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

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 applicability; and

    —  we asked that the RDAs be integral to the notification process itself so as to assist the Government make them as effective as possible.


  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.

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