Committee of Public Accounts: Press Notice


Publication of the Committee's 35th Report, Session 2007-08

Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:

"The pathfinders housing market renewal programme, designed to tackle the problems of low housing demand in deprived areas in the North of England and the Midlands, has been more successful at demolishing old homes than at building new ones. The DCLG must work to foster confidence among local residents, especially where the programme has led to community stress. It does not help where demolition plans threaten the distinctive historical character of neighbourhoods.

"The desire of those who wish to continue living in their areas should not be disregarded. Ways need to be found of helping existing residents bridge the gap between the compensation they receive under a compulsory purchase order and the cost of another local property.

"Even though the programme is now five years old and some £2.2 billion investment has been committed, it is difficult to tell whether pathfinder interventions are having any more effect on local housing demand than the normal operation of the market. The department should draw on a wider range of socio-economic indicators to determine the extent to which pathfinders are having a beneficial effect on deprived neighbourhoods."

Mr Leigh was speaking as the Committee published its 35th Report of this Session which, on the basis of evidence from the Department for Communities and Local Government and representatives of two pathfinders, examined sustainable regeneration of the pathfinder neighbourhoods, community engagement and support, and the Department's oversight of the Programme.

The Housing Market Renewal Programme ('the Programme') aims to tackle the problems of neighbourhoods with acute low housing demand in the North of England and Midlands. In such neighbourhoods, the high concentrations of difficult to let or sell properties ("low demand" properties), the loss of population and the inability to attract new households had created neighbourhood decline and deprivation. Launched in 2002 by the Department for Transport, Local Government and the Regions, now the Department for Communities and Local Government, the Programme established sub-regional partnerships or 'pathfinders' covering nine areas. The Housing Market Renewal Programme is expected to last from 10 to 15 years and, to March 2008, has cost £1.2 billion, with a further £1 billion committed up to 2011.

The Programme aims to improve the quality of the physical infrastructure of the neighbourhoods concerned. So far, over 40,000 houses have been refurbished. The Programme also aims to acquire and demolish homes and replace them with newly built homes. However, more homes have been demolished than built and without longer term support, demolition sites, rather than refurbished and improved housing stock, may be the Programme's legacy.

In some areas, communities have opposed plans to demolish and rebuild homes. Regeneration of neighbourhoods is more likely to be sustained if local communities are actively engaged. In many neighbourhoods pathfinders aim to rebalance the mix of tenure, attract higher-income groups and develop more sustainable communities, with the risk that existing home-owners will be priced out of the market.

Pathfinders do not have statutory powers to enforce the implementation of their strategies. Instead they must influence a large number of local and regional regeneration agencies to achieve their plans.

It is too early to judge the overall success of the Programme as it is expected to run for a further ten years. The number of "low demand" properties in pathfinder areas has fallen, but by some measures it has fallen less than in England as a whole. The extent to which improvements in the housing market are the result of pathfinders' interventions, rather than broader economic factors, is also difficult to determine. The Department has measured the Programme's progress and impact by monitoring changes in the gap between house prices and vacancy rates in pathfinder areas and their respective regions. Sustained regeneration will require improvements in other areas which go beyond the regeneration of the physical infrastructure, such as local economic performance, employment opportunities, community safety and access to high quality public amenities and transport.