Monthly Archives: March 2015

Freeing public service to perform

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Dr Toby Lowe from the Centre for Knowledge, Innovation, Technology and Enterprise (Newcastle University Business School) presents his Idea for an Incoming Government: make public services more effective. He urges us to move away from a ‘Payment by Results’ approach, and suggests alternatives that would cope better with the messiness of the problems we face in our society.

What is the problem?

Governments have attempted to make public services more accountable for producing desirable social outcomes. From reducing reoffending to helping the long-term unemployed to find work  increasing numbers of programmes are commissioned using a ‘Payment by Results’ approach (PbR).

The rationale behind seems compelling – we should only pay for work undertaken that is effective in solving the problems that society has identified. Unfortunately, the evidence suggests that PbR creates a paradox – programmes commissioned on this basis produce worse results, particularly for those with the most complex needs.

There are two reasons why this is the case:

Firstly, real life is complex and messy. But PbR programmes need life to be simple and measurable. They require that desired ‘outcomes’ can be easily measured – because payments are triggered by these measures. Unfortunately, the complex social issues which social interventions most often deal with are frequently those that are most difficult to measure. Take, for example, tackling obesity. Body Mass Index (BMI) is the measure that is most frequently used to measure obesity.  It is used a measure of obesity because it is easy to measure: it is a simple measure of weight in proportion to height. Anyone with a BMI of more than 25 is overweight. Anyone with a BMI of more than 30 is obese.

Unfortunately, real obesity is much more complicated than that. BMI doesn’t effectively measure obesity for children, individuals with different body shapes, with different exercise regimes, and with certain medical conditions.  According to BMI measures, this woman, Anita Albrecht, who is a personal trainer, is very overweight, and is only one BMI point short of being clinically obese.

Anita Albrecht

So what happens if you use what is measurable as mechanisms to pay by results? You end up wasting time and money targeting obesity programmes on people like Anita – because that’s what simple targets, which are abstracted from the intrinsic messiness and complexity of life make people do.

The second reason that PbR makes it more difficult to create good outcomes is that they work on very simple cause and effect logic: if you are going to pay a person or organisation for producing a result, then you need to know that it was that person or that organisation which did it. How else do you know who to pay?

Unfortunately, the messiness of real life gets in the way once more. Real outcomes are emergent properties of complex systems. Look at the complex system which lies behind obesity as an issue:

Causes of obesity

This is the reality of what causes obesity. If you pay an organisation to undertake obesity activity, they can only influence a small part of this system.  Whether people actually end up obese or not is the result of the interaction of a hundred other factors.

If you pay people or organisations on the basis of whether they achieve particular results, you are asking them to be accountable for things they don’t control. As a result, they learn to manage what they can control – which is the production of data. This is the evidence about what people do:  They reclassify what counts as success (for example, counting trolleys as beds in hospitals in order to meet waiting time targets). They only work on clients who they know will provide the desired results, and they ignore the more difficult clients. They ‘teach to the test’ – only doing things which relate to what is measured, ignoring people’s needs that don’t fit into the simple measurement framework. And if all else fails, they simply make up data.

They do this because Payment by Results is nothing of the sort. Payment by Results should really be called ‘Payment for Data Production’. It changes the purpose of people’s job from helping those in need to producing the data which gets them paid.

All this is an enormous waste of resources. We end up paying huge fees to organisations who can play the data production game well, rather than those who are good at helping people. We waste resources paying organisations not to help those most in need.

The solution

The evidence is clear. If you want to achieve good outcomes, don’t pay by results. Evidence shows that these alternative approaches are successful:

1) Use systems thinking and invest in relationships. Design systems around people’s needs. Invest in organisations that build relationships with clients, and so who understand their needs authentically. Commission locally, so that the organisations have a connection with the people they serve.

2) Promote horizontal accountability. Make practitioners accountable to one another for the quality of their work. Create mechanisms for peer-based critical reflection, such as Learning Communities.

3) Create positive error cultures. Create cultures in which people talk honestly about uncertainty and mistakes – because this is how people learn and improve.

 

Extending Choices and Access for the Poorest to Low Cost Private Schools in India and Africa

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Dr Pauline Dixon from E.G West Centre, Newcastle’s School of Education, Communication and Language Sciences, draws our attention to international aid in the latest Idea for an Incoming Government hosted by the Social Renewal blog. In particular, she argues that the evidence supports financial contribution towards low-cost private schools in slums of the developing world.

Low-cost private schools

What is the problem?

A large body of research published since 2000 has documented the significant and growing contributions of low-cost private schools in slums and villages of developing countries around the world. In India, Pakistan and Africa these schools have been shown to have better facilities, teacher attendance and activity as well as higher student achievements than government schools. And this is all achieved at a fraction of the teacher costs. Low cost private schools are already contributing to quality “education for all”.

However, even though many poor people are able to access low cost private schools costing £4-£5 per month, others are so poor that they are unable to afford the fees. If international aid were to be given at the grassroots level in the form of targeted vouchers and/or conditional or unconditional cash transfers, then this would assist the poorest to access a better education for their children.

International aid regarding schooling in the developing world needs to focus on quality “Education for All” and not just getting children into ‘schools’ that may be ineffective. Aid agencies should start to consider assisting the poorest parents in gaining access to the better quality and more effective and efficient low cost private schools that already exist in city slums as well as rural areas in Africa and India. Parents voting with their feet away from state education that is failing their children have set an agenda that international aid agencies need to appreciate and acknowledge.

The solution

An education voucher may be a coupon or a cheque that a government or philanthropist provides to parents for them to spend with an education provider of their choice. They may be used as part or whole payment for schooling, which could be in the state or private sector – but typically an approved school participating in the voucher programme. It is possible therefore, through the use of aid vouchers, for funds to reach the poorest at the grassroots level, minimising waste, corruption and theft whilst focusing on efficiency and effectiveness. It is now time that such alternative means of allocating international aid be given a true hearing.

Some, such as Joseph Hanlon et al., also suggest that just giving money to the poor is the best solution to ending poverty. Hanlon et al provide evidence from cash transfer programmes around the world, setting out a case to show that cash transfers given direct to the poor are efficient because recipients use the money in a way that best suits their needs. Cash transfers can be unconditional (no conditions attached for gaining the cash) or conditional (the recipients are required to do something to get the cash transfer). Mothers usually receive the transfer and, in addition, some programmes give money to the student. They can have a broad target or a narrow target providing a very small or large proportion of household income. Typically, conditional cash transfers (CCTs) request those in receipt of the cash to make specific investments in their children’s education and health. The two largest CCTs are in Brazil and Mexico – Bolsa Família and Oportunidades respectively. Chile and Turkey’s CCT programmes focus on the extreme poor and socially excluded, and in Bangladesh and Cambodia CCTs aim at reducing gender disparities in education.

The conditions of the CCTs generally require parents to make investments in their children’s human capital in the form of healthcare and education. The education conditions have typically until now focused on government school enrolment. That is, the child’s school attendance requirements are set at between 80 and 85%. Focus could now be on the low cost private schools’ sector, which would be part of the ‘condition’ of the transfer. The child would need to access a school of ‘quality’ that would increase their attainment and ability, and not merely prove ‘attendance’.

The evidence

In India, randomised control trials have illustrated the advantages of directing funds to the poor through an alternative provider and management sector. The ARK (Absolute Return for Kids) Delhi voucher programme funded by a London based charity has been shown to provide access to the poorest as well as to benefit girls from the poorest families in society. Some of the poorest children in the slums of Delhi started school in 2011 using ARK vouchers. They are attending schools of their own choice. At the end of year one of the voucher scheme, children in both control and treatment groups were tested again in the standardised tests. The results show that there is a positive and statistically significant impact of the voucher programme on math achievement. The voucher adds up to about £100 per year and includes the payment for fees, books, uniform and meals.

The Punjab Education Foundation (PEF) has been running the Education Voucher Scheme (EVS) in Lahore since 2006. In 2011 a total of 40,000 vouchers were offered in 17 districts including Lahore.  Over half of the voucher recipients are girls. The aim of the scheme is to allow the poorest of the poor to have equal access to quality education. The LEAPS project found that children in low cost private schools in Pakistan were 1.5-2.5 years ahead of children in government schools.

In Columbia, the Programa de Ampliacion de Cobertura de la Educacion Secundaria (PACES), was set up 20 years ago and provided vouchers to help 125,000 children from low-income families. Researchers tracked the children over the years. They also tracked a similar number of families who had applied for, but were not allocated vouchers due to limited numbers. The results show:

  • Parents who were given vouchers opted to send their children to private schools and not keep them in the state system
  • The children stayed on until 8th grade (about 13 years old), were less likely to take paid work during school time (therefore concentrated on their studies) and they scored higher in achievement tests than their peers attending government schools.
  • The number of youngsters graduating from high school rose by five to seven per cent and they were more likely to try for university.

Looking at the evidence regarding cash transfers, this shows that they are not only affordable for donors and governments, but provide immediate hardship and poverty reduction for those in receipt of the transfer. They facilitate economic and social development, initiating the potential to reduce long-term poverty. Providing those at the grass roots with a monetary payment, which is regular, assured, practical to administer, fair and politically ‘acceptable’, allows the poor to be in control and in charge of their own development.

References:

Watch Dr Pauline Dixon’s TED Talk on how private schools are serving the poorest in Asia and Africa and why, how and whom they are run and supported by: https://www.youtube.com/watch?v=gzv4nBoXoZc

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All Children Need to be Able to Read

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Professor James Law (School of Education, Communication and Language Sciences) presents Newcastle Institute for Social Renewal’s latest Idea for an Incoming Government: get all children reading well at age 11 by 2025. Using the findings of Save the Children’s Read On Get On report, Professor Law suggests that we are failing our children with the current system, and argues that change is needed to prevent further exclusion.

Children's reading

What is the problem?

There has been a lot of hand ringing recently about our addiction to screens, games consoles, tablets and all the rest of the gadgets which now permeate our lives. Yet this obscures a much more significant underlying societal problem which we overlook at our peril. Too many children are managing to get through school without being able to read. This means that in our predominantly ‘white collar’ world they are pretty much excluded from school activities and ineligible for most employment.

Getting children to read has been the focus of the National Curriculum for many years following the introduction of the Literacy Hour. Indeed, so dominant has this trend been that the word ’literacy’ seems to have replaced ‘reading and writing’ in many children’s vocabulary.  Yet once children reach the age of ‘learning to read’ it is assumed that they will be ‘reading to learn’ and support for poor readers fades away and they are largely left to fend for themselves. Evidence suggests that an inability to contribute in these later stages of primary school leads to disengagement in the whole process of schooling well before the children reach secondary school.

But let’s have a look at some of the figures, taken from the report produced by Save the Children in September 2014 called Read On Get On. This report was designed to shed light on the data behind this issue and to ensure that these issues became an integral part of the manifestoes of all the political parties as they move towards the General Election in May 2015.

Last year a quarter of all children left primary school without being able to read well. This figure rose to 40% in the most socially disadvantaged groups. Low income white British boys were by far the most vulnerable group. The reading gap between boys and girls is one of the widest in the world. Similarly, the gap between the most and the least socially disadvantaged groups is wider in the UK than it is any country on Europe apart from Romania.

It is almost as if we have deliberately engineered inequity into our educational system. This is directly related to employment prospects. A quarter of people earning less than £10,000 per year are not functionally literate. The figure for those earning over £30,000 is one in 25.

The evidence

Underpinning this challenge is a need to understand how these difficulties emerge. We contributed a chapter in the report about the way that oral language skills – that is children learning their own language – have a bearing on children’s reading. Difficulties learning to read start in the preschool period as children struggle with basic language competency. In most cases it’s not that they don’t speak, but rather they often start late and then don’t keep up as the language skills of their peers race ahead. Again this is clearly related to social disadvantage.

Using data from 18,000 children in the Millennium Cohort Study, we showed that when you follow the children from three years to five and then at eleven years the gap between the highest performers and the lowest is 26 months at five years rising to 31 months at eleven years. Children do catch up, of course, but equally the skills of some children seem to fall back and this was twice as likely for the more disadvantaged groups. Whether a parent reads to their child has been consistently shown to predict more positive outcomes and there seems to be a special role for dads in this, particularly when children are in primary school, something that attracted a lot of attention when the report was released. It is also important to note that early child development fits into another cross party initiative called 1001 Critical Days which focuses on the importance of child development up to two years of age, but the need to keep an eye of a child’s development doesn’t stop at two years.

The solution

The ambition of Read On Get On is simple enough: to get all children reading well at 11 years by 2025. Underpinning literacy are oral language skills. And this has led to an additional aim of all children achieving good early language development by the age of five by 2020. The report calls for a national mission to address these issues. This mission seeks to engage parents in reading to every child for just ten minutes every day, to encourage volunteers to give their time to help children with reading and language, to bring together voluntary sector, schools, policy makers and the private sector together to create innovative solutions with local schools leading the way. And finally that this be driven across government, supporting these local initiatives.

Clearly the Government has a responsibility for the economic prosperity of the country and they are sensitive to international comparisons, as we see with the alterations being proposed for the A level system to raise Maths attainment to that of South Korea and other countries. Undoubtedly it is important to let our strong students thrive. Yet the fact that we appear to continue to fail students, who come out of school ill-prepared for the workforce, and thus vulnerable to external competition in a multinational world, raises real questions which are posed in Read On Get On and it is very appropriate to look for solutions in the party manifestoes.

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Restricting the Marketing of Alcohol Directed Towards Young People

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What impact does alcohol marketing have on young people? Our newest Idea for an Incoming Government is from Professor Eileen Kaner and Dr Stephanie Scott (Institute of Health and Society), who call for restrictions to be put in place, protecting our national health, and improving young lives.

Alcoholic beverages in bottles

What is the problem?

Alcohol use is the leading risk to health and well-being in young people, accounting for seven percent of disability adjusted life years in 10-24 year olds globally, with UK adolescents amongst the heaviest drinkers in Europe. Frequent, often high-intensity drinking in early to mid-adolescence has been linked to a myriad of adverse effects. Short-term implications, which pose the greater immediate risk, include accidents; early and unprotected sex; exacerbation of mental health problems; and poor school attendance and reduced educational attainment. Acute problems may have life-time consequences, such as early disfigurement or unintended pregnancies. Moreover, the longer and heavier an individual drinks, the greater the risk of developing chronic health problems such as liver disease or cancers later in life.

As a caring society, we should do more to limit youth exposure to alcohol marketing. But how can we be sure that there is a connection between this and alcohol misuse?

A growing body of literature, including two recent systematic reviews (Anderson et al, 2009; Smith and Foxcroft, 2009), demonstrates an association between exposure to alcohol marketing and initiation or progression of alcohol use, as well as development of pro-drinking attitudes and social norms (Gordon et al, 2010; Lin et al, 2013). UK research suggests that alcohol brand recognition is common amongst young people as young as 10-11 years old (Alcohol Concern, 2012) with US studies demonstrating identification with desirable images in alcohol advertising in 8-9 year olds and brand-specific consumption in 13-20 year olds (Austin et al, 2006; Siegel et al, 2013).

Despite the heavy attention paid to price and traditional advertising, alcohol marketing is much more extensive and comprises price, product (image/branding), promotion (including advertising) and placement (point of sale and outlet density or distribution), defined as the ‘4 Ps’ or ‘marketing mix’. This means that availability as well as how a product looks or tastes can be of as much importance as how much it costs. The extensive nature of alcohol advertising, including through new media (e.g. sponsorship of social networking sites) means that young people are regularly exposed to alcohol promotion including many who are below the legal age to purchase alcohol.

A recent qualitative study in North East England among 14-17 year olds found that marketing seemed to play a key role in building recognisable imagery linked to alcohol products, as well as associations and expectancies related to drinking (e.g. having fun, drinking games, brand slogans or logos, drinks associated with certain TV shows, such as cocktails).

The solution

  • Restrict alcohol advertising in newspapers and other adult press, with content limited to factual information about brand, product strength and provenance, mirroring The Loi Evin model in France.
  • Establish an independent body to regulate alcohol promotion in the interests of public health/safety.
  • Review the use of new media to market alcohol with a view to limiting the exposure of ‘under age’ young people who frequently access key sites (e.g. Twitter, Facebook etc.).

The evidence

In terms of price restrictions only, recent research conducted in Canada over the course of eight years (where a minimum unit price has been implemented) suggests that a 10% increase in the price of most drinks led to a 32% fall in alcohol-related deaths (Stockwell et al, 2013). This international evidence is supported by UK modelling work which demonstrates the effects that setting a minimum unit price of 40p would result in (see below).

Alcohol graphic

It is increasingly accepted that a fully joined-up public health response to tackle alcohol problems needs to include policy-focused interventions as well as individual-level input from health and social care practitioners (NICE, 2010). Individual and policy-level interventions are needed which can limit youth exposure to alcohol marketing whilst not curtailing producers’ legitimate right to market their products to adults.

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A Charter for Rural Enterprise

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Jeremy Phillipson (School of Agriculture, Food and Rural Development) considers rural enterprise, in the latest of our Ideas for an Incoming Government. His vision is a Charter for Rural Enterprise, protecting rural economies and allowing them to flourish.

Rural charter image

What is the problem?

We should be doing more with our rural enterprises. Rural areas contribute at least £211 billion a year directly to the nation’s economy but have great potential to achieve even more. Cuts in public spending and the need to rebalance the economy means that our expectations of what enterprise can achieve in employment, wealth creation and service provision have increased. We must, therefore, expect to see growth across the whole country rather than only in certain cities or sectors. The distinctive characteristics, business and employment structure and past performance of rural economies mean that they are well placed to meet this challenge. Through a new Charter for Rural Enterprise, we propose that an effective and transparent rural proofing of growth plans and policies be pushed forward across all business sectors and localities in order to tailor measures to rural conditions and assess their applicability to rural economies.

The solution

Rural areas have a number of dynamic features that enable economic growth:

  • They have more businesses per head of population than many urban areas.
  • Firms started by people moving into rural areas are more likely to sell their products and services on national and overseas markets, thus earning revenue beyond the locality.
  • Many manufacturing businesses are located in rural areas and this sector provides a higher proportion of rural jobs and output than are supported by urban manufacturing firms.
  • Rural economies have pioneered privatisation and community provision of many local services, fuelled by a combination of delivery and access difficulties and the distinctive nature of rural demand.
  • As the economic value and potential of ecosystems services are recognised these will offer increased opportunities for growth.
  • Rural economies have demonstrated their potential to provide more growth and employment if given appropriate stimuli and support from national and local business leaders and policy makers.

However rural growth measures have been more fully developed for the land-dependent sectors of farming, forestry, food and environmental services. Whilst these are important for the nation, in many rural areas we need to look to other sectors that are the primary engines for growth, for example in manufacturing, professional, scientific and technical sectors, and wholesale and retail. Through establishing a Charter for Rural Enterprise, rural economies would be treated as cross-cutting and more effectively embedded in mainstream policies and plans for economic development. This should include a commitment to:

  • Strategies for growth that respond to local variability of the spatial, sectoral and business size profiles of rural economies, and which drive resources to the local level through an approach that meets local constraints and opportunities of rural places. This would identify and respond to the diversity of growth challenges in rural industries. We also propose a review of the needs and opportunities for rural and home-based micro enterprises that have so far fallen beneath the radar of economic and enterprise policy.
  • Spatially-balanced and inclusive economic growth; to this end Impact Assessments should be prepared and published at national and sub-national level for economic plans and policies for areas larger than (lower tier) local authorities (for example City Deals, LEPs’ Strategic Economic Plans and European Structural and Investment Fund Strategies), to demonstrate their impacts on, and inclusiveness of rural areas.  Assessments would identify spatial or functional gaps in, and weaknesses of, policies and programmes, inform future resource allocations and encourage a sense of inclusiveness.
  • Demonstrating ways that rural firms can realise the value of the natural environment to their growth, by securing efficiencies and developing new products and services. We also propose a national review of the challenges and adaptation needs facing rural enterprises in responding to the pressures of environmental change.
  • Strengthening rural business and community institutions which form the bedrock of our rural firms and bolster their innovative capability and resilience; to this end we should build on the experience of the Rural Growth Networks to extend nationally the network of rural work hubs offering flexible work premises and access to shared facilities.  We suggest support for the establishment of rural business clubs and associations that provide rural business mentoring and strengthen the voice of rural business through establishing a National Rural Business Task Force to ensure that core business, financial and innovation policies are sensitive to rural needs.
  • Investment in affordable housing, public transport and local services which are essential for employee recruitment and new business development. In addition to providing meaningful support for building new housing or providing public transport in rural areas, financial help should be provided to small employers with hard-to-fill vacancies due to their area’s lack of affordable housing and poor public transport.  These barriers to employment and growth of small firms are particularly evident in remote rural locations, and local economies with poor connectivity and limited pools of skilled labour, exacerbated by low stock of low cost housing.  The Government should explore how tax reliefs or direct payments can be extended to measures taken by employers to help new employees’ access accommodation or transport to the workplace.

Overall, we need a new commitment to rural enterprise. This would entail more transparent proofing of national and local growth plans across all business sectors and localities. We need better engagement between stakeholders, to strengthen our understanding of rural business potential and to use this to inform strategic commitment to rural economies. Academia needs to play its part in filling the gap in independent rural analysis. This will allow us more firmly to take the pulse of rural economies as they respond to shocks, whether it be flooding, economic downturn or disease outbreak, and to more effectively assist their recovery to full health.

The evidence

  • Commission for Rural Communities (2011) Small towns in rural England.
  • Defra (2013) Statistical Digest of Rural England 2014
  • Defra (2010) Economic Growth and the Environment
  • Atterton, J. and Affleck, A. (2010) Rural Businesses in the North East of England: Final Survey Results.  Centre for Rural Economy Research Report.
  • Phillipson J et al. (2011) Rural Economies: Incubators and Catalysts for Sustainable Growth. Submission to Government’s Growth Review – Stage 2, Centre for Rural Economy and Relu.
  • Phillipson J and Turner R (2013) Rural Areas as Engines of Economic Growth. Rural Economy and Land Use Programme Policy and Practice Note no 41.
  • OECD Rural Policy Reviews: England, United Kingdom 2011

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Joining the dots: making healthcare work better for the local economy

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On Thursday 26th February Professors Rose Gilroy and Mark Tewdwr-Jones (Newcastle School of Architecture, Planning and Landscape) launched a collection of papers that they co-edited in association with the Smith Institute and the Regional Studies Association. Below is the latest in our Ideas for an Incoming Government series from Professor Gilroy, taking a look at the connection between health and the economy, and suggesting a way forward for public health delivery.

Jigsaw puzzle, success in business concept

Who should take responsibility for improving the health of the nation? Is it the role of the NHS, or are we simply shifting responsibility by asking our health system to pick up the pieces (and the cost) caused by policy failures elsewhere? What is the real cost of poor health?

The Marmot Review of 2010 estimated that health inequalities cost the taxpayer over £30 billion a year in terms of lost productivity and associated welfare and health costs. Can we really afford to ignore this? A new joint report from Newcastle University academics, the Smith Institute and Regional Studies Association aims to address the issue of health inequality. Launched at Portcullis House, Westminster last Thursday, 26th February in front of an audience of local government officials, researchers, representatives of the TUC, RTPI, NHS, The Design Council and lobby groups, the report – Joining the Dots: Making healthcare work better for the local economy – discusses the far-reaching consequences of poor health and the responsibility of employers, local planners, and new governance structures in taking a pro-health position that will help to tackle health inequalities.

From considering the social and economic determinants of health; the limitations placed on people’s lives from shrinking local investment in the supply and quality of public services; the need to consider the whole city as an arena for older people’s wellbeing and the struggle to overcome institutional and cultural barriers to make new legislation work, this collection of research challenges all sectors of British society to put health at the heart of its thinking.

The debate was chaired by Andy Love, Labour MP for Edmonton, with the report launched by myself and my School of Architecture, Planning and Landscape colleague Professor Mark Tewdwr-Jones, as co-editors of the report. David Buck, Senior Fellow in Public Health and Inequalities at the Kings Fund joined us to talk about the links between poor health, poverty and worklessness, while Professor Sarah Curtis of Durham University presented compelling evidence linking employment status to health outcomes. Professor Curtis emphasised the long shadow that regional unemployment casts across the course of people’s lives. Elsewhere, Deputy Lords leader Lord Philip Hunt considered the role of the NHS as an employer and reflected on the recent news that Greater Manchester will have devolved power over its local NHS spending, with huge potential implications for local accountability and a new, more holistic understanding of people’s health and social needs.

However, as several contributors argued, it is the ability of individuals and organisations to overcome the often complex local governance map and develop a joint vision and shared objectives that will lead to success in addressing the UK’s deep health inequalities.

The conclusion of this report is clear: too often we intervene too late and forget that health starts where we live, learn, work and play. The key to good health is to build preventative services in communities, helping us to take care of our families, our schools, our workplaces and our playground and parks. When considering national and local spending priorities, we must understand the need to make pro-health choices to tackle the scandal of health inequality in modern Britain.

View the full report via The Smith Institute. (PDF)

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Affordable housing: a fair deal for rural communities

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Professor Mark Shucksmith OBE, Director of the Newcastle University Institute for Social Renewal, considers the problem of providing affordable housing in rural areas, and presents the findings of the Rural Housing Policy Review group.

Cottage at Grasmere

It’s now 34 years since my first book, “No Homes For Locals?” was published. This worries me partly because this suggests I’m not as young as I used to be; but mainly it worries me because we have made so little progress in addressing the challenges of enabling people to live and work in the countryside which prompted me to write that book. There are severe housing difficulties throughout the UK, but rural areas face special difficulties. In the UK, uniquely, rural house prices are higher than in urban areas – in fact, 26% higher on average. The ratio of house prices to local earnings is even worse. And there is far less social housing (council housing and housing association housing) than in urban areas, not least due to Right to Buy sales going through the roof in recent decades.

For the last year I’ve worked with other experts as part of the Rural Housing Policy Review group, chaired by Lord Best, to propose solutions to this challenge which acknowledge the current constraints on public spending. Last week we presented these at a launch in the House of Lords. Here is a summary of our proposals, the latest of our ‘Ideas for an Incoming Government’:

Because more sites are needed:

  1. Since the vast majority of rural schemes are on small sites, Government’s policy is to remove from local authorities the power to require affordable homes on sites of less than 10 homes. This must be reversed. Local Planning Authorities should require all sites, whatever their size, to make an affordable housing contribution. The level of this contribution – in cash or kind – will be determined by what works in the housing market of that area.
  2. Government should provide incentives to encourage land owners to develop rural affordable housing to meet local needs or to release sites for these homes, e.g. through tax incentives or nomination rights, which would also stimulate the local economy.
  3. Since local communities cannot properly influence what kind of development takes place without a Local Plan, Government should require all local authorities to complete their Local Plan preparation within two years

Because new homes must be affordable to local people:

  1. Government should exclude rural areas from the “spare room subsidy withdrawal” (commonly known as the ‘bedroom tax’) because there are so few opportunities for rural tenants in houses to move to 1 or 2 bedroom flats in villages; these households should not be forced to move away from their long-standing social and support networks to urban areas elsewhere.
  2. Where there are already problems from the low levels of affordable housing and limited opportunities to build any more, Government should give rural local authorities the power to suspend the Right to Buy scheme.
  3. To provide a driver for action and delivery by housing associations of all sizes, a new national target for delivery of rural housing through the Homes and Communities Agency should be established of 13% of the HCA’s national investment.
  4. To address problems of accessing development finance, Government should find ways of supporting the development funding of small and medium-sized builders and housing associations that undertake smaller developments: e.g. recalibrating its loan guarantee scheme to cover schemes of less than 25 homes.

Because affordable homes need to be there for future households:

  1. To ensure rents are affordable in low wage, high house price rural communities, Government should not require housing associations to charge so-called ‘affordable rents’ at 80% of market rental rate as a condition for receiving HCA funding. Instead, as in Greater London, rents should be charged at a level agreed between the local authority and the housing provider as being affordable in relation to local incomes.
  2. Where an area is experiencing high levels of second home ownership, Government should endorse the approach taken by the Exmoor National Park Authority, and in other places, by requiring a proportion of open market homes – up to a 100% in exceptional cases – to be granted planning permission with the condition that they can only be used as principal residences.
  3. Although those buying affordable homes on special terms need to be able easily to access a mortgage it is essential that they do not simply resell for a profit at a later date. The Council of Mortgage Lenders should, at long last, produce a standardised mortgage form for rural affordable home ownership which incorporates a ‘perpetuity’ arrangement.

Because leadership is needed from national to community level:

  1. The Department for Environment, Food and Rural Affairs, as the champion for rural areas, should ensure ‘rural proofing’ is continuously and consistently applied to national policies, with specialist, rural technical expertise available to all Government departments.
  2. Because Neighbourhood Plans are a vital means for rural communities to deliver affordable homes, yet require resources and expertise, Government should increase and extend its support (beyond April 2015) for more communities to produce Neighbourhood Plans. And the Homes and Communities Agency should offer match funding to housing associations for the employment of Rural Housing Enablers who can play the key role in bringing together parish councils, land owners, local authorities and housing associations to achieve affordable rural homes.

There is more detail in our full report which you can download free here. The shortage of affordable rural housing is an issue not just for young people and others earning middle to low incomes; it has a wider significance as our countryside becomes ever more socially exclusive, a place where only rich people will be able to afford to live and in which most members of society can never be resident. This growing separation between rich and poor threatens our social solidarity and is far from ideas of ‘one nation’, espoused by successive governments.

Members of the Rural Housing Policy Review

Lord Richard Best OBE DL (Chair of the Rural Housing Policy Review)

Lord Matthew Taylor

Lord Ewen Cameron DL FRICS

Elinor Goodman

David Fursdon DL FRICS

Margaret Clark CBE

Sue Chalkley

Professor Mark Shucksmith OBE

Peter Moore

Peter Hetherington

Cllr Anne Hall

Jo Lavis (Secretary and member)

 

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