Earlier this month, the Government announced budget cuts to its Housing Market Renewal programme. Herpreet Kaur Grewal reports on the future for the programme in lean times
In 1984, Bruce Springsteen recorded a song about a decaying American town: “whitewashed windows and vacant stores … it seems like there ain’t nobody wants to come down here no more”. Fast forward to Britain in 2000, and the lyrics well described certain parts of the Midlands and the North. In some neighbourhoods, falling demand for houses had created a vicious cycle, with declining populations, poor services and rising crime.
In response to the problem, the Government set up the Housing Market Renewal Pathfinders (HMRP) in 2002. The objective of the HMRP programme was to turn around weak or failing housing markets in nine areas. So far, the Government has invested some £1.2 billion in the pathfinders.
Last October, the pathfinders were asked to submit business strategies for inspection by the Government, ahead of an announcement on their funding for the next three financial years. However, they were given little guidance on how to produce the strategies, beyond the fact that they should be adaptable to anything between a five per cent rise in funding and a 20 per cent cut – a task that Mike Maunder, head of market renewal at public spending watchdog the Audit Commission, described at the time as “extremely challenging”.
Then, having received the strategies from the pathfinders in November, the Government took until the beginning of this month – just weeks before the start of the new financial year – to make its decision (R&R, 7 March, p9). And when the news came, it wasn’t good. Of the nine pathfinders, five will have their budgets cut in 2008/09, while eight face cuts by 2010/11. Some of the drops are dramatic. Urban Living in Birmingham, for instance, will see its funding fall by 62 per cent between now and 2010/11. And after 2011? No news.
So why spend less on the programme? According to a spokesman for the Department for Communities and Local Government (DCLG), the move partly reflects the findings of Audit Commission reports published last month, which concluded that the pathfinders’ housing markets have improved. “It reflects a drop in the need for government funding: markets have been changing, and in some areas there is stronger growth,” the spokesman said.
Not all the pathfinders are willing to buy that line. Eamonn Boylan, deputy chief executive for regeneration at Manchester City Council, who is heavily involved in his local pathfinder, says that some people may believe that the initiative has done its job, “but our perception is that the programme has not finished its work. We are seeing improvements, but there needs to be more investment,” he says.
Alastair Graham, director at Oldham and Rochdale HMR, is concerned by what he describes as “a declining trajectory” in the funding allocated to the pathfinder. He is worried that the falling budget signals that the programme may be brought to a close in 2011. “There was a mutual and shared expectation (between the pathfinders and Government) that this would be a 15-year programme. Fifteen years is a fair amount of time in which to deliver,” he says. Nine years, he suggests, is not.
Andrew Delaney, head of regeneration at property consultancy Lambert Smith Hampton in Manchester, also has his concerns. He agrees that the funding allocations could signal the beginning of the end for the pathfinders, with a risk that the programme could become “another intellectual vogue” abandoned in favour of new policies.
So, with less money and an uncertain future, what is the situation on the ground for the pathfinders? Some are confident that they will be able to carry on doing meaningful work with a reduced budget. At Bridging Newcastle-Gateshead, for instance, research and strategy chief Kate Anderson says the pathfinder can cope with the cut. “We have less money than we did in the last few years, but we are pleased with the amount and we can make adjustments to the programme accordingly,” she says.
Boylan, however, says that the Manchester pathfinder’s lower budget will mean that it will only be able to target fewer, higher priority areas. The danger, he says, is that without support, areas that are currently less severely challenged could decline further. “The reduced allocation does mean more risk,” he says.
And what of the long term? The DCLG spokesman says that the advent of the new Homes and Communities Agency (Haca), a merger of national regeneration body English Partnerships and social homes agency the Housing Corporation, could clarify the pathfinders’ future. He says that Haca might encourage pathfinders to build “greater connections” with the Government’s housing growth programmes, hinting that current pathfinder areas could be designated growth points.
The spokesman also says that falling government funding for the pathfinders “recognises that more funding is beginning to come in from the private sector”. But while that may have been the case in recent years, a national downturn in the property market wil change things. “If the values of property are strong, developers are happy to invest,” says Delaney. The reverse, of course, is also true.
The pathfinders’ task has diminished, but so has public cash and investor confidence. While the detail of Haca’s policy is hammered out, the best that the pathfinders can hope for is that the housing market takes heed of another, more positive, Springsteen lyric: “Come on, rise up!”