Supplementary memorandum by South West
Regional Development Agency (ERF 16(d))
1. On 23 November 2001, the RDA wrote to
Stephen Stringer, DTLR, in response to the Department's letter
of 6 November asking for our views on the need for a housing "gap
funding" scheme. The outline of our response was:
"We do consider that the limitations of
the existing ``gap funding'' schemes are a weakness in delivering
holistic economic and sustainable development and indeed the targets
set out for RDAs in the agreed framework. We think in particular
that their limitations will hinder RDAs to deliver on the ``housing
on brownfield land'' target, especially in those areas where market
failure is a contributing factor in making schemes unviable.
It is well demonstrated that ``gap funding''
is an effective way of engaging the private sector in development
projects and if RDAs are to help achieve brownfield targets the
private sector must surely be well and truly engaged. On this
basis, we would welcome the ability to be able to offer 'gap funding'
as one of the delivery mechanisms."
We then set out three important caveats:
we feel that the case that "gap
funding" for housing constitutes state aid has not been proven,
and that this should be dealt with as a precursor to any discussions
with the EU on the need for a scheme;
we expressed concern that any scheme
be limited to the Assisted Area map as there is no direct correlation
between such designated areas and failures in the housing market.
We asked that every effort be made to deliver a scheme with wide
we asked that the RDAs be integral
to the notification process itself so as to assist the Government
make them as effective as possible.
2. HOUSING AND
There are very few references to housing within
the current RES for the South West. However, the Agency recognises
the links between housing and economic performance, both in terms
of ensuring an adequate supply of high quality housing to cater
for the needs of employees and managers of incoming and expanding
firms, and in terms of the effect on the economy of an under-provision
of affordable housing, particularly for key workers.
These are issues which we regularly discuss
with regional partners such as the Regional Planning Body, Government
Office and the Housing Corporation, in order to ensure that our
respective priorities areunderstood and aligned whereever possible
for maximum effect.
With a statutory responsibility to promote sustainable
development we are also concerned to facilitate mixed-use schemes,
on brownfield land, wherever possible. We currently have a number
of major mixed-use schemes in the planning stage, helping to fulfil
our commitment to the region's brown field housing target.