Regeneration - Communities and Local Government Committee Contents



Conclusions and recommendations

The Government's approach: Regeneration to enable growth

1.  We do not consider Regeneration to enable growth to be adequate as a statement of the Government's approach: it lacks strategic coherence and does not seek to define what is meant by the term "regeneration". It is unclear about the nature of the problem it is trying to solve and to what overall outcome the measures set out will contribute. We accept that, as part of a localist approach, there is merit in including a toolkit of options from which local authorities, businesses and community groups can draw. However, within such an approach, central government still has to play its part by setting the national policy direction. Regeneration to enable growth fails to do this and provides no evidence that the Government has a clear strategy for regeneration. (Paragraph 11)

Targeting those in need

2.  We recommend that the Government develop and publish a strategy that recognises the deep-seated problems faced by the most disadvantaged communities, and sets out measures explicitly focussed upon tackling these issues. (Paragraph 18)

Funding and private investment

3.  Unless alternative ways of funding regeneration can be found, there is a risk of momentum and investment being lost and problems being stored up for the future. (Paragraph 33)

4.  We recommend that the Government develop and publish a clear and coherent strategy for how private sector investment can be attracted into areas of market failure. This strategy should, amongst other things, identify potential sources of gap funding that can be used to stimulate private investment. It should also explore how public funding flows can be aligned to ensure they lever in the maximum amount of private capital. (Paragraph 37)

Planning

5.  The Government may have good reasons for its proposed reforms to the planning system, but it is not clear that they will have a significant bearing upon regeneration. We question their inclusion within Regeneration to enable growth and the emphasis placed upon them by the Minister. Planning has in fact brought significant benefits to regeneration, in terms of co-ordination, community involvement and town centre preservation. (Paragraph 42)

Evaluation

6.  The fact that Regeneration to enable growth represents a new and to some extent untested approach makes evaluation particularly important; without it, there is a risk that investment could be wasted. The Minister's assertion that individual programmes such as the New Homes Bonus will be monitored misses the point: it is their combined impact on regeneration—tackling market failure in deprived communities—that has to be considered. We recommend that the Government identify a set of clear objectives to enable the success of its approach to be assessed at both local and national level. These should form the basis of an ongoing evaluation that looks at both quantitative and qualitative information; this should include consideration of the extent to which communities have become more self-sustaining and less reliant on public sector support. (Paragraph 46)

Stalled schemes

7.  We recommend that the Government make and publish an assessment of how many regeneration schemes are currently underway and how many are stalled, compared to previous years. It should also identify what it considers to be the main obstacles to physical regeneration at the present time. (Paragraph 49)

Housing Market Renewal

8.  We recommend that the Government set out a plan for a "managed wind-down" of the Housing Market Renewal programme in all pathfinder areas. In doing so, it should ensure that sufficient funds are available to eradicate the blight that has been left in many neighbourhoods. (Paragraph 58)

Knowledge and skills

9.  We recommend that the Government review how regeneration knowledge and skills can be preserved and bolstered. It should consider options for sharing good practice and ensuring that there are mechanisms in place to pass on the knowledge of experienced practitioners. Actions from the review must then be implemented at the earliest opportunity. (Paragraph 61)

Learning the lessons

10.  While views about the effectiveness of the competitive element varied, our evidence and what we learned on the visit suggested that City Challenge brought a number of benefits. Such benefits included:

  • the requirement for private sector leverage;
  • a five year programme subject to satisfactory review;
  • the mixture of revenue and capital projects;
  • dedicated resources committed to delivery;
  • the commitment from the private sector, public sector and community involvement;
  • the high level of expertise built up;
  • very strong community involvement; and
  • the commitment to complete regeneration, including housing, education, job creation and all quality of life improvements.

In looking to future regeneration schemes, the Government should have regard to these elements. (Paragraph 78)

11.  We recommend that the Government carry out an urgent review of the various regeneration programmes that have taken place over the past and utilise the lessons learned for future programmes. In particular, we note that there is widespread support that City Challenge was a successful programme in concentrating resources on specific areas to promote wholesale regeneration. We further recommend that the Government invite local authorities and their partners to put forward innovative ideas for tackling regeneration in their areas. The most robust of these should then be designated as 'pathfinders' and taken forward with government support. Their success should be evaluated to determine the potential for wider implementation. (Paragraph 81)

Tax Increment Financing

12.  It is important not to consider Tax Increment Financing as the answer to all regeneration problems. It relies on an increase in business rates revenue and accordingly may not be successful in some of the most deprived areas. Nevertheless, it offers the potential to raise finance for regeneration in certain circumstances, and should be available to local partners alongside other tools. We agree that the best time to implement TIF would be as the economy emerges from recession. We look forward to its introduction at the earliest opportunity and to seeing how the Government's proposals work out in practice. (Paragraph 88)

Enterprise Zones

13.  We recommend that the Government work with local partners establishing Enterprise Zones to ensure that each zone has a strategy for bringing benefits to disadvantaged communities across surrounding areas. These strategies should be informed by lessons from the earlier experience of Enterprise Zones. (Paragraph 93)

Public land

14.  We recommend that DCLG issue guidance to local and national public bodies on how public land can best be used for regeneration. This guidance should include provision for an independent expert assessment of whether a particular site is viable and its potential for delivering regeneration. It should also encourage public sector organisations to be prepared to take greater risks with their land. In particular, the Government should instruct the Homes and Communities Agency to transfer land to local partners at no cost where benefits in terms of regeneration can be identified. (Paragraph 104)

15.  It is also important to maximise the contribution that asset backed vehicles could make to regeneration. We recommend that the Government's guidance make clear that borrowing by asset backed vehicles will be considered outside of local government prudential borrowing limits. (Paragraph 105)

European Funding

16.  We recommend that the Government set out proposals for working with local partners to identify sources of match funding, with a view to ensuring that all remaining European Regional Development Fund money is spent. (Paragraph 111)

17.  We recommend that the Government disseminate to relevant bodies guidance setting out the possibilities for the use of JESSICA in regeneration. This guidance should include examples of schemes in which JESSICA is already being successfully employed. (Paragraph 112)

'Community-led regeneration'

18.  We recommend that the Government work with representatives of the voluntary and community sector to develop more detailed proposals for promoting the active involvement of communities and community groups in regeneration. We invite the Government to provide us, in its response to our Report, with a number of examples of "practical mechanisms" for implementing community-led regeneration, both those which are already in use and those which the Government intends to develop. These examples should address the particular concerns community groups have expressed to us about their capacity to play a greater role in regeneration, and set out how they will give such groups confidence about their future and a degree of certainty about funding. (Paragraph 118)

Community Budgets

19.  We recommend that the second phase of the Local Government Resource Review consider how Community Budgets can be used to support regeneration. The Government should ensure that areas with a clear regeneration need are included amongst those chosen to pilot the new neighbourhood level and whole area Community Budgets. These pilots should look in part at how Community Budgets can best be used to tackle issues of deprivation and disadvantage. (Paragraph 129)

20.  We recommend that the Government allow Greater Manchester to take forward its proposal for a single budget at the earliest opportunity, as one of a series of pilots exploring the pooling of capital budgets in areas such as housing, economic development and transport. These pilots should consider the potential of this pooling approach to lever in greater private sector investment. There is an onus upon local authorities as well as central government to make Community Budgets work. We therefore urge other councils and partnerships to come forward with innovative proposals which build on the Community Budgets model. The Government should ensure such proposals are given the necessary support. (Paragraph 130)

Conclusion

21.  We recommend that the Government publish a national regeneration strategy that sets out a coherent approach to tackling deprivation in the country's most disadvantaged communities. This strategy should:

  • begin by defining what is meant by regeneration and by emphasising its focus on tackling market failure;
  • explain clearly the action the Government will take to target resources at the communities most in need;
  • provide for the "managed wind-down" of the Housing Market Renewal programme;
  • set out action to mitigate the risk of a skills shortage in regeneration;
  • include a plan for bringing in private sector investment, considering, amongst other things, potential sources of gap funding, the role of initiatives such as Tax Increment Financing and Enterprise Zones, and the contribution that can be made by better use of public land and European funding;
  • put in place mechanisms to enable community groups to play a greater role in regeneration; and
  • explore the potential of the Community Budgets initiative to facilitate a joined up approach to regeneration and to lever in additional private finance.

It is crucial that the strategy be based upon a clear understanding of lessons from previous approaches and of the factors that have contributed to successful regeneration. It must also include a clear set of objectives against which its own success can be measured. We hope that our inquiry and this report presage a more determined focus on the part of Government to tackle the deep-seated problems of market failure and deprivation which still blight too many of our communities. (Paragraph 137)



 
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Prepared 3 November 2011