House of Commons - Regenerating the English Coalfields

Regenerating the English Coalfields - Public Accounts Committee Contents

3 Responding to the sudden economic change

12. The widespread pit closures began in 1981 but the Government did not establish the Coalfields Task Force until 1997.[39] During this time, many people of working age in the coalfield communities withdrew from the labour market and moved onto incapacity benefits.[40] Although there had been various European initiatives aimed at physical development and inward investment in these areas, by the late 1990s the coalfields as a whole still had a substantial job deficit.[41] The Department told the Committee it was likely that the time between the height of the redundancies and the start of the initiatives contributed significantly to the increase in incapacity benefits claimants and worklessness.[42]

13. The Department apologised for the time taken to develop the Coalfields Enterprise Fund.[43] The Coalfield Task Force report recommended in 1998 that the Department should establish a Coalfield Enterprise Fund of an initial £50 million with an aspiration to increase the fund further. It took five years for the Government to establish the Fund with an initial budget of £10 million and it has so far invested only £20 million of public funds.[44]

14. The main purpose of the coalfield initiatives was to bring land back into productive use to create jobs.[45] Ministers chose to spend the largest proportion of funding on regeneration of physical sites.[46] The Department set target outputs from land reclamation without sufficient assessment of each site's potential and had to include more sites in the Programme to meet the jobs target.[47] Although each site had project milestones, the Department did not set interim milestones or targets at a Programme level against which to monitor progress.[48] Investment for site developments depended in part on receipts from private investors which have decreased in the economic downturn.[49] As a result the Department is not confident that it will achieve its targets by 2017.[50]

15. The Department has not routinely monitored the occupancy rates on the developments it has created.[51] The occupancy rate on two sites that have been completed since November 2007 is below 20%,[52] and the capacity of coalfield areas to make the most of employment opportunities on new site developments depends on the pace of the economic recovery.[53] The initial allocation for the balance of spending between the physical regeneration on sites, support for training and skills development was not based on a robust evaluation and may no longer be valid.[54] The Department said that it reviewed the balance of need over the three initiatives annually up to 2007 and considered the shape of the funding going forward.[55] The Department has considered on a site-by-site basis if development of jobs off the site was a more appropriate and cost effective way to regenerate the local community, but it said the economic downturn may require a different approach.[56]