Money where the mouth is

The government’s mission to eradicate the UK’s most run-down housing estates by “knocking them down and starting again” took another step last week, with a call to estate regeneration promoters to express their interest in receiving help from the Lord Heseltine-led taskforce set up to drive the initiative.

The ambition - to renew the country’s 100 most run-down “sink estates”, as the government terms them - has already proved controversial in relation to its potential social consequence. The prime minister, launching the initiative, made it central to a package of measures he claimed could “end poverty”, evoking a picture of brutal high-rise buildings and dark alleyways haunted by criminals. This bleak image is shamefully in evidence in the architecture of many of the UK’s poorest estates. And as Building reported in January, evidence abounds, too, of the link between run-down, hostile urban environments, and a poverty trap that lays generations of families to waste through a hopeless cycle of low incomes, limited education and low aspiration.

But, as we reported then, the picture painted by the government of a fresh regeneration push as a fix to poverty ignores the complexity of the communities it is designed to help. Many contain close-knit social groups, particularly among elderly residents, which offer a source of emotional relief from financial poverty. The question of what happens to these communities as their homes are “knocked down” has so far barely been addressed by the government. Instead, the chair of one lobby group indicated this week, the alarming rhetoric from Whitehall has bulldozed the fear of God into tens of thousands of people.

Now, on top of the social consequences, initial fears over the viability of the programme from a developer perspective are also looking increasingly well founded.

Some housebuilders, such as Countryside, have welcomed the government’s initiative as offering a potential boost to their regeneration businesses. And it’s easy to see the allure of schemes that, if these regeneration experts navigate their complexities as they have proven they can, will drive a significant premium on selling prices within the developments.

This bleak image is shamefully in evidence in the architecture of many of the UK’s poorest estates

But notwithstanding this, the emerging detail of the support behind the government’s scheme offers little encouragement over the scale of its reach. The £140m seed funding announced by Downing Street - a paltry amount given it is spread over six years and 100 schemes - did at least look to have been supported by a £2.3bn loan package unveiled in the last Autumn Statement, to “help regenerate large council estates” and support “major housing developments”. However, Building was told by the communities department this week that just £290m of that would actually go to estate regeneration - and £150m of that has already been spent. So, we’re back to just the £140m.

As well as raising questions over how many schemes can really be kick-started by the government, this funding crunch is also in danger of geographically restricting the projects that can be supported, due to the inescapable conclusion that schemes will need to be largely self-funding. This is possible where there are areas of deprivation close to existing house price hot spots, such as the South-east, but is much less likely elsewhere, as the money made on homes for sale is unlikely to offset
the costs of the scheme.

So if the government really wants to drive a top down, national regeneration push, it needs to much better co-ordinate its funding and its ambition. It also needs far greater harmonisation of its policies towards affordable housing, given that a significant factor undermining the viability of regeneration schemes is the increased cost its extension of Right to Buy will pass on to councils, who will need to compensate eligible leaseholders on estates before any redevelopment can get off the ground.

In the meantime, pockets of regeneration will still happen, and there are other ways in which the housebuilding sector is helping to address the country’s housing problems, such as through developing prototypes for lower cost affordable housing.

But there is no escaping the fact that the UK’s failure to provide enough good quality housing for its population is a problem on a national scale. And it’s a problem that will only find a solution when policy co-ordination rather than rhetoric is central to the government’s thinking.

Sarah Richardson, editor