Select Committee on Transport, Local Government and the Regions Sixth Report


III. FAILING MARKETS

Managing change

135. The neighbourhood renewal approach focuses on revitalising the poorest neighbourhoods rather than preventative actions to stop neighbourhoods declining in the first place. By assuming that every neighbourhood can be saved, it also fails to deal with the management of change required in those areas facing acute decline. The social and financial costs of managing decline including school closures, high crime, high levels of social services need and environmental management costs, described above, all place additional pressures on the public services, compounded by the high turnover of the population. We have heard how decline ought to be managed in a planned and orderly manner,[302] and how the various agencies ought to come together to re-prioritise their budgets and activities in a co-ordinated way that can respond to the needs of an increasingly marginalised population. However we heard little evidence of this happening. We recommend that the Neighbourhood Renewal Unit should identify and promote good practice in managing change in those areas which are seeing dramatic decline and abandonment.

Regional intervention

136. There are three main regional organisations with a clear role in responding to the problem of low demand:

  • Regional Development Agencies (RDAs) which are responsible for the Regional Economic Strategy; and

  • Government Offices for the Regions, which are the most important bodies with responsibility for planning, neighbourhood renewal and housing strategy.

The Report of the Unpopular Housing Action Team concluded that the strategies of the three bodies need to be integrated,

It did not, however, identify a lead regional organisation. We heard about the problems caused by the lack of an institutional framework to co-ordinate regional activities and investments.[304] As a result:

  • too many houses continue to be planned for greenfield sites;

  • RDA activities are increasingly moving away from co-ordinated, sustainable regeneration of inner urban areas towards economic development; and

  • the Housing Corporation is left trying to deal with the consequences of over-supply of social housing but with an inadequate remit to deal with private sector housing renewal.

HOUSING CORPORATION

137. As a national organisation, the Housing Corporation has to deal with the problems of both a lack of supply of affordable housing in the south of the country and an over-supply of social housing in parts of the north and midlands. Both these problems will require significant investment. We heard from the National Housing Federation that whilst the introduction of a low demand indicator had increased funding for housing regeneration in the north, through the Generalised Needs Index, this increase in funding was offset by an increase in funding to social housing in the south through the Housing Needs Index.[305]

138. The issues facing Housing Corporation Regional Offices are more clear cut. In the Northern Region in particular, there is an over-supply of social housing, which (as described above) puts individual registered social landlords' business plans at risk. The Housing Corporation has shifted the emphasis of its Approved Development Programme away from new build towards rehabilitation and renewal in these areas; but the legacy of past approvals for new schemes is still evident. Astonishingly a recent study by Heriot-Watt University found that of the 87,000 housing association homes affected by low demand, 10,000 had been built since 1988.[306]

139. Because the Housing Corporation only has responsibility for social housing, its role in private sector housing renewal has been limited, although it has recently developed a pilot programme of Housing Regeneration Companies to work across tenures.[307] The volume of evidence which we have received calling for a Housing Market Renewal Fund suggests that the funding and powers of the Housing Regeneration Companies, whilst useful, are insufficient.[308]

140. Our advisor, Professor Ian Cole, recently undertook a review of the Regional Housing Statements, prepared by Housing Corporation Regional Offices and Government Offices for the Regions. He found that the Regional Housing Statements took account of Regional Planning Guidance (RPG) and Regional Economic Strategies (RES) but this was not reciprocated in these documents.

    "All the Regional Housing Statements refer to the existence of the RPG and RES and state that they intend to be consistent with their strategic priorities. Some Statements go on to summarise the key points of the RPGs and RESs and show how housing priorities link in with RDA and RPG priorities. However, from the other perspective, only one RES referred to the existence of a Regional Housing Statement. Similarly while all RPGs considered housing as part of their remit, only one RPG referred specifically to the Regional Housing Statement."[309]

This lack of cross-reference is partially an issue of the timing of the production of the various documents; but the need for better co-ordination in the regions is widely accepted. The Director of Investment and Regeneration for the Housing Corporation (North)[310] confirmed the need for improved strategic co-ordination:

    "There has also to be better co-ordination between ourselves and the Regional Planning Guidance, the Regional Economic Strategy Policy and the RDAs in place so that there is clarity between planning guidance and the development of housing."[311]

We recommend that Housing Corporation Regional Offices, Government Offices for the Regions and the Regional Development Agencies should develop formal working procedures to ensure that full and consistent account is taken of low demand, unpopular housing and failing housing markets in regional housing, planning and economic development strategies. The Government Offices for the Regions should take the lead in co-ordinating this and report on progress on an annual basis to the DTLR.

REGIONAL DEVELOPMENT AGENCIES

141. When the RDAs were established it was intended that they should promote the sustainable economic development of their regions.[312] The Agencies were given a lead role in meeting the Government's target that 60 per cent of new housing should be built on brownfield sites.[313] The North West Development Agency's Regional Economic Development Strategy, published in 2000 stated, "The NWDA together with partners will support the promotion of large scale programmes of co-ordinated housing renewal and regeneration."[314] However, since sponsorship of the RDAs has passed to the Department of Trade and Industry, their objectives have become more tightly focussed on economic development, described by ONE North East:

    "Their remit is quite clear in terms of the changes under current Government policy. The Regional Development Agencies really have to address the whole question of wealth creation and moving towards improving wealth in some areas and moving to some degree away from the social agenda."

142. The change in the RDAs' objectives creates concern that they are no longer prioritising the regeneration of inner urban, brownfield sites. As part of its inquiry into the need for a new European Regeneration Framework, the Urban Affairs Sub-committee has received evidence from property consultants, King Sturge, that:

    "I have concerns that the Regional Development Agencies are moving away from urban regeneration and towards the promotion of economic development, inward investment etc. Whilst this role is in itself important to regeneration, it leaves a question as to who, apart from local authorities and local agencies, are promoting the Government's urban renaissance agenda."[315]

The Environmental Audit Committee was also concerned that the Departmental separation of responsibility for sustainable development from other aspects of regional policy, following the 1997 General Election, would lead to reduced emphasis on sustainable development in the regions.[316]

143. Moreover, it is vital that economic development and regeneration take place in tandem so that as people gain access to jobs, the area in which they live is sufficiently attractive for them to want to remain there and that proposals for housing market renewal take account of the economic viability of an area. There are places where there is effective co-ordination; in East Manchester, for example, we saw good practice in the bringing together of the Urban Regeneration Company and proposals for housing market renewal. There is a serious danger that RDAs under the auspices of the DTI are neglecting regeneration. The DTI and the DTLR should ensure that RDAs continue to give priority to sustainable development and the re-use of brownfield sites for housing. Proposals for inner urban areas need to include co-ordinated regeneration and economic development activities.

PLANNING

144. The planning system is supposed to balance the supply of and demand for housing but over the last 30 years the number of new houses built outside the cities has led to decentralisation and suburban sprawl as people move out of inner urban areas and into the suburbs.[317] In Birmingham, for example,

    "Younger economically active households are moving out of Birmingham, particularly black, minority ethnic households, to cities around the edge of Birmingham to Telford, to Redditch, to Tamworth, three growth towns, 15 miles away."[318]

The Government's Planning Policy Guidance Note 3, which was welcomed by our predecessor Committee ,[319] was introduced in March 2000. It set out a clear policy to stem the decentralisation by stating that new homes should be built in urban areas and on brownfield land in preference to greenfield sites.

    "Local planning authorities should provide sufficient housing land but give priority to re-using previously developed land within urban areas, bringing empty homes back into use and converting existing buildings in preference to the development of greenfield sites."[320]

145. Yet the evidence we have received suggests that regional and local planners are not implementing PPG3 and are continuing to allow too many new houses to be built on greenfield sites. They are clearly not giving priority to the re-use of the empty homes and the sites on which they stand:

  • Regional Planning Guidance is not setting rigorous targets to reduce the vacancy rate, which then feeds through to an additional requirement for new homes to be built on greenfield sites;

  • there is insufficient information about the number of greenfield sites that currently have planning consents;

  • local authorities are ignoring the vacant properties and brownfield sites in neighbouring boroughs; and

  • Regional Planning Guidance does not take account of proposals for housing market renewal.

Overall too many new homes are being planned for greenfield sites, and Regional Planning Guidance, such as that proposed in the North West, is likely to make the problem worse.

Targets to reduce the vacancy rate

146. Regional Planning Guidance (RPG) sets out the requirement for new homes in a region on the basis of forecasts of demand and in the light of the region's existing housing capacity.[321] Alan Wenban-Smith explained the importance of assumptions about the vacancy rate in determining housing capacity. RPG "should allow enough vacancy for ease of movement, but no more. Where the current vacancy rate exceeds the national target (or a regional target derived from it), the amount of housing to be provided should be reduced accordingly."[322] Assumption of a higher vacancy rate would increase the number of new homes required to be built on greenfield sites, "It is a significant difference in the sense that all that extra feeds through and at the end of the day means more greenfield land must be identified to meet it."[323]

147. Despite a national vacancy target of 3 per cent, the draft RPG for the North West set out requirements for new homes on the basis that the vacancy rate would remain at 4.3 per cent[324] Alan Wenban-Smith argued that this had led to an assumption that 25,900 more homes would be required over the plan period, than if a 3 per cent vacancy rate had been assumed.[325] The Panel Report on the Draft RPG for the North West defended its assumption that the vacancy rate will remain high:

    "The advice in PPG11, paragraphs 5.21 and 16.05 refers to the housing vacancy rate as a 'contextual indicator' which is not directly influenced by RPG.[326] Clearly it is desirable that maximum use should be made of the existing housing stock but only where this is suitable for the purpose. It must be primarily for individual local authorities to decide, taking account of local circumstances the extent to which it is feasible to bring vacant or difficult to let housing back into use."[327]

PPG3 requires planners to prioritise the re-use of empty properties and the brownfield sites on which they stand, in preference to new building on greenfield sites and we are disappointed that this does not appear to be happening. Regional Planning Guidance must reflect PPG3, should include rigorous targets for the reduction of the vacancy rate and should use this to calculate whether any additional houses are needed.


302   EMP89A Back

303   Op cit, Paragraph 1.12 Back

304   Q 417 Back

305   Q 419 Back

306   Housing Corporation Sector Study 13, Characteristics of low demand housing associations, February 2002 Back

307   See EMP86 Back

308   Qq 218 and 220 Back

309   Review and Evaluation of Regional Housing Statements, DETR Housing Research Summary Number 143, 2001 Back

310   Which covers the North West, North East and Yorkshire and Humberside Back

311   Q 191 Back

312   The role of the RDAs is described in greater detail in the First Report of the Environment, Transport and Regional Affairs Committee, Session 1997-98, HC415 and the Tenth Report of the Environment, Transport and Regional Affairs Committee, Session 1998-99, HC232-I Back

313   Department of the Environment, Transport and the Regions, SR2000, Service Delivery Agreement Back

314   Page 35, England's North West: A Strategy Towards 2020, NWDA, 2000 Back

315   ERF08, HC483-II Back

316   First Report of the Environmental Audit Committee, Session 2001-02, HC326, Paragraph 326 Back

317   EMP47(a) Back

318   David Thompson, Q 77 Back

319   Seventeenth Report of the Select Committee on Environment, Transport and Regional Affairs, HC490-I, Session 1998-99, Paragraph 7 Back

320   Planning Policy Guidance Note 3, DETR, 2000, Paragraph 2 Back

321   The Tenth Report of the Environment, Transport and Regional Affairs Committee, Session 1997-98, HC495-I looked at how projections of housing demand were made Back

322   EMP76 Back

323   Q 270 Back

324   Q 270 Back

325   EMP76 Back

326   Alan Wenban-Smith told us this was a "cop-out," Q 275 Back

327   Paragraph 7.18, Regional Planning Guidance for the North West: Panel Report, 2001 Back


 
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