Housing and Planning Bill (First sitting)

Roberta Blackman-Woods Excerpts

Tuesday 10th November 2015 Public Bill Committees

[Mr Bacon]

Q 11 In relation to large cities, Berlin has more than 3,000 dwellings that have been developed very recently using self-build and custom house building. Are you saying that in large urban areas such as London it is not a problem to do it in the way that some people are suggesting?

Richard Blakeway: It is more challenging because we have a very heated land market and development opportunities tend to be more complex, but it should not be dismissed. We think it has a particular role to play, for example in outer London where the kind of density that might be built through custom build and self-build is appropriate to the local vernacular.

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

Q 12 Are you certain that the sale of high-value council housing will yield enough resource to fund the right-to-buy scheme? Do you think it will guarantee that enough houses are built?

Richard Blakeway: Certainly within London, our analysis—and we have had some support from Savills on this—suggests that there are sufficient capital returns and receipts from the sale of high-value council houses in the capital to cover the cost of discounts in the capital and the cost of reprovision, as well as other things such as debt financing and so on. The straightforward answer is yes, within London.

[Dr Blackman-Woods]

Q 13 The Bill does not require social housing to be built in the same place that houses were sold off through the right-to-buy scheme, so how can we guarantee that enough of those houses will be built in London?

Richard Blakeway: The Government have very clearly set out their ambition that there is at least a one for one replacement of those homes, so you will get one extra home each time. That is a very clear statement by Government and is something that our modelling shows can be achieved within London. In addition, we would like to see it go further. We would like to see a two for one replacement in London, so that you get even more affordable house building as a result. I note the point that you make about where those homes are built and whether they can be built within borough. Given that the reprovision of council homes should, in the first instance, be undertaken by the local authority in our view, we would expect that it would look to achieve that within borough, but I think realistically, constraints around both finance and land will mean that not all homes are reprovided within the existing borough. The important thing from our perspective, given that we have one housing market within London, is that they are reprovided within the capital.

[Dr Blackman-Woods]

Q 14 Nevertheless there is not a requirement to do that. Would it be more helpful if there was a requirement that the houses are replaced in the same area that they are sold from?

Richard Blakeway: There are a number of statements relating to reprovision which are very clear about that being done within the local area. We have an established role for the Greater London Authority as well as the London Government more widely around housing provision. The Localism Act gave the Mayor of London the same functions as the Homes and Communities Agency. We would expect the reprovision to be done within the capital. Government have been very clear that that is their intention and their aspiration. The issue is whether we are doing one for one replacement or whether we are seeking to exceed that, and we would like to see two for one replacement.

[Seema Kennedy]

Q 15 In relation to clauses 22 to 31 on rogue landlords, do you think the provisions in the Bill will raise the standard of property available in the rental sector in London?

Richard Blakeway: We very warmly welcome Government’s measures on tackling rogue—often criminal—landlords, not just the measures in the Bill but more widely. We very strongly welcome that. One of the key changes which we would like to see is for us to have access to the data which will be collected around bad landlords. One of those clauses pertains to that. We would like the GLA to have access to that because it would enable us to build on existing programmes which are seeking to improve the quality of the rented sector in the capital, not least the London rental standard. We have something like 140,000 private rented properties already managed under that standard and the higher expectations which that demands. So we think it will make a significant impact, we welcome the changes, but we would like access to the bad landlord database.

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[Brandon Lewis]

Q 21 From the work you have done looking at this and the opportunities for London in the starter homes brand, do you see that as an opportunity to get an overall increase in the housing supply in London—to push that supply up?

Richard Blakeway: Yes. We see a real role for starter homes within the capital. As I have set out and as you know from our conversations, we expect that to happen alongside other products, such as shared ownership, which can play a different but similar role to promote low cost of ownership in London. We think there is a real opportunity to increase not just the volume, but the proportion of low cost of ownership opportunities in London with a suite of products, including starter homes and shared ownership. What we would like to see is a role for the Mayor of London to co-ordinate that being reflected in the Bill—a change to the Bill to enable that.

[Dr Blackman-Woods]

Q 22 How can you be so confident? Have you carried out work on this to know that other affordable housing products will also be delivered alongside starter homes?

Richard Blakeway: I think I have expressed some caution to the extent of saying that some of the issues in relation to starter homes will be set out in the regulations, and that to undertake a full assessment we need to see the regulations. One critical thing is what percentage of starter homes are required on each site—that is a critical issue that will be set out in the regulations. What we have said very clearly, however, is that the quota of starter homes will be applied, but then we would expect that the London plan policy, which seeks to maximise affordable housing, will also be applied afterwards. So the two tests are still applied to schemes.

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[The Chair]

First of all, welcome to all our witnesses. Thank you very much for coming to give evidence to the Committee. For the record, please would witnesses introduce themselves to us?

Sir Steve Bullock: I am the Mayor of Lewisham, and I am the executive lead for London Councils on housing.

Martin Tett: I am leader of Buckinghamshire County Council, but I am here in the capacity of a representative of the Local Government Association, where I am vice-chair of the housing board.

Philippa Roe: I am the leader of Westminster City Council.

Phil Glanville: I am a cabinet member for housing in Hackney.

[Dr Blackman-Woods]

Q 27 We have just heard evidence from the Deputy Mayor with responsibility for housing. He was fairly confident that, in addition to starter homes being delivered, other forms of affordable housing would be guaranteed. Perhaps we could have your views on this. Do you agree with him?

Philippa Roe: I do agree with him, but it is about giving us the flexibilities to be able to deliver those homes. I certainly believe that within London we can provide significantly more housing than has been provided to date. The sites are there. From the local authority perspective, our hands are somewhat tied in what we can deliver; there are a number of reasons for that. First, there is the funding side of it and how we can use the money. We have the housing revenue account, but the amount we can borrow against it is capped at a relatively low level. We could lift that cap quite sensibly and still borrow prudentially, and use that money to build. We are limited on where we can spend that HRA headroom, as well as section 106 or community infrastructure levy monies. I will come on to talk about the issues we face in Westminster which are driving this, but we in Westminster would like to be able to team up with other boroughs outside Westminster but within London to deliver our housing need. Also, I think we ought to be able to put into that pot money from high-value council house sales and from right to buy. It should be voluntary.

There are several reasons why we in Westminster have a real issue with housing, although they are true of central London and across the parties. It stems from the fact that there is enormous demand—people want to come and live in central London—and the way that the regulations work on taking on a duty to house means that your local connection does not have to be that deep. About 40%—39%, to be precise—of the people we take on a duty to house each year have less than a year’s connection to Westminster, and many of them have no connection at all because they have come from abroad and we are the first authority they register with. They do not necessarily have a particular need to live in Westminster, because they are probably not working in central London. There is no particular need for them to live in Westminster. What they need is good-quality housing.

Combine that with Westminster’s existing density of all its building, not just housing, and the high value of those units, and we are put in a position where it is just about impossible to house that huge demand within the boundaries of Westminster. We therefore need to be quite selective to support people with a genuine long-term connection to Westminster; we also prioritise people with work needs or who perhaps need to stay in Westminster because they have connections with health support services or whatever here.

I think that I am speaking on behalf of London Councils when I say that we believe that there is a mechanism which would free up local authorities to team up together. Perhaps several central London boroughs with money could team up with one or two outer London boroughs with land, in order to produce not just housing but proper regeneration. One of the issues we face in this debate is that we talk about housing in a silo. Actually you cannot do that if you are to create a proper community. You have to talk about proper regeneration of an area.

If we could pool those funds—perhaps even get some GLA money as well and work with a private sector developer—we could create mixed communities with the market housing, intermediate housing and social housing that we need, alongside a GP surgery, a school and hopefully, although it would be much more expensive, transport infrastructure that we could work with the GLA to put in place. That way we would be creating communities, not just homes. In return for that, it is important that the funding boroughs have some nomination rights, but it would all be voluntary and by negotiation with the receiving boroughs. Everybody would be happy; it would not be foisted upon a borough.

Martin Tett: Just to add to that, the LGA very much recognises the Government’s aspiration to build a substantial number of new houses every year. Probably, 230,000 houses is the minimum we need to build in order to accommodate the rapidly growing population. We are very keen to work with the Government in order to make that happen; we think that local councils can be part of the solution to this problem, rather than part of the problem itself. We are very keen to have those negotiations with the Government.

On increasing the supply of affordable housing, clearly there is a change in the definition of affordable housing, which is obviously material. The other concern we have is about infrastructure. I completely agree with Philippa’s point that it is not just about putting up houses. It is about securing the infrastructure alongside them that makes houses into communities. We obviously need to make sure that the exemption from section 106 for starter homes, for example, does not result in additional congestion, additional pressure on school places, addition pressure on doctors’ surgeries—all the sorts of things that lead local communities to resist house building in their area.

My last point is that there is still some detail to be worked through as to how the financial process will work for the funding of some of the processes, particularly for the discounts involved. We need to make sure that houses sold, for example, from the registered social landlord sector are replaced on a one-for-one basis in the same area. Obviously, a replacement in a different part of the country by the same RSL will not meet the housing need in the area where the original house was.

Sir Steve Bullock: I will not repeat what Philippa has said—

[The Chair]

You do not all have to answer every question.

Sir Steve Bullock: —but she is right about the need for the boroughs to work together. That is something that we are very keen to do. To get to the heart of your point, I have to say that I am less confident than the Deputy Mayor about the impact of starter homes. We welcome them as another way of getting people on to the housing ladder in London, but we have two anxieties. One is that they might drive out other forms of affordable home ownership, rather than being additional. Secondly, they are time limited, by definition. One thing that I suspect we may come back to is the mix of units that we need to deliver in order to meet the housing needs that we have as individual boroughs.

Phil Glanville: I am a bit more pessimistic than some of my colleagues. I think we are going to squeeze out social housing and truly affordable housing in the planning system. We are already seeing a lot of challenges across London in terms of viability in planning schemes. Where we would have seen developments come forward with 30% or 40% affordable housing, it is falling to 10% or 20%. It is not an alternative to shared ownership as a truly affordable, low-cost housing option. Of people in Hackney that are registered on the Share to Buy website, nearly 3,000 of those that have registered for an affordable housing purchase product earn less than £40,000. If we are talking about an accessible product, a product that has a cap of £450,000 in inner London is simply not affordable. That would bring the cost down to around £420,000. That is not accessible for those who aspire to home ownership but are earning less than £40,000. If we want to have a creative, vibrant inner London, where people of different communities can afford to live and buy—we aspire to let people buy—then we need a range of products. Starter homes are not a replacement for shared ownership.

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[The Chair]

Minister, can I be rude enough to say that with an eye on the clock, I want to hear from Roberta Blackman-Woods?

[Dr Blackman-Woods]

Q 58 I was struck by your opening remarks, where you all talked about having infrastructure to support housing development and building housing in communities. I wonder whether you think the Bill should do more to address the need for infrastructure and what you think about the provisions that could exempt some starter home sites from paying CIL. Would you like to see that amended?

Sir Steve Bullock: One of the things that will be important is that the Bill does not get in the way—this will largely be around the exemptions—of some of the big and complex schemes that we are doing. Those are, in effect, sweating land that is already there and intensifying the development. Some of that takes time and there are risks that we need to avoid. If the number of leaseholders on a development goes up and you are planning a comprehensive regeneration, you can make it unviable. It is those kinds of things. Crucially, working across Departments will be important. I am not sure whether the Bill can help that, but we need to be sure that it does not hinder that.

Martin Tett: I will comment on the generality. I mentioned the importance of infrastructure at the beginning. When I go to public meetings, it is the big topic raised by local communities whenever a development is talked about, and it is obviously significant when you have a major development of many hundred houses. There is also the cumulative impact of lots of small infill developments. People tend to ignore the impact of 10 or 15 houses, but if you have lots of them, particularly where large houses are being redeveloped in rural areas, you can cumulatively have a significant impact. People see the difference in their commute, their journeys and so on. There is a large impact in the south-east, which is already densely populated and seeing significant housing growth. The need to address the issue of adequate contributions towards local infrastructure is fundamental.

Philippa Roe: Some parts of the Bill are still being ironed out and discussed, such as those relating to who has which powers between the Mayor and the London boroughs. It is absolutely vital that any housing development regeneration is driven by the boroughs, because they have a far better understanding of the infrastructure impacts in their local areas. I just cannot see how a top-down approach, given how diverse the 33 boroughs are, can work in that holistic approach.

Phil Glanville: The 20% discount for starter homes is probably not enough to be offset in terms of the community infrastructure requirements. There is an element that some of that is local decision making. We decided to exempt the Woodberry Down regeneration from CIL, because of the challenges of the infrastructure: building the new schools, delivering the employment opportunities and delivering the public realm. You need flexibility at a local level to make some of those decisions, but I am not sure that the 20% discount warrants a full exemption.

[Matthew Pennycook]

Q 59 There is broad agreement that we need to increase supply, but as you said, Councillor Glanville, affordability is key. There is no statutory definition of affordability, and the Bill gives the impression that the working definition is 80% of market rent. Do you think there is an opportunity here to define what we mean by affordable?

Philippa Roe: No, I think that would be too prescriptive. The definition of affordable is up to 80% of market. That is absolutely crucial because it will be different in different boroughs. Each borough has different needs. For example, in Westminster about a quarter of housing stock is social housing; about 1% or 1.5% is affordable for that next tier of low to middle-income workers, and the rest is very expensive, either to rent or to buy.

Our real gap is that intermediate. Our businesses are telling us that that is a real gap. All the supermarket shelf-stackers, people working in our restaurants and theatres and so on, need homes where they can commute at a reasonable cost and time. That is Westminster and we are quite different from perhaps an outer London borough or Tower Hamlets or, indeed, some of the boroughs round the table. As long as we have the flexibility of up to 80%, given as the definition of affordable, then each borough can do it appropriately for their area.

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[Kevin Hollinrake]

Q 66 Can you see measures in the Bill that will speed up the planning process?

David Orr: I see measures that have the potential to speed up the planning process.

[Dr Blackman-Woods]

Q 67 At the moment, it seems as if homes sold under the right to buy will not have to be replaced in the same area. Do you have any concerns that that might lead to further regional disparities in the amount of affordable accommodation available? Would you like to see an amendment that would ensure that they are replaced in the same area?

Sinéad Butters: Our members certainly would. They are concerned about like for like replacements in the same geographical areas. The overriding factor is that local authorities working with their housing association partners can decide on what is appropriate for that community and have the flexibility to apply that. Some of the provisions in the Bill, such as the pay-to-stay provisions, are blunt instruments applied nationally which do not take account of local factors.

We would like to see that. Our members would be keen to ensure that those strong relations with local authorities in helping meeting housing need are maintained.

David Orr: I think this is a matter for individual housing associations and the conversations they have with local government partners and others. If, in any given local authority area, housing associations sell under the right to buy, I think how they are replaced is a matter for them in discussion with their local authority partners. I am not keen to impose unnecessary restrictions. It seems to me that we are under a great deal of pressure. There is much less public money going into new housing and we need to retain as much flexibility as we can. We have to look at the objectives and the pattern of behaviour of housing associations across the country. They mainly want to invest in the areas that they work in. That is what they care about, right across the country. I am anxious that we are creating a debate that will not turn into anything in real life because, in practice, if people sell they will want to try to replace in those areas where they can.

[Dr Blackman-Woods]

Q 68 I might come back to that later if there is time. I wanted to move on very briefly to the pay-to-stay provisions, because you mentioned them. I wonder how workable you think the provisions in the Bill are and whether, as a result of pay-to-stay, some of your tenants will not only have to pay a higher rent, but be able to claim housing benefit. Is that an economically competent set of proposals?

Sinéad Butters: We have case studies and examples that demonstrate just that: people who are at the margins of the £30,000 for a variety of reasons—bear in mind that that is two working adults outside London earning £15,000 a year—are judged to be able to pay a market rent. It is of significant concern to me and to our members when people are at the edges. The case studies indicate that some working-age adults in those particular circumstances would find that a disincentive to work or to gain promotion or to take on extra hours. That is why we are really concerned about the one-size-fits-all figure.

While we recognise that people who could pay more for a product should be able to, we can make those choices locally, but the blunt instrument of £30,000 outside London is really going to act as a disincentive. We have a number of examples of people who are, say, on zero-hours contracts or in part-time work where it would not be in their interests to take a promotion, because they would not be able to afford their rent.

David Orr: I think pay-to-stay is wrong in principle. Government should not be setting rents for housing associations, and personally I believe that Government should not be setting rents for local authorities either. Accountable boards and accountable local authorities should set the rents that they think are appropriate for their organisations, their neighbourhoods and their tenants.

The challenges we recently encountered with the Office for National Statistics and the classification decision all make it more difficult for housing associations to operate independently. I am very pleased that the Government said that they wish to see housing associations be independent bodies in classification terms. We should not be taking measures where Government tell; we should have measures where Government enable.

This is an absolutely clear case in point. For some housing associations, pay-to-stay, externally imposed, will be an administrative nightmare that will end up costing a huge amount of money and have an adverse impact on the day-to-day relationships with tenants. In an environment where housing associations had a much broader ability to set their own rents, they could think more strategically about markets, neighbourhoods and places where you would charge higher rents and where you would charge lower rents, and that is where we have to get to.