Just catching up with the news around housing numbers.
Here is BBC news: "investment in housing would be trebled to £2.1bn, funding 110,000 new affordable homes to rent or buy over the next two years and creating 45,000 jobs in construction" Same "extra 110,000" figure in the Guardian
Contrast that with the 2020 group from March calling for "a house building fiscal stimulus package [of] £6.35bn to fund the building of 100,000 social homes over the next two years".
CLG: "£1.5 billion boost will deliver an additional 20,000 new affordable energy efficient homes over the next two years - and a further 10,000 homes delivered through the private sector".
Building Britain's Future: "We have already committed to investing an extra £1.2 billion this year to build new houses. But to ensure that we meet the needs of young families across the country, we will expand this building programme by investing a further £1.5 billion over the next two years to deliver 20,000 additional energy efficient, affordable homes to rent or buy."
So, the 2.1bn figure is £1.5bn announced yesterday plus £400m for kick start and £100m for LAs (the latter two announced in the budget) plus some unidentified 100m? (Or a bad typo on the 1.2bn?) . It could involve the extra £500m for kick start mentioned on the HCA website.
I am not sure where the 110,000 figure comes from. It could be the total figures for next year. I don't think it can be extra numbers funded off the back of the most recent announcements.
All a little confusing ...
CEP Urban and Spatial Programme Blog (formerly SERC)
Wednesday, 1 July 2009
Wednesday, 24 June 2009
Youth unemployment "hotspots"
A new report from the Centre for Cities on youth unemployment makes for depressing reading. Youth unemployment stands at around 900,000 and is set to top the 1m mark. The spatial distribution of increases in youth unemployment is quite uneven.
The report discusses the role of the government's new Future Jobs Fund in tackling rising youth unemployment. Centre for Cities argue that, given the short term nature of the jobs created, this fund is best aimed at places suffering unexpectedly high short run increases in youth unemployment. Other policy initiatives should then continue to focus on longer term structural problems. This seems sensible.
Note, however, that the fund identifies "hotspots" as those places where the rate of unemployment is more than 1.5% above the national average. If Centre for Cities are right, this focus on levels instead of changes is not very useful for identifying places where the policy intervention is most likely to benefit young people.
Is this another example where policy gets it wrong by focusing on places rather than people?
The report discusses the role of the government's new Future Jobs Fund in tackling rising youth unemployment. Centre for Cities argue that, given the short term nature of the jobs created, this fund is best aimed at places suffering unexpectedly high short run increases in youth unemployment. Other policy initiatives should then continue to focus on longer term structural problems. This seems sensible.
Note, however, that the fund identifies "hotspots" as those places where the rate of unemployment is more than 1.5% above the national average. If Centre for Cities are right, this focus on levels instead of changes is not very useful for identifying places where the policy intervention is most likely to benefit young people.
Is this another example where policy gets it wrong by focusing on places rather than people?
Wednesday, 17 June 2009
Digital Britain
There is a strong spatial component to the proposals in the Digital Britain reported published yesterday. A 50p a month levy on fixed telephone lines will be used to generate a national fund to ensure universal access to broadband by 2012. A big chunk of this money will be spent on rolling out broadband to rural areas.
Providing high fixed cost public goods to sparsely populated areas often requires government intervention. No individual is going to pay the fixed cost if others can just free-ride on their investment. Of course, broadband is actually quasi-public in that you can restrict access to subscribers. This should make provision easier if the aggregate benefits to rural communities outweigh the costs. A tax on rural communities where this is the case can then be used to provide broadband and solves the public good problem.
What if the aggregate benefits to rural communities do not outweigh the costs of provision. There are then two arguments for doing so. One is an efficiency argument. That there are positive externalities to access to broadband. In aggregate, networks certainly demonstrate these kind of externalities (the internet is more useful now more people use it) but the effects of adding small numbers of people are, well, small. You can try some kind of economic development argument (although remember that the individual benefits to businesses directly affected weren't enough to outweigh the costs, so you are looking for some kind of externality).
Alternatively, you can resort to arguments around equity not efficiency. As I have discussed before, spatial policy is often not a very good tool for tackling equity issues. In the case of broadband we have a fixed rate levy (which is certainly a regressive tax within the group of consumers that have fixed lines and I would assume regressive overall) going to subsidise rural broadband that will benefit a lot of very well off people (as well as helping some rural poor).
One wonders if this is another case where worries about "postcode lotteries" ends up squashing serious debate about spatial policy?
Providing high fixed cost public goods to sparsely populated areas often requires government intervention. No individual is going to pay the fixed cost if others can just free-ride on their investment. Of course, broadband is actually quasi-public in that you can restrict access to subscribers. This should make provision easier if the aggregate benefits to rural communities outweigh the costs. A tax on rural communities where this is the case can then be used to provide broadband and solves the public good problem.
What if the aggregate benefits to rural communities do not outweigh the costs of provision. There are then two arguments for doing so. One is an efficiency argument. That there are positive externalities to access to broadband. In aggregate, networks certainly demonstrate these kind of externalities (the internet is more useful now more people use it) but the effects of adding small numbers of people are, well, small. You can try some kind of economic development argument (although remember that the individual benefits to businesses directly affected weren't enough to outweigh the costs, so you are looking for some kind of externality).
Alternatively, you can resort to arguments around equity not efficiency. As I have discussed before, spatial policy is often not a very good tool for tackling equity issues. In the case of broadband we have a fixed rate levy (which is certainly a regressive tax within the group of consumers that have fixed lines and I would assume regressive overall) going to subsidise rural broadband that will benefit a lot of very well off people (as well as helping some rural poor).
One wonders if this is another case where worries about "postcode lotteries" ends up squashing serious debate about spatial policy?
Friday, 15 May 2009
Catching up (with the Regeneration Framework)
It was SERC's annual conference last week (see what you missed here) and I have been tied up with organising that as well as pushing forward some of our long term research. As a result I haven't been keeping up with the policy debate as much as usual lately (nor with this blog).
Taking the opportunity of late Friday afternoon to catch up, I read through "Taking forward the regeneration framework" published earlier this week.
Let's start with a definition: "the Government’s view is that regeneration is a set of activities that reverse economic, social and physical decline in areas where market forces will not do this without support from government". Then an ambition: "Regeneration is central to our ambition to create sustainable places where people want to live, work, and raise a family". So far, so good. Government has an important role to play in urban development. It should help correct for market failures and provide public goods, and some regeneration projects may play this role.
But here's the thorny issue: "[investment will be] targeted – not trying to transform everywhere – but investing where it will have most impact by supporting those communities where the most severe poverty and worklessness persists and where there is the opportunity to deliver long-term change". Despite the assertion that: "[The framework is] built on what we know works" the second part of this (long term change) sounds, at least to this reader, like wishful thinking.
To repeat: It is very unclear that regeneration policy (helping poor areas) makes for good social policy (helping poor people). As the recession means that we now have a lot more of the latter it is important to have a serious debate about whether spending £6.5bn on the former is the right policy response.
Taking the opportunity of late Friday afternoon to catch up, I read through "Taking forward the regeneration framework" published earlier this week.
Let's start with a definition: "the Government’s view is that regeneration is a set of activities that reverse economic, social and physical decline in areas where market forces will not do this without support from government". Then an ambition: "Regeneration is central to our ambition to create sustainable places where people want to live, work, and raise a family". So far, so good. Government has an important role to play in urban development. It should help correct for market failures and provide public goods, and some regeneration projects may play this role.
But here's the thorny issue: "[investment will be] targeted – not trying to transform everywhere – but investing where it will have most impact by supporting those communities where the most severe poverty and worklessness persists and where there is the opportunity to deliver long-term change". Despite the assertion that: "[The framework is] built on what we know works" the second part of this (long term change) sounds, at least to this reader, like wishful thinking.
To repeat: It is very unclear that regeneration policy (helping poor areas) makes for good social policy (helping poor people). As the recession means that we now have a lot more of the latter it is important to have a serious debate about whether spending £6.5bn on the former is the right policy response.
Thursday, 9 April 2009
Strong Foundations?
The conservatives published their thinking on housing policy yesterday.
The biggest issue that housing policy needs to address is housing supply. They propose to do this by scrapping regional plans and replacing them with increased incentives to develop. The latter part of this is certainly a step in the right direction. But the incentives seem small (central government will provide matched funding of council tax on new properties for 6 years and as this is part funded by scrapping HDPG it is not all additional). It also doesn't address the crucial question of how one could convince local authorities in, say, South Manchester to build more housing that might have large benefits for the city-region as a whole. Some kind of higher level body is needed in these circumstances to internalise the (potentially large) cross boundary externalities and provide the right incentives.
At the same time, the proposal is that back gardens will cease to be brownfield while local communities will get to redefine their own green belt. I imagine the overall effect of these two changes will be to reduce the supply of land and it is not clear whether the incentives would be sufficient to overcome this.
There are proposals involve Local Housing Trusts building houses for local people. Community size can be increased by 1% per year if 90% of the local population is in favour. I assume this is aimed at rural communities. Theoretically this could help with very localised problems, although there will be strong disincentives for existing home owners that border the new development to object, so the 90% criteria could be pretty tough. I also think that local houses for local people is a very unappealing principle.
Piloting "right to move" for existing social tenants sounds interesting. Proposals for more complex intermediate shared ownership schemes are less convincing.
Finally, they will scrap HIPS but retain energy performance certificates. These will now only need to be produced once the sale is agreed but somehow it is claimed that this will still change behaviour. I would suggest more that is needed on that particular line of reasoning.
Overall, then, a mixed bag. Some interesting ideas, some marginal and a few odd ones.
The biggest issue that housing policy needs to address is housing supply. They propose to do this by scrapping regional plans and replacing them with increased incentives to develop. The latter part of this is certainly a step in the right direction. But the incentives seem small (central government will provide matched funding of council tax on new properties for 6 years and as this is part funded by scrapping HDPG it is not all additional). It also doesn't address the crucial question of how one could convince local authorities in, say, South Manchester to build more housing that might have large benefits for the city-region as a whole. Some kind of higher level body is needed in these circumstances to internalise the (potentially large) cross boundary externalities and provide the right incentives.
At the same time, the proposal is that back gardens will cease to be brownfield while local communities will get to redefine their own green belt. I imagine the overall effect of these two changes will be to reduce the supply of land and it is not clear whether the incentives would be sufficient to overcome this.
There are proposals involve Local Housing Trusts building houses for local people. Community size can be increased by 1% per year if 90% of the local population is in favour. I assume this is aimed at rural communities. Theoretically this could help with very localised problems, although there will be strong disincentives for existing home owners that border the new development to object, so the 90% criteria could be pretty tough. I also think that local houses for local people is a very unappealing principle.
Piloting "right to move" for existing social tenants sounds interesting. Proposals for more complex intermediate shared ownership schemes are less convincing.
Finally, they will scrap HIPS but retain energy performance certificates. These will now only need to be produced once the sale is agreed but somehow it is claimed that this will still change behaviour. I would suggest more that is needed on that particular line of reasoning.
Overall, then, a mixed bag. Some interesting ideas, some marginal and a few odd ones.
Tuesday, 7 April 2009
Manchester: top of the league?
I was in Manchester yesterday for the launch of the Manchester Independent Economic Review (MIER).
The review argues that Manchester is the city in the North most likely to be able to raise its growth rate and, by doing so, drive growth in the North. To achieve this, it needs to make difficult policy decisions (some of which are not devolved at the moment)
I agree that there's a case for thinking that a few resurgent cities might help achieve regional growth objectives. The work on productivity differences that we did for the MIER is certainly consistent with Manchester being one of those cities (although, note, not THE city - but that's cautious academics for you).
So, to those hard policy decisions. The review identifies skills as a priority. I'm sure that's true but it is difficult to know what role local authorities might play. I think those in Manchester assume devolution here would mean control over the existing skills budget. I don't have a strong position on this (as yet), although at a minimum they could take some local expenditure which is wasted (e.g. on too many shiny new buildings) and spend more of it on skills.
Talk of shiny new buildings brings us to land use planning (for housing, commercial and transport). On housing, in particular, the local authorities have decision making power but need to come up with some credible method of collaborating. They then, within reason, need to build the kind of houses people want to live in, in the places where people want to live. (Ditto for office space). This means less brownfield and more building in South Manchester. This will be politically difficult (and also raises questions about the extent to which national planning guidelines would prevent this anyhow).
On transport, they need some strong political leadership on congestion charging. I also think that they, probably, want to convince the government that their £2.5bn of TIF projects represent much better value for money than £25bn on high speed rail (more on this in the near future). Again, both politically difficult decisions.
Do they, as the report suggests, need increased powers at city region level to achieve this? I'm not sure that the MIER makes the case for this one way or the other. Collaborative agreements, the new regional plans, and less binding national guidelines might be enough on many of the policy areas. Others would strongly disagree. I am increasingly convinced that the available evidence does not answer this question either way so expect to hear lots of people claiming the opposite.
Overall, the MIER highlights the ambitions of (some) in the city. I understand there will now be some kind of response as well as a strategic plan to take things forward. It will be interesting to see how things develop from here.
The review argues that Manchester is the city in the North most likely to be able to raise its growth rate and, by doing so, drive growth in the North. To achieve this, it needs to make difficult policy decisions (some of which are not devolved at the moment)
I agree that there's a case for thinking that a few resurgent cities might help achieve regional growth objectives. The work on productivity differences that we did for the MIER is certainly consistent with Manchester being one of those cities (although, note, not THE city - but that's cautious academics for you).
So, to those hard policy decisions. The review identifies skills as a priority. I'm sure that's true but it is difficult to know what role local authorities might play. I think those in Manchester assume devolution here would mean control over the existing skills budget. I don't have a strong position on this (as yet), although at a minimum they could take some local expenditure which is wasted (e.g. on too many shiny new buildings) and spend more of it on skills.
Talk of shiny new buildings brings us to land use planning (for housing, commercial and transport). On housing, in particular, the local authorities have decision making power but need to come up with some credible method of collaborating. They then, within reason, need to build the kind of houses people want to live in, in the places where people want to live. (Ditto for office space). This means less brownfield and more building in South Manchester. This will be politically difficult (and also raises questions about the extent to which national planning guidelines would prevent this anyhow).
On transport, they need some strong political leadership on congestion charging. I also think that they, probably, want to convince the government that their £2.5bn of TIF projects represent much better value for money than £25bn on high speed rail (more on this in the near future). Again, both politically difficult decisions.
Do they, as the report suggests, need increased powers at city region level to achieve this? I'm not sure that the MIER makes the case for this one way or the other. Collaborative agreements, the new regional plans, and less binding national guidelines might be enough on many of the policy areas. Others would strongly disagree. I am increasingly convinced that the available evidence does not answer this question either way so expect to hear lots of people claiming the opposite.
Overall, the MIER highlights the ambitions of (some) in the city. I understand there will now be some kind of response as well as a strategic plan to take things forward. It will be interesting to see how things develop from here.
Thursday, 19 March 2009
Housing Lists
More gloomy reading from the housing market from the National Housing Federation who are predicting that waiting lists for social housing are set to soar by 2011.
They (along with others in the 2020 group) are calling for a "house building fiscal stimulus package [of] £6.35bn to fund the building of 100,000 social homes over the next two years". If you are going to spend large amounts of money on a fiscal stimulus it seems sensible for at least some of it to go towards buying things that you are pretty certain to want in the long term. And we will want more housing long term (regardless of what is currently happening to the housing market).
Two caveats, however. First, something odd seems to be happening with the construction sector where the number of people employed has not fallen as fast as people where expecting. This might weaken the case for the fiscal stimulus side of the argument. (Although, if the explanation is that they are all building the Olympics - rather than reducing hours - it does make you wonder what will happen to house building as 2012 approaches). Second the NHF is predicting 2 million people on housing waiting lists and a £6.35bn stimulus builds 100,000 homes. Given the public sector fiscal position, the long term housing supply response will have to come from the private sector and this means sorting out the planning system so that private developers can build more.
They (along with others in the 2020 group) are calling for a "house building fiscal stimulus package [of] £6.35bn to fund the building of 100,000 social homes over the next two years". If you are going to spend large amounts of money on a fiscal stimulus it seems sensible for at least some of it to go towards buying things that you are pretty certain to want in the long term. And we will want more housing long term (regardless of what is currently happening to the housing market).
Two caveats, however. First, something odd seems to be happening with the construction sector where the number of people employed has not fallen as fast as people where expecting. This might weaken the case for the fiscal stimulus side of the argument. (Although, if the explanation is that they are all building the Olympics - rather than reducing hours - it does make you wonder what will happen to house building as 2012 approaches). Second the NHF is predicting 2 million people on housing waiting lists and a £6.35bn stimulus builds 100,000 homes. Given the public sector fiscal position, the long term housing supply response will have to come from the private sector and this means sorting out the planning system so that private developers can build more.
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