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Session 2002 - 03
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Delegated Legislation Committee Debates

Local Government Finance (England) Special Grant Report (No. 111) (HC 421) on the Neighbourhood Renewal Fund

Eighth Standing Committee
on Delegated Legislation

Tuesday 18 March 2003

[Mr. Derek Conway in the Chair]

Local Government Finance (England)

Special Grant Report (No. 111) (HC 421) on the Neighbourhood Renewal Fund

8.55 am

The Minister for Social Exclusion and Deputy Minister for Women (Mrs. Barbara Roche): I beg to move,

    That the Committee has considered the Local Government Finance (England) Special Grant Report (No. 111) (HC 421) on the Neighbourhood Renewal Fund.

It is a great pleasure to serve under your chairmanship, Mr. Conway.

The Committee will know that the neighbourhood renewal fund is one of the many important elements in the framework that central Government and our regional and local partners are constructing to deliver lasting regeneration. The national strategy for neighbourhood renewal was published in 2001 to provide a template for tackling deprivation using some of the knowledge that we gained through the work of the social exclusion unit. The neighbourhood renewal fund plays a vital role in the overall progression of our strategy of renewal and regeneration.

As the Committee knows, the neighbourhood renewal unit was established to oversee the strategy and to push it forward. Although the programme and the unit have not been operating for long, achievements have already been made. In Nottingham, around 2 million of the neighbourhood renewal fund and funds from the Home Office's crime reduction programme and Nottingham city council's housing department will be used to complete the development of a CCTV super-monitoring station. That will have a real impact on several high-rise blocks and outer estates in the Nottingham city area by deterring potential offenders and assisting convictions. It will also greatly assure members of the public.

In Liverpool, a project is protecting young children from accidents by offering affordable safety products such as plug cover sockets and door locks. In Greater Manchester, the youth contact team has worked with local partners to run environmental clean-ups and a football tournament. It has also taken part in outreach work on the streets. All that has led to an overall reduction of almost 40 per cent. in youth nuisance and an 18 per cent. reduction in recorded crime.

We are trying to look 10 to 20 years ahead to ensure that we make improvements to mainstream services that can and will be sustained without the unit's specific input and far beyond the operation of time-limited grants such as the neighbourhood renewal fund. We are increasing mainstream funding throughout Whitehall, so that Departments can re-examine the ways in which they have been tackling

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deprivation and can target money more effectively at the areas that are most in need. The neighbourhood renewal fund is providing additional money to kick-start that process.

Regeneration is dependent on the actions of the whole community, and it is only by harnessing its efforts and skills that we can ensure that regeneration and long-term change are brought about. The neighbourhood renewal fund and related community programme funding support the work of communities as part of local strategic partnerships; by that, I mean the coming together of local authorities and statutory agencies in the community sector to assist in the delivery of locally determined priorities.

Yesterday, I informed the House of the success of the 87 local strategic partnerships in the 88 local authority areas that are eligible for the neighbourhood renewal fund and community programme money. Of those 87 local strategic partnerships, 86 succeeded at the first attempt to gain accreditation in February 2002. The 87th partnership succeeded shortly afterwards at its second attempt.

Mr. Philip Hammond (Runnymede and Weybridge): The Minister has given several anecdotal examples of the projects that are funded from the neighbourhood renewal fund. Will she explain the methodology that her Department uses to measure the value for money and benefits derived from the funding?

Mrs. Roche: I understand the hon. Gentleman's point and shall come on to the statement of use that must be provided. As he will know, the aim of the fund is to kick-start the provision of mainstream services, and guidelines leave it to the local strategic partnership to determine locally how best the money can be spent.

The success means that all 88 areas eligible for the neighbourhood renewal fund will receive their full allocation for 200304 from next month, subject to approval of the special grant report. The report sets out the purpose of the neighbourhood renewal fund, individual allocations from the fund and the conditions for spending the money in 200304. It is not radically different from the 200203 report, in line with our commitment in 200203 that we would minimise the changes introduced for this round.

The Committee will know that the fund enters its third year in 200304, but it might be helpful if I outline how this special grant report has moved on from the previous one. Provision for the initial three-year period of the neighbourhood renewal fund was made in the 2000 spending review, and the fund was launched in 200102. Provision for the forthcoming third year was confirmed in the spending review, together with new money for two further years.

That brings us to the question of the hon. Member for Runnymede and Weybridge (Mr. Hammond). Each local authority receiving an allocation from the fund must work with its fellow members of the local strategic partnership to improve services in its most deprived neighbourhoods, including contributing to the achievement of the Government's floor targets and its own partnership's local neighbourhood renewal strategy targets. It may be that one area decides to use the neighbourhood renewal fund money to focus on

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raising the attainment of educational standards in local schools.

Funding from 200102 to 200304 totals 900 million and has been targeted in each of the three years at the 88 most deprived local authority areas in England. We allocated 200 million of funding in 200102 and 300 million in the current financial year. The report was laid before Parliament on 27 February so that we could seek parliamentary approval of the allocation of 400 million in 200304. The current 88 eligible areas will continue to receive the funding on the same basis as in the past two years. The recipients have received indications about the level of their funding allocation for 200304 since we first consulted on our plans for the fund in October 2000. As the Committee will know, the Government use the indices of deprivation 2000 to determine eligibility for the grant and distribution.

Mr. Michael Trend (Windsor): May I ask about the duration of the grants? I was with the Select Committee on Public Administration recently in Bristol, which has areas that use the grants. Organisations that were part of the community partnerships were no doubt benefiting from the grants, but it was important to them to be able to have expectations about how long the grant might go on for and the work that they could plan for over a three or five-year cycle. Will the Minister comment on that?

Mrs. Roche: The resources available from the neighbourhood renewal fund go to the local strategic partnership; they will usually go to the local authority as the accountable body. Then the money may be used in various ways. Sometimes it will be used to give grant to local organisations. Sometimes it will be used not to provide continual funding, but to kick-start a project. Let me give an example. Last week in my constituency, I discussed with the community sector and the local authority the provision of a one-off grant to kick-start regeneration in a particular high street area.

Neighbourhood renewal funding is not meant for the very long term; it ensures that we get regeneration off the ground. The overall aim is that mainstream services should begin to tailor what they do, so that they reach all parts of our community. I understand the point made by the hon. Member for Windsor (Mr. Trend) about the expectations of the voluntary sector when it considers funding. However, neighbourhood renewal funding is only part of the solution in respect of regeneration. Mainstream programme resources are being increased throughout the country and should be having a positive effect in neighbourhoods outside the 88 eligible areas that we are targeting with the fund.

In drafting the report, we have emphasised the fund's role in providing a time-limited push to improve mainstream services. The money is not just for use by the local authority or for the funding of traditional public sector services. We want it to be directed towards any struggling service, provided that the most deprived neighbourhoods benefit from the ensuing service improvements. I say to the hon. Member for Runnymede and Weybridge, who leads for the Opposition, that the grant is targeted. It can be spent

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in any way that will tackle deprivation in the most deprived areas. The money should contribute to the improvement of mainstream services, particularly but not necessarily exclusively in relation to the floor targets.

It remains a condition that each local authority, as the accountable body, should agree the use of the fund with its fellow local strategic partnership members. In line with that, we will still require the local authority to agree with the other members an annual statement of use regarding how their fund allocation is being used and the impact that they plan to achieve with the spending. We do not want to introduce any further monitoring demands, but we are keen to ensure that local authorities and their partners work together to come up with a good idea about how to use the fund.

The only other significant change in the special grant report No. 111 is that in paragraph 12 of annex B, where we suggest that increased use may be made of the fund to support the delivery capacity of local strategic partnerships by funding the development and review of local neighbourhood renewal strategies and the establishment of performance management and monitoring systems. That answers the question that was asked by the hon. Member for Runnymede and Weybridge about how we will continue to monitor the use of the fund. We are anxious to put a fund in place that gives enough freedom and flexibility for the local partnership to determine its priorities, while also accounting for the money that is given. I hope that the Committee will agree that we have tried to preserve the flexibilities that the fund was designed to offer.

Many partnerships using the fund have found it to be essential in the long-term delivery of their regeneration strategy. That is why the spending review 2002 extended the fund by an additional 450 million for 200405 and 525 million for 200506. We have not yet decided precisely how that money should be distributed, but I hope to make a statement to the House on that issue soon. I hope that my explanation has been helpful, and I commend the special grant report to the Committee.

9.10 am


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