Examination of Witnesses (Questions 188-199)|
TUESDAY 5 MARCH 2002
188. Welcome to the second session on the need
for a new urban regeneration framework. Would you identify yourselves
for the record.
(Mr Smith) My name is Nigel Smith and
I am Chair of the RICS Regeneration Panel.
(Mr Brown) I am Chris Brown, Chief Executive of Igloo
Regeneration and a member of Nigel's panel.
(Mr Hood) I am Gordon Hood. I am Head of Grant and
Urban Regeneration at King Sturge.
189. Has the Department given sufficiently high
priority to finding a replacement for the Partnership Investment
(Mr Smith) We think not. The demise of PIP was widely
trailed for a couple of years. There was nothing in its place
when it eventually got the chop, and it has not moved ahead quickly
enough since, particularly with getting a housing scheme in place.
190. Do you think that the Department could
have been quicker than 14 months in finding a replacement?
(Mr Smith) Undoubtedly.
191. Why do you think they were so slow? Is
this typical of the way they work generally?
(Mr Smith) I really do not feel that it has been given
enough priority from high up, whether that is within the Civil
Service or amongst ministers. It just does not seem to have received
any priority. The housing scheme continues to proceed at a very
(Mr Brown) I also think there is a lack of practical
understanding within the Department, all the way through the Department,
of how this scheme actually works on the ground. People in the
Department have never been out there, they have never experienced
it, they did not realise how important it was.
192. Is there any national guidance given to
businesses on how they should operate in this field?
(Mr Smith) As far as we are aware, no.
(Mr Hood) I deal with private sector clients, and
the only advice we have is the advice that has been given to the
RDAs by DTLR. There is nothing else; there is no material at all
available for developers.
(Mr Brown) This was a gap that the RICS identified
in discussion with the Department, and the Department were excellent
on this; they were very good at working with us, we shared the
costs of producing some guidance. Once we had identified the lack
of guidance, we produced it very quickly, in about four weeks,
much more quickly than the expert group of the RDAs managed to
produce guidance. The guidance really has not been the problem.
The RDAs have not taken the guidance and said, "This is something
we are now going to promote to the outside world." It has
sat there on the RICS website, and anyone who reads it and then
goes to an RDA and says, "Can I have one of these grants?"
gets a fairly blank look usually.
(Mr Hood) There is a lot of bureaucracy associated
with it, and developers are not keen on bureaucracy. The system
appears to be now that the RDAs have delegated responsibility
for spending under the single pot to sub-regional strategic partnerships.
Often if you have a scheme and you want to go forward with gap
funding, you have to submit your scheme to the sub-regional partnership,
they then score it, submit it to the Regional Development Agency,
and then if you are successful you are invited to make the outline
application. Then, if you are successful, you are invited to make
a full application. So it takes some time.
193. Is there any evidence that any guidance
has been issued to the sub-regional partnerships on these issues?
(Mr Smith) Not beyond what the DTLR and an expert
RDA group have issued to RDAs.
194. If you look at the consequence of what
has happened to the practical, on-the-ground work that has taken
place, do you have a sense as to how much private sector involvement
in regeneration schemes has been lost in the last couple of years?
Can you quantify that?
(Mr Brown) I think it is almost all of it. We have
seen a lot of organisations disband their urban renewal arms.
People had specialist urban renewal organisations. Within months
of the flow of gap funding being turned off, these organisations
started being disbanded, people moved to other tasks. I notice
the Department in its evidence to you said they do not expect
any take-up of gap funding or expenditure on gap funding in 2001-02,
which suggests the market has stopped completely.
(Mr Smith) Yes, it has absolutely stopped in its tracks.
There was obviously an amount or a number of schemes feeding through
the pipeline under the old regime. Those have continued and gradually
tapered off, but we phoned round the RDAs to ask them what they
had on the go, and it was very, very little and very tentative
at this stage. I would say almost a complete stop.
195. Can you give us any examples? If you imagine
an estate like Hulme, which was developed over the course of a
number of years, are there examples like that elsewhere in the
country of developments that have stopped halfway because gap
funding disappeared and the project just died, and you end up
with a project that is half done.
(Mr Brown) Hulme would be the example that I would
go to. Actually Hulme is a PIP survivor, and there is still some
gap funding left to go out, which will be needed for the high
street. In Hulme as well, the success of that regeneration process
has meant the development can now go ahead without grants.
196. There must be other examples.
(Mr Brown) What has happened is that schemes that
have been on the go have generally been PIP survivors, so they
have had a continuous fund of money to keep doing future phases.
The problem has been starting off new schemes, so again Manchester
examples: Ancoats, what is now called New Islington, the Millennium
Community. They are having to be done by Direct Development. The
private sector just cannot get involved in those because there
is no way of taking projects forward.
197. Do you have a sense of how much of the
activity that was there previously from the private sector has
been taken up and is now happening as a result of Direct Development?
Is it comparable, or is it just a fraction of what was there before?
(Mr Brown) It is just a fraction. It is difficult
to say precisely because there is clearly a time lag. The RDAs
have to acquire the land in order to spend money as Direct Development.
That takes time, but the amount of land acquisition that the RDAs
are doing at the moment is very small, much smaller than the amount
the private sector was doing beforehand.
198. What are the benefits of the new gap funding
schemes? What kind of projects do you think they will be most
(Mr Smith) Very, very few. They will be employment
schemes, obviously, principally employment schemes in Assisted
Areas, principally Tier 1 Assisted Areas. I see nothing coming
outside Assisted Areas.
(Mr Brown) We have not found any schemes yet. We are
trying to do mixed use schemes in that fragmentation zone where
there is quite a lot of dereliction on the edge of city centres.
So we are doing schemes which are residential and commercial.
We have not found any schemes yet that qualify for grants.
(Mr Hood) We should not lose sight of the fact that
there is another funding source which does provide grant funding
and gap funding for regeneration, and that is European assistance,
but that is not without its problems either; that tends to be
even more bureaucratic and long-winded compared to the gap funding
we were talking about just now. We have been dealing with schemes
in south Yorkshire which have taken eight months to go through
the process from submission of the full application to approval,
and private sector developers can lose interest fairly easily
when that happens.
199. If the schemes are so useless, as you imply
they are, what is the point of the RDAs advertising them?
(Mr Brown) I think that is a fair comment, but I do
not think that is the reason why the RDAs are not advertising.
I think the reason they re not advertising them is because their
focus is very strongly regional economic development now, so although
they still have an urban renaissance target to try and achieve,
when they view a scheme they are always thinking, "What does
this contribute to our economic target?" rather than "What
is this doing for the community in the area?"
(Mr Smith) Although all RDAs have urban renaissance
brownfield targets in their strategies, they seem to be way down