Examination of Witnesses (Questions 1-40)
Q1 Chair: Good
afternoon and welcome to our first evidence session in our inquiry
into Regeneration. Just for the sake of our records, could you
identify yourselves and say which organisation you represent?
Neil McInroy: I
am Neil McInroy from the Centre for Local Economic Strategies.
I am Katie Schmuecker from the Institute for Public Policy Research
Josh Stott: I am
Josh Stott from the Joseph Rowntree Foundation.
Q2 Chair: You
are all welcome. The Government has issued a document about regeneration
to enable growth. Do
you think there is anything missing from that document that you
would have liked to have seen in it if you had been responsible
for writing it?
Neil McInroy: To
talk about the document first, I think that the proposals in the
document are, from our point of view, weak and disappointing on
five main counts. First, there is no strategic direction in the
document as such; it is very piecemeal; it has nothing about how
growth, social inclusion, work within environmental limits connect
up. So, on the first count there is no strong narrative or strategic
direction within it. Second, it has poor connections between strategy
and delivery and I am unsure exactly what the document sets out
to do. It is quite fragmented; there is no vision there, and it
does not address the big questions, for instance how economic
development links to planning.
The Centre believes that the third thing missing
is that there is not enough talk about local enterprise partnerships;
there is not enough consideration of business rates; there is
not enough around enterprise zones, tax increment financing, local
government finance review or even how all this connects up to
the Work programme. So, there are bits missing and in that sense
it is weak. Fourth, there is nothing on the pure assets of place
in terms of social assets, financial assets, public assets, private
assets; there is nothing on how we connect up those various positive
aspects within any given locality. Fifth, there is an overriding
physical focus in the document, and it does not say how those
physical assets would connect up to public or social assets within
any given locality. So, we at the centre believe that it is quite
weak and disappointing. What needs to happen is something that
is much more strategic and embedded in each locality, and which
tries to build on the assets within any given locality.
We would endorse much of what we have just heard. Looking at the
document, there seems to be a very strong focus on a market-led
approach and on places where there is the greatest potential for
growth. I think that leaves us with the question of what that
means for places that fall outside that, such as peripheral towns
outside of our great centres of growth, which are often located
in the cities. Perhaps they are places like Barnsley or Blackpool,
to give just a couple of examples. What is the strategy for those
places, and also for the deprived communities as well? We would
like to see a lot more specific details there. I think we would
agree that, if the document is meant as a strategy, it is weak;
it reads rather more like a collection of Government policies
and the way in which they may apply to some deprived places.
We would also like to see something a little more
ambitious in terms of a cross-governmental approach. Neil mentioned
the links with the Work programme. That is something we absolutely
endorse, in the sense that there is discussion about the central
role of local authorities in terms of a more localist approach
to regenerationthe role of local authorities in co-ordinating
that. We are very supportive of that, but local authorities need
to be adequately resourced to do that and to be able to influence
other areas of local public service delivery. Absolutely essential
to that is employment services in the Work programme.
Josh Stott: I would
endorse most of what has been said so far, particularly in terms
of what Katie said about a lack of strategy for places that will
not be able to benefit from the proposed growth incentives. To
our mind, regeneration is about reversing decline and tackling
disadvantage, not simply about promoting growth. This seems to
be a major gap in the regeneration document that has been produced.
There seems to be an assumption that the trickle-down effect will
work and growth will benefit all. Our evidence certainly suggests
contrary to that, and that a rising tide will not lift all boats.
There have been plenty of areas, even in areas of strong economic
growth, where persistent deprivation is still occurring in deprived
neighbourhoods, and there does not seem to be an acknowledgement
or a forward strategy for dealing with these places. It seems
to be about promoting personal mobility and incentivising growth,
and a big part of the equation has been missed in terms of disadvantaged
Q3 Chair: You
also drew attention in your evidence to the Scottish Government's
approach. It might be a bit uncomfortable for some of us to mention
that, but you felt that they had had a much better shot at trying
to look at these issues in the document they produced.
Can you explain why you say that?
Josh Stott: I do
not know whether people are aware of it, but it is a much fuller
document; it is the beginnings of a strategy. Critically it attempts
to define regeneration first and foremost, which the coalition
Government's document does not attempt to do. We are left questioning
quite what it is, let alone how it is to be delivered. The document
fails to outline the current challenges facing the regeneration
sector, and it also fails to reference the past 15 years previously
in terms of what has gone on in regeneration, and what success
stories and lessons we should be learning and drawing from. It
is silent on all those issues.
Q4 Chair: On the
point of definition, do you think it is important that we have
a definition? Should we be trying to distinguish between something
called regeneration and something that might be called economic
Neil McInroy: I
think that is very important, because there is a slipperiness.
I think one needs to be quite clear what one is talking about.
It seems to us at the Centre, having had 25 years' experience
of working in regeneration and economic development, that there
is no silver bullet here. We have tried lots of different initiatives
over the years. We have thrown money at the issue; we have established
partnerships on the issue, but the lessons from all those past
activities and from abroad tell us that there are perhaps a couple
of abiding things that mean you can regenerate places and make
them successful and resilient in perpetuity. Those two things
are: the connectivity between commercial, public and social activity
within any given place. We, at the Centre, believe that it is
the connectivity and relationships between those three elements
that is fundamentally important. If you have a weakness in one
of those particular elements, or there is not a good connection
between those elements, then a place is more likely to go into
decline. So, the thing that we focus on is the relationships between
those three elements in any given locality.
The second thing is that we need to have greater
emphasis on the assets and capital within those places: financial,
human, social, environmental and production capital, particularly
around manufacturing. Those two elements of a place-based blend
of social, commercial and the public and the focus on assets are
how you can regenerate places. It has been proven in this country
and elsewhere. One needs to have a focus on those things as a
starting point for regeneration.
Regeneration is about the intersection between the social, economic
and physical. One of the promising things about this approach
is the localist approach that is endorsed, as much as we can tell
what it is so far. But what is important about that is, as Neil
says, context really does matter. Quite what blend of those three
elements is required will vary from place to place; how ready
a community is to be engaged in regeneration will vary from place
to place. Our research certainly shows that it is not as simple
as deprived neighbourhoods not having the capacity to engage with
regeneration, whereas slightly better off neighbourhoods do. It
is not that straightforward. There are some very deprived neighbourhoods
that have excellent examples of community-led regeneration, and
the reverse is also true. The definition of regeneration is important
because it helps people come together around an understood idea
of what it is they are trying to achieve.
The other thing I would say about regeneration is
that we should regard it as a process and not an event. That is
something we tend to say about devolution quite often; you mentioned
Scotland before. But in terms of regeneration, too often we have
looked at it as an event: it has been a project, a pot of money
that is there to be spent, rather than an ongoing build up of
relationships within an area to deliver on a vision for a place
in partnership between the different players that Neil mentioned.
It is that ongoing and sustained element of regeneration that
is vital for it to be successful.
Josh Stott: Picking
up on some of those points, I think the key reason the definition
of regeneration is important is that it means different things
to different people. A community worker in Bradford will have
a very different view from a property developer in Newham, so
trying to define and have a common understanding of regeneration
and its different elements is really important. Historically there
has been a great disconnect across the different elements and
strands of regeneration, its different governance arrangements,
different spatial levels and between economic, social and physical
investment and interventions. We are all saying the need is for
those three elements to come together and join up. Without a common
understanding and strategy, that will never happen.
To pick up the point as to whether regeneration is
distinct or should be seen as distinct from economic development,
our strong view is that it should. Economic development is obviously
crucial and is the name of the game at the moment, but for us
regeneration starts in areas of decline and in priority disadvantaged
areas; it is about reversing that decline and stabilising economies.
At that point you can build the foundations for future growth.
For me this what distinguishes regeneration from economic development.
It is about targeting deprived and disadvantaged areas.
Q5 James Morris:
Perhaps I may probe a little more the lessons that we can learn
from the past. All of you have talked about regeneration playing
a role within deprived communities, but if you looked at the evidence
over the last 15 to 20 years, a lot of the indicators of deprivation
in many of our most deprived communities in, say, Greater Manchester
or areas of the Black Country that I represent have stayed broadly
the same; in fact they may have got slightly worse. Why do you
think that is? Why have previous schemes failed to get underneath
some of those underlying issues of deprivation?
Unfortunately, there is no straightforward answer to that. If
there was, we would have sorted this out years ago. Deprivation
is by its very nature complex. As I was talking about previously,
the context of the area will be very important. This is why we
think a more localist approach to regeneration is a helpful one.
But what we need to understand is that deprived neighbourhoods
are not islands. They are where they are partly as a result of
their relationships with the wider labour and housing markets.
One thing I would stress very strongly is that, while we strongly
support and endorse a community-led notion of regeneration, on
its own that will not suffice, because we have to make the links
between what is going on in a deprived neighbourhood and what
is happening in the wider economy of the area and wider housing
market of the area, and the way in which those two things operate
will have implications for the prospects of people in those areas.
Q6 James Morris:
What I am trying to get at is: what was in the nature of regeneration
schemesit would be good to get some examples from the last
15 yearsthat did not understand that, where money was applied,
a scheme with all the best intentions was applied to a particular
area and it did not have the impact that was hoped for. Are there
some examples we can focus on where previous regeneration schemes
Neil McInroy: I
think I will cover your question, James. To start off very briefly,
it is quite clear why regeneration has failed in the past. I think
it is fairly obvious that what we have here is money being thrown
at a problem without due understanding of the connectivity and
relationships that take place in any given locality. It seems
to us that what needs to take place is that, when money is thrown
at an issue, there is a clear headed network and connectivity
and galvanised vision of how that place should turn around. Money
has been thrown at physical initiatives or community regeneration
initiatives without a proper connectivity between all the elements
within a place. If you look at the regeneration that has been
successful, you will find there is a good community buy-in; there
is a public sector intervening and creating a co-ordinating role;
and there is a private sector that understands the issues in that
locality and offers supports in different ways for the success
of that location.
To move on to where there have been good things happening
in previous schemes, there needs to be co-ordination of spatial
scales. The worry is that we have got rid of the Regional Development
Agencies (RDAs)we now have Local Enterprise Partnerships
(LEPs)and there could be a lack of co-ordination in any
given locality because of the absence of the RDAs and at the same
time a weakening of the approach. Some people say local strategic
partnerships were a bureaucratic process-driven thing, but they
did provide that key co-ordinating role within any given locality.
Q7 James Morris:
I just want to get underneath this. Are you both saying that one
of the failures of previous regeneration schemes was a lack of
understanding of the dynamics of particular locations and communities,
and an assumption that if you applied money at a certain scale
it would necessarily lead to regeneration? If you take Hulme in
Manchester as an example, which we discussed, it was a success
but only because it was very much community-based, but it was
very local in terms of the way it understood the dynamics of that
particular part of Manchester. Is that what historical failure
was aboutlack of understanding of local community dynamics
and an assumption that, if you just flow money from the centre,
that would solve the problem?
Neil McInroy: I
think that is one of the reasons why it would go wrong. When it
goes right there is an understanding of community-demand dynamics.
I also think that, if you are talking of environmental or economic
regeneration or cultural regeneration, one needs equally to understand
the dynamics relating to those particular aspects for it to be
a success. That requires a much deeper, voracious awareness of
the dynamics in any given locality.
To add to that, on the point of community dynamics, certainly
failing to understand those linkages between neighbourhood and
the wider labour market in particular explains some of the regeneration
failures in the past. Some of our research looked at the area
of Speke in Liverpool, which is one of the most deprived neighbourhoods
in the country. The amount of economic development that has gone
on around Speke is enormous, yet the area itself has not improved
economically to the extent you might expect it to have done. Clearly,
there are some social elements to regeneration that need to be
addressed in that example.
However, there is a danger of the pendulum swinging
too far the other way if we are not careful. If you look at New
Deal for Communities, for example, the evaluation of that, which
was extremely community-led in its approach, suggests that too
often neighbourhood representatives did not have an excellent
grasp of the issues facing their area, and sometimes professionals
were not robust enough in challenging the anecdotal evidence and
assumptions of those communities. I think that helps to explain
one of the reasons why perhaps the New Deal for Communities did
not deliver quite as much as we might have hoped it would have
Josh Stott: Where
Katie started is that there are not any magic bullets here, and
the outcomes of our research into area-and place-based regeneration
initiatives are very mixed. So, I am not sitting here saying that
we have the answers, but the critical thing is that we do not
give up on these places. Just because a previous policy has not
worked does not mean we should not develop alternative policies
in order to try to deal with them. There is a big question about
the long-term costs of doing this.
Q8 James Morris:
I certainly was not suggesting that we should give up on deprived
Josh Stott: Sorry.
I was not suggesting you were.
Q9 Heidi Alexander:
To follow up the question of learning from past programmes and
initiatives, in the Government's three-and-a-half pages of text
that introduce their Regeneration to Enable Growth document,
one of the things they put past failure down to is barriers that
thwart local ambition and limit agencies' room to manoeuvre. There
is a suggestion there that perhaps different elements of bureaucracy
and the planning system may have got in the way of regeneration
in the past. Do you agree with the Government in that?
Neil McInroy: To
an extent, yes, in that they did become a bureaucracy and became
process driven. There was a managerialism about all the processes
that were a burden. To move forward, however, one cannot get rid
of planning, local Government and interventionist policy. One
needs to have those but of a different type. I think the new direction
for regeneration needs to learn from that bureaucratic machine
that became regeneration and be lighter on its feet, be smarter
and more bespoke and deeper at certain points where it needs to
be. I think that does require a more localist perspective.
It seems to us at CLES that regeneration is one of
those things with which you need to be very careful about when
you want to intervene. Then you need to be careful about how deep
you intervene; you need to know how long you hang around for and
then you need to know how to get out. I think in the past all
those four elements were not understood very well. We need to
do all those four elements but in much smarter ways, and effective
local Government, effective localism, should give an advantage
for that to occur.
Josh Stott: Just
to pick up the point in terms of there being barriers, I think
that sometimes people perceive barriers, and it comes back to
the idea that regeneration needs to be integrated, because we
are talking about different sectors with different languages,
skills sets and objectives operating at different spatial levels.
It is incredibly complex. Inevitably, there will be barriers.
It is the ability to be able to bridge those different levels
and areas of interest that regeneration is all about. Without
the right resource and capacity, it cannot happen.
From our research, one of the barriers that has been an issue
in the past is the attitude of other Government agencies and Departments,
which play a critical but sometimes not a central role in regeneration.
I am thinking particularly of issues to do with skills, welfare
to work and transport. Pushing forward the Government's localist
agenda across Whitehall would be one issue I would like to see
raised as one of the potential barriers.
Q10 Simon Danczuk:
One of the key words that I think all of our witnesses have used
so far is the need to co-ordinate activity within regeneration.
There is a change of attitude from the Government, which is that
the public sector is not going to do everything. The impression
you have given me is that previously the public sector did everything,
and the co-ordination was between the series of public-sector
agencies. Now the private sector is coming in and the vehicle
for that is local enterprise partnerships, where we have much
smaller and more manageable units that are working with public
sector and private sector people at a more local level than previously.
To what extent do you think the LEPs will be able to pull things
together to provide that more joined-up approach?
Josh Stott: It
is very early days and time will tell. They have no statutory
powers or funding. I think they are a very important voice for
business, a voice that perhaps has been missing previously. Obviously,
operating at the functional economic area is the correct area
in which to operate. Our concern is in terms of their remit. It
is about growth and economics; it does not cover the social and
environmental parts of regeneration we have been talking about,
and there is no explicit remit to target deprived areas and concentrations
Q11 Simon Danczuk:
You do not subscribe in any way to the trickle-down theory, that
if we can build economic growth, the more deprived areas will
benefit. You are saying that will not happen?
Josh Stott: I certainly
do not subscribe to it in full. There are persistent areas of
deprivation and concentrations of worklessness, within affluent
towns and cities enjoying economic growth. Unless you connect
individuals to the labour market effectively, the more deprived
areas will not benefit. The LEPs do not have a remit to tackle
deprivation, if it is not high on their agenda, then it is unlikely
that it will happen.
I would entirely endorse that. I would also slightly challenge
what is behind your question. I certainly would not want to give
you the impression that we thought regeneration in the past had
been all about the public sector. It has not; it has been about
a partnership between the public sector and the private sector
and the voluntary and community sector, or at least it certainly
works well if that has been the case. I think that potentially
LEPs have a vital co-ordination role. Having said that, it is
actually the role of local authorities within LEPs that is very
important here, because local authorities have roots in the neighbourhoods
we might be talking about in terms of places that require regeneration,
but they also have a presence on the LEP boards. Local authorities
are potentially the fulcrum of this task of co-ordinating and
linking between the neighbourhood and the wider functional economic
Q12 Simon Danczuk:
But the LEP itself cannot do that; you still need the local authority
in your view to be the driver of change here?
The local authority plays a fundamental part on the LEP of course,
and I think part of that role should be to drive that change,
Neil McInroy: The
key thing here is stewardship of place. At CLES we are easy about
who does that stewarding role, but it needs to be strategic, voracious
and powerful to do that. My feeling of the LEPs when they first
came out was, "Fantastic; here we go. We have got a turbo-charged
chamber of commerce sitting in any given locality that will drive
economic success as you see in a Japanese, German or US model."
They have since become a bit more of a partnership, a kind of
local strategic partnership, with a focus on the economic. They
are on a moving journey clearly, but the danger is that they are
even more remote because they have a narrow focus around business
and are business-led. They could be even more remote from what
the locality requires in terms of all that other stuff and all
the connection between the economic success and community activity
and so on.
I think that LEPs need to move forward quickly, and
they already are, and start to receive powers through the decentralisation
process from Whitehall. I think they need to draw down powers
from Whitehall and not necessarily suck power away from local
Government. I think that working with local Government you should
be able to draw down powers from the centre, and we need to do
that speedily, particularly in those areas that need regeneration.
Areas like Oldham, for instance, did not do very well even in
the good times, so the trickle down did not work even in the really
good times. One needs to move very fast in these difficult times.
LEPs need to get those powers and co-ordinate and be strategic;
they need to steward a place in a broader palette of activities
than was initially proposed for them.
Q13 Simon Danczuk:
Let's assume they get those powers. Are they going to be able
to drive regeneration forward without substantial amounts of public
money? I was interested in one of your earlier remarks. You said
that in the past we had thrown money at this problem without necessarily
solving it. There will certainly be less money available this
time round. Does that mean regeneration cannot be successful in
Neil McInroy: I
think regeneration can be successful with less money. I believe
it is about the connections between different facets within places
I outlined earlier. If you did get better co-ordination between
the commercial activity, including greater levels of giving and
philanthropy within that sector, and had an enabling, entrepreneurial,
innovative council and you had a respect for and tried to harness
the social and human capital in those places, and made great heady
connection between all those three, that does not necessarily
mean lots and lots of money. If you look at regeneration success
round the world, you will find there is great regeneration done
without lots of public money being thrown at it, but what it does
need is a strong stewardship of place, be it from the local authority
or from a LEP that has the power and some resources to act as
a steward effectively.
As to less public money being available, I think that is simply
a reality that has to be accepted. The question becomes: what
do you do with the smaller pot of money that is available? I think
the question we would ask is: on what should that be targeted?
The Government's approach it appears is to target that money on
those places with the greatest potential for growth. To our mind
that leads to the question: what of those places that do not demonstrate
such great potential for growth? What is the policy and strategy
for those places?
Q14 Heidi Alexander:
I am interested in you, Neil, talking about the stewardship of
place and saying that is absolutely essential. I think that all
three of you in your written evidence referred to concerns about
capacity within the regeneration sectorskills, expertise,
knowledge and experienceand what is happening currently
given the Government's approach.
Can you say something about what evidence you see out there of
those skills and that expertise being lost at the moment?
Neil McInroy: We
are in quite a worrying place in many localities because LEPs
and other activities have not managed to pick up the slack swiftly
enough, so what you have is a hollowing out of street wardens,
of neighbourhood wardens, regeneration officers or economic development
people. All that industry has been hollowed out. What you have
is a deficit there, and also in terms of connecting up services
at a local level. That is why there is an urgency both to move
quickly with LEPs and also to move quickly in terms of supporting
the social and human capital in communities themselves. At present
we have, of course, the big society and this re-energisation of
civil society. That is not making a connection with regeneration
at this point in time, and clearly it needs to. I would argue
that LEPs particularly need to engage with the re-energisation
of the civil society to ensure that some of the activity that
took place in the public sector has a chance of growing more within
the social sector.
Josh Stott: I will
not point to specific examples, but as the cuts kick in there
are increasing skills gaps in planning, housing and economic development
and regeneration across local authorities. It will be the areas
that face the most severe challenges or most complex problems
that will be most stretched. It is not simply about throwing money
at it, but if you do not have the resource and the capacity, as
we have said previously, those areas that face the most severe
challenges will spiral into decline essentially.
Q15 Heidi Alexander:
What do you think the Government should be doing now to ensure
that those skills and expertise are not lost and are maintained?
Do you think it could be doing anything now? Neil has talked about
making sure the LEPs come forward a bit more quickly.
Josh Stott: The
LEPs seem to be the only show in town at the moment, and it is
what everybody in the regeneration and economic development sector
talks about. It is all about the LEPs now. It is such early days.
Inevitably, there are places that have got well-established partnershipsLeeds
city region, Manchester city regionand places that have
got strong and established business voices that are connected
into the public sphere which will be able to form LEPs, but the
coverage is not widespread at the moment, so there are areas that
have not even got LEPs in their infancy at the moment, let alone
a strong LEP. In terms of what the Government could do, I guess
a starting point would be the regeneration document that we are
discussing today, which, as you refer to, is three or four pages
of text supported by some appendix tables. So, in terms of the
message that sends out and providing answers to some of the questions
that we are raising, it seems to fall a long way short.
Neil McInroy: It
strikes me that the Government need to get more spatially and
socially aware; they need to recognise that not every locality
will be able to build the new civil society in similar ways. If
you are strapped for time and money, with lots of pressures of
lifeas some localities face more than othersyou
are unlikely to be able to build the big civil society more than
other localities. It needs to be spatially and socially aware.
In that, you would hope it could focus or at least relax some
of the pressures, particularly in local Government, in those particular
localities. That would need an awareness of the social and spatial
ramifications of the cuts to a much greater degree. In particular
the RDA assets are something that could be utilised, in how they
are divested or disposed, in a more creative way locally to assist
regeneration, and also making it a statutory duty for regeneration
or local economic development would help in putting emphasis on
regeneration and economic development in certain localities.
To pick up on that, those local authorities that have seen the
deepest cuts to their budgets are struggling to implement those,
and some of those places are arguably often those that most need
economic development and regeneration. Functions outside the statutory
core of what local government has to do inevitably come under
greater pressure. Certainly, the Institute for Economic Development
has found from a survey of its members that jobs are going, and
in some cases entire economic development regeneration departments
within councils are going, so clearly there is an issue of capacity
here. It is not just the public sector but the private sector
to some degree. A lot of the private sector companies that are
engaged in regeneration were extremely hard hit as a result of
the credit crunch and recession.
Q16 George Hollingbery:
I am a self-confessed ingénue; I know nothing about regeneration
at all. To be quite straight with you, I come from a privileged
part of the country and it is not something I have experienced.
I find myself continually confused by what I am hearing. I do
not really find myself illuminated today about what regeneration
really is and what is standing in its way. I am surprised not
to hear you talking so much about individuals and inspirational
individuals and people driving the process forward themselves.
To come back to Heidi's question, which is about capacity and
so on, has the capacity been in place to negotiate the structures
and get round the complexities of the work programme as it will
be, or the planning process as was? Is that what the structures
are there to doto allow people to negotiate the extraordinary
road blocks that stand in their way to helping themselvesor
is there a real need to create the social capital that does not
exist in a lot of these places, and help people over the hump
so they can help themselves?
Neil McInroy: Earlier
I alluded to the fact that the structures have been too cumbersome,
and, if you like, cowed or suppressed some of that individual
talent and energy to get on and do things in a community within
any given place. Clearly, the Government is going in the right
direction when it seeks to get rid of some of that bureaucracy
and heavy-handedness. However, an individual's role needs to be
supported in some localities by particular ways of working and
policy interventions. I think that a greater awareness of that
in certain localities needs to be recognised, and there needs
to be heavier and perhaps more deeper intervention in some localities
compared with others. I think that is what I am broadly saying.
You have touched on the role of people there. One of the big debates
within regeneration is whether it is about people and supporting
deprived individuals or about places and geographic areas. Our
research tells us that it is fundamentally about both. You cannot
look at one without looking at the other. Certainly, if you focus
only on individual mobility, clearly that can have some very positive
effects for the individuals concerned. We certainly would not
want to suppress that.
Do not misunderstand me. This is not a counsel against
supporting individual mobility, but what you have to do alongside
that is develop places as well because, if people do not have
a positive reason to stay within a deprived neighbourhood, if
their circumstances change, they will move out. The result of
that can be a spiralling decline of a place as the physical fabric
of the area declines; it is a less appealing place to live; crime
goes up; the reputation is tarnished, and the result is that it
becomes an area of last resort. We have seen that sort of vicious
spiral of decline in the past. It was seen in the 1980s and early
1990s; it was a big problem in a lot of our communities. A lot
of work has been done. A lot of the regeneration that has taken
place has stalled and in some places reversed that spiral of decline.
We need to be extremely careful that we do not re-enter something
like that. That is why, in our view, while individual mobility
and supporting people to improve their personal circumstances
is extremely important, improving places has to go hand in hand
Josh Stott: To
pick up the point about personal mobility, again we would fully
endorse some of the proposals put forward. We certainly would
not argue with providing people with access to greater opportunity,
but there also needs to be a recognition that people have attachments
to places and it does not always pay to relocate or travel for
work. In many instances, if you have strong social and family
connections, covering childcare costs for example, people are
attached to a place. As Kate outlined, it will be the more mobile
who leave and you will have the residualisation effect of the
most deprived and least skilled people concentrated in severely
There is an issue of sustainability for those places that are
the most economically prosperous and growing. If our approach
is simply to support individual mobility out of lagging places
and encourage them to move to places that are growing, the consequence
of that would be severe strain on the sustainability of some places.
It seems to me a better approach for the UK as a whole is for
us to support places to achieve their potential.
Q17 Mark Pawsey:
Both Katie and Josh used the expression "spiral into decline".
You explained it a little, but, Josh, how would we recognise a
place that is spiralling into decline? Would that be happening
simply because of the lack of a regeneration policy?
Josh Stott: It
is difficult to say this is simply due to a lack of regeneration
policy. There will be lots of complex factors that will influence
a spiral of decline. A simple way of understanding when you have
a spiral of decline would be to look at population change and
the proportion of out-of-work benefit claimants in an area. If
that is increasing over time, you will see, as I have talked about,
there is this residualisation and concentration of deprivation
in an area.
Q18 Bob Blackman:
The proposition, obviously, is that the Government are taking
the view that the resources available for regeneration will be
reduced. Therefore, if you read the document, they are saying
their approach is to concentrate on fewer targeted areas rather
than a broad swath of things to allow local regeneration to take
place. That is one way of paraphrasing the Government's approach.
What do you think will be the effect on the areas that have the
targeted investment? Do you think that will work?
Neil McInroy: The
key thing about the targeted investment is to understand how that
money or input connects up within any given locality. In that,
if money is given through the public sector, for instance, you
would look to have a greater understanding of public sector spend
in terms of supply chains and all those local economic multiplier
activity effects. One needs to look at procurement, particularly
public-sector procurement, to understand what benefits can be
extracted through that process in any given locality.
You also need to look at social return on investment
and different ways of measuring the inputs to any given locality.
The local area needs to be much more clever or smart at understanding
the ripple effects of any given investment, and needs to be much
more voracious in trying to look at where that spend goes, what
the social return on that spend would be, how it builds up capacity
and resilience for it not to decline in the future.
Q19 Bob Blackman:
Is it your view that there should be specific objectives associated
with any targeted investmentthat is, this is what you have
to achieve to get this money?
Neil McInroy: Clearly,
there needs to be that, so clear outcomes.
Q20 Bob Blackman:
At the moment in the document, as I read it, it is a bit vague
and open, which leads to the belief that you could succeed without
really knowing about it or fail without understanding that you
Neil McInroy: There
definitely need to be outcomes that relate to the document, but
not just outcomes in terms of a number who entered work or whatever.
It needs also to relate to process outcomes in terms of how that
money and those resources will be utilised, and an understanding
of its ripple effect at any given locality.
Q21 Bob Blackman:
What is your view of the new homes bonus in encouraging regeneration?
It is not clear that it provides a huge incentive to many local
authorities. What will be interesting is the way in which the
new homes bonus intersects with the new neighbourhood planning
powers. That is an interesting question to look at. In broader
terms, we have a couple of concerns about the new homes bonus.
One is the potential for it to act as a disincentive to physical
regeneration where that means housing demolition, if it is based
on net additions. The result of that may well be that building
on greenfield sites becomes more appealing. There are some big
questions there about thinking about what sort of development
and regeneration we might want to see in places, and some of those
issues around targeting areas of greatest deprivation and also
issues of sustainability.
The other concern is that the new homes bonus will
favour those parts of the country where the market is stronger
and there is a much greater market demand to build more houses.
That is less likely to benefit some of the sorts of places that
we are talking about when we talk about regeneration. Finally,
the prospect of top-slicing the formula grant to pay the new homes
bonus could be interpreted as a reverse redistribution, so instead
of being from wealthier authorities to authorities with a lower
resource base, as formula grant currently operates, we could see
money flowing in the opposite direction ifI say "if"it
is wealthier authorities that benefit disproportionately from
the new homes bonus.
Q22 Bob Blackman:
You specifically said in your evidence to us that the Government's
approach was likely to contribute towards long-term decline of
many deprived areas.
What evidence do you have that this approach will lead to that,
or is it just your presumption?
Josh Stott: I said
earlier, hands up, Joseph Rowntree Foundation (JRF) are not suggesting
we have got the answers to regeneration, and indeed all of our
evidence has got mixed outcomes in terms of the assessment of
area-based initiatives. The point that was really emphasised in
the submission was that the Government's proposals are about promoting
and incentivising growth. I do not have a problem with that. The
problem is about the areas that will not grow. Our concern is
that you have areas that are in decline and have the weakest housing
markets, where the new homes bonus will not act as an incentive
because, without public subsidy to begin with, the houses will
not be built. The key issue is around connecting people in deprived
areas to jobs.
Q23 Bob Blackman:
Is not the evidence there that people in deprived areas that get
jobs move, because they are more economically mobile and therefore
choose to take a step up rather than staying put?
Josh Stott: Inevitably,
some people do that, but the danger is that you end up with high
concentrations of out-of-work deprived people. If you just focus
on backing growth and winners, there will be losers and, wrapped
up in that, severe social costs and costs to the Exchequer.
Q24 Bob Blackman:
The problem is that, if you look across areas of London that I
know very well, the same thing will be true. Millions of pounds
have been thrust into them through regeneration schemes; the claimant
counts have hardly varied.
Josh Stott: I think
we all agree that what has gone before has not necessarily worked.
I do not think anyone promotes a continuation of the policies
of the past. I think what we are very much emphasising is that
there needs to be a better connection between the neighbourhood
level and the functional economic area level. There is a disconnect
Q25 Bob Blackman:
There is a disconnect. Perhaps I may ask all of you what you think
should be done to arrest the decline.
To arrest the decline of?
Q26 Bob Blackman:
These particular areas. Clearly, there will be a position whereby,
if you have targeted investment, other areas that are not targeted
will not get investment, and potentially there will be decline.
I think the question is: who and how do you target? Currently,
that is not very clear in the Government's approach. The Government's
approach appears to be to target growth. As I have said once or
twice already, that leads to the question in our minds: what happens
to those places that fall outside of that, often places that are
lagging and, if anything, are potentially going backwards? I think
the question is: what is the additional effect that public money
can bring? In the context of very limited public resources, does
it make sense to spend that limited resource in places where growth
would happen anyway because it is a growing area? We would argue
that perhaps the priority should be to focus public money on where
there is market failure to address those failures.
Q27 Bob Blackman:
Just to take that example, Government would argue that it is going
to implement high-speed rail, and therefore there will be regeneration
and growth in all the areas where there will be stations that
have high-speed rail. The Government invests and the private sector
invests around it. That is a "creation" approach.
You raise an interesting point. If you look at the targeted investments
listed within the documentCrossrail, high-speed rail, the
Olympicsthere is a very heavy greater south-east bias listed
in those particular programmes that they have decided to highlight.
We have to look at how this supports the Government's wider objective
of rebalancing the economy. I mean that in spatial terms. The
Government has talked about rebalancing the economy away from
an over-reliance on the greater south-east, but if you begin to
look at how the detail of some of these policies is likely to
stack up in practice, you get a picture of continuing over-reliance
on the greater south-east of England and also a focus on those
areas where growth is more likely to happen anyway. I think that
is an issue.
Neil McInroy: CLES
undertook some workthis is a shameless plug, by the way
in eight economic areas in 16 local authorities around the UK,
including affluent and not so affluent places.
The work was a diagnostic; it worked out how those places operated
and the effectiveness of the connection between the commercial,
social and the public in those localities. We found that, in those
areas where there was a good connection between those strengths,
there was more likely to be effective use of investment and more
effective regeneration schemes than in the past. We found that
the conditions in those localities were perhaps more ripe to benefit
from any ongoing investment. I would say to the Governmenta
shameless plugthat they should look at doing a diagnostic
of localities and become spatially and socially aware, and not
focus on the traditional deprivation indicators as much. They
should focus on the relationships, networks and connectivity between
the various elements in those places.
Q28 Chair: So,
you will just abandon those areas that do not have that in place,
because the money is not being put in?
Neil McInroy: If
you have to have prioritisation in terms where regeneration money
should go, clearly you need to set criteria where it goes and
where you focus your activities. What I am saying is that there
is more likelihood in those areas where there is a bigger bang
for the buck, if you likewhere there are better connections,
relationships and networksthen you may wish to focus on
those; or, if you do need to focus on those that are particularly
deprived, one seeks to put in place interventions that build up
the networks and connections in those places.
Q29 George Hollingbery:
Neil, I think your organisation is very clear that Tax Increment
Funding (TIFs) and enterprise zones are something you favour.
Can you say why?
Neil McInroy: We
favour TIFs. We favour any mechanism that allows a greater level
of autonomy and control over the economic destination of place,
and thus enterprise zones allow more local powers over breaks
in tax and those sorts of things. Again, TIF allows a different
mechanism for those benefits to be accrued by appreciation of
land value to be harnessed by that locality. So, we are supportive
of them on that basis.
They are, however, in our view limited. TIF is predicated
on levels of land appreciation and some areas may not have that.
The enterprise zones can have perverse effects in a given locality.
What happens when you stop the period of tax breaks? They do not
come without their flaws, but certainly they are welcome. I would
advocate a whole suite of other types of local economic instruments
to be placed at a local level.
Q30 George Hollingbery:
Others have given us evidence that enterprise zones particularly
can attract all the investment in a particular area and then abandon
the harder-to-reach areas. Is that a reasonable view?
Neil McInroy: Very
much so. It is like the earlier response I gave. It is about when
you put in place these mechanisms, how long you allow them to
last and then how you decant and over what period. Those are very
careful calibrations. I believe that in the 1980s they were deployed
in a clunky way rather than a very bespoke and adroit way. That
was part of the problem then. I hope that this time they are much
more careful, selective and lighter on their feet in terms of
when and how and how deep they do things.
Q31 George Hollingbery:
On enterprise zones, are there any particular lessons from the
1980s we should look at?
On enterprise zones, we have concerns, because certainly our evidence
from using them in the past is that they are much better at attracting
employers from the surrounding area to relocate than they are
at creating new employment opportunities. That is our big concern
with enterprise zones. If that can be overcome, great, but I have
not yet seen any convincing means of doing that.
Q32 George Hollingbery:
A little earlier I was asking about that block to innovation and
regeneration. What more could enterprise zones do? What could
the zone do that would really help regeneration?
One potential thing would be for an enterprise zone perhaps to
come with other supporting services to support growing businesses
and perhaps be specifically targeted on a growing business rather
than any business to relocate, and perhaps having some rules around
who can move into the area. One slightly disappointing thing about
the enterprise zones, as I understand it, is that there is an
expectation that they will be around about 100 hectares, which
is a relatively small area. I think that, if they were larger,
it might help to overcome some of these issues about displacement.
Q33 George Hollingbery:
Is there anything you would do about less rules?
Specifically relating to enterprise zones?
Q34 George Hollingbery:
Yes. What would be taken away to make those jobs and lives easier
to regenerate an area?
Specifically in relation to an enterprise zone?
Q35 George Hollingbery:
Let's not worry so much about enterprise zones as specific measures
the Government would take in a certain geographic area to make
Neil McInroy: Growth
and enterprise come in many guises. Clearly, there are things
that you may wish to remove to stimulate a whole sea of different
creativity and energies. Clearly, you could have temporary relaxation
of a whole range of legislation that is forced upon any given
place. If that is determined locally, and done on the understanding
that it is being relaxed for a certain period, clearly you could
have a look at a whole sea of legislation pertaining to any given
locality. That would be welcome. It would be a free space, an
innovative space, a free zone. Let's explore that. Of course,
there are powers you would not want to overstep, in terms of health
and safety and other elements, but you could relax some elements
I think within a period of time, at least to animate in any given
Q36 George Hollingbery:
Do you have any thoughts on land auctions?
Josh Stott: It
is not an area that JRF have researched in great detail.
Q37 George Hollingbery:
What about the other areas we were just talking about?
Josh Stott: Katie
has picked up the key point I would raise in terms of the displacement
effect. Essentially, you are moving jobs around an area rather
than creating new jobs. As I say, land auctions is not an area
about which I know a great deal, but there could be a danger that
they promote development in unsustainable locations as these sites
may generate the biggest receipts.
Q38 Simon Danczuk:
In terms of the Government's document, you have used very polite
and sophisticated language to describe your thoughts. Like you,
I have read many hundreds of Government documents of various kinds.
I have to say that I find this a more unusual one in terms of
its content and what it does and does not include. In all seriousness,
using tabloid language, in a few words how would you describe
Neil McInroy: I
think I go back to the very first question: there is no narrative,
no connections, bits missing and nothing on assets, physical focus.
If one of our junior members of staff had written this after two
weeks, I would be disappointed.
I think we can safely say it is not a strategy. My question would
be: is this implicitly suggesting some kind of sink or swim approach
for places? Lots of opportunities are outlined in this document,
many of which we would welcome. Some of which, though, are for
areas that do not currently have the capacityI am aware
that I am moving away from "tabloid".
Q39 Simon Danczuk:
We were going to point that out to you. You won't get a job with
the Sun, that is for sure. Go on, Josh. What is your response?
Josh Stott: I think
the three words I would use are: thin, weak and disappointing.
There is a failure to recognise the importance of place and the
complex challenges faced by the most disadvantaged communities.
Q40 Chair: On
that point, thank you all very much for your evidence.
1 Regeneration to enable growth: what Government
is doing in support of community-led regeneration. www.communities.gov.uk/publications/regeneration/communityledregeneration Back
The Scottish Government's regeneration discussion paper can be
found at www.scotland.gov.uk/Publications/2011/02/07095554/0 Back
Evs 133, 143, 154 Back
Ev 133 Back
Productive local economies: creating resilient places can
be found at www.cles.org.uk/wp-content/uploads/2011/01/Resilience-for-web1.pdf Back