Community Housing

Debate between Richard Bacon and Danny Kruger

Thursday 12th March 2020 Commons Chamber

[Mr Bacon]

I recommend that my hon. Friend talks to the National Community Land Trust Network, because the truth is that there are lots of different solutions that work in different environments. He will have heard, as I did, the Secretary of State for Housing, Communities and Local Government say earlier that the great idea of neighbourhood plans does not work if it is then overridden by developers who take no account of what local communities have said they want. It undermines the credibility of the whole neighbourhood plan process. In my hon. Friend’s particular case, I suggest that he talks to Tom Chance and Catherine Harrington at the National Community Land Trust Network, to see if there is a way forward, particularly if my right hon. Friend the Minister does what I hope he will do, which is relaunch the community housing fund so that the funding continues to be available, preferably on a long-term basis.

[Danny Kruger (Devizes) (Con)]

Does my hon. Friend agree that community land trusts offer potentially a large part of the answer to the housing shortage in this country —uniquely among new developments, they frequently have considerable support from local communities—and that, although this Budget was overwhelmingly brilliant, it is disappointing that the community housing fund was not extended to meet the enormous demand for community land trusts?

[Mr Bacon]

I agree with everything my hon. Friend says. I draw attention to an utterly apposite quote on the front page of “Community Builders”, a book by the Demos think-tank. I happened to attend the launch several years ago. It says:

“Giving communities more power over local housing developments can help to get more homes built”.

Various arguments are made against community housing and alternative ways of doing things. I want to stress something and make sure that the Minister is aware of it by the end of this debate, so I might as well say it now. We know very well that the Treasury’s infrastructure targets are based on what housing can be delivered. I was in a meeting with the Transport Secretary the other day and, like many of us lobbying for our areas, I have been in various meetings with Ministers over the past few weeks. The clear indication given is that if a proposal brings more housing, it is more likely that a Member’s constituency will get the bypass it needs or that its major road will be dualled, and so on. My point to the Minister is this. If he and his colleagues want extra housing to be accepted, greater density than might otherwise be achieved, a system that is against sprawl and in favour of the most efficient use of land, including brownfield, and if they want something that is more environmentally sustainable and green, rather than just greenwash, all of that, not just some of it, is made easier if we involve the community.

I talked to the Secretary of State earlier today. He mentioned a view that he believes may be held by some in the Treasury—it was not his view—that community housing may not represent good value for money. I will tell you what definitely does not represent value for money, Mr Deputy Speaker, and that is having a parcel of land handed from pillar to post, from one public sector body to another, sometimes for generations.

When he was Mayor of London, my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) said, “Let’s cut this Gordian knot and make something happen.” The thing that happened was the scheme on the site of old St Clement’s Hospital in Mile End, which he had celebrated and opened as Mayor of London. It was the fact that it was community scheme that helped drive it forward. That is much better value for money. In an environment where we are talking about rewriting the Green Book in a more sensible way, we should be thinking much more laterally and broadly about how different approaches can deliver better, faster and greener outcomes that are in every sense better for the community, our nation and people, and also better value for money. I thank my hon. Friend the Member for Devizes (Danny Kruger) for helping me raise that point.

As my hon. Friend alluded to, the Budget did not announce that the community housing fund will continue, although I am sure something will happen in due course. It is worth saying, for the benefit of the House, that the most common form of community-led housing, although it is not the only one, is via a community land trust, which is a legal entity that acquires land through purchase by the community, perhaps though a parish council, another local authority or a gift, and then oversees the development of affordable housing to buy or to rent. The housing remains affordable in perpetuity, while the land value is in effect removed from the equation because the land is held by the community land trust, which is a not-for-profit group that acts as the long-term steward.

Frankly, the community housing fund has been a tremendous success story for this Government. It was originally launched by George Osborne in his March 2016 Budget. The story of what happened next is important, particularly in terms of ensuring value for money. Over that summer, the community housing sector, led by the National Community Land Trust Network, worked up a detailed plan for how the money should be spent, although I regret to say that the Treasury initially decided, at the end of 2016, that the money should be handed to local authorities, which is in effect what happened—in two tranches totalling £148 million. This is a very important point to bear in mind if the Secretary of State or his ministerial colleagues want to discuss the question of value for money with the Treasury, because the Treasury may sometimes suggest that the community housing approach is not necessarily the best value-for-money approach. What actually happened was that the councils, having been given the money in a very non-ring-fenced way, spent it in the way that councils usually do. The Community Land Trust Network then did the obvious thing of talking to the councils about ensuring that the money was spent in the best possible way for community housing projects—and some of it was, which is good news, although, inevitably, not as much as might otherwise have been the case.

In November 2017, our right hon. Friend the present Business Secretary—who was in his place on the Front Bench not a few minutes ago—was Housing Minister, and he addressed the National Community Land Trust Network at its annual conference, announcing a rather more targeted scheme, and it is that scheme that has been such a huge success. In just 18 months, the pipeline in Homes England’s system has grown to more than 10,000 homes; that is actual projects that are good to go. Independent analysis by Sheffield Hallam University has found that 859 communities are bringing projects forward, and that the community housing fund has increased the potential pipeline from just under 6,000 homes—when I and some of my colleagues met the then Prime Minister my right hon. Friend the Member for Maidenhead (Mrs May) in 2017 to push the idea of announcing and getting on with the community housing fund—to over 23,000 homes today. That is staggering growth and it is down to the community housing fund.

The research estimates the total funding need for projects outside London over the next five years to be about £260 million. That includes £57 million of revenue funding and £172 million in capital funding via Homes England. The Government may ask why so much of the money that was available was underspent when the bids closed in December 2019. The answer is very simple: it was not open for long enough. Eighteen months is too short a time period, even for the very best of housing developers, and in many cases, community groups are, by definition, starting from scratch. They need longer to establish themselves and to develop projects using the revenue component of the fund. Since the fund opened in July 2018, Homes England has received 379 bids, and it is estimated that that would require double the revenue that was in the fund at the point of closure. It is absolutely clear that that part of the fund was a smash hit, but not enough projects, in 18 months, had reached the point where they could bid for the capital element. It makes sense to have a much longer, stable community housing fund over the life of a Parliament.

Communities in every corner of England are playing their part in tackling the housing crisis in this way. We heard the Secretary of State mention First Homes earlier today. Communities are pioneering First Homes. In Cornwall, a community land trust has built 252 homes over 10 years, sold at a discount to make them affordable to local people. Thanks to the community housing fund, there are now plans for another 209. Many colleagues have campaigned to make these schemes happen, including the Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Camborne and Redruth (George Eustice), and my hon. Friends the Members for North Cornwall (Scott Mann), for South East Cornwall (Mrs Murray), for St Austell and Newquay (Steve Double), for St Ives (Derek Thomas) and for Truro and Falmouth (Cherilyn Mackrory). Indeed, the predecessor of my hon. Friend the Member for Truro and Falmouth, Sarah Newton—whose loss to this House is much lamented by many—was one of the campaigners who originally suggested to George Osborne the idea of using the additional tax receipts from higher taxation of second homes to fund more community housing.

Communities are pioneering new approaches to affordability. In York, a group called YorSpace has planning permission to build 19 homes and a common house. It is developing a tenure called mutual home ownership, which lets members build up equity in their homes through monthly payments. It has raised £400,000 through a community share issue—local investment by local people—but it needs the community housing fund to provide capital grants.

Communities are building better and building beautiful. Some of us attended the launch of the Building Better, Building Beautiful Commission, chaired by the excellent Nicholas Boys Smith and the much lamented late Roger Scruton. Marmalade Lane and New Ground are two co-housing communities featured in the new “National Design Guide”, and both have won numerous awards. They were featured in the Building Better, Building Beautiful Commission’s report. Communities are pioneering new methods of construction. In Brighton, a self-build co-operative called Bunker is on site as we speak, building its first two homes for families on modest incomes. It is one of many community groups using off-site manufacturing and other construction innovations that the Government want to encourage.

I could go on—there are many other examples. I will give just one, in particular. Communities are working with landowners on projects that no one else would build. In Taunton, Somerset Co-op community land trust got started by converting a disused building into flats for young homeless people, and then went on to develop eight new affordable homes. It had been developing a bid with Homes England to take forward a new 30-home development in partnership with a local landowner, but the community housing fund closed just at the point when it was ready to apply.

The Minister may be familiar with the Oakfield scheme in Swindon, the headquarters of Nationwide Building Society. I recommend that he visit the scheme when he gets the chance. As he will be aware, Nationwide is a mutual building society, not a profit maximiser, and, like many building societies, it is going back to its roots in thinking about how it can do more to solve the housing crisis. This is an interesting scheme because although it is in some senses conventional—that is, it is not a community land trust scheme—Nationwide held a statutory consultation process where it really, seriously took account of what the community wanted for a development on a derelict brownfield site that no other house builder would touch. It now has a beautiful scheme coming forward that lots of local people are supporting. The total number of statutory objections it had in the consultation phase for the planning was zero.

I urge the Minister to reflect on the fact that one of the big problems that not just this Government but every Government have faced is getting people to accept the idea of more housing. I have been on platforms with people taking part in election debates with their political opponents where they have talked about extra housing being a sad price that has to be paid. We have somehow forgotten that the idea of development is cognate with developing—it is supposed to be a good word. We have managed to turn “development” into a bad word. The only way we turn it into a good word again, and therefore get it to be more widely welcomed, is to have good development. It is not an add-on. It is not a small piece on the side that we can perhaps think about at some point in the future if we have time—it is part of recasting how we do housing in this country.

We should not expect that people will get it right all the time. Upstairs a few moments ago, I was reading David Vise’s book about Google, where he talks about the fact that we treat Google a bit like a university. We try lots of stuff, and some of it is going to fail. I am not advocating failure—I am advocating success, but the way we get success is by experimentation and learning. By having lots of small, early cheap failures, we are more likely to have success. This applies across Government projects, but it is true in housing, as in many other areas. The great thing about housing is that we have learnt a great deal already, so there are fewer opportunities to make mistakes if we bother to learn those lessons and take more opportunities to get it right.

The housing White Paper, “Fixing our broken housing market”, of which I have a copy here, came out three years ago, in February 2017. It has been the Government’s view for three years that we have a broken housing market and that we need to fix it. We have had a lot of position papers, we have had every think-tank under the sun coming out with policy statements, and we have had some movement, but we have not had quick enough movement in changing the way in which we do things.

Yesterday, like my hon. Friend the Member for Devizes, I was very pleased, in supporting the Budget, to hear the Chancellor say that there was going to be £12.2 billion extra for affordable housing. I thought personally that the shadow Chancellor was a little churlish in calling it “only” £12.2 billion—I would say that it is quite a reasonable start.

The £12.2 billion that the Chancellor announced yesterday is a five-year programme. The community housing fund was originally slated as a £300 million programme over five years—£60 million per year. The point is that if all that money had been spent—and it has not been yet, for the reasons we have discussed—£300 million is still only 12.45% of the £12.2 billion that the Government are planning to spend on affordable housing. The central burden of “Fixing our broken housing market” is that just doing the same again and again will not solve the problem. We have to start doing things differently. We have to start thinking differently. Community housing, supported through the community housing fund, is a very important part of that.

I was addressing a community housing conference in Surrey only a few weeks ago. I like to refresh my presentation, so that I say things that are interesting to me each time, and there is a chance they might be interesting to the audience. I put up a slide that talked about the well-known national organisation Grandmothers Against All Development, with a question mark after it. The audience looked rather blank, and I said, “I made that up actually.” I have yet to meet—and I do not think I ever will—the grandmother whose daughter has just had her second baby and wants her daughter’s family not to have somewhere decent to live. All we have to do is bottle that thought and create the wiring under the bonnet to turn it into reality, and we have gone a long way to solving the problem.

The central problem we face with housing is that most people feel that they have no voice. Most people feel that they have no say over what gets built, where it gets built, what it looks like or how it performs in terms of thermal performance. If the Minister really wants green housing, the best thing he can do is involve local people, because I have yet to meet the person who would not prefer to have a house that costs nothing to heat. We have known for many years how to build a house that costs basically nothing to heat—£100 to £150 a year for heat and hot water—and yet we do not routinely do it.

I heard the Secretary of State say in a statement a few weeks ago that the volume house builders would have to ensure they met the quality standards, otherwise they would no longer be eligible for Help to Buy. I found myself thinking: if they did not meet those standards, how can they have been eligible for all these years, basically producing small, expensive, poor-quality, environmentally-unfriendly dwellings that most people would prefer not to buy?

Believe it or not—I can demonstrate it with evidence, which I am happy to share with the Minister—there are more people in this country who want to build their own homes than people who want to buy new ones. Only 33% of people in this country would prefer to buy a new home. Two thirds of people would prefer not to, and 61% of people in this country would like at some point the chance to build their own home. We have to take the energy that is there and turn it into something real, and we need radical changes in how we do things to make that happen.

Rod Hackney, who was the adviser to the Prince of Wales and is a renowned architect, once said:

“It is a dangerous thing to underestimate human potential and the energy which can be generated when people are given the opportunity to help themselves.”

That is what we have to make happen.