Government Pathfinder Project Criticised

The £2.2 billion Government plan to improve the housing market in deprived areas of the Midlands and north of England has been criticised in a National Audit Office report.

Edward Leigh, the chairman of the Commons Public Accounts committee, said the Housing Market Renewal scheme, set up under John Prescott, when he was deputy prime minister, had been a total waste of public money.He said: "This is a disastrous piece of social engineering in which £2.2 billion has been spent and 10,000 homes demolished that should have been refurbished.

Some 40,000 properties have been refurbished, 10,200 demolished and 1,100 built as part of the nine Pathfinder projects launched by then Deputy Prime Minister John Prescott in 2002 in an effort to revive poor neighbourhoods.By completion of the Housing Market Renewal programme in 2018, Pathfinders expect to demolish 57,100 properties and commission 67,600 new homes.

The report by the National Audit Office found that low demand for housing was now less severe in the Pathfinder neighbourhoods, but it said it was "not possible to identify a causal link" between the Pathfinder activities and these changes in the housing market. It identified concerns that in some areas, the Pathfinders tried to press ahead with demolition projects before engaging sufficiently with local people to explain their plans.

In some areas landlords bought up empty houses earmarked for demolition in the hope of making a profit from compulsory purchase orders, adding an average cost to Pathfinder projects of £10,000 per property affected, and pushing up the overall bill by £50 million over five years, found the report.

And it said that residents forced to leave their homes under compulsory purchase orders found that there was an average £35,000 gap between the compensation they received and the amount needed to buy a suitable alternative property.