Housing Strategy (Merseyside)

– in Westminster Hall at 3:30 pm on 23rd March 2005.

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Photo of John Pugh John Pugh Shadow Spokesperson (Education) 3:30 pm, 23rd March 2005

I originally intended this to be a rather more far-ranging debate and hoped to secure a one-and-a-half hour slot, but as I have only half an hour, the Minister will forgive me if I concentrate more narrowly on the concerns that affect my constituency, while still sticking entirely to the topic as advertised.

The Government have a vision for housing in this country that is laudable in many respects. It centres on the concept of sustainable communities, to which we all hope to belong. Part of that vision is to avoid unnecessary encroachment on to green belt and greenfield sites, which would take away from sustainable communities the countryside that surrounds them. An equally laudable objective is to revive cities—to encourage people to live in cities as well as to shop in them and visit them for recreation. City centres are, as a result of a number of Government initiatives, being gradually repopulated, and I support that.

The Government wish to reduce the distances that people have to travel to work, which is surely a sound environmental objective. They share with everybody in this country a laudable concern about the lack of affordable housing and they want to do something about it. They also have it in mind to tackle the scandal of empty homes that could be filled, and the correlative problem of unwanted homes in communities in which there is no demand for them. They are homes in communities where employment has gone and the community is in a state of relative decline.

During my time in Parliament, I have investigated those topics. I served on the Select Committee on the Office of the Deputy Prime Minister, which considered the problem of empty homes in detail. We went to Bootle, Burnley and east Manchester, and I found the whole experience informative and thought provoking. We studied and assessed what regeneration schemes based on housing actually achieved. I pay tribute to Andrew Bennett, who is likely to retire in the next few weeks, on his work in ensuring that those topics are firmly planted on the political agenda of all politicians.

I have had a long-term personal commitment to regeneration, even outside the confines of my constituency. I served on Sefton council, where my votes and those of my party were crucial in ensuring that Bootle received city challenge status. At the time, the Labour representatives had reservations about that, because they viewed it as top-slicing money from other local authority budgets. I supported city challenge and neighbourhood renewal schemes in my constituency and elsewhere, and I have seen genuine success emerge from them—perhaps not as much success as was envisaged when they started but, by and large, they were worthy schemes that achieved genuine benefits that permeated into people's everyday lives.

I am delighted to see money spent on deprived areas, but have always been slightly anxious about the fact that when money is too tightly focused, as could have been the case with city challenge until some latitude was shown, it is not best spent and is pumped into one patch of land. Then, the aim can become to use up funds, rather than to use them most efficiently to secure the best benefits for the area. In common with most people who have studied regeneration, I accept the need for targeting and ensuring that the jam is not spread too thinly, but if there is insufficient flexibility, targeting can become a weakness in a scheme—leading to a situation in which the funds are present within a targeted area, but the projects are not.

There is a theory that housing development can lead to regeneration. I do not depart from that theory because, in part, I agree with it, but it can be pushed too far. The most extreme example was the Hatton Garden area in Liverpool, where there was a presumption that if lots of council housing were built, the area would be regenerated. That missed the fact that the net effect would be to produce high rates of council tax, which acted as an economic disincentive for businesses to come to that area, with the result that one might have housing in the area, but not employment. That theory must be examined and, in some ways, contested.

There is also a theory that the prime housing problem in the north is one of managing decline—that housing stock is the same throughout the north and that in most areas of the north all we really need to do is to lose a few houses so that the number of houses matches the number of people. It is similar to the concept that the north-west consists of Burnley writ large. However, that is not the situation in large parts of the north-west, and certainly not in large parts of Merseyside.

In my constituency, we have had something of a mini-economic boom. Unemployment is at its lowest for some time, having fallen rapidly since 2001—it is a happy coincidence that I was elected then. Many of the jobs in my town are in the care and leisure sectors and are relatively low waged. However, there is pressure on housing, which leads to high prices. As unemployment has fallen sharply, house prices have risen sharply. There is a genuine shortage of affordable housing, but that has been masked in some ways.

Those who read The Times assiduously for housing articles might have seen one weeks ago about an organisation called Green Pastures, which does a lot of work for the homeless in Southport. It buys fairly elderly detached and semi-detached properties of a substantial size and converts them into flats, mainly paying for the cost of purchase via housing benefit. The scheme has made Green Pastures a substantial landlord; I pay tribute to its work in bridging the gap between people needing houses and getting them.

However, the current situation leads me to review and reflect on the Government's overall strategy—not so much its goals, but its implementation. Planning policy guidance note 13, as it affects us, is a two-edged sword. As in many places outside the pathfinder areas, it is interpreted locally as a housing limit—a limit on the number of new houses that can be built. In one sense, I am not unhappy with that because it prevents the demolition of lots of lovely old Victorian houses in Southport and their replacement by sometimes, but not always, elegant retirement homes, sold at an appreciable cost. To be sustainable communities, towns need balanced populations. If the houses in Southport attract only elderly people, there will be a problem in future.

The way in which the housing market moves does not necessarily reflect what the community requires. I recognise that there is a need for flat accommodation because of the number of marriage break-ups and single people looking for homes, but, crucially, that limits the number of new builds for family homes. There are exceptions to the rules, however, as the Minister's civil servants will readily anticipate. Even in Southport there are brownfield sites, but not large ones: they tend to date back to the era in which people would start businesses in their back gardens and then extend a little beyond them and start garages or printing businesses or whatever. Brownfield sites can be released, but site assembly is expensive for building interests.

We really need an influx of affordable housing; we need a mix and we need flexibility. That is what the house builders say and what common sense tells us, but we have PPG13 to deal with. The problem is not that we cannot build affordable housing on new land, but that to build sustainable estates with a variety of houses, we need the latitude to build a mix of affordable and other kinds of housing.

The other solution open to my constituents is to go into the pathfinder areas. I am sure that there is an inherent logic that makes people investigate that possibility. It is meant to be there; I understand that. However, the arguments against it are quite strong in Southport within Merseyside. First, it is environmental nonsense to make people travel any further to work than they need to. Secondly, the expense of a lengthy journey time is often unaffordable for people on low wages. Thirdly, in the pathfinder areas, we are finding prices increasing appreciably: I am told by reliable people that some houses in the pathfinder areas are being bought as investments by firms, building societies and so on because they can see a real prospect of their increasing in value. That is not the objective of the pathfinder initiative.

Across Merseyside in general—this point is well encapsulated in the recent Heartlands debate—mass demolition further reduces the housing stock in many areas and means that those houses that are available rapidly become more expensive. To put it in a personal context, a gentleman who worked for the council came to me the other day with his wife and child. They were unable to find a house in Southport that they could afford. They were asked to go to the pathfinder areas and look at property lower down in Sefton, towards Liverpool. They explained that would mean the man giving up his job. The housing department said, "Well, that's really what you ought to do." When somebody who has a job has to move and render themselves unemployed to get a house, we have to investigate whether general regeneration is taking place or people are being shuffled along without achieving any positive economic or personal effect.

It is not true that jobs follow housing. Normally, housing follows jobs. There are problems with that, but there are equal problems with the expectation that jobs will follow housing. Most people come to the obvious conclusion that what is required is that we strike a sensible balance. I query whether we are likely to achieve that.

In my constituency the Southport partnership, which has done a great deal of good regeneration work, believes that the most significant break for the economic expansion that has taken place in the town in the past few years is the availability of housing. I have been convinced not only by the partnership, but by speaking at great length with the Housing Corporation, which is entirely sold on the idea that there is a problem. At some point, the Housing Corporation wishes to present further details of its analysis to the Minister and her civil servants. The issue has been brought up when we have discussed the regional housing strategy and it has been reflected in many other boroughs across Merseyside. In addition, it has been accepted by the Government office for the north-west. I am not saying that we have got to the stage where, a little like the emperor's new clothes, the housing strategy for Merseyside is not what we would take it to be, or that it is not achieving the objectives. I am sure that the Minister can cite statistics that prove all sorts of genuine and real benefits from it. However, I do not think that we will maximise the benefits unless we have greater local flexibility.

That is not the view of an isolated, oddball MP for an atypical constituency. I am sure that Ms Russell could make an identical speech, although she would refer to Chester rather than to Southport. If one were to speak to the leader of Liverpool city council, as I have done recently, and to analyse the problem as I have presented it, I do not think that he would have any difficulty in recognising the problem and acknowledging that to solve it a degree of flexibility is required in the Government strategy. The Government should not simply have a global strategy for the United Kingdom but should implement it properly in particular areas, and not in a doctrinaire way. One of the Government's favourite clichés at the moment is "one size fits all", and Ministers have used that expression time and again as they have sought to introduce novelty and diversity into areas of public service. Sometimes, they put things the other way round, saying that we do not live in an age when one size fits all. If I had a fiver for every time a Minister has used that expression, I would be a very rich man indeed; it is a cliché of the times.

What I am saying, however, is that one size does not fit all in terms of housing need in the north-west; it is certainly not fitting very well in Southport. Given the Heartlands controversy, it is probably not fitting very well across Merseyside either. I therefore ask the Minister to think about my comments, to acknowledge that I am coming at the issue not with a set of anecdotes behind me, but with the support of the regional Housing Corporation and a good number of councils, and to respond.

Photo of Yvette Cooper Yvette Cooper Parliamentary Under-Secretary (Office of the Deputy Prime Minister) (Regeneration and Regional Developement) 3:46 pm, 23rd March 2005

I congratulate Dr. Pugh on securing this Adjournment debate and on raising some important themes relating to housing and, in particular, the relationship between the housing market and the local economy in Merseyside.

Local authorities and regional housing and planning bodies have to address a set of challenges. They have to respond to housing need—one of our most basic human needs is to have a home—but they must do so in a way that supports communities, not dormitories, and that recognises the relationship between the local economy and the local housing market. The hon. Gentleman is right to say that housing and the local economy are closely linked, but often in complex ways. Housing has a big impact on the local economy. Businesses will not invest in places where the work force do not want to live. Equally, a tight housing market can make it difficult for people to move to where the jobs are, which can cause recruitment problems for businesses. Low housing demand can also have a big impact on an area's wider economic performance. We need to address housing and economic strategies together. That is why we have investment in the growth areas in the south-east. That means that we can invest in the housing that is needed to respond to economic growth. It is also why we have the housing market renewal programmes—the pathfinders—to work in areas of low demand in various places around the country.

I agree that it is wrong to suggest that the north is simply a region of low demand while the south, and particularly the south-east, are regions of high demand. That is simply not the case and such an approach is far too simplistic. In many areas in the north, such as Yorkshire, as well as in the north-west and the north-east, house prices have increased considerably and there are areas of high housing demand. Equally, some areas, including parts of Merseyside, have been plagued by serious problems of low demand. That is why we have the housing market renewal pathfinder based there. The hon. Gentleman is right that we need to strike the right balance in our approach to the local economy and housing development.

The hon. Gentleman asked whether the pathfinder is about managing decline, but that does not need to be the approach. In fact, the approach of the pathfinders should be about ensuring that we have the right mix and the right choice of housing for local people and about responding to a changed economy. The pathfinder areas are often those in which housing developed in response to particular social and economic circumstances—certain kinds of housing were required, often reflecting particular industrial patterns of development and particular lifestyles. Those forms of housing are now out of date because people want different things with a different mix of housing in the area. Pathfinders can help to stem the flight from the cities and support regeneration. At the same time, they can reduce pressure on housing hot spots. That was certainly the approach taken by the Merseyside pathfinder, and it has been used to deal with pressure on housing hot spots such as Southport.

Sefton borough council is revising its housing strategy with the help of the Government office for the north-west. We believe that local authorities need to take a strategic approach to their housing priorities. The production of a housing strategy is an important part of developing a wider approach to the local economy and housing needs, but it needs to involve other stakeholders through consultation and partnership. It will allow local areas to provide a proper framework for making sensible decisions. The regional housing board is reviewing its strategy and has already asked for views through an issues paper published earlier this year. A new draft strategy will be issued for public consultation very shortly, which will provide an opportunity to address many of the specific issues raised by the hon. Gentleman about his constituency and Sefton.

Photo of John Pugh John Pugh Shadow Spokesperson (Education)

I attended one of the consultation sessions—I was probably the only Member of Parliament present. A number of groups were arranged to discuss various topics. Strangely, when people came to decide what topics they wanted to discuss, the largest grouping—two large groups—wanted to discuss affordable housing. They wanted to discuss that rather more than the classic objectives that pathfinder projects initially set themselves.

Photo of Yvette Cooper Yvette Cooper Parliamentary Under-Secretary (Office of the Deputy Prime Minister) (Regeneration and Regional Developement)

The hon. Gentleman is right. Although he would not expect me to anticipate the contents of the housing board's new strategy or the Government's response, I agree that one issue that has emerged from the consultation process is widespread concern about the extent of the shortage of affordable housing in some parts of the region. The problem is not confined to rural areas; it appears to be affecting urban areas such as parts of Sefton. The board and the Government will clearly need to take that into account when developing the new strategy and making investment decisions.

The hon. Gentleman will know that in the period 2004 to 2006, Sefton's allocation from the regional housing pot was £26.2 million. Yesterday, we announced the allocations to be made to the regional housing boards and said that over the following two years £500 million would be available to the north-west for affordable housing. We have substantially increased investment in affordable housing since 1997 because we recognise its importance to the housing market across the country. The individual allocations will need to be discussed within the region. The timetable suggests that they will be set out during the autumn of this year, but further discussion will clearly be needed.

At the same time, the North West regional assembly has started work on reviewing the spatial strategy with a view to submitting a new draft to Ministers in September. Again, although it is too early to say what will be in the draft spatial strategy, it will give us a key opportunity to address many of the questions on the future of the housing market in the region. It will also allow us to look much more closely at sub-regional housing markets, in recognition of the fact that different areas may face very different problems. Those problems need to be addressed not only through the housing board allocations but through the regional planning process.

As part of the preparation for the spatial strategy, the regional housing strategy and the consultation discussions to which the hon. Gentleman referred, reference has been made to the relationship between the housing affordability problem and the extent or appropriateness of different restrictions on overall provision. Such matters are complex because the over-supply of housing in some parts of the region, where building has outpaced increasing demand, has led to areas of serious low demand. It has not been a managed process. Many areas of low demand are being dealt with through pathfinders, but require substantial investment to turn the communities around. At the moment, they often contain street after street of boarded-up homes. That is partly because the housing market has not responded to different demands for choice and overall pressures on demand and supply in the area. If a new housing estate is built offering people alternative housing, and nothing is done to improve the existing stock, people might move from one area to another, which can have a detrimental impact on members of the community who are left behind.

Such issues need to be considered extensively as part of the work on the regional housing strategy and the regional spatial strategy. The Government have issued new guidance for public consultation entitled "Planning for Mixed Communities" to replace the relevant parts of the national advice in PPG3. Responses to the guidance note are invited until 15 April. We believe that a sustainable community needs a mix of decent housing of different types and tenures to support a range of households of different sizes, ages and incomes. That must include the provision of affordable housing to meet local needs.

The draft advice suggests that when drawing up development plans local planning authorities set out what affordable housing is in the context of local income levels, house prices and rents; the proportion of affordable housing that will be provided throughout the plan area; the proportion of affordable housing that will be sought on residential sites above a certain size; and the size and type of affordable housing that would be required. The fact that we are considering issuing revised advice on the issue shows how seriously we take it.

We must always bear in mind the fact that markets change over time, and so do local housing markets. Such change is often a response to local economic, social and community changes, but the triggers for a change in a local housing market can often be unexpected. For example, an estate that has problems with crime can be caught up in a vicious cycle when people want to move away because the problems in the environment were not tackled quickly enough, or improvements in a local school can attract people to the area and increase demand in its housing market.

Photo of John Pugh John Pugh Shadow Spokesperson (Education)

I am grateful to the Minister for allowing me to intervene because she enables me to put on record my thanks for her constructive and helpful response. No one wants the Government to change their overall objective. All we want is the strategy to be reviewed in the light of evidence presented. Given what the hon. Lady has said, I do not think that the Government will object to that.

Photo of Yvette Cooper Yvette Cooper Parliamentary Under-Secretary (Office of the Deputy Prime Minister) (Regeneration and Regional Developement)

The hon. Gentleman is right to say that such matters need to be taken into account. As he said, we have set out our clear objectives. The opportunity for him to discuss local issues further will be provided by the regional housing strategy draft, which will be put out for consultation very shortly. The consultation period will be relatively limited, so I urge the hon. Gentleman and his constituents to make representations to the Government office for the north-west as rapidly as possible. All factors need to be taken into account. It would not be appropriate for me to respond definitively about how the balance needs to be struck in his area, because that is the role of the regional housing strategy and the local Sefton housing strategy. There is certainly plenty of opportunity for further debate.