Neighbourhood renewal pilots that fail to deliver could have cash withdrawn
Neighbourhood renewal funding is to be linked to performance, and some areas could have cash withdrawn if they fail to turn around ailing housing markets, Housing Today has learned.

Civil servants met officials from the nine new neighbourhood renewal pathfinder areas last week in York to thrash out the detail of their roles. It is believed that the government has agreed that large-scale demolition is needed in a number of the areas.

The neighbourhood renewal pathfinder areas were set up last month with £25m in funding to tackle unpopular housing in both public and private sectors. Former housing minister Lord Falconer was known to be in favour of a long-term market renewal fund, and the sector has its fingers crossed for a share of an £8bn, decade-long pot in next month's Comprehensive Spending Review.

But sources said ministers want to see value for money, with as much cash as possible raised through the sale of land in partnership with developers. Responsibility for setting the pathfinders' agenda and finding partners rests with local authorities.

Although sources claimed the general mood at the York meeting was positive, it is understood that the government will be looking at a number of sanctions if any partner fails to meet its responsibilities.

For example, funding could be linked to performance and a regular review, perhaps every three to six months, could be introduced in order to keep track of progress. Anyone who underperformed in their duties could be called in to explain their position. In addition, a sharing of knowledge and best practice will lead to the development of an evaluation and monitoring framework.

The Office of the Deputy Prime Minister is understood to believe that in low-demand areas existing housing must be cleared and replaced with quality dwellings even if it means building fewer homes. Any large-scale demolition work is unlikely for another two to three years, however.

All the pathfinders will be looking to develop such schemes over the next 10 to 15 years during which time they will be working with delivery vehicles on the ground.

Meanwhile, as attention turns to action on tackling unpopular housing in the North and Midlands, chancellor Gordon Brown this week signalled extra support and resources could be made available for overstretched housing markets in the South-east.

Speaking at a union conference in Birmingham, Brown said housing would be a priority in July's comprehensive spending review.

He said: "We will do more to try to remove barriers to planning and housing so that instead of congestion, overheating and pressure on house prices in one part of the UK, and emigration, depopulation and unemployment in other parts, we can ensure balanced economic growth."

The chancellor’s kind of neighbourhood: How the renewal fund got started

February 2001
Birmingham’s Centre for Urban and Regional Studies starts the ball rolling with its M62 report, which found collapsing housing markets in parts of the North and Midlands
November 2001
The housing sector in the North and Midlands calls for an £800m-a-year market renewal fund to tackle failing public and private housing markets in the M62 corridor and West Midlands. Liverpool, Manchester and Birmingham councils meet with former housing minister Lord Falconer to lobby for the fund
January 2002
Falconer asks the Treasury to consider the decade-long fund. The minister meets with Northern councils in Leeds
February 2002
Three Northern councils draw up plans for “market renewal partnerships” to turn around decline
March 2002
Local Government Association confirms it is in talks with lenders about establishing intermediary loan bodies to aid the renewal of private homes. The DTLR’s empty homes select committee backs the fund
May 2002
The DTLR announces £25m funding for neighbourhood renewal pathfinders in nine low-demand areas. Councils that saw race riots last summer warn a renewal fund will be vital to avoid future tensions