House of Commons - Communities and Local Government Committee

Select Committee on Communities and Local Government Committee Second Report

4 Regeneration and funding

72. The regeneration challenges faced in many coastal towns are similar to those faced in non-coastal areas, except that many are physically isolated, often with poor transportation links.[196] The evidence has highlighted some common factors that can contribute to successful regeneration in coastal towns, though these factors are not exclusive to coastal areas. This includes location, the role of entrepreneurs and the private sector, the role of the local authorities, partnership working and buy-in from the local community to change.

73. The location of a coastal town can be of critical importance to its regeneration success, in terms of the regional economy. The Seaside Economy report indicates that seaside towns in the South West and to a lesser extent, those in the South East "have fared better in terms of employment" than those in other regions as they have prospered from the wider regional economy.[197]

74. BRADA stressed the importance of communicating a vision for an area coupled with public sector investment, which it argued can be very successful in levering in private sector investment in the regeneration of coastal towns.[198] Shepway District Council provided an example where through a £10 million public investment it was able to successfully lever in "£22 million […] from private, public and voluntary sources" to fund in excess of 50 regeneration projects in Folkestone.[199]

75. Witnesses also highlighted the role of the private sector in regenerating coastal towns.[200] Some drew particular attention to the important role of local entrepreneurship.[201] In Whitstable, for instance, one entrepreneurial family bought a local hotel and former Oyster Store, and now runs both as successful businesses which draw trade from London, contributing to local regeneration.[202] In Folkestone, local entrepreneurs played a significant role in the establishment of the town's creative quarter, attracting artists and visitors into the area.[203] It was particularly disappointing therefore to learn from Lincolnshire Coastal Action Zone that overall levels of entrepreneurship in coastal towns were lower than those in non-coastal towns.[204]

76. The importance of different people and organisations working in partnership towards a shared vision was also stressed by some of our witnesses.[205] This was also emphasised by local stakeholders during our visit to Margate and Hastings.[206] One way of achieving such a unity of vision is through masterplanning—a spatial planning process that sets out a plan for the future development of an area. East Riding of Yorkshire Council argued "if one has a masterplan that is clear, crisp and understandable […] One then has a prospectus in which the RDA and others can invest".[207] The price of not having a clear shared vision, by local people and organisations, for the development of an area can often be regeneration failure. This situation can occur where different groups within an area have competing regeneration strategies.

77. Local opposition to change can be seen as a barrier to regeneration. East Riding of Yorkshire Council, for instance, told us that it can be difficult to gain support for change from people who have moved to the area to retire: it stated "there is still a generation of people who do not want the town to change".[208] Devon County Council argued "sometimes tensions result from a strong NIMBY attitude from the older generation which can restrict development of opportunities for the younger members".[209] During our time in Exmouth we heard from local stakeholders about the difficulties they had encountered in trying to change the nature of the area.[210]

78. Devon County Council argued that the peripheral location of coastal towns can result in them being "rather insular and inward looking, with a resistance to change, which prevents them in some instances from taking full advantage of new opportunities."[211]

79. Differences of opinion over regeneration between different groups within the community can occur in any settlement. The demographic profile of many coastal towns, where a significant proportion of the community may have chosen to move to the area specifically because they like it the way it is, can exacerbate these tensions and represent a greater barrier to regeneration than may be experienced in some other areas.

80. BURA argued that the most appropriate economic development strategy for each coastal town will be different. It also argued that economic development strategies do not have to rely solely on inward private sector investment. Indeed, in some instances, where a coastal town is particularly isolated or has particularly poor transport links, it may not be possible to attract private investment from further afield. It told us that there was also scope for economic development based on domestic investment and highlighted the example of Hastings where a "home-grown enterprise" was developing.[212] The New Economics Foundation supported this view. It stated that "large scale inward investment is not appropriate for many coastal towns" and that there is an important role for indigenous growth strategies.[213] Any successful economic development strategy must overcome any disadvantages of poor transportation links, through focusing on what industries and businesses will be able to be sustainable in coastal towns given these limitations.

81. Caradon District Council argued that regeneration is more costly in coastal towns: "to deliver any benefits […] will always cost more than its counterpart in an inland town".[214] It argued that a shortage of land, often arising from physical and geographical constraints, coupled with the limited access to markets, meant that it was "costing more and more to deliver any given output in a coastal town compared to others".[215] The South West Regional Development Agency disputed Caradon's argument. It stated "the agency sees equally difficult cost-benefit analyses in some inner city areas. It is difficult to say that coastal towns have either a special or higher cost".[216] While we recognise that there are particular challenges in coastal towns, there is no substantive evidence to demonstrate that they generally experience lower cost-benefit ratios or higher costs in regeneration projects than other areas.

82. The heritage of coastal towns, particularly in seaside resorts, can be seen as both an asset and a challenge. English Heritage stated that there are some "specific qualities and challenges" in coastal towns, in terms of their heritage, pointing out that the extreme climate and large number of public and listed buildings in seaside resorts can lead to higher maintenance costs.[217] It could equally be argued, however, that high numbers of listed buildings are also an asset for these towns. English Heritage also stated that a "significant proportion of funding" is put into coastal towns in response to these challenges: "around 20% of our regeneration funding since 1999 has gone into coastal towns; that is around £10 million".[218] The Heritage Lottery Fund told us that it had "given over £230 million to more than 517 projects in […] English coastal resorts" since 1994.[219] This level of funding represents only 7% of the total Heritage Lottery Fund spending over the same time period; however, these figures do not represent the whole picture as the figures for seaside resorts exclude a large number of coastal towns that are not resorts.[220] It explained that the funding was not specifically targeted at seaside resorts, but that many had benefited due to the "combination of distinctive heritage needs combined with social and economic needs".[221] For example in Great Yarmouth the Heritage Lottery Fund has invested £6 million in a range of schemes to revitalise the town.[222] Many coastal towns have an opportunity to capitalise upon the heritage of their towns, particularly seaside resorts, owing to their historic buildings and infrastructure, such intervention can contribute to the regeneration of their area, particularly in attracting tourists and investors.[223]

83. In the regeneration field, there are opportunities to share best practice across the UK. Practitioners and policy-makers involved in the regeneration of coastal towns participate alongside those involved in the regeneration of non-coastal areas. There has been little national linkage of coastal towns as a specific grouping at a policy or operational level although there are some signs that this is beginning to change. In 2006, for example, a national conference, Coastal Futures, was held in Skegness, hosted by the Lincolnshire Coastal Action Zone; a Seaside Network was launched by BURA; and a number of further events are planned for 2007.[224] 'Coastal towns' was the central theme of one of the Government's 2006 city summits.[225]

84. BURA argued that coastal towns would benefit from learning about each other's experiences as they may have more in common with each other than, for example, other towns within the same region.[226] It also argued that the DCLG has a role to play in supporting the spread of best practice between coastal towns.[227] The Minister of State, Industry and the Regions, Department for Trade and Industry, Rt Hon. Margaret Hodge said "I accept that clearly there is something to be gained from sharing the experiences" between coastal towns but she implied that that it was not appropriate for central Government to take the lead on this as she stressed the role of the regions and sub-regions.[228] Leaving responsibility for the sharing of best practice on coastal town regeneration with regions and sub-regions is not an adequate response, as coastal towns would benefit from the sharing of best practice and experiences at a national level. We welcome the recent events which have facilitated such exchanges but regret that these have been ad hoc. The Government has a role to play in supporting and encouraging coastal towns to share experiences and expertise. We recommend that the Government supports a permanent network to facilitate the spread of best practice in coastal town regeneration.

Funding

85. There are no national or regional funding streams specifically targeted at coastal towns, but coastal local authorities are eligible to apply for funding from a large number of distinct sources. Two specific sources of regeneration funding that coastal local authorities have accessed and valued have been the Single Regeneration Budget (SRB) and the Neighbourhood Renewal Fund (NRF). Coastal local authorities have been allocated a total of £411.4 million from the NRF during 2001-08, equating to 14% of the total NRF allocations across England during this same time period, although the expenditure may not necessarily be specific to coastal towns.[229] There have been six rounds of SRB funding with the last round allocations made in 2001; in this last round £230.690 million was allocated to projects in coastal towns. This equates to 19% of the total funding allocated.[230]

86. Many witnesses argued that there is inadequate funding for the regeneration of coastal towns.[231] The New Economics Foundation stated that "Coastal resorts received less than 5% of funding in SRB Rounds 1 to 3 and less than 3% in Round 4. Finally, in 1998, the criteria were broadened with coastal towns specifically targeted and 44 bids were awarded to regenerate coastal towns".[232]

87. A number of coastal towns have benefited from funding sources such as neighbourhood renewal funding yet some witnesses argued that strict eligibility criteria had excluded many others. East Riding of Yorkshire Council, for instance, told us "Most of the […] coastal local authorities eligible for Neighbourhood Renewal Fund (NRF) programmes featured because they cover major industrial towns/cities and therefore have strongly urban neighbourhoods. In contrast, individual, gstand-aloneh coastal towns exhibit smaller, but particularly intense, pockets of deprivation."[233] Thanet District Council argued that its coastal towns (Margate, Ramsgate and Broadstairs) have high levels of deprivation yet still did not qualify for support from the NRF.[234] The Channel Corridor Partnership stated that Folkestone was "in that worst of all positions; bad, but not quite bad enough" to qualify for regeneration funding.[235]

88. Many organisations supporting coastal towns expressed concern about the absence of any funding stream to replace the SRB, funding from which came to an end in March 2006.[236] Shepway District Council argued that the end of SRB funding seriously compromises the ability of local partnerships to invest in regeneration projects and that 50 projects "are now under threat and, if lost, would be extremely difficult to resurrect in the future."[237] Kent County Council drew attention to the fact that other significant funding streams, such as ERDF Objective 2 funding, the Heritage Lottery Fund's Seafront funding and the Townscape Heritage Initiative, were coming to an end.[238] East Riding of Yorkshire Council argued that the loss of European funding in particular would make it, "more important for the coastal towns to identify their contribution […] to the regional picture", highlighting the increased importance of RDAs in providing regeneration funding for coastal towns.[239] The Government appears to have recognised the difficulties that coastal towns may face in accessing regeneration funding. The Rt Hon. Margaret Hodge MP told us that she was aware that a number of coastal towns failed to meet the new criteria for EU funding, telling us "that is a problem which I am going to think about at a national level, how we can ensure that we have sufficient and appropriate resources in coastal towns".[240]

89. Several witnesses commented on the difficulties resulting from the "cocktail of funding" available for organisations trying to regenerate coastal towns.[241] BRADA stated that even in places where significant regeneration was taking place, like Blackpool, funding tended to be provided for individual, small projects and therefore was often not sequenced effectively.[242] The Southport Partnership explained that when major schemes are funded from a number of different sources there is increased risk of failure because if one funding stream fails—as can happen if a partner's priorities change, their funds are over-committed or timescales are altered, the "whole thing collapses or it will take another three years to put back together again".[243] Mr Miller, managing director of a theme park, Adventure Island, provided one example indicative of the fragmented nature of funding streams: in Southend, he argued, funding was being invested in different regeneration schemes despite the overarching need to maintain the cliff wall and protect people's homes.[244] Some witnesses also highlighted the excessively bureaucratic burden imposed on local authorities by the need to enter a large number of competitive bidding processes to gain funding.[245] The Isle of Wight Council argued that there are too many competing and conflicting schemes which "demand a high level of administrative activity up-front for limited return".[246] We also heard numerous calls for longer-term funding streams for regeneration to ensure the sustainability of projects and programmes and to reduce uncertainty.[247] The Dover Pride Regeneration Partnership explained that they can currently only deliver small intervention-based projects as its own funding is only guaranteed for three years, limiting its ability to deliver any long-term regeneration plans.[248]

90. Given these criticisms it is not surprising that a number of our witnesses called for a rationalisation of funding streams for regeneration. BRADA advocated a 'single pot' approach, arguing that this would result in investment that is more effective.[249] It did not, however, advocate the creation of a new national funding stream specifically for coastal towns on the grounds that there would be the danger that funding would end up with only one or two coastal towns as "it would become competitive and there would be a whole host of losers".[250] The Minister of State, Local Government and Community Cohesion, Department Phil Woolas MP stressed the importance of Local Area Agreements (LAAs). He explained that one of the objectives of LAAs is to bring together as many specific area-based grants as possible into a pooling arrangement, providing a greater level of local flexibility on expenditure.[251] We recognise that LAAs can contribute to greater local flexibility but note that LAAs do not provide a solution for the replacement of existing regeneration funding sources referred to by the witnesses.

91. Given the number and complexity of the funding streams available for regeneration in coastal towns, there is considerable scope for their simplification and integration. We are not persuaded, however, that a specific funding stream for coastal town regeneration is warranted. We recommend that the Government evaluates the impact of the termination of various funding streams on coastal town regeneration, with a view to addressing any funding gap.

FUNDING FOR LOCAL AUTHORITIES

92. The demographic profile which defines so many of our coastal towns, the high percentage of the population which is elderly, transient or vulnerable, can impose higher than average costs on local authorities. In social care, for instance, Torbay Council argued that the shift in Government funding to general funding for local authorities, via a formulaic approach, means that funding is not transferred on a pound for pound basis.[252] This is suggested to be significant due to the higher levels of dependency on the state by the elderly in coastal towns, as many will have no local family support network.[253] The Minister for Local Government, Phil Woolas MP, claimed that demographics were already adequately reflected within local authorities' Revenue Support Grant and added that he had "increased the weighting in that grant in this current two-year settlement to reflect the fact that significant numbers of people are living to 80 and beyond".[254] This is an important development, not just for local authorities in coastal areas, but for all local authorities nationwide as they strive to provide support services for an ageing population but, nevertheless, it does not address the specific point made that the elderly in coastal towns may have higher levels of dependency upon state support than those in non-coastal areas owing to their lack of family support. We agree with witnesses that it is important that the Revenue Support Grant calculations take into account the levels of elderly and transient populations in an area, and recognise the geographical variation in demands placed on services by these groups.

93. As BRADA told us the public realm has a particularly significant role in those traditional seaside resorts which are dependent upon tourism, where "their very attractiveness relies on this grand public space".[255] Many witnesses, however, drew attention to the poor condition of the public realm in seaside resorts.[256] The Southport Partnership said that improving the condition of the public realm was the key element in coastal town regeneration.[257] The East Kent Partnership said one could "forget the tourism product unless you improve your public realm locally".[258] Supporting the public realm—the piers, parks, promenades, public shelters and bandstands that typify many coastal resorts developed on a grand scale in the 19th century—can also impose significant additional costs on the local authority, yet, as BRADA told us, doing so rarely generates a direct commercial return.[259] Blackpool City Council argued that central government takes "little account of" of this additional burden.[260]

94. Further it argued that visitors can place additional pressures on "services such as street cleaning, waste collection and disposal, and public conveniences".[261] Day visitor numbers are taken into account within the revenue support grant funding formulae but as Blackpool City Council pointed out, a review of the indicators used on day visitor numbers in the revenue support grant funding formula, commissioned by the ODPM in 2005, "revealed that there was no acceptable way of updating the data based on currently available information". As a result, visitor figures remain, in Blackpool City Council's view, "crude in the extreme" as the data is disaggregated from national surveys to arrive at local authority figures.[262] Brighton & Hove City Council also criticised the methodology: first, it argued that "additional local authority costs arising from a day visit to the seaside are very much greater than those arising from a trip to a shopping complex or a private leisure park";[263] secondly, it argued that the day visitor data is out of date as it is based on data from 1998 to 1991.[264] The Minister of State for Local Government, in response to a question on the costs of the public realm, countered that "I have never met a council […] which do not say they have higher than average costs maintaining the public realm" and that "the formula does take into account the number of estimated visitors.[265] We agree with witnesses that Government funding to local authorities should reflect the impact of day visitors on the costs associated with maintaining the public realm in the formula for funding allocations. We suspect that witnesses are correct in their assertions that the funding formula methodology needs to be improved and recommend that the Government ensures that the data on day visitor numbers is both localised and up to date.

REGIONAL DEVELOPMENT AGENCIES' ROLE

95. Regional Development Agencies (RDAs) "are the primary vehicle for delivering support for the economic development of coastal authorities".[266] They therefore have a significant role to play in the regeneration of coastal towns. Evidence has shown that all coastal RDAs have supported projects in coastal towns. Some witnesses have praised the work of RDAs in supporting the regeneration of coastal towns. BRADA stated that the creation of the RDAs has "helped focus attention on coastal towns and some, for example SEEDA, have targeted declining coastal towns through their Regional Economic Strategies".[267] Brighton & Hove City Council stated that its relationship with South East Regional Development Agency (SEEDA) "has been extremely positive […] We even have a Sussex coastal towns strategy" and cited the seafront development initiative as an example of a successful intervention on the part of the RDA.[268] The English Regional Development Agencies argued that RDAs offer a wide range of support to support coastal towns. Some examples are: the South West RDA, which supports a Market and Coastal Towns Initiative; the North East RDA which has focused on the visitor economy on the North East coast; and the East Midlands RDA which is supporting a Coastal Action Zone.[269] Rt Hon. Margaret Hodge MP, the Minister responsible for RDAs, argued that all RDAs "had developed strategies to tackle the specific issues which face the coastal towns in their regions".[270]

96. Nevertheless, other witnesses believed that RDAs were not best placed or equipped to address the needs of coastal towns. BURA stated "there is a basic problem for RDAs, which is that they will always argue that their region is the coherent unit-they have to argue for that—and they therefore do not […] have any incentive to see the specific interests of the coast".[271] East Riding of Yorkshire Council said it could be a challenge to gain RDA recognition for coastal towns. It stated, "our RDA is very much based on sub-regions which cut across the coastal strip".[272] It also argued that, in its region, "because of the quite urban and rural split within the RDA, neither team [of officers within the RDA] fully understands the needs of a coastal town".[273]

97. Witnesses also commented on the varying levels and types of support provided by RDAs. BRADA stated that some RDAs provide significant financial and policy support to coastal towns, such as the North West RDA, but that others do not.[274] It called for all RDAs to have "special coastal initiatives […] primarily to ensure that the specific coastal issues are properly identified and thus adequately addressed".[275]

98. The Rt Hon. Margaret Hodge MP stressed that giving RDAs "maximum flexibility" over funding and regional policy decisions was part of the Government's approach to devolving power, the implication being that this principle applies to policy and funding towards coastal towns.[276] She also stated that there was a "huge amount" of collaboration between RDAs: she thought that SEEDA was "the lead among the RDAs on the issue around coastal towns" and assumed that it organised a forum for sharing best practice.[277] No evidence however was received from any other witnesses, including the RDAs, to support the assertion that RDAs share best practice on coastal towns.

99. We note that RDAs have adopted a variety of approaches towards supporting coastal towns and that a number of these has been welcomed by local regeneration partners. We are not convinced that any mandatory requirement for RDAs to adopt a specific approach towards coastal towns would be beneficial. We do recommend, however, that one RDA (such as SEEDA, owing to its expertise) has lead responsibility for facilitating the sharing of best practice on coastal towns across regions, and that RDAs establish regional forums for coastal towns.

196 See para 11-12 Back

¹⁹⁷The Seaside Economy, p 7 Back

198 Q 135 Back

199 Ev 75, HC 1023-II Back

200 Ev 4, 14, 32, 55, HC 1023-II Back

201 Ev 20, 75, HC 1023-II Back

202 A Committee visit to Margate, Whitstable and Hastings took place on 18 October 2006. Back

203 Ev 75, HC 1023-II Back

204 Ev 117, HC 1023-II Back

205 Q 165 Back

206 Annex B, Annex D Back

207 Q 21 Back