Billions Promised for House Building Bonanza

Prescott accused of throwing cash at the south and 'bulldozing' the north.

Senior ministers yesterday kickstarted a multibillion-pound housebuilding programme in the southern regions of England, underpinning the country's richest areas with a string of new townships.

With the government under pressure to provide more affordable accommodation, hundreds of thousands of homes - on some estimates more than 600,000 - could be built around Milton Keynes, the Essex/Cambridgeshire border, Ashford in Kent, and the 40-mile-long Thames Gateway corridor over the next 30 years.


But while unveiling a sustainable communities plan for England, John Prescott was at pains to stress his determination for a "step change" in housing policy. He pledged to build townships and emerging "cities", rather than tawdry housing estates.

"I want to make it absolutely clear this is not homes everywhere and anywhere," he told the Commons. "This is homes in sustainable communities to meet the shortfall in supply - not suburban sprawl, not soulless estates, not dormitory towns."

With a pricetag of £22bn on the plan, it was clear last night that Mr Prescott had been successful in getting an extra £2bn from the Treasury since chancellor Gordon Brown's three-year spending review last July.

Facing the wrath of Conservative MPs in the home counties, and countryside groups fearful of more greenfields being swallowed up, the deputy prime minister tried to balance the government's growth strategy with plans to rescue collapsing northern neighbourhoods, where around 1m homes are blighted by low demand.

But northern backbench Labour MPs, while broadly welcoming the initiative, are uneasy about concentrating more development in the already booming south-east. Although housing forms a centrepiece of the plan, ministers made clear that new jobs must go hand in glove with housebuilding to make the communities self-sustaining.

Mr Prescott said that holding back potential investment in the south would not necessarily mean it being diverted to the north: "It's not a north-south issue - it's meeting the demands of the south, and meeting the demands of the north in a different way."

He failed to reassure critics, including the Liberal Democrat housing spokesman, Edward Daley. He accused the government of fuelling the north-south divide, claiming that the south would be getting four times more than other regions in the package.

In a combative performance, David Davis, the shadow deputy prime minister, berated the government for presiding over the lowest level of affordable, or social housebuilding since records began - a third down on 1997. He ridiculed the plan, half-jokingly, for proposing "bulldozing the north and concreting over the south".

Giving a taste of battles to come, a succession of Tory MPs warned that the proposals would unleash a rebellion in the shires, claiming there was little evidence of demand for homes on the scale envisaged by the government.

Labour MPs representing northern constituencies claimed that a £500m housing market renewal fund to rescue northern neighbourhoods, might barely touch the problem. Peter Pike, the MP for Burnley, said many people in his constituency were "living a nightmare" in collapsing neighbourhoods. Gordon Prentice, the neighbouring Pendle MP, said thousands of people in East Lancashire had to endure "thousands of empty rotten decaying properties".

With nine housing market renewal pilot areas designated, ministers acknowledge tough decisions have to be taken, with tens of thousands of houses facing the bulldozer. Some areas will be turned into parkland, although renovation and rebuilding will take place elsewhere.

But with Tony Blair chairing a cabinet committee to push forward the favoured Thames Gateway project, it is clear that the demands of the south have priority. The Gateway, an emerging "linear city", has been divided into five strategic areas, with evocative names - such as a new "metropolitan district" of inner east London (48,000 new houses) and Mid Gateway City, near Dartford (47,000 new houses).

Now, with an extra £446m for regeneration, the government announced yesterday that two development corporations, around Thurrock in Essex and in east London, would be established using legislation pushed through by the last Tory government. Margaret Ford, the chairwoman of the national regeneration agency English Partnerships, estimated this could attract £500m of private investment to clear up 5,000 hectares (12,000 acres) of former industrial land that constitutes 80% of the Gateway area. Eventually, it could accommodate up to 200,000 new homes.

The key question, which Mr Blair's cabinet committee has to address, is whether the government has the capacity or the money to provide the rail, road, and bus links to the string of townships envisaged, as well as building schools, health centres and other community facilities.

The scale of the investment needed was underlined last year in a report from consultants on the projected Milton Keynes/South Midlands growth area. They put a pricetag of £8bn on infrastructure, such as road and rail links, and warned: "This cannot be funded by a bits and pieces approach."

But housing professionals welcomed the plan, though the National Housing Federation said that while its foundations were good, ministers had to ensure resources were spread fairly around the country. And the House Builders Federation welcomed the fact that the government had been forced to address the acute housing shortage in the south. But it warned: "The scale of funding needed to address this is phenomenal."

The Guardian, 06.02.2003

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