Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 188-199)




  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.

Mrs Ellman

  189. Has the Department given sufficiently high priority to finding a replacement for the Partnership Investment Programme?
  (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 slow pace.
  (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.

Chris Grayling

  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 suitable for?
  (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 their agenda.

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