SALFORD STAR CALLS FOR PATHFINDER PUBLIC INQUIRY PART 2
Please read Part 1 by clicking here
WHAT IS HOUSING MARKET RENEWAL OR THE MANCHESTER SALFORD PATHFINDER?
In Salford, the Pathfinder covered the whole of Central Salford within a few miles radius of Manchester – Broughton, Kersal, Ordsall, Langworthy, Seedley and the area defined as Irwell Riverside.
Pathfinder was a Government project started in 2003 with a vision to "create a mixed housing offer with a range of types, values and tenures that will meet the aspirations of both new and existing residents". In other words, the vision was to bulldoze loads of existing, affordable houses, and build new expensive ones for Manchester commuters without pissing off the people already living in those areas.
The Pathfinder financed schemes include Countryside Properties `New Broughton'; Broughton Green in Higher Broughton; the Urban Splash `upside down houses' in Chimney Pot Park; LPC Living in Ordsall, and Miller Homes' Unity Quarter in Kersal.
WHY THE SALFORD STAR IS CALLING FOR A PUBLIC INQUIRY INTO SALFORD PATHFINDER…
For five years the Salford Star has been trying to get its head around what Housing Market Renewal (HMR), or Pathfinder, has been up to in Salford. How much money has been spent, what that money has been spent on and whether the community has benefitted from it or not. Simple questions. But it's been impossible to get answers.
So impossible that, a few years ago, when we actually asked the head of housing in Salford how much public money had been spent and where it was going, he admitted that he himself didn't know… "It's very complicated" he said.
Hello, this is the Head of Housing in Salford! In 2009 we gave him his very own Mary Burns Award (see here).
There has been no transparency around the Pathfinder programme at all. Until we shamed the Manchester and Salford Pathfinder team they didn't even have a website. And when they finally did put one up at the insistence of the Audit Commission, it was never updated without a kick. Even now, the last News Item is from November 2009 (see here). There's not even a News Item about the Pathfinder closing down at the end of March. Not very good practice from an `integrated secretariat' that in one year alone was paid almost £750,000.
Whenever we've tried to find out how much public money has been given to developers it's been hidden under the cloak of `commercial confidentiality'. We still don't even know the exact amount of Pathfinder public money that's been poured into Salford, never mind where the hell it's all gone. It's been two years since any kind of annual financial report was produced.
Even within these out of date figures it's impossible to extract what's been happening in Salford because the Manchester Salford Pathfinder lumps all the figures for the two cities together – except where the powers that be choose to give specific examples for specific areas.
Yet we're talking about £354.13million in Pathfinder public money, plus another £156.74million in other public funding. That's over half a billion quid's worth of public money for the two cities.
What we have got is a report produced last week by the Audit Commission which gives some figures and statistics that make shocking reading.
• For every £1 that private developers put into Pathfinder housing schemes in Manchester and Salford the public sector puts in almost £6.
• For that, the public sector clears the community out, bulldozes the houses, clears the land ready for building and hands developers what is called `gap funding', which no-one seems to be able to explain.
• The developer builds the houses and if they sell, keeps almost all the profits. The Audit Commission report states that "the HMR programme has so far generated capital receipts of £1.83million". This is for the whole of the Manchester and Salford! 3807 new houses have been built. That's less than £500 per house that has been handed back from developer's profits.
• To help people buy the new expensive houses a whole range of public subsidies have been introduced, including First Time Buyer Initiative, Home Buy Direct and Shared Equity. 40% of new properties bought in a Pathfinder sample of 1,379 were purchased via one of these schemes. But even though house prices have dropped, the Salford Star has evidence to show that people have been paying original top prices within these schemes. Top prices mean top profits for developers, subsidised, again, with public money.
• Even with all these subsidised schemes in place, when properties in the new developments haven't sold, the developers have just downed tools and stopped building until they've been bailed out with more public money via the Government's Kickstart scheme. Countryside Properties, for instance, was sweetened with £8million for its New Broughton development.
• The Government has also bailed these schemes out by buying unsold properties, via grants for social housing companies (which wasn't the aim of Pathfinder), again ensuring developers don't lose out.
• Many people from communities cleared out of the Pathfinder areas in Salford have lost out financially, while the developers have been supported through thick and thin. A Land Tribunal found that Jimmy Griffiths' house, which was compulsorily purchased by Salford Council in Higher Broughton, had been undervalued by 42%. Last year, the Land Tribunal also awarded Jimmy's brother, Guy Griffiths, a figure that was 55% higher than Salford Council's original offer for his house. The judge said it "raises serious questions over the Council's valuation".
• Many people who owned their own houses in Salford and had them compulsorily purchased and bulldozed by Salford Council could only afford a new house in the same area with some form of shared equity scheme. Whereas previously they owned 100% of their home, now they only own 30%-50% of it.
• In Manchester and Salford, Pathfinder spent 49% of its budget on demolitions, acquisitions and site preparation for developers. It spent a further 17% on improving existing houses and 13% on `environmental improvements'. Which would leave 21%, or £70.8million, for its own costs, and grants for private developers. This excludes extra Government grants and payments from Manchester and Salford Council.
• The Audit Commission report provides figures for Lower and Higher Broughton which show that a total of £76.5million of HMR and public money has been pumped into schemes resulting in 933 new houses This works out at a public cost of around £70,000 for every new house built.*
The only conclusion that Salford Star can reach, based on these figures, is that the whole Pathfinder programme has been a free for all for developers that's been shrouded in secrecy and unaccountability. This is one of the reasons why we are calling for a Public Inquiry.
In the next article we will be looking at the benefits, if any, for Salford's existing community… READ PART 3 HERE
READ PART 4 HERE
READ PART 5 HERE
READ CONCLUSION PART 6 HERE
* The £76.5million figure includes 592 houses that have had external improvements. Given that 17% of the costs are for improvement, we've deducted this and divided by 933, giving around £70,000 per house.
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