Audit Commission

Places in the North and Midlands, where the government has spent billions attempting to revive the housing market, are being hit hard by the recession and may struggle to recover.

Housing Market Renewal Pathfinders were set up in 2003 to restore confidence in areas where demand had collapsed, homes were abandoned, shops boarded up and crime rife.

But because these areas are more vulnerable to the effects of the recession, progress made to lift local economies, rebuild communities and encourage developers to build new homes could be slowed.

An Audit Commission review into the progress of pathfinders published today (Wednesday 13 May), says that the recession could not have come at a worse time for them. Six years into what was envisaged to be a 10-15 year regeneration programme, there is still much to do to ensure pathfinders have a lasting impact and they can ill afford delays.

More than 7,000 homes were built or converted in pathfinder areas in 2007/08 – as many in one year as in the previous five. But as developers now retreat from high risk areas, pathfinders will have to work harder than most to convince them to stay.

Despite the challenges ahead, the Audit Commission says that there are opportunities for pathfinders. They can take advantage of lower land prices, put in place community and physical infrastructure and make sure they are poised to make the most of the eventual upturn.

Most pathfinders are considering their options and looking at a variety of ways to beat the recession. Some are switching their focus from new build to refurbishment, concentrating on providing high priority family homes over apartment blocks or accelerating land and demolition deals.

Audit Commission Chief Executive Steve Bundred said:
"The recession will prove a very testing time for pathfinders. But they have built strong foundations over the last six years and are well placed to weather the economic storm. Pathfinders must work closely with developers, re-focus their targets and keep a watchful eye on efficiency and value for money if they are to limit any potential damage and make sure they are able to make the most of the post-recession world."

The Audit Commission recognises the progress that pathfinders have made, but warns that expectations remain high. It says the programme could be seen as a forerunner to the emerging place-shaping agendas, which aim to align physical, social, and economic regeneration activity. Pathfinders' expertise in this area should not be overlooked.

In addition, pathfinders are now the responsibility of the new Homes and Communities Agency, which will be considering how it approaches the programme in the context of the recession as well as the impact the Chancellor's Budget will have on spending plans.

Notes to editors

1. In April 2003, nine Housing Market Renewal (HMR) Pathfinders were announced to take forward new approaches to tackling the most acute areas of low demand and abandonment in the Midlands and North of England. A tenth, Tees Valley Living, gained pathfinder status in April 2008.
2. Pathfinders work closely with a range of public and private sector partners but the constituent local authorities play a lead role.
3. Between 2003 and 2011, the government will have invested around £2.2billion into pathfinder areas. Individual allocations vary - in 2008/09 it ranged from £13 million to £54 million.
4. The pathfinders straddle two or more local authority areas: Bridging Newcastle Gateshead (Newcastle and Gateshead); Gateway (Hull and East Riding of Yorkshire); Transform South Yorkshire (Sheffield, Barnsley, Rotherham and Doncaster); Urban Living (Birmingham and Sandwell); Renew North Staffordshire (Stoke on Trent, Newcastle under Lyme and Staffordshire Moorlands); Manchester Salford (Manchester and Salford); NewHeartlands (Liverpool, Sefton and Wirral); Oldham and Rochdale Partners in Action (Oldham and Rochdale); Elevate East Lancashire (Blackburn with Darwen, Hyndburn, Burnley, Pendle and Rossendale); Tees Valley Living (Middlesborough, Hartlepool, Darlington, Redcar and Cleveland, Stockton on Tees)
5. The Audit Commission assesses the performance and progress of pathfinders on behalf of the Department of Communities and Local Government (CLG). From 1 December 2008, operational responsibility for the pathfinder programme transferred to the newly formed Homes and Communities Agency (HCA) and the Audit Commission will work with pathfinders on their behalf to provide commentary on the programme and help inform policy debate.
6. The Commission's current review, published today (13 May, 2009) looks at pathfinders' progress and outlines the challenges they face.
7. Detailed reports on individual pathfinders and general information about the programme can be found at www.audit-commission,gov.uk/housing
8. The Audit Commission is an independent watchdog, driving economy, efficiency and effectiveness in local public services to deliver better outcomes for everyone.
9. Our work across local government, health, housing, community safety and fire and rescue services means that we have a unique perspective. We promote value for money for taxpayers, auditing the £200 billion spent by 11,000 local public bodies.
10. As a force for improvement, we work in partnership to assess local public services and make practical recommendations for promoting a better quality of life for local people.