Regeneration

Regen 36

Written evidence submitted by Devon County Council

1. Summary

The recession has affected Devon as severely as any other part of England emphasising some of the inherent weaknesses in the county’s economic structure. Devon County Council’s views are that:

· The centralisation of funding creates acute difficulties for rural communities when there are acute shocks to the economic fabric.

· Most local authorities have a clear understanding of the problems facing their communities, particularly the local impact of the recession. Too few national schemes harness local knowledge to maximise their impact.

· The Watermark Centre in Ivybridge is a successful community-led regeneration.

· In Okehampton , where three businesses have recently closed and the unemployment rate doubled , Devon County Council and partners are working together to address the skills and training needs of individuals, businesses and potential employers in the town and its hinterland.

2. Introduction and Background to Devon County Council

2.1 This is Devon County Council’s submission to the Communities and Local Govern ment Select Committee Inquiry into the Government’s plans for r egeneration to enable growth . Devon County Council has 62 members (41 Conservative, 13 Liberal Democrat, 5 Labour, 2 Independent and 1 Green Party) representing 750,100 people. Its gross budget for 2010/11 is £1.385billion. The County Council’s Strategic Plan 2009-2013, prepared after the local elections in May 2009, has four core principles and five priorities.

A. Core Principles:

1. Care – To deliver high quality services that care for Devon, its residents and environment.

2. Community – Work with local people to help build strong and prosperous communities and

3. ensure a sustainable future for all.

4. Enterprise – To develop a competitive economy as the key to a better quality of life for all.

5. Value – To be a businesslike Council that is lean and focused, providing good value for money.

B. Priorities:

1. Support local business and tourism.

2. Improve knowledge, skills and productivity.

3. Promote green travel, improve roads and reduce congestion.

4. Provide responsive services that support people and families in need.

5. Reduce waste, improve recycling and reduce landfill.

2.2 Devon is one of the largest economies in the South West covering a land area of 6,564 square kilometres. It is home to almost 400,000 economically active people, 32,000 VAT registered businesses and almost 70,000 self employed people. 50% of Devon’s businesses have a turnover below the VAT registration threshold and there are 3 times more people employed in agriculture and twice as many working in tourism than the national average. P eople in work ing in Devon earn £2,600 less than the national average – that’s equivalent to the Devon economy losing £1 billion a year because it s business can’t match average wage levels. This loss of earnings is compounded by a high number of part time workers and a high dependency on the public sector.

2.3 The recession has affected Devon as severely as any other part of England emphasising some of the inherent weaknesses in the county’s economic structure. The low productivity, low wage businesses that characterise Devon's economy present a number of challenges as it emerge s from the recession. Devon businesses operate within a relatively weak in-county market, but also face the problem of distance to external markets. This is exacerbated by poor or no connectivity to even standard 2Mbps broadband. The challenge all of this poses to local economy may well be further exacerbated as public sector spending cuts filter into the economy.

3. Effectiveness of the Government’s approach: r egeneration is hampered by problems of organisation complexity

3.1 T he organisation al landscape is quite complex. In addition to the three tier local authority structure (county council, eight district councils and 407 parish/town councils) there is the plethora of agencies organisations and partnerships within the county with different remits, linked agendas and funding arrangements, making a concerted and joint effort often hard to achieve. As part of our move to establishing and supporting a private sector-led Local E nterprise Partnership the organisation landscape is being reviewed and the number of partnerships will be reduced and streamlined.

3.2 Delivering national Government's aspiration to support private sector growth and rebalance employment away from the public sector will continue to require localised suppo rt in the changing landscape. As we move away from regional and national economic development structures (abolition of the RDAs and regional Government Offices, centralisation of the Business Link service and European programmes etc), there is an increasingly important role for upper tier authorities like Devon County Council to show strategic leadership but very much working alongside and with the private sector and following th e wishes of local communities.

4. Effectiveness of Government’s approach: the need for local resourcing for c ommunity-led r egeneration to e nable economic g rowth

4.1 Government sets out a vision for its role in enabling regeneration as:

· reforming and decentralising public services – lifting bureaucracy and empowering local areas to do things their way;

· providing incentives to drive growth – freeing up local areas to grow their economies;

· removing barriers that hinder local ambition – abolishing outdated planning rules, enabling local tax increment financing and facilitating Big Society innovations;

· providing targeted investment and reform to strengthen the infrastructure for growth and regeneration and to support the most vulnerable – almost £20 billion central government infrastructural investment in developments including the national high speed rai l network, new affordable homes .

4.2 It is not clear that these roles are entirely consistent. Identifying the right level and scale to develop and deliver regeneration is absolutely the right approach. Devon County Council ’s experience is that the more successful regeneration schemes are those which originate from within the co mmunities. However, regeneration activity ne eds to be adequately resourced. It is the resourcing of regeneration activity which causes concern. On the one hand power and freedom is being decentralised and locali sed, and we feel this is right, b ut on the other funding is being centralised and directed to the private sector and the growth agenda.

4.3 The planned investment in the h igh speed rail network will not benefit the business or communities of Devon or the far South West. The first round of the Regional Growth Fund was not accessible to the majority of business in Devon. Disadvantaged by their scale of operation , b usiness in Devon are further hampered by the uneven playing field of European funding and state aid intervention constraints . If G overnment is fully committed to localism it must complement the freedom it is giving to local communities with the local resources that enable them to do the job.

4.4 The intentions to revise the management arrangements for the Rural Development Programme for England to create ‘national consistency’ seem s at odds with the G overnment’s ‘localism’ agenda and inappropriate when the relatively modest amount of funding is being reduced and the programme has only a couple of years to run.

4.5 The centralisation of funding creates acu te difficulties for communities when the re are acute shocks to the economic fabric. This is the situation currently faced by Okehampton, a market town on the northern edge of Dartmoor, which had been struggling with the impacts of the latest r ecession but is now also trying to cope with the closure of three substantial firms which has caus ed 350 redundancies and suddenly doubled the unemployment rate. With much of Dartmoor in its catchment area, this community has made especially productive use of Local Action Group funds under the RDPE programme . However, without this source of finance, there seems to be very little scope to attract any central g overnment funding to stimulate economic recovery which underpins local regeneration .

4.6 Devon County Council led an emergency meeting on 16 March 2011 to agree a support and economic regeneration package for Okehampton . The meeting included representatives of the town, local business leaders, members of the Town Council, West Devon Borough Council, Devon and Cornwall Business Council, local training providers, the community planning partnership, Devon Heartlands, and local business support agency BIP. A working group will be established to review the skills and training needs of individuals, businesses and potential employers in the town and its hinterland.

4.7 The Council’s view is that the correct approach in deploying funding will be one that achieves parity between rural and urban areas. Devon is a largely rural county and benefits little from national funding sources. Lack of high speed broadband connectivity is a prime example of how the regeneration of rural economies has lagged behind urban economies. A significant number of business premises in rural areas have no or very slow connectivity (less than 2Mbps) [1] . This places our businesses and communities at a real competitive disadvantage and we would look to Government to help redress this imbalance. Supporting enterprise growth in rural areas is far more costly and time consuming that in urban areas. Flexibility in approach and delivery is needed if funding is going to be effective and deliver meaningful results and impacts. Adopting a one size fits all approach in terms of the focus and solutions will not work. Competitive bidding processes are not necessarily the answer: they can be resource intensive and do not always lead to optimum allocation – reflecting the ability of ‘bid writers’ rather than community need.

4. 8 W hilst new initiatives and funding mechanisms put in place by Government to drive economic growth are welcome, it is not clear t hat t hey will help local communities and local economies in Devon. The core principles of reform and decentralisation; removing local barriers and freeing local communities to drive their own growth accord very much w ith the ambitions of Devon Count y Council and the communities it represents. In many cases, either the constraints to enterprise growth are location specific or the solutions require locally tailored implementation. The support needs to be flexible to allow each location to implement the solution that is reflects local issues. Support should not be constrained to certain activities headings but should be considered against the likely long term impact on enterprise growth

5. Lessons from regeneration projects : example of the Ivybridge Watermark Centre

5.1 Devolved programmes are notoriously difficult to manage; striking the right balance between due process, deployment of funds, early deliverables and contribution to local and wider objectives is difficult. It requires skills and experience that is not alw ays present within a community. But ‘parachuting’ those skills into a community does not create ownership and passion for change within the community which is the critical component of long term success. Balancing the roles and interests of each partners or representative group is also problematic.

5.2 The Watermark project is an example of a sustained partnership between Devon County Council with the people of Ivybridge to produce a state of the art community anchor building that addres ses long standing needs in the c ommunity for economic, social and environmental regeneration of this market town. The new building, opened April 2008, provides a 21st century Library and IT centre, one stop shop information point on local services and advice agencies, a 200 seat performance/meeting hall, meeting and conference facilities and 16 offices for local people with complementary business support advice.

5.3 The Watermark Centre was voted as the community's top priority through the Market and Coastal Towns Initiative in-depth consultation process. Supported by DCC a partnership with a broa d range of statutory agencies and the local c ommunity was formed to:

· Assist the Town Council to a build a robust steering group to drive the project forward. This included DCC Library Servic e, the District Council, local enterprise a gencies, local Regeneration and business groups and c ommunity arts and culture groups.

· Help develop a capital and ongoing sustainable revenue five year plan .

· Advise on selection and procurement of an architectural services and construction team

· Facilitate discussions with and develop funding applications to European and regional funding streams, netting over £1m in external funding (Objective 2, RDA Devon Renaissance and Renewable Energy 4 Devon)

5.4 The funding package of £4m was secured at the end of 2006, building work commenced in March '07 and the scheme was completed in 12 months; opening to the public in April 2008.

5.5 After just 18 months from opening, the Watermark is having a dramatic affect on the town's fortunes and its c ommunity:

· The Watermark has provided direct employment for 9 full-time and over 20 part-time local people .

· The library continues to see unprecedented levels of footfall – 214,202 visitors in first year of opening and membership - 600 new members within one week of opening and footfall increase of over 161% from the old library facility .

· The 16 business offices are fully let; producing 13 FTE jobs, 11 part-time posts and 4 volunteer placements to date .

· Over 600 arts, theatre and cinema events have been staged; appealing to a wide spectrum of audience tastes and pockets .

· The ‘one stop shop’ Information Desk has responded to over 32,000 requests for local information and advice .

· A community office hosts advice services (CAB, Relate, Credit Union) and for the first-time ever, an ‘ Ivybridge Cares’ bureau to support carers living in the area .

· The Centre generates an annual spend of over £50,000 on local food and service suppliers; 66% of whom are located within a 15 mile radius of the new Centre .

· The number of ‘high street’ vacant retail units has decreased from 19 to 10 and many are under negotiation for rental by local business interest .

· 9 new enterprises have started trading as a result of increased footfall and business confidence in the town’s future .

5.6 The Watermark is raising other communities’ aspirations for ‘community hub/anchor’ facilities across Devon and has received regional and national acclaim:

· The Association of Market Towns South West Regional Winner ‘Best Partnership’ Award .

· 2009 UK and Ireland Public Library Awards Highly Commended Award for Partnership .

· Shortlisted to the third round of the 2009 British and Urban Regeneration Awards .

6. Lessons from the previous Government’s approach to regeneration

6.1 Regeneration is not a short term activity. The conditions that ensure businesses remain competitive in an expanding global economy are constantly changing. The mechanisms by which communities share in and benefit from business growth are complex and fragile. It should not be the role of the public sector to subsidise investment in individual firms but it does have a long term role to ensure that business is not disadvantage by its location and that communities are not disadvantaged by business location. The culture of persistent grant giving has to end. Government support will be required until a cultural shift can be created where the private sector contributes to wider area investment and self sustaining funding mechanisms for community investment are developed.

6.2 Most local authorities have a clear understanding of the problems facing their communities, particularly the local impact of the recession. Too few national schemes harness local knowledge to maximise their impact. The last Government announced around 50 economic, labour market, social, and housing recession initiatives which were a reactions to short-term priorities rather than a comprehensive, considered, strategic response.

6.3 The previous Government’s approaches had little regard for local circumstances, tending to be one-size-fits-all: making them difficult to apply to local issues. With over 10,000 people currently claiming unemployment benefit, the County has seen some of the harshest impacts of the recession in the South West and currently has one of the highest unemployment rates of any non-metropolitan area. But Devon is bypassed by national and regional responses which are biased towards urban areas and large scale manufacturers.

6.4 Rural economies are fragile: they depend on part time seasonal works where both partners in a household often need to work to survive. Under the previous Government, the benefits systems and mortgage relief programmes did not account for people on reduced hours or the vast number of self employed that have seen their incomes redcuce. Similarly the mix of agricultural and tourism industries gives rise to a great deal of seasonal and temporary work in Devon: removing job security and certainty of income. Jumping from one short term job to another hides any issues of long term unemployment that are the trigger for many national support schemes further disadvantaging communities in counties like Devon.

March 2011