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Charles Clarke hotseat: Key worker living
Thursday 20 May 2004 at 3p.m.

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Introduction

House prices in London and the South East, and parts of the East, are among the highest in the UK. We know that the cost of housing is an increasingly significant reason why school and FE teachers and children's social workers leave these parts of the country. This threatens our commitment to raising educational standards and improving public services.

We need to retain experienced staff in London and the South East in order to provide high-quality services and ensure that all young people fulfil their potential. The Key worker living initiative was introduced from April 2004 to help teachers afford homes in London and other areas of high housing cost.

In London, there is a particular issue. Although London is very attractive to young school teachers, many move away when they want to settle down and start a family. This is just the moment when they are beginning to take on crucial middle-leadership roles in schools. The London Challenge Key Teacher Homebuy Scheme is therefore targeted at such teachers in London only, to enable them to afford family homes.

This is the first time that FE teachers and children's social workers have been eligible for support with housing costs. School teachers were previously eligible for the Starter Homes Initiative, which has been replaced by the current Key worker living initiative.

The terms of the offer are as follows:

Equity loans of up to £100,000 over the next two years for up to 1,000 school teachers who have been identified as potential leaders of London's education system, to enable them to afford family homes
Equity loans of up to £50,000 to help key workers, including teachers, buy a home on the open market or a new property built by a registered social landlord
Shared ownership of newly built properties (you buy at least 25% of the home and pay a reduced rent on the remaining share)
'Intermediate renting', where the rent is set at a level between the one charged by social landlords and the one private landlords would charge

The programme, introduced at the end of March, has raised a number of important questions, for example:

Working in London used to be regarded as the peak of a teacher's professional career. How can we recapture that?
How do we strengthen the link between recruitment and retention schemes and high-quality education in London?
Knowing that teachers prefer owner-occupancy, how do we get a balance between buying from the existing stock of housing and building new key-worker housing?
How do we ensure that this is a scheme with safeguards for public funds and, at the same time, is focused on the need of teachers and is not bureaucratic?
What can we do to ensure maximum take-up from teachers?