Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Minutes of Evidence

Examination of Witnesses(Questions 43-59)




  43. Good morning. Could I ask you to identify yourselves please.
  (Councillor Dame Sally Powell) I am Dame Sally Powell, and I am terrified!
  (Ms Elkington) I am Elaine Elkington, Director of Housing.
  (Mr Pallace) And I am Nigel Pallace, Director of Environment.

  44. Do you want to say anything by way of introduction or are you happy for us to go straight into questions?
  (Councillor Dame Sally Powell) Straight into questions.

Mr Streeter

  45. Starting with some easy questions, how much affordable housing do you feel you need in your borough and how do you know? What indicators do you use to measure that?
  (Councillor Dame Sally Powell) Well, I will ask Elaine to do the detail, but in principle we currently have 450 families in bed and breakfast. Every year we do a housing need survey which is done by Fordham's and we currently estimate that we need 8,354 new homes to meet the needs of all the people in the borough.

  46. What is actually constraining the supply of affordable housing at the moment? What is the thing that is holding you back?
  (Councillor Dame Sally Powell) Principally two things which are land value and lack of resources. We have got sites, but we do not own them, they are in the private sector, so land value and resources from the Corporation.

  47. Are you being creative with partnership deals with the private sector to release those sites?
  (Councillor Dame Sally Powell) We have done amazingly creative things with the private sector. The St George's Imperial Wharf development is a model of a private-public partnership where we have achieved 50 per cent private sector housing and 50 per cent affordable and not just straight RSLs, but it is discount market rent, discount market sale, student accommodation, elderly people and RSLs, but there are huge problems dealing with developers. One is they are not interested in open-book negotiations. Some are, and I would commend Chelsfield. They are absolutely superb. I would criticise enormously St George. They are not interested in open-book negotiations, and there is another problem in terms of the associated section 106 agreements in terms of what comes first and we need the affordable housing first, whereas obviously the developers want the private housing first, and the affordable housing does not always then get delivered. For example, and I will ask Nigel to explain, we are just having huge problems with St George because they have just cancelled a contract with Ujima Housing Association because we refused to give them additional planning permission.
  (Mr Pallace) Yes, planning permission was given following extensive negotiations and having granted permission and commenced the development, the developer has now come back, saying, "We would like planning permission for some more units". This was not possible given that we had already, we felt, allowed the maximum levels sustainable in that area and we were in effect told that unless we were supportive, then they would not accelerate the delivery of affordable housing. The agreement that requires the phasing of the scheme requires that they provide certain tranches of affordable housing linked to the amount of market housing that they are providing. The delays in the scheme meant that we were unable to use up housing allocations that the housing corporation had made available, so it effectively slowed down the progression of affordable housing once planning permission had been made.

  48. Is that a question of better contracts in the first place?
  (Mr Pallace) It is a very complex issue because of the complexity of the legal agreement.

  49. The Government's Spending Review announcements in relation to social housing, are you confident that this is going to tackle your problems?
  (Councillor Dame Sally Powell) I think it is fantastic that the Government is putting so much money into housing. I had a meeting yesterday with the Corporation about the regional housing allocation programme and their new policy and there is a real difficulty in that my criticism of the Government is that they are into the numbers game, which they have to be because there is such a huge housing need and all the predictions are that we need X thousand homes in the next ten years or whatever, but my concern about numbers is that you are then pressed into the value-for-money argument and high land value areas do not represent value for money. The total cost indicator is such that I think we are about to embark on doing what we did in the past, like building boxes which are not going to be suitable and/or building unsustainable communities. The unsustainable community bit is about we want mixed communities, that is what we aspire to, we want mixed communities. Now, I also have this conversation with Sir Robin Wales from Newham because, if you like, London is such an interesting microcosm of policy and the policies of Newham have to be different from the policies for Hammersmith & Fulham. We need affordable homes because we have got so many people in need. They need much more private sector housing so that they have less dependency on social services provision, et cetera. Therefore, in London you have to have a different policy for different local areas. My concern about the Corporation is that they have almost a blanket policy for London and they do not understand some of the dynamics and that what we will end up doing is building the numbers game down the Thames Gateway and then you do not have a sustainable community in Hammersmith & Fulham because it is going to cost more there, so there are two things. Either you do something about land values, which I do not think any government will ever do, it is a bit radical doing something about land values, or you pay more money to high land value areas so that you have got key workers and these are not just people on benefit, but virtually everyone who is employed now, so this is for key public sector workers near big hospitals, Chelsea, Westminster, Charing Cross, Hammersmith. They all need nurses, administrators, occupational therapists, et cetera, and we need more affordable houses in high land value areas.

Christine Russell

  50. Just sticking with the land values, is your real problem, your biggest problem in Hammersmith & Fulham the high land values rather than the lack of sites?
  (Councillor Dame Sally Powell) Yes.

  51. You have the sites?
  (Councillor Dame Sally Powell) We have got sites.

  52. Can I then go on to ask you about the powers that you feel you have to actually assemble and develop those sites. What is your experience in Hammersmith & Fulham and do you actually need more powers?
  (Councillor Dame Sally Powell) I might need to bring Nigel in, but I would just say first of all that we have never CPO-ed a piece of land at all, but if we wanted to, we have got the powers to do it and now that we have got the London Development Agency, that has been incredibly helpful in bringing a bit more weight to it.


  53. Have you even threatened it?
  (Councillor Dame Sally Powell) Yes, it is a very useful threat, I have to say. I often ask Nigel, "Can't we CPO that land?", and he always comes back and says, "No, we can't".
  (Mr Pallace) There are three key points here. One is that the planning policy framework may not actually seek housing where we try to secure housing because of our exceptions policy approach, which has been very, very effective, but the land that we are talking about is usually dedicated for employment, so a compulsory purchase set against that back-drop would hit the first snag.

  54. Is that not because you have the plan wrong because it is pretty crazy to be going for more employment if you have not got enough housing?
  (Councillor Dame Sally Powell) We use our employment policy to—
  (Mr Pallace) It is partly a means to an end and it is partly to protect the genuine need for employment land. The policy would not have been sustained if we did not need employment land, but the policy is effectively saying that we have such an important and pressing need for affordable housing that we are prepared to compromise delivery of the employment policy to a degree, but only in order to achieve affordable housing where the need exists. If we did not have that, there would be large amounts of market housing being developed on sites where we are able to protect it for affordable housing. This has effectively been a means of achieving a 100 per cent target for affordable housing which would otherwise not have happened and that is largely why we have secured so much affordable housing as a percentage of overall residential development compared to others.

Dr Pugh

  55. Can I change the subject to key workers. In your submission, you mentioned moderately low figures for social workers, police officers and teachers living in the borough. I would suggest that these people do not often live near where they work anyway. Have you got figures for unfilled vacancies in the public sector and have you got comparable figures with other boroughs and maybe other areas, and have you got any comparison with the private sector because clearly unfilled vacancies are the effect if you have got a big problem?
  (Ms Elkington) To answer your question directly, no, but to my knowledge not many boroughs do have that sort of information. What we are doing is working on a sub-regional level with local RSLs and our employers group, which was established through our local strategic partnership, to try and bottom out on those figures. In terms of occupational groups, we only have rough estimates. Obviously the sort of information the Council has from its own records is available to us, but we have found a reluctance from other agencies to give us that information and one of the reasons they are reluctant to do that is because we may then as a local authority say, "You, as an employer, have a responsibility to try and deliver some of this housing yourselves".

  56. But surely it is crucial to know whether you are actually having difficulties in actually getting public sector workers and clearly giving a figure of how many live in authorities is a system which dissuades you from doing that?
  (Councillor Dame Sally Powell) I am sure we could get those figures for you and produce a one-sheet table, but what we have also done, and I do not think any other authority has yet done it in the country, but we are just about to launch it, which is that we use some of our Neighbourhood Renewal Fund to employ somebody to write a key worker housing strategy which we have developed in partnership with all the public sector and it might be helpful to you to have that because it is, I think, the first in London and we are trying to get all the agencies to work together. I have a real problem both with the Corporation's definition of `key worker housing' and I have a real problem with the Challenge Fund where they have top-sliced for the key worker because they have restricted the definition.

  57. Assuming we have agreement on the nature and the size of that, we then turn to the solution. Now, you seem to indicate that there is a real difficulty in reducing the land. If you then supplement the salaries of key workers, you do not increase the amount of build and you do not increase the amount of housing, will not the net effect of that be simply to push the houses up still further, so it will still be housing that eligible people in their area of work will not be able to afford on their salaries? Would you not prefer the solution of actually having more houses, in other words, to increase the supply?
  (Ms Elkington) Yes, I think we would always go for the bricks and mortar subsidy. One of the issues about the starter homes initiative was precisely that, that house prices would be inflated whatever the subsidy level was, £25,000 or beyond, so I agree that the issue is about subsidising the housing and having something in perpetuity for other people because, as Councillor Powell says, our housing strategy for key workers has indicated that you might be a key worker at one stage in your life with one need, but actually you move through the spectrum as you go on from being prepared to share with, for example, nine other people to actually aspiring to have self-contained accommodation on your own, so it is a continuum and I think the challenge for us is to actually design a strategy which meets the needs of all those life cycles, if you like, of the key worker.

Mr O'Brien

  58. Following on that point, how do you see intermediate forms of tenure, such as shared ownership or low-cost home ownership? How is this impacting upon meeting the housing needs in your borough?
  (Councillor Dame Sally Powell) If I can deal with shared ownership, I have always been quite a supporter of shared ownership in that I own my own house and how ridiculous for me to be a hypocrite and say that no one else can have ownership of anything. I would be a much greater fan of some sort of equity scheme whereby a quarter of rent went into capital, you know, you got some capital out when you wanted to move and then you used that capital and purchased something or even purchased an equity share. The problem in my borough is that the cost of the equity share is such that working-class people cannot afford it.


  59. Can you give us an example?
  (Councillor Dame Sally Powell) If you are a nurse, you earn how much—£16,000? To get into equity share, and we have a list of how much people earn, a weekly affordable housing cost is £106 a week, so you cannot afford the rental element and the mortgage element. You just cannot. You have not got the cash. You have not got the net income.

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