Pathfinders lose way

A £2.2bn regeneration programme to turn round depressed housing markets in the North and Midlands has worsened problems in certain areas, says a report by the National Audit Office.

The spending watchdog found that uncertainty over continued funding had damaged developer confidence in the flagship housing market renewal programme and had led to “unexpected” bid costs for contracts.

It concluded that the government had been unable to prove that the programme, which has involved the demolition of 10,000 homes, was of any benefit to the areas in which the houses had been knocked down.

The programme aims to tackle the problem of low demand and empty homes in nine “pathfinder” areas. In addition to the houses that have been demolished, 40,000 homes have been refurbished and 1,000 homes built.

It is difficult to convince landlords to invest when cash is only guaranteed for two years

David Corner, audit office

The audit office said the strategy was “radical” and “high risk” and found no evidence to demonstrate that the improvements in the pathfinder areas were necessarily the result of the programme. It reached this finding because the communities department had failed to collect enough data to assess their impact.

The report concluded that the pathfinders had blighted some areas because houses had been bought up and kept empty before clearances. It also noted that the promotion of housing “growth points” in other areas of the North might depress demand in pathfinder areas in future.

David Corner, director of regions, regeneration and renewal at the audit office, said: “It’s difficult to convince private investors and social landlords to invest in these areas when funding is only guaranteed for two years.”