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News Release from: Chartered Institute of Building [CIOB] | Subject: Rising cost of affordable homes
Edited by the Buildingtalk Editorial
Team on 23 December 2004
Rising cost of affordable homes
John Prescott blames the house builders for rising cost of affordable homes.
The Office of the Deputy Prime Minister has now received the protest from the East of England Regional Assembly about the departments failure to make good its promises over infrastructure funding The political head of the department John Prescott however is probably the Governments most enthusiastic advocate of infrastructure development as the key to sustainable communities, as he made clear when he visited the Thames Gateway development area recently
This article was originally published on Buildingtalk on 12 Mar 2004 at 8.00am (UK)
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Like the East of England region, this is marked out for massive housing developments in line with the sustainable communities plan.
To give an idea of the location, the Deputy Prime Minister said that from the new offices of the ODPMs Thames Gateway Delivery Unit, one may see most of the London end of the Gateway.
"To see the impact of our work" he said, "and the scale of the challenge, you only need to look out of the window.
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Just over the water in the daytime you can see English Partnerships Greenwich Millennium Village - an attractive and welcoming new community created in one of the most unpromising places in London.
It shows what we mean by creating more sustainable communities - places with jobs, homes, transport, schools and the other facilities which people need for a decent quality of life.
"The challenge to us is to create more of these communities.
Places like Barking Reach, the biggest brownfield site in London, are going to be transformed by a public private partnership between English Partnerships and Bellway [development company].
"The new Channel Tunnel Rail Link will bring huge levels of new investment into Ebbsfleet, Stratford and other areas in the Gateway.
The Learning and Skills Council has recently supported our target that 180,000 new jobs should be created as the programme rolls out.
We are backing our commitment with £850 million of investment up to 2008.
There is around £200 million a year available to allocate to projects in this spending round, and we have allocated £100 million to new projects which will help create sustainable communities in the Thames Gateway".
Rail projects open up investment opportunities This is a rather different picture of infrastructure investment to that recently outlined by the East of England Regional Assembly.
Mr Prescott had more to say on this question.
"Just think ? the Greenwich Peninsula was one of the most poisonous plots of land in London.
And now its going to be a sustainable community the size of a small town.
"This has happened partly because we decided to divert the Jubilee Line Extension to North Greenwich [site of the Millennium Dome].
We got a lot of flak for that but it was the right decision.
The Jubilee Line, together with the massive investment in the Channel Tunnel Rail Link, has not only helped to open up huge investment in East London.
It has also made our bid for the 2012 Olympics possible".
Mr Prescott however had a rebuke for the construction industry which has put in this infrastructure.
In return for around £10 billion investment it has generated a massive uplift in the value of previously derelict sites and the huge private investments that follow from that.
This is partly the reason for the rising cost of housing which is troubling the Deputy Prime Minister.
He appears to put most of the blame for this on the developers and contractors.
"We are not building enough homes", he said.
"You dont have to read Kate Barkers report to know this.
The fact is that we need to build at least 200,000 new homes in London and the South East over and above our previous plans.
"Thanks to the CTRL and our other investments, the Thames Gateway is going to have one of the best transport corridors in the country.
Stratford will be less than 10 minutes travel time from Central London with the new international and domestic CTRL services running through the middle.
And we are looking at extending the Docklands Light Railway to Barking Riverside.
So we are using the transport infrastructure to open up derelict sites for development".
But he added, "Let me tell you that Ive had enough of rising construction costs.
Over the last few years they have gone up well above inflation.
In fact, construction costs have risen by 47 per cent compared with 18 per cent for inflation.
And for social [affordable] housing, the figure is 63 per cent.
Thats scandalous".
Indeed it is, but it would be fairer to the development industry to say that the rise in costs on these sites is about 20 per cent for the rise in building costs due to inflation which the Government is supposed to have under control, and about 40 per cent for the rising cost of land.
Maybe you dont need to read Kate Barkers report to know that, but she did point it out and proposed that the Treasury and the ODPM should take measures to restrain the uplift and take a share of it to augment planning authorities revenues.
More money promised for better planning Nothing further has been heard about these proposals, but Mr Prescott has just announced the renewal of a Government pledge "to deliver more money and more help to local councils to build a planning system to be proud of".
Speaking at the Local Government Associations recent general assembly, the Deputy Prime Minister told delegates that planning was a vital tool for local government to build thriving sustainable communities.
"Planning", he said, "needs to be more relevant, more interesting, more effective and more efficient.
It needs to raise its game.
It needs to excite people.
"Were putting in more money through the Planning Delivery Grant - nearly £600 million over five years for local authorities to improve their planning performance.
And local authorities will be able to raise more money from planning fees, allowing them to invest even more in a better planning service".
Meanwhile, the East of England Regional Assembly has spelt out to the ODPM exactly how planning intends to raise its game, to become more relevant and interesting by investment in the transport infrastructure, by developing the regions ports and protecting its low-lying areas from encroachment by the sea.
No doubt EERA is as proud as any planning authority of the efficiency with which it has prepared its Regional Spatial Strategy along lines commended by Kate Barker and approved by ODPM.
At the same time the regional assembly has warned the leader of the Sustainable Communities project against unsustainable growth and has renewed its call for decisions on Government funding for essential infrastructure.
An assembly which has agreed to the building of nearly half a million new homes in line with the sustainable communities policy cannot find much excitement or interest in planning bereft of the infrastructure required, as Mr Prescott himself has recently expounded, to impart momentum to economic growth.
As experience in London has shown, sustainable development begins with the right decisions on infrastructure.
It is not an add-on after the event.
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