Examination of Witnesses(Questions 180-199)|
TUESDAY 22 OCTOBER 2002
180. How would other fiscal devices stop the
second home syndrome?
(Councillor Clarke) We would like to see the legislation
implemented which is promised on council tax, but that alone will
not be sufficient because if you sell a £1 million house
in the South East and buy a house for £300,000 or £400,000
house in the South West, £300 or £400 a year on council
tax is not there.
181. So what else is needed?
(Councillor Clarke) I think new ways of shared equity.
I think that in some cases and I have not worked this through
182. How will ways of shared equity stop the
second home syndrome?
(Councillor Clarke) No, it will not.
183. That is the problem. You outline to the
Committee that the real problem is the fact that you have people
moving in paying exorbitant prices for second homes. What can
(Councillor Clarke) I am sorry, I misunderstood your
question. I do wonder from time to timeand I will probably
get shot for saying itwhether there is room to look at
that new Schedule A tax because some of this ownership has nothing
to do with domestic and residential accommodation. It is a form
of investment and capital gains tax.
184. Have local authorities discussed this at
(Councillor Clarke) That particular opportunity or
(Councillor Clarke) No, we have not. I am expressing
a personal opinion that that gap now is so great that it is not
bridgeable by other conventional means.
186. My questions are directed to South East
Development Agency. You started off talking about numbers and
one number I picked up in your submissions was 2,790 people in
bed and breakfast accommodation in the South East. What percentage
is that compared with the total dwellings in the South East and
how does that compare with other areas and other regions?
(Mr Dunnett) I cannot give you at this moment in time
a percentage off the top of my head with respect to your question,
I am afraid.
187. Is it better or worse than the North West
or the North East?
(Mr Dunnett) We have a substantial problem.
188. Is it better or worse?
(Mr Dunnett) I will give you a response to that after
189. You will give us a note?
(Mr Dunnett) I will give you a note
190. You do not really know that it is a problem,
(Mr Dunnett) I do. We have done a substantial review
of homelessness. I have a study about six inches thick in my office,
but I am not prepared to give that information to answer that
question at this moment.
191. Let us talk about the consequences of affordable
housing. Is it in any way affecting the South East economy?
(Mr Dunnett) It is substantially affecting the South
East economy. If I could give you a couple of pieces of information
first. We have done substantial research which is trailed in our
report. I have a draft report in front of me from Roger Tym and
Partners and Three Dragons which looks at the effects of affordability
and using the affordability index as a methodology. I understand
the capability and availability of an individual buying a terraced
property. What we have found is that, in 43 districts
192. I am sorry, that is a slightly different
point. I am under the impressionit may be an incorrect
impressionthat the South East economy has been expanding
more rapidly than many other regions in the country throughout
a consistent period of time and, throughout that period of time,
property has been pretty unaffordable in your terms in the South
East. So, where is the connection between the expansion in the
economy and the affordability of property?
(Mr Dunnett) The affordability of property is different
across the region and it affects the public and the private sector
differently. With respect to the private sector, which is the
basis of your question, the private sector is experiencing significant
difficulties in attracting low paid or low skilled employees in
the areas of high housing cost which is to be expected: Surrey,
Berkshire, Milton Keynes, Oxfordshire and Buckinghamshire. There
is less difficulty from the private sector's perspective in hiring
low skilled workers in areas such as Kent and East Sussex which
have a completely different economy to the wealthy areas of the
region. I would remind the Committee that Kent and East Sussex
have a similar GDP and a similar population to the North East
of England. As an economy, we have substantial areas in the South
East which are deprived and therefore which are suffering significantly
with respect to house prices.
193. I am not entirely sure that I understand
that answer, but can I turn to the public sector side of things.
You wrote in your submission that the early indications are that
if the question of affordable housing is not tackled, public services
are likely to deteriorate substantially. I want to press you a
little on these early indications. The performance of local authorities
across the South East and across the whole of the country are
monitored on a year by year basis very, very extensively. If there
were a deterioration of the kind you have mentioned, you would
expect to see South East authorities performing less well or councils
performing less well than the North West and North East.
(Mr Dunnett) That is true in the health sector and
we can provide you with information subsequent to this Select
194. Generally speaking, southern hospitals
and PCTs are performing less well than
(Mr Dunnett) We have a higher incidence of poorer
performing health delivery agents in the South East than other
195. And Councils?
(Mr Dunnett) The evidence we do have is the difficulty
that local authorities are having and experiencing in hiring and
196. That is a different point. I am talking
about performance and how you are doing. Can I finally make the
pointI think you know what I have been driving atif
you were more successful in, as it were, resolving some of these
recruitment problems, the economy would thrive further and there
would therefore be a further requirement for labour in the South
East and the problem would complicate itself again. Would it not
be possible to work on redirecting economic growth to other areas
of the country?
(Mr Bevan) I think there are two elements, if I may
respond to your question. The first is that our regional economic
strategy specifically sets out to identify how we can improve
the efficiency of economies of the underperforming parts of the
South East and if we cannot allow the underperforming parts, which
I noted earlier are very similar to some of the worst areas in
the United Kingdomwe are a very large areathen it
is very difficult to see how we can actually achieve that form
of transfer to other parts of the country. There are substantial
numbers in the South East who are underperforming. Six hundred
thousand adults do not have basic skills. We have the third highest
number of poor performing houses. So, our first response is with
respect to the economic strategy in the South East to enable the
poorer parts of the South East to be able to benefit from the
growth as opposed to spurring the success in the successful areas.
The second answerand we do have significant support for
this point and evidence to support itis that the companies
who come to the South East are there for specific locational reasons
and the vast majority of any companies, were they to move, would
not move to other parts in the United Kingdom; they are more likely
to move to places in Europe.
197. It is the often held view that the areas
with the greatest need for new housing are the areas that have
the lowest availability of brownfield land. What can RDAs like
yours do to maximise their use of brownfield?
(Mr Dunnett) The particular challenge in the South
East is the lack of large brownfield sites. The sites which sit
on national land use database and show a significant amount in
number are predominantly airfield sites which are not as appropriate
for future development. The South East England Development Agency
has been, over the last two years, working with all the local
authorities in the South East and with departmental officials
and we hope before Christmas to launch what we are calling the
Brownfield Land Assembly Trust. The particular issue in the South
East is that there are many thousands and tens of thousands of
small sites, one-tenth of an acre in size, which are scars to
the urban fabric, if one wants to use that sort of terminology,
but also are unsited in local capacity sites. So, what we have
been working to is to assemble packages of these two sites into
critical mass levels to provide economies of scale and to be able
to put them to the private sector who are not taking these sites
forward because of their complexity, the amount of working capital
required in taking them forward and the difficulty and complexity
of the planning system and that the cost of capital is too high
over a three to four year period to bring these together. So,
we are looking to do that on a programme basis with local authorities
to plan them, to remediate them, to assemble them, to service
them and to bring forward sites which would otherwise not come
198. How critical is the concept of having a
high density of housing builds in meeting your 60 per cent target?
(Mr Dunnett) If I could make one comment and then
pass to my Regional Assembly colleague. SEEDA set up in its first
regional economic strategy to surpass the Government standards
recognised in the South East. We cannot encroach on the green
lands, if I can put it that way. It is absolutely essential to
meet the demographic requirements of the South East to actually
retrofit the required homes, which are required for single person/single
parent families in predominance, back into the urban fabric.
(Mr Bevan) We are actually meeting a 60 per cent target
at the moment but that is because the overall targets are quite
low. If we were meeting the overall regional target, we would
still need 1,500 more brownfield dwellings a year. The emphasis
on brownfield is problematic. The calls on brownfield sites in
terms of infrastructure and other assembly issues make it much
more difficult to get affordable housing as part of that development
component. In a sense, affordable housing is easier to achieve
on greenfield sites and I think it is true to say that the sequential
tests for PPG3 is actually slowing down release of greenfield
sites and that is one of the reasons why overall figures in the
South East are declining.
199. Is the use of brownfield land in locations
that are closed to employment increasing the need for people to
travel across green belts and is that more or less sustainable
with development of green belt itself?
(Mr Bevan) For example, the announced growth areas
in Thames Gateway, Milton Keynes and Ashford are all in the less
pressure areas of the region. Those areas where pressure on housing
is greatest are not going to benefit from that sort of joined
up investment and I think that is really what is required, a more
holistic approach. We were talking before in the previous evidence
about urban design plan approach to redevelopment. We need that
sort of approach too in those pressured areas like Thames Valley
and like Hampshire. The tools available to local authorities to
do that are very limited. Section 106 agreements are very cumbersome
and the skills and resources that local authorities have without
those sort of special development vehicles that the Government
are talking about are very limited.