Regeneration

Regen 34

Written evidence submitted by East Riding of Yorkshire Council

Summary

The East Riding of Yorkshire Council welcomes the opportunity to contribute to the inquiry of the Communities and Local Government Committee, following the publication of the DCLG "Regeneration to Enable Growth : What Government is doing in support of community­led regeneration". The following report provides the Council’s response to the questions raised, with key issues in the East Riding summarised as follows :

• LEP arrangements are welcomed, although approval has not yet been given for the Hull, East Riding and Scarborough area LEP bid;

• The scale of interventions proposed by Government, thus far, appears in many respects to be beyond the reach of local level community­led regeneration;

• The new arrangements for business support through local councils is welcomed, although delivery mechanisms for other services have the potential to take local delivery beyond the reach of existing service providers, particularly voluntary and community sector organisations;

• There appears to be limited recognition of genuine cases of market failure, where there is little or no prospect of private sector interest in investment for economic development;

• Specific consideration of the economic circumstances relating to coastal locations would be welcomed;

• The lack of a strategic approach due to the removal of Regional Economic Strategies places greater reliance on LEPs and local authorities to work closely to align priorities for functional economic areas;

• The existing local Partnerships in the East Riding are well developed, and provide a good basis for delivering the principles of the Big Society and Localism agendas;

• The revocation of the statutory guidance for the preparation of the Local Economic Assessment leaves the potential to limit future ability to undertake comparisons of local economic growth between areas.

In addition, the report uses case examples to illustrate some of the responses more fully.

1) How effective is the Government’s approach to regeneration likely to be? What benefits is the new approach likely to bring?

The white paper "Regeneration to Enable Growth" raises concern over how effective the emerging policies for regeneration may be in the Council’s area.

There appears to be mismatch between the local aspirations set out in the document and the scale at which the interventions mentioned in this paper can be influenced and delivered.

At present the delay in reaching a decision on the Local Enterprise Partnership proposal for Hull, East Riding and Scarborough, is causing some uncertainty, but this is not preventing activity to develop arrangements based on the functional economic areas, which were identified through the preparation of the Local Economic Assessment for the East Riding. This approach offers a positive way forward, especially the potential to work more closely with partners in neighbouring locations which fall within a different County Council administrative area (ie Scarborough, York and North Yorkshire).

With regard to local support for business, the proposals to move away from the regional Business Link arrangements to provision through local Councils is welcomed. Prior to Business Link, business support services provided by the Council in the East Riding had been aimed at bespoke support to meet specific local business needs, where over 90% of the businesses are SME’s. This has included formation of local business networks, "Meet the Buyer" (supply chain) events, rural support programmes, and "Wheels to Work" projects, which have been particular important in remote rural areas. Much of this "localism" had been lost under the previous arrangements.

This concern is also illustrated in the targeted investment section of the paper, where there is no opportunity for local groups to influence the targeted investment in transport mentioned in the paper, the investment in the Olympic Park has already been committed, and only a limited role for local communities can be foreseen in the affordable homes strand or the greatly overcommitted Regional Growth Fund.

With regard to High Speed Rail 2, there may be potential for the benefits of the investment to be realised in provincial areas, if there can be advance investment in regional rail services, to ensure that the linking infrastructure and routes are prepared in advance of the main line upgrades, to allow faster, and direct services onto the upgraded High Speed 2 routes.

Although this targeted investment may support regeneration in specific locations, the examples provided in the consultation paper are aimed at regional or sub­regional intervention, rather than at a local level. There appears to be no recognition of the need for investment to deliver local regeneration / economic development activity, especially transformational projects which cannot directly attract private investment due to the initial returns being either marginal or negative.

It is projects at this level where local communities can directly influence the delivery, own the benefits derived, and often see that the basic intervention acts as a catalyst to encourage business confidence and local economic growth.

The formation of the Community First fund is welcomed. In the past, community groups have struggled to secure funding to undertake small projects which can help them gain legitimacy in their area and boost their capacity whilst addressing a localised need.

2a) Will it ensure that the progress made by past regeneration projects is not lost and can, where appropriate, be built on?

Of primary importance is the need to ensure the protection of assets acquired with the assistance of Regional Development Agency programmes and funding, either directly, or in partnership with local authorities for the purpose of delivery of strategic regeneration programmes. In general, the original investment is protected by a legally binding funding agreement, to ensure that where a commercial return is generated at a point in the future, then the original investors benefit from a share of the uplift value when it is realised.

A major concern is the potential for any backward move in the assembly of land and property which places any call on local authority funds, which may already have been accounted for in initial investment appraisal and impact analysis for regeneration schemes. There is a compelling case for any land and property to be retained within local ownership, for the purposes originally intended, to ensure that community endorsed regeneration programmes can continue to be realised.

It is considered essential, that mechanisms which in the past have allowed locally elected members, residents, businesses, civil society organisations and other civic leaders to engage and shape the regeneration of their town or area are able to evolve and metamorphose to take account of emerging policy, rather than being removed and replaced.

It is also considered very important, in this period of policy transition, to ensure that the local community remain engaged and informed about the changes being implemented, and understand how this change is likely to impact upon their involvement, and the regeneration programmes they have already influenced. Each community has only a limited pool of people with the necessary skills, ambition and patience to dedicate to the regeneration of their town or area. These resourceful community representatives are exactly the part of society upon which the success of the "Big Society" will depend, and their contribution must be retained to ensure that the best possible outcomes can be achieved in those localities that have already made significant progress.

It is concerning, however, that the earlier work developed through the cross party Coastal Towns Inquiry appears to have lost momentum in the new Government’s approach. The second government response to the Coastal Towns Inquiry was particularly encouraging, in recognising the specific problems and challenges being faced by coastal areas. "The Strategy for Seaside Success" published by DCLG on behalf of the previous Government in March 2010, translated this recognition into a positive policy framework, which could be applied at local level. The challenges of Coastal Towns were also recognised by Opposition through the publication of "No Longer the End of the Line" (Dec 2009), and the opportunity to re­visit the issues raised at that time would be welcomed.

2b) Will it ensure that sufficient public funds are made available for future major town and city regeneration projects as well as for more localised projects?

The main concern is that the mechanisms being put in place for funding any transformational regeneration schemes at local level will rely on either:

­ Private sector development i.e. Community Infrastructure Levy, or;

­Strategic regeneration/development sites which are marginal and require a moderate public sector investment to satisfy development appraisal i.e. Tax Increment Financing.

In the current economic climate, characterised by a failure of commercial property markets, very limited commercial lending by banks, and severe constraints on public sector funding, there is clearly a substantial lack of significant private development taking place. This is particularly marked in deprived areas, where development is often much needed, but not particularly commercially attractive, unless there are incentives available to the developers.

The level at which targeted funding thus far has been directed, by the Government’s new proposals, appears unlikely to filter down to a local level where regeneration needs are specific to a neighbourhood or district. The lack of flexibility to target available funding to specific local regeneration projects could result in many local aspirations being impossible to take forward for the foreseeable future.

These circumstances make the resources available from the Regional Growth Fund (RGF) and European Regional Development Fund (ERDF) critical in delivering major local regeneration projects, and will require these funds to be closely aligned in order to maximise the potential benefits to the regeneration of deprived areas in England. At this time there is no certainty that the RGF and ERDF will be aligned, particularly in view of the over subscription to the RGF.

Due to the scope of the RGF, and the limited amounts of funding compared to demand, it cannot be seen as a replacement for the scale and range of funding that had previously been available through the Regional Development Agencies. Whist it is acknowledged that it will not be possible to return to the generous allocations delegated to the RDAs, it is significant that although RDA funding was allocated through a competitive process, distribution was made on a strategic basis for agreed priorities within a specific geographical area. Therefore, there may be benefit in allowing packaged bids to be promoted by a LEP, where several smaller initiatives have the potential to generate benefits to the local economy. This could have disproportionately positive impacts for the amounts involved, particularly in areas predominated by SME activity.

In this connection, Yorkshire Forward is continuing to look at innovative methods of securing funds, and thus ensuring the continuing viability of local regeneration programmes which extend beyond the remaining life span of the organisational.

3) What lessons should be learnt from past and existing regeneration projects to apply to the Government’s new approach?

An overall strategic underpinning and easily communicated vision at a range of geographical scales is important to ensure resources are allocated in a way that meets an evidence based need and are allocated in a transparent manner which can be communicated to local partners.

In the East Riding of Yorkshire, it is considered that the previous work of Yorkshire Forward in developing the Regional Economic Strategy, has provided an effective framework within which local regeneration programmes can be developed and delivered to encompass integrated regeneration activity at a local level.

Without a similar strategic framework, it is expected to become much harder to provide a rationale and evidence base to support proposed interventions, when compared with other localities elsewhere in the sub­region or region. Similarly, it is hard to see how the competing activities of LEPs within a region can be considered equitable without clear structures and strategies that can be applied to local regeneration programmes.

This may lead to disengagement, if local priorities, based on the needs of an area, do not readily fit within either government departmental priorities, or the priorities established by the business led Local Enterprise Partnerships.

As highlighted in Case Example 4, a broad based partnership approach of empowering local elected members, residents, business leaders, civil society representatives and civic representatives to take an active part in developing and informing the strategic vision and actions on regeneration activity within their area, has worked well within the East Riding of Yorkshire. These transparent partnerships which have a remit to engage in all areas of regeneration including Education and Skills, Economic Development, Worklessness and Economic Inclusion, and Planning, in order to ensure a co­ordinated approach, have been a successful vehicle for agreeing a strategic direction and then gaining community buy­in during the development and delivery of associated projects. We would advocate that this model should continue to be used.

There is concern that the publication appears to use the terms "Regeneration" and "Economic Development" as interchangeable terms, which they are clearly not. In consideration of the questions, it has been observed that these two terms are discrete, and that regeneration is a much more complex activity which takes account of social, physical and environmental factors, through an integrated approach to market failure and the development of the local economy.

In addition, regeneration activity should engage existing democratic structures, including town and parish councils to counter democratic deficit and explore ways of pooling resources in this challenging public sector fiscal environment.

4) What action should the Government be taking to attract money from (a) public and (b) private sources into regeneration schemes?

As already noted, regeneration activity is much more complex than pure inward investment or the development of capital assets. As such, there is potential for a wide range of public sector involvement where pooled resources could reasonably be expected to result in substantial regeneration benefits. Strengthening local partnership working particularly between different public services, and how they work with voluntary and community groups could improve effective services at a local level. This could include sharing buildings, facilities, staff and other resources.

Examples could include mental health benefits of good quality open space or the motivational effects of workplace visits to successful businesses by school children from areas characterised by low skills and aspirations. Further challenges however may be experienced where there are new governance models being developed for local service delivery e.g. schools (trust schools), healthcare (General Practitioner led consortia), economic development (business led LEPs).

5) How should the success of the Government’s approach be assessed in future?

The most robust and transparent quantitative tool for measuring the need for, and success of, the regeneration activity is the Index of Multiple Deprivation (IMD).

This measure provides a broad based indicator, including a range of facets which either impact on, or are a result of, the economic performance of a local area. The IMD can be interrogated down to super output area, providing a very precise economic assessment of a targeted geographic area. It is updated regularly to allow a time series of comparable rankings.

Allied to this, the Local Economic Assessment (LEA) of an area should also be able to quantify the impact of the preferred approach to local regeneration, providing information on business structure of the locality as well as productivity and business health in the area. The LEA can also assist in identifying key barriers to economic growth, and the opportunities to deliver growth in the area.

However the removal of the statutory guidance associated with the preparation of the LEA and removal of the duty on local authorities to report to government any NIs concerning Economic Development, may result in local authorities collecting and communicating different data. This would make benchmarking and comparison across local authorities or Local Enterprise Partnerships very difficult, and remove any likelihood of ascertaining what success may have been achieved from the Government’s approach to regeneration.

Alternatively, a more qualitative approach to measuring success could be employed. The progress made with regeneration activity in recent years has required a broad based partnership approach, to develop and deliver locally based solutions to economic problems. The local partnership structures which have been employed in recent years have built capacity and empowered residents, the local business community, civil society organisations and civic leaders, to develop and lead local regeneration programmes in conjunction with the local authority. By empowering a range of stakeholders in this decision making process, it has been possible to achieve the long term buy­in which has allowed local people to develop a greater understanding of local regeneration processes, and also appreciate why some ideas will not have the desired effects in a local area, and therefore are not taken forward. Individuals have also become more aware of successes elsewhere, what has worked well, what will not, eventually allowing them to self­assess any success of approaches to regeneration in their area and communicate that back in a appropriate manner. This approach has been effective in overcoming the ‘not in my back yard’ type of respondent who will judge a whole policy approach in a negative manner because of one individual intervention which has impact upon them.

March 2011