Regeneration

Regen 42

Written evidence submitted by Cornwall Council

Introduction: Cornwall Council (CC) welcomes the opportunity to respond to the Select Committee’s Inquiry on Regeneration. The Inquiry follows the publication of ‘Regeneration to enable growth: What government is doing in support of community-led regeneration’. In summary our response requests the Committee to consider the following argument:-

· Cornwall has distinctive opportunities and challenges to deliver ‘regeneration that enables economic growth’- synthesised in ‘Future Cornwall 2010-2030: A joint strategy’. This represents an agreed statement of the vision and objectives of Cornwall to 2030; and the 5-year priorities to 2015; and encompasses our immediate ‘Economic Ambition’ for Cornwall over the next five years where we have stated that we want to enable a ‘confident, resilient Cornwall that is a leader in innovative and low carbon technologies’

· Our strategy meets all major national policy objectives – the economic contribution that will enable localism and the Big Society, ‘rebalancing’ the economy, ‘Low Carbon sustainable growth’, ‘Britain – open for business’ etc. We also believe that integrating these themes at Cornwall level produces economies of scale and synergies that can contribute to ‘deficit reduction’ and can provide a blueprint for success for other UK non-metropolitan areas.

· Government support of ‘regeneration to enable growth’ requires Government to match its localism ’words’ with positive steps to empower Cornwall to deliver the strategy through enhanced powers and responsibilities discharged by institutions in Cornwall.

· In this respect, therefore, the current CLG ‘advice and guidance’ is inadequate. Whilst it outlines a range of important measures and programmes, these do not amount to a comprehensive approach to either regeneration or to enabling growth. Rather they are a ‘menu’ of options potentially available to private and community sectors, local authorities, and ‘vulnerable individuals’.

· The options ‘menu’ is also inadequate in its effective omissions of BIS-led enterprise, inward investment, innovation and skills (especially higher-level skills); and DECC-led energy and low carbon measures and policies. These will be central to most local (and certainly Cornwall’s) regeneration and growth strategies and are areas where Cornwall’s experience should lead to greater devolution on these matters.

· ‘Regeneration to enable growth’ requires a comprehensive, strategic approach. Regeneration and economic growth happens in places. Cornwall provides a place where government can confidently enable this comprehensive approach –in some senses a non-metropolitan variant of the GLA or of the potential of the Greater Manchester Combined Authorities (GMCA).

· Our response makes an offer to government to take this comprehensive agenda forward. We will be delighted to explore this in greater detail with the Select Committee; and to assist you further to advise government on how to put ‘regeneration to enable growth’ into practice.

Future Cornwall – the opportunity and the challenge: Cornwall (together with the Isles of Scilly – IoS) is unique for the strong coherence of our traditions, culture (and language) as economic drivers for our communities, the Cornish, ‘brand’ and sense of ‘place.

We are also unique in our economic challenges and opportunities. Although remaining an area with one of the lowest GVA per head and average weekly earnings in Great Britain (around 65% and 80% respectively); we have in the last decade delivered amongst the highest GVA per head growth rates (over 20% above national average) of any sub-national area. This has been anchored by a range of transformational investments such as Combined Universities Cornwall (CUC); by developing specialisms in environmental industries and technologies (especially renewables); and with major expansion, modernisation and diversification of traditional business sectors such as Tourism, Agri-Food and Drink. Underpinning this impressive performance has been the successful delivery of EU Convergence and Objective One programmes, together matching public and private sector development and regeneration investments. In short, if government wishes to consider non-metropolitan exemplars in actually delivering ‘Regeneration to enable growth’, Cornwall is certainly in both the UK Premier and EU Champions League of areas to learn from, and to support for further success in the future.

2011-15 presents Cornwall with a new set of challenges-government’s fresh approach to rebalancing and regeneration; the broader deficit reduction efforts; the local needs to complete and move beyond the EU Convergence Programme; and to realise all the dividends that the assumption of unitary local government in 2009 offered.

‘Future Cornwall 2010-30 – A Joint Strategy’ sets out how we can respond to these challenges. We consider it of national significance both in terms of the strong tripartite understandings – public, private, community and voluntary sectors – that led to its formulation and adoption; but also because of the way it encapsulates in one coherent economic geography and set of communities the overall national policy agenda being promoted by government.

Future Cornwall is a practical example of:-

· Localism – led by the tripartite ‘megacommunity’ of Cornwall’s public, private and civil society; and supported by the new unitary local council – the largest non-metropolitan unitary in the UK

· Rebalancing – both nationally and locally.

o Geographically, Cornwall provides a focus for sustainable growth, economic resilience, and reduction in ‘dependency’ in a former fragile area, with multiplier effects for wider economic geographies, and benefits for ‘UK plc’ more broadly.

o From public to private sector, from consumption to investment, developing key sectors beyond financial and business services. ’Future Cornwall’ provides a strategy for graduating from enduring (UK and EU) public expenditure to a new low carbon economy based on internationally-competitive environmental goods and services; modernisation of tourism, food and drink and other key sectors; physical and ICT connectivity; and skills-based investments.

· ‘Big Society’ –Cornwall decisions taken by institutions accountable to Cornwall residents and businesses is integral to the tripartite ‘megacommunity’. Together with the Isles of Scilly, our successful LEP bid illustrated strong partnerships within and between the public and private sectors.

‘Double devolution’ to Towns and Parish Councils and to civil society organisations is a key component of our putting Big Society into a Cornwall setting. It is essential that there is sufficient and realistic leverage for regeneration through devolved and hypothecated means of raising revenue; which is both sensible in its application and transparent in partnership with business. This needs to be supported by local animateurs who can link regeneration to an enabled community in the spirit of the ‘Big Society’ and the pride that people have in Cornwall. This was the basis of our increasingly successful evolution of regeneration strategy in Camborne, Pool and Redruth; which is resulting in innovation infrastructure, destination cultural and leisure (Heartlands) and modern, quality workspace. Devolution will allow Cornwall (and the Isles of Scilly) to evolve approaches which link such major regeneration to the needs and opportunities of all our communities – building (bottom up) from neighbourhood interventions

· Low Carbon growth – with huge tidal and marine resource, geothermal, wind and solar potential, Cornwall can be the ‘renewables powerhouse’ of the national economy; and of significance in terms of applying R&D to environmental goods and services industries and technologies. This is already supported through major projects such as the Hayle wave hub technology, the PRIMARE research programme to explore marine renewables, and opportunities such as Clay Country eco-town, with links to geothermal and sustainable construction technologies. It is therefore essential that the ability to fund and support training and skills in these fields is both devolved and coherent.

· Deficit reduction – with freedoms and flexibilities akin to those potentially sought by GMCA constituent local authorities, Cornwall can realise economies of scale and asset utilisation promised by the move to unitary status; together with leveraging EU and market investment for the remainder of and beyond the Convergence Programme

Future Cornwall – enhanced powers and responsibilities: Given distinctive opportunities and challenges; a coherent socio-economic geography, set of communities, and strategic approach; and a track record of successful delivery and improvement; it is now timely for Government to support ‘Future Cornwall’ with a comprehensive approach to enabling Cornwall’s leadership to deliver ‘Regeneration to enable growth’.

Indeed, our major critique of the CLG advice and guidance being considered by the Select Committee is both that this comprehensive approach does NOT appear to be on offer; and that the paper’s geographical perspective sub-nationally is mainly skewed toward London and the South East (e.g. Crossrail, Thames Gateway, even arguably HS2).

However Government has the example of the Greater London Authority (GLA), and has recently approved the establishment of the Greater Manchester Combined Authority (GMCA) from April 1st 2011. GMCA’s ambitions to set priorities, pool public resources, and commission/delivery manage roles and functions across economic and business growth, transport, skills (including further education), housing, regeneration, waste management, low carbon developments and strategic planning – as part of a coherent approach to regeneration and growth – should be available as an option for non-metropolitan areas. Cornwall’s leadership team would welcome an opportunity to progress such a case with government, and requests the Select Committee to consider a recommendation in its Inquiry Final Report that enhanced powers and responsibilities for regeneration to enable economic growth in Cornwall be pursued by Government as a matter of urgency (e.g. given the 2013 end of the EU Convergence Programme) and the need to develop and implement successful arrangements for the following Transition Period.

Specific responses to the Inquiry questions: The above presents an outline general case for ‘Regeneration to enable growth’ in a Cornwall context. With respect to the specific questions asked by the Select Committee, whilst, clearly, there are a number of community regeneration and worklessness dimensions to the Inquiry, our strategic ambitions for economic growth and development suggest the following responses for the Committee’s consideration:-

1. How effective is the Government’s approach to regeneration likely to be? What benefits is the new approach likely to bring? Cornwall welcomes the major themes of government policy, as outlined above – localism, rebalancing, big society, low carbon growth – and we can contribute to a strategy for deficit reduction. These provide economic, social and environmental underpinnings for ‘Regeneration to enable growth’. We also welcome the new flexibilities to work outside of the confines of an artificial south west architecture on key issues that we share with similar geographies nationally and internationally.

We are delighted that Cornwall’s initial proposal for a Local Enterprise Partnership (LEP) was in the first round of LEP approvals; and this provides the strategic economic leadership team and mechanism for planning and managing economic change. As a public, private and community sector partnership, the LEP provides tripartite support for the economic dimensions of the overall ‘Future Cornwall’ strategy.

We also continue to invest in Cornwall Development Company (CDC) which, alongside other private, public and community sector partners, provides a critical mass of delivery management capacity and capability with which many areas may struggle in the aftermath of the RDAs and with the changing HCA roles and reach.

Government’s approach to regeneration will be more effective where local areas are ambitious, have broad tripartite buy-in to strategic direction, a purposeful partnership focusing on economic growth and regeneration, and a critical mass of delivery management capacity and capability.

Where such preconditions are met, government itself needs to be more ambitious in the powers and responsibilities it is prepared to delegate to the area. In this respect ‘Regeneration to enable growth’ is a menu of options rather than a comprehensive approach to regeneration and growth. As a menu, the benefits which will accrue are likely to be important but partial (i.e. benefits in tackling deprivation may not produce sustainable economic growth, whilst investments in growth sectors may not deliver improved social outcomes in disadvantaged communities).

Government needs to make clear that genuine localism in regeneration and economic growth is on offer to ambitious areas; that it can lead to powers and responsibilities akin to GLA and the direction of travel epitomised by GMCA; and that it is prepared to work with ambitious areas to this end.

2. In particular: Will it ensure that the progress made by past regeneration projects is not lost and can, where appropriate, be built on? 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? Cornwall has benefitted from past regeneration programmes, notably the EU Objective One and Convergence Programmes – and a range of national and regional initiatives. Cornwall recognises that 2011-15 will be marked by deficit reduction in UK public finances, together with graduation from the Convergence programme after 2013.

Building upon the progress made by regeneration investments in this context requires new models of development intervention – increasingly private sector-led and public sector enabled. Government will only support enabling in the Cornwall context if it:-

o Ensures that match funding is available to complete the Convergence Programme effectively, and that post-2013 Cornwall can build on Objective One and Convergence to create a new ‘joined up’ EU role in Cornwall’s future development – matching the whole range of EU interventions with national programmes (e.g. like Regional Growth Fund) and private investments

o Recognises the necessity for ‘renationalised’ economic functions post-RDAs to have strong local shaping and tailoring – and in Cornwall’s case to have a clear Cornwall dimension to future Business and Enterprise Support (including the to-be-announced Enterprise Zones), Inward Investment, Innovation, and Skills programmes

o Provides a stable investment climate and appropriate incentives to encourage the development of new industry clusters such as the renewables sector in Cornwall, which can deliver future major employment, regeneration and GVA benefits. Areas which have the potential to deliver growth of national significance in these sectors need an incentives regime tailored to local needs, including appropriate local fiscal regimes to enable and retain private investment and development.

o Provides also a stable investment and incentives regime for private and community sector participation in affordable housing and community regeneration programmes. In this respect, there are concerns over how the new affordable housing policies will impact on Cornwall, and the degree to which a specific regime tailored to Cornwall needs will be required.

In terms of adequacy of public funding for Cornwall’s sustainable growth and economic resilience, government needs to:-

o Bring to fruition the range of measures it has suggested may be available for local areas – TIF, CIL, Bonds etc; complete an ambitious Local Government Resource Review; and ensure that local areas of growth are able to access new instruments in a timely and effective manner.

o Apply both financial incentives (e.g. Feed-in-tariff scheme),and programme priorities (e.g. TSB research and commercialisation programmes)to low carbon growth sectors (especially renewables) – ensuring some ‘localisation’ of both policy regimes and funding so Cornwall can make a significant contribution to UK and local sustainable growth of high value and priority sectors

o Ensure the public sector asset base is deployed effectively to leverage market investment and service delivery. Cornwall’s local government estate has significant potential for rationalisation – but the positive impact will be multiplied many times if a whole-Cornwall approach can be taken by Cornwall’s leaders to the public asset base (include maritime resources).

o Bring together the above measures with mainstream public budgets, increasingly enabling the pooling and integration of public resources in an Integrated Cornwall Investment Programme.

3. What lessons should be learnt from past and existing regeneration projects to apply to the Government’s new approach? There are many examples of regeneration investments that have delivered transformational change over recent decades. Indeed, Cornwall will argue that Objective One and Convergence Programmes have laid the foundations for this type of transformation. However, overall government approaches have tended to be limited by:-

o Difficulties in reconciling ‘trade-offs’ and linking ‘investing in success’ and ‘tackling deprivation’ approaches to regeneration and growth strategies

o Fragmentation of intervention strategies derived from different national departmental priorities (e.g. skills, business growth, planning, transport etc)

o Uncertain and inconsistent involvement of business and community sectors in prioritisation and delivery management of economic change

o Lack of local legitimacy to top-down initiative, and lack of well-founded ‘mediation’ mechanisms between national priorities and local concerns

o Inconsistent capacity and capabilities to plan and manage policies, programmes and projects effectively

These limitations can best be addressed through ‘joining up’ national priorities and approaches in economic development and regeneration through coherent regions like Cornwall and (as appropriate) the Isles of Scilly. The previous government attempted this at south west level, but this approach faltered through lack of local legitimacy and coherence. As argued above, we consider Cornwall has the socio-economic coherence, local leadership and legitimacy, strategic approach, ‘megacommunity’ involvement, and delivery arrangements to provide a strong test-bed for extending devolved decision-making in development and regeneration.

In particular, the new Local Enterprise Partnership needs to be empowered to negotiate and agree the economic development priorities of ‘Future Cornwall’ with government departments and NDPBs (as outlined above for Business Support, Renewables, Affordable Homes etc); whilst the Council, CDC and other delivery bodies need the empowerment of accessing new financial instruments and powers (e.g. TIF, CIL, Asset-backed vehicles plus the outcomes of a ‘permissive’ Local Government Resource Review)

5. What action should the Government be taking to attract money from (a) public and (b) private sources into regeneration schemes? The major policies of a Cornwall approach include:-

o Ensuring completion of the EU Convergence Programme, with satisfactory public and private match funding, and alignment of EU funding streams with appropriate national programmes such as RGF

o A post-2013 EU regime which allows Cornwall to integrate all EU financial instruments (e.g. ERDF, ESF, EAGGF, FP etc) within an overall ‘Future Cornwall’ integrated investment programme

o Evolution of area/place-based budgeting mechanisms and former Multi-Area and Local Area Agreements into a holistic Cornwall Budget and Integrated Investment Programme certainly across development and regeneration drivers (i.e. akin to GLA and/or GMCA powers and resources)

o Agreement to rationalisation of the public sector asset base in Cornwall, and use of the asset base to leverage private investment in Future Cornwall priorities

o Agreement to deployment of new financial instruments – TIF, CIL ,renewable energy incentives, plus the outcomes of the Local Government Resource Review within the scope of any agreed Future Cornwall enhanced powers and responsibilities

6. How should the success of the Government’s approach be assessed in future? We have argued in this submission that the major themes underpinning government’s approach to regeneration include localism, rebalancing, Big Society, Low Carbon growth, ‘Open for Business’, deficit reduction. It is clear that impact and outcome evaluations can be identified for each of these themes, and we can anticipate that government’s record will increasingly be judged against these themes as parliament proceeds. More specifically, in ‘Regeneration to enable growth’ government identifies its roles as:-

· "reforming and decentralising public services

· providing powerful incentives that drive growth

· removing barriers that hinder local ambitions, and

· providing targeted investment and reform to strengthen the infrastructure for growth and regeneration and to support the most vulnerable"

Both the major themes, and the specific government roles have a resonance with ‘Future Cornwall’ ambitions – and are a satisfactory basis upon which to assess the impact and outcomes of government’s approach as it affects Cornwall over 2011-15.

Conclusions: Cornwall Council is delighted to have had an opportunity to make this submission to the Select Committee’s Inquiry on Regeneration. We have argued, solely in response to one aspect of the Committee’s scope of Inquiry – i.e. the enabling of economic growth in Cornwall. We could also present a similar economic analysis with respect to tackling deprivation and worklessness, benefit dependency etc. Indeed, we would welcome an opportunity both to expand upon and extend our argument should the Committee either wish to undertake a specific Cornwall case study, or should it hold oral hearings as the next stage of the Inquiry.

In summary, the major limitations and concerns with ‘Regeneration to enable growth’ are:-

· Lack of specific commitments from government to a comprehensive approach to enhanced powers and responsibilities in ambitious areas

· Omission of major consideration of BIS-led Enterprise, Innovation and Skills contributions to growth(and especially the local leadership and influence on ‘renationalised’ roles functions from RDAs); and DECC-led carbon reduction and renewable industries programmes and incentives

· Concern over the future of EU funding regimes, ease of implementing new financial instruments (e.g. TIF, CIL, outcomes of Local Government Resource Review), a whole public sector approach to asset utilisation, and the tailoring of incentives (e.g. renewable energy FITS) to specific priorities of local areas

These limitation and concerns can be addressed by Government committing to negotiating agreements with the Future Cornwall leadership team over Government’s own contribution to Cornwall priorities; to its empowering the LEP in the first instance as the strategic economic leadership body for Future Cornwall; and to a longer run discussion of Cornwall (probably with the Isles of Scilly) gaining legal powers, freedoms and flexibilities at least akin to the most advanced metropolitan areas in England.

March 2011