Housing Market Renewal

Robert Flello Excerpts

Tuesday 12th July 2011 Westminster Hall

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I am delighted to have secured this debate on behalf of all hon. Members who share my concern about the cancellation of the housing market renewal initiative, and the terrible impact that that will have on those affected by it. I shall give an overview of the problems faced by all pathfinder areas and highlight how the cancellation of HMRI will affect some areas of Liverpool.

The Government’s plans for house building over the course of this Parliament can at best be described as conservative. Between 2005 and 2010, Labour delivered 256,000 affordable homes in England, including 142,000 additional homes for social rent. Over the five years of this Parliament, however, the Government are planning to deliver only 150,000 affordable homes—100,000 fewer than Labour achieved in the previous Parliament. HMRI was originally envisaged as a 10 to 15-year programme, but it was abruptly ended eight years in, when many of the schemes were reaching fruition.

In March, an Audit Commission report estimated that the HMRI had generated about £5.8 billion of economic activity across the UK, which created 19,000 jobs in the construction and related industries, and sustained more than 2,600 jobs in the construction industry each year. Thousands of homes have been built and more than 108,000 have been refurbished.

At the neighbourhood level, HMRI has helped to stabilise market conditions and provided a strong sign of change. Private sector resources have been leveraged in to the projects, and more than 15,000 new homes have been built in areas where no properties had been built for a long time.

In Merseyside the pathfinder scheme known as NewHeartlands delivered 2,297 new builds, refurbished 18,263 homes and made 65% of its planned acquisitions. Shelter, the housing and homelessness charity, said:

“The Housing Market Renewal pathfinders have brought much needed investment to parts of the North and Midlands experiencing low demand for housing and long term economic decline.”

The decision to cut £120 million of funding and to end HMRI has been tough on Liverpool. There are thousands of people on the housing waiting list across the city. Many families live in overcrowded or unsuitable homes. The decision puts an end to the good work being done to alleviate these problems and makes future work difficult, and it is clear from the mixed messages coming from the Minister for Housing and Local Government—I am sorry that he is not here today—that there is no clear exit strategy.

Rather than putting in place a phased withdrawal that would allow local authorities to manage the axing of funds, the Government have stopped the scheme dead, which has created confusion, uncertainty and bitter disappointment. The lack of strategy is evident, given the situation that the Government have left behind.

[Robert Flello (Stoke-on-Trent South) (Lab)]

I congratulate my hon. Friend on securing this most important debate. Will she join me in raising the fact that other areas must have suffered, including areas such as Stoke-on-Trent? The Renew North Staffordshire pathfinder scheme cleared many properties in that area and demolished great swathes of the city, often taking a long time to piece together the ownership of the various lots of land. It was ready to start the next phase when, all of a sudden, it found itself with derelict land and nothing to build.

[Luciana Berger]

We have had similar experiences in Liverpool. It is devastating for the cities and towns concerned, as there are literally acres of flattened land with nothing on them. Near Smithdown road in Picton, there is nothing but green-grey grass, but people know that houses once stood there.

In Kensington and Picton, which are two wards in my constituency, some dilapidated housing stock sits mostly empty and boarded up. Some people live in what have become ghost towns. Eight out of nine houses are unoccupied. The people still living in those areas feel desperate and let down. They put up with living in decaying conditions because they were promised that they would be rehoused. People across Liverpool knew that if they lived in an area in a certain phase—one of phases 1 to 8—at some point they would be moved out their housing and the area would be regenerated. They now face the disappointment of having to stay.

If progress is not made on demolition, the shell of these properties will rapidly deteriorate, and that will increase the risk of collapse, which could endanger residents. Worse still, the land next to the residents lies idle. As I said, new homes were meant to be built there, but that will not happen because the funding has been withdrawn. The majority of people remaining in the clearance areas are vulnerable, elderly or have health problems. Residents would like to stay in the local area, but they do not have that choice because there are no new or alternative houses.

This is happening not only in Liverpool, as I am sure we will hear from other hon. Members, because it is a familiar story in the other pathfinder areas. The Audit Commission report into HMRI states:

“At this stage there are too many isolated and vulnerable residents still living in poor housing”.

Mike Gahagan, the former chair of the Transform South Yorkshire pathfinder, has said that

“the sudden termination in HMR funding has left many families in distressed surroundings”.

Stuart Whyte, the former chair of Gateway Hull and East Riding of Yorkshire pathfinder highlighted the fact that the areas have increasingly become a magnet for crime and antisocial behaviour.

These residents are already vulnerable and living in these areas for an extended period is likely to have a major impact on their health and well-being. Empty homes attract the theft of valuable metals and lead. The other weekend, I visited Ben Kwonko, a constituent who lives in an area where eight out of nine homes are tinned-up and unoccupied. His home is damp and lead has been stolen from his roof numerous times. He and his family are desperate to move out of that property, but he has no choice. There is also an increased likelihood of arson attacks in these areas.

The Minister might have realised the damage that ending HMRI has done to these areas, as he announced in May that a £30 million transition fund would be made available to the five most deprived HMRI areas— Merseyside, east Lancashire, north Staffordshire, Hull and Teesside. I welcome that announcement as a first step. Liverpool has been comparatively lucky by being able to access some of that money, but the reality is that such figures are a drop in the ocean when compared with the scale of the challenge. The money will not deal with all the outstanding housing renewal problems in some the neighbourhoods in Liverpool.

I refer to an example in Anfield, which is in the constituency of my hon. Friend the Member for Liverpool, Walton (Steve Rotheram), who I am sure will reinforce the point. In his constituency, areas in phases 6 and 7 do not meet the transition fund criteria for occupancy, and there is a requirement that the fund should not open up new phases of redevelopment. However, people are stuck in those areas. The funding decision also leaves four pathfinder areas with no extra funding and no clear idea of why that is.

Will the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell), share with us how the figure of £30 million was arrived at? How was the decision reached over which pathfinder areas are to receive money from the transition fund? What were the criteria and who set them? What support, if any, does he plan for those pathfinder areas not eligible for the transition fund? The transition fund does not address the fact that a large amount has already been spent on pathfinder schemes—thus far for nothing. We have seen £2.2 billion of taxpayers’ money invested in housing market renewal since 2002. What assurances can the Under-Secretary give that these areas will not regress, and that money already spent will not be wasted?

It is not only taxpayers’ money that is in danger of being wasted. Ros Groves is chair of the Anfield and Breckfield housing and physical regeneration group in Liverpool. The Minister for Housing and Local Government—I keep referring to him because I was expecting him to answer the debate—was in Liverpool when he announced the transition fund in May. Ros Groves said that he

“went on about how we need to get private sector involvement and I said: ‘We’ve got that. We’ve had £207 million spent here by businesses. What do you do with that? Just throw it in the bin?’ And he didn't have an answer because there is no answer.”

I hope that the Under-Secretary will be able to answer that today.

As well as a clear lack of a strategy on how to deal with residents living in pathfinder areas, there has been complete confusion over what funds will be available to finish the planned development in these areas. In October 2010, the Housing Minister said:

“We will complete all the committed HMR schemes, and we will then roll the funding up into the regional development fund to continue the good work.”—[Official Report, 21 October 2010; Vol. 516, c. 1114.]

That gave hope to pathfinder areas that they would be able to maintain funding for these projects—albeit on a reduced scale, but still at a reasonable level. However, the Minister’s commitment was left in tatters just over two weeks ago when Lord Heseltine, the chair of the independent advisory panel for the regional growth fund, told the Communities and Local Government Committee:

“The regional growth fund is not in any way a replacement for the housing market renewal funding...There is no way in which we are doing housing renewal.”

That is a complete rejection of what the Minister said to the House in October and of what he told my hon. Friend the Member for Liverpool, Walton and me in a meeting in Liverpool. He gave false hope to those in Liverpool and other pathfinder areas that a solution may be found.

We are left with a lot of unanswered questions, so I hope that the Under-Secretary will answer some of them today. What discussions has he or his colleague had with Lord Heseltine regarding using the regional growth fund to develop the HMRI pathfinder areas? When was the decision made not to allow regional growth fund money to be used for housing? Who made it and when did the Housing Minister find out? Did the Under-Secretary or the Housing Minister know in advance of Lord Heseltine’s Select Committee appearance that he was going to veto the use of regional growth fund money for housing market renewal? When the Housing Minister gave his commitment to the House in October, had an agreement been reached to provide funding from the regional growth fund, which has subsequently been breached, or was he hoping that the funding could be used, but had not yet received concrete assurances that it would?

In addition to explaining how the Government made the decisions that have got us into this mess, I hope that the Under-Secretary will finally give us some clarity and provide an indication of how we can move forward and complete the housing projects, which is ultimately what we all want to see. I believe that the Housing Minister is interested in finding a solution.

[Luciana Berger]

The transition fund that was announced was £30 million. If the projects had continued in Liverpool alone, £120 million more would have been needed over the next seven years. However, there are another eight pathfinder areas. We expected some scaling back, but there are areas in my constituency and others across the pathfinder areas in which people are living in dilapidated housing. Those people were supposed to be decanted in a few years’ time. Their properties were expected to be regenerated and rebuilt, thus bringing much needed jobs to local areas and improving people’s surroundings, as they all deserve.

[Robert Flello]

On that point, let me just say that while £120 million might sound like a large amount—indeed it is a very large amount for just Liverpool alone—does my hon. Friend accept that if the cuts were not being made so deep or so fast, it would not be such an issue? Does she also accept that the economic benefit to not just Liverpool but the country would be huge and would far outweigh the investment required?

[Luciana Berger]

I thank my hon. Friend for his helpful intervention. Of course, if the cuts had not been so deep or fast, we could have had that money. As I said, it was another seven years before the HMRI was due to be completed. I do not have the figures in front of me, but I have seen some astounding numbers detailing the economic benefits and multiplier effects of having those houses built in all the areas. The knock-on effects would benefit the NHS, and people would find work and also live in better areas. As I said, there would be many more local construction jobs. On an annual basis, there would be nearly 3,000 sustainable jobs in the construction industry, and such jobs are much needed up and down the country. Although it is clear that the HMRI has ended, there is still a window of opportunity—albeit one that is rapidly closing—to build on the work done under the initiative and to utilise the expertise and partnerships that were built up during the course of the scheme.

In Merseyside, all the NewHeartlands authorities are trying to maintain momentum. Other sources of funding to finish regenerating these neighbourhoods are being thoroughly investigated. I have spent several hours meeting the housing market renewal teams at the council, and they are dedicated to doing everything they possibly can to leverage in that funding.

Liverpool is actively market testing refurbishment-based solutions for three of its neighbourhoods—Arnside road, Granby Four Streets and Webster Triangle. Initial indications are that there may be interest from partners to deliver in some of those areas. Meanwhile, in the renewal areas, new homes are being delivered by lead developers and are popular. I live on a former housing market renewal site. Examples of other such sites include the Parks in Anfield and the former Easby estate, both of which are in north Liverpool, where historically there has been little or no private sector house building.

Will the Under-Secretary commit to working with councils such as Liverpool and local communities to develop plans and identify funding for developing the pathfinder areas? So far, little support has been extended by the Government to make up for the complete cut in HMRI funding. The reality is that while councils are doing their best to find innovative solutions to this problem, their efforts are a drop in the ocean compared with the level of funding previously committed under HMRI, so they need more support from the Government.

As Elaine Stewart, the head of housing renewal services at Liverpool council, has said:

“We have to forge more relationships with the private sector although, in housing market failure areas, private sector rules don’t apply and we have to be realistic about the amount of private sector funding coming in. Without some public sector funding, it won’t work.”

At the final oral evidence session of the Communities and Local Government Committee inquiry into regeneration, the Minister for Housing and Local Government hinted that the Government may bring forward new funding. He said:

“This is not a policy launch, but I have an idea in mind where communities will be able to access further sums of money through a local process which will enable them to regenerate in ways that suit them locally.”

I would love to hear about those proposals. It is a shame that the Housing Minister is not here to tell us more about what he meant. However, until the Minister comes forward with something other than an idea—he did refer to it only as an idea—we will not be any closer to a solution.

On behalf of all my affected constituents and all those across Liverpool and the other pathfinder areas who live in intolerable conditions, I urge the Under-Secretary to go back to his Department and revisit the decision to end HMRI. Some £790 million has already been committed in Merseyside. We want a solution that will mean an end to thousands of people being forced to live in out-of-date, decaying and dangerous housing.

I thank you, Mr Gale, for your stewardship this morning. I hope that the Under-Secretary will address the issues that I have raised, and I am sure that my hon. Friends will raise other concerns during the rest of the debate.

--- Later in debate ---

[Mr Iain Wright (Hartlepool) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Gale. I remember with fond affection that you had to endure my ramblings in Committee during the passage of the Housing and Regeneration Act 2008, alongside your co-Chairman at that time, my hon. Friend the Member for Bootle (Mr Benton), whose constituency, like mine, is a recipient of housing market renewal funding. I feel like we are all back together for a nice reunion.

I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on securing this important debate on an issue that affects many thousands of decent residents in the north and in the midlands. I have a pathfinder project in my constituency. It extends throughout the Teesside area and incorporates sites not only in Hartlepool, but in Gresham, Middlesbrough and South Bank, which is in the borough of Redcar and Cleveland.

Between 2007 and 2009, I was the Minister in the Department for Communities and Local Government responsible for housing market renewal. I travelled across all the HMR areas when I was a Minister. I met residents in Stoke-on-Trent, Liverpool, Birmingham and Sandwell, and I was struck by their enormous enthusiasm and ambition. They were determined to see a reversal of the slow and painful decline in their neighbourhoods.

[Robert Flello]

My hon. Friend will no doubt recall walking down the high street of what was Coalville and is now Weston Heights in Stoke-on-Trent and seeing the phenomenal transformation that was taking place to turn what was a very run-down estate into one where people are still flocking to buy and rent properties. What a transformation that was, especially when combined with the other transformations in Stoke-on-Trent, such as the brand new hospital and the fantastic regeneration of our schools, and what a damn shame that it has ended.

[Mr Wright]

I agree with my hon. Friend. Alongside our hon. Friend the Member for Stoke-on-Trent North (Joan Walley), we are pushing on behalf of north Staffordshire. I remember seeing the huge ambition in that area, among others.

It is worth going back to the basics of what HMR was trying to achieve. It was trying to stem and reverse long-standing decline in areas characterised by acute housing market failure. In many respects, that was due to an imbalance of one particular type of property in an area. For example, about 37% of all the housing stock in the entire borough of Hartlepool—14,500 properties—is terraced housing. On any measure, that is too much of one particular type of stock, so there is a need to rebalance the stock the town provides to residents—both now and in the future. That was true of other HMR areas.

What struck me most when I had responsibility for this matter—more fundamentally than acute housing market failure—was the disconnect between those areas and economic activity. The areas were blighted by low skills and, often, virtually no employment. To succeed, I felt that housing market renewal had to be linked explicitly to economic success, and that was why, when I was able to announce in 2008-09 an extra £1 billion of funding for housing market renewal, I wanted to link it explicitly with the possibility of securing extra funding and with injecting skills and employment into those areas, with a particular emphasis on apprenticeships for young people.

It is also important to recognise that this was deliberately a long-term programme. Those areas in the north and the midlands were built in the Victorian era to house workers in heavy manufacturing industries. When those industries declined in the post-war era, their economic raison d’être was often lost, and areas have struggled to adapt. Those big social and economic changes cannot be solved overnight, so HMR was deliberately a 15-year programme to put those areas back on a sustainable footing. The abrupt cancellation of the programme, without any other suitable replacement, undoes all the good work that has been done, and sets those neighbourhoods back decades, as my hon. Friend the Member for Liverpool, Wavertree so eloquently said. More taxpayers’ money than was originally planned for HMR will be needed to sort out the social and economic problems caused by the cancellation of the programme.

Since 2006, for every pound of HMR funding in Teesside, we have levered in an additional £1.06 of other public sector investment and 61p of private sector investment. For Hartlepool in particular, the figures are actually much better. Hartlepool has received about £4.5 million of HMR funding between 2006 and 2011, but that has been complemented by £13.7 million of other public funding and an astonishing £20 million of funding from the private sector, so that is more money coming in from private companies as a result of public sector investment. As many as 2,500 private sector jobs in the construction industry have been created or safeguarded as a result of that initiative. If private companies see the Government losing faith in those areas and failing to maintain investment, it is difficult to envisage how private sector money will stay and grow there.

That is frustrating, because Hartlepool has shown how good progress can be made. We have seen the complete redevelopment of Trinity square by a good Hartlepool house builder, Yuill Homes, and it is now a thriving and welcoming area in the centre of town. At the Headway site close to Chester road, 280 terraced properties have been demolished and work on 170 high-quality, mixed-tenure homes has begun. A second of four planned phases is now progressing. The development agreement for the Headway site made provision for raising employment, skills levels and training opportunities, including the provision of apprenticeship places.

Last month, alongside Bob Farrow, a long-standing tenant of the Belle Vue area, I opened the first modern homes in the area, which replace 50 pre-fab and terraced properties. Bob has lived his entire life in the Belle Vue area, having been born in Borrowdale street. With other residents, he has been closely involved in the planning of the new development. It is a myth—if the Minister is going to suggest this—that the programme has had a top-down approach. It has been bottom-up, with residents actively involved in planning the future of the areas. At the opening of the new homes, Bob said:

“I knew when I first saw Housing Hartlepool’s plans for the new Belle Vue estate that it was going to be wonderful, but these fantastic homes have exceeded expectations. Hartlepool residents have been closely following the progress of the new homes and it is great to see them become a reality.”

In the Perth, Hurworth and Grainger streets part of Dyke House, a compulsory purchase order is in process, meaning that several hundred residents, who have been living with uncertainty, are now seeing some progress. Credit for that must be given to Damien Wilson, Hartlepool borough council’s assistant director of regeneration, who alongside me, the three ward councillors—Mary Fleet, Stephen Thomas and Linda Shields—and officers, Amy Waller from the council and Helen Rooney from Housing Hartlepool, have been going to the Hartlepool Rovers quoit club every Friday at 5 o’clock to keep residents up to date with developments.

However, I am concerned that this progress of breathing new life into disadvantaged areas is incomplete, and that people will be left in limbo for years. As the Audit Commission stated in its review of HMR in Teesside:

“This is a particular risk…where so many schemes are at a relatively early stage. There are a number of areas where a large number of properties have been acquired that are awaiting demolition. This has the potential to leave communities living in a very poor quality environment…The slowing down or stopping of interventions will undermine commitments made to communities and damage community confidence in neighbourhoods.”

Through all their policies, the Government are damaging the communities in my constituency and the wider north-east. Economic policy, social and welfare initiatives, and public sector cuts all disproportionately affect my area and focus on neighbourhoods that least have the tools to battle those challenges. Areas such as Hartlepool, Middlesbrough and Redcar and Cleveland are less likely than anywhere in the country to be able to withstand economic recession and public sector cuts. HMR was starting to turn round decades of neglect, economic inactivity and housing failure to provide neighbourhoods with the housing and hope that they deserve. The Government have taken that away without putting anything in its place. For the first time in many years in this country, we have no dedicated urban regeneration funding programme. I hope that the Minister will reflect on what his Department has done, and do something for my constituents and other decent residents across the midlands and the north of England.