Future Homes Commission Report

Lord Greaves Excerpts

Tuesday 4th December 2012 Lords Chamber

[Lord Greaves]

My Lords, I, too, thank the noble Baroness, Lady Whitaker, for introducing this short debate on this very interesting and useful report. I associate myself with pretty well everything that has been said by all four previous speakers, particularly my noble friend Lady Maddock. I am particularly pleased with the emphasis in the report on design, which is so important. I think it is a little optimistic about how useful the Localism Act will be in these areas, but we will see.

I shall talk about a case study of the problems and frustrations in my own area—Pendle in Lancashire—associated with trying to make a very modest contribution to affordable housebuilding in this country. I should declare an interest as a member of Pendle Borough Council. I have read what seem to be innumerable announcements and press releases while lots of schemes with interesting names have been coming out of the Government about housebuilding, but none of them seem to reach our valley up in the Pennines in east Lancashire.

We have a shortage of affordable family housing, like many areas, partly due to the fact that most three-bedroom houses on council estates have now been sold off. We have wanted to build a number of affordable family houses on council-owned land on small sites, many of which are a result of the housing market renewal programme, when the powers that be at that time would not allow us the money we needed for renovation of areas unless we knocked down a few blocks of houses. We resisted as much as we could, but some of the worst have gone and we are left with small brownfield sites. The idea was to replace what had been there with a mix of affordable houses to sell, to rent and possibly for shared ownership.

It has proved very difficult indeed to do this. In the small town of Brierfield there is a cleared site that was formerly three streets where various schemes were drawn up for 30 or 40 houses. In my own town of Colne a small, cleared site of two blocks is proving impossible to redevelop and in my own ward there are two derelict blocks of housing which are all boarded up. Many but not all of those now belong to the council; it requires a compulsory purchase order and demolition before any rebuilding can take place. That will cost, believe it or not, around £1 million and that money simply does not happen. Yet when there are sites, the money simply does not add up.

The idea is that the council provides the land for free and that the development is done by the council’s own joint venture company on behalf of the local housing association, which now operates all the former council housing in the area. One scheme of just eight houses in my own ward is now going ahead. We had hoped that it was going to be a mix of tenures; it now all has to be for rent and that only just adds up. Most of the schemes on these sites do not add up at all. The grant per unit from the Homes and Communities Agency is £21,000 to £22,000 per unit; the affordable housing unit, including the free land, might cost £95,000 to build. The ability of the registered social landlord, Housing Pendle, to pay for it does not come to more than about £70,000 to £75,000 when one takes into account the level of local rents that can be charged and the future administration and maintenance costs. There is a gap there of something around £20,000. The council has been able to plug that gap with right-to-buy receipts in one scheme, but there is a limit to those.

We want to build and it is a very modest scheme. It is necessary locally but we cannot do it, in most cases, because the money which is available and the subsidies that are available from central government via the HCA are simply not big enough to plug that gap. Like many other authorities in the north of England and similar areas, we are stuck. We want to make our own, very small contribution and it is not possible. I hope that the Minister will look at that.