Regeneration

Regen 54

Written evidence submitted by the Department for Communities and Local Government

Summary

1. Over the last decade, our economy became more and more unbalanced, unstable and unfair. We are now paying for those mistakes with the highest level of public debt on record.

2. The Coalition Government’s first priority is restoring the health of the national economy by reducing the deficit and returning the UK to sustainable, balanced economic growth. Every place has the potential to grow, but growth is harder to achieve in some places than others. Regeneration is a vital component of our approach to growth and to rebalancing the economy.

3. The scale of public deficit means that previous models of regeneration which relied heavily on public sector subsidy are now simply unaffordable. Moreover, previous approaches were often characterised by bureaucracy and top-down directives, and failed to respond to local circumstances, needs and priorities. These approaches didn’t work. Many places are overly reliant on the public sector and still face significant challenges. We need a new approach.

4. The Government is putting local partners in the driving seat – providing the right mix of incentives and tools to enable local residents, councils, businesses and civic organisations to regenerate and grow their area as they see fit. We will play an enabling role – reforming and decentralising; providing incentives for growth; removing barriers; and making strategic investments to provide vital infrastructure for growth and regeneration.

5. This approach will better deliver local regeneration and growth. It is now for local partners to respond and determine how they use the regeneration toolkit1 to address local priorities.

Introduction

6. The Government aspires to a future where local communities, councils, business and social enterprises come together to agree priorities for their area, and work in partnership to drive forward their plans for regeneration – corralling resources, and working collaboratively with local service providers to improve the lives and opportunities of local people and unlock growth.

7. On 31 January 2011, Local Government Minister Grant Shapps and Communities Minister Andrew Stunell outlined the Coalition Government’s new approach to regeneration. Regeneration to enable growth [1] sets out how the Government is putting residents, local businesses, local authorities and civil society organisations in the driving seat. It also describes a toolkit of powers, flexibilities, rewards and incentives we are providing that can help drive local regeneration and growth.

8. The Select Committee announced their inquiry into regeneration a few days later. The Government considers this helpful timing as we are keen to hear from others what else we might do to support the localist approach to ensure that local regeneration can contribute as much as possible to national economic growth.

9. There is very little domestic policy that does not in some way support regeneration and growth – housing, planning, employment, transport, skills, business support, environment, civil society, health, crime prevention; they all have a role to play. In turn, regeneration and growth can support much other domestic policy, providing the economic and structural improvement that supports health and wellbeing. The toolkit underpinning the Government’s approach to regeneration therefore features elements from many different government departments. Accordingly, this evidence, whilst submitted by Ministers of the Department for Communities and Local Government, reflects this cross-government approach and is presented on behalf of central government as a whole.

The Coalition Government’s commitment to regeneration to enable growth

10. The Coalition Government’s first priority is restoring the health of the national economy by reducing the deficit and supporting growth. Economic growth is essential if we are to tackle unemployment, poverty, poor health and inequality and improve standards of living for a growing population.

11. A strong national economy depends on the strength and vitality of local economies across the country, and the Local Growth White Paper [2] set out the Government’s strategy to encourage locally-driven growth that is sustainable and fair. Where a local area is declining or has suffered and not recovered from past decline, its problems – which often include worklessness, poor health, poor environment, and high crime – are costly to manage, offsetting the contributions of other more successful places. For example, the Marmot review [3] reported that health inequalities were costing around £52bn a year in lost productivity, reduced tax revenue and higher welfare payments. In economic terms, declining and static local economies therefore act as a drag on the performance of the UK economy as a whole.

12. We therefore need every part of the country to fulfil its potential if we are to maximise national economic growth. Every place has the potential to grow, but growth may be harder for some areas to achieve. Regeneration plays a vital role by addressing local failures in the land market, labour market and capital market which in turn remove market barriers that prevent economic growth.

Why do we need a new approach?

13. Over the past 10-15 years regeneration became overly reliant on large-scale direct public sector investment, and this was not only unsustainable, but there is anecdotal evidence that it also may have discouraged private investment. For example, studies have shown that (a) regeneration can raise land prices, through landowners' 'hope value', which increases risk for private sector investors [4] , and (b) the complexity, and bureaucratic nature of public sector led regeneration partnerships can act as a strong disincentive to private sector investment [5] . Moreover, the recession, the scale of public deficit, and the resulting squeeze on public finances mean previous models of regeneration are now simply unaffordable.

14. That said, even if funding conditions were more favourable, we wouldn’t pursue the same model. The limitations of previous approaches to regeneration signal the need for a new approach:

· Modest results

10 years of intense investment brought some positive changes to deprived areas and neighbourhoods, but these improvements were relatively modest despite favourable economic conditions. The gap has narrowed but not closed [6] . Today many places are overly reliant on the public sector and still face significant challenges in spite of years of intensive regeneration funding – in particular ex-industrial areas which, despite significant regeneration investment, continue to face long term decline, and much higher unemployment rates than elsewhere in England.

· Failure to tailor to local circumstances

The previous Government relied too heavily on direction and control from Whitehall. Evaluation of the New Deal for Communities [7] suggested that the initial top-down requirement for a delivery plan containing target outcomes for worklessness, health, education, crime, housing/ physical environment and community was unrealistic and encouraged spreading resources too thinly, without due regard to local circumstances and priorities.

· Failure to involve local people

In the past, too many people felt that regeneration and growth were ‘done to’ them rather than being something they were part of. This caused resentment and disengagement [8] . Regeneration partnerships have often lacked meaningful community representation, and the needs of local residents have been overlooked [9] , [10] .

· Bureaucracy

Too often, we have seen multiple activities and funding streams going into the same area, each with its own silo bureaucracy and reporting arrangements. For example, research in Liverpool in 2006 [11] identified over 30 different regeneration initiatives, each with different funding sources and structures.

The new approach – connecting local growth and regeneration to deliver long term sustainable growth

15. The Government’s approach to policy making and public services is to decentralise decision making to the lowest appropriate level – to individuals, public service professionals, neighbourhoods, communities, democratically accountable local authorities, and other local institutions – and give them maximum scope to come up with solutions that meet the needs of their own localities.

16. Decentralisation should result in improved outcomes:

· Higher Growth

ü By Decentralising to Individuals and Households

Individuals and households, and the choices they make to improve their wellbeing, drive the market. Opportunities for growth are best created when policies are designed to provide individuals and households with the capability to make the choices that are best for them. This market driven approach ensures that providers must compete and innovate to meet those preferences.

ü By Decentralising to Communities

Communities can contribute to growth by strengthening and building "social capital" (such as community goodwill and trust). Social capital is built when policies bring people together as communities and networks to establish trust and cooperation. This can increase wellbeing, but also provides the trust and relationships between consumers and providers that can enable economic growth.

ü By Decentralising to Local Government

Local governments can contribute to growth by tailoring policy solutions to best support the local needs of individuals, households and communities. Society and the economy grow better when governance provides the fiscal, administrative and political frameworks that best reflect people’s preferences. Experimentation and innovation in local service delivery can also result as different places try to find solutions through different approaches in different areas.

· Improved Services


Decentralisation can help deliver better quality, more efficient and responsive public services by removing unnecessary and expensive bureaucratic burdens, reducing prescription, increasing choice and transparency, and better aligning services with user preferences.

· Greater Civic Participation


Decentralisation will give every citizen the power to participate and change the services provided to them through better information, new rights, greater choice and strengthening accountability via the ballot box. Engagement of the local community can bring benefits for those who get involved and can contribute to more successful outcomes for local communities.

17. The result of this process of decentralisation will be that individuals and communities will increasingly take responsibility for improving their own area, as part of helping to build the Big Society. Government’s role will therefore be:

· to set the national policy framework within which other actors can best perform their role

· to support, where necessary, the transition by providing people and communities with the necessary rights and tools to information, to influence services, and to hold service providers and institutions to account

18. Our new approach to regeneration builds on lessons about what does and doesn’t work:

· By including regeneration as part of our agenda for economic growth, we are ensuring that regeneration strategies link people to the opportunities brought by economic growth so are more likely to deliver lasting change to peoples' lives.  Evidence shows that regeneration strategies are more effective if they consider the needs of local people in terms of skills, mobility between places and other barriers to work, in addition to investment in infrastructure and the quality and environment of a place, where appropriate [12] .

· By removing top-down requirements and increasing local control, we are ensuring that local people, not Whitehall, will shape the future of their area, and that regeneration and local growth are defined in a way that best suits local circumstance. Evidence demonstrates the importance of locally designed and delivered interventions which can take into account local conditions and address locally specific barriers to people finding work. [13]

· By tackling bureaucracy and bringing an end to top-down reporting requirements, we are ensuring more efficient use of resources.

· Increased funding flexibility will allow local partners to channel resources to address their priorities. Removing ring fencing from funding has helped local authorities take a more strategic approach to regeneration. [14]

· A range of measures are being provided to support private sector investment and engagement in driving economic growth and rebalancing the economy (see paragraph 25).

· And Local Enterprise Partnerships will work across boundaries so that interventions to drive local economic growth can take account of the wider economic context [15] . The partnerships established so far are already setting out plans, for example, to attract investment, boost tourism, or strengthen transport links.

19. It is not for Government to identify which areas need regeneration, or define what it is, what it should look like, or what measures should be used to drive it. As guardians of taxpayers’ money, neither is it for us to throw money at a problem when other solutions or funding sources could be found, nor to try to artificially hold back the inevitable evolution of communities.

20. Instead, we believe that it is Government’s role to:

· reform and decentralise - giving local partners in every area the freedom to agree priorities and define any plans to regenerate and grow their area, and providing them with a toolkit of powers, tools and flexibilities they can use to drive their plans forward, and the information they need to hold local institutions to account

· provide powerful incentives for growth

· listen to and consider whether it can assist in removing any barriers that hinder local ambitions

· provide targeted investment in vital infrastructure to support growth and regeneration and aid transition, and in those people and places needing most support.

21. Regeneration to enable growth sets out more detail on this approach, including the Government policies and programmes that are helping to deliver it. In this way, Government aims to give all areas the opportunity to deliver local growth and regeneration. It is now up to local partners to respond and to decide how they use this toolkit to address their local priorities.

Delivering the approach

22. We should not be fooled into thinking we are starting from scratch here – local partners have not waited for Government to give them permission to take ownership of their local area. Many community groups and partnerships are already active across the country, and have been for years. The Baytree Renewal Area in Manchester for example, where Grant Shapps and Andrew Stunell outlined the Government’s approach to regeneration1 on 31 January, was established as the result of a campaign by the local residents. The physical improvements brought to the housing and streetscape were designed in partnership with local people, and residents also successfully bid for lottery funding to convert an overgrown allotment into a children's wildlife garden and adventure area.

23. What is new is the toolkit of flexibilities, tools, powers and incentives that Government is now providing that can be used to support locally-led regeneration and growth. The high levels of take up of many of these opportunities show how welcome they are and how ready local partners are to take advantage of them. For example there were 87 applications for the Neighbourhood Plan front-runners, and there were 28 applications to be one of the eight Community Infrastructure Levy front-runners.

24. Regeneration is more likely to succeed if the conditions for economic growth are met. Through the Growth Review, the Government is undertaking a root and branch review of how growth can be accelerated. Measures announced in last week’s Budget included:

· Government will establish 21 new Enterprise Zones in Local Enterprise Partnership areas in England. Through a combination of fiscal incentives, reduced planning restrictions and other measures, these Zones will help kick start new investment and drive the creation of new private sector jobs in the areas they cover. The Budget named 11 Local Enterprise Partnerships who have been asked to come forward to identify Enterprise Zones within their boundaries, and announced that a further ten will be identified through competition amongst all other Local Enterprise Partnerships.

· The planning system will be reformed and simplified through a range of measures:

ü The current suite of National Planning Policy Framework documents will be condensed into a concise easy to use document.

ü The new Framework will be inherently pro-growth, underpinned by a powerful new presumption in favour of sustainable development. This will ensure that the default answer to development and growth should be 'yes' unless this would compromise the key sustainable development principles set out in the National Planning Policy Framework.

ü A range of measures to simplify the planning process will be consulted on.

ü Piloting the use of land auctions on public sector land - auctions of parcels of land with planning permission to increase competition and bring greater certainty and reduced risk for developers.

· Government is amending the stamp duty treatment of bulk purchases of residential property to boost the private rented sector and house building activity by attracting investment from other funding sources besides mortgage finance.

· Government will accelerate the release of public sector land to encourage new homes and jobs. The Homes and Communities Agency is leading the way, making use of Build Now, Pay Later techniques to speed up delivery and ensure value for money. It will shortly announce the first tranche of available sites, with a comprehensive strategy for bringing more land forward being published in May. In the future, Departments holding land will publish their release programmes and be held to account for delivery of new homes and jobs created as a result.

· A range of measures to support small and medium enterprises, including:

ü no new domestic regulation for firms with fewer than ten staff and new start-ups over the next three years

ü extension to the temporary one-year increase in Small Business Rate Relief for a further year, benefiting over half a million small businesses

ü £180m for up to 50,000 additional apprenticeship places over next 4 years 

ü Research and Development tax credits

ü Continuation of the Time to Pay scheme

ü UKTI support to Small and Medium Enterprises who want to export

ü extension of the Enterprise Investment Scheme and doubling of Entrepreneurs’ Relief to £10 million

ü 1p reduction in fuel duty and deferral of the planned increase

25. A wide range of actions are already underway to attract the private sector investment, drive growth and encourage private sector engagement in going for growth. For example:

· The creation of Local Enterprise Partnerships has given local communities and businesses the opportunities to support economic growth and regeneration in their areas by addressing the particular barriers to growth they face. 31 Local Enterprise Partnerships have been announced so far, covering 87 % of England’s population.

· The Regional Growth Fund is aimed at supporting projects and programmes with significant potential for creating long-term private sector-led economic growth and employment. In particular, it will help those areas and communities that are currently dependent on the public sector make the transition to sustainable private sector-led growth and prosperity. Schemes submitted in Round 1 of the Regional Growth Fund are being considered and successful bids will be announced shortly.

· The Local Government Resource Review is considering options to enable councils to retain their locally-raised business rates. Such an approach will help provide incentives for local authorities to promote economic growth and help to further encourage a positive relationship between local government and business.

· The Review will also deliver proposals to introduce Tax Increment Financing powers, allowing councils to fund key infrastructure projects by borrowing against future increases in business rates, thereby freeing up development opportunities that would otherwise not have been taken forward.

· The Government is reforming the way in which it ensures that business start-ups and existing Small and Medium Enterprises can access the information, business advice and enterprise support they need. This will support enterprise creation and growth, and support economic development in local communities.

· UK Trade and Investment is putting in place new arrangements for provision of sectoral and local support for foreign direct investment through a single national framework for England (outside London). Local Enterprise Partnerships will be important in ensuring these new arrangements fully reflect the local offer.

· The Government is freeing learning providers from outside interference so they are able respond to local training needs and market demand to support the growth and regeneration of their local economy.

· A range of other tools already exist that local authorities could also use to support businesses and deliver local improvements. For example Business Improvement Districts are partnerships between a local authority and local businesses to develop and deliver priority projects and services that will have a direct, positive impact on the trading environment in a defined area. These can include public realm improvements, improved promotion of the area, or extra safety and security measures.

26. The Localism Bill, currently before Parliament, also provides for other elements of the regeneration toolkit, including:

· Measures allowing local businesses much more say with regard to business rate supplements, allowing them to vote for and in effect approve all future planned economic development projects that they will be funding.

· Powers for local authorities to introduce discounts on business rate bills, allowing councils to attract and retain local business, for example in particular locations or from particular sectors (within the constraints of the state aids rules).

· the General Power of Competence which will, for the first time, give local authorities genuine freedom to act in the interest of their local communities

· measures to enable local communities to save valued community assets, and challenge to run local services.

· proposals for neighbourhood planning, whereby local communities will be empowered to shape the planning policy for their areas, including what new development should take place, what it looks like and where it goes.

· reforms to the Community Infrastructure Levy which, alongside the New Homes Bonus, will create a compelling package of incentives for areas to accept growth by giving local authorities and residents the means and flexibility to manage the impacts and share in the benefits of growth.

· increased flexibility regarding social housing allocations, homelessness provision and tenure, allowing local councils to better manage their housing stock and better serve vulnerable individuals and families who find themselves in housing need.

· enabling the Mayor of London to create Mayoral Development Corporations and giving the Greater London Authority a new strategic housing and regeneration role in London.

· powers for communities to instigate local referendums on any local issue; and power to veto excessive council tax increases.

27. Several other elements of the regeneration toolkit are already in place or are in train, including:

· The Homes and Communities Agency was re-launched in November 2010 as a smaller investment and enabling body working for local communities on their priorities. The Agency will deliver up to 150,000 new affordable homes over the next four years.

· We announced in February the outcome of bidding to the HCA for decent homes funding for 2011-12 and 2012-13 and indicative funding allocations for the following two years. The Decent Homes Backlog programme will invest over £2 billion to improve the conditions of people’s social homes in some of the most deprived areas. Some of this funding will make possible wider regeneration schemes for difficult estates.

· In February, the Homes and Communities Agency published its first list of all Agency land and property assets as part the Government's transparency agenda. This information could enable local partners to work with the Agency to support the assembly of local land development opportunities.

· The Government is working with 16 local areas to develop the first phase of Community Budgets, focussing on the needs of families with multiple problems. These will pool and/or align the national and local funding they need to deliver transformational solutions for these families. We are working with several other areas to pool and align budgets at a local level. These include a number of areas that are looking to develop a Local Integrated Services approach, which seeks to address entrenched problems through involvement of communities in the design, commissioning and delivery of locally tailored services, responding to local need and priorities. 

· The final New Homes Bonus scheme was published on 17 February. The Bonus will include bringing empty properties back into use – providing an incentive to those authorities which refurbish existing homes and tackle blight. There will be no penalty for demolishing homes which are already recorded as long-term empty – providing an incentive to press ahead with renewal programmes already underway. And in addition, as unringfenced funding, the Bonus will provide a significant, flexible resource which can be reinvested in regeneration and growth.

· We have committed £100 million as part of the Affordable Homes Programme to bring empty homes back into use. Funding is available from April 2012 and HCA have invited expressions of interest from interested parties.

· The proposals for NHS and public health reform give local government the freedom, responsibility and funding to innovate and develop their own ways of improving public health in their area, to make a major impact on improving people’s health and tackling health inequalities in every community. Local authorities will receive a new grant and a premium that rewards progress in improving health and reducing health inequalities.

· The new Work Programme will play a crucial role in getting people back to work.  Government will no longer prescribe what support providers will offer individual clients. Instead it relies on the market to decide what works best in different local labour markets across the country.  Providers will be paid on the results they achieve. They will need to work side-by-side with local partners if they are to be successful and deliver the best possible outcomes.  We are now evaluating bids to deliver the Work Programme and remain on track to begin in the summer. 

· Through Broadband Delivery UK, we are investing £530m to deliver superfast broadband to areas that the market will not deliver to. This will ensure that an acceptable level of broadband is delivered to households, business and communities in rural and other remote parts of the country that are currently excluded. 

· Government responded to the Clapham Review of Coalfields Regeneration on 10 March setting out the Coalition Government’s commitment to continuing support to communities in coalfield areas, including c.£150m to complete viable committed schemes and £30m for the Coalfields Regeneration Trust for the next 2 years.

· Strategic leadership for the Thames Gateway is now coming from a group of local authorities and business leaders in London, Kent and Essex, and the Mayor of London, who collectively have responsibility for setting the direction that development should take within the Gateway and where investment incentives should be directed. We have also announced plans to transfer the functions of both the London and Thurrock Thames Gateway Development Corporations to the relevant local authorities, or other London bodies.

· Enabling works for Crossrail are underway across London – at Paddington, Bond Street, Tottenham Court Road, Farringdon, Liverpool Street and Whitechapel, and on the Canary Wharf Crossrail station. Crossrail awarded the major tunnelling contracts in late 2010, and other elements are out to tender.

· On 28 February, the Government commenced a major public consultation on its proposals for the High Speed 2 rail link . The Appraisal of Sustainability [16] shows that the station developments along the proposed route for the initial London-West Midlands phase could support the creation of around 30,000 new jobs and would feed directly into existing regeneration plans, particularly around Old Oak Common in West London and in the Eastside district of central Birmingham .

28. DCLG launched its Barrier Busting Portal on 15 December, providing local community groups, individuals and local authorities with direct access to a team of Whitehall barrier busters dedicated to helping local people put their ideas into action. A number of cross-cutting regeneration cases are already being considered, in addition to many cases on individual issues such as planning, barriers to increasing volunteering, and acquiring assets. Barriers being addressed include Government legislation, information and capacity gaps, and local differences in priorities.

29. DCLG is also working with four vanguard communities to help them deliver their vision of the Big Society by, for example, working with colleagues across Government to remove identified barriers where we can, or helping community groups can turn their local plans into reality, such as the installation of rural broadband or giving people a greater say on local development and budgeting. We are also working with other communities who have now approached us with some specific proposals to grow the Big Society in their communities. A number of other local authorities have also shown interest in this work.

30. The Committee will no doubt be keen to discuss recent cuts in direct regeneration funding. We recognise these are posing challenges for some areas. However, we have taken steps to ease the transition as far as possible, for example:

· As part of the local government funding settlement, we included a transitional element to ensure that no area will face an excessive cut in public funding next year.

· The Homes and Communities Agency and DCLG are working with housing market renewal and growth areas to help them manage the transition and identify alternative funding sources, including New Homes Bonus, and bring a stronger emphasis on refurbishment including community based renewal projects. A new £5m transition fund was announced on 31 January to help safeguard and develop expertise and capacity in the five worst affected areas.

· The Spending Review provided £1.3bn to deliver existing Regional Development Agency and Homes and Communities Agency commitments, so that subject to value for money current projects which are valued by local communities are seen to completion.

31. Not all regeneration and growth programmes require large sums of money, but where direct funding is needed, a range of sources are still available. Local partners in many areas are already proactively considering how to take forward their plans through a combination of thinking creatively about alternative ways of delivering their aims, attracting alternative funding sources, and seeking opportunities for collaboration and efficiencies. These include:

· the applicability of sources of direct funding such as the Regional Growth Fund, European Regional Development Fund, Rural Development Programme for England and Community First

· the income that the new incentives schemes (e.g. New Homes Bonus) could provide

· the potential of options such as tax increment finance, community shares and social impact bonds

· building up an asset portfolio and using it to generate an income stream, and

· ways of attracting and leveraging private sector investment, including through assets and venture capital approaches.

32. Moreover, direct regeneration funding has always been dwarfed by mainstream and infrastructure spend, and Regeneration to enable growth describes a wide range of mainstream and infrastructure programmes that, despite unprecedented public spending constraints, continue to contribute to regeneration and growth and support disadvantaged people and places. This includes investment in affordable and decent homes, transport, business support, skills, education, employment and health services.

33. Whilst we expect local authorities to take the lead in building the capacity of local communities, central Government has a role in galvanising and enabling the transition to the Big Society. As cited above, there are many examples where local partners and communities are already involved in improving their area. However, we recognise that some communities may need more support, and several actions are underway on this:

· The training of 5,000 Community Organisers. Working within communities and with existing community organisations these Organisers will build the local networks and leadership that will give communities greater confidence and capability to shape their future.

· Community First grants will encourage more social action in neighbourhoods with significant deprivation and low social capital.  Neighbourhood groups will work with businesses, charities and public authorities, encouraging people to help others and themselves to improve the quality of life locally. 

· Actions to attract social investment. Growing the Social Investment Market [17] sets out our strategy to ensure social ventures can access the capital they need to grow and help build a bigger, stronger society, including the key role of the Big Society Bank as a wholesale investor and champion of the market.

· £100 million Transition Fund enabling charities, voluntary sector and social enterprises currently heavily reliant on public funding to adapt to and manage the transition to a different funding environment.

· An emerging programme of work from Groundwork focusing on building social capital, economic inclusion and environmental sustainability in some of the poorest places. Groundwork will work with local organisations, offering advice and support to help them build their capacity to drive forward local projects, secure funding and engage the wider community.

34. The Homes and Communities Agency is on call to local authorities to provide specialist expertise and technical services across a range of housing and regeneration issues. The role they play will vary according to place, capacity and local need, but could include masterplanning, economic appraisal, brownfield land, procurement, levering in private investment though joint ventures and help with securing and making best use of land and property assets.

35. Specialist sector-led organisations such as UK Regeneration also have a role to play in supporting those involved in regeneration, including sharing experiences, promoting knowledge of what works, and building professional skills and networks.

36. As set out above, Government has already brought substantial change to the regeneration landscape and provided a wide range of tools, powers and incentives that form the regeneration toolkit, but there is more to come. Upcoming milestones include:

· The Government will consult on the revised National Planning Policy Framework over the summer, with the aim of finalising the Framework by the end of 2011 if it is possible to do so.

· The first Community Budgets will be in place from next month, and the intention is that all areas will operate Community Budgets by 2013/14.

· The Local Government Resource Review will deliver proposals in July 2011.

· Bids that are successful in round one of the Regional Growth Fund will be announced shortly. The second round will open on 12 April.

· From April, local District Managers at Jobcentre Plus will have greater discretion to tailor support to local needs, working with local partners, including local authorities and Local Enterprise Partnerships, to secure more sustainable employment for those out of work.  .

· DCLG and the Office for Civil Society are considering the capacity of different communities to participate in the Big Society and take advantage of the new Community Rights and other opportunities. In the next few months, we will publish a web document setting out the vision for the Big Society, the opportunities and rights it offers, our analysis of the capacity within communities and the support we can offer to help build this.

· DCLG hopes soon to announce the results of work with the 11 Capital and Assets Pathfinders to help them make more effective use of their public estate. There are significant opportunities here - for example, when mapping local assets, one local authority was surprised to discover that 35% of non-domestic buildings in the town centre were public sector owned or controlled.

· The Government will consult on the detail of our reforms to the Community Infrastructure Levy in the summer. Following the consultation we will introduce amendment regulations, which we expect will come into effect in April 2012.

· A number of further Local Enterprise Partnerships are gearing up and will be established over the next year.

· Tunnelling activity for Crossrail is expected to begin in late 2011 with full tunnelling getting under way in 2012.

· The High Speed 2 consultation will close on 29 July, and the Government expects to announce its response by the end of this year.

Assessing impact and looking ahead

37. The Government believes that top-down performance management frameworks, such as target setting, not only create inefficient bureaucracy but also distort the outcomes that local professionals pursue on the ground, to the detriment of meeting the needs of local people.

38. Instead of relying on bureaucratic accountability to central government, the Government’s approach is therefore to strengthen democratic accountability to local people, where individual service users and citizens have the information they need on how service users and local institutions are performing and can hold them to account through the power of choice and ballot box. This approach is already being adopted in a number of ways across public services:

· by dismantling the top-down performance management regimes that have created bureaucracy and distorted behaviours in the past, such as Comprehensive Area Assessment;

· by making more information available to citizens about the services that they receive and the institutions that are entrusted with delivering them – for example, by requiring local authorities to publish every item of expenditure over £500;

· by creating greater choice for users of services, for example by extending the use of personal budgets across adult social services; and

· by giving communities the right to challenge service provision – for example, the right to challenge to run local authority services being taken forward under the Localism Bill.

39. In line with the Localism agenda, the Government will not be imposing any performance management frameworks on local partners to assess the success of its approach to regeneration. It will be up to local partners to determine the success or otherwise of their plans, and for local people to hold each other to account if their expectations are not met.

40. We should not be so naive to imagine that a localist approach will always mean that local partners will always agree about the solutions to local problems, or that national Government or Ministers will not wish to express a view from time to time. We are keen to encourage mature debate between all partners. In extreme cases, there may still be a role for central Government to intervene more directly through the levers that it retains.  However, this would be a last resort - after other forms of support (including sector-led support) have been exhausted.  We would expect such cases to become increasingly rare in the future.

41. Ultimately, success of our approach will be measured by the strength and balance of the UK economy. Whilst there will be no formal evaluation or assessment, national statistics relating to employment, civic action, the wellbeing indicators being developed by the Cabinet Office, and the Index of Multiple Deprivation may be helpful to all of us interested in regeneration.

42. To inform future policy development, Government will want to understand how the tools and incentives we have provided are being used locally, and the range of approaches local partners are taking to progress their regeneration schemes. Each individual policy or investment within the toolkit is subject to its own evaluation arrangements. However we will take an interest in the results from these and implications for regeneration and growth. We will also want to identify whether any further tools and incentives would be helpful.

43. We will therefore continue a dialogue with local partners with these questions in mind. The Government will be open to requests for support and ideas from the sector, including through the barrier busting portal. We are monitoring such cases to identify any shared concerns that might warrant new central government action.

Conclusion

44. Local communities have already delivered some excellent examples of what the Government wants to see. We are now in the process of building the toolkit of flexibilities, tools, powers and incentives that will support locally-led regeneration and growth. Local Enterprise Partnerships, the Regional Growth Fund, Community Budgeting, Community Organisers and the barrier busting portal are now part of the landscape. The Localism Bill will bring forward a wider range of tools such as neighbourhood planning, community rights, and business rate discounts; the Local Government Resource Review will propose better incentives in the business rates system and deliver powers for tax increment finance; the Budget added Enterprise Zones, a package of support for Small and Medium Enterprises, and fundamental changes to the planning system to the toolkit; and other elements are to come.

45. In many ways Localism has turned the traditional model of regeneration on its head, and such an institutional and cultural change will take time to fully establish. Yet, less than a year since the launch of the Coalition Government, we are already a long way down the track.

March 2011


[1] Regeneration to enable growth: What Government is doing in support of community-led regeneration , Department for Communities and Local Government, 31 January 2011

[2] Local Growth: realising every place’s potential , HM Government, 28 October 2010

[3] Fair Society, Healthy Lives: The Marmot Review , February 2010

[4] Factors affecting private investment in regeneration: Urban Research Summary No.6 , Department for Communities and Local Government, 2006

[5] Evaluation of the Single Regeneration Budget Challenge Fund , D epartment for C ommunities and L ocal G overnment, 2007

[6] Evaluation of the National Strategy for Neighbourhood Renewal – Final Report , Department for Communities and Local Government, 2010

[7] New Deal for Communities 2001-2005 An Interim Evaluation Research Report 17 , ODPM, 2005

[8] National evaluation of housing market renewal pathfinders 2005–2007 , Department for Communities and Local Government, 2009

[9] Evaluation of the National Strategy for Neighbourhood Renewal: Local Research , Department for Communities and Local Government, 2010

[10] Urban regeneration through partnership A study in nine urban regions in England, Scotland and Wales , Joseph Rowntree Foundation, 2000

[11] City leadership: giving city regions the power to grow, Centre for Cities, Marshall & Finch, 2006

[12] Strategies for Underperforming Places , Spatial Economics Research Centre, 2010

[13] Action to reduce worklessness: what works? Local Economy , 24, Green A.E. and Hasluck C, 2009, pp.28-37

[14] Working Neighbourhoods Fund: Scoping Study , Department for Communities and Local Government, 2010

[15] Functional Economic Market Areas: An economic note , Department for Communities and Local Government, 2010

[16] HS2 London to the West Midlands: Appraisal of Sustainability , Booz & Co ( UK ) Ltd and Temple Group Ltd, February 2011

[17] Growing the Social Investment Market: A vision and strategy , HM Government, 14 February 2011