Starter Homes Initiative (Hansard, 4 March 2002)

§ Baroness Maddock
asked Her Majesty's Government:
Whether the progress of their Starter Home Initiative is satisfactory.

§ The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton)
My Lords, last September we allocated £230 million in Starter Home Initiative funding to 95 schemes to help 8,000 key workers. In January we published bidding guidance for the remaining £20 million funding, which we intend to allocate in May to help 2,000 key workers. Schemes are now up and running in local areas. The first key worker completed an assisted house purchase last October.

§ Baroness Maddock
My Lords, I thank the Minister for that reply. He will be aware that since the scheme was announced many people believe that much of its value has been wiped out by house price increases in London and the South East. Of course, those increases are due to a lack of supply of affordable housing. However, does the Minister share my concerns that police and health authorities are continuing to sell residential properties in their ownership? When can we expect an evaluation of the scheme to be published?

§ Lord Falconer of Thoroton
My Lords, when we announced the scheme in July 2000, we said that 10,000 key workers would be helped. As I indicated, the £230 million already allocated helps 8.000 workers. The remaining £20 million, which will provide funds for key workers to put down as a deposit on a property, will help a further 2,000 workers. Therefore, we have been able to maintain the number of key workers that need to be helped. The problem for such workers in London, the South East and other areas of high demand is intense. I agree with the noble Baroness that all employers of key workers, including statutory employers, need to see how they can help to ensure that as many as possible of their employees are housed.
Evaluation is certainly planned but nothing has been commissioned yet. It is anticipated that research will begin in approximately January 2003 once more 5 people have been through the scheme. That research will examine all aspects of the scheme, including the impact on staff retention and recruitment—plainly one of the vital elements of the scheme.

§ Baroness Byford
My Lords, does the Minister agree that a difficulty is caused by the lack of house build? Does he also agree that this Government have presided over the lowest level of housing stock to be built since 1925? That obviously has an effect on the proportion of housing available under the Starter Home Initiative. Will the Minister comment on that and—he referred to the South East—on how the situation affects rural areas?

§ Lord Falconer of Thoroton
My Lords, that question is a little rich. The reason why house-building is now at its lowest level since 1925 is because of the extreme reduction in money that was made available until 1996 by the previous government. We have now turned round that situation and have increased the funds available. However, as noble Lords know, one cannot, simply by turning a tap, change the amount of house-building that takes place. Perhaps I may say that that was rather a bold question.
So far as concerns rural areas, the noble Baroness is absolutely right. In many cases, rural areas experience as great a problem in relation to key-worker housing as do certain urban areas.

§ Lord Marsh
My Lords, is the Minister aware that an increasing number of former council flats in central London are reaching well in excess of a quarter-of-a million pounds? Is he aware that this is an urgent problem of an order of magnitude different from that affecting the rest of the country?

§ Lord Falconer of Thoroton
My Lords, I agree that there are problems in relation to the price of housing, including ex-council housing, in central London. However, a very similar problem can also be found in, for example, Cambridge. As a result, people who were previously able to get a foot on the house-buying ladder can no longer do so. We need to consider that issue because the effect of being unable to house such people directly affects not only those people but the economy as a whole.

§ Lord Glentoran
My Lords, I declare an interest as a hoard director of the NHBC. Is the Minister aware that the main constraint on house-building is the planning authority? Is he also aware that inflation in the house-building industry is running way ahead of national inflation, based largely on the cost of manufactured products, which relate to fuel costs, and aggregates and landfill costs? Will the Minister comment on both the planning situation and those increased costs?

§ Lord Falconer of Thoroton
My Lords, the planning system is riot fast enough, not consistent enough and does not engage the community enough. People from all across the spectrum are fed up with the way that the 6 planning system works. That is why we published a suite of Green Papers at the end of last year proposing a fundamental reform. Yes, the cost of building has risen but, more significantly, the cost of land has also risen. We need to consider all aspects of the issue.

§ Baroness Sharp of Guildford
My Lords, perhaps I may press the Minister to answer the Question put by my noble friend Lady Maddock; that is, at a time when there is such a shortage of housing for public sector workers, why are the authorities selling off nurses' accommodation and police accommodation? The problem with giving extra money by way of help is that that is just more money chasing after a given stock of housing.

§ Lord Falconer of Thoroton
My Lords, in many cases the reason why the police or the National Health Service, for example, sell off land is to use the money to provide more policing or health facilities. There is an issue of priorities, which needs to be addressed.