Clause 10
Housing and Regeneration Bill
10:30 am
Margaret Moran (Luton South, Labour)
I am very pleased to be here under your chairmanship, Mr. Gale. The purpose of the amendments is really to facilitate the HCA’s objectives. The Bill, as it currently stands, implies restrictions on the disposal of lands by the HCA for less than the best market price. In other words, the opportunities for the HCA to dispose of land that might be in the wider public interest are limited within the Bill. The purpose of this amendment is to give the HCA power to dispose of land at less than best consideration—a Treasury term, as we know, which in practice means highest market price. So the concept can be used to further the objectives of the HCA, as the Minister has repeatedly outlined. The objective of the HCA is not only to improve the supply and quality of housing in England and to secure regeneration of land or infrastructure but to support the regeneration and development of communities and their continued well-being; to meet the needs of people living in England. Now that is a very wide objective which requires wider powers of disposal than are currently outlined in this Bill. So by deleting and replacing the words
“may not dispose of land for less than the best consideration which can reasonably be obtained unless the Secretary of State consents”,
the need is removed for the HCA to gain special permission from the Secretary of State each time it seeks to dispose of land outwith the current requirements for best consideration. So amendment No. 38 removes from the Bill the exception basis, if you like, which means that there has to be specific permission from the Secretary of State.
Amendment No. 39 deletes subsections (2), (3) and (4), which contain conditions as to where land might be disposed of for less than best consideration—for example, where there is a grant of a term of less than seven years or where the HCA has compulsorily acquired land. The amendment would make the clause a positive rather than a negative one—that is, it would enable the HCA to dispose of land in pursuance of its objects. The restrictions would no longer be needed.
The register of surplus public sector land contains about £10 billion-worth of land—about 4,500 hectares—and that includes a mix of local authority, central Government and Government agency land. There are surplus public-owned sites in just about all of our constituencies. I know that in my own area of Luton the incoming Labour council has, unlike the previous Liberal-Tory administration which did nothing in this respect, spent a great deal of time identifying small pockets of land which can be used for affordable social housing. I emphasise small pockets of land because in my constituency our housing crisis is acute. We are landlocked—we are green-girdled—so every available small bit of infill land is vital to us. Every local authority has a list of public-owned sites, but the details of those sites, to whom they are sold and what price they go for, remain restricted, according to the Town and Country Planning Association.
Of course, one of the biggest and most important objectives in this Bill and indeed in the housing Green Paper is to secure those additional sites, those surplus public-sector sites, for housing and, as stated, to create up to 50 per cent affordable homes on such sites. The Government announced in the Green Paper that 550 additional public sites would be brought from the British Railways Board (Residuary)—about 340 sites—the Highways Agency and the Ministry of Defence.
Unless legislation enables the HCA to dispose of land at less than best consideration in order to achieve its stated objectives, it is very difficult to see how much of that land can be brought into use for affordable social housing, and therefore how the HCA and the Government’s targets are going to be achieved. Without legislation to enshrine the principle that I am outlining in amendment No. 38, so that the HCA can dispose of land for less than best consideration in furtherance of its objects, it is possible that the HCA will find itself in a perverse situation. That has already occurred in a number of areas. For example, agencies such as NHS Estates have sold their land and buildings at full market price, believing that they were required to do so, often to private developers who were able to outbid registered social landlords. At the same time, however, the very same NHS trusts need new key worker accommodation. They then have to apply, or through RSLs bid, for further Government funding to provide key worker homes for their health care staff. So we are finding a double whammy and the Government are paying twice out of the public purse. That is why the amendments are so important.
A recent internal transfer of 96 surplus NHS sites to English Partnerships at a cost of about £320 million was described as a successful disposal scheme. The costs had to be recouped from the residual development. In other words, the developer had to sell off a proportion of those homes to recoup those costs. That makes it extremely hard to secure a significant number of affordable homes from the final scheme.
We all know that because social rented housing does not make a profit, it is usually the first thing to go on a private developer’s site when margins are squeezed. So we see repeatedly that sites like these, even sites that are in public sector ownership and disposed of at full market value effectively, are squeezed of the affordable rented housing that we know is desperately needed. So we have to look to ways in which we can ensure that the public sector land referred to in the Green Paper will be available for genuinely affordable homes that will go on being affordable in the long term and not just at first purchase. I think we have an opportunity to provide some leadership through the HCA. We all know in our own local authority areas of cases in which public sector land is disposed of and RSLs are outbid by private builders who do not take the same attitude to increasing the amount of affordable rented accommodation.
I have had experience in the real world. Before I came to this place, I was chief executive of a housing association. We saw local authorities who had the power to dispose at less than the full market value, but used the protection of the kind of terms that are currently in this Bill to avoid developing land. Dare I mention local authorities in London beginning with the initial W, predominantly Tory authorities, who use the argument that they have to dispose of what land is available at full market value in order to avoid their responsibilities for developing social rented housing? I saw that when I was running an RSL.
We all know that there are difficult sites to develop, such as land-locked sites. In my own constituency we have tiny sites in the most densely overcrowded areas which are simply not viable for RSLs to develop. I have had the experience over and over again of trying to develop sites in the most acutely overcrowded areas of housing need. Such projects simply would not stack up according to the Housing Corporation’s total cost indicator, as it was then. We then saw private builders come in with larger amounts of money to develop those sites for sale rather than social rented accommodation.