Select Committee on Transport, Local Government and the Regions Minutes of Evidence


Examination of Witnesses (Questions 620-639)

MS SALLY KEEBLE, MP AND MR MICHAEL FAULKNER

WEDNESDAY 12 DECEMBER 2001

  620. So the Department supports the concept?
  (Ms Keeble) We have not formally reached a decision on it yet because the submission has come in quite recently. There are also some issues around the proposals for the Market Renewal Fund. There are discussions about exactly what the money would be used for because there are a range of measures they are talking about using both on capital and on revenue. One of the other factors would be who would be responsible for such restructuring because there is a strong feeling that it should not just be the local authorities, there needs to be a much wider body, and it would need to be looked at on a sub-regional basis rather than just a local authority basis. There are quite a lot of issues that still have to be resolved about the way a Fund would operate and exactly what it would do. The overwhelming question is obviously the one about the level of the Fund and that is being looked at as part of the Spending Review.

  621. Looking at this 2010 target, to some extent, it seems to imply that all areas can be turned round and saved. Is the reality that in some places with economic decline, jobs have gone, there are not as many people economically in those areas, and should we simply accept that is the natural consequence of economic and social change and areas will decline and wholesale demolition will be needed, and we have to manage that, rather than pretend we can turn it round?
  (Ms Keeble) I do not think that is an acceptable solution for quite a number of different reasons, one is that the causes of low demand and abandonment are quite diverse. Certainly they include economic decline, and that is most obvious in the coal field areas where the mines have gone, so the economic reasons behind the settlements are not there. There is also issues about obsolete housing, where the housing is simply not up to standard and there is no way it could be repaired, that goes probably back to VAT. There is already evidence, you have probably seen it, that quite a lot of money has been spent bringing property up to value only to find that it still cannot be let and it has to be pulled down. There are also issues about neighbourhood management. Again, you have probably seen areas where there has been wholesale abandonment because of the high crime rates and the area has become such that people do not want to live there. There is quite a number of different reasons for decline and low demand, some of them can be managed, some of them are about changing and rebuilding the housing because it is of a type that people do not want to live in, and some of it is about economic pressures. You have to tackle each of those different problems head on. In some areas, of course, there will need to be demolition and on quite a substantial scale, but in some areas it is possible to turn those areas round, and I think we should focus on doing that.

  622. Picking you up on that point, for whatever reasons, along with other measures, there will be a need for substantial demolition?
  (Ms Keeble) Yes.

  623. All of the indications are that no one has any money to undertake the demolition.
  (Ms Keeble) This year and next year the planned demolition is something like 23,000 or 24,000 properties, that is already in the pipeline. That is very, very substantial, it is about 20,000 this year in local authority housing and about 3,000 private sector and next year it is about 19,000 local authority and about the same in private sector. There is demolition already going on. There is also some reprovision going on. If you look, for example, at the Chilwell Housing Action Trust, which you might have been to, there they have taken down a number of tower blocks and they have provided a smaller number of units, that is a really good example of how they coped with the changing population. Most of the new units, or a large number of them have been sheltered housing because the population has aged and they have completely reprovided a certain sector of housing. That has, perhaps, been an example of the way that quite careful thinking can be done to bring areas back into use.

  624. Going back to demolition, most of the demolition plans are in the public sector, this is a particular problem the Committee has been faced with when we went round, in terms of the scale of the problem in the private sector, they are really not resourced to tackle that. Every authority we have spoken to said the same, we have a problem, we can see it coming at us but the resources we have are not going to tackle it, they are only going to scratch the surface on the problems in the private sector. On top of that we have CPO powers which are in urgent need of revision. Where we have local authority sector properties with right-to-buy within them that is now causing a major problem, people are coming in at the last minute and buying properties, pushing the cost of sorting them out through the roof.
  (Ms Keeble) First of all, the point about the funds for the private sector, as I said we are looking at the Market Renewal Fund and that would cover all sectors, the funds for that, that is part of the discussion about the Spending Review. However, we have simplified the arrangements for renewal areas and those, obviously, cover different sectors. It is also the case that in some of the regeneration work that is being done, in Kensington New Deal for Communities, which I think the Select Committee went to see, work has been done there across sectors, with the Housing Association being the agent for that, which I think has been a particularly innovative way of dealing with it. You are right, there are problems, particularly in some of the ex coal field areas and some of the activities of private sector landlords who brought up huge swathes of properties which are now derelict and which the owners refuse to do up. We are looking at one particular development there to tackle quite a number of those little villages and try and tackle and overcome some of the problems of abandonment and dereliction there. As part of the planning Green Paper, which is being launched even as we speak now, we also have our proposals for simplifying the CPO procedures. Under the right-to-buy we do not have proposals to change the right-to-buy. We recognise, particularly in Tower Hamlets that there has been a problem on one estate, where people have exercised their right-to-buy in very large numbers. Part of our housing funding from this year on included a low demand indicator, which has been the first time that the problems of low demand have been recognised and those financial—

Chairman

  625. What is a low demand indicator?
  (Ms Keeble) It allows for extra funding for those local authorities that have a problem with low demand. It accounts for two per cent of the total funding, which is quite modest now, but it is the first time that the extra pressure caused for housing authorities by the problem of low demand has actually been recognised.

Ms King

  626. When the Deputy Prime Minister visited Tower Hamlets last year and saw that on the Ocean New Deal for Communities, for example, most of the housing allocation money was going to be wiped out in buying up people's right-to-buy or allowing them to exercise that right. He said that one solution might be what they did in Scotland, which was to suspend the right-to-buy in areas where regeneration schemes have been announced. Are you looking at that as a possible option?
  (Ms Keeble) We have not looked at changing any of the right-to-buy provisions.

Mr Betts

  627. The Home Swaps scheme in Salford we have heard about, do you know how much it would cost to widen the coverage of this type of initiative to all low demand areas? Is that something that you are seeking do and obtain funds from the Treasury for?
  (Ms Keeble) I am not familiar with that. Can you just describe it for me?

Chairman

  628. What happened is that in Langworthy in Salford you have two blocks of turn-of-the-century housing, one on one side of the main road and one on the other side. Both received substantial sums of money to modernise them and bring them up to the date, but they are now suffering from low demand. The intention of Salford Council is to clear one block and then try and preserve the other block. The people in the block to be cleared are being offered the chance to move to similar property and to retain the equity that they had in the old house by taking it into the new one.
  (Ms Keeble) We have not made an estimation of an extension of that programme. I would say, however, that in almost all of the areas where there is regeneration of housing estates there is a major issue of making sure that people are prepared to move in some instances, if you have to clear and reprovide housing. I would say that is obviously one of the issues round the Ocean Estate as well in Tower Hamlets. It is well recognised and it is one of the big issues that comes up in housing management for any regeneration scheme.

  629. Salford was very pleased with the Home Swaps scheme, although they had to admit about only two or three people had taken advantage of it so far.
  (Ms Keeble) How many?

  630. Two or three people have taken advantage of it but they hope for many more. It appears to have taken a long time for your department and others to clear the scheme as an experimental one. When this Committee was in Manchester we had one person who was very keen to impress on us that she had been trapped in one side of Langworthy unable to sell her house for the last 10 years and she was now being offered the opportunity to move across the road and to be trapped on other side of the main road probably for the next 10 years and she was not too happy with the scheme. Do you have any comments on that?
  (Ms Keeble) There are obviously real difficulties for people who are stuck in owner-occupied houses in areas of low demand because it is virtually impossible for them to move and because a house loses its value in such a dramatic way they cannot get the equity out of their property to move to an area of their choice. It seems to me that if we are looking at dealing with a low demand problem and regenerating housing we have to make sure, one, that we provide people with the type of housing that they are going to want to live in for a period of time, which can sometimes provide dramatically different housing, for example a shift from family housing to housing for older people; second, that we also provide people with some greater ability, if they do want it, to move or move out. Also, this is going to be the real trick of the Market Renewal Fund, in most of these areas what we are trying to do is bring value back into areas that have none so that the housing market can operate as it would normally down here. That is going to be an extremely difficult thing to do. If we are seriously going to turn around the low demand areas and get the market operating properly back in the North-East and North-West and Yorkshire and Humberside that is the intervention that the government has to make.

Mrs Ellman

  631. We have seen streets which have been part of government initiatives over the last 30 years that are still facing great difficulty, what has the government learned from its mistakes?
  (Ms Keeble) One is that it is not enough just to repair properties and think that that is the sum total of the problem. You can bring houses up to a certain standard but that sometimes does not deal with the underlying issues which might go very much wider, as I indicated before. The second lesson is that if you are going to renew those low demand areas you have to look at the wider strategies, that includes looking at employment and looking at neighbourhood management. If you look at some of the very interesting work that has been done in some New Deal for Communities areas by some of the housing associations, they have tackled the wider problems and they have managed to create sustainable communities. I think those are probably the two biggest ones actually, not going for short-term gains and tackling the wider problems that are involved in an area.

  632. Where would you say the greatest success has been achieved in housing renewal and wider regeneration?
  (Ms Keeble) I think, despite their very turbulent beginnings, that the Housing Action Trusts have done some very good work because they have reprovided housing to a very high standard, a remarkably high standard. They have also tackled some of the wider issues about job provision, local communities and things like that. They have also empowered communities, which I know sounds very vague, tenants have become much more engaged in managing their own estates and that helps to sustain them over the longer term. I have to say they have also had vast amounts of money.

  633. Are there any particular places, can you name any particular place it has been successful?
  (Ms Keeble) We might be here all day. I think Castle Vale have done extraordinary work, both in providing a wide range of housing and getting private sector housing into what was once truly a big council estate. They have also managed to tackle some of health problems for the local community and educational problem. They have improved the infant mortality rate simply by changing the way the services are managed on the housing estate. They have got school standards up as well because they have worked with the schools, which quite a lot of housing areas have not done. The Tower Hamlets Housing Action Trust has done well in terms of providing a range of different types of housing in place of tower blocks.

Chairman

  634. A success in a low demand area?
  (Ms Keeble) In Liverpool, the Housing Action Trust there has done extremely well again in reproviding and taking the tenants with them and in changing tower blocks into some very good sheltered housing, so that they have kept track of the changing community and they have thought in a very substantial way about how to do it. I think some of the New Deal for Communities schemes-I am just thinking of one, I think the one in Liverpool has done well, and the Kensington one.

Mrs Ellman

  635. Who has made that judgment?
  (Ms Keeble) Who has made it?

  636. The judgment?
  (Ms Keeble) That they have done well? If you ask me which ones I think have done well then I make that judgment looking at what they have achieved.

  637. Although it has hardly started to achieve anything in Liverpool.
  (Ms Keeble) I think what they have done, which is interesting, is to get partnership working across tenures, which is very difficult. In quite a lot of areas you go and people can say, "we cannot do anything because that is owned by a private landlord, that is housing association, that is council". There is a problem of mixed tenures. I think Kensington New Deal for Communities has recognised that because it has found a model for tackling it.

  638. Are you looking at models or actually concrete achievements?
  (Ms Keeble) You have to have a model in place to be able to do anything at all. If you look at some of the other areas of low demand where they have not been able to get that then the areas have not been able to make progress. You can look at the coal field communities in Nottinghamshire and Derbyshire where you have small isolated places that have not been able to get a model to really tackle some of the difficulties they have. I take your point that the Liverpool New Deal for Communities is early days, but they have a model which is able to tackle some of the difficult intractable issues they have and we have to follow through.

  Chairman: I think if the Committee is going to get through all of the questions we have to be a bit quicker with our questions.

Ms King

  639. I am sorry to bring you back to this but I really did want an answer of what your Department is going to do with right-to-buy, are you saying you will not consider suspending it, what are you going to do to ensure that government money, say £25 million in this case, does not just go down the drain, it is not used to improve social housing stock because of right-to-buy?
  (Ms Keeble) Are you talking particularly about the Ocean Estate?


 
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