New Housing Supply
Debate between James Morris and Clive Betts
Mr Betts
That is not something the Select Committee looked at. I will pass it over to the Treasury Committee, just as Ministers pass matters over Treasury Ministers.
There is, however, a worse problem in certain areas. I have been advised by Les Sturch, the director of planning at Sheffield council, but this is also happening in other councils. Because of market changes in housing, many developers are saying that although certain sites have—or could get—planning permission because the land is owned for housing in a local plan, they are not developable in economic terms. Local authorities therefore have to revisit their local plans and look for new housing sites in more favourable areas. That is a real problem and will put pressure on green open spaces because developers will say, “These sites are much more attractive to develop in the current climate.” Ministers must address that problem in the planning system, or else Members will be knocking on ministerial doors and saying, “Why do I have to provide lots more housing sites in my constituency when so many sites have not been built on, even though they have planning permission or could get it if developers applied?” That is a longer-term problem.
We recognised that public funding will, of course, be limited for the foreseeable future, so we looked at the private sector and markets to see what was available. There is a long-term problem. Everyone has said that such housing is an obvious form of investment, but sums have traditionally shown that investors believe they can get a 6% return, although they need 8%. There is therefore a gap, and evidence to the Committee suggested that that is why developments have tended not to happen.
However, there is increasing evidence that developments are beginning. The Greater Manchester Pension Fund is working with Greater Manchester council to provide homes, and Aviva pension fund and Derwent Homes are coming forward with schemes. Places for People gave evidence to the Committee.
James Morris (Halesowen and Rowley Regis) (Con)
The hon. Gentleman refers to the scheme in Greater Manchester, but does he agree that there is great scope for local authorities to take on more borrowing capacity and leverage pension funds in order to invest further in houses of different sorts?
Mr Betts
Absolutely, and I was going to welcome the Government’s consultation on relaxing restrictions on local authority pension funds to provide more scope to invest in infrastructure, particularly housing projects. That helpful move forward should be welcomed.
The Committee also considered a bigger deal—a housing investment bank, for example, or an extension of the Green investment bank. Lots of good initiatives scattered around the country are beginning, but small projects often find it difficult to access institutional funds, and small pension funds do not want to get too heavily involved in lending to one particular scheme. A housing investment bank could link up investors who might want to invest—including smaller investors—with borrowers and smaller schemes, and the risk could be spread across those schemes, thereby making the investment more attractive.
Regeneration
Debate between James Morris and Clive BettsWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Mr Betts
I shall make some points about that in a minute. The hon. Gentleman anticipates what I am going to say and makes a valid, correct point.
Our fundamental criticism of the Government—it will be interesting to hear what the Minister says—is that we did not believe that they had a strategy for dealing with the issue. We did not believe that there was such a strategy in the Government’s report on regeneration. We even contrasted that report with the approach to regeneration in Scotland, where the Government seemed to have an overall view of what should happen. It is not just a party political point. I am sure that the Minister will be relieved about that.
In the 2005 report, when we had a Government of a different persuasion, the Committee was critical of the Government allowing the pathfinders to go their own way, but not of drawing together themes and trying to enable them to learn lessons from one another. Our criticisms reflect those of a previous report on a previous Government. We do not ever seem to have had an overall, clear national framework.
James Morris (Halesowen and Rowley Regis) (Con)
From the inquiry I recall conflicting evidence about what we mean by regeneration. A lot of the evidence we heard was that people could not give a single, coherent definition of what regeneration was. Will the hon. Gentleman give us his definition of regeneration?
Mr Betts
I will explain what I think it is about. The hon. Gentleman anticipates me. I do not know whether it is helpful to give a simple definition of regeneration to cover all possible examples, but it should reflect some elements of regeneration schemes.
The hon. Gentleman’s first point is right. There was a lot of mixing up of regeneration and growth. For example, High Speed 2 and Crossrail were mentioned in the Government’s regeneration paper as examples of funding to help regeneration. It is a fairly big stretch of anyone’s imagination to link HS2 and Crossrail to the potential for regeneration schemes. That is a little step too far. I am happy to support those schemes and believe they will help economic growth nationally, but I am not sure whether they really relate to particular regeneration.
Communities and Local Government (CSR)
Debate between James Morris and Clive Betts(13 years, 3 months ago)
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James Morris
I do not agree. Baroness Eaton is obviously doing her job on behalf of the Local Government Association, and she is doing it well, but I know from my experience as a business entrepreneur that having one’s feet against the fire is a profound stimulus for innovation and transformative change.
The hon. Member for Sheffield South East said rather dismissively that a few local authorities getting together to share back-office services would not get us far. I agree that that will not plug the whole gap in certain contexts, but we must take the idea of shared services seriously. In my constituency, we are beginning to see partnership working across the political spectrum really deliver efficiencies and change, for example through new commissioning structures in local government. That must be the future, where local government does not take the role of the service delivery arm, but instead takes on more of a commissioning role. We need to look at new funding arrangements.
Mr Betts
The hon. Gentleman described my earlier comment as dismissive, but that was not my intention. I welcome savings that can genuinely come from sharing back-office services or chief executives where appropriate, but it might not be appropriate in all circumstances. Indeed, the same is true of sharing services not only between local authorities, but between local authorities and other public sector bodies. My point was that I do not believe that could fill a 9% gap in the spending power of an authority, which is also the point that the LGA is trying to make. The Minister said that no cuts in front-line services were necessary because all the savings could be found by sharing services; I was disputing that.
James Morris
I do not want to get into a debate on the definition of a front-line service, but I take the hon. Gentleman’s point. Once we have gone through the period of retrenchment that is necessary to get the country back on a stable footing, the essential challenge in local government will be to maximise the potential for collaboration, efficiency and shared services. That could be through innovative relationships not only within local government, but importantly, across the whole spectrum of local public services. I urge the Minister to take forward the idea of community budgeting and the previous Government’s work on Total Place, which I welcome, because my perception is that sharing the totality of public spending and of public services in the next wave of local government could deliver cost reductions and a much higher level of service.
The Committee reflected on a variety of evidence presented to us. It is a tough settlement, but one that presents a series of interesting questions and opportunities. It is a tough time for local government, but tough times produce change for local government, and many would argue that it is necessary change. The hon. Member for Sheffield South East touted the figure of 80% increases in local government spending under the previous Labour Government. It could be argued that public sector organisations need periods of retrenchment during which they can examine how their processes are operating. We might be looking at a period of necessary change in local government during a tough period of fiscal retrenchment across the economy.