28 June 2002
The policy has, in part, led to rising house prices in some areas, which has exacerbated the widespread shortage in housing, the Commons' urban affairs sub-committee was told on June 25.
The key workers initiative was created to provide affordable housing for low-paid staff such as nurses and police officers.
But Richard McCarthy, chief executive of the Peabody Trust, a registered social landlord, said it concentrated solely on freeing up the existing supply of housing and failed to address the bigger issue of a lack of supply.
'That has helped drive up the price of property in some areas by restricting the general supply of housing,' he told Public Finance.
McCarthy told MPs that the government should encourage the use of compulsory purchase orders (CPOs) on private ground.
'The former utilities companies and transport bodies own enormous amounts of urban land that could be purchased through CPOs. The government, local authorities and development agencies could all have a major role to play in that,' he said.
But Carl Powell, director of planning and transportation at Westminster council, said that changing planning systems alone would not be enough. 'The situation has reached crisis point for some local authorities. We also need more central funding for registered social landlords,' he said.
A report by the Local Government Association, published on the same day as the sub-committee hearing, echoed Powell's call. It also states that local authorities should be given powers to define key workers.
Junior housing minister Tony McNulty, in his first speech since being appointed, this week warned councils not to rely on agreements with private developers. He said it was vital to push ahead with 'fast-track' schemes.
'Many of the proposed solutions to this issue are complex and long term,' he told a conference on affordable housing in London on June 24. 'What we can do in the shorter term is squeeze out every last opportunity for decent homes from the existing framework.'
PFjun2002
