A.  INTRODUCTION

  The Housing Corporation (the Corporation) welcomes the opportunity to give evidence to the Committee's inquiry into the New Towns: their problems and future.

B.  THE CORPORATION'S ROLE AS INVESTOR

  The Corporation distributes funding to housing associations via its Approved Development Programme (ADP); the amount provided under this programme will rise to over £1.2 billion in 2003-04.

  The Corporation has three key investment objectives:

(i)  providing new, affordable housing in areas of economic and demographic growth;

(ii)  contributing to regeneration and neighbourhood renewal; and

(iii)  meeting the needs of a wide range of vulnerable people.

  All are relevant to the New Towns.

C.  THE CORPORATION'S ROLE IN NEW TOWNS

  There are a number of areas where the Corporation might contribute to the future development of the New Towns.

(i)  Providing additional affordable housing

  The New Towns were built about 50 years ago in areas of high demand to meet that demand. Most of the original affordable housing in these towns is in local authority ownership.

  The location of many of the New Towns is very important. They are sited in the South East of England in locations close to London. One of the issues facing the South East of England is finding places where new housing, including affordable housing, can be sited to meet the increasing demand. The New Towns could usefully contribute to meeting this need. The Corporation and housing associations could provide an element of the affordable housing that would be needed.

  The Corporation has recently been discussing with English Partnerships how we might work together in the New Towns to provide affordable housing in areas of high demand. We are considering how best English Partnerships' land and powers and Corporation ADP funding can be put together to achieve the wider objectives of securing affordable housing development more cheaply and effectively than is now the case. We have agreed to develop a framework for working together and are focusing on two case studies Basildon and Milton Keynes. Our intention is to develop a protocol for joint working which is clear about the roles and responsibilities of the various players, including English Partnerships, the Corporation, local authorities and housing associations, and the terms and conditions under which land, funds and other resources are made available.

(ii)  Regenerating existing estates

  The affordable housing in the New Towns is largely owned by the local authority and is up to 50 years old. The houses are therefore approaching a time when they could need considerable work to ensure that they are fit for purpose.

  In the Housing White Paper published in December 2000, the Government set out its view that transfer of local authority stock to housing associations should continue and indeed increase. When local authority stock is transferred to housing associations private finance is raised to fund improvements to that stock. Transfer may therefore provide a mechanism for funding improvements to existing affordable housing in the New Towns. However the particular design and maintenance features of this stock makes valuation difficult and this will need to be addressed.

  As part of its work in regeneration, the Corporation is piloting a number of new tools. In one of the New Towns, Telford, there is a problem with poor quality stock which is adversely affecting the area in which it is sited. We are considering an application to fund the acquisition and demolition of the privately owned stock to improve the surrounding area and increase the value of neighbouring stock. We are currently evaluating the use of acquisition and demolition and other new tools in regeneration.

(iii)  Housing Market Renewal

  One of the issues that has come to the fore recently is that of housing market decline and collapse. In some areas there have been significant problems with housing markets leading to a rapid decline in demand and increasing numbers of vacant properties. Although this has initially been seen as a Northern problem there is evidence that it is more widespread.

  The Corporation is supportive of proposals being worked-up for a Housing Market Renewal Fund which would be used to restructure housing markets in areas where they have failed. The National Housing Federation, in collaboration with the Key Cities Housing Group and the Northern Housing Forums commissioned a paper from Birmingham University which sets out the case and uses for such a fund.

  One area which has been affected by housing market decline and might benefit from a Housing Market renewal Fund is the Birmingham/Sandwell area which is close to Telford. It has become increasingly clear that housing markets do not operate in isolation. Additional provision in one area can lead to decline in neighbouring area. Thus it will be important to consider any future development in Telford against the background of what is happening in the Birmingham/Sandwell area. It would be unfortunate if growth in Telford was to exacerbate decline in these two areas.