Building More Homes (Economic Affairs Committee Report)

Lord Best Excerpts

Thursday 2nd March 2017 Lords Chamber

[Lord Best (CB)]

My Lords, I maintain the long tradition of beginning by saying I do not want to repeat anything anyone has already said, then repeating everything that everyone has said. I hope there will be some slight changes of emphasis in my remarks. The Economic Affairs Committee’s report is a really impressive analysis. I congratulate the noble Lord, Lord Hollick, the committee members—I used to be one; it is a great committee to serve on—and the very well-chosen special advisers, Professors Christine Whitehead and Geoff Meen.

I hope almost everyone has now accepted the core message of the report: we have to build a lot more new homes. Relying on a handful of large housebuilding companies will not do it, so we must dramatically boost building by all the other providers: councils, housing associations, SME builders, retirement housing providers, Build to Rent developers, self-build and custom housebuilding, and more.

Since publication of the committee’s report there have been some radical changes to the position facing us when your Lordships debated the then Housing and Planning Bill last year. In what seemed like an endless tussle over that legislation, with one of the Government’s heavy defeats featuring in this week’s BBC2 documentary “Meet the Lords”, we argued for more affordable homes to rent, not just homes to buy. Now we have the Government’s housing White Paper. Although some regard it as insufficiently radical, I recognise that it represents a shift in housing policy in absolutely the right direction. I also congratulate Gavin Barwell, the Housing Minister, on his leadership. Not least, the White Paper fully acknowledges the requirement for affordable rented homes and the new version of starter homes for sale will no longer replace all the homes so badly needed for rent.

On the Economic Affairs Committee’s views on excessive dependency on a few very large housebuilders, there is plenty of good stuff in the White Paper on diversifying the housing market. I welcome the encouragement for the fledgling Build to Rent sector, which draws in funds from institutional investors to create new, well-managed additional homes, in contrast to buy-to-let speculative investment, which simply acquires homes already there.

Local authorities are rightly disappointed that the Government are not planning to fully relax opportunities for them to borrow to build new council housing. I doubt whether the Government’s stance is really because the Treasury believes local authorities will go wild and borrow excessively, having now seen councils behaving cautiously and prudently where they have had the chance to borrow to build. Rather, it is the continuing reluctance by government to follow international practice and define investment in new housing as being outside the definition of public expenditure. This means housing investment would add so much less to the annual deficit if non-public bodies, such as housing associations, did the spending.

The White Paper helpfully emphasises government intentions to see more publicly owned land released for housing—it’s the land, stupid. Other changes beyond the White Paper also give hope for the future. I am keen on the creation of whole new settlements—those garden villages or garden towns that are beginning to come forward. The signs are good that an amendment promoted by the noble Lord, Lord Taylor of Goss Moor, and a number of us from across this House will obtain government approval at Third Reading of the Neighbourhood Planning Bill. This amendment would give councils a greater say in the development of major new settlements, thereby incentivising more local authorities to get behind the creation of these mini new towns, where capturing the land value at the outset enables lots of homes to be developed in high-quality, mixed-income new communities.

On the subject of good news to fulfil the hopes expressed by the Economic Affairs Committee, a new report from the National Housing Federation, Demise of the NIMBY, strongly suggests widespread acceptance of the value of building more homes in place of the endless opposition to any new development which has characterised the debate for years. The biggest housing association concentrating on rural housing, Hastoe Housing Association, similarly reports an increase in the number of parish councils asking it to come to develop homes for locals in their village. Of course there will remain stiff opposition to housebuilders simply adding a lot of “executive housing”, with no additional infrastructure for the community, on the edge of the village. But the need for homes for locals is now accepted in many areas, with neighbourhood plans helping determine the location for them, and this means less hassle to build extra affordable homes.

Perhaps it is worth noting that, in terms of getting the extra homes built, it is very often the housing associations that can make things happen: they are well placed to expand the new Build to Rent market, being in a position to borrow on rather more favourable terms than speculative developers; they can partner local authorities in joint venture companies; they can be central to the master plans for new settlements; they are ideal retirement housing providers since they can be trusted, rightly, by older people wishing to downsize; and they can pursue their core role of providing affordable rental homes, and creating communities which include housing for shared ownership and sale, this time often in partnership with the housebuilders.

I am delighted to see that the Government have found an extra £1.4 billion in hard cash to support this work. More of the same would mean more new and affordable homes. The housing association sector really does have the potential to double its output and to generate the very large numbers of extra homes that we know will not be forthcoming otherwise. Their non-profit, social purpose means they add social value by taking in the most disadvantaged, by working with smaller charities locally, by working with health and social care providers, by investing in training and employment, and by generally supporting every kind of community activity.

Sadly, I have to conclude on a sour note. The positive approach of the Department for Communities and Local Government, which I am applauding, is not matched by the actions of the Department for Work and Pensions. The DWP is undermining housing policy by vainly trying to cut the costs of housing benefit before market conditions make this a sensible option. When supply more nearly matches demand, government can exert downward pressure on rent and therefore reduce housing benefit. But that cannot happen yet. The compulsory 1% per annum real reduction in rents for housing associations and councils means an accumulated 12% revenue cut over four years, which of course impacts on their ability to create additional affordable homes.

All the DWP’s other new benefit caps and ceilings, and the freezes on local housing allowances, mean tenants on the lowest incomes getting less government help with housing. Time does not permit me to speak about the DWP’s latest plans to limit rents charged for specialist supported and sheltered housing, which I fear, if taken forward, will undermine the excellent work of the DCLG in supporting—magnificently—the Homelessness Reduction Bill, which I was honoured to take through its Second Reading last Friday.

However, I must draw attention to the even bigger concern for everyone in the housing world: the reductions in help for tenants in the private rented sector mean fewer and fewer landlords will take in anyone who relies on government help with their housing. Shelter figures show that, by 2020, the local housing allowance will not cover rents for even the cheapest properties in over 80% of local authority areas. Landlords already face the inherent risks of poorer households finding deposits and rent in advance, as well as the DWP’s insistence on paying housing support to the tenant not the landlord. The result is not simply that, in seeking to prevent homelessness, councils and charities will find fewer and fewer landlords willing to accept the people they want to assist. The even greater anxiety is that, gradually, more and more of the 800,000 existing private sector tenants who receive housing benefit will find their landlords ending their current shorthold tenancies. Unless the DWP recognises the need to lift the freeze on local housing allowances and returns to paying housing benefit on the cheapest market rents, a major calamity awaits.

So, there are plenty of reasons to be cheerful about the opportunities for building more homes, as the EAC report advocates so powerfully, but also serious difficulties for poorer households needing somewhere to live, because DWP welfare reforms are undermining constructive DCLG housing policies. I end therefore with a plea for the Government, collectively, to reconcile these conflicting trends so that the good intentions of the Housing Minister and of the housing White Paper—echoing so much of the Economic Affairs Committee’s thinking—can be fulfilled.

Housing and Planning Bill

Lord Best Excerpts

Monday 25th April 2016 Lords Chamber

[Lord Taylor of Goss Moor (LD)]

My Lords, I thank the Minister for her kind comments and draw attention to my registered interests.

I have pressed on this issue for a number of years and I am delighted that the proposal has positive cross-party support. It will make a real difference. The principle is fundamentally clear. At the moment, local authorities in rural areas have the option, in effect, of either brownfield development within previously developed areas, which is a good thing, or the opportunity to extend existing villages and towns sequentially by a series of developments to meet housing needs. That can be a good thing but often it is deeply unpopular because it builds on the very places that people most value.

By going down the route of allowing local authorities the option of using the New Towns Act to acquire land to create new settlements to meet local needs—going through a local process and with local support—it gives an opportunity to create great places without treading so hard on the toes of those who live in wonderful historic communities. Many of these, frankly, are at breaking point. They have problems with traffic congestion, getting children into schools and meeting service needs.

Local authorities will be able to do this in a way that allows the owners of the land to be properly compensated and to do well out of it. None the less, it allows, through the capture of land value, for these places to be well served with schools, shops, GP surgeries, parks, sports facilities and all the other things that make a great place while at the same time making housing available at much lower cost. This is because we can make land available to small builders, self-builders and housing associations for starter homes. A whole range of needs often are not met at the moment because land values are so high or land is not available; or great places are not delivered because the person who owned the land took the money and the taxpayer was left scrabbling to provide the schools, the shops and the GP and other services that are needed.

It is an extra tool in the box. We can plan for the housing which we agree across the House is needed. It is not the only solution but it changes the opportunities available to local communities and local government. It will be hugely welcomed. I have spoken to a wide range of organisations, from the National Association of Local Councils, of which I am president, to CPRE, to the country landowners, to many of the major housebuilders, to local government bodies and to many of the local councils that have pioneered this kind of approach. It has universal support.

This is an important change. I greatly thank the Minister, her colleagues and the other parties for the support that they have given to it. I particularly thank my colleague, the noble Lord, Lord Best, who has helped me bring this to the House.

[Lord Best (CB)]

My Lords, I support the noble Lord, Lord Taylor of Goss Moor, in his Amendments 128ZA and 128ZB. I, too, thank the Minister for accepting the amendments in advance of this debate. I congratulate the noble Lord, Lord Taylor, on his sterling work over several years in flying the flag for new settlements and new garden villages—small new towns, if you like. These can achieve all the objectives of good design, sustainability and sensible land use and produce significant numbers of new homes. I commend the work of the Town and Country Planning Association over the whole of the past century in promoting the benefits of new towns and new communities. I hope their hour has come, or nearly so.

As the noble Lord, Lord Taylor, has explained, building a settlement of 1,500 to 5,000 homes with a well-formulated master plan all in one place means that land does not have to be found haphazardly in dozens of little parcels. Instead of evoking protests in 100 places where local people object to seeing 20, 30 or 40 more homes built in their area with no extra infrastructure, lots more traffic and no social gains, the new settlement can generate a greater number of homes with all the necessary transport and community facilities built in.

Housing and Planning Bill

Lord Best Excerpts

Wednesday 23rd March 2016 Lords Chamber

[Lord Taylor of Goss Moor (LD)]

My Lords, I shall speak to Amendments 103A and 103B and in support of Amendment 103. Given the hour and the timing, I will say much less than I would have liked to on this issue, about which I feel quite passionate. I will restrain myself despite the fact that, as a Cornishman, I have already missed my last train home. A little bit of me feels that I could speak for a few hours and bring noble Lords the same pain that I already feel. I am quite grateful that the Motion to adjourn was withdrawn; at least I get the chance to speak to these amendments, having missed my train.

For some years, I have been arguing that it is extraordinarily important that we find ways to deliver the amount of housing needed and that we give local authorities new options for doing that. The principles of the new towns were abandoned in the early 1980s because housing need was basically being met by housing supply at that point and there were projections of big falls in population so there was an assumption that we did not need large new settlements to come forward. We are now in period where the number of over-65s will go from 10 million today to 19 million by 2050, while more babies were born last year than in any year since 1971. We are seeing big increases in population but we are no longer delivering the houses to meet them.

We should offer local authorities and local communities the option of creating new garden villages—settlements to meet local need—that can capture the value of land, rather than making multimillionaires of lucky landowners or lucky speculative developers, and can create fantastic places that have doctors’ surgeries, schools, parks, shops and all the facilities to create a genuine community and restore our faith in ourselves that, just as our predecessors built wonderful villages and towns, we can do the same. At the moment, that is near impossible because so much value is captured in the process, so what we get are bland estates without facilities. If anyone is going to pay for those facilities, it is the taxpayer, while a few people make themselves very rich indeed.

That is why I have argued that the powers in the New Towns Act should be extended to communities, and I was delighted last week to see the Government making commitments to do that. However, if we are to do that, we need to be clear about the role of the development bodies that will do that place-making, create those fantastic places and ensure that the houses and communities are built in a timely way and at prices people can afford. If the land value has been captured, they can be affordable homes. The remit of that place-making body is critical. Amendment 103 goes to the heart of that because the existing duties are long outdated and will need bringing up to speed. We will need to be clear about that remit. Amendment 103 is a very good first amendment on that. There are other elements that can be brought to it. I hope the Minister will be able to come back with some proposals on that, given the commitments that the Government made last week.

My own amendments are about modernising the process. Let me be absolutely clear what I believe that process must be for these local scale communities. That process must be one that is locally led. This is not something forced on communities. It is a new opportunity for communities to deal with their needs in a different way, and then protect themselves much more effectively from unwelcome development that otherwise might take place on appeal—or perforce around existing historic market towns and villages, many of which, frankly, are at bursting point and congestion point and cannot go on developing in that way.

The starting point will be the local plan process—or amendment to the local plan—and it would then go through all the normal community consultation and examination. The question is then: what is the next stage? At the moment, to bring forward a new town involves a public inquiry process, as if that local plan-making had not taken place at all, but no proper parliamentary scrutiny process, let alone any up-to-date parliamentary scrutiny. The old system quite simply is not fit for purpose.

I was going to run the Committee through what happens under the old New Towns Act and what can happen under a modern urban development corporation-type approach. I will not do that because people can do without the lecture. I was recently appointed a professor of planning and I guess the temptation is now always to lecture. I definitely will not do that. I understand that I have missed my train, but other noble Lords have not missed theirs. All I would say is that it is incredibly important to have a system that is modern and fit for purpose. The Government have made a commitment to go down this route. The Bill provides an opportunity to provide a modern, accountable, fit-for-purpose way of delivering these development bodies.

[Lord Best (CB)]

My Lords, I intend to make myself extremely popular by not speaking to this amendment, other than to say that I am extremely supportive of the amendments in my name and that of the noble Lord, Lord Taylor of Goss Moor—and to say that my speech is available by email if anyone would like to read it later.

[Lord Harris of Haringey]

My Lords, I want to speak to this group of amendments because I think they are very important. Earlier on in the Committee today, I specifically raised the importance, in terms of planning, of looking at the concept of what is the community that you are trying to create—and making sure that the community is sustainable and has all the benefits you would hope for.

Over the past 20 or 30 years there has been enormous progress in understanding what makes a community work. It is not simply the number of homes. It is not simply the mix of homes. It is also what else is there. That is the place-making function. This is the content of Amendment 103, moved by my noble friend: it has focused on the series of expectations about the role that the new town development corporation—or whatever else—might use in trying to create a community.

The issue is not simply identifying the possibilities for development and putting up more new homes. That would be the route to some of the urban disasters that we have seen over the past 30 or 40 years. It is about creating a place. It is about creating an environment in which people can live and have a sense of community. The content contained in the amendment refers specifically to the vibrant cultural and artistic development of the community. It talks about protecting the natural and historic environment and the importance of high quality and inclusive design. This is about creating places in which people actually want to live. That should be fundamental to the whole planning process, and writing those into the legislation—the Local Government, Planning and Land Act, and the New Towns Act 1981 —is exactly the right way forward for the Bill. However, my concern is that they have not been included in the Bill up to now. I hope that the Minister—she is now nodding, so perhaps that is a good sign—will be able to tell us that the Government accept the principles behind my noble friend’s amendment.

On the point that has just been made by the noble Lord, Lord Taylor, about the importance of consulting and involving communities, communities live and thrive only if they have the support of the people who are going to live there. That is why consultation and involvement in that process are such a critical part of making sure that those communities and places are indeed viable. That is my understanding of the intention of these amendments, and I hope that the Minister is going to tell us that the Government wholeheartedly embrace that and are going to accept them.

Charities (Protection and Social Investment) Bill [HL]

Lord Best Excerpts

Monday 20th July 2015 Lords Chamber

[Lord Mackay of Clashfern (Con)]

My Lords, I will raise a question in relation to this amendment which has nothing to do, primarily, with the issue that has been raised, and which will come forward in another Bill. One of the problems for charities is that from time to time they are subject to compulsory acquisition. For example, if a charity owns property which is required for a road or something of that sort, the authority that has compulsory powers in relation to that will be able to acquire it. I am not clear that this amendment is consistent with that possibility, because the Charity Commissioners would find it impossible to block a compulsory acquisition if it was made within the terms of the particular statute which authorises the acquisition.

As your Lordships will know, there are many statutes which authorise compulsory acquisition. However, an important aspect of compulsory acquisition is that the acquiring authority has to pay the full value of what is required. I do not know what the Government’s proposals will be in relation to this other matter, but all I can say at the moment is that the amendment does not seem properly to recognise the possibility of charitable property being acquired by compulsory acquisition under one of the compulsory acquisition statutes. I would be glad if the noble Baroness would deal with that.

[Lord Best (CB)]

My Lords, I will raise a somewhat technocratic reason why the amendment could be very important. If government compels charitable housing associations to sell their assets—even if they are reimbursed by the Government—and then tells them how to spend the money they receive from selling their assets, these charities may become classified by the Office for National Statistics as “public bodies”. If government takes away the autonomy of charities and assumes the role of their boards or trustees in crucial decision-making, a line may be crossed. Already, government heavily regulates the activities of charitable housing associations and determines their income by instructing them on the rents that they must charge. In the event that government also tells them when to dispose of their assets and at what price, and subsequently instructs them on how to use the money, intentionally or not, the charitable housing associations could be deemed by the independent Office for National Statistics as public bodies.

Does that matter? I am afraid that it matters a lot. At present, only the grants these bodies receive from government count as public expenditure, so their borrowing from banks, building societies, et cetera, adds nothing to government debt. All that changes if housing associations are classified as public bodies. The £60 billion they have already borrowed would be added to the national debt and all their new borrowing—around £4 billion this year—would be added to the Government’s annual deficit. So if compelling housing associations to sell their homes—and compelling them to use the proceeds, perhaps to replace the ones they have sold—leads to these bodies being classified as public bodies, government finances will take a huge hit. Government would then feel obliged to curtail drastically further borrowing by housing associations, which would stop them delivering the affordable homes that the nation so clearly needs. There are other reasons for not pursuing the latest right to buy sales policy, but this may be the one that causes the Treasury the greatest concern. This amendment would prevent government making a mistake that it could later regret deeply.

[Baroness Barker (LD)]

My Lords, at the moment I am training for a charity event and I spend quite a lot of time, mostly at weekends, cycling rounds the parks of south London and north Surrey. The existence of alms houses and charitable housing associations is a timely reminder of the importance that the charitable sector has always had in this field and of the extent to which the charitable housing sector has always been an irritant to government, both locally and nationally. There is something marvellous about preserving its values in concrete.

We should remind ourselves that this is the protection of charities Bill. It is principally concerned with the extent to which the Charity Commission has the power to act against charities and individual trustees to ensure that the general public continue to have faith and confidence in charities. The amendment moved by the noble Baroness, Lady Hayter, may not be perfect for her intent, but the way that I read it is that she is seeking to get from the amendment and the discussion of it an undertaking that, should the Charity Commission be called upon to judge the performance of a charity or its trustees under the policy that is being brought in—as the noble Lord, Lord Cormack, explained, it still being formulated—the test which the commission will apply is: did the trustees act in alignment with the charity’s objectives? Of course, those objectives may not change in ways that are consistent with government policy. That is simply what the noble Baroness is trying to get on the record. For that reason, although the wording may not be perfect, the intent behind the amendment is worthy of our support.