The latest housing figures issued yesterday make for very depressing reading:
A few "highlights":
- Annual housing completions in England totalled 141,900 in 2008, down by 19 per cent compared with 2007
- Private enterprise housing completions (non-seasonally adjusted) were 32 per cent lower in the December quarter 2008 than the December quarter 2007. In contrast, housing completions by Registered Social Landlords (non-seasonally adjusted) rose 10 per cent.
- Private enterprise housing starts (non-seasonally adjusted) were 64 per cent lower than the December quarter 2007. Housing starts by Registered Social Landlords (non-seasonally adjusted) fell 5 per cent.
It is very unclear what the government can do about this. Michael Parkinson makes some suggestions in his recent report on the credit crunch.
The only short term thing I would add is that it makes sense to go back and reassess the costs and benefits of projects and downgrade any that claim large benefits from "transformational" impacts on the back of leveraged private sector development. Actually, a bit more scepticism on that front would not hurt with the long term evaluation of projects either.
It's also clear that the current model of partly financing regeneration through constraining land supply, increasing property prices and then using section 106 (to fund regeneration projects partly aimed at sorting out house price affordability caused by constraining land supply!) is not going to work in the short run. As it's not necessarily a great long run model either, perhaps it's a good moment to revisit that thorny issue?
CEP Urban and Spatial Programme Blog (formerly SERC)
Friday, 20 February 2009
Wednesday, 11 February 2009
Local Authorities and the Downturn
After my post on the geography of recession, I have been trying to clarify my thinking on the role of Local Authorities.
It is certainly the case that the recession will impact different places in different ways. Some of these differences are predictable, some not. However, it is a big leap from this observation to the conclusion that we need to further devolve economic decision making.
There are at least three separate issues here. The first concerns the role of local government spending as a complement to national monetary and fiscal policy. Here, local authorities face problems of timeliness, displacement and leakage that surely limit the extent to which policy variation makes sense. I am particularly unconvinced by suggestions that buying locally where-ever possible will (a) do much to stimulate local economies; (b) help cash strapped local council tax payers.
A second issue concerns local authorities role in helping mitigate social effects. Local authorities play a vital delivery role here. Ideally, policy should also vary with local conditions. Case study evidence from IDeA and LGA show that this is the case. Of course, this is one of the well known benefits of devolution, but it doesn't actually make the case for more devolution.
Another benefit of devolution is that it allows for experimentation. That seems to be the case in response to the recession. But it is important that this experimentation draws from past experience and from an understanding of current conditions (it's also important that lessons are learnt for next time). For example, my colleague Christine Whitehead suggests that in the last crisis advice and small scale assistance worked better to help maintain people in their homes and limit costs to the public purse than did either addressing the consequences of repossession through homelessness policies or transfer of stock to the social housing sector. It is hard to see this reflected in current policy experimentation in this area.
This brings us to the third issue regarding housing and planning. But this is already a long post and that is a big issue best left to another day.
It is certainly the case that the recession will impact different places in different ways. Some of these differences are predictable, some not. However, it is a big leap from this observation to the conclusion that we need to further devolve economic decision making.
There are at least three separate issues here. The first concerns the role of local government spending as a complement to national monetary and fiscal policy. Here, local authorities face problems of timeliness, displacement and leakage that surely limit the extent to which policy variation makes sense. I am particularly unconvinced by suggestions that buying locally where-ever possible will (a) do much to stimulate local economies; (b) help cash strapped local council tax payers.
A second issue concerns local authorities role in helping mitigate social effects. Local authorities play a vital delivery role here. Ideally, policy should also vary with local conditions. Case study evidence from IDeA and LGA show that this is the case. Of course, this is one of the well known benefits of devolution, but it doesn't actually make the case for more devolution.
Another benefit of devolution is that it allows for experimentation. That seems to be the case in response to the recession. But it is important that this experimentation draws from past experience and from an understanding of current conditions (it's also important that lessons are learnt for next time). For example, my colleague Christine Whitehead suggests that in the last crisis advice and small scale assistance worked better to help maintain people in their homes and limit costs to the public purse than did either addressing the consequences of repossession through homelessness policies or transfer of stock to the social housing sector. It is hard to see this reflected in current policy experimentation in this area.
This brings us to the third issue regarding housing and planning. But this is already a long post and that is a big issue best left to another day.