Memorandum by the Local Government Information
Unit (LGIU) (UWP 61)
PROPOSED URBAN WHITE PAPER
1. LGIU COMMENTS
ON THE
RECOMMENDATIONS OF
THE URBAN
TASK FORCE
In its inquiry into the proposed Urban White
Paper, the Committee will be examining the recommendations of
the Urban Task Force to see if they should be included in the
White Paper. Below are LGIU's comments on some of the proposals
made by the Urban Task Force.
The basic message in the final report of the
Urban Task Force, Towards an Urban Renaissance is very
welcome—that an urban renaissance is urgently needed and
that sustainability needs to be given a high priority.
Local authorities are given a central role in
driving the urban renaissance and the report calls for the powers,
resources and democratic legitimacy of local authorities to be
strengthened. The main gap in the report however, with its emphasis
on planning, design and housing, is the failure to address the
social and economic issues that affect people living in deprived
urban areas—such as the lack of employment, poor health,
low educational standards, ingrained discrimination and racial
tension. Without the latter it is difficult to see how a socially
inclusive urban renaissance can be created and we hope the White
Paper will add policies in this area.
Managing the urban environment (chapter 4)
The report recognises that local authorities
would need to be given legitimacy to undertake the proposed strategic
role through the provision of a clear statutory duty and increased
resources to devote to the new management responsibilities. The
strategic role suggested by the report is analogous to the responsibility
of local authorities to produce an overall housing strategy for
their area, which goes beyond their management responsibilities.
Extending this principle to management of the urban environment
is a challenging but necessary proposal.
The introduction of a strategic responsibility
would provide a framework, the report suggests, for ensuring that
urban management requirements (such as environmental maintenance,
security) become an integral part of all relevant service plans.
It proposes that guidance to this effect is issued to local authorities,
so that they include clear management and maintenance policies,
objectives and targets in all relevant service plans, and report
annually on progress in their Local Performance Reports.
The proposal to place Town Improvement Zones
on a statutory footing to improve town centre management is welcomed.
The report states that if a certain percentage of businesses want
an improvement zone, then all businesses within that zone would
have to contribute. Currently the Government's proposals would
limit such powers to beacon councils but the urban task force
makes clear the need for all councils to have such a power.
The report supports hypothecated taxes. In this
section the report recommends the use of fines for criminal damage
and community reparation to repair and maintain the local environment
according to local people's stated priorities. Community service
could be fine tuned but the use of hypothecated fines is a questionable
precedent.
Delivering urban regeneration (chapter 5)
The report recognises both the need to enhance
the strategic role of local government in delivering urban regeneration,
and the importance of councils having sufficient legal powers
to carry out this role. The significance of the proposed power
for local authorities to promote the economic, social and environmental
well being of their area, now included in the current Local Government
Bill, is recognised in the report. From the perspective taken
in the report, it is extremely important that this new provision
is not restricted by excessive limitations.
The report looks at different types of partnership
structures for delivering urban regeneration. Its preferred model
is the "arms length" urban regeneration company whose
stakeholders include the local authority, community representatives,
one or two developers and possibly a housing association and major
landowners. Although such partnership bodies can be helpful, they
are not always the best solution and the report shows a tendency
to be prescriptive. It does however call for reviews in two key
areas.
Where a local council has a stake of more than
20 per cent in a company it is deemed to be influential and any
expenditure incurred by the company necessarily counts against
that local authority's credit approvals. This is a severe constraint
on the involvement of local authorities in companies. The proposal
in the report that only the local authority's share of the investment
counts against its credit limit is a step in the right direction.
However, the report could have gone further in recommending the
complete removal of this constraint so that local authority investment
in regeneration does not act as a constraint on its credit limit
which is what the LGIU has been advocating.
Where a regeneration agency wishes to dispose
of public assets at less than market value, current regulations
prevent it from doing so. The report argues that there is a case
for dedicated regeneration agencies having the benefit of such
disposals where it makes possible the creation of an otherwise
non viable project or where it creates an asset base for community
benefit. The LGIU has criticised the guidance to RDAs which reinforces
the need to dispose at the highest value obtainable. The ability
to hand over assets to community development trusts can also be
key to their survival. This proposal too is greatly welcomed and
could begin to address the jobs' gap in inner cities by enhancing
local capacity. It is important it is included in the White Paper.
The report recommends that the urban regeneration
partnerships should produce the "spatial masterplan"
discussed in the design section (chapter 2). This is a local authority
function and while real consultation is essential, handing this
task over to partnerships may not be considered appropriate by
local authorities.
Investing in skills and innovation (chapter 6)
This is a disappointing chapter which focuses
on the important issue of professional development but fails to
develop its call for building capacity for community participation.
It is hoped that the White Paper will bring forward proposals
to support some of the excellent work that is being carried out
by local authorities to support ethnic minorities and deal with
some of the difficult issues around what is meant by "community"
and how to ensure that those most disadvantaged have a strong
voice.
Planning for change (chapter 8)
The specific recommendations for changes to
the planning system to make it more strategic and to facilitate
mixed uses are welcome. A more important role is envisaged for
regional planning to prevent urban renaissance policy being undermined
by the decisions of individual authorities. The Task Force wants
quicker decisions in urban priority areas and sees this as possible
if there is a more effective development plan. While this approach
and aim is supported, there is concern on two accounts.
The first is the proposal that authorities who
are regarded as performing well—in terms of quality of development,
level of public acceptance, and speed of decision making—are
to be rewarded with more freedoms and powers under the Beacon
Council Scheme. But urban regeneration would be better facilitated
by a system that encourages innovation on the basis of merit rather
than the beacon status of the council. This would mean that individual
authorities could apply for exemptions from restrictions as and
when necessary and exemption would be granted on the basis of
merit in each case, rather than being tied to the authority's
beacon status.
The second relates to punitive measures such
as the proposal for developers who do not get a decision within
the requisite period to recover all the fees if the authority
is responsible for unnecessary delay. Further, it is proposed
that the Secretary of State could appoint a statutory agent with
the relevant planning powers.
Often inner city sites are complex and time
must be given for consultation and negotiation. Holding the threat
of a legal challenge over fees or the threat of taking away a
local authority's planning powers is not the way to get best decisions
or build partnership working.
Managing the land supply (chapter 9)
The proposals to give greater powers to local
authorities to use enforced sale to deal more effectively with
derelict land are welcome. So are the proposals to streamline
the Compulsory Purchase Order system and the requirement for other
public bodies to contribute towards urban regeneration by releasing
vacant land and buildings. This would mean, for example, that
organisations such as the Ministry of Defence and NHS Estates
would be required to negotiate the transfer of portfolios of development
land to Regional Development Agencies (RDAs) and local authorities
to secure locally determined regeneration objectives. However,
additional local authority credit approvals will be required to
finance this scheme.
The proposals also relate to the creation of
a revolving fund for land assembly, so that public investment
in the initial costs of site purchase can be offset by a share
of subsequent gains. It is unclear how this recommendation relates
to the proposal outlined earlier to move away from the current
requirement of having to dispose of public assets at market value.
While usefully highlighting the issues of increased financial
resources, this may not be the best way to deal with the problem.
Cleaning up the land (chapter 10)
The report fails to deal with the key issue
of providing incentives and resources to clean up land where such
land has a negative value with no prospect of recovering the cost
of cleaning through an increase in its value.
Recycling the buildings (chapter 11)
These are significant recommendations and welcome,
particularly those related to harmonising VAT rates. The disappointment
is that the report has not been able to look at the main cause
of the empty houses—the lack of sufficient good quality
jobs in the North and the drift to the South. Housing policy needs
to be linked to economic policy.
The statutory duty on local authorities to maintain
an empty property strategy is welcome but in order to implement
it the strategy will need to be accompanied by adequate resources
and the necessary powers to take action against owners who allow
their properties to fall into disrepair and disuse.
Attracting private investment (chapter 12)
The proposal to introduce a package of tax measures
to provide incentives to develop particular sites has been estimated
to cost £300 million a year and to generate an additional
300,000 homes on derelict land over a 25 year period ("Fiscal
Incentives for Urban Housing: Exploring the Options", DETR,
1999). But there is no clear assessment of the relative benefits
of this type of package against direct investment in local authority
led regeneration in social housing. Also, these measures are likely
to only work in areas of buoyant demand where there is some return
on investment. It is therefore likely that public funding will
still need to play the major role in areas with no demand.
The role of public investment (chapter 13)
These proposals are welcome.
Public housing investment (chapter 13)
The report raises important questions about
the provision of housing by reference to continental models. In
doing so it ignores two key features of such provision:
The continental housing companies are outside
the PSBR financial type controls though within continental definitions
of capital investment. Continental arms length companies are owned
and controlled by the municipal authority. Local democratic accountability
is maintained as opposed to the strategic accountability advocated
by the report.
On stock transfer the report states that to
bring the council stock up to a standard that would give most
estates a positive value would require £40 billion. It argues
for a package of measures including debt cancellation to enable
local authorities with large social housing stocks to transfer
some or all of the stock to arms length management organisations.
It does recognise that these transfers come with a price tag of
higher rents and loss of secure tenancies. Higher rents will create
higher cost in housing benefit. The case for changing the rules
on PSBR is unfortunately not made and the stock transfer is therefore
seen as the only option despite the problems that it causes.
CONCLUSION
On the whole there is much that is good about
the report and it is greatly welcomed. It places urban regeneration
at the centre of policy making, recognises and supports the role
of local authorities in driving the process and contains some
very significant recommendations to ensure both public and private
investment in the most deprived areas of the city.
Some of the weaknesses of the report are as
follows:
— It relies heavily on the private
sector. While private investment is clearly crucial for regeneration,
there are situations where simple public sector initiatives will
be cheaper to the public purse and more accountable. These are
not clearly identified.
— It fails to deal with the social
and economic issues at the heart of urban decline. An improvement
in the built environment on its own is not enough to bring about
the urban renaissance.
— It is weak on bottom up renewal.
Although it clearly calls for this approach it never deals with
conflicts within "the community" and issues such as
racial tension and discrimination. Nor does it promote the community
development trust approach to regeneration. The urban regeneration
companies that it promotes are much more private sector led.
— It does not identify clearly the
percentage of social housing required and the need for a higher
percentage to be required in new housing developments.
— There are contradictions in the report.
Although local authorities are given a lead role, the spatial
master plan is seen as the function of the urban regeneration
companies. The role of housing companies is confused.
2. A NEW FINANCIAL
AND GOVERNANCE
FRAMEWORK FOR
JOINED UP
THINKING AND
WORKING
Although the Environment, Transport and Regional
Affairs Committee is not specifically looking at the financial
framework for regeneration as part of its inquiry it is an area
of key importance.
Local authorities want to work in partnership
with others, including central government, so that services are
delivered in a coherent and seamless way. The local government
finance system and the way in which central government manages
and funds initiatives can undermine collaboration between agencies.
The lack of discretion and accountability at a local level makes
it very difficult for councils to carry out their community leadership
role. The system does not lend itself to an integrated approach
to regeneration.
Local authorities are having to respond to a
myriad of different initiatives and often have to compete against
each other for funding. Different agencies such as government
departments, RDAs and government offices can have inconsistent
approaches. There is little coherence in timescales, targets demanded
or outcomes required. There can be contradictions between different
schemes and initiatives. Different schemes are subject to various
financial and audit requirements. They can overlap and duplicate
each other.
— There needs to be a move away from
competitive bidding to a more collaborative approach between local
and central government where there are financial flexibilities
between programmes that offer extra funding on the basis of agreed
plans and outcomes. The LGIU has supported the LGA's New Commitment
to Regeneration and the move towards a Contrat de Ville type agreement
between central and Local Government.
— There needs to be a rationalisation
of central government funding regimes.
— Councils should have the ability
to pool budgets within a clear framework ensuring probity and
accountability.
January 2000
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