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

Memorandum by South East England Development Agency (HOU 30)

1.  Will the funds in the Spending Review 2002 achieve the Government's target of a decent home for all by 2010?

  1.1  Availability of affordable housing in the South East is the prerequisite to a decent home for all by 2010. At present the future of Housing Corporation funding is not clear, but it is evident that the current allocation of funding will not be sufficient to tackle the depth of need in the region, to provide for homeless households and to meet the housing needs of those who are unable to secure accommodation through the market due to the high costs in the region. The SE region will require the highest number (over half a million) of new homes in the UK to meet the demographic needs of the population. Around two thirds of these new homes over the next 15 years are required for single person, single parent households. The estimate derived from RPG of the quantity of affordable housing needed in the SE is for around 12,000 per annum.

  1.2  The region has lower percentages of unfit, difficult to let and empty properties than the English average, but given the size of the region, the actual numbers are high. The SE region has the fourth highest number of households in unfit homes in the UK, and the third highest number of households living in poor conditions. The quality of social housing in the South East is generally reasonable, but there are still large numbers of homes in the social sector in need of repair and updating. Many homes in poor condition are in the private sector, for example areas such as Slough in Berkshire and Rowner in Gosport; and areas such as these need greater intervention to meet the Government's decent homes target. Across the region 12 per cent of private households are in poor housing against 8 per cent of social sector households.

  1.3  Whilst the SR2002 does provide for an increase in Housing Corporation funding, the mechanics of how this will be implemented, especially in conjunction with English Partnerships' new role, has yet to be determined.

2.  How spending of the new resources should be balanced between social housing and options for owner occupation for those who cannot afford to buy on the open market, and the mechanisms for their distribution.

  2.1  In the first quarter of this year there were 3,380 households in the South East accepted as homeless and in priority need, with 2,790 accommodated in bed and breakfast or hostel accommodation. A significant increase in funding to greatly increase the rate of supply of social housing is the only real option if these needs are to be met by 2010. The current rate of new homes being completed through the Approved Development Programme (ADP) and Local Authorities Social Housing Grant (LASHG) is barely keeping pace with the erosion of social housing stock as a result of Right to Buy. RTB mitigates against being able to build up the required number of affordable homes.

  2.2  Additional resources are needed to tackle homelessness through the provision of social housing. However, there is also an urgent need for key worker accommodation, the shortage of which affects the ability, particularly of the public sector, to recruit. Many key workers such as nurses or police officers early in their careers are unwilling to commit to home ownership and therefore need affordable "sub-market" rents. There is also a need to provide low cost ownership options for the next stage of their lives in order to be able to retain them. The supply of smaller homes to purchase on the open market is not adequate, and often beyond financial reach, and there is an insufficient supply of low cost ownership options.

  Recent research commissioned by SEEDA, and carried out by Roger Tym and Partners with Three Dragons, identifies that the problem of affordable homes is particularly acute in the public sector. The need is not only for the most readily identified categories such as nurses, police etc but is across the whole of the public services sector, and those in the private sector who provide public services. Early indications are that if the provision of affordable housing is not tackled, public services in the South East are likely to deteriorate substantially. It is important that definitions of key workers should be flexible to respond to local needs and not be restricted to crime, health and education.

  2.3  As a priority, adequate resources should be targeted in those areas of greatest pressure in the SE to meet social housing needs, below market rental or low cost ownership options. It is important that there is a diversity of product and that funding is available where it is most needed. In both the social rented sector and shared equity schemes, issues of perpetuity need to be addressed so that the first owner is not the only beneficiary of subsidy.

  2.4  Although growth should be encouraged in areas of opportunity such as Thames Gateway, Milton Keynes and Ashford, it would be unwise to build a disproportionate number of social homes in these areas. New developments should be of mixed tenure and mixed use, and should be managed to ensure that the supporting infrastructure of jobs, services, schools etc is put in place upfront.

  2.5  Care must also be taken to regenerate and refurbish the towns adjacent to the new growth areas to ensure that there is no displacement that would lead to the "hollowing out" of the present towns and subsequently greater social dislocation. Building homes where there is currently no housing pressure alone will not necessarily reduce demand in areas of high pressure. The South East Regional Economic Strategy seeks to promote sustainable economic growth in the areas of economic success as well as to provide alternative and attractive locations for the predicted growth in the South East to take place.

3.  Role of planning obligations

  3.1  Affordable housing coming forward as a result of planning obligations is not adequate to meet the scale of demand and is likely to remain a marginal mechanism for dealing with the affordable housing problem. However, improvements to the present arrangements can always be made. For example, simplified, quicker and more transparent processes for Section 106 agreements are needed to secure implementation once the planning permissions are granted. Local authorities often lack negotiation skills and knowledge of development economics. Clear and streamlined procedures are required, based on an improved skills base (planning/housing policy and practices, funding law, development economics etc), together with clear targets linked to robust and up-to-date assessments of local housing need. These assessments of need must go beyond social rented housing and take into account key workers and the mix of affordable housing "products" that is required locally. In addition, structure and local plans should have a presumption for high density in urban areas and for the provision of smaller units.

  3.2  The recently established power enabling RDAs and EP to provide gap funding to private sector housing schemes where these are uneconomic is potentially of considerable significance. This could well remove some of the pressure on the planning system to deliver affordable housing through a process which was never designed for that purpose.

4.  Ensuring the quality of affordable housing

  4.1  It is important that future house building programmes are well planned and designed. Wherever public sector influence can be leveraged, design should be written into the brief. Wherever Government finance is provided, agencies, departments or other public bodies should only support high quality design for large developments. Support would also be welcome to encourage such standards on smaller developments, as many of these do not reach those thresholds especially in rural areas. For example, SEEDA and the Housing Corporation have agreed that they will not support any projects in the South East unless they reach appropriate BREEAM standards. SEEDA has just established with CABE the first Regional Design Panel to review all major schemes. Local Authorities and developers will be encouraged to approach the panel early in the process (at development brief stage) for advice on planning and to build-in quality (design, materials, technology, master-planning) from the inception of the scheme.

  4.2  New housing should be directed to town centres where possible. New developments should be in highly accessible locations, close to jobs, transportation hubs and services. Social and physical infrastructures should be developed to create sustainable communities. Housing developments should reflect a mix of tenures and provide for market and affordable homes to promote mixed communities. Design and density should be key considerations for a long-term vision of delivery that includes excellence in design, the use of sustainable materials and construction, and long term recognition of the management and maintenance costs. Regional design panels should be established across the country to review all significant developments—not only in relation to size but those significant in their own location.

  4.3  Public attitudes are a barrier to the provision of affordable housing. This is based on a perception that affordable housing comprises large single tenancy estates, poor quality design, environments that are out of keeping with surrounding areas and with high levels of unemployment and crime. This must be addressed through good planning and design if these perceptions are to be challenged.

  4.4  Consideration should be given for gap funding to support demonstration, benchmarked projects to provide economies of scale for innovation/environmentally sustainable construction eg photovoltaics, triple glazed units. Government could also assist by funding research into building technology for sustainable construction.

  4.5  SEEDA is also in the process of launching a regional "Brownfield Land Assembly Trust" to bring forward small sites for affordable housing. This will assemble and procure quality affordable homes, on a critical mass programme basis, using sites that are too small and/or complex for the private sector to bring forward. These homes will act as demonstrations of what can be achieved on a commercial basis without compromising design and quality.

  4.6  There needs to be a greater supply of affordable "below market" rented and low cost home ownership options. However, treating this as purely a supply issue is unlikely to solve the problem. For example, in the SE the level of public sector pay, and the fact that it does not allow workers to purchase on the open market, is a contributory factor. Therefore, there is a need to look wider than the much needed additional funding and to look at pay levels in the public sector, land availability for housing and new mechanisms for bringing forward sites. New approaches are needed to address current departmental regulations for disposal of land held by public sector landowners such as the MOD.

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Prepared 22 October 2002