We have just heard evidence from the Deputy Mayor with responsibility for housing. He was fairly confident that, in addition to starter homes being delivered, other forms of affordable housing would be guaranteed. Perhaps we could have your views on this. Do you agree with him?
Philippa Roe: I do agree with him, but it is about giving us the flexibilities to be able to deliver those homes. I certainly believe that within London we can provide significantly more housing than has been provided to date. The sites are there. From the local authority perspective, our hands are somewhat tied in what we can deliver; there are a number of reasons for that. First, there is the funding side of it and how we can use the money. We have the housing revenue account, but the amount we can borrow against it is capped at a relatively low level. We could lift that cap quite sensibly and still borrow prudentially, and use that money to build. We are limited on where we can spend that HRA headroom, as well as section 106 or community infrastructure levy monies. I will come on to talk about the issues we face in Westminster which are driving this, but we in Westminster would like to be able to team up with other boroughs outside Westminster but within London to deliver our housing need. Also, I think we ought to be able to put into that pot money from high-value council house sales and from right to buy. It should be voluntary.
There are several reasons why we in Westminster have a real issue with housing, although they are true of central London and across the parties. It stems from the fact that there is enormous demand—people want to come and live in central London—and the way that the regulations work on taking on a duty to house means that your local connection does not have to be that deep. About 40%—39%, to be precise—of the people we take on a duty to house each year have less than a year’s connection to Westminster, and many of them have no connection at all because they have come from abroad and we are the first authority they register with. They do not necessarily have a particular need to live in Westminster, because they are probably not working in central London. There is no particular need for them to live in Westminster. What they need is good-quality housing.
Combine that with Westminster’s existing density of all its building, not just housing, and the high value of those units, and we are put in a position where it is just about impossible to house that huge demand within the boundaries of Westminster. We therefore need to be quite selective to support people with a genuine long-term connection to Westminster; we also prioritise people with work needs or who perhaps need to stay in Westminster because they have connections with health support services or whatever here.
I think that I am speaking on behalf of London Councils when I say that we believe that there is a mechanism which would free up local authorities to team up together. Perhaps several central London boroughs with money could team up with one or two outer London boroughs with land, in order to produce not just housing but proper regeneration. One of the issues we face in this debate is that we talk about housing in a silo. Actually you cannot do that if you are to create a proper community. You have to talk about proper regeneration of an area.
If we could pool those funds—perhaps even get some GLA money as well and work with a private sector developer—we could create mixed communities with the market housing, intermediate housing and social housing that we need, alongside a GP surgery, a school and hopefully, although it would be much more expensive, transport infrastructure that we could work with the GLA to put in place. That way we would be creating communities, not just homes. In return for that, it is important that the funding boroughs have some nomination rights, but it would all be voluntary and by negotiation with the receiving boroughs. Everybody would be happy; it would not be foisted upon a borough.
Martin Tett: Just to add to that, the LGA very much recognises the Government’s aspiration to build a substantial number of new houses every year. Probably, 230,000 houses is the minimum we need to build in order to accommodate the rapidly growing population. We are very keen to work with the Government in order to make that happen; we think that local councils can be part of the solution to this problem, rather than part of the problem itself. We are very keen to have those negotiations with the Government.
On increasing the supply of affordable housing, clearly there is a change in the definition of affordable housing, which is obviously material. The other concern we have is about infrastructure. I completely agree with Philippa’s point that it is not just about putting up houses. It is about securing the infrastructure alongside them that makes houses into communities. We obviously need to make sure that the exemption from section 106 for starter homes, for example, does not result in additional congestion, additional pressure on school places, addition pressure on doctors’ surgeries—all the sorts of things that lead local communities to resist house building in their area.
My last point is that there is still some detail to be worked through as to how the financial process will work for the funding of some of the processes, particularly for the discounts involved. We need to make sure that houses sold, for example, from the registered social landlord sector are replaced on a one-for-one basis in the same area. Obviously, a replacement in a different part of the country by the same RSL will not meet the housing need in the area where the original house was.
Sir Steve Bullock: —but she is right about the need for the boroughs to work together. That is something that we are very keen to do. To get to the heart of your point, I have to say that I am less confident than the deputy mayor about the impact of starter homes. We welcome them as another way of getting people onto the housing ladder in London, but we have two anxieties. One is that they might drive out other forms of affordable home ownership, rather than being additional. Secondly, they are time limited, by definition. One thing that I suspect we may come back to is the mix of units that we need to deliver in order to meet the housing needs that we have as individual boroughs.
Phil Glanville: I am a bit more pessimistic than some of my colleagues. I think we are going to squeeze out social housing and truly affordable housing in the planning system. We are already seeing a lot of challenges across London in terms of viability in planning schemes. Where we would have seen developments come forward with 30% or 40% affordable housing, it is falling to 10% or 20%. It is not an alternative to shared ownership as a truly affordable, low-cost housing option. Of people in Hackney that are registered on the Share to Buy website, nearly 3,000 of those that have registered for an affordable housing purchase product earn less than £40,000. If we are talking about an accessible product, a product that has a cap of £450,000 in inner London is simply not affordable. That would bring the cost down to around £420,000. That is not accessible for those who aspire to home ownership but are earning less than £40,000. If we want to have a creative, vibrant inner London, where people of different communities can afford to live and buy—we aspire to let people buy—then we need a range of products. Starter homes are not a replacement for shared ownership.
Councillor Tett, what is the LGA’s view on the Bill’s provisions on brownfield sites? Will the power for local authorities to compile registers of brownfield land help to protect the green belt, particularly in places such as Buckinghamshire? I know that your view is of the whole LGA.
Martin Tett: Yes, I have to be very clear that I am representing all of the LGA here, not my particular area. We are very supportive of the idea of building on brownfield first, rather than going into open countryside or particularly into the green belt; we support the Government’s policy on that. The issue we have is the actual process for identifying brownfield sites. We need to be very clear about what they are and how they are defined, as well as the additional burden placed upon local authorities to compile and maintain those registers in, frankly, very financially stretched times, when, particularly in planning departments, it is quite difficult to attract and retain experienced staff. We need to ensure that, if this becomes an additional burden for local authorities, it is fully funded by the Government. As a concept it is a very good idea; we just have concerns about the financial implications and the practicality of it.
So as a concept you think it is a good idea. Do you also think that it helps communities to have ownership of these things, because there will be something very visible for them to see and feed into?
Martin Tett: I think you have asked a slightly different question. Brownfield sites—previously developed sites—are normally more acceptable to local communities. In terms of the development hierarchy, it is nearly always the area that local communities would support first, rather than going into greenfield or green belt sites.
As for local communities, that is a different issue to do with the infrastructure surrounding them and that is where people look. I go back to my previous observation about ensuring, for example, that any development does not lead to undue pressure in terms of road congestion, pressure at junctions, doctors’ surgeries and so on. That is a separate issue that goes back to section 106 and CIL obligations, which most local authorities look to housing developers to provide.
From your understanding from your respective boroughs and work undertaken across the LGA, do you believe the sale of higher-value council homes can cover the costs of both the right-to-buy scheme and the levels of replacement of both the housing association homes lost to the rental sector and the loss of those council homes? Is that a realistic scenario?
Sir Steve Bullock: The difficulty in giving you a definitive answer to that is that it depends on how you implement the scheme. The definition of high value will be crucial to this. The initial work done on this, certainly from the London perspective, does indicate that there would be an outflow of funds from London to the rest of the country, which we are deeply concerned about. We are clear that we would need to know more before we could give you a hard and fast answer on this.
Philippa Roe: I completely agree with what Steve has said, and I would certainly endorse what Rick Blakeway said about trying to keep as much money as possible within London, where the greatest housing crisis is, so it seems sensible to keep the money there.
One thing that has been mooted that, instead of the money being put in a pot for literally every high-value council house sold, the boroughs should be given a fund—a sum of money that they have to find, however—which is then supposed to be driven by the council house sales. One concern we have in Westminster about that is that obviously we have some very high-value properties, but our churn rate is very low. Up until very recently we gave tenancies for life and they could even be inherited. Having a sub-market-value rental property in central London is an extremely valuable asset. People do not give them up easily, so our churn rate is incredibly low. I would call for recognition of that if any targets are set, particularly for central London boroughs. I do not think ours is the only one to face that issue.
Martin Tett: Taking a wider perspective than just London, one of the ambiguities I mentioned earlier, as my colleagues have said, is about the definition of high value. How would you define that in different parts of the country? High value in London may be different from high value in Buckinghamshire, which may be different from high value in Doncaster or Teesside. There is ambiguity at the moment on that. In addition, what is the definition of a vacant property? If you have a tenancy exchange, is that property vacant or an occupied property in transition?
So we need to work through some of those ambiguities and negotiate with the Government. The other issue we have is how the model actually works. How do you predict for a particular year how much money is required for the RSL discount, which means you know effectively how much you have to charge to local authorities as a levy? That in turn dictates how much they have to sell. We are not clear yet on the details of how that will operate. Again, we are happy to negotiate that with the Government.
Phil Glanville: We need to see some clear exemptions around the value of new properties that are being built. Councils such as Hackney and Islington, Camden and Southwark have ambitions to build new affordable housing on their own land in London in order to meet that housing need. If that is taken into account when they become void, building any new home in the centre of London is likely to see those homes included within any cap or formula. Although there could be flexibility on exempting them, if their value is still included in the formula, the effect is the same: you would have to sell more of your existing stock.
It is worth saying when we are talking about high-value properties in London that Hackney is still the 11th most deprived borough in the country and the wards on the City fringe are some of the most deprived in Hackney. On Rightmove today I saw properties there that are worth £450,000. That is for a two-bedroom flat in a block that was built in the 1930s and ’40s; it is not a street property in Kensington, Islington or Stoke Newington. That is the effect that the overheated London market is having on our council stock. These are still very humble family properties on council estates in London; that is not the definition of places where poorer people should not live, which is what I think was the genesis of the policy in the Policy Exchange report.
Martin Tett: I agree with Councillor Roe about unintended consequences. If you try to shoehorn everything into the Bill, there is a danger of locking in things on which you might need flexibility later. The LGA is keen to sit down with the Government, understand some of the intentions behind the Bill and try to work through the best solutions that lead to the best outcomes for not just the Government’s policies but local councils and their housing responsibilities.
Sir Steve Bullock: Going forward, the Bill is interesting in the way it proposes to create that space. I suspect that that means that if we are going to be in an ongoing process of negotiation beyond the Bill becoming an Act, local and central Government need to step up their games to demonstrate how they will make that work and how we can have sufficient transparency to provide the reassurances that people will want.
If the Bill becomes law, the Secretary of State will acquire powers in respect of local development plans. With your LGA hat on, Mr Tett, why do you think a significant number of local planning authorities have still not adopted local development plans? Is there a systemic issue that is preventing them from doing as other local authorities have done?
Martin Tett: I can give a generic answer to that, but we would have to get down to some specifics as well. There is a complex answer to what sounds like a very simple question. In some cases I suspect that, quite frankly, local authorities have not risen to the challenge sufficiently. In some areas, though, I think they have made their best efforts but, during the process, have fallen foul of various requirements. The one that is cited to me a lot is evidencing the duty to co-operate to the satisfaction of the planning inspector.
There is a lot of frustration in some councils because they have been found to be inadequate and effectively have to restart the whole process. A lot of councils say to me, “Why can’t we go back to where we were found to be inadequate, rather than having to start again?” Councils in my area have failed their local plan on two occasions and are now well into their third, whereas had they been able to short-circuit that, they would probably now be well into adopting a plan. There is a variety of reasons throughout the country and it is a long-drawn-out process. In some cases, councils have not risen to the challenge; in other cases, the process itself is convoluted, complex and difficult.
Martin Tett: It is both. There is a variety of answers to that. In some cases, if one is honest, there has probably been inadequate political leadership, but often local councils are really struggling with sufficient professional, experienced officer capacity. One thing we have all experienced across virtually every council in the country is that experienced, professional planning officers are very difficult to recruit and retain. They are being hoovered up—I use that expression quite often—by the private sector. As the building and civil engineering industries have recovered nationally, they have been able to pay substantially higher salaries than local councils. It is very difficult to recruit and retain the experience required for the successful implementation of a local plan.
May I ask the London representatives about the parts of the Bill that relate to rogue landlords, banning orders and so on? How do you see that working within the context of London boroughs?
Martin Tett: First, although we welcome the provisions in the Bill, we are not clear that they will necessarily go far enough to make the impact that we all feel is needed. For example, on the level of fines, in my borough we had a landlord who was making £319,000 a year. That is at the extreme end, with landlords who are close to being criminal. A fine of £5,000 would be a minor inconvenience to them. Secondly, we would welcome the proposed register, but it needs to be very accessible. The deputy Mayor has been talking about that. It may be something that individual or would-be tenants need to be able to access.
Philippa Roe: We similarly support the proposals. They sit alongside the tools which, as a council, we already use very effectively—for example, to do with environmental health—to pick up on landlords who are providing substandard properties. The proposals will be another tool in our armoury, which is good.
Phil Glanville: I would go along with what has been said: the proposals are positive. Sharing the tenancy deposit database with local authorities allows them to build up a better picture of landlords in a given area or neighbourhood. It is a question of where thresholds lie in terms of banning orders and the register, and where they will end up. Moving to a fine-based system rather than having to take things to a full prosecution is a positive step—though one questions whether the fines would be enough of a deterrent. In building more tools for our armoury the proposals are a positive step.
I would like to return to part 4. There is nothing on the face of the Bill that would ensure the proceeds from the sale of high-value council homes—or payments to the Secretary of State, in cases where local authorities do not want to make those sales—will be kept in the local area. Miss Roe, you told the Evening Standard in July that as a result of this policy:
“What we will see is a reduction in the number of social housing units in London and more units built outside.”
There are concerns in rural areas, too, that we will not see that link. Let me ask all the witnesses—what would you like to see, or what would need to be amended in the Bill, to give you certainty that the proceeds will be kept locally, to meet housing need in the area from which the proceeds have been taken?
Philippa Roe: First, I was misquoted in that article—that was not quite what I said, although it has been used and used.
As Richard Blakeway said, we understand that London is going to generate far and away the largest proceeds from this measure, given the value of our housing stock. The Government need to find a solution to funding right-to-buy sales outside London, and there is an acceptance that some of the proceeds will have to go outside London. However, there needs to be a mechanism within the regulations for keeping most of that money in London, because it is London that has the biggest housing crisis. It seems sensible to use that money to create housing where it is most needed, so I am hoping that we can find a balance.
Councillor Glanville, you said that you want to build, in your authority, affordable housing on land that you own. You emphasised the importance of exemptions. Are you promoting housing co-operatives as a way of delivering affordable housing? Perhaps the other witnesses could answer for their own authorities.
Phil Glanville: To answer that question, we have quite a few housing co-operatives within the borough already. They tend to be managing existing stock that they have been bequeathed through CPOs in the past and through the squatting movement in the ‘70s and ‘80s. As far as I am aware, they are not currently seeking to develop. We are focusing on working with housing association partners and our own new build programme that will deliver 3,000 homes over 10 years, 52% of which will be truly affordable. The rental properties there will be council rented homes on our land, making best use of our assets. We are bringing forward 18 sites. In fact, the borough is the largest house builder of any kind within Hackney, including building homes for sale, which is important as we are not against building homes for sale or for low-cost home ownership; we just do not think that the Bill will help with that process in borough such as Hackney.
We are also doing regeneration with our partners. We are tripling the density of an estate called Woodberry Down in the north of the borough, where we are building 5,500 homes over the next 20 years. We have no lack of ambition to develop such homes within the borough. With some of the freedoms that Councillor Roe mentioned around the HRA, we could do a lot more.
To be clear, for the land that you own on which you plan to build affordable housing going forward, the council is not proposing that those be held as housing co-operatives.
Sir Steve Bullock: We also do not expect some of our existing housing co-operatives from that historical period to play a significant part going forward, although we are doing other things. Harking back to an earlier question, we have literally just agreed on a scheme for self-build. However, there is an issue with a number of these alternative approaches that is simply about scale. To get the volume of units that we need, we are having to build in thousands, rather than tens and hundreds. However, we have a housing association that is owned by the tenants, which is now beginning to develop itself. We think that that is potentially a useful development going forward.
Philippa Roe: Similarly, we have big regeneration plans in Westminster. Everybody thinks that Westminster is extremely wealthy, but we actually have four of the poorest wards in the country with extreme deprivation in them. We have massive regeneration plans for those areas, but it will be us, the council, driving that regeneration programme. We will work with the housing associations that happen to have properties in those areas, but it will be mainly driven by the council, working with the private sector. Again, we will be building market housing to help fund the whole scheme, intermediate housing and social housing.
Given that there is a lot of concern about right to buy, I am puzzled why authorities that wanted to protect affordable housing would not use the housing co-operative route as an obvious exemption. It is certainly obvious from international evidence that it can be done at scale using housing co-operatives.
Phil Glanville: Returning to what Mayor Bullock said about scale, it is the scalability of the housing co-ops that exist in London that makes it challenging. We are looking at working with, say, the almshouse movement to build new, affordable homes that are also exempt because people are beneficiaries rather than tenants. Where we can innovate on our land, we will do so, but the scale of the crisis in terms of the thousands of homes that we need to build makes it difficult to use the co-op movement as it is currently constituted.
The National Audit Office recently produced a report saying that some local authorities had reduced their budgets for planning and their planning departments by up to 50%. The Bill contains a number of changes that should expedite the planning process. Will this mean that authorities are more likely to staff up their planning departments with the right number of competent people to be able to turn round applications?
Philippa Roe: The absolute key to having the right staffing within our planning departments is to be able to charge a fee that covers the cost of expediting the planning process. At the moment, we cannot charge anything like enough to cover that cost, so basically our council tax payer is subsidising the developers. We are very lucky in Westminster, because of where we are. We have a Westminster Property Association, which funds six planners, to whom its members have access. We can pay appropriate salaries to attract good people, but they are limited to the Westminster Property Association members. I think other local authorities struggle, as we struggle with the rest of our planning applications. As was mentioned earlier, our good people who have Westminster experience are very valuable in the private sector, and they are being hoovered up. We cannot keep them unless we can pay them the appropriate salaries. We really need planning fees to be raised.
Martin Tett: I completely support the Councillor Roe on this. There is an almost universal plea from local authorities, whatever their political complexion, that they be allowed to recoup the costs of planning with appropriate planning fees. That would do a great deal to help us to resource up. I also re-echo the point that some of the salaries that the private sector pays good, experienced planners are very high compared with what local government can pay. It is a real challenge.
Martin Tett: I want to echo one thing, to put it in context. Remember that lots of authorities, particularly municipal boroughs, have responsibilities that also include social care for children, safeguarding adults and so on, and almost universally those statutory responsibilities are growing as a proportion of total council budgets, so councils are in a very difficult position. I understand your point, but we have to weigh that against some of the other responsibilities that councils have.
Councillor Glanville, to take you back to your earlier remarks, can you clarify something for me? I think you said that you have recently been able to negotiate down to—did you say 10% of affordable housing? You linked that to starter homes. Can you clarify exactly what you were saying?
How does that link to starter homes, which have not actually come in yet? I am struggling with why you were linking a scheme that you are negotiating at around 10% with a policy that has not actually come into force yet.
Right. Just to clarify, the local authority’s negotiation to 10% has nothing to do with the starter homes policy, because that policy is not in place yet.
You also said that you want to build on a lot of the land that you, as a local authority, own. How much land have you got and not built on yet?
Phil Glanville: We are building 3,000 homes on 18 sites, which is the largest development programme in inner London, and we are looking at a further 15 sites that we hope to develop on-site before 2018. We are making good use of our right-to-buy receipts, which we do not have to return to Government. We are doing all we can to develop new homes on our land within the housing revenue account cap. Once we have been through those sites and built that capacity, we will look at innovating, whether with almshouses, co-ops or housing associations. We are very ambitious about building new homes on our land. As I say, we have one of the largest development programmes in the capital.
I have been to see things such as City Mills, which is a really good example of great regeneration work that is bringing back more density. You talked about the HRA cap. How big a cap do you need? What extra capacity do you need in your HRA?
Phil Glanville: We have £168 million, and we have had some recent extensions, which obviously I welcome, from DCLG. It is about having flexibility. Nobody wants to go out and borrow £200 million, £300 million or £400 million, but the way the deals are structured means that to get the best value for the council, you often front-load the development costs to get the best value out of the development. That means that you need more flexibility around the cap, so you can have negotiated periods in which you can exceed the cap for two or three years and then come back down below it. All these schemes would need prudential borrowing requirements and proper financial management—they would not be signed off by the relevant council officers if they did not. A process, even where we had to go to the Secretary of State for that kind of permission, would be useful. I do not think anyone wants to run up the national debt, but the point is to have the flexibility to ensure that the development we need gets off the ground.
So with your current programmes, you have had an increase in building of over 60% since 2010, which is really good. We want to see more homes, and it is particularly good to see that kind of increase in supply. I assume from your earlier comment, that you also support housing supply and home ownership. Bearing in mind we are rebuilding—the reality is that we dropped below 200,000 first-time buyers in 2009; the figure is back to double what it was then, but we want to see that go further, so that more people have the chance to own their own home—surely starter homes have an important part to play in that. I emphasise, as I think Rick Blakeway did earlier, that there is a difference between the price and cap. I appreciate we all want to see houses below that price, but surely creating affordable homes for first-time buyers is quite an important part of the mix?
Phil Glanville: They could be part of the mix. The challenge of meeting the aspiration for home ownership is whether starter homes are truly affordable in boroughs such as Hackney and inner London where incomes are around £40,000 and below. That can work in shared ownership at the moment within the borough. We are building 500 shared ownership ourselves, because we want to meet that aspiration for low-cost home ownership.
The challenge is where the affordability is. The reality is also that, whether shared ownership or other forms of low-cost ownership like Pocket, they are there in perpetuity, whereas with the starter home discount only the initial purchaser benefits from and is locked in for five years. That is also a challenge when we go back to the planning process and communities and social mix.
One of the things the planning process is there to do is to ensure that we have a mixed community and development—to have people like “them”, I suppose, in context. When people protest against new development, they often say, “My sons and daughters couldn’t purchase a home there.” The challenge is that, because starter homes come in before other forms of affordable housing, we will not see local people being able to afford to buy them. They will just be on the London market. The need is there, but I think we need to have another look at starter homes.
Councillor Tett, on a completely different topic and just taking the LGA—we have become very London-focused in the last half an hour.
I appreciate you sit on a county council, having visited you a few times in Buckinghamshire. Looking at Part 6 of the Bill on neighbourhood planning, you have a number of areas in your county going through a neighbourhood plan process or which already have the plans. Some 1,600 or so are going through across the country. In terms of giving more flexibility, ease and speed to that process of creating the plans, do you think this could potentially play quite a big part in making sure that communities are more supportive of local development, where they feel they have that control? One of the challenges behind neighbourhood planning is that, like local plans, it is time-consuming. Do you think speeding up the process across local government and more importantly in the communities themselves will be welcomed?
Martin Tett: Are we supportive of neighbourhood planning? Absolutely. There is an enormous advantage in allowing local communities to shape the future of their own area, be they villages or towns; not just in terms of housing, but in terms of the style and architecture and where the facilities are based. We have seen significant engagement across the country where neighbourhood planning has been introduced.
One of the issues that arises is that sometimes neighbourhood planning runs ahead of the other local plan, for example, in district councils in rural areas. We have a number of examples where neighbourhood plans are in place but there is no local plan for the surrounding district, so they lack the overall planning context of how many houses the area will have. They may face the disappointment that, in the future, they have to effectively redo their plan because the housing numbers are significantly higher than were originally anticipated. Certainly in terms of community engagement, they have been successful. From the point of view of Buckinghamshire and from talking with other county leaders, I think neighbourhood plans have gained a lot of traction across the country.
If we are able to get the neighbourhood plans simpler and a bit quicker to get through for communities, but with links to areas that have a local plan, do you think that that proper, joined-up approach for community engagement and for ultimately delivering the housing we need would be welcomed by the local authorities?
Martin Tett: I am just trying to make sure that I fully understood your question. In terms of speeding up the delivery of local plans, we welcome anything that makes the local planning process simpler. We still believe that democratic accountability in local planning is important. That is what gets the local community buy-in to the ultimate adoption of local plans. Not in every case will the local community be fully supportive of a local plan, but if it is seen to be the local councillors they voted for who can explain to them why something has been done and why it is necessary, by and large you will get more acceptance than, for example, if there were, in extremis, a Government inspector appointed from Bristol who comes in and effectively writes the local plan for a community. We would like to ensure that local communities and local councillors effectively remain in the driving seats in developing local plans for their areas and that neighbourhood planning fits within the context of an overall local plan adopted by a council.
I was struck by your opening remarks, where you all talked about having infrastructure to support housing development and building housing in communities. I wonder whether you think the Bill should do more to address the need for infrastructure and what you think about the provisions that could exempt some starter home sites from paying CIL. Would you like to see that amended?
Sir Steve Bullock: One of the things that will be important is that the Bill does not get in the way—this will largely be around the exemptions—of some of the big and complex schemes that we are doing. Those are, in effect, sweating land that is already there and intensifying the development. Some of that takes time and there are risks that we need to avoid. If the number of leaseholders on a development goes up and you are planning a comprehensive regeneration, you can make it unviable. It is those kinds of things. Crucially, working across Departments will be important. I am not sure whether the Bill can help that, but we need to be sure that it does not hinder that.
Martin Tett: I will comment on the generality. I mentioned the importance of infrastructure at the beginning. When I go to public meetings, it is the big topic raised by local communities whenever a development is talked about, and it is obviously significant when you have a major development of many hundred houses. There is also the cumulative impact of lots of small infill developments. People tend to ignore the impact of 10 or 15 houses, but if you have lots of them, particularly where large houses are being redeveloped in rural areas, you can cumulatively have a significant impact. People see the difference in their commute, their journeys and so on. There is a large impact in the south-east, which is already densely populated and seeing significant housing growth. The need to address the issue of adequate contributions towards local infrastructure is fundamental.
Philippa Roe: Some parts of the Bill are still being ironed out and discussed, such as those relating to who has which powers between the Mayor and the London boroughs. It is absolutely vital that any housing development regeneration is driven by the boroughs, because they have a far better understanding of the infrastructure impacts in their local areas. I just cannot see how a top-down approach, given how diverse the 33 boroughs are, can work in that holistic approach.
Phil Glanville: The 20% discount for starter homes is probably not enough to be offset in terms of the community infrastructure requirements. There is an element that some of that is local decision making. We decided to exempt the Woodberry Down regeneration from CIL, because of the challenges of the infrastructure: building the new schools, delivering the employment opportunities and delivering the public realm. You need flexibility at a local level to make some of those decisions, but I am not sure that the 20% discount warrants a full exemption.
There is broad agreement that we need to increase supply, but, as you said, Councillor Glanville, affordability is key. There is no statutory definition of affordability, and the Bill gives the impression that the working definition is 80% of market rent. Do you think there is an opportunity here to define what we mean by affordable?
Philippa Roe: No, I think that would be too prescriptive. The definition of affordable is up to 80% of market. That is absolutely crucial because it will be different in different boroughs. Each borough has different needs. For example, in Westminster about a quarter of housing stock is social housing; about 1% or 1.5% is affordable for that next tier of low to middle-income workers, and the rest is very expensive, either to rent or to buy.
Our real gap is that intermediate. Our businesses are telling us that that is a real gap. All the supermarket shelf-stackers, people working in our restaurants and theatres and so on, need homes where they can commute at a reasonable cost and time. That is Westminster and we are quite different from perhaps an outer London borough or Tower Hamlets or, indeed, some of the boroughs round the table. As long as we have the flexibility of up to 80%, given as the definition of affordable, then each borough can do it appropriately for their area.
Without being impolite to the other witnesses, I fear that we have come to 10.45 am, which is the end of our allotted time for the session. Thank you very much to all four of our witnesses for their extremely useful and interesting evidence. I ask the next panel to come to the floor.
If there is anything members of this panel want to say and have not had an opportunity to say, we welcome written evidence at a later stage.