Housing Market Renewal (Legacy)

Thursday 24th November 2011 Written Statements

[The Minister for Housing and Local Government (Grant Shapps)]

The last Government’s housing market renewal pathfinder programme imposed large scale Whitehall targets for demolition and clearance across the midlands and the north of England. The centrally driven schemes were often resented by local communities and created as many problems as they solved. This top-down approach has not worked, often resulting in blighted areas where large scale demolition and clearance projects have been stopped in their tracks, leaving some families isolated in abandoned streets.

There was widespread public controversy over an obsession with demolition over refurbishment, the lack of transparency of the pathfinder quangos, large profits by developers, the demolition of our nation’s Victorian heritage and perverse incentives being given to run down neighbourhoods.

The designation of areas for demolition effectively increased deprivation in those areas; many social landlords prepared the ground by “voiding” and boarding up properties. In turn, this undermined the housing market as mortgage lenders were unwilling to lend in such areas. Areas were effectively managed into decline—to make the notional benefits of wholesale demolition more attractive, ensuring a larger windfall gain for the state.

Local communities in some of the most deprived areas of the country were told they would see a transformation of their areas, which in reality amounted to bulldozing buildings and knocking down neighbourhoods, pitting neighbour against neighbour and leaving families trapped in abandoned streets. This was wrong.

As campaigning group Save Britain’s Heritage has remarked:

“From the start, pathfinder showed an appetite for destruction....The classic English terraced house was demonised as “obsolete”. Whole neighbourhoods were declared surplus at the keystroke of a consultant’s laptop. Bureaucratic arrogance reduced communities to inmates of a “Zoo”—Zone of Opportunity—for house builders. Statisticians assumed compulsory purchase and eviction for demolition were acceptable measures for householders in a property-owning democracy. Quite predictably, the cure turned out worse than the disease”.

The coalition Government are taking a different, more localist, approach. We are putting residents, local businesses and civic leaders in the driving seat and providing them with local rewards and incentives to drive refurbishment and renewal.

On 31 January 2011,1 announced a £5 million growth and housing market renewal transition revenue fund. The primary aim of this fund was to help safeguard and develop expertise and capacity in key growth and former housing market renewal locations.

But I also want to implement measures to tackle the “ghost streets” created by the last Government’s programme. On 9 May 2011, I announced a £30 million capital fund to help families trapped in abandoned streets resulting from the pathfinder demolition schemes. This funding was targeted at the five most challenged former housing market renewal areas—Merseyside, East Lancashire, North Staffordshire, Hull and Teesside—where the lowest quartile house prices have remained well below the average for that part of the country, and where surrounding housing markets are weak. As part of their bid, local councils were asked to set out clear exit strategies showing how former housing market renewal commitments could be unwound or transferred to other regeneration schemes.

In response to the bids from local authorities, I have decided to make an additional £5.5 million available—bringing the total fund to £35.5 million. This means that all families in streets or blocks that are more than 50% vacant will be helped. This £35.5 million fund will be match funded by local councils in these five areas, giving overall funding of £71 million.