Housing

Lord Burnett Excerpts

Thursday 8th July 2010 Lords Chamber

[Lord Burnett]

My Lords, I thank the noble Lords, Lord Gardiner and Lord Touhig, and congratulate them on two excellent maiden speeches. I have known the noble Lord, Lord Touhig, for many years and I was delighted when he was introduced into the House. I also thank the noble Baroness, Lady Ford, for calling this debate at such an opportune time. Housing is a major problem but, as was said earlier in the debate, it was not given the prominence that it should have been at the last general election. Before I come to my speech, I draw attention to my interests in the register, including my personal interests and the fact that my law firm acts for a number of building companies and developers.

Increasingly, the country is aware of the massive debts owed by the state. The headline figure of the accrued national debt is about £800 billion, which, according to the previous Government’s Budget, should rise to about £1.4 trillion in three years’ time. Private finance initiative debt is estimated at about £200 billion. Two years ago, the figure for unfunded state pensions was estimated to be £700 billion, although according to a recent report it is now rather more than that. Therefore, there will be little government cash for new work on infrastructure and little government cash for affordable housing.

However, the need has never been greater. Local authority housing waiting lists are high. The number of new houses needed is now 250,000 a year, which accounts for the critical problems of homelessness and lack of housing. The number of housing starts in the past two or three years has been about 120,000. That includes private sector housing, housing provided by registered social landlords and a small amount of council housing. Two or three years ago, before the recession, there was a compound shortfall, but that has been greatly exacerbated. The lack of housing—in particular, the lack of affordable housing—has led to a crisis for many people. Young people cannot find residential property at reasonable rents. Couples are living with their parents for years. Many families and individuals are living in unsuitable accommodation and, as the noble Baroness, Lady Ford, said, many people are trapped in abusive relationships.

The sooner local authorities and others in the housing sector are told which infrastructure projects will qualify for state grants in their areas, the sooner they can plan and adjust their planning policies. The Government should give urgent consideration to this. Local authorities are not yet aware of exactly how much money will be spent on new roads and other infrastructure. I hope that local authorities will be flexible enough to renegotiate existing planning consents, and I hope that they will be flexible in their approach to the planning system.

However, it will be the private sector that funds affordable housing in the future, and I hope that local authorities will be realistic in their demands of it. Anything that the Government can do to simplify and expedite the planning system will be welcome. The existing planning system, which demands a plethora of reports, surveys, studies and experts, is hugely expensive, bureaucratic and time-consuming and immensely unpredictable. Unrealistic targets for the percentage of affordable housing required as part of any housing scheme have contributed to problems of viability and delay in the delivery of many housing schemes. It is notable that councils that have a high percentage requirement for affordable housing are those with the lowest rates of delivery of both affordable and private housing, which in turn drives up prices.

Why has the planning system failed to deliver? Mainly because it is glacially slow. It takes five to 10 years to prepare, draft, consult, examine and adopt a local plan. It takes at least two years to get detailed planning consents and then a year or two to start delivering the finished houses. We must find ways of speeding the process up. The recent announcement of the revocation of the regional strategies will unfortunately lead to delay—I hope only in the short term—and confusion. The process must not be allowed to stagnate or continue. We cannot afford delay. We must guard against local authorities doing nothing, divesting themselves of any responsibility and therefore continuing with the current planning-by-appeal system, which is the inevitable consequence of the protracted delays and the absence of adopted local development plans. We cannot spend a further year or more tackling and tinkering with the system. Radical change is needed to speed up the planning system. Decentralisation of decisions on the location and number of homes and so forth is fine, but strict timeframes for the production of development plans are required urgently.

We need the jobs. The construction sector should be a major employer. Construction should be about 8 per cent of our GDP. Banks should be more flexible and lend on sensible criteria, but they should be free to lend fast and sensibly. These factors are holding up the production of housing and employment and ruining people’s lives in the process. The Government must act on housing and they must act now.