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Regeneration House of Commons Communities and Local Government Committee Regeneration Sixth Report of Session 2010–12 Volume I: Report, together with formal minutes, oral and written evidence Additional written evidence is contained in Volume II, available on the Committee website at www.parliament.uk/clgcom Ordered by the House of Commons to be printed 19 October 2011 HC 1014 Published on 3 November 2011 by authority of the House of Commons London: The Stationery Office Limited £0.00 The Communities and Local Government Committee The Communities and Local Government Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Department for Communities and Local Government. Current membership Mr Clive Betts MP (Labour, Sheffield South-East) (Chair) Heidi Alexander MP (Labour, Lewisham East) Bob Blackman MP (Conservative, Harrow East) Simon Danczuk MP Rochdale (Labour, Rochdale) Stephen Gilbert MP (Liberal Democrat, St Austell and Newquay) David Heyes MP (Labour, Ashton under Lyne) George Hollingbery MP (Conservative, Meon Valley) James Morris MP (Conservative, Halesowen and Rowley Regis) Mark Pawsey MP (Conservative, Rugby) Steve Rotheram MP (Labour, Liverpool Walton) Heather Wheeler MP (Conservative, South Derbyshire) Mike Freer MP (Conservative, Finchley and Golders Green) was also a member of the Committee during this inquiry Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk. Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/parliament.uk/clg. A list of Reports of the Committee in the present Parliament is at the back of this volume. The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in a printed volume. Additional written evidence may be published on the internet only. Committee staff The current staff of the Committee are Glenn McKee (Clerk), Judith Boyce (Second Clerk), Josephine Willows (Inquiry Manager), Kevin Maddison (Committee Specialist), Emily Gregory (Senior Committee Assistant), Mandy Sullivan (Committee Assistant), Stewart McIlvenna, (Committee Support Assistant) and Hannah Pearce (Media Officer). Contacts All correspondence should be addressed to the Clerk of the Communities and Local Government Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 1234; the Committee’s email address is [email protected] Regeneration 1 Contents Report Page Summary 3 1 Introduction 5 2 The Government’s approach: regeneration to enable growth 7 Targeting those most in need 9 Resources 12 Regional Growth Fund 13 New Homes Bonus 14 Rail investment 15 Resources: conclusion 16 Private investment 17 Planning 18 Evaluation 21 3 The current picture 23 Stalled schemes 23 Housing Market Renewal 24 Knowledge and skills 27 4 Learning the lessons 29 What can be learned? 31 City Challenge 34 Conclusion 36 5 Stimulating regeneration 38 Tax Increment Financing 38 Enterprise Zones 39 Public land 41 Regional Development Agency assets 42 Public land: conclusion 44 European funding 44 6 Promoting a localist approach 47 “Community-led regeneration” 47 ‘Strategic localism’ 49 Community budgets 50 7 Conclusion 55 Annex—Visit to Greater Manchester 57 Conclusions and recommendations 65 2 Regeneration Formal Minutes 70 Witnesses 71 List of printed written evidence 73 List of additional written evidence 73 List of Reports from the Committee during the current Parliament 75 Regeneration 3 Summary Regeneration is a long term, comprehensive process which aims to tackle social, economic, physical and environmental issues in places where the market has failed. The Government has set out its new approach to regeneration in Regeneration to enable growth: What Government is doing in support of community-led regeneration. However, the document gives us little confidence that the Government has a clear strategy for addressing the country’s regeneration needs. It lacks strategic direction and is unclear about the nature of the problem it is trying to solve. It focuses overwhelmingly upon the achievement of economic growth, giving little emphasis to the specific issues faced by deprived communities and areas of market failure. The measures set out in Regeneration to enable growth give us several grounds for concern. First, they are unlikely to bring in sufficient resources. Funding for regeneration has been reduced dramatically and disproportionately over the past two years, and unless alternative sources can be found, there is a risk of problems being stored up for the future. The Government is wrong to place so much emphasis on funding streams such as the New Homes Bonus, the Regional Growth fund and rail investment , which, whatever their benefits, are not focused primarily upon regeneration. Also lacking is a strategy for attracting private sector investment: the Government should consider possible sources of gap funding and the potential for the alignment of public spending streams to encourage private investment. Moreover, Regeneration to enable growth assigns too much prominence to changes to the planning system and does not acknowledge the benefits effective planning has brought to regeneration. Finally, the document fails to consider how its approach to regeneration will be evaluated; this is a new way of doing things and, without some form of evaluation, there is a risk that investment could be wasted. The financial and economic climate has impacted dramatically upon regeneration, but it is not clear that the Government appreciates the scale of the challenge. The withdrawal of Housing Market Renewal Funding in particular has created significant problems, leaving many residents trapped in half-abandoned streets. Action is urgently needed to help those affected. The Government also needs to act quickly to mitigate the risk of important regeneration knowledge and skills being lost. The Government has apparently paid little regard to the lessons from previous approaches to regeneration. There is a great deal that can be learned—from both successes and failures. Successful regeneration requires: a focus on people and places; a long-term approach; close partnerships; co-operation between the public and private sectors; strong local leadership; and the active involvement of communities. The Government should urgently review the lessons learned from past regeneration programmes and encourage local areas to learn from each other. There are a number of measures that could, as part of a wider approach, contribute to stimulating regeneration and incentivising private sector involvement. Tax Increment Financing could, in certain circumstances, play a useful role; we look forward to its implementation at the earliest opportunity. The creation of new Enterprise Zones should be carefully managed to ensure the zones bring benefits to deprived communities across 4 Regeneration surrounding areas. Better use should be made of public land and European funding to maximise their contribution to regeneration. The Government has rightly committed to putting communities and community groups at the heart of regeneration. This should not be seen as something new: community involvement has been central to successful regeneration for many years. Moreover, there are concerns that, in spite of its aspirations for ‘community-led regeneration’, the Government’s approach will do little to support it. At a time of significant spending reductions, many of the community groups most closely involved in regeneration are uncertain about their future. More work is needed to ensure that practical mechanisms are in place to promote the involvement of communities and community groups in regeneration. A localist approach to regeneration also needs to assign an important, strategic role to local government. The Community Budgets initiative has an important role to play in enabling councils to co-ordinate regeneration across their areas. Such an approach could also help to lever in private sector investment, especially if it involves the pooling of capital funding. Government has to maximise the contribution of Community Budgets to regeneration and to lead the way with a joined-up approach at the national level. Councils should also come forward with innovative proposals which build on the Community Budgets model. The Government should now produce a national regeneration strategy which addresses all these issues and sets out a coherent approach to tackling deprivation and market failure in the country’s most disadvantaged areas. This should be the first step towards a more determined focus on the part of Government to tackling the deep-seated problems that still blight too many of our communities. Regeneration 5 1 Introduction 1. In January 2011, the Government published Regeneration to enable growth: What Government is doing in support of community-led regeneration. This document stated that the Government would be taking a “different approach” to regeneration. This approach would be “localist—putting residents, local businesses, civil society organisations and civic leaders in the driving seat and providing them with local rewards and incentives to drive growth and improve the
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