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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