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


Examination of Witnesses (Questions 180 - 194)

TUESDAY 20 NOVEMBER 2001

LORD FALCONER OF THOROTON QC, MIKE GAHAGAN, JOYCE BRIDGES AND MIKE ASH

  180. When you are buying a house for £4,000 in a pub, you will get a Sellers' Pack with it?  (Lord Falconer of Thoroton) The Sellers' Pack only applies where the thing is put up for sale in the market. The transactions in the pub are so fast that there has not been a substantial marketing exercise for them.

Mr Cummings

  181. There are still houses up for sale on the open market in my area for substantially less than £5,000.  (Lord Falconer of Thoroton) We need to look to see, in houses below a particular value, whether or not the Sellers' Packs should apply to them.

  182. I do recall the minister on the floor of the House saying he would look at it. That was nearly 18 months ago. Are you still looking? When do you intend to stop looking?  (Lord Falconer of Thoroton) We need to address these issues in good time for when the legislation comes back before Parliament. The principle of the Sellers' Packs we believe is a good one. Yes, there are issues about that and there are issues as well about whether or not criminal sanction is the appropriate sanction for not having a Sellers' Pack. The principle of having an obligatory requirement on people to provide basic information, including information about the condition of a house that they are seeking to sell, is a good one because it will reduce the possibility of people in the middle of a transaction, with lots of other transactions dependent upon, having that transaction fall through, causing great distress to people in the process of buying and selling their house.

Christine Russell

  183. We are aware that the government has introduced a scheme for providing low cost accommodation for key workers. Could you tel us how you define a key worker?  (Lord Falconer of Thoroton) Key workers are people who are working in the public sector, in important and critical jobs. There is no hard and fast definition but the people who have bee helped in the scheme that we have proposed have been teachers, social workers, policemen and nurses.

  184. Have you received any representations or backlash, for instance, from unions or anyone representing workers that are not deemed to be key?  (Lord Falconer of Thoroton) I do not think we have had much of a backlash. Prison officers have suggested they should be included in the scheme.

  185. How many units of affordable housing do you think are required in England and Wales now every year? How many do you feel can be provided or should be provided from the housing corporation? How many should come through the route of planning gain?  (Lord Falconer of Thoroton) We have always shied away from saying what is the precise number of affordable houses that need to be provided.

Chairman

  186. Because you have been frightened to provide the money for them.  (Lord Falconer of Thoroton) I think because it is very difficult to predict. The moment that you give a particular figure, it will change. Circumstances repeatedly change in relation to what demands are.

Christine Russell

  187. My local authority, for the past ten years or more, has said, "We have 5,000 people on the waiting list and we therefore need X number." Your department must receive from all local authorities their housing strategies or—?  (Lord Falconer of Thoroton) I am not saying the material is not there to make an estimate. It is not just about what local authorities say the number of houses is; it is also about, for example, how many new households are being created in a year. The number of affordable houses required is greatly in excess of the numbers that have been built. There is absolutely no doubt about that. One needs to increase as much as one can the number of affordable houses that are available. To some extent, we have sought to do that by increasing considerably the expenditure made through the housing corporation on new builds. In terms of how many affordable houses will be built by the Housing Corporation ADP and other programmes, it is 100,000 over the next three years. I am not saying for one moment that that matches what the demand will be for affordable housing. On the issue about using the planning system to get as many possible, I think that is very important. We have to construct a planning gain system which produces as many affordable houses as possible but that means a system that is not choking off development. You have to pitch it at a level whereby you get the maximum housing gain.

  188. Do you have a target in mind of what numbers you feel could come through that stream?  (Lord Falconer of Thoroton) It will vary from place to place. In the draft of the document Heading Towards London's Spacial Development Strategy it proposes a target of 50 per cent affordable housing throughout the whole of London, by way of example. There has been some research done by a group called The Three Dragons for London which they shared with us which showed certain London boroughs could easily sustain 50 per cent affordable housing: City, Westminster, Kensington and Chelsea, because the gains for the developer are so great that they will have no trouble in doing that but, if you go to other areas—Barking and Dagenham, Tower Hamlets—they could not remotely sustain a 50 per cent affordable housing target unless there was 100 per cent subsidy from people like the Housing Corporation. It will vary from place to place as to what the target is. I would have thought we were totally agreed that you have to get the level at the level which will produce the most affordable houses in the particular area without choking off the supply of development.

Chairman

  189. Your department has had a fair number of discussions over the years with the Treasury about supplying money to do things. Sometimes they have been somewhat acrimonious. Given that you have a certain amount of money, fairly frequently programmes underspend. Is that not somewhat sad?  (Lord Falconer of Thoroton) I think it is because sometimes it will indicate that we have not spent properly. Other times, it will indicate that we have under estimated the amount of money that can be spent in a particular time. There is one area which I am responsible for where there has been a significant underspend, which is the new deal for communities. The reason why there was a significant underspend at the start was because it took longer to identify how best to spend the money in deprived areas. Looking at that experience, it was probably right to delay the allocation and distribution of the money because if one had spent it all at the speed that originally been envisaged some of it may not have been as effective as it otherwise might have been. It is sad, but we have to be quite sensible about how we spend money.

  190. In the next round, having learned from those lessons, are you going to bid for the money that you can spend in the years in which you can spend it?  (Lord Falconer of Thoroton) Certainly we will only bid for the money that we think we can spend. Whether we will be right in that assessment or not is a critical question.

  191. Do you think the errors that occurred in the past were a reasonable measure of inaccuracy?  (Lord Falconer of Thoroton) It is impossible to tell. We plainly have to learn from what happened in the past and we have plainly to pitch our bids in the spending review at a level that we believe we can spend at. It is incredibly difficult from time to time to identify the precise timing of expenditure.

  192. Do you and other ministerial colleagues get this information regularly as to how far you have spent this year's budget?  (Lord Falconer of Thoroton) Since I have been in the DTLR, I have on two occasions since June been told what the level of expenditure has been which gives you a monthly clear picture of where the underspends are.

  193. You have been able to take some action to remedy that?  (Lord Falconer of Thoroton) Not in every case, no, because the one thing you cannot do when you are underspending is simply shovel money out of the door. You have to identify precisely what is the reason for the underspend and whether or not there are means for making the expenditure occur.

  194. Do you think the new accounting systems that have been brought in make budgetary control easier?  (Lord Falconer of Thoroton) I think the problem that you are identifying is about judgments made in a spending round, about what is the right phasing of the expenditure of money. Hopefully, the new budgetary controls will make it easier to identify what is possible, but I do not think it is ever going to be got completely right.

  Chairman: On that note, can I thank you very much for your evidence?





 
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