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

Memorandum by Liverpool City Council (HOU 03)

  1.  This memorandum is submitted on behalf of Liverpool City Council and supplements a memorandum provided to the earlier phase of the Inquiry.


  2.  We welcome the announcements made by Ministers following the Comprehensive Spending Review, which seem to indicate that housing is poised to benefit from a significant overall increase in resources from 2003-06. Clearly we cannot fully evaluate the likely impact until key spending decisions are made on the levels and balance of funding to:

    —  the Housing Market Renewal Initiative;

    —  mainstream investment in maintaining and improving existing housing;

    —  housing regeneration activities; and

    —  the provision of additional affordable accommodation.

  However, there is concern that the spiralling costs of providing affordable housing in London and the South will undermine the provision of adequate resources for needs elsewhere including the North West.

  3.  We also welcome announcements within the speech by the Deputy Prime Minister following the Comprehensive Spending Review and other recent developments, which promise to improve the tools available to tackle housing problems.

  4.  In particular we welcome the Housing Market Renewal Initiative and the proposed incorporation of its approach into the North West Regional Planning Guidance. We welcome the proposal for a housing gap—funding scheme to support housing programmes where the market price is less than the cost of development.

  5.  Removing restrictions on private sector renewal through the Regulatory Reform Order is also welcome. We support the development of a new PSA target in relation to the improvement of non-decent private sector homes occupied by vulnerable households and await proposals on how vulnerability is to be defined. We also welcome the intention to tackle the minority of unscrupulous landlords and boost the drive against poor conditions. However, as we note below we would caution that the resources for private sector housing are already inadequate.

  6.  We further welcome the present debate on options available to local authorities to complement stock transfer to achieve the decency standard for social housing and hope that this may provide assistance to our current wide ranging options appraisal in relation to our stock. However, we note that the ODPM is only expected to make an announcement on new stock options in January 2003.

Will the funds in the Comprehensive Spending Review achieve the Government's target of a decent home for everyone by 2010?

  7.  We would point out that the Government has so far agreed only a PSA target for social housing, which it is now proposing to extend to vulnerable households in the private sector. No PSA target applies to the private sector stock as a whole. If the Government wishes to ensure a decent home for everyone by 2010, it will have to give further emphasis to ensuring that sufficient investment is made in private sector housing.

  8.  In Liverpool unfitness and disrepair are more prevalent and most problematic within the private sector and particularly within the private rented sector. Our 2002 Housing Strategy Appendix estimates that unfitness in the private sector is 2.5 times that in the social housing sector. The City Council is currently enthusiastically reviewing its private sector renewal policies to make best use of the new flexibilities. However, as we have indicated previously our resources for private sector renewal fall far below needs.

  9.  Despite current stock transfer proposals and decommissioning of redundant stock, as things stand there is no chance that we can achieve the decency standard for City Council homes by 2010 without significant public and private sector investment over and above the current levels. We currently estimate that 79 per cent of Council homes, almost 28,000 dwellings, are non-decent with an estimated cost of over £203 million to make them decent.

  10.  RSL stock in Liverpool is a significant 16 per cent of overall stock. Work is currently in hand to measure compliance with the decency standard consistently across all the RSLs with stock in Liverpool but as yet no baseline information or likely performance figure against the 2010 target are available.

How the spending of the new resources should be balanced between social housing and options for owner occupation for those who cannot afford to buy (including shared ownership) and the mechanisms to be used for their distribution.

  11.  The direction of resources for affordable accommodation is not a salient issue for Liverpool. As previously advised at a city wide level we have an over supply of affordable accommodation (although too much of it is in low demand, poor condition or obsolete). However, decisions on the balance between social housing and owner occupation should be made locally on the basis of a strategic local assessment of housing market conditions rather than by setting national targets. In Liverpool where our owner occupation level at 52 per cent falls below the national average of 68 per cent, we have set a strategic target within our Community Plan to increase it to 60 per cent by 2010.

  12.  There is value in developing a more flexible form of tenure which would allow people to move along a continuum between traditional social rented tenancy and full home ownership. This would have the advantages of adaptability to changing market conditions and be useful to developing mixed communities.

  13.  We believe that detailed decisions on the use of resources should be made locally on the basis of agreed strategies whether local housing strategies, or sub-regionally (eg in the Housing Market Renewal Pathfinders) or on the basis of agreed regional strategies. Locally based decisions rather than national level decisions are more likely to deliver positive outcomes and value for money. We recognise the merit in the Government's intention announced in the Spending Review to bring housing investment together into a single regional pot and support its intention that such investment should link with planning, infrastructure and economic growth strategies.

  14.  Fundamentally the problem of affordable housing relates to the over-heating of the economy in the South East which brings with it acute housing pressures. Ultimately the Government needs not to address short term housing palliatives to deal with these pressures but seek to develop regional economic strategies which stimulate and balance economic growth in regions across the country. This was recognised by the Government in the Comprehensive Spending Review when it set out an objective to make sustainable improvements in the economic performance of all English regions and over the long term reduce the persistent gap in growth rates between the regions.

The effectiveness of the Housing Market Renewal Fund in tackling housing needs in areas with low demand

  15.  We recognise that the Housing Market Renewal Fund is a once in a lifetime opportunity to transform the prospects of communities in the pathfinder areas. In the Merseyside Housing Market Renewal Partnership, the three local authorities of Liverpool, Wirral and Sefton with their respective Local Strategic Partnerships and partners the Government Office, Housing Corporation and the NWDA have made a firm start in developing the required infrastructure and are determined to co-operate to make best use of this opportunity. We are confident that the market renewal approach, complemented by planning and economic development strategies is the correct strategic approach.

  16.  To realise its full potential benefits, the Housing Market Renewal Initiative will need a variety of support from Government, in a positive partnership with the Pathfinders.

  17.  Primarily the Housing Market Renewal Initiative needs a firm long term commitment of dedicated funds. No funding has yet been confirmed except for the £2.66 million per Pathfinder for this year. An early announcement of funding will assist the Pathfinders in developing their strategies.

  18.  Critical to the success of the Pathfinders will be their ability to attract private sector finance into areas with currently depressed markets. Private investors will need confidence in a firm long term public sector commitment to the renewal process in the Pathfinders if the Pathfinders are to maximise leverage of private sector resources.

  19.  The Government MUST continue mainstream funding for housing alongside the HMRF. As submissions to the Comprehensive Spending Review from housing bodies across the North West made clear the HMRF will only work if it is AN ADDITION to existing resource streams. It will not work if Housing Investment Programme or Approved Development Programme resources are reduced to balance out the extra HMRF funds. This is equally important for areas outside the Pathfinders including conurbation areas not included within Pathfinders.

  20.  Government (and other partners including financial institutions) need to help in developing the new and improved tools and skills, which are required to meet the scale of the problem. Examples of better tools include an effective Compulsory Purchase regime to accelerate clearance, equity release models and removal of regulatory barriers facing RSLs.

The role of planning obligations in providing affordable housing

  21.  As Liverpool has a surplus of affordable accommodation at the city-wide level and does not currently have an affordable housing policy, using planning obligations to provide affordable housing has not been a salient issue for the city.

  22.  However, in view of the highly polarised nature of housing markets within the city, the City Council is exploring the possibility of framing and including in its reviewed UDP a policy to address localised shortages in affordable housing. It recognises that this approach is at odds with the current emphasis in affordable housing policy on identifying and addressing affordable housing shortages on a district-wide basis.

  23.  The City Council also recognises that the current government approach to affordable housing arises from a wider concern about creating balanced communities, by providing wider housing opportunity and choice and a better mix in the size, type and location of housing. It needs to be emphasised that Liverpool shares these concerns but considers the key issue locally in relation to achieving balanced communities to be one of enabling the expansion in supply of middle and upper market housing so as to diversify and revive failing local housing markets made up almost entirely of low value housing. The City Council considers it unhelpful that the focus of the national planning policy agenda in respect of creating balanced communities has largely ignored this latter aspect. However, it does acknowledge that initiatives arising in other areas of government policy such as the HMRI Pathfinders are beginning to address this matter.

  24.  To meet the need for affordable housing, high density urban housing is encouraged in planning policy. High density new housing has a place in certain locations in Liverpool. However, it must be emphasised that a crucial issue for Liverpool is a shortage of low density suburban house types which are much in demand by the better off and more mobile consumers, who are likely to leave the city to obtain this type of accommodation. If Liverpool cannot increase its supply of low density suburban housing then its economic regeneration will simply mean that the newly economically advantaged will leave the city and jeopardise its urban renaissance.

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