Mike Gahagan was at the heart of the Whitehall nerve centre devoted to tackling low demand in the North and Midlands. Now he runs one of the pathfinders set up as a result. Here, he gives us an insider view of the policy's launch.
Is it poacher turned gamekeeper or vice versa? Whichever: it's not very often that one has the opportunity to advise ministers on the creation of a programme and then to help implement it.

But that has been my experience on the housing market renewal fund, first as director of housing at the ODPM and now as chair of Transform South Yorkshire, one of the nine housing market renewal pathfinders.

On 26 March, deputy prime minister John Prescott announced that Transform South Yorkshire would get £71m over the next two years to tackle low demand. Five of the other pathfinders have also received their first allocation of a 10- to 15-year programme.

Yet it seems a long time since 2001 when the Core Cities Group, the National Housing Federation and the Centre for Urban and Regional Studies persuaded ministers of the case for a fund dealing with low demand. It was decided that the pathfinders needed to be long-term commitments across local authority boundaries and aligned with health, education and personal security.

Before any major spend took place, each pathfinder was to prepare a prospectus justifying what it proposed to do, and these would be used by the Audit Commission to assess their performance.

Finally, to make best use of the regeneration experience in local government and other sectors, the ODPM decided that the policy should be decided with the areas concerned. "We issue no guidance" was never an absolute but showed determination not to impose a centralist view.

Reality bites
So has real life matched policy expectations?

I was taken aback at how tough it has been to write Transform's prospectus. Not, as one might expect, in terms of gathering data or defining projects – that wasn't easy, but we were backed up by CURS and considerable local expertise in the authorities and their partners – but in reflecting on paper the coherence of the strategy. This seems a scarce skill that I suspect we rather take for granted in the civil service. I believe other pathfinders have had the same experience.

However, with the good offices of the Transform team, local officials, consultants and others our prospectus was submitted to ODPM on 29 December 2003, one day before our self-imposed deadline.

We had two great advantages in preparing the prospectus. The first was the ability of the four council and their partners to work together. Clearly, the long history of joint working in South Yorkshire was bearing fruit. The second was the Treasury's unexpected allocation of £2.6m from the capital modernisation fund, well before the spending review. Besides enabling each pathfinder to fund some early projects and get its name known, this paid for detailed analysis and preparation of the prospectus and resulted in a far more professional approach to major capital spend than many programmes have enjoyed.

After the submission of the prospectus, we had negotiations with the ODPM, which were tough but fair. We pressed the case for our full bid and the ODPM, with the draft Audit Commission assessment behind it, challenged some of our justifications or proposed projects. Generally there was a mature debate around the issues, though the going could be tense at times. In at least one pathfinder, the rattle was thrown out of the pram on more than one occasion.

Throughout the process we had the Audit Commission in the back of our minds: was such-and-such an action justified, or could we prove that this or that project was appropriate? The commission had adopted a "critical friend" role throughout the preparatory stages, but now we were after our full allocation it really went for the jugular.

I thought it had us bang to rights, although we disagreed vehemently about some of the detail when we saw the first draft report. The commission retained some of its views but was prepared to change others. Overall, we had to acknowledge that the main weaknesses that it identified had to be corrected and we now have an action plan, approved by the board, to do just that.

The commission's role was one of the innovative elements of the programme, and it has more than proved the value of this grit in the oyster. Nevertheless, it is here that some fine-tuning is necessary over the next few months. One of my concerns is that the "critical friend" role needs to be better defined. Speaking to other pathfinder chairs, it is apparent that those involved were unclear as to whether they were meant to be critical or friendly. If the idea was to avoid surprises, it failed.

Moreover, the links between the commission and the ODPM were not always evident. For example, if you read the commission reports on various pathfinders and then try to assess how the department has reacted to them in allocating resources, it is difficult to see how influential the reports were. Perhaps the ODPM should issue a short decision letter as it makes the allocation.

One topic on which we disagreed with the commission was the responsibility of the pathfinder to manage the potential impact of development outside the area and, in particular, its ability to influence the supply of housing in parts of the region well away from its boundaries. We argued that this is a regional responsibility and one that, if not done well, has the potential to undermine the actions of any pathfinder. Low demand was partly caused by past regional planning guidance allowing housing supply to get badly out of line with demand.

Joint working
Will regional spatial strategies be any better? I have my doubts. In Yorkshire and the Humber, the regional assembly and regional housing board – both highly effective bodies – are working jointly on the best approach to this problem. I'm not sure that a similar joint effort is being made in other regions. The Barker Report recommendation that the regional housing boards be merged with the regional planning bodies is right in principle, even if it is difficult to implement.

At the start of the process, the conferences held with all interest groups were critical in defining and carrying forward the policy discussions but, to maintain the policy dialogue, the joint working group of the ODPM, the government offices and pathfinder directors will need reinvigorating. It has fallen into disuse under the pressure of producing and dealing with the prospectuses. I understand that the ODPM, in conjunction with the pathfinders, will be revamping the group.

Finally, throughout the process, the ODPM stuck to its non-prescriptive approach, which must have required a lot of self-discipline on its part. At no stage did it insist on a certain action or set of priorities but challenged the assumptions or conclusions, leaving the pathfinder to define priorities, timescales and outputs. As we move into the delivery stage, this will work to the ODPM's advantage. The aims the pathfinders have adopted, the timetables we have set, the outputs we have promised to achieve, are all ours. We cannot blame anyone else if we fail to deliver.

So ministers and officials at the ODPM, the Treasury and the Audit Commission can allow themselves a pat on the back at the successful establishment of the policy.

For the pathfinders, the early glow of satisfaction at the approval of the prospectus and the announcement of money is rapidly fading into the recognition that the hard slog of delivery is just beginning.

Source

Housing Today