'High risk' housing plan criticised

A £2.2bn government programme to boost the housing market in deprived areas of the Midlands and north of England has taken a "high risk" approach, according to the public spending watchdog.

The National Audit Office said in a report on Friday that the Pathfinder regeneration project had created "heightened stress" in some neighbourhoods earmarked for demolition.

And it found that there was no "causal link" between the 'housing market renewal' project and improvements in the areas.

Launched by former deputy prime minister John Prescott in 2003, the scheme has seen 10,000 homes demolished, 40,000 refurbished and 1,000 new houses built.

But the NAO found that while vacancy rates had fallen in some areas, there was no improvement in others.

Auditor general Sir John Bourn said: "While there have been physical improvements in some neighbourhoods, it is unclear whether intervention itself has led to improvement in the problems of low demand.

"And in some cases, intervention has exacerbated problems in the short-term."

Commons public accounts committee chairman Edward Leigh added that: "Many local inhabitants of these areas feel as though the Department for Communities and Local Government has run roughshod through their towns and communities, but the question is to what benefit?

"There is no evidence that Pathfinders are bringing about improved social cohesion and although low demand for properties has fallen in the Pathfinders areas, it hasn't fallen as quickly as it has in the rest of the country.

"You have to wonder if these areas would see the same or greater regeneration if left to their own devices.

"This is a 15-year initiative and £2.2bn has already been committed to it. Given its performance to date, it is hard to think of another programme which was trumpeted with such a fanfare, but which has hit so many wrong notes."

However communities minister Iain Wright told the BBC Radio 4 Today programme that: "[Pathfinder] has worked in many cases. It is doing a good job. Housing markets in the Pathfinder areas are performing better.

"As we move forward, given the announcement of £1bn last month, I am keen to move on further and faster to ensure that these areas that have been blighted for decades do a lot better and that the residents there have a great quality of life."

Wright also denied suggestions that homeowners in deprived areas were losing out financially after having their area designated as suitable for renewal through Pathfinder activity.

"The whole reason for the Pathfinder renewal project is because we have low market demand… there’s been acute low market demand in these areas for quite some considerable time," he said.