Deputy Prime Minister and First Secretary of State

Speech to the Guardian and Observer Urban Regeneration Conference

Check against delivery

Introduction

Thank you for inviting me here today.

I am particularly grateful to the Guardian and Observer newspapers for the role they have played in stimulating a serious debate about sustainable communities.

The supplement they produced at the weekend - and their other supplements on the Communities Plan in February and the Urban Summit last October were excellent.

Al Gore first described sustainability to me as the "liveability" factor - the local environment on your door step, the parks, the public spaces as well as decent homes for ordinary people. Sustainability is about the overall quality of life in our communities.

It's an agenda that affects us all.

People care about where they live. So it's very important that we have this debate and learn from what works and what doesn't.

Scale of the problem

We are building fewer homes today than at any time in the 1920s.

The problems we face in our communities are deep rooted and different in different parts of the country.

With many empty homes in some parts and a desperate shortage in others, some problems go back generations and there is almost a North South divide.

When we came to power in 1997 the repair bill for local authority housing was £19 billion.

The supply of private homes was declining after years of high interest rates and negative equity.

Our inner cities faced collapse as people left for the suburbs.

And we were wasting our precious land - building as low as 20 to 23 homes per hectare.

Of course, these problems weren't all new. All governments under invested in housing.

All governments failed to tackle the imbalances in the housing market.

And all governments failed to plan for the changes in lifestyles and demographics.

Indeed the issue of Right to Buy dominated housing policy in the 1980s and 90s.

It was of course welcomed by the many who achieved the understandable aim of owning their own homes. But the big mistake was not providing enough replacement affordable housing for local people.

And indeed local authorities were denied the right to use the capital receipts from Right to Buy sales to replace the social housing lost under Right to Buy.

That is unacceptable - especially when a staggering £40 billion was spent subsidising the Right to Buy since 1980.

I'm not saying the policy was wrong. Many more people have become home owners as a result - home ownership is now over 70%. But social housing in high demand areas was lost and not replaced.

And as the market became more volatile companies started exploiting the Right to Buy for their own gain.

That's why we've taken action to reduce the discounts in areas with severe housing pressures, and why we've restricted the scheme in rural areas.

Our draft Housing Bill takes these reforms a step further by extending the repayment and qualification periods.

But the long term answer must be to offer better and different incentives to help people buy their own home while keeping as much of the social housing stock as we can.

Home ownership has increased by over 1 million since 1997. But we can do more with mortgage share and home buy schemes - where you get the financial support to move from public housing to buying your own home.

I've asked Brenda Dean to chair a new Home Ownership Task Force to look at how we can capture that 'double dividend'. She'll be reporting back to me in the Autumn.

Achievements

Over the past six years we have already made major improvements.

The year on year investment and the £5 billion release of capital receipts has helped repair half a million homes.

And, we're determined to meet our target of making all social housing decent by 2010.

We've modernised stock transfer and given the tenants a choice.

More than half a million homes have transferred since 1997 in 87 local authorities. That has brought in £8 billion of private finance.

We've met our 60% brownfield target and added 30,000 hectares to the greenbelt.

We're now seeing a real urban renaissance. All of our core cities are on the up. Just go to Leeds, Birmingham or Bristol and see for yourself.

People are moving back - young people, young families. And not just in their hundreds - in their tens of thousands.

Take Manchester - the city centre's population has risen from under a thousand in 1991 to approaching 15,000.

And, all this underpinned by a stable economy, more jobs and reform of our public services.

Step Change

We've put the footings in place and learnt from the mistakes of the past.

Now we need a step change in our approach.

The Communities Plan I published in February, and the legislation we now have before Parliament gives us a new, radical agenda.

It's an agenda for change which, for the first time, goes beyond the bricks and mortar of traditional housing policy.

At the heart of the Communities Plan is a vision - creating sustainable communities which put people first.

Modern, vibrant communities which we can all be proud of. Communities which stand the test of time.

The challenge we face is turning that vision into reality. Making it happen in our communities - where it really counts.

The Communities Plan announced our proposals to spend £22 billion over the next three years.

• that includes a doubling for affordable housing - up to £5 billion.
• a threefold increase for key worker housing.
• a £610 million start up fund for the Thames Gateway and other new growth areas.
• £500 million for the low demand areas.
• and extra funds to improve our local environment.

So we've made the resources available, but we're also determined to see the money is well spent.

We're making major reforms to housing finance so we can shift resources to the areas of greatest need.

From next year we will also have new Regional Housing Boards.

New working arrangements between the Housing Corporation and English Partnership will help deliver an extra 2,000 affordable homes this year.

The RDAs are working with English Partnerships to release more brownfield land for housing.

By using brownfield first and raising the density of build we can get more homes on the same amount of land. Yet I am still accused of wanting to concrete over the South East!!

We are providing incentives to free up accommodation above shops and bring more empty properties back into use through compulsory leasing and reducing council tax discounts on empty properties.

Authorities must be prepared to take over the ownership of empty properties if it means giving local people a roof over their heads.

I also want to look at how we can be more flexible with the way local authorities allocate land for housing.

Unless there's a convincing case otherwise, local authorities should allow land allocated for industrial or commercial use to be used for housing or mixed use development.

We have to think creatively and think how we can use existing indigenous assets to increase prosperity.

For example, only in Britain could canals be seen as liabilities. In 1997 we changed the Treasury rules and British Waterways have turned our canals into assets.

In Birmingham, Manchester, Leeds and Hull our old canals are bringing new life into our city centres.

In Birmingham they have built a new centre around the old canals and it has been transformed from a motorway city into a city with a wonderful centre and a new heart.

Surplus Public Land

We can also do a lot more with the vast amounts of surplus public land - much of it owned by the government.

We will shortly publish the first national register of all surplus public land.

There's enough surplus public land in London alone for 80,000 homes.

I am working with colleagues in central and local government land to see how we can use this land to contribute to increasing housing supply.

Growth Areas

The reality is that in London and the South East the housing problem is not going to correct itself simply by market forces.

If we are going to provide homes for people who need them we have to plan for it.

I know there are concerns about the type and scale of growth. That's understandable.

And, of course there will be new housing on green field sites - even the CPRE acknowledge that we can't build on brownfield in places where there isn't any.

But, it's about the quality of development and how and where it's done.

I don't want the pepperpot developments we've had in the past. And I don't want more urban sprawl.

That's why I've given a guarantee to safeguard the greenbelt and why I've increased the density figure for new housing developments.

It's also why we're concentrating new development in the four new growth areas - Ashford, Milton Keynes, Stansted and the Thames Gateway.

Our focus is on increasing housing supply in these areas and getting a level of critical mass and certainty into the system.

The planning reviews we have set up will report by the summer and by the end of the year we will have Shadow arrangements in place for two new Urban Development Corporations in Thurrock and East London.

I know a major concern is that the growth areas must have the necessary infrastructure. Se we are bringing forward the key decisions needed on transport, schools, hospitals and the potential for jobs.

The growth areas give us a chance to re-design our communities and move on from the way we planned our New Towns in the past.

The opportunity is there. The Thames Gateway alone could deliver an extra 200,000 homes and 300,000 new jobs. And virtually all of that on brownfield land.

If we are serious about sustainable growth, re-balancing the South East economy and protecting the countryside at the same time we have to concentrate new development where it makes most sense - there is no real alternative.

It's not a case of development in the South at the expense of the North.

If we don't respond to the housing and growth pressures in the South, the effects will be felt across the whole country.

Urban Regeneration

Of course the growth areas aren't the only areas for development.

In other regions the RDAs are having an impact.

As the Chancellor said in his pre-budget report, we want the RDAs to take a more pro-active role in linking regeneration with housing.

We want them to work with local authorities to establish Enterprise Areas in the most deprived wards.

In those areas we will encourage the use of the new powers in our Planning Bill to provide a more flexible planning regime.

We now have 11 new Urban Regeneration Companies across the country.

And I can today announce that I'm adding three more to the list in West Cumbria & Furness, Sandwell and Derby. All have the support of the local authorities and the other partners.

I also want to ensure that our regeneration programmes like New Deal for Communities and Neighbourhood Renewal link much closer with the Communities Plan.

Today I am announcing the allocation of a further £800 million for each of the 88 Neighbourhood Renewal areas.

This is in addition to the £900 million we've already allocated.

Low Demand

Low demand in the North is as much of a problem as high prices in London and the South East.

I am making it a priority to move ahead as quickly as we can with the £500 million investment in the nine low demand pathfinders in the north and the Midlands.

Each Pathfinder is preparing its long term plans.

These are vital if the investment is to be effective. And I will not allow the Pathfinder programme to move at the speed of the slowest in the convoy. Those that get ahead will get more of the resources that are available at that time.

We expect three of the Pathfinders to put forward their plans this year and I'm pleased that the first - Manchester-Salford - will complete its plans shortly.

Overall these plans will bring in over £1billion pounds of public and private investment to rebuild the Pathfinder areas and lead the way for others.

Housing Bill

We have also set out proposals in our draft Housing Bill for licensing bad landlords - particularly in the low demand areas, where the problem is often at its worse.

And in June we will set up support teams in some of the worse affected local authorities to clamp down on bad landlords.

Modern Construction

In both the low demand and growth areas we face real problems in construction.

Building standards have improved, but the skills shortage is a major constraint on the supply of new homes.

Patricia Hewitt and I will publish a housing and skills strategy in the summer to help raise standards.

But, we must also switch our attention to more off-site manufacture - which not only cuts the build time, but offers better design and quality and a much better safety record.

We've already increased the funding for the Housing Corporation to provide an extra 4,000 off-site homes this financial year - that is an investment of £250 million this year alone.

And I can announce today that we've set the Housing Corporation a new target that from 2004/5, 25% of new homes they fund should be off-site manufacture.

I am proud that the millennium village concept that I developed at the Dome site in Greenwich is a leading example of a sustainable community and off-site manufacture.

Planning

I'm determined to challenge existing thinking and apply the maximum pressure for change.

And no where more so than in planning, which is vital to the delivery of the Communities Plan.

I've already set aside £350 million over the next three years to help speed up and reform the planning system - that's four times more than the last spending round.

I want improvements in getting plans in place and improvements in the handling of planning cases.

That will be our basic criteria for allocating the money.

We already have a Planning Bill before Parliament - the first for a decade - which will streamline the system and focus planning guidance much more on sustainable development.

I have provided resources for new regional centres of excellence to bring planners, architects and designers together.

But, I want to go further. I want planning to be more pro-active, not reactive.

Planning authorities should see their job not just as operating the planing system, but making sure they are meeting their housing targets and meeting the quality standards in the Communities Plan.

The provision of housing is vital to us all so I will be asking the Audit Commission to assess the performance of authorities in delivering the right sort of housing, in the right quantities, and in the right places.

I also intend to take action when planning authorities are not delivering on the targets for dealing with planning applications - and will intervene when necessary.

We can't be in a situation where major housing developments are being held back. Planning must be part of the solution not part of the problem.

I don't want to paint all planning authorities with the same brush, but there has to be culture change.

The planning profession itself has become downgraded - there's an inertia in the system.

We have to look afresh at the skills and capacity of the built environment professions. I have therefore asked Sir John Egan to develop a skills and training strategy - targeted at the planning and other professions crucial to delivering Sustainable Communities.

I hope Sir John will do for professional skills what "Rethinking Construction" did for the construction industry.

PPG6

But it's not just what others can do. Government has to get the planning policy right.

Take PPG6 - our policy for promoting town centres. Our policy is clear. We are encouraging retailers to focus on in-town rather than out of town retail development.

And it's working. After years of unfettered out of town development we now have more shopping development in town then out of town - more than at any time since the mid 1980s.

But it's hard work. Some retailers and developers are challenging the policy.

I am therefore confirming today that the Government's policy is and will remain to encourage in town shopping developments rather than out of town.

I will clarify that in a Parliamentary statement and in due course in a revised PPG6.

Conclusion

These are just some of the issues we are tackling in the Communities Plan. I could have mentioned many more.

All are important. All part of the Communities Plan.

There was a time when we led the way in planning for communities. Think about our Garden Cities. Think about Port Sunlight. Or think about how our ancestors centuries ago built cities - living, thriving communities - like Bath, Edinburgh and York.

They're all places we're proud of.

We just seem to have lost our way.

We forgot about what makes people want to live in our towns and cities.

We forgot about their aspirations.

We forgot about community.

You can't transform communities overnight. But I'm determined to make changes.

We've put the foundations down for the long term.

We have the vision.

We have the funding.

And we have the determination - the political will - for a step change.

Not just in housing, but in design, our "liveability" and in how we plan for sustainable growth.

A new agenda.

A new "urbanism".

A new approach to our thinking about where we live and how we live.

Speech by the Deputy Prime Minister, John Prescott on 8 April 2003