20 th August 2013 Response: Towards a growth plan - New Anglia Local Enterprise Partnership for Norfolk and Suffolk
Introduction We need a housing market in the New Anglia area that supports the kinds of employment and commercial opportunities the LEP hopes to create. Housing associations are strong local businesses, rooted in the community. Although they partner with local and national government to deliver new affordable homes, they are independent from the public sector and operate on sound business principles. The National Housing Federation is the trade body for independent housing associations and has compiled this response on behalf of members working in Norfolk and Suffolk. New Anglia s housing associations fully support the LEP s aim of improving and extending the area s independent economic offer, and more firmly establishing New Anglia as an area of economic activity in its own right - Norfolk and Suffolk are often seen as areas which are predominantly attractive to people who work in Cambridge and other commuter areas. Housing associations have been contributing to the local economic activity of the area for some time, adding gross value of 313.8m annually to the economy of the LEP area. However, there is also no shame in New Anglia being an accessible and attractive place to live, connected to an already established centre of economic growth. We believe that New Anglia can make the most of its connections, whilst simultaneously encouraging the growth of new industries on the doorstep. An important part of achieving both these goals is improving the local housing offer those workers who will take up employment in growing local industries as well as for people commuting to jobs elsewhere. Although housing is more affordable in Norfolk and Suffolk than other parts of the surrounding area, affordability is still a serious problem for people on middle to low incomes without access to large deposits. Affordability and housing development The growing key sectors identified by the LEP offer a vision of the types of jobs and skills that the New Anglia area hopes to deliver in years to come. The Federation and its members welcomes all initiatives to bring sustainable economic growth and jobs to Norfolk and Suffolk, which will complement the longstanding commitment of housing associations to supporting local enterprise, as well as helping their residents find employment and make an economic contribution to the area. These priority sectors; energy, tourism, ICT and life sciences sustain many skilled jobs. However, they are also characterised by the number of jobs they will provide on middle and lower-end salaries.
As it stands there are few locations in Norfolk and Suffolk where house prices and private rents will be affordable to people on these middle-to-lower incomes. Whilst housing costs are lower than other areas in this part of the country, affordability issues remain with house prices still between nine and ten times the average income in Norfolk and Suffolk, and deposits of around 30k needed to buy the average home. Many people on middle and lower incomes are still effectively priced out of home ownership. There needs to be a robust analysis of how the local housing infrastructure could support these new jobs, and what kinds of new development would be needed in order to make this a realistic prospect. In order to encourage those who live in New Anglia to work in New Anglia, the strategy will need to take account of the impact housing affordability. Research published recently by the National Housing Federation and COMRES shows that around one in seven line managers surveyed in the East of England said that the lack of affordable housing had a high negative impact on their ability to recruit and retain staff. 83% said that the cost of buying a home in the local area is a problem, and that people commuting into work because they cannot afford to live in the local area is having a negative impact on companies bottom lines. We need good quality homes at all price points that people can afford. It will be important for the final New Anglia growth plan to include metrics to measure both the number of homes built and housing affordability. This would be easy information to gather and offer a clear measure of success for the LEP. The LEP has correctly identified the potential offered by lower land costs to encourage development in Norfolk and Suffolk. The LEP should take advantage of these lower land values to encourage private developers, working in partnership with local authorities and housing associations to deliver the strategic housing need identified by the LEP. The LEP should take on a coordinating role bringing local authorities together with other partners to work out what the barriers to development are, and where good quality, much needed housing development can take place. It is very positive that the LEP recognises the importance of coordinating approaches to CIL and Local Plans. However the document could be more direct in recommending the role of the LEP in coordinating and funding local housing delivery. In many parts of Norfolk and Suffolk there are complex local tensions around new development, relating to both planning and availability of land. These will need to be addressed sensitively but in a coherent, pragmatic and positive way if New Anglia is to achieve its desired housing delivery. It will be necessary to make the argument for the economic and social benefits of granting planning permission and making land available for new homes both to local authorities and to local residents. There is potential for the LEP as a non-political body to sit above planning and drive forward difficult local negotiations. At a recent NHF roundtable in Norfolk local authorities and housing associations made two pledges for action: To embed housing delivery as part of local growth plans and ensure that these homes meet the needs of the community. To co-operate to put together practical information for developers and landowners which will encourage development.
In order to ensure that these important pledges come to pass the LEP should take on a clear role of coordinating local authorities plans to develop a strong road map for housing in Norfolk. This should include a wide range of considerations such whether there is a need for more private rented accommodation, whether there is a commercial need to invest in more good quality, versatile older people s housing, and how the LEP can support the provision of affordable rural housing, to stop the exodus of young people from Norfolk and Suffolk s village communities. Most importantly the LEP needs to ensure that local plans will provide for affordable homes to buy and to rent at the right prices for people on average incomes in Norfolk and Suffolk. The Federation strongly supports the LEP s statement that we need to use all available mechanisms to increase the rate of new building to meet extant needs and support growth. However we feel the LEP could be bolder in identifying its role in increasing housing supply in East Anglia. Housing associations are supporting the UK s ailing house building industry and have kept building throughout the recession, despite activity tailing off in the private sector. Housing associations built a quarter of all new homes completed in England in 2012/13, compared to just 18% in 2006/07 before the credit crisis. Housing associations in Norfolk and Suffolk are ready and willing to build and would therefore be ideal partners to help the New Anglia LEP deliver the new homes that are so necessary to support a growing local economy. This economic activity delivers substantial benefit and supports skills and training to retain a supply chain of skilled construction staff. The LEP should work together with housing associations to mitigate land costs, planning barriers and development risk so that housing associations can deliver the homes that will support the LEP s ambitions. The LEP is looking ahead to create jobs and skills that will provide for the current and future population of the area. It is critical that the LEP also take on a role in ensuring that there are sufficient homes at the right prices to house the next generation of East Anglia, to help ensure that economic future. Green economy Housing Associations have been leaders in developing skills and utilising new technology to reduce carbon emissions from homes. They have undertaken substantial improvement works to existing stock and are keen to do more, particularly to tackle fuel poverty in off-grid neighbourhoods. Both in terms of new build homes and domestic retrofit, housing associations have made a substantial contribution to the New Anglia area, reducing CO2 emissions and putting money back in the pocket of local people who can use it in the local economy. We therefore support New Anglia s flagship work on supporting and growing the low carbon economy and are keen to be more actively engaged in delivery.
The National Housing Federation has recently developed in partnership with the European Investment Band, a social housing financial instrument which can support low-carbon retrofit. We provide additional information on this in our submission on European Funding at Appendix A. We would encourage the LEP to take up the financial instrument, either for New Anglia alone or potentially in partnership with another LEP, in order to invest in the skills and carbon reduction which housing associations can offer. Already, housing associations in the New Anglia area are discussing potential partnerships and match funding opportunities which they could bring to a European funding programme, and we are confident that work could begin promptly at the start of the next structural funding timeframe. A loan programme, of a size which suits the New Anglia area, would support substantial investment in energy reduction measures but importantly would also invest and sustain a supply chain for materials and skilled work. Building a skilled workforce Housing associations are businesses deeply rooted in their communities, and have been supporting employment opportunities for local people for decades. In Norfolk and Suffolk Housing associations directly employ around 3,000 full time-equivalent jobs, and support many more in the wider supply chain. It is estimated that the 2,086 homes Housing Associations plan to deliver in the LEP area between 2011-15 will support around 4,400 jobs. In addition many housing associations are tackling unemployment head on by helping young and long term unemployed people in their communities find work and training opportunities. In the last two years Housing Associations have supported 250 apprenticeships across the East of England. The LEP has identified addressing youth unemployment as a key part of its economic development strategy for East Anglia, in particular focusing on apprenticeships and reducing the number of NEETs (people Not in Education, Employment or Training). Housing associations are already meeting a number of the aims outlined by the LEP in their area and are keen to work with New Anglia to improve, extend and share best practice from their own successful employment and skills programmes. Case Study: Saffron Housing Trust Innovative Apprentice Partnership Programme Saffron Housing Trust currently employs 11 apprentices and has been providing successful apprenticeship programmes for many years. The trust is dedicated to creating opportunities for young people in South Norfolk. Recently two Saffron Apprentices jointly won the 2012 CTS Apprentice of the Year award.
Now Saffron are helping other businesses in South Norfolk take on apprentices to help young people obtain experience, quality training and a qualification. Saffron are working with Broadland Council Training Services, Diss High School and The Barefoot Entrepreneur Robert Ashton. They have created an Innovative Apprentice Partnership Programme that makes it simple and straightforward for local businesses in South Norfolk to take on an apprentice. Saffron match apprentices to an appropriate interested business. The trust will handle contracts, paper work and arrange training for the apprentice via the council, as well as providing support to businesses and apprentices throughout the apprenticeship. The aim is to reduce the complexity and administrative burden of setting up an apprenticeship for local businesses, and therefore encourage organisations to offer these opportunities to young people. The first apprentices will start in September 2013. Case Study: Victory Housing Trust Holt Youth Project Victory Housing Trust funds the Holt Youth Project, helping young people in North Norfolk improve their confidence, gain qualifications and acquire practical life skills to help them transition into adult life and the world of work. The project works with young people aged 14-16 at risk of becoming NEETs. The young people enrolled in their ACT programme (Achieving Confidence and Training) are supported to build self-esteem, pass exams and find work. They offer work experience placements and training to provide a link between school and the workplace for young people who may have struggled in mainstream education or who are lacking direction as they approach school leaving age. In June 2013 the project won The Queen s Award for Voluntary Service the MBE for volunteer groups Case Study: Broadland Housing Trust Broadland Meridian In 2008 Broadland Housing Trust brought the employment support service Meridian into their wider group structure forming Broadland Meridian. The service has been providing specialist employment support for over 25 years, focused on upskilling unemployed people, preparing for work and helping people find permanent employment. They offer free courses covering a range of skills from ICT to maths and English. Introduction to IT courses are oversubscribed and Broadland Meridian continue to support a wide range of people into work.
Broadland Meridian are partnered with Job Centre Plus and the National Careers Service and have successfully attracted investment from the European Social Fund. These case studies show housing associations dedication to removing barriers to employment for young people in their area, as well as their ability to form effective partnerships with local schools, colleges, councils, volunteer organisations and businesses.. Attracting inward investment The LEP outlines attracting direct investment as a key element of its economic growth strategy for New Anglia. There are a number of opportunities around housing that could achieve both the ambition to attract investment, and the need to increase housing supply. For instance the LEP could look to front-fund investment in housing in order to remove the risk for developers who can only build what they expect to be able to sell. Institutional investors are typically looking for an index-linked investment without the risks traditionally associated with property development. If the LEP could underwrite that initial risk, perhaps by incentivising local authorities to contribute the land for development in return for housing provision it could be a valuable means of increasing investment in housing supply. This could be particularly relevant for increasing the supply of purpose-built private rented housing, something the government is very much in favour of. New Anglia have an opportunity to get in front of this agenda. An excellent example of this kind of forward-thinking investment stimulus is the partnership recently agreed between Kent County Council and Kier Property Development. The council agreed a land transfer with the developer in February 2013 whereby the county council provide land for the property firm, which, with the addition of pension fund investment will enable Kier to build 152 homes across the region. Upon completion of the Kent project, Kier will then lease the homes back to a housing association to manage. The plan is to build the right range of affordable housing and rental accommodation to generate stable returns for investors. It is proposed that this type of innovative land transfer deal will not only provide an attractive return for investors, but will help to solve the problem of limited housing supply in Kent. Kier is looking to roll this proposal out further to other local authority areas using the same investor-backed model. The New Anglia LEP could undertake to coordinate Norfolk and Suffolk local authorities with a view to entering into similarly innovative partnerships. Conclusion The consultation draft of Towards a Growth Plan contains welcome recognition of the complexities and opportunities offered by New Anglia s unique housing market and geographical location. The NHF and its members in East Anglia strongly support all the stated
aims to increase affordable housing supply in the area. It is particularly welcome that the LEP has spelled out the affordability issues facing people on middle incomes in this area, despite the fact that housing costs are lower than in some other parts of this region. The LEP is willingness to be explicit about the fact that housing is a necessary part of the new infrastructure that will support the key industries outlined in the document. However we call on the LEP to be bolder about its own role and potential to stimulate this much-needed housing growth. In order to provide the future jobs and opportunities for East Anglia s next generation, and to establish New Anglia as a centre of thriving economic growth an improved housing offer will be vitally necessary. The LEP should make a clear strategy for increasing affordable housing provision, and take a lead role in breaking down local barriers around planning and the use of public land. Other LEPs have already recognised the need for a non-political local body to step in and address these issues from a strategic perspective in order to address the multi-layered complexities around local development. New Anglia should do the same, or put its own ambitious plans for growth at risk. There is a growing body of evidence that poor local housing provision hampers economic growth and acts as disincentive to investment in the UK. As businesses rooted in their communities, but with extensive experience of innovative housing development, housing associations are the perfect partners to help the LEP drive forward this agenda. The National Housing Federation has already taken a lead role in bringing together local authorities, Housing Associations and other partners to discuss obstacles to development. We are happy to submit additional information and text for the growth strategy as required. We would be delighted to work more closely with the LEP to help New Anglia develop a truly 21st century housing market for Norfolk and Suffolk.