Birmingham’s dark secret

Five years ago this month, Birmingham city council’s housing department was, as one councillor puts it, “a basketcase”. It had been awarded zero stars for its housing repairs service by the Audit Commission; it was millions of pounds in debt; and its 70,000 tenants had just stunned it by rejecting a transfer of their homes to 10 housing associations. Today, walking around the gleaming new Park Central area, which was branded a “slum quarter” by residents 10 years ago, the city looks well on the way to recovery.

The Audit Commission agrees and has awarded the council a star for its housing services. Given this dramatic turnaround, why will no one talk about housing and regeneration in Birmingham?

Before visiting earlier this month Regenerate spent several days calling consultants, academics, housing associations and housebuilders in the city to get their views on what has happened in the five years since that spectacular “no”’ vote. But those enquiries met with an almost identical response: “Sorry, but I just don’t want to go on the record about this …”

Reluctantly, one source finally spelled out the reason: people are scared stiff of how the council reacts to criticism. “There are still some very powerful and difficult people in the council,” says the source. “As a housing association or developer in a city this size with only one council, you are acutely aware of that. You are dependent on the council for land and backing for schemes.”

Another consultant with 20 years’ experience of working in Birmingham adds: “There is a siege mentality at the council and it is quite simply not open to criticism or any ideas from outside.”

And criticism there is aplenty – particularly of the impact of the council’s efforts to meet the decent homes standard in 2010. Sir Albert Bore is leader of the Labour group on the council and the former council leader – he is also one of the few people willing to speak openly. “The council is now seeking to meet the decent homes target by selling off land on the open market to raise the capital it needs,” he says.

The amount to be spent by the council by 2010 is £587m, with about £200m of this to come from land sales. Bore, also an adviser to property consultant Colliers CRE, adds: “As a result, post-2010, we’ll have a number of council estates dotted around the city where we have given them new doors and windows but we will not have created places where people want to live.”

An academic who spoke only on the condition of anonymity, says: “The council’s current approach to regeneration is piecemeal rather than thinking strategically about the long-term future of estates. I’m just not sure long-term if it makes any sense to meet the decent homes target in areas where the design of homes is fundamentally poor. What is the point of pouring money into areas that you can predict are going to be problematic again in years to come?”

There is a siege mentality at the council and it is not open to criticism from outside

Industry consultant

This is a concern shared by tenants. Jim Nicholl, chair of the tenant liaison committee, says: “It is much better now, but perhaps it might be sensible to look at a programme of longer-term change so that the homes are available for the people who want to live there – right now, that isn’t the case … If possible, we’d rather the council kept the land [as opposed to selling it] and built council housing on it.”

When told of local experts’ reluctance to comment, Conservative councillor John Lines, the newly re-elected cabinet member for housing in Birmingham, is momentarily lost for words. “I think this is bizarre. I am gobsmacked to be honest,” he says. He thinks for a moment, then says: “Maybe people are worried that something bad might come out.”

Speaking with Lines, however, it is impossible to believe that anything bad could ever come out of the Conservative-Liberal Democrat coalition that wrested control from Labour in 2004 and was returned to power at the start of the month. He talks enthusiastically of his “passion for council housing” and – with good reason – lays the blame for Birmingham’s struggle to meet the decent homes target squarely at the door of the previously ruling Labour group. The rejection of the transfer plan that would have triggered the injection of £1.25bn into the 49,000 homes that were judged to be “non-decent” left the city with the incongruous situation of Tories championing council housing. It is a role that Lines has taken to with great gusto, professing to have “every confidence that we will meet the decent homes target by 2010”. This is despite the fact that it sought and was refused an extra year to meet the standard in November 2004. With two-and-a-half years to go, Birmingham still has 24,500 homes to bring up to the standard.

Bore insists the council is “missing a trick as there isn’t an overall regeneration strategy”. He cites the Park Central scheme – built by Crest Nicholson after the 2,500 homes were transferred to housing association landlord Optima – on the edge of the city centre in his Ladywood ward as one which the council could repeat elsewhere. “This is the most exciting development in the city just now. It has brought about the regeneration of what was an awful, awful council housing estate.”

Following this precise model would be hard to do, however, as tenants have – after a second vote in favour of the council as landlord in summer 2005 – now twice rejected stock transfer. Indeed, Nicholl says tenants would welcome the city council winning its argument with central government to be allowed to borrow money to invest in and build council housing – the so-called “fourth option”. As Lines points out, Park Central benefited from almost £50m of funding from the government’s estates renewal challenge fund: “Birmingham has had to scratch around as we don’t have the kind of sums that have been available there.”

Housing associations, housebuilders and consultants privately protest that such schemes are still feasible, but will require the council to work in joint ventures with private developers. Nobody will come out and say it, but the council’s approach to selling land to the highest bidder proved damaging to the construction of new social and affordable housing in the city. A quick look at the sums invested by the Housing Corporation in Birmingham in the years since 2002 show a sharp decline the year after the land sale policy was introduced. This fall was noted by housing minister Yvette Cooper, who criticised the council for “pushing up the cost of land” it sells to housing associations. A Birmingham housing association chief executive says that because of “the problems of land valuation, sites stopped coming through” and that this was a major contributing factor to Housing Corporation investment falling from over £78m in 2004-2006 to just £26m in 2006-2008. This translates into a fall of just under 1,000 homes being built in the city to 635 (see chart, attached). As one consultant concludes: “As far as housing is concerned, the council is seriously underperforming.”

Lines disputes this, saying: “The reason for the decline in Housing Corporation spending is that the government is running out of money.”

He also rounds on Cooper, accusing her of “getting her facts wrong” and adding that she “apologised a fortnight later”.

As far as housing is concerned, the council is seriously underperforming

Birmingham consultant

He makes no apology, however, for “selling land to the highest bidder – certainly as far as private developers are concerned”, but says “discounts are given to housing associations as we get affordable housing [from them]”. That rather ignores the fact that virtually all new urban developments by private developers contain some social and affordable housing.

The only person from a housing association prepared to even hint at a criticism of the council’s approach is Chris Handy, chief executive of Accord Housing Association – also the only association happy to go on the record. He says: “The city has been rightly preoccupied with meeting the decent homes target over the last two to three years – it has been putting all of its energy into that. It is now able to engage much more fully on the wider regeneration agenda … We are moving to a stage where the city council is engaging with us much more and we are talking with it about its strategic housing thinking.”

According to Paul Spooner, regional director for the West Midlands and North West for English Partnerships, there is definite evidence beginning to emerge of the council beginning to lift its gaze beyond the 2010 deadline. He cites work that EP is doing with the council and Professor Michael Parkinson of Liverpool John Moores University to work out how the council can better use its assets to help expand the city centre to the east to depressed areas like Digbeth and Deritend: “The city centre has been a huge success but areas outside have lain dormant for many years.”

Spooner also points to an upcoming canalside scheme at Icknield Port Loop to the west of the city centre, led by the regional development agency Advantage West Midlands and developer Isis. “The aim is to create something like Brindley Place which could create several thousand new homes over the five-year project,” he says.

But he adds: “To tackle some of the housing estates in the city requires a strong partnership with the private sector to bring in finance. Birmingham needs to decide what way it wants to go. We are getting a real sense that they are keen to [work with the private sector] in the city centre. They now need to transfer this approach elsewhere in the city. There are proven models for doing this that work elsewhere and we would be happy to work with them on this.”

The omens are not good. One consultant who has worked in the city for the past 20 years says: “There is immense frustration in the business community not just with housing and regeneration but with the council leadership as a whole. If you look at the other core cities, they have really stolen a march on Birmingham and as a result the business community has been focusing its attentions and money elsewhere.”

This was picked up on in the most recent Audit Commission report on the council’s corporate performance in February this year. It says: “The council is insufficiently committed to working with others to make truly effective partnership working possible … Many key partners have expressed negative views about the nature of their partnership with the council. The council needs to engage with its partners and have an honest debate about the reasons behind this.”

Lines says: “I disagree with the finding on partnerships. If you speak with the housing associations on BISHOP [Birmingham Social Housing Partnership], I would hope that the reaction from them would be positive. Our record of building with housing associations is one that I am extra proud of.” For once, the silence speaks louder than any words.