Rowntree Foundation, of which I was the then director, joined forces with the Rural Development Commission to ascertain what would ensure that affordable homes were built in small villages by housing associations with support from statutory bodies. I declare an interest as I was a commissioner on the Rural Development Commission at the time. They concluded that the factor most likely to effect this result was to get local people—who are to this day called rural housing enablers—to do the hard graft of liaising between: planners; landowners, some of whom are very sympathetic and concerned about the local community; the parish council, which may or may not be sympathetic to start with but needs to hold a lot of meetings about every scheme; the housing associations, which may or may not be interested in building six houses in the middle of nowhere; the local community at large; and the housing and planning departments of the council. All these need to get behind the idea that a small development, which no doubt would be situated a long way away from where the provider, the housing association, is based, should be built. I recall a very nice site on the estate of Sir Marcus Worsley at Hovingham in north Yorkshire, that he said he would be very happy to make available to us. When I told my finance director, he said, “Not another of those ghastly rural schemes where every time we have to change a light bulb or a washer in a tap I’ve got to send someone out and it costs an absolute fortune. There will be local protests and your staff will be tied up. Instead of doing six homes in Hovingham, can we not do 65 in Leeds?”. That was always the cry.

But the answer is “no”. If there is a rural housing enabler in North Yorkshire, someone else can go to all the meetings, get everything teed up and get the planners on side. Then the housing association can step in with its expertise and build the homes. These people are the key. It will not matter whether the Homes and Communities Agency—the Housing Corporation at the moment—has a target of 6,000 homes a year or whatever. If there are no rural housing enablers on the ground to do the preparations for these small developments, it is very difficult to see how they will be accomplished.

Rural housing enablers have been funded through the good work of the Commission for Rural Communities, which picked up on the work previously done by the Countryside Agency and the Rural Development Commission, but that funding is coming to an end. The plan has been for local authorities to pick up the tab and to pay for rural housing enablers instead of the Housing Corporation and the rural agency of the

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day doing it. I fear that, in many cases, hard-pressed, cash-strapped local authorities will not find the funds to replace those which the Housing Corporation and the Commission for Rural Communities have been putting up to pay for these rural housing enablers. Instead of the HCA simply setting a target, making available grants and seeing lots of homes being built all over the place, nothing much will happen without the rural housing enablers. The housing associations will prefer the economies of scale of urban development and we will not see these small village schemes taking place.

If the county council is to put up the money, it will have to consider where it will get the extra cash from for a rural housing enabler. Enlightened county councils have said, “We no longer give a 50 per cent council tax discount in rural areas for second homes and empty properties. We give only a 10 per cent discount on council tax and will use the balance to fund rural housing enablers and other aspects of rural housing”. But where that enlightened policy is not in practice, it is very difficult for the county council to find the extra funds.

Of course, it is not always very popular. I had to address a meeting in Cerne Abbas, a delightful village in Dorset. There was a plan to build eight rural cottages with a beautiful flint facing, which I am pleased to say now exist; six houses are also to be built in lovely Yorkshire stone in Hovingham. However, when I addressed the public meeting in the Cerne Abbas village hall, it was not only full with 200 people standing nose to nose, but people were also outside and we had to have a loudspeaker for them. But, believe it or not, they did not all turn out to support the eight cottages for Cerne Abbas. To my astonishment, they opposed the housing for local people, which, once accomplished, was a huge success.

It is sometimes difficult for local authorities to stand against this tide and to say that they are going to put money into rural housing enablers to make sure that homes appear in villages. I suggest that the Homes and Communities Agency takes under its wing the concept of the rural housing enabler and does not expect these people to be funded across the country by others. They should be funded centrally where the HCA has a target for rural housing and where it will see its target accomplished if RHEs are in place. At the moment there are about 40 of them, but I fear that number will drift downwards as councils find it difficult to take on the funding.

I support the thinking behind this important amendment, as well as initiatives to strengthen the board to ensure that a champion is in place to set a target for rural housing. I hope that the Homes and Communities Agency will have statutory powers to ensure that rural housing enablers are in place around the country and, more than that, I hope that they will use them. Otherwise, very little will happen.

Baroness Byford: I support my noble friend’s amendment. In some ways there is very little to add to what the noble Lord, Lord Best, said. He brings great expertise to the Committee, for which I am grateful. I share his concerns about the amount of money that will be available to encourage and promote rural housing.

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That is why I particularly like my noble friend’s amendment, which calls for the HCA to take particular account of the viability of rural communities. I know that the CRC is doing a review on affordable housing and linking economic affordability with sustainability.

The noble Lord, Lord Best, reflected on more than 30 years of housing. The sad thing is that, with a few exceptions, we are not much further forward than we should be pro rata if one looks at what has happened over those 30 years to housing in urban areas. Clearly there has been much more progress in those areas. It is there to see, so I very much support my noble friend’s amendment. I am quite concerned that the board members, whoever they are, may not necessarily have rural affordable housing at the back of their minds, because it is a very small part of the overall pattern of housing compared with the bigger urban needs. Even more, there should be someone on the board who is recognised for having a particular skill, ability or understanding of what happens.

The other thing to remember is that, within the classification of rural housing, one could be talking about a small hamlet of 100, 70 or 50, compared with 10,000. People living in a community of 10,000 obviously have a greater say, because more people are involved in the community and understand it, than do people in a few villages where only one, two or three affordable houses are needed. I very much have a mind to support the amendment, and I hope that the Minister will take on board my noble friend’s comments.

Two other issues are tied up with this matter. My noble friend has called for the viability of rural communities. I am sure that Members of the Committee will be as anxious as I was to see the announcement in the press this weekend not only that 2,500 post offices will close, many of which are in rural areas, but that 4,000 more may close. If you start ripping out the heart of rural communities, even if they are small, by closing things such as rural post offices and schools—in the same way, the Government currently give more money to children who are educated in urban areas than they do for children in rural areas, in some cases by nearly half the same amount again—there is real proof that, unless someone speaks up for rural communities, they get lost. This is the Government’s problem; rural communities have a very small number of people compared with urban areas.

I hope simply that, if the Minister cannot accept the amendment, the Government will duly consider the best way in the Bill to help and encourage those who want to live and work in rural areas. The Bill is a once-in-a-lifetime sort of Bill. We are setting up the HCA and we should not let this occasion go by without addressing the concerns of rural communities.

Baroness Hamwee: No one would argue with the sentiments that have been expressed. I made a note of a couple of things that the noble Lord, Lord Best, said which made me think about the practicalities of all this. I agree with what has been said so far about not having representatives on the HCA board.

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Nevertheless, human nature means that individuals’ own backgrounds come into play perhaps more than features with us when we try to create neat legislation.

The noble Lord talked about building six houses in the middle of nowhere. I use his words; I would not like it to be thought that we on these Benches regard the countryside as being nowhere.

There are different financial and practical considerations in getting the numbers up in urban areas. The Cerne Abbas experience sounds very familiar to me from an urban background just as much as a rural one. There is interdependency between towns and countryside, and I do not want to forget that.

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