INTRODUCTION

  The ODPM: Housing, Planning, Local Government and the Regions Select Committee has requested memoranda from the Government on planning for sustainable housing, affordable housing and the effectiveness of regeneration initiatives.

  This memorandum covers the three issues, which the Government sees as part of one wider challenge: how to build and maintain thriving, inclusive and sustainable communities in all regions.

  Meeting this challenge is the key objective of the Office of the Deputy Prime Minister. The Office now brings together at the centre of Government key issues around place and communities, such as the regional agenda, local government, housing and homelessness, planning, neighbourhood renewal and social exclusion. The Office's agenda is encapsulated in our aim, objectives and performance targets, which are attached at Annex A.

  In July the Deputy Prime Minister announced to the House his strategy to deliver a step change in our policies for creating successful and sustainable communities. He promised a further statement around the turn of the year, setting out a long-term programme of action in greater detail. This will set out how we will achieve our objectives, building on the policies and programmes developed over the last five years, in particular the Neighbourhood Renewal Strategy, the Urban and Rural White Papers, The Way Forward For Housing and the Planning Green Paper. In advance of that statement it will not be possible to give a clear Government position on some of the points raised by the Committee.

  The Government welcomes the Committee's enquiries. There are formidable challenges to face, and the Government will not overcome these on its own. We therefore welcome the debate that will be provoked by the Committee's work, and hope that witnesses will engage in some of the difficult issues covered by this memorandum.

A: PLANNING FOR SUSTAINABLE HOUSING

The overall scale of housebuilding required

  The Deputy Prime Minister is looking to achieve a step change in the supply of new housing and to work with regional, and local partners to see how and where this can best be achieved. The ways to achieve this will include making better use of land, for example, through higher densities but also the redevelopment of brownfield and urban sites, for example to secure more housing in mixed use schemes. A major contribution will come through accelerating the potential of Thames Gateway and the other growth areas, which, subject to discussion with regional and local partners, have the potential to provide an additional 200,000 homes. The significant extra resources which have been allocated to housing and planning are a clear sign of the Government's commitment to creating thriving, inclusive and sustainable communities in all regions.

  Given the wide variation in need between different parts of the country, the Government believes that local authorities are best placed to carry out local housing needs assessments. These assessments are better able to consider the diversity of needs and priorities at a local level and should be reflected in local authorities' housing strategies, investment plans and in the implementation of planning powers for affordable housing.

  The scale of the problem and the limited number of potential sites in some areas make it essential for local authorities to work with regional bodies to identify the most sensible solutions to problems in their sub-regions. The growing sub-regional co-operation and the way this ties-in with the Regional Housing Statements are essential to strengthening the links between plans for the provision of additional housing and regional planning.

Whether the proposals are likely to significantly reduce house prices

  The determinants of house prices are complex and involve the inter-relationship of a number of elements including land and housing markets, new housing production and the land use planning system. Furthermore, although house prices have a strong national dimension because of the relationship with interest rates, house prices also tend to reflect the local context, where a large number of local and even site specific factors come into play. On the demand side the main influencing factors are population growth, income, interest rates and location; on the supply side the main factors are land availability and construction costs.

  The action we are taking—for example improving the delivery of housing through the planning system and tackling shortfalls in housing, a more vigorous approach to land assembly and infrastructure, and increased use of innovative construction techniques—will assist in moderating the recent growth in house prices.

  The Government's commitment to low cost home ownership schemes will help those on low incomes to meet their aspirations to become home owners, and the Government's commitment to social housing will help meet the needs of those who are unlikely to be able to afford home ownership in the future.

THE GEOGRAPHICAL DISTRIBUTION OF NEW HOUSING, INCLUDING PLANS FOR THE FOUR GROWTH AREAS

  The Government is aware that a number of areas are in need of an increased housing supply. We will expect all local authorities to deliver the housing numbers set out in Regional Planning Guidance. There is a planned review of RPG9 due to start in 2003.

  We will also accelerate the existing proposals for significant growth in the four growth areas identified in Regional Planning Guidance. These are Milton Keynes and South Midlands, Thames Gateway, Ashford and the London—Stansted—Cambridge corridor. We have an opportunity with these areas to create sustainable high quality new communities that will bring benefits for everyone. Over the coming months we will take into account these studies and work with partners in each of the four areas to establish where, at what scale and how quickly growth can be achieved. There will be a strong emphasis on the delivery of these plans.

Whether the proposals will promote high quality sustainable communities whilst avoiding poorly designed urban sprawl

  The Deputy Prime Minister has made it clear that the Government will not tolerate urban sprawl—nor will it concrete over the south-east, or any other region. Since May 1997, approximately 30,000 hectares have been added or proposed to the green belt—an area approximately three times the size of Bristol. The Government plans to tackle housing pressures in London and the South East by providing for sustainable, high quality communities in the growth areas. This will help to reduce the pressures elsewhere in the South East, whilst protecting valuable countryside for the benefit and enjoyment of all.

  To produce more sustainable development, we must use land more efficiently to reduce the overall land take. Good design and layout can help avoid unnecessary incursions into the countryside and secure the quality and attractiveness of residential areas.

  Through PPG3 we have introduced tough new measures—including an urban brownfields first policy—to meet the country's housing needs in the most sustainable way possible. The Regional Development Agencies are on course to achieve their target to reclaim or remediate 1,100 hectares of brownfield land per year by 2004 early—last year they dealt with 1,085 hectares, and next year they are forecast to deal with 1,157 hectares. The Government's target that 60% of new homes should be on brownfield land has been achieved eight years earlier than predicted—but, as the Deputy Prime Minister made clear in his statement, we need to keep up the pressure. Following the review of the role of English Partnerships, completed in 2002, EP will have a new role which will include assisting with the assembly of sites for regeneration and sustainable development, and developing and maintaining a national brownfield strategy.

  We expect land for new housing to be used more efficiently through higher densities. For example, in the South East we have been building at an average of density of 23 dwellings per hectare. If these developments had been built to PPG3 densities we would have seen over 11,000 more homes each year over the last four years. This is why the Deputy Prime Minister spoke about the need to make good use of housing land to deliver the homes we need in London and the South East and said he would intervene in planning applications for low density development of less than 30 dwellings per hectare.

  The Government is considering proposals that would provide incentives to authorities to dispose of vacant Housing Revenue Account (HRA) land or surplus or inefficient HRA property. The proposal is that the set-aside portion of a capital receipt from the sale of HRA property in these circumstances be reduced to zero. The proceeds from these disposals could then be used either for the provision of new affordable housing or for the provision of other replacement housing assets.

  It is also important to make best possible use of existing stock. Bringing empty homes back into use has desirable outcomes in terms of reducing opportunities for crime, vandalism, arson and anti-social behaviour. It also eases pressure on the housing stock and for development on greenfield land. We are taking forward a range of measures designed to bring more empty homes back into use, as outlined in our response earlier this year to the TLGR Select Committee Inquiry on Empty Homes. These include:

—  Fiscal incentives introduced in Budget 2001, including a reduced rate of VAT applicable to dwellings empty for more than three years and 100% Capital Allowances for the refurbishment of empty space over commercial premises.

—  Increased funding for the Empty Homes Agency and forthcoming guidance for local authorities and developers on unlocking the potential of empty properties.

—  Reform of private sector renewal legislation; and

—  The introduction of pathfinder projects to help local authorities tackle low demand and abandoned homes where the problems are most acute.

PROPOSALS FOR NEW MILLENNIUM VILLAGES

  The comprehensive long-term programme of action will demand a new standard in how we build houses and communities, seeking improvements in density, design, environmental standards and construction techniques.

  The Millennium Communities initiative, being delivered across England by English Partnerships, aims to demonstrate how that step change in standards, density, design and construction techniques can be delivered. The Urban White Paper promised seven such Communities on brownfield land, noting that Greenwich, Leeds (Allerton Bywater), and Manchester (New Islington) were already planned. Since then we have announced the final four—Kings Lynn (Nar Ouse), Telford (East Ketley), Milton Keynes (Oakgrove) and Hastings.

  The seven Millennium Communities will deliver over 6,000 new housing units. A range of targets have been set per unit, including a reduction of 20% in water consumption, a reduction of 50% of energy consumption, a reduction of 50% domestic waste, a reduction of 70% in defects on handover to the occupier, and a reduction of 50% in construction waste. Achieving all these targets in all Millennium Communities, as well as density, design and sustainabilty, is particularly testing. In some instances, progress is slow, but the lessons learned will inform future developments and ODPM remains committed to delivering Communities.

THE BALANCE OF NEW DEVELOPMENT BETWEEN HOUSING FOR SALE AND SOCIAL HOUSING

  On 18 July, the Deputy Prime Minister July set out a strategy to increase the supply of housing overall, including both housing for sale and affordable housing. There has been a continuing decline in the provision of all houses, social and private. The strategy will tackle the shortage of housing in areas of high demand, where record costs are impacting directly on living standards.

  Existing planning policy guidance for housing, PPG3, underlines the importance of creating mixed and inclusive communities which offer a choice of housing and lifestyle. Local planning authorities are encouraged to work jointly with housing departments to assess the range of needs for different types and sizes of housing across all tenures in their area.

  The Government does recognise that there is a need not just for more homes, but for more homes that people can afford. The Deputy Prime Minister is considering carefully how best to use the additional resources for housing, but it is clear that a substantial proportion will be used to increase funding to provide additional homes for key workers and new social housing for the homeless and families in temporary accommodation. This will build on previous increases in investment for affordable housing following the 2000 Spending Review, when the Government nearly doubled the Housing Corporation's, Approved Development Programme to over £1.2 billion by 2003-04.

  The Government is also seeking to improve the delivery of affordable housing through the planning system, as set out in its consultation document "Reforming planning obligations: delivering a fundamental change", published in December last year.

  On 18 July, the Deputy Prime Minister announced that the Government would pursue the objectives of the planning obligations consultation paper without new legislation, which would have been employed to promote a set tariff to replace negotiated planning agreements. The objectives include dealing with the lack of openness of negotiated agreements, the delays caused to the planning process and the lack of certainty for developers. The Government will revise policy guidance and work with all the relevant stakeholders to create a more streamlined system that will enable the community to share in the benefits arising from development. The scope for using planning obligations to secure affordable housing in a wider range of circumstances than set out in current policy is being considered as part of the revision of policy guidance.

The extent to which decisions relating to housing, including numbers, tenure and density, should be taken by central and local government

  The need to increase supply of new housing is a major challenge for government and its regional and local partners, working with the construction industry and other stakeholders. All of these have a key role to play in helping achieve the step change in housing supply, which the Deputy Prime Minister announced on 18 July. The Government is considering the scale of response needed and the Deputy Prime Minister indicated some of the potential, for example in the growth areas, in his statement. The Government is also looking closely at the measures needed to achieve a major increase in supply but it will want to consider first the views of regional and local partners on how, where and by when increased supply can be achieved.

CONCLUSION

  The Committee's enquiries are highly relevant to the Office's agenda to build and maintain thriving, inclusive and sustainable communities in all regions. Many of the issues raised by the Committee are being considered as part of the long-term programme of action which the Deputy Prime Minister will announce around the turn of the year.

  This memorandum has summarised some of the key considerations which are informing the Government's plans for a step change in its policies to build successful communities. The Government is determined to ensure that housing shortages, especially in London and the South East, are addressed, to reduce the impact of housing costs on living standards. It is also committed to turning around problems of low demand and abandonment in parts of the North and the Midlands. And it is determined to meet these challenges through the creation, or re-creation, of communities.

  The Government is keen to hear the views of witnesses, and any early conclusions from the Committee, on how all stakeholders can work together to achieve our common goals.