Memorandum by South East England Development
Agency (AFH 51)
1. The purpose of this submission is to
provide an overview of the actions being taken by the South East
England Development Agency to facilitate the delivery of affordable
housing in the South East region. It includes current SEEDA initiatives,
identifies areas where there is scope for better joined-up working
between public bodies, and suggests procedural changes that could
increase the overall supply of affordable housing.
2. SEEDA is one of the eight Regional Development
Agencies established in 1999. The Agency does not have a specific
housing remit, but works closely with the main regional bodies,
such as the Housing Corporation and the Government Office, for
example in the preparation of the Regional Housing Statement.
3. SEEDA's role is to implement potential
project solutions to the affordable housing requirements in the
region, and this paper is therefore offered to the Committee on
4. In the South East affordable housing
includes the need for low cost home ownership, social rented accommodation,
shared ownership and privately rented accommodation managed by
5. There is a significant shortage of social
rented housing and the levels of income required to purchase a
home in the region are beyond the means of many. Key Worker initiatives
which target health workers, the police and teachers etc are welcome
but there are many other employee groups on lower incomes such
as transport and shop workers etc, that are essential to the economy
of the region who are also experiencing real difficulties in securing
accommodation. Therefore resources need to be balanced to provide
a range of lower cost options including social housing and initiatives
to assist those on lower incomes to become owner-occupiers.
6. The Regional Housing Statement identifies
the provision of affordable housing as the "single most important
housing priority in the South East". The Regional economic
Strategy Review Consultation document issued by SEEDA in April
this year identifies it as a significant problem for the region.
7. The lack of affordable housing affects
the ability of business to attract and retain workers. Key workers
in both the public and private sectors have difficulty in securing
affordable accommodation. This is not only an issue for the more
successful parts of the region such as the Thames Valley, but
increasingly for less prosperous and rural areas.
Current available public resources will not
be sufficient to achieve the pace and scale of change in supply
that is needed. For example, applications to the Housing Corporation
was four times higher than the amount of available funding, many
of the unsuccessful applications containing deliverable proposals
for affordable housing. Increasing resources to the Housing Corporation
in the SE so that it could provide a greater supply of social
rented and shared ownership accommodation to support key worker
initiatives would therefore make a contribution to the supply
of affordable housing in perpetuity.
8. If these existing trends continue, and
without intervention, pressure will build up in the housing market,
further increasing costs, prices and rents relative to the rest
of the UK which will impact on the region's competitiveness, and
in turn the national, economy.
9. Despite the Government's clearly stated
aims of directing housing investment to brownfield sites and increasing
the density of development, this is proving difficult to achieve
in practice in the South East. Traditionally, the private sector
housebuilders have focussed on providing homes at low density
on larger greenfield sites given the significantly high profits
available and the totally elastic demand as people move out of
London seeking high quality larger "family" homes.
10. In contrast, urban brownfield sites
in the South East are often small (typically <0.4ha) with development
constraints or complex or fragmented ownerships. Even where landownership
is more straightforward, the landowners often have unrealistic
expectations of value or are unwilling to sell. The net effect
is that the potential contribution of smaller brownfield sites
in the urban areas is not being realised.
11. At present, public bodies are compounding
the problem by disposing of surplus sites to the private sectoron
a "best consideration", rather than a "best value"
approach which has the impact of increasing the subsidy already
required to secure affordable housing.
12. In SEEDA's view, a substantial supply
of affordable housing in the South East within the government's
target for 60 per cent of all dwellings to be built on brownfield
land cannot be achieved without a pro-active approach aimed at
firstly tackling market failure to bring the small sites forward,
and secondly, and most particularly, the limitations of existing
policy relating to land disposals of major public sector landowners.
13. In this context, the proposals in the
Planning Green Paper to remove the minimum size of site on which
Local Authorities can insist on a percentage of affordable units
is vitally important.
14. The Urban White Paper specifically identifies
the need for RDAs and Local Authorities to assemble brownfield
land to enable and accelerate an Urban Renaissance and using CPO
powers where appropriate.
15. Unless brownfield land continues to
be assembled, there is no prospect of the region being able to
maintain a 50 per cent accommodation of homes on recycled land,
let alone 60 per cent, or SEEDA's aspiration, as reflected in
the Regional Economic Strategy and endorsed by the Regional Assembly,
to exceed 65 per cent.
16. The type of housing requiredie
substantially for smaller homes for couples, single parents or
single person householdsis not suited to traditional housing
"estate" development. To establish sustainable communities,
as noted in the Rogers Task Force, it is essential that these
homes be retro-fitted into a presently active community.
SEEDA PROGRESS TO
17. SEEDA has therefore looked for practical
solutions to the assembly of small sites, and also by bringing
together all publicly owned assetsto be used in a way to
accommodate these pressures.
18. SEEDA's main activities to facilitate
the delivery of affordable housing in the South East region have
developing the concept of a Brownfield
Land Assembly Trust (BLAT);
research into the optimal/"best
value" use of surplus public land assets including:
opportunities to accommodate
affordable/key worker housing on surplus land within schools (the
Wokingham Schools' Project);
whether a "best value"
approach to the disposal of surplus NHS sites can make a positive
contribution to provide key worker/affordable housing;
the needs of the private sector
for affordable/key worker housing;
demonstration projects on SEEDA's
own sites at Chatham Maritime, and at Ropetackle, Shoreham.
19. Looking to the future SEEDA will be
seeking to influence the agenda through a number of initiatives,
assisted development/gap fundingincluding
support for RSLs larger demonstration schemes to drive up quality
in planning, design technology and built form;
promoting the BREEAM rated benchmarkthe
Housing Corporation and SEEDA have both announced that they will
only support larger schemes if they are rated;
supporting technology research to
promote the increased sustainability of housing;
establishing the first Regional Design
panel in 2002 to promote best practice;
promoting and enabling the Building
for Nature initiativelaunched in 2001 by SEEDAto
provide advice to housebuilders on how to incorporate best practice
in bio-diversity and environmental enhancements.
20. The BLAT proposal is to establish a
special purpose vehicle (company), that will acquire, remediate
and masterplan packages of small brownfield sites (<0.4 ha)
in the South East. It will then work in partnership with local
authorities; housing associations; contractors and private sector
developers to procure new homes to meet identified local housing
needsprincipally affordable and key worker housing.
21. The establishment of the BLAT is included
in SEEDA's 2002-03 Corporate Plan with a specific request for
funding of £15 million from the SR2002 to progress this proposal
as a mainstream project. SEEDA is taking the steps to establish
the BLAT in 2002 from within the existing budget of the agency,
but the research commissioned shows that to make the proposal
fully operational will require an initial endowment of about £15
22. The proposal evolves directly from the
work of the Egan and Rogers Task Forces, culminating in the policy
framework provided by the Urban and Rural White Papers. It will
address a specific shortcoming/failure within the housing market
and make a small, but nonetheless significant, contribution to
the Government's target of providing over 60 per cent of new homes
on recycled land and/or buildings.
23. An Inter-Departmental Whitehall Group,
chaired by SEEDA's Chief Executive, has now been established involving
the DTLR, HM Treasury, DTI, Housing Corp, Housing Associations,
Reading and Medway Councils, Government Office and the SE Regional
24. Three pilot studies were commissioned
in August 2001 to assess the potential contribution BLAT could
make in three very different areas with the South East, in selected
wards within Reading (Katesgrove), Wealden (Forest Row) and Hastings
(Central St Leonards and Gensing).
25. It is evident from these pilot studies
that there are potential housing sites which have been overlooked
by developers and fall outside the net of local plan allocations.
These additional sites provide clear evidence to support the creation
of a BLAT.
26. Intervention by the public sector, rather
than leaving this to private sector market forces, is required
present market dynamics are compounding
the problem, delivering large unit, low density development rather
than increasing the limited supply of urban brownfield sites;
bringsThe market is not bringing
forward sufficient opportunities at presentthe cost, planning
efficiency and value of the smaller sites in prohibitive to private
need to bring forward smaller infill
sitesfoster an urban renaissance and more cohesive, integrated
and mixed society;
reducing cost to Governmentchiefly
from SEEDA (reclamation/servicing) or Housing Corporation (SHG)
due to programme/critical mass/economies of scale;
providing public sector key worker
housing on presently public sector held land (procurement via
BLAT avoids the developers profit that would arise if private
sector initially purchased land and then "sold" back
to public sector);
the need to provide for affordable
homes especially in the areas of high land values;
enable the public sector to capture
the market "upside" that arises from the confidence
and improved market risk as a direct result of the regeneration
of an area subsequent to public sector investment (assuming private
sector unwilling to take the initial risk);
more efficient exit strategies, retaining
the ability to sell/securitise packages of key worker housing
when optimal land value (and grant recovery/claw-back) have been
promoting construction and design
best practice in line with the Egan and Rogers agendas.
27. The BLAT special purpose vehicle provides:
an efficient and effective mechanism
to acquire, remediate and masterplan packages of small brownfield
sites in the South East;
an opportunity to work in partnership
with local authorities, housing associations and private sector
developers to procure better quality (in terms of construction
and planning) new homes to meet identified local housing needs;
opportunities to improve master planning
to provide cohesive, quality, mixed use and mixed tenure urban
environments and townscape;
private sector funding to be levered
to minimise the investment of scarce public sector resources;
28. SEEDA has been keen to examine the extent
to which the disposal of surplus public land, using a "best
value" approach, can make a positive contribution towards
meeting the Government targets to provide key worker/affordable
housing and to develop brownfield land.
29. The agency is funding two projects:
first, working with Wokingham Council, looking at their schools
portfolio, and secondly the South East Regional Office of NHS.
The NHS project is to consider opportunities presented by the
land disposal programme in the region to meet regional objectives,
such as key worker housing. With regional partners, GOSE and SEERA,
SEEDA has also initiated a regional framework with MoD, in an
effort to ensure a more co-ordinated approach by the public bodies.
30. SEEDA is acutely aware of the need for
a "best value" rather than "best consideration"
approach to ensure the optimum disposal and use of public sector
land interests. This needs to meet more than just the capital
financing requirements of individual organisations and must recognise
the relationship with broader regional economic and social objectives.
Surplus sites owned by one part of the public sector often hold
the key to address other government public bodies' agendas which
require subsidy or other forms of direct supporteg affordable
housing, community facilities etc. The failure to identify complementary
public uses or interact in there increases the inefficiency of
and ultimately the total cost to Government.
31. This issue has become more sharply articulated
during the preparation of RDA corporate plans, and particularly
the discussions with Government over the summer of 2001 about
the establishment of regional outcome targets.
32. In the South East, these have embraced
the consideration of targets for brownfield land reclamation,
now agreed at 75 hectares per annum, of which SEEDA will seek
to achieve 40 hectares on its own account. This means that the
balance needs to be provided from other public sector bodies,
and the assumptions which SEEDA has built into the corporate planning
process specifically draw attention to the contribution of major
public sector landholders such as NHS, MoD and surplus Railtrack
33. At a national level, English Partnerships
has begun a dialogue with public sector landholders for the transfer
of surplus public assets to a specially qualified public body
on a portfolio basis, starting with Ministry of Defence and NHS.
A useful model exists in the Coalfields Regeneration Programme,
whereby the transfer of coalfield assets to EP has been followed
by detailed implementation by each appropriate RDA. A transfer
from MoD, NHS and DFES of sites suitable for housing should be
contemplated in the South East to the BLAT.
34. This project originated from discussions
between SEEDA and Wokingham District Council to pilot a scheme
to provide key worker accommodation in particular for teachers,
on school sites within the district. The objective, similar to
the BLAT approach was to identify small pockets of under-utilised
land and buildings within the curtilage of operational schools.
It was not the intention to target school playing fieldsmost,
if not all of the property in question is likely to be covered
by playing field legislation as set out in the planning and education
35. The planning policy framework is set
out within draft PPG 17, the Town and Country Planning (Playing
Fields) England direction, which contains a presumption against
losing playing fields to development, and for the Secretary of
State the opportunity to call in applications where Sport England
36. In addition to the planning legislation,
the Schools Standards and Frameworks Act 1998, new framework for
maintained schools, sets down legislation whereby changes of use
to, or disposal of playing fields must be referred to the Secretary
of State (Education).
37. The study sought to identify sites with
a capacity to provide key worker housing. It was demonstrated
that sites selected are non-essential to the current provision
of recreation and physical education at the selected schools,
and further, the development for teachers could be catalytic in
improving existing facilities. A total of 138 units were identified
as a potential outcome of the pilot, subject to securing planning
permission. The Brownfield sites contribution was approximately
100 of those 138 units.
38. The pilot study could therefore be used
to demonstrate how key worker housing need can be met.
39. There is a unique opportunity for the
public sector to make an important contribution to solving the
affordable housing problems. SEEDA, as the Regional Development
Agency of the South East, is well placed to do this by undertaking
the traditional role of facilitating the assembly of small sites
whether by agreement or compulsory purchase, reclaiming and servicing
land and by bringing together all publicly owned assets to be
used in a way to accommodate these pressures.
40. In the South East, which has particular
housing pressures and land shortages, there is a specific need
for a high proportion of affordable housing provision to remain
so designated in perpetuity. If new provision is lost to the market,
then the problem will remain or recur.
41. The RDA is well placed to provide the
necessary skills but its ability to do so is dependant on Ministerial
guidance to the landowners and having a sufficient level of available
resources. Without a significant increase in the funding and/or
the ability to defer receipts until best value has been achieved,
many of the opportunities identified will not be realised.