Examination of Witnesses(Questions 200-219)|
TUESDAY 22 OCTOBER 2002
200. Returning to SEEDA's buy-out, what are
the funding obstacles to be overcome in order to make this work?
(Mr Dunnett) Receiving funding to our bottom line
to enable it to happen, being blunt. We are capped as a regional
development agency as far as funding is concerned and our principle
challenge is attracting funding to get it kick-started.
201. How many homes do you think it can deliver?
(Mr Dunnett) I believe that, when it is up and running,
it will take three or four years to build up obviously a sufficient
bank of housing. It should well be able to deliver 3,000 to 5,000
affordable homes per annum.
202. When you say that the problem is funding,
is it going to happen or is it not going to happen?
(Mr Dunnett) We have debates and discussions in with
the department as to how our funding line can be enhanced at the
moment. We are looking to use some additional funding we have
in Hastings to start this particular approach from a Hastings
203. But, if you do not get the funding, then
it is not going to happen? You do not have the resources?
(Mr Dunnett) We do not have a specific commitment
in the next six months to handle it. The South East Development
Agency is going to have to either cut other parts of its budget
or continue its discussions with the department.
204. Do you believe that the affordable housing
targets in regional planning guidance are meaningful if they are
(Mr Bevan) At the moment, an overall indicator in
the South East is 12,000, but that is not really based on anything
but a guess as far as we can tell. A housing needs study needs
to be undertaken regionally in order to get a much stronger basis
for a target and we are discussing a joint approach to that with
the Government Office. So we hope that in the review of regional
planning guidance, we will have a tougher, stronger based affordable
housing target. It is extremely important to have an affordable
205. Why do you think it has proved impossible
to meet the affordable housing targets in regional planning guidance?
Is there a blockage somewhere in the system?
(Mr Bevan) Over the past year, we have undertaken,
as our evidence suggested, a range of work analysis and work with
local authorities and RSLs throughout the region to identify the
blockages to affordable housing delivery. We came up with 46 action
points and 20-odd of them were with Government and I am sure you
do not want me to go through them now but it is to do with the
speed of local plan making, resources from Central Government,
the rules applied to right to buy and all sorts of issues. Within
that, affordable housing targets are, I think, important for four
reasons. First of all, they set a benchmark for provision and
help other agencies involved in affordable housing to plan according
to that benchmark such as the Housing Corporation. They require
a follow through and development plan, so that is where the real
leverage comes in local plans and structure plans. They assist
local authorities in negotiating with developers for affordable
housing evidence to new housing developments and they provide
the basis for subregional targets because it is the subregional
targets where a real housing need study can be undertaken that
will provide a much stronger basis for affordable housing targets.
206. Let me try and simplify the matter. Would
it not be the case that affordable housing targets in regional
planning guidance should be based on what authorities think can
be provided rather than what is needed? Would that not be a much
more realistic approach?
(Mr Bevan) I am sorry, what local authorities think
. . .?
207. That they build what they think can be
provided rather than be burdened with targets that just cannot
(Mr Bevan) I think we need to address the reasons
why the targets cannot be realised. What is the point of a target
if you are just going to put as a target what you think you are
going to achieve? Targets need to be based on an assessment of
what the need is to deliver the sustainable community and the
well-being of a population for which local authorities are responsible.
208. But the Committee have been informed that
it is proving quite impossible to make affordable housing targets
in the planning guidance? Are you not placing an impossible burden
upon the providers of housing?
(Mr Bevan) It may be a stretching target, but I think
they are based on a sound assessment of what housing need is and
therefore it would be foolish simply to abandon them on the basis
of what people think they can deliver.
209. I just wanted to make sure that we had
an answer from the South West team as well on affordable housing
(Councillor Clarke) We would like to pick up the brownfield
issue where, because we are not predominantly an industrial region,
we have limited availability. We wanted to put forward through
our RPG 36 per cent and we were forced up to 50 per cent brownfield
against the national average of 60 per cent. In affordable housing,
we are back to the kind of market forces I was talking to you
about because, when you sit down now with your 106 agreements
to get the roads infrastructure and the school places and then
you want affordable housing as well and you have this massive
price gap because of the two-tiered nature . . . I was thinking
when you were touching earlier on some of the pressures elsewhere,
if you take the example of Cornwall, Cornwall is likely to be
the only place in Britain which will continue to have Objective
1 status at the next review. It is a very low wage area, but it
is one of those areas which is the most attractive for relocation
and second homes. It has been put on the map by the Eden Project:
two million visitors a year. You now have a massive gap. You are
looking at a number of £300,000 and £400,000 houses
which are totally out of the reach of locals. Apart from that,
the two-way pressure is (1) the availability but (2) this market
gap between all these other costs and what actually makes the
price affordable. We have one calculation in here which we can
leave with you where, to be affordable in many of our locations,
the price needs to be around £70,000 but, when you put all
these other components together, you cannot construct a house
and make the land available for less than a selling price of £110,000.
Sir Paul Beresford
210. Can I come back to the South East. SEEDA
made a comment about variations between the economic climates
within its own area. There is an argument that one could use with
planning, with co-operation with the DTI, through Government influence,
through SEEDA et cetera that one ought to be concentrating on
moving jobs, demand and so on and so forth into those areas that
have a low economy and that you ought to be tightening up on those
areas with the high economy and high demand and, to encourage
them to do so, we could actually reduce the tax in the house for
affordable housing so as to encourage it elsewhere. Is there any
sign of the Government helping at all?
(Mr Dunnett) There are two halves to that, if I may.
The second half I will put to my colleague who is responsible
for that. The principal issue about getting greater activity in
areas such as the Thames Gateway, Kent and East Sussex is infrastructure
to them. Clearly you cannot create communities unless people can
commute in and out or actively work within those communities.
The number one priority in the regional strategy has been to provide
infrastructure, not just physical but virtual with respect to
broadband, and also with respect to skills.
(Mr Bevan) In those areas of economic success that
we are talking about, it is simply reproduction of the society
you have got. We are not talking about a huge expansion of jobs
or a huge expansion of populations but we are accommodating the
children and grandchildren of existing populations.
211. Can I take you to the Regions White Paper
which suggests changing the funds up from the Housing Corporation
to regional bodies or to regional assemblies. There are two parts
to this question. Do you think the regional assemblies will do
a better job than the Housing Corporation? If they do that job,
is there a danger that they will reinforce tensions that already
exist within the regions?
(Mr Dunnett) With respect to provision of funding
in the South East, I personally feel that the provision of a particular
body is less important than the present players working together
holistically. Whether or not it has a structural body to me is
a bit irrelevant. What is absolutely important is that the Housing
Corporation, the Assembly and, for example, English Partnerships
and the local authorities work together to come to a holistic
212. And the second part, tensions within the
regions, between London and Surrey, that sort of thing?
(Mr Dunnett) The biggest issue between London and
the region is the region's housing problems are largely the result
of wealthy people exiting London and taking up the brownfield
sites which are available in the South East, causing additional
pressure by taking away the opportunities for housing for people
who actually live there. We have a migration out of London problem
in the South East.
213. Is the Assembly sensitive to that sort
(Mr Dunnett) The Regional Assembly is already working
closely with the LDA to try and tackle some of those issues.
Sir Paul Beresford
214. Would you not agree there is also a flow
the other way in that the middle age group, 20 to 35, is actually
moving out of the South East into London?
(Mr Dunnett) Very much so. Whether or not they are
moving out of London, they are moving out of the South East and
the biggest problem we have in public sector retention is people
from 25 to 35 who cannot afford to have a home. They start off
in their first job and they move outside the South East and therefore
we are losing all that vibrant early stage skill.
215. They are not moving because of the attractiveness
(Mr Dunnett) No, because that age group tends to be
starting with a family and they want to have a larger home to
build their family.
(Mr Bevan) We do share with London the objective of
providing sufficient homes for people who need them.
(Councillor Clarke) I believe it will help, not least
because it will assist to integrate housing strategies with other
strategies and you need them together. In terms of the tensions,
the last RPG was taken through when the pressures we have talked
about this morning were beginning to be apparent and they have
developed the skills there. I think they will be able to cope
(Ms Houlden) From the South West's perspective, the
important thing to remember is the rural nature of the region
so Countryside Agency funding is also vital so we have a coherent
approach to sustaining rural communities. In terms of the migration
point, I think the South West would argue that many people over
the age of 45 are moving down to the South West, that is our fastest
growing population, and we are losing quite a lot of young people,
and that is back to the affordability issue.
216. Can you tell us a bit about what is happening
in terms of your regions and the intermediate sector and what
you regard as the best forms to meet your needs?
(Ms Houlden) From the South West perspective we need
a package approach. As Chris Clarke mentioned earlier, one of
the problems with shared ownership in the region is that even
if you are only paying half the market price and rent the other
half, you cannot actually afford it. In Bath, for example, the
average house price is about £140,000 which means a shared
ownership of £70,000, and for many people a mortgage of £70,000
is out of their reach. A package approach would help in small
pockets but we need a mixed ownership approach.
(Mr Bevan) I would concur with that. In part of our
findings that I mentioned before was the reintroduction of do-it-yourself
shared ownership instead of Homebuy, which has a much more flexible
approach to the percentage of equity that you can take. One of
the key issues at the end of the day is the flow of such properties
into the market where ultimately they are lost for affordable
217. Do you think, for instance, local authorites
do enough in this sector or do they concentrate too much just
on the rented sector?
(Mr Bevan) I think they would like to do more. Talking
to our local authority, they would certainly like to do more and
they find the change of arrangements frustrating.
(Ms Houlden) One of the other things local authorities
would like to see more of is incentive schemes for getting people
to downsize from larger houses, which is a particular problem
in some of the villages.
(Mr Bevan) A key reason for the frustration of local
authorities is right-to-buy receipts. 90 per cent of local authorities
in the country are in the South East and the proposal to pool
right-to-buy receipts and reallocate them is very worrying to
them. Those with debts have to pay 75 per cent back to repay debt
and obviously that limits the amount they can put into this sort
of work, but if those who are debt-free are going to be at risk
of losing their allocations in the areas where affordable housing
is probably one of the most pressing issues, that is a key problem.
Mr Clelland: I have a question on right to buy
but that is coming up later.
218. Can I just go back to the question of shared
ownership. What you are really saying is anyone on average earnings
cannot afford to pay the rent and something towards the mortgage,
but what do you do? Do you have to subsidise the building of the
(Councillor Clarke) Yes, it occurs to me that one
of the things that may need to be done is for an amount of money
to be made available either as an income stream or a capital sum
which is detached from the rest of that particular house and whether
that would have some kind of reversion to the local authority.
I think the other point to make is the pace of this has been absolutely
breathtaking. We have got several graphs which show the rate of
this. For example, Taunton became the tenth fastest increase in
Britain and West Somerset is amongst the very highest population
increases revealed by the recent Census figures.
219. Can I take you back to this issue of key
workersnurses, teachers and police officers and so on.
In the South East we are agreed that that is not a nearly good
enough definition and it needs to be wider and more flexible;
is that right?
(Mr Dunnett) Yes.