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Hertfordshire Housing Conference 9 November 2012 Housing and growth The role housing associations can play in stimulating the local economy Kevin Thompson Chief Executive kevin.thompson@nhh.org.uk. www.nhh.org.uk. What I will cover National picture What is driving the recovery

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  1. Hertfordshire Housing Conference 9 November 2012 Housing and growth The role housing associations can play in stimulating the local economy Kevin Thompson Chief Executive kevin.thompson@nhh.org.uk www.nhh.org.uk

  2. What I will cover National picture What is driving the recovery The role construction could play Government thinking – stimulus package The contribution housing could make Hertfordshire picture Hertfordshire housing associations contribution and capacity The way forward www.nhh.org.uk

  3. What is driving the recovery? Estimated GDP growth by sector to quarter 3 2012

  4. Impact on housing Construction sector supply chain employs three million people and generates around 13% of GDP Lowest level of housebuilding for 90 years Housing represents 12% of construction down from 17% 232,000 new homes needed year on year 114,000 in 2011 www.nhh.org.uk

  5. Contribution housebuilding can make • New homes a quick way to boost growth – 330,000 plots already with planning permission (CPRE) • Benefits retained within local economies – jobs, schools, suppliers, local people housed to work in local businesses • Compare High Speed 2 – economic benefits being assessed from 2037. • Impact on investment – attractive, stable, long term • Contribution to finance sector recovery • £10 billion bond financing since 1987 • £5.4 billion since the 2008 banking crisis www.nhh.org.uk

  6. Facts and figures Additional 1% of GDP for every 100,000 homes built 1.5 jobs in construction for every home built Up to six jobs in the supply chain for every home built Every £1 spent on construction generates £3 in the wider economy (source National Housing Federation) www.nhh.org.uk

  7. A practical example Impact of spending £1 billion on shared ownership properties 66,000 new homes 99, 000 new jobs in construction 396,000 new jobs within supply chain £15.25 billion generated within the wider economy (source National Housing Federation) www.nhh.org.uk

  8. Political tide turning David Cameron “The government is serious about rolling its sleeves up and doing all it can to kick start the economy. (the proposals) provide a comprehensive plan to unleash one of the biggest homebuilding programmes this country has seen in a generation” Nick Clegg “Todays major boost to housing and planning will make it easier to build a home, easier to buy a home and easier to extend a home. A boost that will get Britain building again. Building thousands of affordable homes and generating thousands of new jobs.” Ed Balls Labour commitment to spending £3 billion on new homes www.nhh.org.uk

  9. Homes for Britain 40 organisations connected with housing and construction promoting housing as ‘a driver for growth, mobility and strong communities’ Mark Prisk Launching the campaign at the Conservative party conference “delighted to support this initiative and strongly support the principle of building more homes” John Cridland, Director General CBI “The single most important thing the government can do to get the economy going is to get housebuilding going. We need the housing equivalent of the Olympics” www.nhh.org.uk

  10. Prime minister’s stimulus package Announcement 6 September pledged £40 billion equity guarantee for infrastructure £10 billion equity guarantee for private and affordable rented housing Extra £200 million equity finance to stimulate building for rent Extra £300 million for affordable and empty homes Planning holiday and Section 106 changes around non-viability Accelerate the release of public land via the HCA Additional support for first time buyers www.nhh.org.uk

  11. Prime minister’s stimulus package In order to Generate 70,000 new homes including affordable and starter homes Generate 15,000 new affordable homes Fast-track the planning process for new development Support 140,000 jobs in the construction sector Support investment in new and existing homes Support the government’s aim of a market led boost for the economy www.nhh.org.uk

  12. Initial response New money for affordable housing Insufficient detail. Strings attached? Will it be worth it? Expressions of interest only been sought to date Planning relaxations Backlash of concerns about what might go up? Section 106 Is there slack in the planning system to reduce time taken? Will appeals be any quicker? How many stalled sites will come forward to be renegotiated? Scrapping S106 entirely resisted for now www.nhh.org.uk

  13. Housing associations in Hertfordshire Hertfordshire Chief Executive’s Group Aligned in the Hertfordshire Housing Consortium with local authority heads of housing B3 Living Housing Association Hightown Praetorian & Churches Housing Association Howard Cottage Housing Association North Hertfordshire Homes Origin Housing Riversmead Housing Association South Anglia Housing Thrive Homes Watford Community Housing Trust www.nhh.org.uk

  14. Economic impact in Hertfordshire Spend in the local economy Collective turnover £290 million Amount spent on property maintenance £87 million Amount spent on suppliers £125 million Staff salaries - largely spent in local economy £63 million Jobs Number of employees 1,800 Number of apprentices and trainees 35 Homes for Hertfordshire workers Affordable homes provided 52,000 Proportion of affordable homes in the county 60% Households we house 10% www.nhh.org.uk

  15. Indirect impact on the local economy • Approach to Procurement • Strategies to make it easy for smaller local firms to tender for work • Advertise in Hertfordshire eg Supply Hertfordshire Journal • Buyers events • Toolkit to assist bidding for work • Our own pre-qualification standards as alternative to Constructionline to bid • No minimum turnover - assess risk relevant to type and value of work being sought • OJEU tendering evaluation criteria includes • Commitment to skills and training • Encouragement of local employment • Helping local communities thrive www.nhh.org.uk

  16. Indirect impact on the local economy Housing the workforce High private sector rents 37% rise in last five years – likely to be 27% higher by 2017 on current trends – discouraging modest income workers who drive the economy from settling in high value areas such as Hertfordshire Regeneration Redevelopment of shops, community facilities, improving neighbourhoods – encouraging and retaining investment Contribution to employment and skills Contribution to Hertfordshire labour market – recycling skilled workers Minimum of £2.9 million on training www.nhh.org.uk

  17. Stimulating supply Public land release Easy economic impact for government to release this Government owns 40% of UK land Enough government owned brownfield land to build two cities the size of Leicester Government commitment to stimulate release – little to show Contribution local authorities can make www.nhh.org.uk

  18. Stimulating supply Certainty Rents – commitment to current RPI based regime only till 2015 Flexibility on use of assets – to encourage investment in new homes Government grant? Yes or no. Chancellor’s Autumn statement Spending Review 2015 www.nhh.org.uk

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