MR PADDY MCINTYRE, MR STEWART CUDDY AND MR COLM MCCAUGHLEY

27 APRIL 2004

  Q167 Chairman: Gentlemen, you are very welcome. Perhaps I can take this opportunity to thank the Executive for its hospitality on our first visit in relation to this inquiry. Our Gurney girls are in the corner, so could I ask you when you first give evidence to give your name for the record so they can there on in know who is speaking. If I can start with the questions on new build targets. We are looking to achieve a target of 1,750 new social houses per annum. In your view, are Housing Associations alone capable of achieving that figure?

  Mr McIntyre: Paddy McIntyre, Northern Ireland Housing Executive. I think it is fair to say for some years there were concerns around the delivery of the new build programme, representations were made by our board, by the housing council, the various political parties and so forth to the Department. The Department carried out a review of the problems associated with the delivery of the new build programme which were primarily related to the identification and the acquisition of land, delays in planning, general programming matters, and produced a report, probably in the early part of last year. We were party to the production of that report. There were a number of recommendations in it about how those performance problems should be addressed, including new structures for managing the programme, a level of over-programming, advanced land acquisition, clearing up planning delays and so forth. In the year just completed, the new build programme has delivered more or less around the target which was set for that year. We have always said that we need to keep a watching eye on this but our view at the time the report was produced was that these recommendations offered the possibility of those targets being met. It appears in the first year that they have been met but we all need to continue to keep an eye on that, we all need to continue to play a role. I think the real issue now is whether or not there is funding available in the coming years to support a new build programme of 1,750 buildings.

  Q168 Chairman: You said we all have a role to play, what is the role that the Housing Executive plays in enabling that achievement?

  Mr McIntyre: First of all, we are the overall assessor of housing need obviously and have put together the programme in conjunction with the Department. Our key role is really around the issue of land identification and land acquisition. We do that, for example, in urban and rural areas through clearance and vesting and so forth. We have a land asset ourselves which forms a significant part of the new build programme in terms of land transfer. For example, in areas of West Belfast where there are difficulties about individual Housing Associations acquiring individual sites for significant developments, we will act as a strategic acquirer. In those ways we make a contribution to this programme. We believe, for example, and this is a matter we have been discussing with the Department, that there is probably a larger role we should be playing in land identification. We also believe that PPS12, that is the Planning Policy Statement on Housing and Settlements, offers a significant role for the Housing Executive in terms of influencing both the assessment of what land is required and the allocation of that land to meet social housing need and affordable housing.

  Q169 Chairman: In the Belfast District Housing Plan you make reference to "bringing forward proposals to promote site identification and improve programme delivery through better programme management". Could you just expand on the meaning within the plan in relation to those two issues?

  Mr McIntyre: In the context of Belfast or generally?

  Q170 Chairman: In the context of the Belfast District Housing Plan and comments towards bringing forward proposals to promote site identification.

  Mr McIntyre: Again, because of the levels of housing need in Belfast we are probably more active in the city than elsewhere in identifying land for housing. Three or four years ago we carried out a very significant study of land availability in Belfast to identify what land might be available within the context of brown field development and so forth. That is one example of how we do it. We are extensively involved in urban renewal which in itself brings into play land for social housing which eventually transfers across to Housing Associations for development purposes.

  Q171 Chairman: So you think that there is a future for solid partnerships between the Housing Executive and Housing Associations to accelerate some of the new build?

  Mr McIntyre: Again, the new build programme was delivered as a result of the joint efforts of the Department, ourselves and Housing Associations. One of the structures that was put in place subsequent to the Department study was a tripartite working group which is intended really to manage the programme in its entirety and difficult schemes in particular from start to finish.

  Q172 Chairman: Just turning to the grant aid scheme enabling private developers to engage in social housing construction and operation, what advantages would such a grant aid scheme have over traditional grant aid to Housing Associations or the Housing Executive?

  Mr McIntyre: I suppose it brings more providers into the marketplace, if developers actually own land, there would be significant advantages. They have expertise that perhaps the public sector does not always have. There will be issues about value for money and controls. I suspect the Housing Association movement will argue, as they are arguing in England as a consequence of the Housing Bill, that they are heavily regulated, whereas private developers are not. Private developers, from the proposals I have seen arising out of the Housing Bill so far, do not seem to be subject to the same level of regulation. Our view is that it is new ground—it is still to be tested in England. There are substantial objections to it but the Government seems to be intending to pursue it and our view is that we, in Northern Ireland, should be keeping an eye on it with a view to applying it here if it will add to the delivery of the housing programme.

  Q173 Chairman: Are there any developers that have identified themselves as willing to co-operate within a Northern Ireland context?

  Mr McIntyre: I think—and my colleague Mr McCaughley will add to this—we have been approached on two or three occasions in the past by developers who have been interested but that has been within the context of no grant aid on offer. I suspect once grant aid becomes on offer if that particular initiative applies in Northern Ireland certainly there will be plenty of developers who will be coming through the door of the Department and ourselves.

  Q174 Reverend Smyth: I think you are aware that the Housing Executive is developing a measure of affordability at district council areas. What stage is this development at and what benefits do you imagine it will bring in terms of developing housing strategies at the local level?

  Mr McIntyre: The background to this is that a few years back, along with the Department and the Council for Mortgage Lenders, and given concern that had been expressed about affordability and so forth, we commissioned some research at Province wide level which indicated that whilst we did not have affordability problems on the scale of London or Dublin, there was still nevertheless an emerging problem which we wanted to track. We have been developing a methodology to do so at district council level. I may ask my colleague, Mr Cuddy, just to expand on how that methodology works and where we are with implementing it at this present stage.

  Mr Cuddy: Yes. A further impetus to that work was our role in PPS12 which the Chief Executive has referred to which is about assessing need for area plans. Part of that needs assessment was to deal not only with social housing but also with low cost affordable housing. To inform that work we believed we had to develop some form of affordability index and we are currently working with four academics from some of the leading universities in the UK to develop that index. Basically it looks at head of household income at district level, then using the Council for Mortgage Lenders' annuity calculation for mortgages, to see what scale of mortgage that level of income would support. That level of mortgage is then compared with a profile of house prices in that area and from this we can determine the extent to which there may be an affordability problem. I must stress that it is an index, an indicator, it will not crunch out specific precise numbers but it will enable us to do further work into affordability in that location. The benefits you asked about our enhanced ability. We believe we will be able to inform the area plans through the PPS12 input, ie the assessment of housing need. In turn, that should enable the Department of the Environment to assess the land requirement for social housing and for low cost affordable housing and hopefully the benefit of that land is then either rezoned or provision is made for it for that level of housing.

  Q175 Reverend Smyth: You have mentioned, of course, the mortgage people, you have mentioned the academics, are there any other stakeholders who you have been involved with to try and draw up such a plan?

  Mr Cuddy: Yes. We have been involved with the Department of the Environment who are responsible for the area plans. We have been in consultation with the Department for Regional Development who have responsibility for the overall regional strategic plan. We will in due course also take it to our housing council who, as you know, are an advisory body and with whom we consult on a regular basis and, indeed, we will consult further afield once the model has been refined and we feel it is appropriate and fit for purpose.

  Q176 Reverend Smyth: We have been talking about the model. Have you considered any other alternatives to the net stock model?

  Mr Cuddy: Perhaps I could maybe clarify that what I have been talking about is the affordability index. The net stock model is a different model, it is a strategic planning tool which tries to identify the requirement for social housing at a regional level. Whilst there is clearly some relationship, that model is a different model and is used for a different purpose.

  Q177 Reverend Smyth: Have you looked at any other alternative to that net stock model?

  Mr Cuddy: Yes, indeed. In fact, there are essentially two models at regional level. Both of those models are described as residual models, they basically look at estimates for projections of households over the next five to ten years. Then they look at the output from the private sector in terms of new build and then they identify any shortfall. That shortfall would be deemed to be the requirement for social housing. Now I would stress that is at our regional level, however we deem that to be the top down approach. We then have a bottom up approach in-house which looks at waiting list analysis, we use that to get an idea, an assessment, of need locally. Of course we then have three points, if you like, the two figures from the two elements of the net stock model plus the bottom up approach. We believe using those three tests gives us a fairly good insight into needs assessment both at a regional level and a local level in Northern Ireland.

  Q178 Reverend Smyth: When we are speaking of needs, can we move on a little bit then. I notice that you have actually stated you believe the Department for Social Development's review of the house sales scheme is timely, why?

  Mr McIntyre: I will pick that one up, Chairman. I suppose it is really worth stating at the outset the strengths that the right to buy scheme has had in Northern Ireland. It has created low cost ownership for well over a hundred thousand people. It has created a mixed tenure in many estates throughout the Province. A lot of people have remained on those estates as a result of that house sales scheme. It has also brought huge capital receipts into the Housing Executive and, indeed, into the public expenditure system generally here in Northern Ireland which we have been able to deploy in new investment. Why do we think it is timely? Well, I suppose given the scale of sales here, the potential impact on stock available for letting in years to come would be one of the issues. The cost of replacing a house compared with the cost of the receipt we are getting I think is an issue now. Our rental income is beginning to fall as well now which it should do, obviously, given that our expenditure on some programmes will fall as well but, nevertheless, that is of concern to us. From that point of view, we have said in our submission that we do believe it is timely.

  Q179 Reverend Smyth: Is there any evidence that the house sales policy has been used strategically to address the issue of affordable housing?

  Mr McIntyre: Before right to buy we had very low levels of owner-occupation here, well beneath the rest of the United Kingdom in the late 1970s/early 1980s. The question I would ask is "Where would we be now if it had not been for the right to buy?" So our argument would be that strategically at provincial level the right to buy has increased the levels of low cost home ownership for a large number of families who otherwise would not have had that opportunity. At a provincial level we believe, yes, strategically it has contributed significantly to helping people access low cost home ownership.