Local Government and Housing Committee

Okay. We've reached the third item on our agenda today, our fourth evidence session with regard to the committee's inquiry into social housing supply. I'm very pleased to welcome, joining us in person, Katie Clubb, head of service for strategic housing for Conwy County Borough Council, and Emily Owen, cabinet member for the authority; and joining us virtually, Jim McKirdle, housing policy officer with the Welsh Local Government Association, Rosie Jackson, interim housing strategy and development manager with Swansea Council, and David Rees, principal officer for strategic planning with Swansea Council. Thank you all very much for giving evidence to committee this morning. Let me begin with an initial question on measuring housing need. What's your view on the new local housing market assessment process, and does that give us a clear picture of housing need? Who would like to begin? Any volunteers?

Hello, I'm David Rees. I've had some involvement on the Swansea LHMA.

Yes, David.

Obviously, it's very good from the point of view of ensuring consistency across Wales in terms of the time frames of people doing the studies to keep them up to date, and the methodology is consistent across the board. From a planning point of view, some of the results are throwing up very high social rent single-bed needs, and it's important to meet those needs if that's what's being identified, but also I think, when you're creating places, it's important that, perhaps, the LHMA isn't the only evidence base that is considered; there might be particular circumstances in an area that mean that there's already a high proportion of a certain type of affordable housing, so you don't want to necessarily build a high proportion of single-bed social rent flats in one place. So, what I'm trying to say is, really, it's a very useful evidence base, but something that needs to be taken account of in the mix with other things—local knowledge at that local level.

The other thing we've found is it's very much based on past trends, and I've not necessarily got the answers for this, but if you take, for example, a place like the Gower where people who were in housing need might have had to move out of the area, there's no evidence of them forming in that area, so it may be underestimating the need in certain parts of Swansea, and, again, that's why we want to take into account other evidence bases.

Yes. We did hear in our previous evidence session today that perhaps it would be good if the data that's available through those local housing market assessments are joined up with other data streams. Is that something you think would be valuable, and how achievable is that?

Yes, I think—[Interruption.] Sorry, go on.

Sorry, I don't want to keep talking when there are other people who should be talking as well, but I think that would definitely be—. Our LDP has got text in the policy that says the LHMA will be an important part of the evidence base, but also linked to other information sources and the knowledge of the local affordable housing officer and the surrounding environment—what housing is already in that area.

Okay. Would anybody like to offer a view on other data streams, formal data streams that could be linked in and joined up?

I think linking everything in so that, when our LDP comes out, it is more joined up, obviously, is always a good thing. I think it's quite challenging. So, we've done the new LHMA and, as David said, it has come up with a very large number compared to what we had previously. I think that's put the frighteners on people quite a bit, given the scale of which we're talking and how big the jump is. But I think it's really important to remember that it's not a new-build target. I don't think it's clear enough at the moment that that isn't a new-build target—there are lots of other factors that come in, that we're working really hard on, that will account for that number as well. And I think we need to really build on the other policies and how it all works and links in together. And recognising that, obviously, from the LHMA work, we're looking at hitting that 20,000 new-homes target that Welsh Government has, which is great, but my worry is, even with the new LHMA process, from which, I must say, it's really useful to have benchmarking data, because I found it really difficult to compare between local authorities to gauge how we're doing and whether there are areas where we could improve, because everyone measures it completely differently—. I found it quite tricky to be able to gauge that. So, this is a positive step in that regard. But in regard to trying to get that 20,000 new-homes target, this is part of the process in order to do that. But I suppose my concern, and I'm sure we'll touch on this a bit later, with that target, is we're so focused on that new-homes element, I'm not sure we're monitoring the net. In Conwy, certainly, we are losing properties, and the net figure is a lot, lot lower than the new-homes figure.

Yes. Okay. Rosie.

I was just going to add to what David said, really. Yes, it's given us not so much of a shock, it's not unexpected, but the affordable housing need is significantly higher than it was previously, which wasn't unexpected, but the proportion of one-bedroomed properties is extremely high. So, from a housing management perspective, we wouldn't want to be just building one-bedroomed properties, and I think the housing market assessment takes into account the current level of homelessness as unmet need. I think us, along with all other local authorities, have had a significant increase in homelessness applications and the amount of people in temporary accommodation since COVID and, quite rightly, with the 'all in' pledge, a focus on priority need, so that everybody gets accommodation. But what that's doing is putting a huge increase in the amount of people in temporary accommodation, and those are the sorts of figures that are fed into the local housing market assessment. But, really, for longer term community planning, housing planning, we need mixed communities. We can't just build one-bedroomed properties. There is going to have to be that balance. So, I just wanted to add to that, really.

And our waiting lists, as well—. Our local authority waiting list information is what we've used as the example of unmet need. In Swansea, we don't have a common waiting list, which I think is a problem for us when it comes to it, because there's risk of double counting and that kind of thing, in terms of the waiting list information, and that's probably something for us to look at in terms of how we record that data. But that is a factor. So, I would just echo, really, what's been said, in that the local housing market assessment can't be the only piece of evidence, and I think, in Swansea, certainly with the LDP, planning colleagues have always taken that approach. The LDP has always been part of the assessment of need. So, that was my comment on that, really.

Okay. Thank you, Rosie. Katie.

Yes, I wanted to touch on, obviously, that we've built into ours the shift, the numbers on homelessness and the temporary accommodation figures, and linking our LHMA back to our rapid rehousing plan and making that link around homelessness. I think I'd also just mention the caution around the data that we do use from housing registers—the two main sources. Obviously, that's the social housing register. We do have a common housing register, which makes that helpful, but it's a tool the registers use to allocate social housing. So, actually, people in those initial triage discussions are steered, and if there are areas with very little housing, they're told about that, and, sometimes, they may choose a different area based on that. So, you see then that the register creates—it's almost like a self-fulfilling prophecy that areas with low levels of housing may not have that high demand, because people don't choose them. So, it is a tool for allocating housing, and, sometimes, then, when you use it as a data set, it isn't necessarily accurate. And I think it's quite important that that's noted when it goes into documents like that. And, similarly with the affordable housing register—the intermediate register—in general, we notice that where there is a development going up, people will start to register their interest in those homes there. So, again, it’s a register as a tool for allocating rather than the data, and we’ve just got to be aware of that when we’re looking at it.

Okay, Katie. Thanks. Jim.

Not to repeat what my colleagues have said, but I think it’s true to say that expectations of the new LHMA process are very high, and that comes from a variety of groups. Rosie has mentioned homelessness, but also, whenever you’re discussing the accessible housing requirements, or the needs of larger households, there’s a reflection that the LHMA process can be improved, and using additional data of the kind that you’ve already signalled is part of that. So, I don’t think anybody thinks that the LHMA is a finished product; it’s part of an improvement. It’s better than the previous version, and the consistency is very much welcomed, as Councillor Owen has said, but also the Welsh Government's role in making data available to underpin that consistency, and I’m sure that we can further develop those arrangements to improve in the next iteration of LHMAs.

Okay. Thanks for that. We'll move on then to delivery and how we increase the supply of social housing. What are the major challenges for social landlords in increasing supply? What are the major problems, the major reasons why perhaps we're not able to see that provision of social housing developing and increasing as we would like? Emily.

While we’re talking about this, I think we’ve got to remember that we’re coming at this on the back of COVID, and that significantly impacted developers and house builders. Developers have gone bust in many places, and that’s really had an impact on how fast we can get schemes off the ground. Obviously, there are financial constraints and the funding, but I think the TACP funding has been excellent, and has really let us use that element of flexibility, which has been really helpful. Seeing the SHG money that’s coming in, we’ve got quite a healthy pipeline for stuff, but there is a worry after COVID and developers are struggling—the cost of materials is going up, everything is going up, and we’re trying to be more innovative. We want good-quality houses that are EPC A and are really good houses, but they come at a cost. So, there, again, everything is just going up and up and up for people to be able to deliver it.

My concern is that, now everything’s coming online after COVID and things are moving again, do we have the capacity within developers, within north Wales as our area, to do that if all local authorities’ pipelines are all starting to look healthy at the same time? Is that feasible? But I think that we’re coming out of that time of COVID, so I’m hoping that, naturally, some of the developments will come on board faster. I know, in other areas, there have been phosphate issues and things like that that have had to be overcome as well. And I think, on the land element of this, we have our own land that we are prioritising for housing, but the land that’s left comes with challenges, because, otherwise, it would have been used already. So, if we’re using that on the back of everything else, local authorities are finding things financially extremely difficult, and have done for many years. So, we've cut and cut and cut. Some of our officers have been cut to the point where they don't exist, and that's just—. Referencing back to the first question about the LHMA, we don't have a research team any more, so it's quite tricky to be able to get some of that out, and I suppose that will go on with the other bits that we've done.

But some of the good things that we have been doing are that we've got fast-track programmes going on for those projects that are bringing in over 50 per cent of affordable housing delivery. So, we're recognising some of the challenges that are going on and working really closely with our RSL partners so that we can bring stuff forward quicker, to really try and escalate that affordable housing churn to come out. Because we really have seen a dip since COVID, and I think that's where the TACP money has been really helpful, because we're so far into this crisis, it's so deep, that we're never going to build our way out of it. We've got to use building as a tool to getting out, but it's very much a part of the process, and buying housing back is a quicker way of doing it. But I'm sure we'll come on to that later. That comes with its own challenges, let's say.

Okay, Emily. Thanks very much. Would anybody like to add anything to that? Jim.

Councillor Owen has mentioned a number of the constraints there. I would start with land availability generally. I think that that always has been and perhaps always will be a restraint on development. Phosphates is an issue in some parts of Wales, which hopefully is being overcome through proactive action. General rises in costs and the costs of borrowing, much higher interest rates than a few years ago, means that the cost of borrowing is greater. The general rise in build costs means that the amount of social housing grant required and investment required to develop homes has increased. Councillor Owen also mentioned contractors going out of business, so the availability of contractors who are able to take the risks of development has seen a reduction across Wales.

I think, generally, we can't see development on its own as part of the work of a social landlord, either a council or an RSL. It's part of an overall financial environment that we're operating in. So, there needs to be as much certainty around the general financial environment as possible, with a stable rent policy, so that income is predictable, so that you can plan through your business planning processes effectively, and have the uncertainty removed over any other investments. I'm thinking particularly of investment in existing stock, as a landlord's first priority has got to be the maintenance of and safety of existing stock. So, removing all the uncertainty over the requirements to meet WHQS 2023, for example, and costs around retrofitting, would be a major influence on investment decisions and part of that overall environment around investment decisions for development.

Okay, Jim. Thanks very much. And Katie.

I'm going to build on that a bit around the standards, because I was going to talk—. I think we mentioned in our written response the pressures on social landlords in terms of the investment in their own stock versus those delivery plans, but also in terms of the TACP. The TACP, as Emily said, was a really great opportunity, the flexibility that it bought and that ability for us to move more quickly in terms of acquisitions, but we have experienced some issues in terms of the standards that have needed to be met. I think it's really important that I'm clear here that we all want the most important things around decent, quality housing that helps people's health and well-being. So, when I talk about standards, the examples we have are where we had properties—brand-new-build properties—that we could have used TACP to bring in, but literally a bedroom might have been 30 cm too small on the size standard and we weren't able to bring it back, or ex-council properties that had been council properties that were unable to be brought back in, either around those energy requirements or size standards. So, I'm not talking about advocating for low-standard homes, but I guess there's a recognition, in Conwy, that we have such a high number of people, and still at this time some families, living in bed-and-breakfast accommodation, so it felt almost ludicrous that we couldn't bring back some of these homes to use as social homes because of those standards. So, there's something around that flexibility going forward, albeit aiming, over the longer term, to meet the standards that we absolutely support.

Okay, Katie. Thanks very much for that. Okay, I'll bring in other committee members—. Sorry, Rosie. Yes, Rosie.

Sorry, I was just going to add. What has been said by Councillor Owen and Katie really echoes with what the situation is with Swansea as well. So, just on the issue around land, what we've found is that, again, we're in the same position, we're using our housing revenue account landholdings because that's what we have left. All of the substantial and developable land has been sold off in the years prior to the local authorities being able to develop. What we've found is that the land and building development fund is a really, really useful fund for us, which we've used on several schemes now to take out the abnormal costs, really, to make the land suitable. So, that's something we would really like to see continue.

In terms of the standards that Katie just mentioned, we'd have a similar issue, whereby we've got quite a strong acquisition programme in terms of buying back ex-local-authority properties. That's outstripped our new-build programme at the moment, anyway, although we have got a pipeline. We've bought about 156 properties back, but some of them, because of the size of bedrooms, particularly, haven't met the grant requirements. And whilst there is flexibility, we've sometimes made the decision to purchase them purely with HRA funding, because we still wanted them. So, I would agree with Katie that there needs to be more flexibility in terms of, if you're buying back an ex-council property, why would you not say that that's suitable for people to live in in terms of standards?

The other thing as well is that, in terms of—. I don't know if we'll come on to a question in a bit more detail in terms of planning, but in Swansea, we've got a really good relationship with planning and planning colleagues, but some of the issues are around the sustainable drainage systems approving body and the sustainable drainage requirements, which are new. There is much less resource in SAB teams than there is in planning teams, but they deal with the same number of applications. And those are where we see delays, really, not necessarily on the planning side, but on the SAB scheme. It's new for developers, it's new for RSLs and it's new for local authorities, and that's certainly an area of challenge in terms of those requirements and how schemes get impacted by them and the delays, really, because of a lack of resources, I think, to deal with the number of applications that come through.

Okay, Rosie. Thanks for that. Yes, we will be coming on to planning and other issues in a bit more detail later on. Sorry, Emily.

It's okay. Sorry, I just wanted to touch on something that Rosie mentioned, because I think it was a really good point. I just wanted to highlight what Rosie was saying about the standards and then them deciding to buy, through the HRA, that property. I think it's a really big point that just highlights the difference between stock-holding and non-stock-holding authorities, because we're not stock holding, we don't have that ability to do it. So, when our RSL partners are saying, 'We don't want to buy those older properties or ex-council properties because they're not going to meet standards', or, 'It's going to cost us a lot of money in order to do that; we'd rather reinvest', we can't do very much about that. And there is a big difference, and I think you'll see it with the homelessness numbers. You can almost draw a line where it looks at the data of those stock-holding and non-stock-holding authorities, because there's that inability to do it because of the new legislation.

People who are presenting as homeless become the statutory responsibility of the council at the time of presentation, but they're not the statutory responsibility of the RSLs. So, there is a real mishmash as to where this is going, because if we don't have the ability to buy those properties anyway—. We have bought a few through the TACP, so I'm very pleased. I think we've got about five now, but it's very different from the 156 that Rosie's been able to buy back in. I think it really does go to show the different challenges that local authorities are facing because of the set-up. And it's just a point, really, to highlight that whilst the grant flexibility has been great, we have still found it really challenging to buy back those acquisition properties, and one of the reasons that's being cited to us, really, is the standards in the future and how much it's going to cost and whether that aligns with different RSLs' business plans, when we don't have the ability. Because it would cost us a lot less money to buy that property than it would do to keep that family in a bed and breakfast. I just wanted to highlight that, really.

That's very useful, Emily. Thanks very much. Okay. Luke.

Diolch, Cadeirydd. If we could just think about, for a moment, the Welsh Government's grant regime, is that supporting the building of social housing in the way that it should be? Ultimately, is it working? Katie.

Yes, we've already mentioned—. I think it's really important to mention the TACP and the difference that that has made and how that has undoubtedly made a difference. Because I think it's really hard, when you think about when that 20,000 homes target was set and the unprecedented circumstances we've been through since then in terms of, we are not where we should be because we know that contractors have gone into administration, we know of all the material and labour costs, we know that some of those schemes haven't come through, so the TACP and that flexibility was a really important development.

And I think that flexibility is the message that we'd be giving going forward. So, we are ready; we do have a healthy pipeline now and the worry is that some of our RSL partners might be phasing some of this forward, whereas if we can pull grant forward, we can probably do more now to make up for that lost time. But it needs that flexibility of the amount of grant, but I think, also, between those funding streams, that flexibility, like that which came with TACP in terms of being able to do things a bit differently.

So, that would be the message. It's worked really well, but there's the potential now for it to, I don't know what the word is, 'stretch' I guess, so that it's not set out over a few years, so that we can work at the pace that we need to. We have such—and I'll keep going back to it—an urgent situation in terms of our homelessness in Conwy and when we're there, you see that when you talk about targets and 20,000 homes and you talk about the units, actually, the reality of what that means—. And I think, as Emily said, for us, it won't just be about the new build or that target, there are lots of other areas: the existing homes that we have and reopening some of those; the empty homes we're bringing back into use; the Leasing Scheme Wales. For us, it's around that broader, affordable need that matches to our local need at the moment.

Is that a view shared by all of the witnesses? Rosie.

Yes, I would agree with everything that Emily has said, really. We've used TACP in Swansea. We're lucky, we've got a generous social housing grant allocation; we've got very active housing associations. We're at the start really of our journey with the social housing grant, because although we've built new-build properties, it's only relatively recently that local authorities have been able to access the social housing grant. We used innovative housing programme grants to fund some of our earlier new-build schemes, hastening to add that, on our new-build schemes, although we've had five, they've availed us of 88 properties. So, you can see the difference in what we're doing with acquisitions and new builds, but we have got a pipeline that's developing now to bring more schemes forward and a few larger sites, which will up that for us.

In terms of our feedback from RSLs, the standard viability model has been updated in terms of the assumptions within it and costs, and they have informed us that that is working better for them. But I think one of the caveats on that is that the financial assumptions in the SVM need to be regularly updated, I think, because costs increase so rapidly; it's really important that it's kept under review and regularly updated. I think it happens on an annual basis at the moment. Whether or not there's a question that that could be done more frequently, I don't know, but certainly a close track needs to be kept on live cost increases.

The other thing, from a local authority perspective, is that the social housing grant gets paid to local authorities in arrears, so, on completion of schemes. Now, that does have an impact on the financial viability of schemes. We will tend to press forward with schemes anyway, but housing associations get their grant in advance currently, although I understand that Welsh Government is looking at that position at the moment—I'm sure that Community Housing Cymru will have already mentioned it—and that will have an impact on RSLs' viability. Our concern is whether it would have an impact on us achieving full spend of the social housing grant year in, year out. I know there are probably other factors at play for Welsh Government to consider in terms of that decision, but that will be an issue going forward, particularly for RSLs, if that regime changes, and we would prefer to be able to get a grant either upfront or certainly as staged payments as schemes are developed.

Thank you. Looking at the time, Chair, I'm interested—

Yes, I think that Jim—. Briefly, if possible, Jim.

Yes, only to—. Not to repeat the points that have been made—Rosie has made my point about payment in arrears. I think I'd repeat the point about as much certainty as possible across the whole financial framework for RSLs and councils. The grant levels at the moment—investment by Welsh Government—are at unprecedented levels and we've certainly not, within living memory, seen that level of investment. It would be great if that could continue, but we need certainty around business planning to have the confidence to invest in development going forwards. So, I'm just making the pitch again about the whole financial package being what’s important to landlords when making those investment decisions.

In the interest of time, I'll move to my final question, Chair, specifically around the exemplar sites that are being delivered via the Welsh Government’s land division. Do you think it’s feasible to expect local authorities to be taking on the land assembly role? Emily.

To be honest, that’s not really been our experience. We have been taking on most of it, and it’s only more recently that we’ve been looking at working with the land division to do some of the bits that really need unblocking. There are opportunities to work more collaboratively together with it. I think what we’re finding is some of the things that the Welsh Government land division is currently looking at are the really complex sites that have been blocked by infrastructure or Welsh Water or something that is really quite complex, and we do not have the capacity, time, skills in some areas, to try to unblock that at speed. So, yes, absolutely, we are working together more. For us, it will definitely be beneficial to keep that relationship going.

Any other comments? Rosie.

In terms of what Councillor Owen said, we’re always keen to work with the Welsh Government in identifying sites that would be appropriate for us, but from a local authority development side, we’re dealing with relatively small sites and we wouldn’t have the capacity or expertise to take on any roles, I wouldn’t say, that the Welsh Government are doing. I think that would be better suited as a central issue. As Councillor Owen said, they’re dealing with larger complex sites. That’s not something I think that we would be in a position to take over. But we would certainly want to work with them and identify if there are plots of land that as a local authority we could develop or work with RSL partners to bring forward.

We'll move on to Carolyn Thomas.

Can I just ask Rosie and Emily: is that because of statutory consultees taking so long? That was raised earlier—NRW and Dŵr Cymru et cetera.

Yes, sometimes it is. There's infrastructure stuff as well. There are other things that play. But yes, the statutory consultees take an extremely long time.

Rosie, is that something—?

Are you talking about the sites—

The complex sites, as you were saying.

I can't really speak to that, because we haven't really had much experience of that directly working with the Welsh Government on those; there might be a planning input into that. Generally, in terms of planning and statutory consultees, yes, that process can take longer, not from a planning perspective, but just in terms of getting responses, particularly around highways and drainage. But that comes down to capacity and resources within authorities, which—I think it's already been mentioned—is really challenging at the moment. There aren't necessarily the resources to do things as quickly as they should be done.

Can I just ask Jim as well: in your experience, do local authorities still have rural housing enablers, and even urban housing enablers, to do that housing assessment of need? Because it sounds to me that they don't.

There still are some rural housing enablers in Wales. I'm going to say I think there are four, maybe three, mostly operating in north-west Wales, although I think south Powys and north Monmouthshire also has a rural housing enabler, and they're still supported in part by Welsh Government funding.

Thank you. And can I just ask Emily—? You said you've got little land left for development now that you could develop on. Earlier, we were talking about sharing of public land, maybe owned by the police or owned by health. Is that an issue for you in north Wales, or are people talking regionally across public bodies?

There's definitely a bigger piece of work that needs to go on with this, with the health board in north Wales in particular. I think the will's there; I think there's a capacity issue within that and being able to actually move things forward. I don't think they're holding it back because they don't like the idea of it. But just trying to get that momentum and to get stuff moving I think is a big piece of work that needs to be done.

Thank you. That's interesting to know. And just on planning generally, what are the main issues? We've talked about capacity. The Welsh Government are talking about maybe using CJCs and sharing of planning officers to help. Earlier, there was also talk about delegated authority as well, so there's inconsistency there—that some local authorities might use delegated powers more than others and may want to take things to planning committee more. Do you think CJCs might help with that? Will it help with capacity? Your views on that, please.

I think with the CJCs I'd like to see exactly what it means and exactly what is being suggested with it. Streamlining is a great idea. My worry is that it will just become duplication and we'll still end up doing stuff at local level and at CJC level as well. So, I'd like to explore that a little bit more, but I'm absolutely up for a more co-ordinated approach. I'd just caution that, obviously, the CJC in north Wales covers quite a large area, and something that may be strategic in Wrexham, for example, may not be strategic in Conwy. So, it's just about how does that work and exploring that a bit further.

Are you saying that maybe CJCs are a bit too big, and, maybe, if it was planning, if it was divided into two, or—?

I'd like to see how the proposal is planning to work. I do think that we need some more strategic approaches to really drive forward, particularly on the housing situation. I don't necessarily think that CJCs are a bad idea to place that, but we just need to think about how that's going to work in practice so that we don't end up duplicating stuff. Really, with all that you were saying about delays in planning and things, it's making sure that that pre-app stage is really utilised. We know that there are developments that we have at the moment where, actually, a lot of these issues could have been teased out at that pre-app stage. If people are engaging at that point, lots of the time that is spent dealing with things further down the line—. It could have all been sorted much earlier on. So, it's just that importance of early engagement with the local authority, with the RSLs, and the community as well.

Thank you. Anybody else? Jim, did you want to come in on this?

CJCs are set up with statutory responsibility around the strategic development plan and the regional transport plan, and I think there are lots of expectations about the potential of CJCs. Authorities are certainly up for conversations about collaboration, about regional working where it works, where there's evidence that it can produce benefits. I think that co-designing any future expansion of regional working is something that needs to be done between the Welsh Government, local authorities and other stakeholders in order to achieve those benefits, rather than for it to be a centrally dictated change in the role of CJCs. I would say that if there are additional duties placed on CJCs, then they need to come with additional resources. It can't simply be about sucking up resources from within councils to a regional level. We've already heard about the lack of resources within some functions in local authorities, and simply replacing that with a regional approach could exacerbate that.

Can you just clarify whether CJCs are funded by local authorities? They have to give some funding, don't they, to them. Yes. Okay. And there are also the public services boards, the regional partnership boards, and the economic ambition board as well. So, are they the best place? I don't know. David.

I was just going to add that I'm a planning policy officer involved in delivery of sites in Swansea, and we've certainly got a lot of good sites that are making progress. The issue that we've found is that there's been a bit of a lag in them getting onto site, and that's partly because of the multidisciplinary nature of planning. There are so many very important and well-intentioned developer requirements, such as SuDS, new ecology standards, and just the complexity of making sure that developments create the quality of place in placemaking terms, and this does take time. I wouldn't say it's necessarily the decision-making part of planning that needs to be looked at, and I think with the CJCs, there will be issues with local democracy, taking the decisions away from the local councillors to a body that isn't necessarily made up of—. I'm not completely sure how CJCs are made up.

I'd really want to emphasise that it's the interface between the different specialisms—from drainage and highways colleagues, the statutory undertakers like Welsh Water and NRW. Planning ends up as a sort of co-ordinator of all these disciplines, and they all need to be moving on the same timeline, and each comment from one will have knock-on effects and often mean that something needs to be redesigned. For example, on streetscenes, with the introduction of SuDS, trying to get street trees and SuDS into streets means that it's not a simple process to get roads adopted. And that, then, leads to delays after the planning consent. So, these aren't necessarily all delays leading up to the planning decision, and it can take another 18 months to get on site because of all the road adoption and separate SuDS procedures that need to be gone through.

Thanks, David. Thanks, Chair.

James.

Diolch, Cadeirydd. I know that we're exceptionally short on time now, so my questions will be pointed to a few individuals, if that's okay. My first question will be to Jim, because I think it's fair if it goes to the WLGA. Research from the Home Builders Federation found that local authorities are not spending all their section 106 contributions. The research found that—and I'll get the figure right—£71.4 million was unspent across 14 local authorities. Can you give us a response to these findings from the WLGA's perspective, please?

I'm afraid I can't. I did look for the research and wasn't able to find it and I haven't been made aware of it by HBF or anyone else. So, unfortunately, I'm not in a position to give you a response.

Does anybody else want to have a punt? Because we're very short on time, I don't—. Emily.

I have checked, and we are spending our section 106 funding. We've put stuff in like setting dates within the legal agreement to make sure that that is happening and having that enhanced oversight with our planning enforcement team being proactive with the developers to make sure that the developers are contributing in a timely fashion. But I have to admit I'm not an expert on section 106.

I think Rosie wants to come in.

I can only speak from a Swansea perspective, and David can come in on the other section 106 contributions, but for our affordable housing section 106 contributions, we spend them. We always aim to achieve on-site affordable housing development with schemes, but where that's not possible, we will receive the commuted sums and that has largely funded our acquisition programme. So, we're spending it. Obviously, there are other section 106 contributions as well, so I don't know if David's got a comment on that from a Swansea perspective.

In Swansea, we've got a central team of planners and people from the finance department co-ordinating a database on section 106, working with all the different departments, and not spending them is not an issue from our point of view. Obviously, there's a small time lag between receiving money and it being put to use on a project that's been identified, but there would be safeguards in place in terms of the co-ordination that we're doing centrally to make sure that that runs smoothly.

Jim, would you be able, perhaps, to look into this further and get back to the committee, if you're able to?

I'm sure if we're able to access the research and talk to colleagues, then we'll be able to come back with some information to the committee, yes.

As we're short on time, Cadeirydd, I'm happy if we write to the witnesses on the other points.

Okay, James. And Altaf.

Thank you very much. Under the Levelling-up and Regeneration Act 2023, the Welsh Government has just announced that it will consult on the new compulsory purchasing powers. Do you think it will make any difference?

Who would like to give an initial response?

In Conwy, we haven't had much cause to use these. It's going to be a resource issue in terms of compulsory purchase powers. I think anything that streamlines would always be welcome, so in terms of any review or anything that streamlines the process. I think the recognition, in terms of the potential around this, is recognising the resources available to councils at the moment and what we can do with those. And we'd always hope to get to a position where we wouldn't need to use them anyway. But I think the message in terms of a review would be that streamlining any process would be good.

Thank you. I think Jim wants to come in.

Similarly, we haven't had detailed discussions. There's only been an announcement about this, and we look forward to the consultation. However, the notion of removing the hope value, which, I understand, is part of the proposal to reduce overall land costs, is something that's worth exploring within the barriers to development, I would suggest.

Great, thank you very much. Coming to my last question, about the communities, how can communities be effectively engaged in social housing developments in their areas? Do you know of any good practice that could help you to build these developments without any problems?

I think that early engagement is really important, both with planning, councillors, and communities, making sure that people know what it is that we're trying to achieve. I think making sure that we're constantly trying to tackle the stigma of social housing and bringing communities on board with us when we're going through projects—. I think part of the thing that I have most when I'm trying to kind of 'sell' developments to communities is, 'But that's not affordable for me, so it's not affordable housing, because that's not affordable for me', and I think that is a really big issue that we need to make sure we are tackling. In Conwy we've got an average wage of around £30,000, and, when you're looking at private rent, a small two-bed is £1,000 a month, which means that intermediate houses, because our partners are linking intermediate houses directly with private rent—. It's 80 per cent of private rent, that's £800 a month, and that's still not affordable for people.

I know that Welsh Government's intention wasn't for intermediate houses to be linked directly to that at 80 per cent; it's more in line with the local housing allowance rate. But that's not happening, and there's that huge cohort of people we're seeing presenting as homeless who are kind of a new cohort, who, actually, don't have complex needs, they are working, it's just there's just no way that they can afford—. Our nurses, our cleaners, our cafe staff, they just cannot afford that kind of rent, and it's a simple problem of, actually, they're quite self-sustaining, it's just that their outgoings and income don't match. So, I think making sure that, when we are talking about communities and social housing, it's really linking that and saying what's in this for you and your communities, and it's not just about—. We've got a huge issue with homelessness and we absolutely need to address it, and we need to get people out of bed and breakfasts in a big way, but we also need to be thinking about these communities for the future, and really have that future generations Act mindset when we're talking about developing new communities and new developments so that the development becomes sustainable and it's not reactionary to the current situation that we're in.

I think, just on that, some of the community stuff that I've spoken to communities about more recently is that there's a bit of frustration that we've got lots of shops in town centres—. Now, we talk about 'town centre first' and brownfield sites and regeneration, which is great, but we've got lots of flats above shops that are one-bedroomed, perfectly reasonable flats, and they seem to be a bit of an enigma. No-one really knows what to do with them, because the access is difficult, or there's a shared entrance or there's 30 cm too small of a bedroom or something—there's something that's going on with them. But, actually, if you go to Colwyn Bay in Conwy, you will see hundreds of these empty properties above shops that, actually, could be in use, and that's part of the solution to trying to move this forward, but I don't think anyone has really got a grip on knowing what to do with that.

Okay, could I just ask one final question? Back to section 106, and how we might get more houses provided through section 106, we've heard suggestions that Welsh Government might support local authorities in negotiating with developers around viability. Is that something that has mileage, do you think? Is that something that you think would help?

I can—. I mean, it could do. I think we've got to—. It's really hard, isn't it, when all of the costs are going up, and we know that costs are going up, and we know that viability is genuinely an issue in places, because we're seeing developers go bust, and that is really tricky. As we said, we are trying to build those homes that are really good quality and they're smart, different types of homes. It's really difficult to keep increasing the cost, increasing the cost, and then saying, 'Oh, and there's 106, and there's this and there's that.' We're trying to be smart with 106 and using it in different ways and topping up sites where you've got a percentage of affordable homes—we're seeing if we can use that 106 money to increase that, things like that with the developer. So, I'm sure Welsh Government helping with the developer is welcome, I'm just not sure that sites are—. Because everything's going up and costs are going up, everything is going up for developers as well.

Thanks for that, Emily. And David.

I personally work on viability assessments with developers, using the Burrows-Hutchinson model that we've had developed across the region and that now is being largely used across Wales. I think any support and training would be very useful for officers. I've been lucky enough to have training through the work we've been doing, but I think what would be really useful is some form of national guidance on viability assessments, for example, if something that comes into play is sometimes unrealistic—expectations of landowners on the value of their land, and not taking into account all the developer requirements that are now being placed on developments, such as the cost of things like extra responsibilities, like SuDS, but also the land take that can take, meaning that fewer houses will be built, which affects the viability—and something that gives policy officers like myself a basis to go back to and refer to in the negotiations. I know this has been discussed with Welsh planning officers and there is a piece of work being funded by the Planning Officers Society Wales to introduce a technical document that local authorities could refer to, but the more weight that that document could have, maybe, at the national level, the better.

Okay, David, thank you very much. Okay, well, thank you all very much—

Can I just have one question, if we've got time?

Well, if you can do it in about 10 seconds, Carolyn.

Do you believe, if developers could give gifted housing, which you could borrow against, that could be a way forward, especially if you haven't got housing stock to begin with? I know we did it in Flintshire. Would that be something that developers might be mindful of doing?

Yes. I think developers are really keen to work with us and RSLs at the moment, to be honest, because they are—. Given the housing situation and the market at the moment, if we've got sites that are 50 per cent affordable, for example, then they know that 50 per cent of that site is going to be bought at the specific price, and they know the cost of those pretty early on. So, I think developers are willing to work with RSLs more than they have been previously.

Okay, thank you.

Okay, thanks very much. Thanks to you all for giving evidence to committee today, Jim, Rosie, David, Emily and Katie; thank you all very much. You will be sent a transcript to check for factual accuracy. Diolch yn fawr. Okay, committee, we'll break until 11:15.

Okay. Welcome back, everyone. We've reached item 4 on our agenda today, our fifth evidence session with regard to the committee's inquiry into social housing supply. I'm very pleased to welcome, joining us here in person, David Ward, chief executive for Tirion, Dorian Payne, managing director with the Castell Group, Mark Hand, director of Wales, Northern Ireland and Planning Aid England, Royal Town Planning Institute, and Mark Harris, planning and policy advisor Wales with the Home Builders Federation. Thank you, all, very much for coming in to give evidence to committee today.

Perhaps I might begin with an initial question in terms of meeting housing need. We've heard already as a committee that the type of homes being built in Wales are not always in line with what people need, for example, there are a high number of single people in temporary accommodation and an undersupply of one-bedroomed properties. So, how joined up do you think social house building is in relation to the types of homes that people need? Who would like to offer an initial view? David.

Yes, I think it's a point well made. Our one-bed apartments, through our schemes, are very popular. They tend to be more popular than the two-bed homes as well. But I think, more importantly, getting the right mix of tenure is important. So, we think that, whilst we support a focus on social rent, there is a bit of a gap in intermediate rent. A lot of people are looking for better value in the rental market, particularly now as the rental costs have gone up so much. So, we think that there's a real opportunity to, certainly from our perspective, bring private institutional finance in to plug that gap and provide a better mix of tenure.

Okay, David, thanks. Mark.

Thank you, Chair. I won't repeat what David said, but I'd agree. I think, from a planning delivery perspective, for local planning authorities it is very joined up. So, housing officers within councils will specify on a site-by-site basis what the exact local need is, down to that they need, I don't know, 10 three-bedroomed, five-person semi-detatched houses, five bungalows. So, that is very well joined up and links directly to local need from the housing waiting list. But I think where the massive gap lies is that it's way off the numbers that we need. And I think, linked to the point that David mentioned, it's around getting that balance between evidence that very clearly points to social rent, one-bedroomed units in particular, and creating mixed communities, which is a different range of types of affordable housing and sizes.

Okay, thanks, Mark. And Dorian.

Thank you. So, from a developer's perspective, an SME development company, we're demand led. So, what we do is we work with housing associations and developing local authorities, and one of the first things we do is look for demand—what mix is required, what tenure is required—which comes back from, as you've said, the housing officer being joined up already with the waiting list, so they already know what's in demand in what area. But, being an SME developer, our problem is that we specialise in brownfield sites, regeneration sites, on a small scale, so that's very restrictive in the constraints themselves: the sites are awkward layouts, they're surrounded, they've got different constraints all around them. So, to maximise the site from its viability point of view, to cover landowners' expectations and make it work, because of the cost of building—and, with that regeneration of small-scale sites, you don't get the benefits of economy of scale. Sometimes we can't necessarily meet the exact requirement of the housing officers, but the local authorities or housing associations still believe they can rent those properties. So, what we've seen, as one point, really, in terms of the join-up question is, I do believe it is joined up. There is a process already in place and we follow that process with our partners, but sometimes there's a crossover where that particular development site itself can't hit the full requirements. So, there's this negotiation between housing associations and local authorities, housing officers, to get grant support to bring that site forward. Does that make sense?

Yes. Okay, Dorian. That's fine, thanks. Mark.

Yes, just very quickly, I agree with everything that's been said. I think another factor—and I think we'll come on to it, maybe, in other questions—is the delay in planning. So, if you're looking at, for instance, sites that are allocated in plans and then brought forward, you can be looking at anything up to 10 years that it takes to get those sites. Now, the demand for housing changes as a result of lots of factors, and something could happen tomorrow that could mean that no longer is it one-bed flats we need. I think it was probably about seven or eight years ago everybody stopped building one-bed flats because they just weren't seen as the right thing to build. So, that's another difficulty—that the demand is now, but the planning system takes a long time to deliver homes, so it's not necessarily in line with what the actual demand is.

Thinking back that seven or eight years, then, Mark, why was that the view then in terms of single-bedroomed properties? Can you remember?

I think it predated the bedroom tax issue, but it also was around, if I remember rightly, a lot of registered social landlords trying to minimise stock turnover. So, the problem with the one-bed flat is the minute that person maybe gets a partner or gets a child, you've got to find them a bigger property and you've got to move them on. So, it was seen as a time when you weren't getting charged for empty spaces. It was better to have a bit of extra room because that gave you more flexibility and you could stay in your house, stay in your community, and that was seen as better.

Yes, sure. Okay. In terms of delivery, what are the main barriers, would you say, that developers face when they're trying to bring forward housing supply? What are the main difficulties, the main challenges?

Well, I have quite a few on my list, so I'll try to be quick. Again, as Castell Group, we are an SME development company, which I believe shouldn't be forgotten in the delivery of social and affordable housing. I want to make that very clear because we are in a housing crisis and local development plans are behind, et cetera, so all that puts pressure on allocating much larger swaths of land to be delivered, which can only allow larger house builders or companies to deliver. But SMEs have really good skill sets to contribute to helping provide new housing and be good partners as well, which will also help the skills shortage too, bringing them through. So, I want to start with that.

But, in terms of delivering new housing and the challenges, yes, you've got land availability. I think you always will have land availability, though, as an issue, because land availability also means viability of land and landowners' expectations. Nobody can control that, so that's always a big part. We've always struggled with the price landowners want versus what we can pay, especially in areas where it works more for private than it does for social and affordable, because district valuers may come around and down-value the land value, which means housing associations can't buy the land, because it's undervalued, whereas other developers can. So, I think there is a problem with land valuations. That is a point that should be looked into.

In addition, though, by far the big elephant in the room is planning. Planning is really complicated. Also, you can't predict it, so it's quite subjective. That's a big barrier for SMEs because we can't afford to risk £50,000 or £60,000 or £70,000 and it not come off. We follow the process of pre-application advice, pre-application consultation, and then full planning. But the timescale to get that through—. If you're already within the settlement boundary—I don't want to take away from the other gentleman here—it takes so long. It takes longer to get the legal consents than it actually does to build new housing—that’s what we’ve found. We build much faster than it takes for the whole process. So, by the time you factor in pre-application, PAC, full planning, then you've got section 106, which takes months, and it really shouldn't do, only then can the judicial review period start, after the decision notice has been released. That's a further six weeks, and you can't sell the site or do anything until that point. Only then can you start after the decision notice pre-commencement conditions, which are still prevalent in use in the planning system and they shouldn't be, really, in my opinion—you can't start a site, and that could take years. So, I believe planning is a huge problem.

There are also, I believe, too many silos. The sector is siloed—i.e. highways and planning will disagree and you'll be at loggerheads. The sustainable drainage approving body and planning will disagree, and you could have a three-month delay just on choosing the type of asphalt that goes in the housing layout where the whole housing scheme is agreed, but highways want the road to be impermeable, SAB want it to be permeable. No-one is agreeing and you can't get a decision for three months just on that one item alone. I've got lots more, but I'll let the other gentlemen kick in.

That's enough to start with, anyway. Okay, Mark, yes.

Thank you. I think, in terms of delivery, some of the main barriers are around land, and I think all of our members and all the developers, registered social landlords and private companies say that they would deliver more if land was available, and that comes down to local development plans, primarily. So, it's about having those up to date, but also having ambitious plans that do look for growth and meeting housing need. And I think there can be a tendency in national policy to look to past trends and population growth data, rather than thinking about how plans can be used as a policy tool to implement positive change—you know, how do we address things like ageing populations, affordable housing need? It needs some growth. Clearly, that growth has to be in the right places, but that land has to be there. So, I think that land availability is certainly one.

Linked with that is the challenge that Dorian's already mentioned around viability of sites and increasing policy requirements. So, one of the key issues that we hear about objecting to development is around infrastructure. You're probably aware that section 106 planning contribution agreements can be used for things like school places, highway improvements, active travel links, all sorts of things, and affordable housing, but there's only so much money in the pot and that cake is trying to be sliced up into increasingly more slices, which means that something isn't getting what it needs, and quite often it's affordable housing that takes some of that hit.

Complexity of the planning system that's been mentioned just now is a challenge, but I think there are elements of that complexity that are introduced for good reason. So, you'll be aware of things around phosphates recently, and we'll come back to that probably in a couple of minutes, and around things like environmental protection, around SABs—so, sustainable drainage systems for developments are there with perfectly good intent, preventing developments from flooding in the future—and also ecological benefits. So, that complexity is there for good reason, but it has added to some of those processes and delays.

And when we were chatting outside, I think we fixed a few problems within 10 minutes—with things like legal agreements, it can feel like you're doing the first one ever every single time a council is doing legal agreements for section 106. That surely could be standardised a bit more, and simplified.

Site sizes can be a challenge. As was mentioned from an SME perspective, LDPs quite often allocate large sites, and there are some benefits around doing that in terms of getting more bang for your buck as a council. So, there's infrastructure demand on a bigger site—for example, if you're over 700 homes, you probably need an on-site primary school, and that can be much easier than trying to extend local facilities that may not have the physical capacity to be extended. So, there can be, perhaps, an ease in going for larger sites from a council's perspective than pepper-potting small bits of development here and there, but that does, by definition, tend to exclude SMEs from the process, and they could bring a lot to the table in terms of delivery.

Okay. Thanks, Mark. David.

I agree with everything that's been said so far, but if I can just concentrate on our area of expertise, which is delivering very large strategic regeneration sites, I think, of the challenges that we've faced recently, construction cost inflation has been a major one. We've seen one site's costs go up by almost 30 per cent in a two-and-a-half-year period. So, that's been a big challenge. Tightening credit markets and access to finance have become much more difficult since the mini-budget of 2022. That's created huge issues for us. I agree with everything in planning, but, for us, big projects, development and construction capacity, and skills and resources in the supply chain are really big issues. And I think that, if you couple that with restraints in capacity from the utility companies, particularly electricity now—we're moving towards an all-electric development proposition—we have real issues in dealing with National Grid in terms of getting the capacity that's required to move to the new technologies.

So, what I think is that, if you put all of those things in combination, then doing large, strategic regeneration sites is just too difficult for the vast majority of organisations. And we have to find a way of trying to unlock that by bolting these things together and having a more strategic view of how we deal with this. As far as we're concerned, we absolutely support the SMEs' role in all of this, but, unless we start delivering our big brownfield regeneration sites and have a portfolio of sites going forward, we are not going to start addressing this crisis that we're facing at the moment.

Okay. Thanks for that, too. Did you want to add anything, Mark Harris?

Yes. I'm, obviously, here representing private house builders. I think a lot of the conversations we hear around this issue are around how councils and RSLs can deliver more affordable homes. But the statistics show that 30 per cent of the affordable homes in Wales are delivered as part of private developments. So, whatever we do, whatever we hopefully get done with the planning system, or any of the other systems that we'll talk about today that are causing delays, we need to make sure they apply equally to all tenures and all sectors, and not see priority necessarily for the affordable housing sector, because, ultimately, that will reduce not increase the supply.

Okay, Mark. Thanks very much. Mark Hand.

If you don't mind, Members, I'll come back with just a couple of extra points. I think two other key issues that are barriers to delivery result around the voices that are heard. So, many of these decisions are made by locally elected members. You're quite often hearing voices from objectors, who tend to be people with homes, in this context, and you don't tend to hear from people on the housing waiting lists—younger generations, who really need this housing. And that can sway decision making, or end up resulting in some very short-term thinking. And that can also be a real challenge when doing LDPs and a lot of pressures against growth that is needed. The evidence on housing need is really, really clear; the challenge is doing that. And one of the biggest objections coming up is around infrastructure capacity, our members are telling us. So, it's fixing some of those other barriers. That can be water, sewer infrastructure, transport infrastructure, and, more importantly, more recently, has been health infrastructure. So, there's a recurring theme that, 'If there are more homes, I'll never get a GP appointment'. So, all of those bigger issues that you'll be facing are very much interlinked with this problem.

Mark, just on that point about planning committees and local members, and, obviously, they will want to reflect the views of local communities, we did hear a suggestion that there might be greater use of delegated powers. Obviously, there's a balance there, in terms of the local democratic nature of the planning system, but is that something you think has some mileage?

I'm not aware—and I'm not sure if colleagues here would disagree—that that's a particular problem in Wales. Typically, around 90 per cent, 95 per cent of decisions are made under delegated powers at the moment. I think, as you alluded to, there has to be that democratic accountability, and it will be those bigger developments that naturally go before elected members, and do rightly have a bit more public airing and a bit more public concern, and it needs to be explored and done in an open and transparent way. So, I think it would be very difficult to create a system that just facilitated these schemes going through under delegated powers. I'm not sure how that would really sit comfortably with the democratic side of the process.

I think one of the things that is problematic is that what should happen is that the allocation of a site in an LDP should give every stakeholder certainty that, in principle, that site will be developed for housing or employment, or whatever that allocation is. And it still feels like there isn't that certainty. You know, schemes can go before planning committees, and there's a debate about should there be housing at all—that argument should not be on the table; it's more about more site-specific things. So, if there's a way of cracking that, I think that might help.

Yes. Okay. And the other Mark.

I think, yes, that's where the frustration comes in, that you go through what is a lengthy three, four, five painful LDP process, you get your site allocated for housing. During that, the infrastructure has been looked at, the highways have been looked at, the school places have been looked at, all the issues have been looked at, and then it ends up at committee, because a member just goes, 'I want it to go to committee.' I think that's what should be challenged. They need to explain why. If it goes to committee, we can't discuss the principle, we can't discuss the highway issues, we can't discuss the school issues, because they've all been resolved; you have to show that there's some issue that hasn't been resolved, through the LDP process. That might be a way of dealing with it.

Right. Okay. And Dorian.

Just to add a point onto that, again, this is from an SME's perspective, where the predominant amount of sites that we do are already within a settlement boundary: white land, brownfield, small infill, windfall sites, et cetera. The vast majority of our sites go to planning committee. I don't believe that they need to; I think definitely that the use of delegated powers, especially for these smaller-scale sites—and when I mean 'small', they're still classed as major sites; they're still above 10. You know, 10, 15, 20, and it can be 30 as well—30 homes—but it's inconsistent. So, we've had as high as 36 homes be approved under delegated powers, but then we've also had a site as small as seven have to go to committee. So, it can change all the time, because, obviously, if councillors want it to go to committee, they can just request it. If one of their local constituents has objected, all it takes is one councillor to request it to go to committee, and it will go to committee. But I've sat in quite a lot of committees, and you have things like housing extensions in there that can take over an hour to get decided, and it's just—. Personally, I think it's a barrier; I really do think it needs to be looked at. Planning officers don't seem to have as much authority, really, as I would expect them to have as a planning officer. But, of course, I know you've got to balance it with the local impact, and brownfield sites, infill sites, do have an impact on the direct local community.

So, we've had a site as small as 14 social housing have nearly 1,000 objections. There are only 30 houses in the cul-de-sac, but that's what happens. That goes to committee, it takes two years to get consent, finally, because it is in white land, the principal development is accepted, and it is policy compliant, and, obviously, we're building it now, but it could've already been built. People could've already been living in there, and that is the challenge. And I know there's no very quick answer for it, but I would agree it does need looking at, and for us—I slightly disagree with Mark on that—most of ours go to planning committee, and I don't think they need to.

Okay. All right, thanks for that. Yes, Altaf.

Can I ask quickly? What you said is correct, but the problem is how are you going to to sell that to communities, because communities—? You never get along with the communities. When they telephone you, when they ask you, you never are there, and it is through their councillor that they make their local development authorities answerable and accountable. You don't remain accountable there.

So, I respect that as well, so thank you. What I would say is what we found, you know, delivering over 100 social housing, being in construction for over 230 social housing homes, having a pipeline of 1,000 social homes across the entire south of Wales, with lots of different RSLs and local authorities, there is a huge social stigma in society, and that is just the bottom line. And councillors—I've spoken to them directly—who would like to personally support our scheme cannot support our scheme because of the community. They cannot change their mind. They do not want social housing. I've written it down here that the common sentence that I get when I spoke to them—. And I don't really go out any more, speaking to communities, and I'll tell you why, because they can be aggressive. And their response is, 'We want to see more social housing, but not here', so—.

Yes. We have heard that in a previous evidence session. Luke.

Diolch, Cadeirydd. Sticking with delivery, if I could go to David, with Tirion. As part of the written evidence that you provided to the committee prior to this session, you described a business model based on pension fund investments. I was just wondering if you could describe how that model would work and how scalable it is.

So, it's the model we're deploying at the Mill in Cardiff and at Whiteheads in Newport and hopefully, shortly, at Parc Eirin, so it's a proven model now. We have a relationship with M&G Investments, the pension fund, and the way it works is we take a site to them and say, 'This is the proposition on the site. This is what we think the rents will look like. This is the overall make-up of the site', we do some initial work with them to make sure that they're comfortable that it's an investment they can potentially make. We then work with the project sponsor, quite often Welsh Government, and we take a loan from Welsh Government on the sites that we've worked on with Welsh Government. A loan is then—

Sorry, is that a loan through the Development Bank of Wales, then?

No, because these are historic loans, so they date back to 2013, the loans that we originally took, although we are negotiating a loan with the development bank for our current scheme at Parc Eirin, so there's been a sort of shift in that. The loan is used for site preparation and planning work, essentially, planning and design; we then jointly agree with the sponsor at the point of planning whether the project can go forward or not, and at that point we take the site on and we find the construction finance to build the project. At the end of the project, we refinance it with M&G based on the terms that we've agreed with them, and we repay the loan with interest, and the units will sit in a bespoke charitable vehicle for 50 years, and we're responsible for managing and maintaining those affordable units for that 50-year period. Once the 50-year period is up, they become completely debt-free, but they're still enshrined in our charitable structure, so they're retained as affordable units thereafter.

So, it's a structure we've developed with M&G, but it's not exclusive to M&G, and we have other institutions out there who are interested. The big issue is it's about scale, as I mentioned earlier. So, by the time we finish the sites we're doing with M&G now, it's about £140 million that they will have invested in. Most of the bigger pension funds are looking for £100 million plus, but preferably £300 million plus, so the key message is, if we have a portfolio, major regeneration sites in Wales—I'm sure we all know sites across south Wales that have been sat there for a very long time, particularly in the post-industrial period—we could put together a portfolio, the institutions would be massively interested in a 20-year financing programme, and that is the game-changer that we're proposing.

So, how would you get around the scalability issue, then, if you take away? Is that the way you would go about it, or is there—?

Yes. I think it's about negotiating with any potential investor about what they want, but essentially it's very straightforward because what they really want is rental assets that will grow in line with their pension obligations, so they're not looking for huge profits, they're not looking to make—. But if you have a 50-year programme that matches their annuity obligations that they have to all their pension holders, then it's stable, reliable income for them, and because of that it's extremely efficient. So, no social housing grant is going into any of our schemes at the moment. So, we're doing 449 affordable units at the Mill, no social housing grant; we're doing 268 in Newport, no social housing grant; we're doing 115 at Parc Eirin with no social housing grant. And it's because the money is 50-year based and it's super efficient, so it's the cheapest money you can get for housing. That's essentially how it works.

Okay. Thank you. That's really interesting.

Just before you move on, Luke—Altaf.

It was interesting to understand a 50-year period—. What is the shelf life of these properties?

So, you can imagine the pension funds are very interested in design quality, management quality, placemaking, all these things that underpin the sustainability of the estates we build for them. So, the initial planned maintenance and reactive maintenance programme, which is looking after the properties—we have to demonstrate an 80-year programme with the pension funds, and then every three years there's a rolling programme and we have to provide evidence. They actually sit on the board of the vehicle, overseeing the investment as well, to make sure that these properties are well maintained, are let, well managed, because they have obviously put a lot of money into making them up.

An 80-year shelf life.

Well, that's the maintenance programme that we have to demonstrate. We would hope they would last a lot longer than that. That's our obligation in the transaction to them. We have to demonstrate a rolling, 80-year maintenance programme.

Fantastic.

Are these built to a certain standard as well, then, did you say?

Yes. So, our most recent scheme in Newport—they're all compliant with Welsh Government standards at the moment. The ones in Cardiff were compliant at the time, but, obviously, regulations have changed. We know it's a moving landscape. We've been fully compliant, it's just they take a long time to build out, so things change during the period of the construction.

Okay. Mark.

Sorry, Chair, can I quickly pick up one point that was made, and it links to other things? We've heard, previously, about how the planning process takes a long time and it's costly and there's a lot of upfront cost. Interestingly, for the SMEs, which HBF do represent as well, most banks won't lend money for the planning process. They'll lend once you've got your planning ticket, but that pre-funding, which Dorian mentioned—£50,000, which is probably quite cheap for planning nowadays—you've got to find that money yourself.

Yes.

So, that's what's restricting a lot of SMEs. The large public limited companies obviously can afford to do that.

Okay, Mark. Okay, thanks for that. And Luke.

Diolch, Cadeirydd. I was going to come on to modern methods of construction and the role they can play in addressing the backlog we have, in terms of social housing and the need to build them. I was going to ask about the barriers, but I think, in the first set of questions, we've touched on quite a few barriers that I think would be quite relevant here—planning being one of them. So, I just wanted to put it out there. Are there any other additional barriers to modern methods of construction specifically that you can see? David.

Yes, so I think there are two key areas here. The first one, again, goes back to pipeline, and I think, essentially, MMC is a manufacturing process. If you were really going to make it cost competitive and scale up businesses that can deliver it, they need a guaranteed order book. So, it's sort of plays back into the need to have big schemes and small schemes running with some sort of guarantee that they're going to proceed so that they can plan their businesses and be part of the supply chain.

There are some other smaller areas that are a challenge. We've done quite a bit of research on this. So, modular that comes in a complete unit is quite difficult to align with the contractor you have on site. So, there's this grey area of who's responsible for what. There's a lot of double counting in the cost of developments. So, you have two contractors, effectively, operating. So, you double your costs in certain areas, on prelims et cetera, and the relationship between those two organisations is a huge challenge. We've pretty much decided, in the short-to-medium term, that closed, panelised systems that can be brought to site and assembled on site is the best current way of doing it, because that negates all those double-counting-of-costs issues. So, there are challenges, but the main one is providing a pipeline so the manufacturers can invest in their businesses.

Mark.

David, you might disagree, with your expertise, but my understanding would also be that MMC requires a degree of standardisation, and that might be worth thinking about, in terms of the future shape of policy. So, at the moment, some councils are looking at things like policies requiring net-zero-carbon homes for the future. So, that would not just mean potentially different standards between England and Wales, but you could end up with 25 slightly different policies in Wales, which wouldn't be manageable or sensible. So, I think there's a need to think about futureproofing those processes as well. And if there is a move towards that kind of policy, then it's better that it's either covered by building regs or a standard national policy, rather than little variations around Wales, which I think would be impossible for the industry to meet. But, with your permission, if colleagues are free to disagree with what I've said, I'm at the edge of my technical expertise.

Thank you. I agree with both David and Mark. It's also something I've done quite a bit of research in. I actually did modern methods of construction as part of my dissertation for my Master's, for which I interviewed about 20 different registered social landlords, and also used our own development company as a base. So, we've built in many different methods, including my team members. We've gone the full standard, from traditional, all the way through to full modular. And there are challenges. You've definitely hit them on the head. You can't do modular in residential without the pipeline and without standardisation; it just will not work. It would be really expensive. I know it was done with the innovative funding, but it was just not value for money from a scale point of view. We also—the same as David—have actually found that closed panel timber-frame systems are actually the most flexible and fast to build. By far, though, I would say that modern methods of construction isn't the solution to building faster in the housing crisis. As I've already said, for us, it's the planning system, the legal point of view to get to, actually, a shovel in the ground that takes longer, sometimes double the time to actually build these houses.

And then the other thing I would say, though, is what we've found is that, on the delivery side, cash flow and cash flow management of these modern methods of construction is really challenging. With full modular, for example, the vast majority of it needs to be paid before it gets to site. There are a lot of smaller housing associations who cannot take that risk. They can only pay you when it's onsite. The developers cannot take that risk. You really struggle to get the funding for that, and also, I don't know if it's changed by now, but back when I did my research on it, housing associations were telling me that, in their portfolio, when it comes to securitisation and refinancing, if their portfolio had too high an exposure to MMC, i.e., modular—really, MMC—they would be restricted in their funding, which is something—I don't know if it's changed now—to look into, because unless you have a pipeline, standardisations, warrantees and funding, and an expertise, obviously, you can't do it.

But, yes, with timber-frame closed panel systems, I believe, you will deliver the housing you need in the time you need, rather than the full modular, because you still have to do the full-on groundworks and have a contractor on site. There are still lots of issues when it arrives on site. So, that's where I am, anyway.

I have a particular interest in modular housing, but I think one of the problems we've had over the years is that, as politicians and policy makers, we talk about it quite a bit as being potentially a way of solving the problem, but I think the pipeline point is particularly important. Anecdotally, I hear, on a semi-regular basis, of people going off to set up a business specifically around modular housing, only to find that there's no business, essentially, and then the company folds.

So, what I would say on that is that if L&G can fail at delivering modular housing—and I went to their factory to have a look, and it was extremely impressive, fully automated, and the technology was amazing—and they can't get it to work, because there's not enough pipeline, then that demonstrates the challenge we've got in front of us.

Great. I don't know if Mark wants to come in before I hand back to you, Chair.

I think that linked to that is just remembering the number of homes we build in Wales. It's only between 5,000 and 6,000 homes a year. So, if you're talking about big-scale pipelines, there are cities in England that build more than that. And when you spread it out across Wales, then, yes, it becomes difficult.

Thank you. Great.

Okay. Carolyn, we've touched on planning a fair bit—

We have, haven't we? [Laughter.] Are there any other improvements you think that could be made? [Interruption.] He's got a big list there. [Laughter.]

Are you happy if I come in first?

Of course.

Thanks, Chair. So, in terms of the Royal Town Planning Institute, we have 27,000 members around the world, about 1,300 in Wales. But what the data is showing over recent years is that the number of private sector members has increased and public sector has decreased. And I think that's partly a reflection of jobs and opportunities out there. So, the system, which we touched on earlier, has become relatively complex. So, there’s a team of experts needed to just submit an application, which has grown, but the team of people in local planning authorities making those decisions and getting those applications through has shrunk.

So, Welsh Local Government Association data is showing that local planning authority budgets more than halved between 2008 and 2022, which is really concerning, and there’s some really helpful evidence that the RTPI has collated, and, helpfully, the Chartered Institute of Housing Cymru has put it in their evidence to you. But 25 per cent of planners left the public sector between 2013 and 2020. So, there’s a real issue around resources and funding.

So, I think, in terms of dealing with that—. Sorry, I should also mention that some of those resource issues are beyond local planning authorities. So, with organisations like Natural Resources Wales who are a key stakeholder in the planning process, and also other council departments, so highways engineers, ecologists, for example, recruitment issues in those sectors also impact on the planning team itself.

In terms of solutions, I think there are a few things that this committee and the Welsh Government could help with. Everybody I've spoken to throughout the sector would support higher planning application fees, because it's recognised that the cost of an application doesn't meet the cost of service delivery. But, that is subject to the caveat that that money is ring-fenced to improve planning services, and that's a real challenge, because the way the public sector is funded at the moment is broken, and there are some very, very real challenges for councils to face in terms of funding, and some pressures, ironically, partly around homelessness and temporary accommodation, but social care, education, and they are the priority funding areas, so planning isn't seeing that investment. So, if there is an increase in cost to the customer, that should be reflected by that funding being a service improvement, and I think everybody would agree that that would be welcomed.

Mark, have you got—? I wouldn't expect a figure, but what sort of increase, realistically, would enable the improvements that are necessary?

Gosh, that's hard to answer. I know that local authorities have written to the Minister and requested a 20 per cent fee increase, but I think that's alongside a bit of work that looks at full cost recovery and what that would mean. That is quite a piece of work and I think would need a bit of a sanity check as well. For example, the application service has a very clear customer in the sense of the applicant who benefits at the end, whereas for a planning policy team, an LDP, you could argue that the entire community is the customer. You know everyone benefits from that certainty about what's protected, what development looks like. And then enforcement is a separate category. So, I think there is a huge amount of work to be done around that, and that might not even be a neat solution, because you might find that your neighbour's small house extension proportionately would have a big fee increase, and the really big development by a public limited company that is making profits would not increase as much. So, that has its own political and appropriateness connotations. So, I couldn't give you an exact figure, I'm afraid, Chair.

No, no, okay.

I think the other couple of things that the Welsh Government could help with would be around apprenticeships. At the moment, there is a lack of apprenticeships and ways into the planning profession, so if we could get more people in and if there were funded opportunities so that people could be released to become qualified, then that would be fantastic. There are some schemes in different nations, but some of those are only available to the private sector, so that's not helping the key challenge here. So, I think work around that.

And then potentially a more extreme example would be to have planning listed as a shortage profession, and for that to be considered around immigration policies, albeit that would be sort of a UK Government thing that you would be lobbying for, if you were to agree, rather than a Welsh Government decision.

Okay, Mark. Dorian.

Thanks, and yes, great points there, Mark, as well. I won't take up too much time. We've discussed quite a lot on planning, but I would say, if I just run through some of our observations, some of them might not have easy solutions.

What we've found working through the process from the beginning, the pre-application advice itself is a great tool. It's absolutely needed, definitely, in my opinion. The only problem we have with the pre-application advice is that we do not always get consultees responding to that, which makes it very risky to go into the planning. Again, that comes back to resource, not just in planning and planning officers though, but the wider consultees, i.e. highways predominantly. It's really difficult to get highways to respond, and they are a major consultee. If they say 'no', you cannot do the development site. Also, we've had it where planning officers have gone back on what they've said on the pre-application advice. I know they caveat it and say you can't rely on it, but I'm just putting it out there on record that that does cause issues to SMEs. I don't think there's more of a—.

Anyway, the next step then is the PAC process, which at the moment is required for any dwelling-houses above 10 or over 1,000 sq m. We don't find the PAC process fit for purpose at all, in my opinion. I don't think it adds any value, really. I'm going to be a bit radical there, and people may disagree. But either way, I think it needs looking at. I personally think the threshold either needs increasing from 10 or, at the very least, it really needs an overhaul, because it's basically an extra month and a bit, and all the developers I know and ourselves internally and the consultees, they all know it's not fit for purpose, so why are we still doing it? That needs changing, in my opinion.

Then, we've got the planning application process itself. That will really, in my opinion—

Dorian, can you clarify 'PAC'?

Sorry. Pre-application consultation, which is after pre-app—. Well, you don't have to do a pre-app, but it's the—. You'd explain it better than me, Mark.

It's okay. I know what you mean now.

It's with the community.

Okay. I didn't want to give the wrong technical definition.

I used to be on a planning committee.

Okay. So, again, that's that one. In the planning application process, again a lot of that comes down to resource and budgets, really, and more people and investment. I think that the eight-week time frame itself is just really unrealistic. We've all discussed that. I just don't think that should be the benchmark, because you're setting everybody up for that expectation and it will always be failed, in my opinion. In today's world—. That eight-week timescale came in, what, just after world war two as a requirement; we're in 2024 now. With the amount of reports you need and consultations you need to get permission, it will never be eight weeks, unless you introduce permitted developments. So, I would stress actually increasing the timescale, as well as increasing the fee. If you think about PPAs—sorry for the acronym as well, but that's—

Planning performance agreements.

I didn't want to give the wrong technical thing as well. We just know these acronyms and what they do. That is an extra 30 per cent on the planning application fee and you're meant to get enhanced timescales. We've done them and still had consultees not respond on time. So, you can pay the extra money, but how is it actually going to increase resource, which is the important thing?

We're also happy for increased timescales. Instead of saying it's eight weeks, say it's going to be longer, but what happens if it goes over? At the moment, you have two options: you either agree an extension of time, which then basically puts the planning authority back in time budget, or you go for non-determination, get it declined and go to appeal, which takes 10 months. So, as an SME developer, what options do you really have, other than to sit there and wait and just keep e-mailing and chasing, chasing and chasing?

Sorry, I'm nearly finished. Then, after the planning application process, if the next step is the section 106—. Well, before that, it's the decision, and I've already discussed about the committee and delegated powers. I think more delegated powers need to be used and, I think, fewer committees. That's my personal opinion. Section 106, the legal obligation to capture contributions, that also needs looking at, because it shouldn't take three months to have a £15,000 contribution signed up on a legal agreement, which holds up the entire rest of the process. It really is what we would call in construction on the critical path. So, that needs looking at and I think, with templates, it could really be standardised.

After section 106, you've then got condition discharge, and I think that with the condition discharge process, we're still using too many pre-commencement conditions. The whole development has been agreed, but yet you could still have a pre-commencement condition that is related to something about landscaping at the very end of the project. I don't agree with that, and you can't start the site, so why have it? It's just a wording change.

They are the key bits of planning. The only other thing I'd say, to put it on record as well, is that should Welsh Government introduce a new policy, like what happened with the PPW, 'Planning Policy Wales' amendment with ecology—. I understand we're in an ecological emergency, but bringing in a new policy with immediate effect and affecting everything that's already in the planning system was absolutely crushing to new housing that was immediately being brought forward. We personally have sites, and so do other developers, that were allocated for development in the local development plan that cannot be brought forward because of a new immediate impact on policy, when we've already, as key stakeholders, made the decision, it's been in the process for nearly 18 months, and now it's halted. That's 20 homes in an area with a housing waiting list, and it was allocated under different circumstances. Now, it may not be able to be developed.

Okay. Thanks, Dorian. Mark.

I'll try to keep it short and build on some of the stuff that has been said: the resource issue and it being wider than planners. We talk about planning and we often think about planners, but it's highways and all the others. I think the other thing is that we're seeing more and more new legislation coming in, which then needs extra skills that there aren't resources for. So, I think the best example recently is that there's some legislation around noise studies that are now required. Within the consultation, the Welsh Government admitted themselves that there wasn't anybody in Wales who actually knew how to do these studies, yet they're a requirement for developers to put in. So, if the resources aren't there—. I think also then, there's the clear guidance around that new legislation. The biodiversity net gain that Dorian just talked about, what it says is 'proportionate to the development'. Each local authority determines that differently. One will ask for a 10-page report for something very simple; another will ask for one side of A4. If there'd been clearer guidance and model forms and model guidance, that would speed things up.

This issue has been around for a long time—this isn't a new issue; we've been talking about this for four or five years. I still think the right people haven't banged heads together to actually talk about some solutions—and that's the Welsh Government, the WLGA, the RTPI and developers. I tried to do it myself on a small scale and didn't get anywhere with it, really. I have to say, again, being a little bit controversial, we hear the Minister talking about one of the answers being regional working, but I don't understand that—I don't see how that's going to help. It doesn't generate more people—it's the same pool of people, just dealing with it regionally. I think it's just going to add political difficulties.

Does anybody think that corporate joint committees might be a useful vehicle? David.

We're attracted to the idea of regional planning, but on the proviso that it is deliberately set up to deliver development on a more strategic level. I've already talked about delivering many more units at a strategic level, but we've got issues around aligning development with major public infrastructure investment, for example. That might be the south Wales metro, which is a good example of that. We've talked about investment in utilities—at the moment, it's extremely fragmented. There is no joined-up thinking about how you need to deliver utilities across a much wider region to facilitate development. And it would be very much on the presumption that, if you have a major site allocated, the presumption is in favour of delivering it, rather than putting it back into the rather cumbersome and lengthy planning process that we've talked about. We think that there are some lessons to learn from the city region concept, for example, and we think that some of our European cousins do it a lot better than we do. But what we don't want—and I think this is Mark's concern—is to add another layer of bureaucracy in the planning system. That's absolutely the last thing we need.

That could be using the north Wales economic ambition board for strategic planning to do with highways, as you said, and infrastructure, but then, when it comes to local planning decisions, they're probably best placed with local authorities.

I don't disagree with what's been said there, and I've championed the idea of what I refer to as 'the development team approach'. I think the Minister has recently mentioned that as well. The problem is that, at the moment with resources as they are, what will happen in Wales, if that goes ahead, is that they will take people out of local authorities to create that team. So, yes, you'll have a team that will deal with one or two big applications, but for all the other smaller applications and the SMEs, there will be even fewer people to deal with them, so that will slow that down. So, overall, you won't get an improvement.

I would suggest that the bulk of what David suggested will be in play shortly with the CJCs that have been established. Their remit is to do a strategic development plan, a regional transport plan and also consider economic well-being. I think once those things are in place, that will naturally start informing infrastructure investments and they'll be targeted at those areas. I would personally suggest that we let those things get up and running before we suggest adding things to the CJCs, and that will take some time. I also think that probably the actual decision making on those schemes, once it's in the strategic development plan, is best placed locally. I think that comes back to some of that democratic accountability that we talked about, albeit that there should be that certainty—it's in the adopted strategic development plan or the regional transport plan, and therefore the presumption is that it is happening, and the consideration before the local authority should be about what are the nuts-and-bolts details: exactly how many homes, what are the distances between those homes and the existing properties next door and those kind of amenity and very local issues, not the principles that should be established and left.

We've got very little time, I'm afraid, but Altaf, please.

I think we have touched on a lot of things, and it was a joy to listen to you all. I was a member of one of the planning committees at Bridgend County Borough Council, so it was all happening there. But we've heard that there are skills capacity gaps in the construction sector in Wales, and it is said that one of the solutions is to go on making the social sector homes and everything. What's your opinion about it? David.

What I would say—and it's a point I've made several times already today—is it's about the scale of the the pipeline. If you've got enough construction projects going forward, then that gives construction companies the ability to build their businesses, invest more in apprenticeships, invest more in skills. It gives the public sector bigger organisations to deal with in terms of training programmes. Without that, the incentive to develop our skills base is not there, and it's going to be a continuing struggle. So, certainty of what collectively we're all doing and delivering over a 10 or 20-year period is where we need to be.

I would agree. This is where I wholeheartedly believe you need large, strategic skills, but you also need SMEs, because there's going to be a lot of supply chain and skills coming through that want to remain in the SME market. It's different, as you've already mentioned—different skill sets and expertise. This is why we're still encouraging SME developments. For example, in Bridgend, in their new LDP, not one site under 100 homes was allocated. So, it's very difficult for SMEs. Doing what we can to keep allowing SMEs to keep building is very important.

A lot of construction companies have moved out of the social delivery market because of recent risks. You all heard and know about the high cost inflation that came through, decimating a lot of contractors. Some contractors were on tens of millions of pounds of contracts. Costs went up 25 per cent; nobody is on a 25 per cent margin in social housing. It does not exist. You're lucky to make over 10 per cent and that's if you're being very efficient. But people choose to build social housing even for what's classed as a lower margin industry-wide, because they have certainty of payment and cash flow. But when inflation comes in and rips that margin away and puts you into a loss position, you cannot sustain it; it's not sustainable. And what we're finding now that that's kind of settling is we still, as an SME developer, struggle to get fluctuation provisions from housing associations, even today.

Very recently, we've signed a contract, we cannot get a fluctuation provision, so we're still taking all of that cost inflation risk. Hopefully it doesn't happen again, but it's because of the way the grant system is set up. The housing associations get a grant—social housing grant or however they fund it—that grant allowance gets crystallised, so their price needs to be fixed because their model is fixed. So, I understand why. If there is a risk that the cost is going to go up 5, 6 or 7 per cent, they've got no allocated pot of funding to deal with that. Their response is, 'If it happens again, hopefully the Welsh Government help again, and hopefully we'll be okay.' But from a construction point of view, there's going to be a lot of diversification away from social because of that cost risk.

I think one big thing to encourage skill sets, encourage SMEs, so some of them will grow into becoming full strategic large-scale players, is to introduce more creative procurement and collaboration, pain and gain approaches, something changing in the grant structure to allow for risk, and then you will end up with better value for money. Because at the moment, we, as well as everybody else, have to price in risk that may not materialise, because if it does materialise, we're eating it all. That's what I would say.

Altaf.

No, it's all right. I think we've touched on the LDP previously, and the utility infrastructure.

I'll just ask one further question, then, in terms of what guiding principle or principles the Welsh Government should adopt in terms of managing publicly owned land. Because we do hear a lot of points made about land in the public estate and how that might be suitable for house building and how that might be achieved. Do you have views on what factors the Welsh Government should take into account in terms of managing publicly owned land and what the guiding principles should be?

Things change all the time, but certainly a few years ago, you'd go in and meet the Welsh Government and it would seem like they didn't actually even know what land they owned, in all honesty. Let's accept they can work out what land they own, it's then is it suitable for housing, and if it is suitable for housing, what are the constraints. Get as many of those issues sorted out so that you can then get it to the market ready to deliver. It just seems to take a very long time. There's a very large piece of land just outside Penarth that the Welsh Government are selling at the moment, at Lower Cosmeston. It's an incredibly painful process that the bidders are having to go through and a lengthy process to get to a position to be able to build on that site.

One of the things you'll often hear is the land development authority used to do this well, so why don't you bring back something like that. That's almost the easy answer, isn't it? Other people might be able to comment, but I think there is a lack of commercialism within the Welsh Government. A lot of the people who are responsible for bringing this land forward have only ever worked within Government and have not worked on the other side, so lack that understanding.

Should there be some new entity to take forward the use of publicly owned land for housing? David.

I think it's more about how you structure the delivery of any given site, particularly big sites. Mark might not agree with this, but I think selling into the market at the front end of a very big project is problematic, because by their very nature, they change over the course of time and it's very difficult to control what your outcomes are from day one. So, our view, and it's the way we've done the Mill, and in Newport, to a certain extent, is that the public sector partners can control the delivery of the site, but let the private sector do what they're best at, which is delivering houses for sale. If you can do that, you can drive more money into a regeneration project and get better outcomes for everyone. So, you don't just have a single source of revenue, which is house sales; you have institutional funding that helps deliver your affordable housing. That releases additional money through section 106 for community facilities. It's a much better way of delivering a much bigger project. It's completely different for SMEs. As far as SMEs are concerned, they want a nice supply of smaller sites that are ready to go and can be developed. But with these bigger 10, 12, 15-year projects, it's much better in my view that the public sector maintains some control of the delivery from the outset and facilitates the private sector, rather than the other way around.

I think in terms of guiding principles, I would suggest a starting point is a recognition there is a housing crisis. That gets talked about, but it doesn't seem to be the top of the policy hierarchy, or perhaps have as much emphasis as it needs. In terms of the commerciality of land, I would agree there is a need for making sure there is a public land register that's identified. Public bodies do own land, but it might not necessarily be in the right locations. So, for example, a lot of councils own historic county farms, which probably are not in the right place for developments, by definition of being farms and in the countryside. So, I think that needs a bit of a sanity check.

In terms of the commerciality arguments that have been raised, where public bodies do own land, and we've already talked about how cash-strapped those bodies are, there's that decision that needs to be made between making the best return from an asset versus the best social good, and there is a legal requirement for those public bodies to get the best value for the public. So, it's some clarity about whether that's a financial value or a social value, and I think public bodies probably aren't quite sure which way they're meant to be going and almost get pushed towards finance because of the current situation. So, I think that clarity would be helpful and that acceptance: are you looking for land sale receipts or are you looking for policy-compliant affordable housing delivery, or even a higher proportion of affordable housing delivery and other policy aspirations around net-zero carbon, for example? It's understanding what is the goal and then making that clear.

Thank you very much, and thank you all for coming in to give evidence to committee today, Mark and Mark, Dorian and David. Thank you all very much. You will be sent a transcript to check for factual accuracy in the usual way. Diolch yn fawr.

The next item on the agenda today is papers to note. There's one paper, which is a letter from the National Residential Landlords Association to the Cabinet Secretary for Housing, Local Government and Planning in relation to the private rented sector. Are Members content to note the paper? You are.

Item 6 is a motion under Standing Order 17.42 to resolve to exclude the public from the remainder of the meeting. Again, is committee content? You are. We will move to private session.