Examination of Witnesses (Questions 210-219)|
TUESDAY 2 JULY 2002
210. Good morning. Can I welcome you to the
third session on affordable housing. Can I just make it clear
that we are a little bit late, but we now have all the evidence
on affordable housing published and it is also available on the
web for anyone who wants it. Can I ask you to introduce yourselves
for the record, please?
(Mr Ben Jackson) My name is Ben Jackson.
I am Director of External Affairs at Shelter.
(Mr Alastair Jackson) I am Alastair Jackson. I am
Director of Policy at Shelter.
211. Are you happy for us to go straight to
questions or do you want to make a brief statement first?
(Mr Alastair Jackson) If we could start with a brief
statement first. Thank you very much for the invitation to be
with you this morning and also for the inquiry that you are conducting.
The most recent Government figures show that about 82,000 households
were in temporary accommodation and in bed and breakfast at the
end of March 2002, and in particular 12,000 of that 82,000 households
are in bed and breakfast. Shelter also estimates that somewhere
between 83,000 and 99,000 affordable homes a year are needed each
year from now until the year 2016. That estimates is consistent
with the estimates produced by other organisations and we believe
it would be the conclusion that the Government came to if it chose
to publish its own official estimates. What we see as a solution
to these two problems is a significant and sustained increase
in Government expenditure in order to meet this outstanding affordable
housing need. At the moment Government expenditure in this area
is about £1.4 billion a year, the forecast for 2003/4. Shelter
estimates that we need an additional £1.7 billion if we are
to start producing the kind of affordable housing need that we
are talking about. It also means confronting some difficult issues,
particularly where the housing is to be built. Clearly new housing
developments, Shelter believes, should be sustainable but we believe
that housing need is an important first principle to be met. We
have made some specific proposals around the Right to Buy and
the potential role of the private rented sector in meeting this
housing need. But essentially Shelter is concerned for the health,
the education, the transport implications of the level of housing
need that we are confronting. We believe there are severe costs
to individuals but also to society associated with not meeting
affordable housing needs which is why we are advocating that this
level of expenditure is necessary in order to meet those needs.
212. I would like to get the figures sorted
out to begin with. I think you are suggesting we need to spend
about £1.7 billion extra to meet the proper housing needs
of the country. Is that right? If so, how do you arrive at the
(Mr Alastair Jackson) It is £1.7 billion extra
that we are arguing needs to be spent. Those are based on our
demographic forecasts of emerging housing need. Also to catch
up with some of the backlog of housing need represented by households
in temporary accommodation and in bed and breakfast. We estimate
the emerging housing need to be 67,000 to 73,000 households each
year in the future. We are adding to that 16,000 to reduce the
backlog. If you take those kind of figures and then look at what
the Housing Corporation needs to spend per unit in order to provide
affordable housing, if you then combine them you get to that figure
of about £1.7 billion on top of what the Government is currently
spending from the Housing Corporation's budget.
213. That is £1.7 billion for additional
units, not to sustain in a better way existing units.
(Mr Alastair Jackson) That is correct, yes.
214. If the Chancellor was to be that benevolent
in his next spending statement what do you think the priorities
for that spending should be and what should be done if it did
not produce £1.7 billion?
(Mr Alastair Jackson) For example, we can talk about
affordable housing for rent versus perhaps shared ownership, shared
equity, starter home initiatives. What we see at the moment is
the Housing Corporation's programme which is driven by what local
authorities tell the Housing Corporation they want at the local
level. The Housing Corporation programme is split roughly 80 per
cent housing for rent 20 per cent low cost home ownership initiatives
of different kinds. We see that being the appropriate split going
on into the future.
(Mr Ben Jackson) I think the key point we want to
make to the Committee is that fundamentally we cannot address
and resolve this issue unless there is additional expenditure.
While we make a number of suggestions in our evidence to do with
the private rented sectorwe have been involved in a commission
developing proposals about the Right to Buy and so onat
the end of the day we think that unless there is that additional
expenditure we are not really going to grapple with the scale
of the problem that we face in this country in terms of affordable
housing. The short answer is that if the Chancellor does not come
up with that, relatively marginal impact can be made in resolving
the problem. That is our view.
215. The £1.7 billion is going to go to
the Housing Corporation, not to local authorities?
(Mr Alastair Jackson) We are assuming the current
framework for investing in additional affordable housing will
continue which is very much dominated, as you know, by investment
through the Housing Corporation.
216. Is that your preference?
(Mr Alastair Jackson) We have not looked into that
particular issue in detail. We have to work with the mechanisms
we haveI am not sure we would get more housing for the
money by doing it in a different way. Clearly there are ways of
switching investment streams either through the Corporation or
through local authorities, but we need that level of expenditure
in order to get that level of output.
217. You have made it clear that you think the
Chancellor should come up with the money. If he does not, is there
not an argument that the private sector ought to be looking at
coming up with housing for some of their key workers?
(Mr Alastair Jackson) Again, the overwhelming need
that we are highlighting to the Committee is about affordable
housing for people with either no income of their own at all or
at the very bottom end of the income scale, and I think it is
unrealistic to say that the private sector is going to put up
wages sufficiently that those groups of people will actually be
able to afford to compete in the market that we see in the south
east and in London in particular. I think there is an argument
to say that for some intermediate, slightly higher income groups,
the market should actually be paying higher wages. But I think
we need to be realistic about the extent to which that happens
and if it will not happen then we cannot say, if you like: "That's
your bad luck, you must suffer poor housing conditions".
I think we need to set them up in homes.
218. Putting up wages means that you have to
put up everyone's. If you actually provide tied accommodation
then you can earmark it for particular groups of workers that
you want to keep and attract, can you not?
(Mr Alastair Jackson) That is correct. I believe that
Boots, for example, have been talking recently about their inability
to recruit and they are looking at some of those options. But
fundamentallyI am sorry to keep coming back to this point
time and time againI think that would potentially make
some marginal difference in some places with special schemes that
a particular employer brings forward, but I think the numbers
are such and the scale of the need is such that if someone could
come up with such a scheme it would be to be encouraged but it
is not going to make the difference that we need to see to affect
the real problem.
219. Just to get clarity on the figures, you
said £1.7 billion for extra units, so when you also talk
about £19 billion pounds required for the backlog of repairs
for social housing, where is that going to come from? You are
saying £1.7 billion extra annually plus £19 billion
when and where?
(Mr Alastair Jackson) At the moment the Government
is funding its decent homes targets in a variety of ways with
existing commitments both to encourage local authorities to transfer
their stock and get housing repairs undertaken as that stock transfer
takes places but also through investmentfor example Arms
Length Management Companyand those kinds of ideas. That
investment is taking place at the moment. There are debates as
to whether it has been timed in the right way and will there be
enough in the end, but that was a clear Government priority (after
the previous election and the last one) which is underway at the
moment. What we are saying is that relatively speaking the supply
of additional affordable housing units has been relatively neglected
compared to the attention and the investment that is taking place.