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

Memorandum by The Housing Corporation (GRI 02)


  The Housing Corporation (the Corporation) welcomes the opportunity to give evidence to the Committee's inquiry into The Effectiveness of Government Regeneration Initiatives. Background to the Housing Corporation and housing associations is provided in Annex 1.


  The Corporation distributes funding to housing associations via its Approved Development Programme (ADP); the amount provided under this programme will rise to nearly £1.3 billion in 2003-04.

  The Corporation has three key investment objectives:—

    (i)  providing new, affordable housing in areas of economic and demographic growth;

    (ii)  contributing to regeneration and neighbourhood renewal; and

    (iii)  meeting the needs of a wide range of vulnerable people.

  Regeneration is therefore an important part of our role as an investor.


General approach to Investment

  Since 2000-01 we have been moving towards a more strategic approach to our ADP investment. A Regional Housing Statement or Strategy (RHS) is produced by the Government Offices and the Housing Corporation in every region. The main purpose of the RHS is to highlight key housing issues in the region and help to identify regional priorities. RHSs are evolving documents that provide valuable information, helping local authorities and housing associations to develop housing strategies.

  In producing the RHSs, we and the Government Offices have involved local and regional stakeholders, such as local authorities and housing associations, mainly through housing forums or officer working groups set up in each area. Regional assemblies have also contributed to the development of the RHSs. Inevitably, the pattern and type of consultation vary depending on local and regional circumstances and organisational structures.

  In particular, we have sought to establish closer contact with the RDAs to ensure that the RHSs are compatible with and help to achieve their economic strategies. We have also developed links with other regional organisations, such as health authorities, regional planning conferences, the Chartered Institute of Housing, the NHF and English Partnerships.

  Our field offices also issue Regional Investment Strategies containing regional and sub-regional priorities for the ADP derived from the RHSs. These regional and sub-regional priorities help the Corporation to identify the areas where ADP funding can do most good. The Corporation uses these priorities when working with local authorities and housing associations, bringing together partners and contributing ADP funding where this can help regenerate an area by funding the provision of replacement and refurbished housing.

  The priorities set out in the RHSs and Regional Investment Strategies set the context for regeneration initiatives in each region and can be used to ensure that area-based initiatives fit within the wider strategy for the area.

Government Regeneration Initiatives

  The Corporation has been and is involved in many of the Government's regeneration initiatives, the most recent of these being the nine Housing Market Restructuring Pathfinders. The Pathfinder initiative was set up partly in response to research funded by the Corporation's Innovation and Good Practice grant programme, and will play an important part in helping associations to manage their stock where the housing market is at risk of failing. The housing association sector will make important contributions at all levels of the initiative. The Corporation will be represented nationally on the Pathfinder initiative's Steering Group and has seconded a member of staff to the ODPM's market restructuring team. All of the Pathfinder boards will have a Corporation representative.

  Housing associations already deliver and manage housing in some of the most deprived areas in the country. They have considerable experience of working with others in complex regeneration programmes and in providing management and maintenance in difficult-to-manage areas. They will therefore often be best placed to advise the Pathfinders and (via their own organisation or, for example, through HRCs—see below) establish how to put Pathfinder strategies into practice in communities. In the coming months we will be examining how to enable housing associations to contribute to the Pathfinder initiative.

  It will be important for the Pathfinders to liaise with other regeneration initiatives in the same or neighbouring areas, such as the New Deal for Communities and the Neighbourhood Renewal Fund. Five key targets drive the neighbourhood renewal strategy. One of these is "tackling poor housing and physical environment". In this, the strategy recognises the importance of good-quality housing. Indeed, the Government has set a target of bringing all social housing up to a decent standard by 2010, with a third of the improvement taking place by 2004—and over half of this will be in the most deprived areas.

  Since local strategic partnerships will decide how to use the Neighbourhood Renewal Fund it is important, particularly when improving housing is an important part of neighbourhood renewal, that local strategic partnerships involve housing associations. In some areas associations are members of the partnership, in others they feed in their views and expertise via housing sub-groups. Associations may also help to deliver regeneration. Tenant involvement will be a key element here and we are encouraging housing associations to support tenants in playing an active role. Given the nature of neighbourhood renewal, associations need to involve not just their own tenants but possibly the tenants of other associations and some owner-occupiers. Housing associations often know a good deal about the communities in which they operate, and they may already work closely with private landlords and home owners.

  Last year we launched our Community, Training and Enabling (CTE) programme. This offers grants to help communities become involved in developing strategies for their areas. We expect to see increased use of CTE grants to support communities involved in the regeneration of deprived areas.

  Neighbourhood wardens can make a big difference in deprived neighbourhoods. The Neighbourhood Warden's Team, also part of the Neighbourhood Renewal Unit, has allocated £18 million of government grants to 85 warden schemes across England and Wales. Of these, 22 are involved with housing associations, with 16 being specifically led by housing associations. The projects are a mixture of patroller and super-caretaker warden schemes, whose function is to prevent problems and respond to community safety concerns in partnership with residents and key stakeholders.

  Neighbourhood management in deprived areas requires greater input from associations. An example of the range of work carried out by an association working to turn round a deprived area is that of Mosscare Housing in East Manchester—see Annex 2. One of the difficulties facing associations taking on such a role is finding the revenue funding to support capital initiatives and provide the intensive on-site neighbourhood management that is required.

Corporation Pilots

  As described above the Corporation uses its Innovation and Good Practice (IGP) grants to fund projects that identify issues affecting housing markets and propose solutions to emerging problems. The IGP grant programme is also used to pilot new ways of tackling the issues faced by deprived communities. We have just published a Regeneration report as part of our bIGPicture series pulling together some of this work and giving practical advice. A copy is enclosed.

  We have been piloting Housing Regeneration Companies (HRCs) to deliver area regeneration with housing as a central theme. A key aspect is to respond to the needs of all tenures, in particular helping to find solutions to the problem of poor private-sector stock. The initial evaluation of the pilots has identified the advantages of having a joint venture organisation which is seen to be independent of any one partner, and has recognised that an HRC provides a focus for community involvement and for attracting public and private sector finance. Factors contributing to success include a strategic commitment by all partners, particularly the local authority; funding to help the organisation start up and to build an asset base; and a willingness by all partners to co-operate in streamlining service delivery and asset ownership. The evaluation also found that individual pilot HRCs benefited from sharing experiences at regular meetings. We will consider how the lessons learnt from the pilots can promote future good practice. Annex 2 contains an example of the work carried out by one of these HRCs to date.

  We are also looking at how housing associations can play a greater part in the wider agenda of regeneration and neighbourhood renewal. We have been carrying out pilot programmes of acquisition for demolition in areas in the North East, North West, Merseyside and West Midlands. This is one of a series of measures aimed at halting decline and aiding regeneration. A key finding from the evaluation has been that these programmes work best in areas where partial demolition is part of a wider regeneration programme, rather than areas where wholesale clearance is needed. The full evaluation, due in 2003, should show which combination of measures is most effective in helping to turn areas around.

  Other tools which could be used to help regenerate areas include "gap funding" where grant is provided to attract private developers to difficult areas; equity loans for repairs/improvements to owner occupied stock; and providing assistance for owner occupiers who need to move from a clearance area to buy another property where the proceeds from the sale of their home is insufficient to buy elsewhere. These are not currently funded via the ADP but we are considering mechanisms for doing so as part of our IGP work on regeneration.

Assessing the impact of our investment

  We have recently introduced a programme of impact assessments to help assess the effectiveness of our investment decisions and to see if scheme objectives envisaged at the bid stage are later achieved. The sort of scheme objectives identified at bid stage can cover sustainability and regeneration, training and employment or issues such as improving tenure mix and increasing community integration and involvement. Our sustainability toolkit, which helps associations to assess whether the schemes they are bidding for are sustainable, provides a useful tool for identifying scheme objectives wider than the provision of housing units.

  Sixty impact assessments took place in 2001-02 as part of a pilot programme. In general it was found that most of the wider objectives set out when the association put forward its bid were achieved. We intend the impact assessment programme to inform future investment decisions by helping us to better understand the factors that affect housing markets. For 2002-03 we are increasing the number of assessments to 90. We are also considering whether we can group some impact assessments so that we can assess the overall impact of several schemes in a particular area. We expect to build on this process as the programme develops. In general, however, it is worth noting that both associations and local authorities found the process useful in helping them review bids they had made or supported in previous years.

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