A new regional policy.
In recent weeks John Prescott has been touring the northern regions to promote support for the proposed assemblies for the North East, the North West, and Yorkshire and Humberside. In the Spending Review for 2002, the Chancellor announced a new Public Service Agreement (PSA) target to 'reduce over the long term the persistent gap in growth rates between the regions'. And the Communities Plan published by the Government in February 2003 includes plans for nine Housing Market Renewal Pathfinder (HMRP) projects in northern towns and cities which have been experiencing housing market failure.
Falling housing demand must now be recognised as an important regional issue which cannot be resolved by housing policies in isolation. The HMRP projects will only achieve their maximum effectiveness if they are developed within the framework of comprehensive regional strategies.
The problems of falling housing demand and market failure are, of course, fundamentally due to the decline in employment and the loss of population in northern towns and cities, with new jobs being created disproportionately in the Greater South East area. The areas most affected are the major conurbations, but also include former mining communities and old textiles towns that have suffered a massive loss of jobs.
The most influential analysis of falling housing demand was the 'M62 study', (1) which examined changes in the local economy, in house prices, and in population movements across the area between Greater Manchester and Merseyside. It showed how these changes had a dramatic impact on local housing markets, causing falling housing prices, outward migration, and, at the most extreme, wholesale abandonment in the areas worst affected. The aim of the HMRP projects is to draw up strategies for restoring sustainable communities in these areas so that they again become places in which people have jobs and want to live.
The projects can identify with reasonable accuracy housing that is unpopular because of structural and design failings, and which cannot realistically be remedied. Some tenants have had to endure sub-standard housing for years and will welcome at last being able to enjoy a good-quality home. These properties should be demolished as soon as possible.
There are also neighbourhoods where changing patterns of housing demand and population movement have led to an excess of socially rented dwellings. What is needed may be a different mixture of tenures, including outright home ownership and equity-shared ownership, as well as a wide range of rented housing.
It is more difficult to decide upon a course of action to be taken in neighbourhoods with streets of pre-1919 terraced housing. Many people have moved out of these houses because their condition is poor, space standards are low, and the neighbourhood is perceived to be in terminal decline. Yet within these same streets there are residents who like their home and want to stay, including owners who have invested a great deal in making them somewhere desirable to live. They are vehemently opposed to plans for demolition (especially where they are dressed up in language which talks of a 'strategic restructuring' of the housing stock).
There is also evidence of demand rising in some neighbourhoods of terraced housing. This can be the result of success in tackling the problems of anti-social behaviour and criminal activity that drove out former residents. It can also be because house buyers recognise the potential for modernising these properties, especially where they are not far from city centres which are experiencing spectacular revivals. Exactly as streets of older Victorian housing have been 'gentrified' in London over the past 30 years, properties in the North may now experience a new popularity.
The fundamental problem, however, for the HMRP projects is the lack of integrated economic, planning, and housing policies in their regions to give a framework for the strategies they are drawing up. Unless such policies are adopted, housing policy faces a nightmare scenario. Homes will be demolished in the North, simply because there is no demand for them, while the pressure for new homes in London and the South will increase still more. Allowing that to happen would be a massive waste of public resources, and would lead to both a painful death for old communities and the unnecessary use of greenfield land.
In October, the Institute for Public Policy Research published an important study calling for a new regional policy for the UK. (2) It documents in depth the wide regional disparities in income, levels of employments, standards of health, and mortality rates. Despite reasonable overall economic growth in the UK, the gap between the North and South has been growing since the beginning of the economic recovery in 1992/93. The enlargement of the European Union will mean that the poorer UK regions will stop receiving EU Structural Funds after 2006, and grant monies will consequently fall unless action is taken by the Government to compensate for the loss.
The IPPR report authors put forward a ten-point plan to reduce these inequalities, which include policies for creating new jobs in the poorer regions; targeting government spending in areas such as science research; re-locating public service jobs from the more prosperous regions; and an unambiguous target in the 2004 Spending Review to narrow disparities in output per head across the UK nations and regions.
In the last few years we have seen the creation of a plethora of new regional agencies, including the regional assemblies, regional development agencies, and regional housing boards. By 2005 we may have elected regional councils. What is urgently needed is an overall strategy that brings all these together.
(1) Nevin, p. Lee, L. Goodson, A. Murie, and J. Phillimore: Changing Housing Markets and Urban Regeneration in M62 Corridor. CURS, University of Birmingham, 2001
(2) J. Adams, P. Robinson, and A. Vigor: A New Regional Policy for the UK. Institute for Public Policy Research, London, Oct. 2002
Chris Holmes, formerly Director of Shelter and Director of Housing for the London Borough of Camden, is a Visiting Research Fellow with the Institute of Public Policy Research. The views expressed are his own.