Memorandum by Liverpool City Council (HOU
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;
the provision of additional affordable
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 gapfunding scheme to support
housing programmes where the market price is less than the cost
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
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
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
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.