Thursday, 14 April 2011

Housing Market Renewal - Audit Commission praises Pathfinder programme

Report released by the Audit Commission shows that Government’s decision to abolish Housing Market Renewal programme is ill advised.

Report Summary:
The report by the Audit Commission found that the Housing Market Renewal programme (HMR) introduced under the Labour Government has made a substantial contribution to improving housing and economic circumstances in some of the country’s most deprived areas.


The report found that since the programme first began in 2002 more than £2.2bn had been invested by the previous Labour Government in tackling the declining housing market in the most deprived areas of the country which had in turn generated some £5.8 billion of economic activity across the economy generally.

The report went on to say that the HMR programme had refurbished more than 108,000 existing homes across the country; attracted private investment to complete over 15,000 new homes; was responsible for creating some 19,000 jobs in construction and related industries; and had also helped to maintain an additional 2,600 jobs in the construction industry each year.

The report concludes that:
“HMR areas need continuing investment. The communities in these deprived areas will still need support, and the task of regenerating housing markets will continue.”

It also added that there is a need to:
“ensure that promises made to communities are met and to reduce the risk of previous investments being undermined by leaving a legacy of uncompleted projects.”

According to Shelter, the Housing and Homelessness Charity:
“The Housing Market Renewal pathfinders have brought much needed investment to parts of the North and Midlands experiencing low demand for housing and long term economic decline.”

The report’s key findings:
• £2.2bn invested in Housing Market Renewal (HMR) programme since 2002 with on average around £115 being spent per resident per year.

• Every £1 of HMR investment attracted an additional £0.50 of investment from the private sector and £0.68 of public investment.

• In Newcastle Gateshead £60 million of HMR funds, together with council and HCA contributions, is set to secure £400 million private investment and deliver more than 4,000 new homes.
What the report released by the Audit Commission says:
The report estimates that by March 2011 the HMR programme will have:
• generated some £5.8 billion of economic activity across the economy
• created some 19,000 jobs in construction and related industries; and
• Helped maintain over 2,600 jobs in the construction industry each year.
Report also highlights that by its closure the scheme will have:
• refurbished more than 108,000 existing homes
• attracted private investment to complete over 15,000 new homes
• Readied substantial sites for future development through selective acquisition and clearance of up to 30,000 properties.
Overview of Housing Market Renewal programme:
The 2010 Spending Review identified that HMR funding will cease from March 2011.

Housing Market Renewal (HMR) Pathfinders have operated in areas of low housing demand. They were introduced in 2002 as a programme to rebuild housing markets and communities in parts of the North and the Midlands where demand for housing is relatively weak; areas which have seen a significant decline in population, dereliction, poor services and poor social conditions.

The intention of the strategy was to renew failing housing markets and reconnect them to regional markets, to improve neighbourhoods and to encourage people to live and work in these areas.

The areas in which HMR operated affected:
• Birmingham/Sandwell,
• East Lancashire,
• Hull and East Riding,
• Manchester/Salford,
• Merseyside,
• Newcastle/Gateshead,
• North Staffordshire,
• Oldham/Rochdale,
• South Yorkshire
• West Yorkshire,
• West Cumbria, and
• Tees Valley.

HMR was originally envisaged as a ten to 15-year programme. Eight years in, many of the schemes are now reaching fruition. Many homes have been built and many more refurbished. HMR at a neighbourhood level has helped to stabilise market conditions and provide a strong sign of change.

Private sector resources have been attracted and developers have built high-quality homes in areas where no new housing had been built for a long time.

The Report highlights the success of HMR projects across the UK:
HMR projects are helping people get jobs and training

Oldham and Rochdale
In 2008/09 in Oldham and Rochdale, 120 people were trained and 80 helped into construction-related jobs as a direct result of HMR. Ten per cent were from under-represented groups.

Birmingham and Sandwell
In Birmingham and Sandwell, HMR activity was used to develop Britain’s first apprenticeship in demolition, with South Birmingham College and the Sector Skills Council. And contractual undertakings as part of HMR funding agreements will help 159 people into work.

Merseyside
By the end of 2009, the Merseyside pathfinder had helped 20 businesses move to more suitable premises by providing rent relocation grants and loans.

East Lancashire
HMR work in East Lancashire during 2008/09 created 71 jobs and safeguarded 13. A further 25 young people found apprenticeships and 16 work experience placements. In 2009, a new apprenticeship training agency found places for 32 apprentices. Individuals are also receiving support to set up and sustain small construction businesses.

North Staffordshire
In North Staffordshire, HMR contracts include community benefit clauses, bringing extra benefits to local communities. In 2009, local labour made up 33 per cent of the workforce, 52 per cent of subcontracting was to local firms, and use of local goods and services was at 33 per cent.

Newcastle Gateshead
In Newcastle Gateshead the HMR pathfinder is helping to set up joint venture vehicles in both constituent councils. Private sector partners have been appointed and some £60 million of HMR funds, together with council and HCA contributions, is set to secure £400 million private investment and deliver more than 4,000 new homes.