Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by English Heritage (ERF 12)

  English Heritage is a major agency for urban and rural regeneration. We have been contributing to the regeneration of England's towns and cities through the restoration of historic buildings for many years. Our funding programmes operate in inner-city districts, towns and villages in each of the nine English regions, often in some of the most deprived areas. We have secured the preservation and restoration of many historic buildings, mainly by ensuring that locally and nationally valued buildings are able to serve an economically viable purpose. Restoring historic buildings for new uses has proved to be a sustainable way to develop urban areas, conserving natural resources and maintaining physical continuity.

  English Heritage's 1999 report The Heritage Dividend demonstrated the significant impact of investment to conserve historic buildings in delivering social and economic benefits. In addition to the clear economic benefits, English Heritage involvement has delivered quality projects contributing to long-term sustainability rather than quick-fix solutions. Our funding for regeneration is delivered primarily through Heritage Economic Regeneration Schemes (HERS) and our main Historic Buildings, Monuments, Parks and Gardens Schemes.

  In acting to safeguard historic buildings, English Heritage has often been one of the first organisations to provide grant-aid in areas with high levels of social exclusion. This commitment to bringing about real change has often given others the confidence to move into these areas, resulting in the transformation of local economies.

  Following the decision of the European Commission in December 2000 that the English Partnerships PIP scheme contravened the EU's state aid rules, English Heritage was advised by the Department of Trade and Industry that our Historic Buildings, Monuments, Parks and Gardens Scheme should be notified to the European Commission. Notification was made in July 2001, citing Article 87(3)(d) of the European Treaty. A decision is awaited. We are hopeful of a positive outcome, and will wish to make further representations if this is not the case. Our Heritage Economic Regeneration Schemes were considered by the DTI not to require notification, since any affect on competition would be de minimis. They are accordingly administered as "non-notifiable" aid, with a strict cash limit on the amount of such aid any one recipient can accept in any three-year period. Our church grant scheme, run jointly with the Heritage Lottery Fund, is not affected by the state aid rules.

  More generally, English Heritage is of the view that gap funding schemes, such as those run previously by English Partnerships, are an important mechanism for securing regeneration, and conservation-led regeneration in particular. They have been very useful in providing additional funding to support projects eligible for our own grants. The Heritage Dividend showed that £10k of English Heritage attracted on average £48k of additional funding from other sources, including from gap funding regeneration programmes. Gap funding is a particularly effective way of making the re-use and rehabilitation of existing buildings and infrastructure economically viable. This is a critical part of sustainable development.

  It therefore seems to us that the European Commission's policies on regeneration are inconsistent. On the one hand, the directorate-general responsible for the ERDF offers substantial funding for economic regeneration (in which heritage is acknowledged to play an important part), while, on the other hand, the state aid rules appear to rule out similar national programmes.

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Prepared 25 February 2002