Housing and Planning Bill (First sitting)

Richard Bacon Excerpts

Tuesday 10th November 2015 Public Bill Committees

[The Chair]

I welcome you all to the first Committee sitting of the Housing and Planning Bill. I hope to keep our discussions pleasant and civilised. There are a couple of little rules. We are not allowed to have coffees, or to drink or eat anything else, and if anyone’s mobile phone goes off they will earn my strict displeasure, or a wiggle of my eyebrow at the very least.

Before we begin the more interesting part of the sitting, I ask Members who have interests to declare now to do so.

[Mr Richard Bacon (South Norfolk) (Con)]

I am organising a seminar on 20 November called “How should Norfolk grow?” It has eight commercial sponsors: Barclays bank, the New Anglia local enterprise partnership, the local train franchise, Anglian Water, Saffron Housing, Norwich International airport, Swallowtail Print and the Maids Head hotel.

[The Minister for Housing and Planning (Brandon Lewis)]

May I draw attention to my entry in the Register of Members’ Financial Interests?

--- Later in debate ---

[Matthew Pennycook]

Q 8 As the Bill stands, have you been assured that they are an addition and will not simply squeeze out other affordable housing in the capital?

Richard Blakeway: A number of the key points will be articulated in the regulations. What is on the face of the Bill at the moment means that starter homes can certainly work alongside other intermediate products in the capital. The key bit will be what is in the regulations. One of the key issues is the quota of starter homes that will be required, which will be articulated in the regulations. There has been speculation that it will be 20%, but we are waiting to see the regulations. It is important that they work alongside each other. Just to pick up on your point, we have a number of intermediate products where the investment is locked in in perpetuity, and we would like to see that continue.

[Mr Bacon]

Q 9 Mr Blakeway, what possibilities are there for the provision of serviced plots within the GLA area for people who wish to build their own home, either individually or in what the Self-build and Custom Housebuilding Act 2015 calls “associations of individuals”, who come together to build their own houses?

Richard Blakeway: We think there is a real role for both custom build and self-build. On the identification of plots, we are working closely with local authorities to compile a list of potential sites. In addition, the GLA is acting as one of the Department for Communities and Local Government’s vanguards and establishing a register of people with an interest. We are seeing a phenomenal rate of interest in London: more than 600 people have signed the register in the past three months. People often look at London and say that custom build and self-build cannot work in the capital, but we do not believe that is the case. We think it has a role to play in the capital—particularly in outer London. We also think that custom build, in particular, has a role to play among conventional house builders and housing associations. There is absolutely no reason why you cannot reserve a proportion of plots for custom build on a large regeneration scheme or development site.

[Mr Bacon]

Q 10 You mean that a housing association itself could offer self-build and custom build to its clients?

Richard Blakeway: Certainly custom build, yes.

[Mr Bacon]

Q 11 In relation to large cities, Berlin has more than 3,000 dwellings that have been developed very recently using self-build and custom house building. Are you saying that in large urban areas such as London it is not a problem to do it in the way that some people are suggesting?

Richard Blakeway: It is more challenging because we have a very heated land market and development opportunities tend to be more complex, but it should not be dismissed. We think it has a particular role to play, for example in outer London where the kind of density that might be built through custom build and self-build is appropriate to the local vernacular.

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

Q 12 Are you certain that the sale of high-value council housing will yield enough resource to fund the right-to-buy scheme? Do you think it will guarantee that enough houses are built?

Richard Blakeway: Certainly within London, our analysis—and we have had some support from Savills on this—suggests that there are sufficient capital returns and receipts from the sale of high-value council houses in the capital to cover the cost of discounts in the capital and the cost of reprovision, as well as other things such as debt financing and so on. The straightforward answer is yes, within London.

--- Later in debate ---

[Matthew Pennycook]

Q 36 You say there is an acceptance that some of the proceeds will leave the capital. Do you think, therefore, that the amendment tabled by the hon. Member for Richmond Park (Zac Goldsmith) to keep the proceeds within London is unrealistic?

Philippa Roe: I would like him to see it succeed. Whether the Government will accept that, given the financial pressures they will face with right-to-buy sales outside London, I do not know. It is worth trying, but I am not sure whether he will succeed.

[Mr Bacon]

Q 37 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 boroughs 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.

[Mr Bacon]

Q 38 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.

Phil Glanville: No.

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.

[Mr Bacon]

Q 39 Could you clarify what you meant by “scale”?

Sir Steve Bullock: The housing co-ops tend to be very small. We are talking about building 15,000 additional units of housing in Lewisham over the next period. They would not be in a position to build anything like those kinds of numbers.

[Mr Bacon]

The existing housing co-operatives.

Sir Steve Bullock: Yes.

Martin Tett: I represent the LGA, rather than an individual borough, so it is probably better if I defer to Councillor Roe on this.

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.

[Mr Bacon]

Q 40 But not housing co-operatives.

Philippa Roe: We do not really have housing co-operatives in Westminster.

[Mr Bacon]

Q 41 The reason why I mention housing co-operatives is because they are exempt from the right to buy.

Philippa Roe: They are.

[Mr Bacon]

Q 42 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.

Philippa Roe: It has crossed our minds as a route that one could look at.

[Mr Bacon]

You might want to look at Berlin.

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.

[Kevin Hollinrake]

Q 43 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 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.