19 Apr 2012 : Column 145WH

Westminster Hall

Thursday 19 April 2012

[Sir Alan Meale in the Chair]


[Relevant documents: Sixth Report from the Communities and Local Government Committee, HC 1014, and the Government Response, Cm 8264.]

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Dunne .)

2.30 pm

Mr Clive Betts (Sheffield South East) (Lab): It is a pleasure to introduce the Select Committee’s report on regeneration. The Committee began the inquiry with a view to considering the Government’s statement on regeneration to enable growth—something that we have commented on in our recommendations. We recognised that, in the current climate, resources were always going to be limited. We therefore considered how the resources that were available could best be spent and, from past experience, what was likely to be most effective. We made inquiries along those lines on our visits to Manchester, Salford and Rochdale, and on my visit Liverpool and Bootle, too. During the inquiry, we had to comment on the Government’s reduction in funding to housing market renewal areas. That reduction has made a considerable impact that came up in our evidence.

I will refer to the Government’s response to our report. Perhaps unlike the recent Government response to our report on the national planning policy framework, the Government were not quite so supportive on this occasion as they were to our comments and recommendations on planning. However, I will obviously focus mainly on our report on regeneration.

Some of us—I am looking at you, Sir Alan—have been around this place long enough to remember a time before 2010 and previous Parliaments when the Select Committee, which has gone through various names, was called the Transport, Local Government and the Regions Committee. It conducted an initial report into empty homes in 2002. That was followed by a report in 2005 on empty homes and low-demand pathfinders, when I think that the Committee was called the Office of the Deputy Prime Minister Committee. The Committee has had various titles but a constant theme of deliberations on the problems of low-demand areas and regeneration.

As part of the Committee’s evidence sessions in 2002, I remember going to Burnley. Frankly, I was shocked by what I saw. We saw evidence of rows of terraced properties with selective pepper-potting of empty homes—properties becoming empty and no one going back to them as residents. We heard evidence of homes being exchanged in pubs for £2,000. Particularly for hon. Members from the south and other more prosperous areas, the idea of even buying a garden shed for £2,000 is quite ridiculous.

Rehman Chishti (Gillingham and Rainham) (Con): When the hon. Gentleman talks about the south and prosperous areas, does he accept that even in the south there are areas of high deprivation? For example, in

19 Apr 2012 : Column 146WH

Gillingham and Rainham there is a seven-year life expectancy difference from Gillingham north to Hempstead. Therefore, the regeneration issue cannot be divided between north and south.

Mr Betts: I accept that there are pockets—indeed, substantial areas—of deprivation, particularly in parts of London, but in towns and cities in the south as well. That is not something that we want to obscure. I was making the generalisation that house prices are generally more expensive in the south, where we would probably not find houses changing hands for £2,000 in the pub. However, the point about life expectancy is well made. Indeed, I think that at some point the Committee will consider the whole issue of public health and the new health and wellbeing boards in councils. I think that one of their priorities will be to address that issue.

Those properties were changing hands, and landlords who had little interest in their management were buying and letting them, often to people on housing benefit, with little attempt to control antisocial behaviour. Owner-occupiers who had previously spent their money—often their life savings—on their properties abandoned them. They walked out because they could not cope with the area any more. The whole area was therefore in a spiral of decay and decline. Clearly, there was population loss, and there were job losses, too. The relative isolation of some ex-mill towns in those parts of Lancashire was an issue, and one repeated in other parts of northern cities, too. We saw an area that was almost suffering death by a thousand cuts—a decline that was not being managed, because there was no effective public intervention. It was simply a matter of complete and utter market failure. There was no question of the private sector coming in with private investment, because the houses were simply regarded as not having any real value.

As a result of that experience and the report from the Select Committee, the Government set up the housing market renewal areas—pathfinders—and put in substantial amounts of public money. The Select Committee then published another report in 2005, which is interesting because it considered some of the same themes as the new report. One of the recommendations of the 2005 report, in paragraph 19, stated:

“The Government acknowledges that it will take up to 15 years to tackle failing housing markets or undertake market restructuring and many of the mechanisms such as compulsory purchase orders have a long lead-in time before taking effect.”

Setting up the housing market renewal areas and the indication of the need for a long-term programme was absolutely right. One criticism that the Minister has made of the Government at that time, which I accept, is that they should have done then what they did for the new deal community areas and actually made a commitment from the very beginning to 15-year funding. It is difficult for one Government to commit another, but the reality is that these areas have failed so much and the needs are so great and so long term—a theme that came out very strongly in our evidence—that Governments must be prepared to commit for that period.

There were other interesting recommendations in the 2005 report, and the Committee clearly heard conflicting evidence about the benefits of refurbishing homes or demolishing them and the whole issue of heritage. Paragraph 24 stated:

19 Apr 2012 : Column 147WH

“The potential heritage value of the housing and its contribution to regenerating neighbourhoods should be considered an important part of any appraisal but houses should not be preserved for the sake of heritage if there is not the demand for them.”

That is a real issue. It is no surprise that many of those areas have failed markets with failed demand. Demolition has been the right solution locally, providing that it has been done in conjunction, consultation and agreement with local communities.

As part of collecting evidence for the current report that we are debating today, the Committee went to Manchester and Rochdale, and I went to Liverpool and Bootle. We saw streets of old properties that were in the process of being demolished. We talked to residents there, and to residents who had moved into new homes. Overwhelmingly, people said to us that the right decisions had been made. Some of the houses had been subject to housing action areas. I do not know how many people in the Chamber are old enough to remember housing action areas and to have been involved in them. The hon. Member for Northampton South (Mr Binley) is nodding from across the Chamber. Homes in those areas have been through one process of regeneration in an attempt to keep them going for 30 years. Those 30 years have now come to an end, and there was little point in trying to do them up once again.

I went to a home in Bootle—I remember it very well—where the property was right out on to the street. The backyard had two wheelie bins in it. They took up half the space, which illustrates how big the backyard was. I could hear water rushing underneath the property through the cellars and water coming through the roof. It is right that there should be local decisions about the future of those areas. In the vast majority of housing market renewal areas, there was full and proper consultation with local residents about what the future held for them and their properties, how they were moved on and decanted into properties nearby and an attempt to keep communities together. That was the right approach. Of course, some properties were capable of refurbishment—perhaps bigger and more substantial properties with the potential to be family homes when they were done up—but local decisions were the right ones to take.

Ros Groves lives in the Anfield area of Liverpool and gave evidence to the Committee. I remember her saying to me that it took a long time for communities to work through the order in which demolition and refurbishment took place. Someone had to be at the end of the queue; but even if they were, the promise was always that their home would eventually be dealt with. Everyone would have the same treatment as their neighbours. She said that the most demoralising thing she had to do as an elected local representative—someone who had been just a local resident and was elected by her colleagues as chair of the residents’ group and eventually chair of the collection of residents’ groups for the whole housing market renewal area—was to stand up at a meeting and say, “I’m sorry; we made promises in good faith that your home eventually would be subject to this renewal programme, either by demolition or refurbishment, and now the money has stopped.” She said, “I felt responsible for telling my neighbours that what was being promised them was not going to happen.”

19 Apr 2012 : Column 148WH

Bill Esterson (Sefton Central) (Lab): My hon. Friend describes the situation in Merseyside well, including in Bootle, my constituency neighbour. There are 6,000 empty properties in the borough of Sefton. He rightly says that people want these properties to be redeveloped and want the work carried out. I hope that he agrees that a combination of private and public money is needed to achieve that. In my constituency next door, people want those properties developed as well. The pressure knocks on, into the green spaces and the green belt. He touched on planning policy frameworks. All these things are linked up. Unless regeneration is done properly, particularly in respect of empty homes, other strong pressures come into play.

Mr Betts: I agree. Whether it is demolition or refurbishment, there is not one right answer. The right answer arises in the context of a local community making decisions. The worst thing that can happen is leaving the areas to decay, because housing pressures, which are not being responded to there, spill over into greenfield sites, although we would rather have houses either demolished and rebuilt or refurbished on existing brownfield sites.

In the end, the criteria are simple. Communities considered whether the areas had a future, whether there was demand for the properties and community support for refurbishment or demolition, whether houses had already been refurbished once, 30 years ago and whether they were adequate. For example, the house that I described in Bootle was built straight on to the road, with no back yard and little prospect of being made into a substantial family home. A number of properties in Skinnerthorpe road in the ward that I used to represent in Sheffield, which is now part of the constituency of my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), are tiny little homes that are damp and inadequate and were subject to demolition, but the larger homes on the road next door, which could be refurbished as family homes, were refurbished properly as part of an ongoing programme, generally with community support.

Rehman Chishti: The hon. Gentleman talks about housing regeneration, but does he not agree that wider regeneration is related to providing the opportunity of hope and aspiration and linked, for example, to facilities in the area? There is a high level of deprivation in Gillingham north, for example, and an £11 million sports facility—Medway Park—which will host Olympic teams. Health, housing and providing such facilities in those areas are part of a combined approach, as the hon. Member for Sefton Central (Bill Esterson) said.

Mr Betts: I shall make some points about that in a minute. The hon. Gentleman anticipates what I am going to say and makes a valid, correct point.

Our fundamental criticism of the Government—it will be interesting to hear what the Minister says—is that we did not believe that they had a strategy for dealing with the issue. We did not believe that there was such a strategy in the Government’s report on regeneration. We even contrasted that report with the approach to regeneration in Scotland, where the Government seemed to have an overall view of what should happen. It is not just a party political point. I am sure that the Minister will be relieved about that.

19 Apr 2012 : Column 149WH

In the 2005 report, when we had a Government of a different persuasion, the Committee was critical of the Government allowing the pathfinders to go their own way, but not of drawing together themes and trying to enable them to learn lessons from one another. Our criticisms reflect those of a previous report on a previous Government. We do not ever seem to have had an overall, clear national framework.

James Morris (Halesowen and Rowley Regis) (Con): From the inquiry I recall conflicting evidence about what we mean by regeneration. A lot of the evidence we heard was that people could not give a single, coherent definition of what regeneration was. Will the hon. Gentleman give us his definition of regeneration?

Mr Betts: I will explain what I think it is about. The hon. Gentleman anticipates me. I do not know whether it is helpful to give a simple definition of regeneration to cover all possible examples, but it should reflect some elements of regeneration schemes.

The hon. Gentleman’s first point is right. There was a lot of mixing up of regeneration and growth. For example, High Speed 2 and Crossrail were mentioned in the Government’s regeneration paper as examples of funding to help regeneration. It is a fairly big stretch of anyone’s imagination to link HS2 and Crossrail to the potential for regeneration schemes. That is a little step too far. I am happy to support those schemes and believe they will help economic growth nationally, but I am not sure whether they really relate to particular regeneration.

Mr Brian Binley (Northampton South) (Con): The hon. Gentleman is making a great presentation and has produced an important report. In respect of Crossrail, particularly, Committee members were able to get a station in Woolwich, which was an important part of the process in this House that will have a massive effect on regeneration in that area, which so badly needs it. Perhaps the hon. Gentleman should be a little careful about sizeable projects and their impact on specific communities.

Mr Betts: I am all in favour of HS2, which will be good for growth in northern cities, such as Sheffield. I am a strong supporter of that and have been for a long time. When considering specific areas—coming back to the point made by the hon. Member for Halesowen and Rowley Regis (James Morris)—regeneration is a response to market failure, as we saw in Burnley, where houses were sold for next to nothing. To take the point made by the hon. Member for Gillingham and Rainham (Rehman Chishti), there is a wider issue of failure of environment, dereliction, failure of skills and lack of employment opportunities.

Rehman Chishti: The hon. Gentleman is right, but in terms of the definition of regeneration, does he agree that one could easily say that regeneration means different things to different people, as with subsidiarity in European law? Linked to regeneration are key attractions, for example, the Dickens festival and the Medway Queen, which is a historical attraction that people come out to see. European funding for such projects is crucial. Ministers should come and visit Gillingham, and I hope that the Minister will visit.

19 Apr 2012 : Column 150WH

Mr Betts: Regeneration is defined widely. Different areas will have different needs and a different response will be required. I agree with the Minister that that is why, in the end, a localist approach to what works in an area is important.

With regard to my comments about Crossrail and HS2, which are massive, major projects involving billions of pounds of expenditure, if a tiny bit of that affects one area, then good, but it is a little bit difficult to recognise such projects as regeneration funding as a whole. In Burnley, Liverpool and Rochdale, we saw market failure and nothing will happen without some public funding. That was the message that came over to us. If the public money is not there, the private money will not be there either. The two need to go hand in hand. As witnesses said to the inquiry, no regeneration is happening in Britain at present, because it has virtually come to a standstill. There is a bit of the tail-off of housing market renewal in respect of schemes that are being wound down, but that is all. There is a need, potentially, for the private sector to invest with some gap funding, which, again, may be available through the European Regional Development Fund, which I will mention in a second.

Regeneration and market failure is not just about bricks and mortar; it is about the environment, as well as various facilities, skills and jobs. If we are going to tackle the difficult, fundamental problems that we see in some of the worst areas, there probably has to be some concentration of whatever public money can be found—recognising the issue of the public finances—in those particular areas. I have made the comment already, but the previous Government’s failing was not in making the money available, but in not committing it for a long enough period to see the schemes through to a successful conclusion.

Mark Pawsey (Rugby) (Con): I am mindful of the advice from the mayor of Newham, because there is rather more to regeneration than continually putting in public money. The mayor’s evidence was that, despite 20 or 30 years of continuing investment, the indices of deprivation had not moved. It is sometimes a matter of attention, not only of continually putting the money in.

Mr Betts: The hon. Gentleman makes an interesting point. It has been said, in particular about helping with skills and improving people’s availability for employment, that what happened was that people in Newham who got that help then moved to other areas. There are clearly challenges to making regeneration successful. One of the criticisms we made in the Select Committee report was about learning lessons from the past. We should look at where money has been spent—the hon. Member for Harrow East (Bob Blackman) was keen on that in the Committee—and at what was got right and wrong.

We took evidence from Lord Heseltine and went to Hulme to look at the city challenge area which, in everyone’s view, was a success. It was, however, a 20-year project and, to begin with, did not go well. Lessons were learnt from initial failures, but it was a 20-year programme with the public and private sectors working together; it was about not only buildings but skills, employment opportunities and the general environment of the area. It was also a lot about demolition of some really bad

19 Apr 2012 : Column 151WH

properties, and their replacement with new, attractive properties in the private as well as the public sector, as we saw on our visit.

The issue of the long term is so important. The hon. Gentleman is right that we can have long-term projects that still go wrong, but if we do not do things for the long term we will not get some areas right at all. There was a lady in the community centre in Rochdale who said to us—she had not been briefed and she put it in her own way—“It is a bit like going on a weight-loss course. It is easy to get a few pounds and even a few stones off at first, but it gets harder and harder. You have got to keep working at it. If you don’t keep going at it for the long term, you clap the weight back on and all the hard work of the previous time has been lost.” That is a real worry now in some housing market renewal areas—that the investment has gone in but stopped halfway, so some of the benefits will be lost. That lady’s comments always stuck in my mind. She was so enthusiastic about her area because it had been about improvements to the school and to employment opportunities. I remember she said, “I used to be ashamed to bring visitors. In fact, I used to pretend that I didn’t live here. Now when they come to visit, I walk down the street with pride because of what has been done.” That is an awfully good testament to what happened.

We ought to learn lessons from the failures. I am trying not to be party political, and the single regeneration budget had some successes but, very often, it was spread too thinly around the place, to give everyone a little bit but without achieving any long-term benefits. Let us learn from the problems of the past as well as from the successes achieved—that is a bit of common ground with the Minister at least. The regional growth fund was proposed as a possible solution, but Lord Heseltine has told the Committee, absolutely bluntly, “This is not about improvements for housing. There is no money here for those sorts of initiatives.” He told us that, in words of one syllable. He basically said, “It doesn’t matter what the Minister says, I am in charge of this”, and I am sure that the Minister does not want to argue with Lord Heseltine on such points.

The Minister for Housing and Local Government (Grant Shapps): wondered whether the hon. Gentleman had noted that two major housing market renewal areas were covered by the £2.4 billion regeneration money.

Mr Betts: Some schemes will affect HMR areas but, in terms of pure concentration on regeneration issues, Lord Heseltine was quite clear to us that the focus of his scheme was about jobs and not about improving homes in any shape or form.

Grant Shapps: Will the Chair of the Select Committee accept my point that people in regeneration areas really do not give a damn which budget is being used to regenerate the area?

Mr Betts: Most of the people that I have spoken to simply hope that some budget is available—that is our criticism about identifying what budgets were available. We had the Growing Places fund which seemed to be mainly about benefiting places that are growing, rather than places of market failure.

19 Apr 2012 : Column 152WH

I will make one aside, which is probably party political. Yes, of course there are reductions in public expenditure, but is it really fair to have a 19% overall cut in public expenditure in the current spending round, a 28% cut in local authority grants, a 50% cut in funding for social housing investment and a 100% cut in regeneration funding through the HMR scheme all at once? That is to put the situation in stark terms.

Let me continue, however, by saying that the Select Committee recognised some really positive developments. We certainly welcomed tax increment financing and local enterprise partnerships, but we wanted to be sure that LEPs were aware of the need to link into regeneration areas. If LEPs are creating jobs, how can they then help to benefit people in some of the poorest communities? That is a positive point. TIFs of themselves are not aimed in particular at regeneration schemes, but they can of course create projects that benefit people in regeneration areas, although how that funding can then be properly linked is a challenge.

We were pleased by the Government commitment on the European regional development fund and their intention to spend all the ERDF budget. Indeed, the Committee will do a further report on that. That has potential for the gap funding to which I referred. The challenge is ensuring that the funding is used and that it is used as constructively as possible in regeneration areas.

We also very much welcome the extra transitional funding of £35 million that the Government found. That was helpful, because of the despair in some of those areas, where only one in 10 houses are lived in and people are struggling in desperate circumstances. To have the funding simply cut off was a real blow, so it was good to have a bit of money put back in the five worst areas, with matched funding from councils, to help people in such conditions. I am sorry about comments in the press in the past few days from some people, who do not live in those areas, complaining that the Government are funding demolition. Of course they are. If nine out of 10 houses are not occupied and we still have to deal with the one that is, the only logical conclusion is to demolish, and to create the area for future regeneration. Of course that is the logic. The Government should be supported in doing that and in working with councils on the problem—I certainly do so.

Bill Esterson: My hon. Friend is describing well the need for massive levels of investment in such areas, but the mention of Lord Heseltine made me want to contribute. There is a rather unfortunate association with the early ’80s in Merseyside, given the release of Cabinet minutes suggesting that the idea of managed decline was something that the Government of the time were considering. Lord Heseltine was of course the one who made sure that that did not happen—to his great credit, and he has recognition for that on Merseyside. My concern, however, is that unless what is recommended in the report is put in place, we could see that managed decline happening in all sorts of places up and down the country.

Mr Betts: That is a worry and it is why intervention by public bodies, whether Government or local authority, is necessary. I am sure that Merseyside will be in there fighting its corner.

19 Apr 2012 : Column 153WH

We paid a visit to Greater Manchester and had an interesting briefing, not merely from the local authorities, cross-party and working together, as they do, on a strategic partnership basis, but from the private sector as well, arguing the case for the infrastructure and skills budgets for the city region to be brought together under local control. The Government have responded positively through the community budget “whole place” initiative, and the revolving infrastructure fund for the Greater Manchester area is another positive step forward. The city deals that the Government are trying to reach are also to be welcomed. Hopefully, more powers will go down to the local level. If cities choose working together to target resources in particular ways to stimulate and to help regeneration, they will be free to do so. Those are a welcome response to the report and the issues we identified.

To conclude, we are dealing with some of the poorest areas in the country—yes, some in the south, as well as in the north and the midlands. Such areas have already had years of decay and decline. If there is no recognition of that, no intervention and no public money made available, those areas will simply get worse, more areas will fall into similar decline and the cost of putting the problems right in the long term will be even greater. In the meantime, the cost in human misery will be substantial.

2.59 pm

Mr Brian Binley (Northampton South) (Con): It is a pleasure, Sir Alan, to serve under your chairmanship again. We spent two and a half years almost living together on Crossrail, and if you would like me to define that further, I am happy to, but perhaps you are pleased to let it go. It is good to be working with you again.

I again congratulate the hon. Member for—is it Sheffield, Brightside?

Mr Betts: Sheffield South East.

Mr Binley: I apologise. Perhaps it is my history that takes me back to Brightside.

The hon. Member for Sheffield South East (Mr Betts) has, with other Committee members, done a remarkable and important job. I also congratulate him on obtaining this debate on regeneration, which is a vital part of coming out of recession. This is an opportune time to be discussing the subject.

I welcome the report. I understand the Government’s emphasis on a localist footprint, which is very encouraging, and that was echoed by the hon. Gentleman. However, some resonances in the report caused me concern. The anticipated absence of funding must be taken into account. We created local enterprise partnerships from a perspective of getting local involvement, but we rather underestimated the importance of funding, particularly in the early stages of their work. That is not directly under the Minister’s control, but it is an important part of the subject.

Too much emphasis can be placed on changing the planning system to solve our problems. The issue is not all about what the Government and local government organisations can do. Planning always needs changing. It never pleases everyone at the same time, and can be over-bureaucratic, but its reformation—we have seen a

19 Apr 2012 : Column 154WH

number of reforms over the years—is not necessarily the great Aladdin’s lamp that it is painted as being. I have some concern about that.

The Committee’s enthusiasm for a national regeneration strategy could muddy the waters if done incorrectly. That needs careful consideration but, having known its Chairman for a considerable time, I know that that will be in his mind.

The trouble with our economy at the moment is that we are faced with a massively changing dynamic within the economic world, which has created a heavy price for some localities. De-industrialisation has left a vacuum in many communities and needs special attention. I am thinking particularly of the coal community, and communities that relied on heavy manufacturing. It is not a new problem, but it is an existing one, and we must recognise it. It brings with it a changing pattern of employment and lifestyle, which has often rendered existing infrastructure outdated and sometimes even irrelevant. That adds to the problems that regeneration revolves around, and we must be careful to take those matters into account.

A very disturbing problem is young people who have struggled to find their place in the labour market. When I left school at 15, I knew that I would go straight into employment. I knew that there would be a job. It was in a shoe factory, which was the local industry, but that did not matter. I went into the workplace, and working has always been an integral concept and part of my life. It affected and moulded my lifestyle and my attitude to life. If we allow a generation to continue to think that life can be about not working, and if we allow some people even to see that as a potential career, we will do massive damage to their chance of enjoyment and achievement in life. We must take that into account when talking about regeneration.

The mindset about regeneration is often negative and backward looking in that many people grow attached to a specific area and the work they are involved in. Often, regeneration, if done badly, can create the mindset of backward-looking negativity. We must be aware of that.

I beg the Minister to recognise that risk aversion is almost a national disease now. If many of the risk management techniques that we have now had existed at the time of the industrial revolution, many projects would not have got off the ground, and Britain might still be messing about in a pre-industrial age. I want to change the concept of risk management. It should not be about stopping things happening, but it often becomes that, because that is an easy way of looking at it. I beg the Minister to see risk aversion as a problem instead of an answer.

If we are to make regeneration effective, we must focus on the positive. When regenerating an area, we must encourage people to feel part of that regeneration. Investors need to experience the confidence of the knowledge that people are involved and have ownership of their areas. All too often, regeneration has been seen as a council responsibility and, by golly, we know that when government becomes involved in projects, as many things go wrong as go right. I want people to be involved so that they can check, police and give to a regeneration policy, to avoid such negativity. I want regeneration to be owned by the local citizenry. We must find ways of involving them. It is no good just putting up posters advertising a 12-week consultation.

19 Apr 2012 : Column 155WH

If a project lasts 10 or 15 years, they must be involved for 10 or 15 years. We must listen to them, and react to what they say. Otherwise, they will not feel that they have ownership, and that is important.

I turn to Northampton, as the Minister knew I would. It is one of the fastest growing towns in the country, which also creates problems. Housing was the object of the previous Government’s growth agenda, as it is of the present Government. By about 2030, our population will increase by 50%, which is a massive change. It is a difficult change, whether for good or bad, and it needs to be managed properly. I have some leaflets here if anyone wants to know about the Northampton Alive project in more depth. You allowed me to get away with that, Sir Alan. The 10 to 15-year project involves heritage, and Northampton has a long heritage. Parliament met there during the days of Edward II and Edward III. Thomas à Becket was there but, not surprisingly, shot out of town quickly when the king asked,

“Will no one rid me of this turbulent priest?”

Sadly, we saw the result of that later.

Northampton enjoys a massive heritage, and we must include that in our view of regeneration. It is central, well connected, and has an enviable record of world-class business investment with the prospect of an even brighter future. The Northampton Alive project consists of a series of 14 or so ambitious regeneration schemes across the piece including, hopefully, an iconic new railway, a landmark waterside development, new and improved shopping—I could go on. The project has captured the people’s imagination, which is what this is all about. We are not focusing on missed opportunities from the past, but preparing to optimise our chances for the future. That is about involving people and getting them excited. When I knocked on people’s doors in the election, some said, “Northampton’s been dead for 40 years.” Reinvigorating those people is a vital part of regeneration. We must understand that regeneration changes the mindset of individuals, as well as the structure of towns.

The real strength of Northampton Alive is that it reaches beyond the confines of development to involve our university, our schools and colleges, local businesses, the borough and county councils, political parties across the piece, West Northamptonshire Development Corporation and the local enterprise partnership. Ownership is diversified because all those organisations are involved in at least one project, and many are involved in several.

Mark Pawsey: One thing that came out of the Select Committee’s work was the need to engage local communities. My hon. Friend mentioned a number of bodies involved in the Northampton scheme, but many of them strike me as fairly corporate. What is happening to communicate with individual people in local communities across the piece?

Mr Binley: My hon. Friend is absolutely right to mention that. I can show Members my newsletter. Councillors from all political parties have encouraged people to become involved in Northampton Alive. In the town, we have built a small steering group, as well as a forum of 60 to 80 leading people from across the business, cultural and heritage sectors, the political

19 Apr 2012 : Column 156WH

parties and the Churches. This is a bounce-back, talk-to, ideas-back operation, and those involved meet every four to six months. This is a 10 to 15-year project, and we know we have the involvement and input of local people. We are not only telling all the people of the town about Northampton Alive, but advising them to become involved in it, and that is important.

Neil Carmichael (Stroud) (Con): I, too, am keen on regeneration. In Stroud, we have the huge, £20 million canal project. The local authority is very much involved, but I would emphasise the need to involve the community. I have set up a canal forum with the aim and objective of making sure that communities—those without the labels my hon. Friend the Member for Rugby (Mark Pawsey) mentioned—are involved. Does my hon. Friend the Member for Northampton South (Mr Binley) agree that the key instrument in this—the one I shall be using —is neighbourhood planning, which will be a useful tool in engaging our local communities and enabling them to set out the framework and the ideas for these projects?

Mr Binley: There is no end to the consultation and involvement we should have with the people of our communities. All too often, such projects have been seen as the council’s business, and things often happen in people’s backyards without their even knowing they are happening. That is totally unacceptable. I want to explore every way of involving people and to make every effort to ensure that their views are taken into account. In that way, we will create a successful project, even when it lasts for 10 to 15 years. I therefore accept my hon. Friend’s comments.

My county stands at the crossroads of England, and it has a number of things going for it. Those of us involved in regeneration have focused on relationships, and we have kept our ambitions in line with what we can achieve. There are three real priorities. Improved connectivity is vital. Leadership in climate change and biodiversity are also important. Finally, there is a stronger, greener community.

Our opportunities are limited, but also enhanced, by certain factors. Population growth is a key factor, and I have talked about the town’s growth. Our economy is worth more than £13.5 billion, but £1 billion of the money earned in the town is spent outside it because our retail offer is not good enough. Dealing with that is another part of the regeneration exercise.

We do, however, have impressive links with the rest of the world, particularly the middle east and China. We can use those links to attract businesses to the jewel in the crown of our regeneration—the enterprise zone. We hope to create 10,000 jobs, and perhaps more, in the next eight years, with 390 new businesses, £5 billion of private sector investment and about 400,000 square metres of new employment and retail space. That is a massive operation, which needs to be sold globally if we are to attract enough people, particularly in high technology and precision engineering. That is what we need to do if our enterprise zone, which is the biggest in the country, with more than half the land area of all the enterprise zones announced in the second tranche, is to work.

Northamptonshire provides an important lesson. It is an important pilot project, from which other people can, I hope, learn. Regeneration is an opportunity that should be grasped positively. Too often, chances across

19 Apr 2012 : Column 157WH

the country have been missed through misdirected optimism and inflated ambitions. When we set out on such projects, we must be realistic and know that they can happen. That is why we need to involve all the groups we are talking about, and more. As I have said, everybody needs to own the project.

Regeneration can unlock so much that is good about a locality. When we sell regeneration, it is vital that we also sell lifestyle. We are talking not just about buildings, construction and fabric. People will not move to Northampton for a decent business site alone, although having one helps; they will move there if we can make sure the town has heart and life and can provide them and their children with a good lifestyle. The more I speak, the more I hope Members will realise that regeneration is a big package, which requires all the involvement I have described.

I am talking about the people retaking ownership of regeneration. That means dropping the pervading negativity. It means stopping focusing on what money is spent and how. It means ensuring that the private and voluntary sectors can work alongside communities. If they work together, projects will gain people’s respect and involvement, and people will want to be part of the regeneration. If we achieve that, the rest will follow.

We can make regeneration an adventure for our local community and for those people who, when I knocked on their doors, repeatedly told me, “Northampton’s been dead for 40 years. Milton Keynes down the road is much healthier and much better placed.” To those people, I say no, it is not. It does not have our regeneration potential, our history, our heritage or our craft industries. We are very well placed—all we have to do is make Northampton alive.

3.18 pm

Simon Danczuk (Rochdale) (Lab): I am pleased that we are having a debate on regeneration. Since I have been in Parliament—I readily admit that I have been here only since May 2010, which is not long—there has been little discussion of regeneration, which is something of a surprise.

As a member of the Select Committee, I want to start by thanking those who gave us evidence. I also thank the Committee staff, and particularly Kevin Maddison, the Committee specialist, who worked on the report and our evidence taking. We could not have been better supported.

I want to focus on the Government’s document “Regeneration to enable growth”, primarily because it is a missed opportunity. The Minister, giving evidence to the Committee, said that he was very proud of it. My view—and I have had nearly 20 years’ experience in social and economic regeneration of one kind or another—is that it is the most unimaginative document to come out of Government that I have ever managed to read. I say that because it could have done much more. I know that the Government’s defence is localism, and that they do not want to be prescriptive, and I understand that. However, the document could still have provided some direction, and suggested approaches for regeneration. It could have reviewed good and bad practice and set some broad priorities for people to follow locally. Unfortunately it does little of that. It suggests a laissez-faire approach to regeneration and gives the impression that the Government do not care.

19 Apr 2012 : Column 158WH

It is reasonable to say that I am not the only person who was disappointed with the document. Professionals from the sector, who gave evidence to the Select Committee, described it as “thin, weak and disappointing” and “The Emperor’s New Clothes”. One witness described it as “vacuous” and another said it was not worthy of a junior member of staff; so regeneration professionals are also disappointed—it is not just me. I readily accept that, as the hon. Member for Northampton South (Mr Binley) said, people do not talk about regeneration when we are out knocking on doors. When we knock on doors in deprived neighbourhoods, in areas that need regeneration, often they do not use that term; but they know that their area needs dramatic improvement. My point is that if those residents were to read the document, they would undoubtedly be as disappointed as the regeneration professionals who gave evidence to the Committee.

Something else that gives the impression that the Government do not care is the money that they have dedicated to regeneration. The figures are set out in the Select Committee report. In 2009-10 Government spending on regeneration was £11.2 billion; in 2010-11 it fell to just under £8 billion; and the estimate for 2011-12 is just £3.9 billion. I readily accept that cuts need to be made, but that is a phenomenal reduction in support for communities that are struggling. However, there are two other problems with that limited amount of money being spent on regeneration. First, it includes public expenditure that has nothing to do with regeneration. My hon. Friend the Member for Sheffield South East (Mr Betts) made the point about high-speed rail. We cannot include all public expenditure and describe it as regeneration spending. That is unrealistic, and I suspect that that is what the Government are attempting to do. The other issue that my hon. Friend mentioned is the regional growth fund. Lord Heseltine came to the Committee and clearly said that the RGF has nothing whatsoever to do with regeneration. Yet the RGF is counted as regeneration money in the £3.8 billion.

Just to help with the debate that happened earlier, about housing and the regional growth fund, I and other hon. Members attended a briefing with Lord Heseltine and the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk), about round 3 of RGF. I asked Lord Heseltine whether bids should be made in relation to housing. He made it clear that housing is not included in RGF, and that people bidding in round 3 should not bother putting in a housing element.

The key issue has been discussed already—I think this is helpful with regard to definitions—that in relation to RGF and other initiatives the Government are confusing things. There is a need to stimulate economic growth—I fully agree with that—but that is economic development, not regeneration. I am all in favour of economic development and stimulating economic growth, but it is not the same as regenerating communities and areas where there has been market failure. So the £3.9 billion is not only a limited amount, it is not actually being spent on regeneration.

That is compounded by the second problem with the regeneration budget, which is the fact that it includes the new homes bonus budget. The reality is that, as we know, a good proportion of the new homes bonus will

19 Apr 2012 : Column 159WH

go to wealthy areas, where there is no market failure. Yet that money is being counted in the regeneration budget. If, as we all agree, there are limited resources for the Government to use, we should expect them to direct those resources to the areas of greatest need. However, they have not done that. The regeneration budget of £3.8 billion or £3.9 billion, the high street innovation fund, for which I know the Minister is responsible, public health money for primary care trusts, and the local government settlement, to which my hon. Friend the Member for Sheffield South East referred—and the list goes on—show that the Government have skewed the allocations away from supporting those in greatest need. The impression that the Government give is that they are prepared to write off whole communities to support more prosperous areas.

To find one example of a conscious Government decision to write off communities, we need look no further than housing market renewal.

Bob Blackman (Harrow East) (Con): The hon. Gentleman is making a strong, powerful case on funding issues. One of the essential considerations is where to apply resources. Is the hon. Gentleman saying that the resources, limited though they must be, should be concentrated on the areas of greatest deprivation, or that they should be spread more thinly? Clearly, we cannot have it both ways.

Simon Danczuk: The point I am making is that the Government say they are spending £3.8 billion to £3.9 billion on regeneration, whereas in reality they are spending a fraction of that on market failure and areas in desperate need. That is a problem for communities—and that brings me to my point about housing market renewal and the abrupt axing of that programme. It was considered to be a long-term initiative, and was achieving success—the National Housing Federation said it had generated £5.8 billion of economic activity, created 19,000 jobs and maintained 2,600 jobs in construction each year. It was a success, but, setting aside all the statistics, it was creating new homes for people, giving hope to some of the people in our most deprived communities, and putting pride back into communities. Its abrupt ending is probably best described by Ros Groves, a Liverpool resident who gave evidence to the Select Committee, when she said,

“we have kids in schools; you ask them to draw a house and they will draw you a house with boarded-up windows, not fancy little curtains or anything else. To me, that is not a future that we can build on, which is criminal. We have a right to have a decent life”.

The Government should have used the present opportunity to frame post-recession regeneration in a different way. I readily accept that money is tight, banks are reluctant to lend, and developers are risk-averse. The challenge for the Government was to capitalise on that new landscape. They could have learned lessons from good and bad regeneration and disseminated the findings so that areas could regenerate better. They could have made areas more accountable for how regeneration money is spent—I admit that. They could have increased the skills of regeneration staff, so that they could leverage in more money from the private sector. Most of all, they could have concentrated their efforts and limited resources on the most desperate areas.

19 Apr 2012 : Column 160WH

3.30 pm

Martin Vickers (Cleethorpes) (Con): I echo other hon. Members in saying that it is a pleasure to speak under your chairmanship, Sir Alan, and I compliment the Chair of the Committee, the hon. Member for Sheffield South East (Mr Betts) on his presentation of the report. Those of us who have served in local government for a long time will remember things such as housing action areas—indeed, I lived in one. We have seen many schemes come and go, and certainly in my area the housing revenue account system was one of the more successful.

Like the Chair of the Committee and other hon. Members, I represent an area that has lost one of its core industries. Many of my constituents from Cleethorpes worked in and around Grimsby docks, which was the core industry in our area. For many years, therefore, tourism has been absolutely vital, particularly in Cleethorpes. Although I share the hon. Gentleman’s analysis in his introduction of the debate, I am disappointed with the tone of parts of the report that seem to hark back to past failures.

Yorkshire Forward was the regional development agency in my area, although it was a disappointment from the start in that it did not mention Lincolnshire. It was good, however, at producing many plans, and I served for five years in a Liberal Democrat-Conservative coalition on North East Lincolnshire council. To suggest a parallel with another situation, we inherited a council that was basically a financial basket case, and spent three or four years concentrating solely on finance.

Once we were able to break out of that and look at regeneration, economic development and growth, we were hampered by the process-driven strategies of Yorkshire Forward, which, as is generally recognised in northern Lincolnshire, delivered little or nothing. Yes, it created grand visions and consulted with the public—that is essential, as has been mentioned—but the consultations raised expectations beyond what was achievable. Things such as the single regeneration budget and other measures were introduced, and some useful regeneration did take place, but on the whole it was rather disappointing, although I accept that work was done in other parts of the region. If the Secretary of State for Communities and Local Government were present, he would say that regions do not exist any more, but the fact is that for many reasons we are still told that we are part of Yorkshire and the Humber.

Much good work was done by the previous Government in cities such as Sheffield, Leeds and others, and we can see how regeneration projects have considerably improved the areas. However, more provincial towns situated in my constituency were—I will not say forgotten, but to some extent too much emphasis was placed on the cities. I hope that the Minister will give me some encouragement that there will be a trickle-down effect towards the smaller towns over the next few years.

The debate about what is growth and what is regeneration has been interesting, but I do not see how we can have one without the other. Regeneration produces growth, and if there is growth, there are more resources for regeneration—it is a circular argument. As the Minister noted in the report, regeneration can mean a great many things. It is not only about the built environment—important though that is—but about health, education

19 Apr 2012 : Column 161WH

and transport, and all the relevant Departments must contribute. Nevertheless, the physical regeneration of our towns is the most noticeable factor because it provides an uplift; the feel-good factor returns, and we need only to go into a new housing estate, school or whatever to appreciate that.

The Department for Communities and Local Government has proposed various initiatives for the high street, and my area was encouraged by the Minister’s colleague, the right hon. Member for Tunbridge Wells (Greg Clark)—I never know what his title is because I have seen it listed as the Minister for Cities, Planning Minister and so on. He is a bit of a jack of all trades, but he does all those jobs very well. He came to my constituency a few weeks ago, and the high street was one of the places to which we took him. I am encouraged by some of the initiatives that we hope will emerge in the not-too-distant future.

We need to harness the initiative of the private sector and local investors, and we are seeing that key Government aim come together in the local enterprise partnerships. We had far too many strategies. I noticed somewhere in the report the claim that we are lacking in strategy, but my area had strategies coming out of its ears—“strategies and support” was the phrase used. Whenever we could not define what a certain committee did, we said that it was responsible for strategies or support; it was an all-encompassing phrase that could mean anything or nothing. For a while, I chaired something called the Hull and Humber ports city region transport board. During my two years on the board, I do not think that any of its members, the private sector or the officials, managed to work out what it was actually for, but the guidelines said that it was responsible for strategy.

I mentioned the leadership that I hope will emerge from local enterprise partnerships. An essential ingredient of any successful regeneration scheme—this could be applied to Lord Heseltine and Merseyside, for example, which was mentioned earlier—is the need for some sort of dynamic leadership. That is necessary not only at political level but with local investors and businesses. If those things come together, they can create a vision for the area without the need for thousands of consultants and bureaucrats, and that does not necessarily need to impinge on every aspect of the local community.

Our forefathers who developed our great cities—one can still go to Birmingham, Liverpool and so on and see what they achieved—did not hire a consultant, produce a document and go into endless consultations. They got on with things and ignored the people around them who were saying, “Oh, it will cost money; it will be delivered late,” and so on. They achieved something that we can still see a generation or two later.

We must all mention our own areas in our speeches for the sake of press releases and so on, and I choose a different place in each debate. This time, I shall mention New Holland, of which I suspect few Members will have heard. Before the days of the Humber bridge, the ferry ran from New Holland across the River Humber to Hull. New Holland is a small town that desperately needs regeneration. I have discussed that with North Lincolnshire council, social landlords and so on. Very modest amounts of money, whether channelled through Departments, local enterprise partnerships, or whatever, can kick-start regeneration in a place such as New

19 Apr 2012 : Column 162WH

Holland that has a population of a few hundred. We owe it to the people of those communities to do something for them.

The Select Committee’s conclusion is on page 69 of its report. The point that stood out for me more than anything else was that we need

“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”.

Part of northern Lincolnshire has the largest enterprise zone in the country, and we are deeply grateful to the Government for delivering that.

This is the other point that I noticed on page 69:

“It is crucial that the strategy be based upon a clear understanding of lessons from previous approaches”.

That is what I emphasise as well, because as I said, we failed in my area as a result of the process that was insisted on by the then Government agency.

Incidentally, I am delighted that my hon. Friend the Member for Erewash (Jessica Lee) is in the Chamber. I am sure that she will contribute later, because paragraph 17 on page 68 says:

“We recommend that the Government disseminate to relevant bodies guidance setting out the possibilities for the use of JESSICA in regeneration.”

We therefore really look forward to hearing from my hon. Friend. With that, I will conclude.

3.40 pm

Heidi Alexander (Lewisham East) (Lab): I have enjoyed the debate so far. We have heard excellent contributions from hon. Members on both sides of the Chamber. I particularly enjoyed the enthusiasm shown by the hon. Member for Northampton South (Mr Binley) in talking about the potential of regeneration to unlock the futures of the next generation. That is what we are talking about when we talk about regeneration: how we can improve parts of our towns and cities—our country—for the next generation. I also enjoyed the speech by my hon. Friend the Member for Rochdale (Simon Danczuk). I agree with all that he said about how funding dedicated to regeneration projects has fallen considerably. No matter how the Government try to dress that up, the facts speak for themselves.

My own view on the regeneration strategy produced by the Government is that it is woefully inadequate. When I first read the document last year, I genuinely thought that pages were missing from the copy that I had been given. The document contains three and a half pages of text and then a series of tables. The tables are primarily about policies and initiatives that have already been announced by the Government. The information has pretty much been cut and pasted from different Departments’ websites and put into those tables. If that is the Government’s strategy, if that is the sum total of the Government’s interest in regeneration—three and a half pages of fresh text—I am concerned about it.

The best description of the strategy was given to the Select Committee by Neil McInroy, chief executive of the centre for local economic strategies:

“If one of our junior members of staff had written this after two weeks, I would be disappointed.”

19 Apr 2012 : Column 163WH

It is fair to say that we did not really hear anyone speak particularly positively about the document when they gave evidence to the Committee.

To call this “community-led” regeneration and to talk about what the Government are doing to support community-led regeneration adds insult to injury. Giving communities the power to do something is very different from giving them the means to do it. There can be all these fancy initiatives, but if the communities themselves do not have access to land and resources and the know-how, knowledge and skills to make things happen and to work with the myriad different players involved in regeneration—the public sector agencies and the private sector—that will not happen. That is my concern about the strategy that the Government produced.

So I ask myself this: when the Select Committee did its report, was the Government’s response to the Committee’s report any better? I do not think that it was. The Select Committee called for the Government to produce a national strategy for regeneration, and the Government said no. The Select Committee called for the Government to evaluate their new approach to regeneration. The Government talk about giving local authorities a toolkit of options to work from in bringing about regeneration. The Select Committee said, “Can we evaluate this new approach?” The Government said no. The Select Committee suggested that the Government commission a study of stalled regeneration schemes across the country to understand the scale of the problem that the country faces. The Government said, “No, it is for local authorities to identify those schemes that have failed.” I could go on and give a very long list, but I will just say this. We also said to the Government, “Please review how the knowledge and skills that have been built up in the regeneration sector but are ebbing away at the moment can be captured.” We suggested that the Government look into that. They said, “No, that is for the sector itself to do.”

In their response to the Select Committee’s report, the Government talk about a “localist vision for regeneration”. If people want that translated into plain English, I suggest that it is the “washing your hands of the problem” approach to regeneration or the “sink or swim” strategy for regeneration. That is fine if all areas have the same ability to swim, but as we have discussed, some areas suffer from the effects of deindustrialisation. Some areas will not be as advantaged as others in terms of the metropolitan area in which they are located. Perhaps they are areas that provide employment to the main city. Some areas do not have the same ability as others to get on and attract the private sector investment that is necessary.

That is the problem with the Government’s strategy as it stands: it does not give anyone confidence that the Government accept and understand that the country’s current economic problems are affecting different towns and cities and different parts of the country in different ways.

Jessica Lee (Erewash) (Con): On that point, is not the entire purpose of localism that people do respond? Communities have different needs, but setting them free and empowering them through the Localism Act 2011 and other measures means that local decisions can be

19 Apr 2012 : Column 164WH

appropriate to a local community. The Big Brother approach is not the correct one; the state does not always know best. That is a fundamental difference between the response and approach by the current Government and the response of the previous Labour Government.

Heidi Alexander: I agree that community involvement in regeneration is vital. During my time on Lewisham council, I did huge amounts of work on stimulating genuine community involvement. I go back to the point that I made earlier: with the best will in the world, communities sometimes need other help to get schemes off the ground. Sometimes that involves public money. Sometimes it involves initiating a discussion with private sector partners to get them interested in the area to start off with.

Some parts of the country are being hit very hard in the current economic climate. Before coming to the debate today, I looked at the unemployment figures and researched some of the statistics for the constituencies of other members of the Select Committee. In my own constituency, Lewisham East, 29 people are chasing every job, yet in Rugby nearly three people are chasing every job and the position is the same in Welwyn Hatfield.

Grant Shapps: Given that the hon. Lady is now making a very coherent argument about jobs and how important they are for regeneration, can she explain why the Select Committee takes the view through its Chairman, the hon. Member for Sheffield South East (Mr Betts), that job generation through the regional growth fund—some 360,000 jobs—is not regeneration?

Heidi Alexander: Regeneration is about jobs, decent homes, improving the quality of the environment—so many different things. It is not good enough to look at big infrastructure programmes and assert that the economic impacts of those new bits of infrastructure will somehow trickle down to some of the communities that are excluded most from the labour market. Given that I represent a London constituency, that issue is very close to my heart.

When the riots took place last summer, a group of people massed outside Lewisham police station at the start of the problems in Lewisham. They stood on the site of a stalled regeneration project. Although it would be too simplistic to say that if only the regeneration scheme had gone ahead, we would not have had the riots—there is not a direct correlation between all the places where riots happened and all the places in need of regeneration—areas with significant economic and social problems experienced some of the worst rioting. If we are to give hope and aspiration, jobs and opportunities to the next generation, we must invest in the areas where those people live. It is about so much more than putting up shiny new flats. It is about giving people the skill and opportunity to access jobs and about quality of life and life chances. We know that in some parts of the country hope, determination, confidence and ambition are harder to find than in some other places.

All Governments of different political persuasions over the past three decades have recognised the differences in economic and social capital in different parts of the country. Moreover, they have all had some form of

19 Apr 2012 : Column 165WH

geographically based, area-focused regeneration programme or initiative such as city challenge, the single regeneration budget, new deal for communities, the neighbourhood renewal fund and so on. I am not saying that all of them were perfect or that we should not learn the lessons from them. However, I would say that this Government seem pretty unique in not having any form of geographically based area regeneration scheme in place. They might talk about the regional growth fund and say that that is focused on areas that are more highly reliant on public sector employment and that are experiencing problems with the decline in the public sector work force, but we have already covered that territory. As we know, Lord Heseltine, who chairs the board that considers the bids that come in for the RGF, has basically said that they are not about regeneration. I suggest to the Minister—


Does the Minister want to intervene?

Grant Shapps: I am grateful to the hon. Lady for allowing me to intervene. The point about the regeneration fund has been made several times and often misleadingly. Although it is not primarily about housing regeneration in housing market renewal areas—I have mentioned two HMR areas that have benefited from RGF funding—it is indeed about regeneration, as the name suggests. It would be quite bizarre to somehow exclude this multi-billion-pound fund.

Heidi Alexander: I was quoting Lord Heseltine when he gave evidence to the Select Committee. Let me quote him again. He said:

“I have said quite clearly that we are not about regeneration.”

Perhaps there is some miscommunication between the Minister and Lord Heseltine.

[Mr George Howarth in the Chair]

The Government also suggest that the new homes bonus will help to get the homes built that we all need. That is all very well, but people must be able to afford to live in them. It was interesting that the Prime Minister came to Lewisham to launch the “affordable” mortgage scheme last month. He stood in a development that I, as the cabinet member for regeneration, had promoted. It is a large-scale regeneration scheme with 788 homes, 146 affordable rented properties and 40 shared-ownership properties. That scheme received a grant of £20.5 million from the Homes and Communities Agency. I hesitate to say that the scheme would not have gone ahead had we not got that grant, but I can 100% say that the amount of affordable housing in that scheme would have been less had we not received that grant. When we talk about regeneration, we need to think about giving people the opportunity not just to live next to middle-class people but to live in a decent home and to be able to do well at school, feel good about themselves and to be able to go out there and get a job. I find it ironic that when the Government are launching a scheme about housing, they stand in a development that would not have been so good had it not been for a Government grant, and that that Government grant is a legacy of the previous Labour Government. I am lucky because parts of my constituency are being regenerated, but a number of schemes have stalled.

In conclusion, let me talk briefly about the Milford Towers development in Catford. It is a ’60s block, which looks like a concrete fortress from the outside. There are

19 Apr 2012 : Column 166WH

about 250 flats above a Tesco supermarket and ’60s shopping area. The council is working hard to find a commercially viable regeneration project that will enable people who live in appalling situations to get a new home and move on with their lives.

Earlier, the Chairman of the Select Committee spoke about the lady from Rochdale who talked about being ashamed of bringing people to her home and neighbourhood. I met a lady who works in Tesco and lives in Milford Towers. She said that when her daughter got married, she could not get ready at home because of the state of disrepair of the flats, so she went to somebody else’s house. She did not want to leave on her wedding day from where she lived. That said it all really and shows the need for that regeneration scheme.

We talked earlier about the definition of regeneration. People who live in such an environment are not worried about definitions; they just want their lives to improve and something to change in their communities. It is for that woman and her daughter that I urge the Minister today to look again at some of the Select Committee’s recommendations about the scale of the challenge that exists in some of the hardest-hit areas of our country. Please look again at the ways in which the public sector can work with the private sector to kick-start some of those stalled regeneration schemes, so that we do not lose the knowledge, skills and experience that have been built up in the regeneration sector over the past couple of decades. This is too important to get wrong.

3.57 pm

Mark Pawsey (Rugby) (Con): It is a great pleasure to follow a fellow Select Committee member, the hon. Member for Lewisham East (Heidi Alexander). As a new member of the Committee, let me say what a pleasure it is to serve under the chairmanship of the hon. Member for Sheffield South East (Mr Betts). This is the first report in which I have been involved. Much of our discussion was based on what regeneration entailed. It is clear that regeneration affects many areas of life, not just housing—there was a bit of a preoccupation about housing among many of the people who gave evidence to us—but tackling a combination of aims that are social, economic, physical and environmental. We became familiar with those terms in our subsequent report on the national planning policy framework.

The previous Government used the most widely used definition for regeneration. They said that it was

“the broad process of reversing physical, economic and social decline in an area where market forces will not do this without intervention.”

The last bit of that definition is the most critical. Later, I will speak about what the alternative mechanisms might be.

While we were taking evidence for our report, there was a real sense, even an assumption, that any form of regeneration is necessarily reliant on large-scale public investment. That view was articulated most by those in the regeneration industry to whom the hon. Member for Rochdale (Simon Danczuk) referred. They are the planners, designers and architects who have become totally dependent and reliant on a substantial flow of public funds to deal with this serious issue. The sector is struggling to come to terms with the new reality of the economic situation that we face.

19 Apr 2012 : Column 167WH

Regeneration always has a local dimension. I am pleased that we in Rugby understand the need for regeneration, and I am delighted that the hon. Member for Lewisham East has drawn attention to how hard my community are working to deal with the consequences of the current state of the economy. In 2010, our local strategic partnership produced a regeneration strategy on behalf of Rugby borough council, setting out a robust framework for regeneration activity in our borough and considering indices such as income, health, education, housing conditions and environmental quality for areas within my constituency that, despite her words, were identified as needing regeneration activity. We are working hard locally to bring together strategies for dealing with them.

My comments will deal with four issues, the first of which is public investment, as opposed to private, and where funding might come from. We have not yet heard a great deal today about the influence of the recently announced national planning policy framework, which will set a new context for regeneration. We have not heard enough about what action the Government are taking. I will return to my assessment of some earlier regeneration projects.

In his tour de force, my hon. Friend the Member for Northampton South (Mr Binley) reminded us all of the truism that less public money is available—not for regeneration, but for all the great things that we expect our Government to do for us. I am concerned about the great weight that the classic definition places on the need for public funding. The classic approach to regeneration involves a simple and potentially divisive claim that the market cannot regenerate, on the basis that the market caused the problem in the first place. If the market caused the problem, the conclusion seems to be that the market can in no way help with the solution. That is not always true. As we heard from the National Housing Federation, we are bringing in both private and public investment in regeneration. Each £1 spent on construction generates £2.80 in economic activity. There are good reasons to encourage both public and private investment.

One point that emerged from our evidence that runs contrary to the evidence provided by some of my colleagues on the Select Committee is that public sector involvement can occasionally discourage private investment, simply because if it is known that public money will be made available, the private sector sits back and waits for that to happen. There is evidence from the Department that tagging an area for regeneration can raise land prices, because if people expect a load of public money to come into the area, prices are driven up. That increases the risk for private sector investors and, in many cases, discourages them. Another issue with some of the regeneration that has taken place is how much public sector money has got lost in bureaucracy and the administration of projects. It is estimated that between 5% and 7% of some budgets have been lost in administration.

It is not true that the private sector always fails. For example, UK Regeneration— a private company with a programme for 20,000 homes by 2020, backed by Barclays Capital—is offering finance and a group of experts to shape the regeneration of key sites for private rented homes within mixed-use developments. The Wellcome

19 Apr 2012 : Column 168WH

Trust recently set up a high street fund to offer assistance to firms facing financial difficulties in the wake of the August riots.

In addition, the Government have announced schemes to stimulate the housing market, particularly the new build housing market, including the NewBuy mortgage indemnity scheme and the build now, pay later scheme, all of which will benefit areas where regeneration is taking place. It is interesting that the Select Committee is working on a report about getting private funding for social housing, which will also contribute to regeneration.

We recognise that the actions that the Government can take are limited, but they have done numerous things. One of the biggest initiatives introduced recently is localism, to which many references have been made in the debate. It is a decisive Government initiative to transform regeneration, much like the planning process generally. In the prelude to the national planning policy framework, the Planning Minister, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), said that people felt that planning was something done to them rather than something that they were part of. The remarks of my hon. Friend the Member for Northampton South bore out the point that it is important that people feel part of the regeneration process, rather than feeling that it is being done to them. When the Select Committee went out and visited communities to take evidence, that was clear from the messages that people gave.

As the hon. Member for Lewisham East pointed out, there is no one-size-fits-all solution. It is not simply a matter of allocating a certain sum to an area; every project is different. What is right for regeneration in the north might be completely different from what needs to happen in more deprived areas of London and the south-west. I welcome the Government’s realisation that regeneration should be done locally.

It is useful that that community focus should be seen as a fundamental part of the national planning policy framework. We have heard reference to the importance of local neighbourhood plans in ensuring that individuals and communities have input into the development of their areas. I know that the Minister will reply later, but when he gave evidence, I asked him whether he felt that the previous planning system was a factor in causing many regeneration schemes to stall. He answered:

“Undoubtedly. Planning in this country, as we all know as Members of Parliament in our local patches, is one of the most endlessly complex, needlessly bureaucratic, horribly confrontational systems that you could possibly invent. I know of relatively few people who do not think the system is broken and in need of urgent fixing.”

I hope that the fact that we have fixed it will go some way to creating additional regeneration activity. We have localism, the NPPF and now the community infrastructure levy, which was introduced by the previous Government but implemented by this one. Local authorities can choose to charge the levy on developments in their areas and use the money to fund the infrastructure that the local council, the community and the neighbourhoods want. Therefore, development might be more readily received and undertaken by local authorities, as they will no longer be out of pocket before new building takes place and can build new roads and infrastructure before regeneration starts.

Tax increment financing works by allowing a local authority to borrow money for its infrastructure projects. Time after time when we took evidence, we learned that

19 Apr 2012 : Column 169WH

it was vital to build infrastructure early, as it attracts other development. Interestingly, the importance of tax increment financing is not lost on the British Property Federation—the body that we will ask to carry out development in regeneration areas. The BPF says:

“TIF can offer a solution for regeneration projects which depend on the delivery of a piece of infrastructure for which funding cannot be found from other, public or private, sources. TIF allows more upfront money to be raised by committing incremental business rates…to be used to repay that initial investment… it will allow some stalled schemes to go ahead.”

Stalled schemes were raised with the Committee time after time when we took evidence.

My final question is this: does regeneration always work? It is important to remember that many parts of regeneration affect certain types of communities, and we need to work hard to support those communities. Generally, regeneration takes place in established urban areas, often in the zone between the city centre and the suburbs that are further away. There is a presumption that regeneration always has to happen, but part of what the Government should do is to look at the provisions that can be made to prevent the need for regeneration in the first place, by paying proper attention to those zones within our urban areas at an earlier stage: prevention is, of course, better than a cure, and if we need to spend and are being asked to spend significant sums of money on regeneration, why do we not act more quickly and remove the need to regenerate in the first place?

When we do take a decision to regenerate, it is vital to get that regeneration right; otherwise, more harm can be done to a community. All the members of the Select Committee who went on site visits will have their own memories. What struck me very strongly was visiting Hulme and seeing a successful regeneration project taking place, but that project was actually a regeneration of a regeneration project that had taken place 20 or 25 years earlier and had failed. In the new project, tower blocks that had been put up in the 1960s and ’70s had been demolished to make way for something that is much more attractive. Perhaps the first regeneration project actually made things worse rather than better. I remember sitting in a room and being shown slides of those tower blocks and walkways between buildings that were completely unsafe. They were in areas where substantial levels of crime and social problems developed as a consequence of doing regeneration badly. As I say, where we do regeneration, let us get it right.

In an earlier intervention, I referred to the evidence that the Select Committee received from the mayor of Newham, who said that his area seemed to be one of perpetual regeneration. The whole point about regeneration is that it is an intervention that changes things, but intervention in Newham during the past 20 or 30 years does not seem to have changed things. According to the mayor’s account, the deprivation index in the area has not shifted at all. Regeneration, far from being something that happens once, has become a permanent state of affairs.

Roberta Blackman-Woods (City of Durham) (Lab): The hon. Gentleman is making a really interesting point about learning lessons from the past and I wonder whether he will join Labour in pressing the Government

19 Apr 2012 : Column 170WH

to carry out a genuinely large-scale evaluation of previous regeneration initiatives, so that we can learn lessons from them.

Mark Pawsey: I am not sure about a large-scale evaluation, but the Select Committee certainly took evidence on such issues, and I am sure that all that evidence is available and in the public domain.

In conclusion, regeneration includes many positive and much-needed programmes to improve run-down areas, but we must not lose sight of the fact that we live in an era with a difficult economic climate and public investment in all sectors—not just regeneration—is being substantially reviewed. Nevertheless, we have an opportunity right now to make a determined push to attract private sector investment into regeneration, so that it no longer needs to be considered as the preserve of the public sector alone.

4.13 pm

Jessica Lee (Erewash) (Con): Thank you very much, Mr Howarth, for calling me to speak. It is a pleasure to serve under your chairmanship this afternoon.

I apologise to all present for my late arrival for this debate. It was not without sending a note to the Chairman in advance to explain, and indeed the reason I was detained is entirely material to the speech that I will now make.

I was on the way to Downing street for an appointment at 2.30 pm to hand in a petition. It is a petition prepared by my local newspaper, the Ilkeston Advertiser, which has been running a campaign to reopen the train station in Ilkeston, one of the two towns in my constituency of Erewash. This is a long-running campaign by the newspaper; indeed, it has been a community campaign for many years. The reason it is relevant to this debate is that we have already heard about a number of different aspects of regeneration, but for me infrastructure is at the heart of regeneration and it is a key element of what we are trying to achieve around the country when we consider regeneration.

I will expand on that point about infrastructure and say why it is relevant to my constituency of Erewash. Ilkeston is now the largest town in the country without a train station and, as I have already said, it is one of the two towns in the constituency of Erewash. The lack of a train station in the town brings difficulties because it deprives people in my area, particularly young people, of the mobility to go out and seek extra training and new jobs. They could get to both Nottingham and Derby much more quickly if they had the mobility that a train service offers. Of course, a train service would also bring visitors, shoppers and new businesses into the town and, in my view, the resulting opportunities would be endless. Derbyshire county council, which is doing a great deal to try and press for this project, says that there would be 150,000 extra journeys if the project were successful, which would bring massive economic benefits to Ilkeston and indeed beyond. So I have started my speech by referring to what I regard as a key component of the whole concept of regeneration, which is mobility for people, and that mobility is achieved through infrastructure.

In many other ways, my constituency is quite blessed in terms of infrastructure. The M1 motorway runs right through the heart of my constituency and, as I have explained, we are near to both Nottingham and Derby,

19 Apr 2012 : Column 171WH

and we are also near to Sheffield. However, in terms of social mobility and particularly for young people, train travel is extremely important, and local rail services—along with longer-term and larger infrastructure projects such as High Speed 2—are key in achieving that social mobility. I will certainly continue to do all that I can to campaign for the train station in Ilkeston to reopen. I can tell all right hon. and hon. Members in Westminster Hall today that our campaign group has been lucky enough to have had a meeting with the Secretary of State for Transport on this matter, and we are waiting for a response from her. I look forward to receiving her response and I know that our campaign has backing from across the community in Erewash.

As I am not a member of the Select Committee, I have not been involved in producing the report on regeneration, but I have really enjoyed listening to the speeches from members of the Committee and I have been very well informed by them. For me, what is really required is the fusion of national vision and local implementation. I suspect that the hon. Member for Lewisham East (Heidi Alexander) and I are probably not too far apart about where we want to get to, but my intervention on her earlier was to make the point that regeneration is about empowering people by setting them free and trusting local communities to make the decisions that are right for them. That is because the key components of regeneration vary greatly around the country.

Roberta Blackman-Woods: I noted the point that the hon. Lady made in her earlier intervention. Does she accept that some previous schemes, in particular the housing renewal areas scheme, put local residents at the heart of the partnerships to regenerate their areas? Localism is not something that this Government invented.

Jessica Lee: I thank the hon. Lady for her intervention, but she may not be surprised when I say that she is tempting me down a path that I am afraid I will resist going down. That is because what is required is a broader approach, which I see being presented through a wider context such as the Localism Act 2011. The emphasis on infrastructure is also important, and I see the coalition Government proceeding with that and putting it in place throughout this year and next year. That is what I hope we can achieve in Erewash.

Mr Binley: I thank my hon. Friend for giving way and it is good to serve under your chairmanship, Mr Howarth.

We were involved in the previous Government’s sustainable communities project, which did not have much local involvement at all. It reported directly to the relevant Minister; I think that the first one was Mr John Prescott, as he then was. Lord Rooker was responsible for the report that started that project, but when he was asked about local involvement at a meeting, he said, “Our job is to push through the Government’s plans.” That attitude concerns me enormously, and we need to learn from it. Does my hon. Friend think that that is a proper view to take?

Jessica Lee: I essentially agree with my hon. Friend’s points. Local communities have a better understanding of their needs and of their vision for the future than do

19 Apr 2012 : Column 172WH

civil servants and politicians based a long way away—certainly far from Erewash—down in London. I accept that a number of factors are involved, but having strong local leadership and empowering it must be at the heart of what we are all trying to achieve.

I thought that it would assist if I set out this afternoon that it is never just one aspect of such leadership that is required, but a number of different cogs in the wheel. My constituency is very varied, and pockets of it have some of the highest levels of social deprivation in Derbyshire. Erewash is in the south-east corner of the county and, historically, it was in some ways neglected by the county council. Now, however, its needs are recognised and understood, and strong leadership is in place. For example, our local enterprise business partnership—the Erewash partnership—is made up of representatives from across the board, including local government, large companies and small and medium-sized enterprises. Together, they create a robust networking organisation, which brings strong business support for new start-ups and beyond. It is an organisation with vision, and has won national awards for its success. It grew organically, and has always been supported by the local council, which sees that it is a successful formula. Such decisions are best made locally, and not far away in Whitehall or Westminster.

We have also had the benefit of other projects. The Long Eaton townscape heritage initiative has drawn on the constituency’s background. Erewash is in the heart of the east midlands, and lace making, textiles, furniture making and upholstery are an important part of our heritage. It is difficult for me to get through a speech in the House of Commons without reminding Members that we have the one remaining traditional lace factory in the country—Cluny Lace—which made part of the lace for the Duchess of Cambridge’s wedding dress. I will not cease to mention that.

My point is that that heritage has perhaps gone. Local businesses have moved into the service industry, and we have a lot of support for high-tech firms and SMEs moving in. The heritage of train building is extremely important to the area, and also to my family—my grandfather worked on the trains all his life. The local council was able to support the local community, by understanding that heritage and implementing appropriate regeneration in the town centre, to give it a vision and make it an enjoyable place to live and work. That project is ongoing.

The feeling is equally strongly in Ilkeston. The Minister will be pleased to hear that we have set up our town team there and have submitted—as have many other Members—a bid under the Portas pilot scheme. We have our fingers and toes crossed. The project brought together not only the local authority and the local enterprise partnership but transport groups, Able Disabled Ltd, Wash Arts, and other small businesses, to provide what is required for regeneration—vision and strong local leadership, as I said originally.

I attended this debate because I wanted to point out that regeneration has to be locally focused. It has to be what is right for a local community, and if communities are empowered with the right structure, opportunities and funding, that can be achieved. We will certainly continue to do all that we can in Erewash.

19 Apr 2012 : Column 173WH

Mr George Howarth (in the Chair): Before I call the next speaker, it might help if I explained that in the event of a Division in the House before the end of the debate, we will adjourn for 15 minutes and the time will be added on to the end.

4.25 pm

Bob Blackman (Harrow East) (Con): It is a pleasure to serve under your chairmanship for the first time, Mr Howarth, and to contribute to this important debate, the topic of which has been the subject of detailed consideration by the Select Committee. It is pleasurable that eight members of the Committee have been able to be here and that other MPs have chosen to participate. I remind Members that we are debating the Select Committee’s report in response to the Government’s published strategy. We have had the opportunity to hear of a great bid for funding for Erewash, and of greater reviews of Northampton and Cleethorpes, but I want to bring us back to the strategy and to what I believe should happen.

A problem in the past has been that with every change of Minister—whatever the Department has been called—there has been a new initiative. In my view, there has never been a proper evaluation of what succeeded and what failed, what was good and what was bad, and whether we could learn lessons. Historically, when Governments have succeeded one another, they also have failed to do that. I am a strong supporter of the Government and of almost everything they do, but I believe that there has been a missed opportunity with the strategy, and I hope that we can persuade my right hon. Friend the Minister that there needs to be much more of a proper strategy for regeneration.

As a veteran of local government, I go back—beyond some others—to the urban programme and the damage that it did, with small amounts of funding that had huge strings attached. It was not really successful, and we still bear the scars across the country. There has been a whole series of schemes, but time does not permit me to go through them all, and I would lose everyone to boredom were I to do so.

The problem is that regeneration is not just about replacing people’s houses. Someone can be given a decent place to live and that will be an improvement, but have they been given a job? Have they been trained to get a job? Has their health been improved? Have the life chances of young people been improved, so that they can get a job in their environment? Has it been ensured that the education system is right and that we have true equality of opportunity, so that people can aspire to be the best they can? Has there been the opportunity for the private sector to invest and create jobs? Without all that, spending on any single strand—whether housing, training or education—is almost wasted money. We need what I call wholesale regeneration of areas, rather than the picking off of little bits and pieces. That is one of my greatest concerns about the position regarding the Government’s strategy.

During the Select Committee inquiry, we considered successful and less successful regeneration schemes, and drawing strengths from the successful ones will start to lead us to what the strategy should be. There are limited resources, and I gently remind Opposition Members that the Government inherited a huge deficit, with one

19 Apr 2012 : Column 174WH

in four of the pounds that they spent having to be borrowed. There is no pot of gold to be handed out willy-nilly. However, it should be clear that if we have a regeneration strategy and Government funding is provided, competition is needed. Ministers should not simply dole out cheques for an area; people should come together as communities in partnership with the private sector and others to compete for the money that is available.

In addition, given the economic position faced by the Government, there is no doubt whatsoever that it will be extremely difficult to make revenue funding available, but the Government gave a commitment before the election to continue to fund the capital programmes and not to cut capital funding in the way that the previous Government planned. My hon. Friend the Member for Erewash (Jessica Lee) mentioned infrastructure, which is a key point. Often, the private sector wants to invest, but things—blockages—prevent it from doing so, and I well remember an example. On the site of Central Middlesex hospital in the London borough of Brent, 80 acres of prime industrial land were not going to be invested in. By using regeneration money, a new road was created and suddenly huge amounts of investment came in. Hon. Members can go and see that today. That investment dwarfed the amount of public money that came in. Therefore, a relatively small spend on an infrastructure project produced large-scale private sector investment.

Heidi Alexander: The hon. Gentleman is talking about the limited availability of money. I should like to ask him the question that he asked us earlier. With limited funds available, does he believe that they should be spent in the areas that are most likely to grow or in areas where the need is greatest?

Bob Blackman: That is a key point in the whole regeneration debate. My hon. Friend the Member for Rugby (Mark Pawsey) mentioned the evidence that we received from the London borough of Newham, where investment has been made in regeneration schemes for 30 years. When we forcefully asked the mayor of Newham whether that should continue and when we should stop public sector investment, he said, “We’d all dearly love to see it end, but just not now.” The view seemed to be that we will still invest in Newham for another 30 years and nothing will change. The housing will be nice, but the indices of deprivation will hardly have shifted.

My view is that if there are limited resources, they should be applied where the maximum gain can be achieved. We have to be honest about the situation and say that certain areas will not get funding because we will not get the most gain from them in terms of growth and opportunities. We have to concentrate the resources, as opposed to saying, “We’ll spread it thinly for everyone,” because by doing that nothing is achieved.

Roberta Blackman-Woods: Does the hon. Gentleman accept that the consequence of the policy direction that he is outlining is that some areas will be abandoned altogether or, indeed, will go backwards if no resources are given to them by the private or public sectors?

Bob Blackman: The potential consequence is that, yes, areas could be told, “We can’t invest anything in you because we’re not going to get any leverage from the private sector.”

19 Apr 2012 : Column 175WH

I want briefly to describe three regeneration schemes. I was chairman of the Harlesden city challenge company that was bidding successfully for Government money. We in that regeneration scheme were in direct competition with everyone else. We brought together the private and the voluntary sector. Uniquely, that city challenge project was about promoting economic growth; creating 2,000 new jobs in the west London area on the Park Royal estate; improving the housing stock on the Stonebridge estate, which was a dramatically bad estate at the time; and improving Harlesden town centre. It was a wholesale regeneration project. Some £37.5 million of Government funding produced £200 million of private sector investment. It was a brilliant and highly successful project that was supported by both parties in Brent.

At the end of that project, we evaluated it and asked whether we had succeeded. Against every single criterion that we had agreed with the Government, we had succeeded. However, when we evaluated the project properly, we said, “Well, in this case, has the unemployment rate changed at all? No, not a bit of it.” We evaluated why and found that, as soon as someone got a job, they moved out of the area to somewhere better to be replaced by someone who had not got a job. In many ways, yes, the project had been successful, because it had created jobs and safeguarded existing jobs in the area, but it had not ended the deprivation. I have repeatedly said both here and in the main Chamber that investing money in the areas of greatest deprivation does not solve the problem. We have not yet resolved that key issue.

The second regeneration scheme that I want to mention is one that my right hon. Friend the Minister will remember well: the Chalkhill estate in Wembley, which was a similar type of council estate to the one that we saw in Hulme. High-rise blocks built in the 1960s replaced some lovely family houses and were built as a village in the sky, where no one would need a car and everyone would live in peace and harmony. People had to compete to get into that estate, but it was not long before people were trying to escape. I remember the previous director of housing describing Chalkhill people coming together to form the escape committee to get out of that dreadful estate.

The replacement of all that awful housing—no one in their right mind would want to live in such an area because of its security issues and run-down nature—was funded by selling off a large part of the land to Asda. We used the capital generated to replace the housing in partnership with a private sector developer. We made sure that the housing was replaced in the way that the community wanted. Instead of having architects and planners doing things to people, the project was based on what people wanted. In our visit to Hulme, we saw a very similar type of exercise.

I should like to allude to the situation in the London borough of Harrow, which relates to a much more recent development. The redevelopment of Harrow town centre was going to be promoted by Harrow college moving there.

4.38 pm

Sitting suspended for Divisions in the House.

19 Apr 2012 : Column 176WH

5.5 pm

On resuming

Mr George Howarth (in the Chair): We now have half an hour added on, which takes us to 6 o’clock. When the sitting was suspended, the hon. Member for Harrow East (Bob Blackman) was in full flight.

Bob Blackman: As is popular, I should say, “As I was saying.” I was talking about a regeneration project for Harrow town centre that goes back two or three years. Harrow college had an imaginative scheme to transfer its main college from my constituency to the centre of Harrow. Harrow on the Hill tube station, which is a fundamental hub in north-west London, would be regenerated. The college would move; there would be new housing and a new shopping centre; and the council would relocate its main civic centre to the town centre.

The scheme was put together creatively by a key partnership of the public and private sector, including Transport for London, but the fundamental issue was whether we would get funding from the Learning and Skills Council. It was presented as a multi-million pound project, bringing in huge amounts of private sector investment. Harrow college spent more than £10 million of its own resources to develop the scheme.

At the last minute, of course, the LSC had over-committed all its funds and every scheme was pulled. As a result, the regeneration of Harrow town centre was put on the back burner and will never happen without substantial public sector investment. The key point is that a relatively small amount of money is required to produce huge private sector investment.

I regard that as a failure of regeneration activities under the previous Government, where everyone was led up the hill—to believe that all this would happen, funding was in place and it would all occur properly—only to be let down at the last minute, when there was never any possibility of public sector funding. That is why, in respect of a strategy for regeneration, we must be open and honest and say that the limited resources must be concentrated on areas that will produce the greatest possible return and improve the quality of life for the maximum number of people.

Page 36 of the report states what the strategy should provide. That is significant. We should have a strategy that emphasises the need for private sector leverage coming in on the back of public sector investment. We should aim for the maximum possible private sector leverage. I depart from the script in the report, because I believe that in competing for regeneration funds the whole process should be competitive, ensuring that we bring together partnerships of the private and voluntary sectors, the community, local authority and all other public bodies. There must be clear priorities, a clear plan and everyone must know what is going to be provided and committed.

In any form of regeneration, strong community involvement is needed. After all, the community living, working and playing in those areas will suffer the consequences if we get it wrong. Therefore, it is important that people are not only consulted, but are part and parcel of the schemes that are to be developed.

Each area listed on page 36 of our excellent report, which I was pleased to participate in and support, emanates from our review of the Hulme project and of city challenge. In my judgment, there has not been a

19 Apr 2012 : Column 177WH

proper and full review of all those different regeneration schemes and various types of activity that Governments of both persuasions have launched on society. As a result, we have in-built failure in many of the processes. It is important to hold a review of the successes and failures of the past. We need to be honest and up front with people, to say, “This is the money that will be available. If there is no money available right now, we will work towards making it available in the future, so that people can plan for that future.”

We can help and assist Ministers in the Department for Communities and Local Government to formulate a detailed regeneration strategy that is truly a strategy for regeneration, as opposed to a pulling together of lists of the various different programmes available. By doing so, we would give people the chance to create regeneration opportunities over the next five years. Under successive Governments, the Ministers responsible have changed fairly frequently, but we have had a period of stability under the current Government, and I hope that our Ministers can take the report forward in the spirit in which we give it, as critical friends of the Government. We warmly endorse the capability of regenerating local areas. There is no single way to do so, but a coherent and convincing strategy is necessary, so that everyone who participates in regeneration can believe that things will change.

5.12 pm

Roberta Blackman-Woods (City of Durham) (Lab): It is a pleasure to be able to take part in this debate, which has been an excellent one. We had powerful contributions from my hon. Friends the Members for Rochdale (Simon Danczuk) and for Lewisham East (Heidi Alexander) and from Government Members. The hon. Member for Northampton South (Mr Binley) gave us an excellent example of community participation, which we could certainly all learn from and apply in our own areas. All hon. Members were champions for their local areas, although I have some concerns about the policy direction outlined by the hon. Member for Harrow East (Bob Blackman).

I pay tribute to my hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Select Committee, for a stunning speech, which got to the heart of what is wrong with and absent from the Government’s regeneration strategy. The Communities and Local Government Committee, which is clearly flourishing under my hon. Friend’s chairmanship, has produced another excellent report, deserving of a wide readership.

Let us be clear: the Select Committee has been truly scathing about the Government’s approach—rather, about their lack of a strategic approach—to regeneration. I have read many Select Committee reports while I have been in the House, and I have never read a report that was so uniformly negative in terms of the evidence coming before the Committee about the strategy of the Government. That strategy is outlined in “Regeneration to enable growth: What Government is doing in support of community-led regeneration”, but the report can lead only to one conclusion. What is the Government strategy doing? The answer is obvious and transparent: absolutely nothing. The Select Committee states of the strategy that

19 Apr 2012 : Column 178WH

“the document gives us little confidence that the Government has a clear strategy for addressing the country’s regeneration needs. It lacks…direction and is unclear about the nature of the problem it is trying to solve.”

That is truly damning. It would be impossible to be more critical of the Government’s approach. Instead, I endorse the report and, in the few minutes that I have, will give the Minister a steer on what I think his Government should be doing if they are serious about regeneration.

The Minister might like to start with a clear definition of his meaning of “regeneration”. The Select Committee has helped enormously, because the report starts with such a definition:

“Regeneration is a long term, comprehensive process which aims to tackle social, economic, physical and environmental issues in places where the market has failed.”

That was not taken on board by the Government, whose response to the report stated:

“Regeneration is an essential element of our approach to building a strong and balanced economy. A strong national economy depends on the strength and vitality of local economies across the country”.

There is no mention of any other regeneration factors that need to be taken into consideration apart from building a balanced economy.

The Minister is probably too young to know, but in the 1990s, after years of Conservative administration, many of our cities and more peripheral areas were languishing, dilapidated and in desperate need of investment and regeneration. That taught us that trickle-down economics do not work, which is an important and painful lesson that “Regeneration to enable growth” seems to have forgotten completely. When Labour came to power in 1997, it helped to regenerate Newcastle, Liverpool, Manchester, Reading and—I could go on—many of our city centres. We also regenerated some of the areas of housing neglect, in particular on the edges of our cities and towns. We inherited from the previous Government a £19 billion backlog in repairs to social housing, so the task was absolutely massive. Labour then introduced a whole range of initiatives although, to be fair, we did not get every single one right. Nevertheless, there was an understanding that some areas in some communities needed more resources and more assistance to improve and to give their citizens opportunities.

Labour’s approach evolved over time. By the time we reached the neighbourhood renewal fund, which was applied effectively in my own area of County Durham, there was a strong partnership-based approach with local communities right at the centre—that was the point that I was making to the hon. Member for Erewash (Jessica Lee) earlier. The approach levered in private sector funds on the back of public sector investment, but it did not only concentrate on housing. The key is in the title: it was the neighbourhood renewal fund and not the housing renewal fund. It looked at investing in the environment, social issues, housing, leisure and employment; it brought new training initiatives into the areas; and it was primarily led by the local community.

My point is that what the Government have said in their “Regeneration to enable growth” document—that the new approach is to lift the burden of bureaucracy and to empower local communities to do things their way—is totally wrong, because such communities, which include mine, did not experience the neighbourhood

19 Apr 2012 : Column 179WH

renewal fund as burdening bureaucracy. It was a resource to be used to turn the area round. Indeed, in evidence to the Select Committee, Ros Groves, chair of a Liverpool residents group, said that regeneration “has to be community-led.” She also stressed that “community-led regeneration” was nothing new.

Similarly, Mike Taylor, head of regeneration in Nottingham, said:

“In terms of the ideas and the revitalisation of communities”

there has been a bottom-up approach

“for many, many years.”

The Government are simply wrong to try to suggest that regeneration initiatives that were previously in place and supported by local communities were not also led by them on many occasions. They were certainly involved in them to a great extent.

Heidi Alexander: My hon. Friend was talking about the history of the bottom-up approach in regeneration initiatives. Projects such as the neighbourhood renewal fund and the working neighbourhoods fund gave community groups resources to do the work that needed to be done in their local areas. That was not hollow rhetoric about giving power: it was giving money to enable that to happen.

Roberta Blackman-Woods: My hon. Friend makes an excellent point. She said something earlier that I want to touch on. When I was reading the Government’s document on regeneration, I had an image in my head of people washing their hands. I had that image because the words on the paper were telling me that the Government are saying that they will just provide a whole new set of powers, but will not provide support to enable anything to be done. That is a travesty.

More than anything, the previous schemes showed that we need a holistic approach to regeneration. As the Chair of the Select Committee said, we have learned that we need a long-term approach to regeneration. My experience in my area of County Durham, which suffered massively from the deindustrialisation of the 1980s, is that by 2007 those areas were only just starting to be turned around after about 10 years of investment, because it takes a very long time, especially when trying to turn round areas that have gone through years and years of dilapidation, lack of investment and unemployment. It takes a long time to change cultures and to embed new opportunities.

I, for one, think it is a tragedy that when I met my local authority a couple of weeks ago to find out what we were going to do about two areas in Durham whose regeneration has stalled, it said that it had very few resources available, but of course will do what it can with the council’s budget to support community-based regeneration in one or two areas, although the level and scale will not address the issues.

Mr Binley: The hon. Lady’s comments are both interesting and constructive, in keeping with this debate. My concern about money is where it can be taken from to ensure that the sort of investment that is wanted in regeneration takes place. We would have to find money from somewhere else to give more to regeneration.

19 Apr 2012 : Column 180WH

Roberta Blackman-Woods: The hon. Gentleman makes an important point, and I will come to it in a moment.

Before abandoning regeneration altogether, we need to know whether the Minister sought a comprehensive evaluation of what worked previously, and what could be improved. Under this coalition Government, we are witnessing a return to the same old Tory policies, with a 42% cut in the decent homes programme and the failure adequately to support the building of new homes and facilities that many communities are crying out for and which, importantly, could be a catalyst for private sector development in the area.

Interestingly, the report documents 76 initiatives that the Government claim are policies that citizens can draw on to regenerate their areas. I am sure that communities are ecstatic about the fact that a civil society red tape taskforce is on hand to help to regenerate their areas, alongside the local government resources review taskforce, which will no doubt help regeneration. I have a very specific question for the Minister. I was surprised by some of the initiatives listed in the document, particularly the Supporting People fund. I understand that the fund assists local authorities to help people with acute care needs to pay for the assistance they need. Is the Minister seriously suggesting that the Supporting People budget should be diverted to regeneration initiatives? That is the point that the hon. Gentleman raised. We are making it difficult for local authorities in terms of the priorities for spending that they are facing.

Even the few schemes that could have a positive impact on communities are not working. For example, a survey for Inside Housing found that only 21% of the authorities surveyed were spending the new homes bonus on housing and planning-related projects, and that not all of them provided direct benefits to communities in exchange for consent to development. That prompts the question why the new homes bonus is even on the list of regeneration initiatives if the money is not being ploughed into communities.

The Minister and others have made much of the regional growth fund, but I will not repeat the comments by Lord Heseltine. We appreciate what he said, although I am not sure that the Minister has fully understood exactly what he said. I accept that, so far, the regional growth fund has done reasonably well for the north-east in terms of the number of projects, but not necessarily the money involved—[ Interruption. ] I am rather worried about the thunder, which may be anger, but I am sure that it is not directed at me, so I shall carry on. The crucial point is that even businesses that received round one money received only 20% of the money, so it has had little impact on the ground, and those companies do not necessarily provide employment for people from the most disadvantaged communities. That is why the definition of regeneration is so important. I will not stand in the Chamber and say that economic regeneration is not important; of course it is, and Opposition Members are pushing the Government to have a plan for growth in the economy. My point is merely that economic growth and regeneration are not the same things, and I am not sure that that is clear from what the Government say because the whole concentration is on economic development.

Given all that, as the Minister knows well, there is no strategy for regeneration. The concept of localism is being used to say, particularly to poorer communities,

19 Apr 2012 : Column 181WH

“Here you are, this is the Localism Act. Get on with it.” There is no understanding of the need to direct funds to certain neighbourhoods to compensate for market failure, or to assist when market conditions make development and regeneration more difficult.

Regeneration is about renewing large-scale infrastructure, and the Labour party welcomes the money that is going into projects such as Crossrail. We think that large-scale infrastructure development is crucial for the future economic development of the country, but regeneration is also about renewing communities and developing policies to enable that to happen.

Mr Binley: The shadow Minister is being generous in giving way and I am grateful. Is there not an opportunity to use the enterprise zones that are connected with the new community infrastructure levies—I am actually still a section 106 man—to ensure that people provide jobs and training for some of the NEETs about whom we are concerned?

Roberta Blackman-Woods: The hon. Gentleman has raised two important issues. I was going to come on to those points, but I will make a comment now. The evidence given to the Select Committee about enterprise zones, and indeed my experience—I remember the first time that we had enterprise zones—suggest that although businesses moved into those zones because of the tax incentives and grants, the jobs were not necessarily new. It remains to be seen whether enterprise zones will create new jobs: if they do, that will be great. However, those jobs will not necessarily be available to people from the most disadvantaged areas, because other things such as training, skills, transport and good housing have to be in place. There has to be a holistic approach.

I am glad that the hon. Gentleman mentioned CILs. One worrying thing about the late changes that were made to the Localism Bill before it became an Act was that it became easier for developers to wangle their way out of a CIL and for schemes to be designated as unviable if a CIL were applied. That is something that we will have to watch carefully over time. Of course we know that it is a difficult economic environment and that things will be difficult for many developers. Nevertheless, it is important that CILs are applied where possible.

In my last few minutes—

Mr George Howarth (in the Chair): I hope that the hon. Lady will be slightly briefer than that.

Roberta Blackman-Woods: I hope that the Minister will address the following five points that were raised by the Select Committee.

First, the Government need to develop and publish a strategy to address the problems faced by the most disadvantaged communities. Secondly, they need to publish a strategy that indicates how private investment will be attracted to areas of market failure. Thirdly, previous schemes must be properly evaluated and lessons learned. Fourthly, the DCLG needs to issue guidance about how public land can be used to stimulate regeneration. Finally, we need to have a holistic approach. It would be good to have a cross-departmental strategy for regeneration and an idea of how community budgets could be used to drive forward regeneration in partnership with local communities.

19 Apr 2012 : Column 182WH

In conclusion, I was on the team from Newcastle university that evaluated the city challenge initiative. There was much in that initiative that would be welcomed today, and it was an approach that sought to be community led. I hope that the Minister will seek to bring such schemes forward.

5.34 pm

The Minister for Housing and Local Government (Grant Shapps): Thank you, Mr Howarth, for your chairmanship in the second half of this debate. It has been an enormously good and welcome discussion, and I congratulate the Communities and Local Government Committee on having instigated and written the report and pushed it through to a conclusion, including this valuable debate. It has given us the opportunity to air a subject that, as hon. Members have said, is not always aired as much as it should be. It is a matter that is vital to our citizens and the economic future of the country.

Unlike many Select Committee reports that I have largely welcomed, on this occasion—as a one off, I am sure—I think that the Committee has got it wrong. My reason for that was revealed in the contribution made by the excellent Chair of the Committee, the hon. Member for Sheffield South East (Mr Betts), whose opening speech concentrated almost entirely on what one might call the housing element of regeneration, and in particular the ending of the housing market renewal programme. Indeed, he went so far as to say that things to do with economic change in the country, such as High Speed 2 and Crossrail, could not be counted as regeneration. That theme was picked up in other contributions, particularly from Opposition Members, and led to the Opposition Front-Bench spokesperson giving the reasons why, in her opinion, the Supporting People programme has nothing to do with how we regenerate communities.

There seemed to be, however, some cross-party agreement about the idea that we cannot just regenerate. My hon. Friend the Member for Harrow East (Bob Blackman) made the excellent point that we can go ahead and rebuild and reshape the physical nature of a community—I am very familiar with the Stonebridge Park estate, which I know well—but 20 years down the line we could end up with the same levels of deprivation, and if we do not tackle those problems, we will not truly regenerate. The Supporting People programme is an important element of that. I do not seek to wrap it up and claim that the regeneration fund is bigger than it is, but if the £6.5 billion is not viewed in the context of regeneration, in many ways it will be wasted in the overall scheme of what it actually means to change lives and regenerate communities for the future.

Mr Betts: I hope that the Minister did not misunderstand the Committee’s comments. No one was denying the benefits of the schemes in the Government’s report, but he says that because a scheme such as HS2 will benefit areas that require regeneration, along with the rest of the country in terms of economic growth, it should therefore be counted as regeneration funding. That is in absence of a strategy for how that stream of funding will connect with other funding and benefit the poorest areas where market failure has occurred. That is the problem with the Government’s approach.

19 Apr 2012 : Column 183WH

Grant Shapps: I understand the point that the Committee Chair is trying to make, but the problem with his analysis is that he is prepared to completely disconnect the joined-up nature of the economy and its ability to succeed in different parts of the country. After he discussed High Speed 2, it was pointed out that there are severe pockets of deprivation in Birmingham—precisely where High Speed 2 will initially run. I do not seek to claim, and I hope I have not given the impression, that all spending in any area, whether Supporting People, High Speed 2—name your project—is regeneration spending. I seek to demonstrate that such spending is not just incidental to, or a coincidence of regeneration, but a fundamental part of it.

Perhaps that is where the Government disagree on a fundamental level with the Committee’s report. I believe that economic regeneration, and regeneration overall, are two sides of the same coin. Unless we build an economy that is capable of producing jobs, generating wealth and therefore benefiting all the citizens of our society, and unless we can do that across the country, rather than just in one corner or area of it, we will never get out of the problems so eloquently described by hon. Members today. The mayor of Newham addressed the Select Committee and said that after all these years of huge public spending, the outcomes are not much different.

Simon Danczuk: Does the Minister understand and accept the difference between economic development and regeneration?

Grant Shapps: Here we have the fundamental difference of view. I think that we cannot simply do regeneration to people or communities. When we try to do regeneration without improving the economic viability of an area, it simply fails and 10, 20 and 30 years later we are left in the same mess that we were in initially. There can be no finer illustration of that point than the housing market renewal programme. As I listened to some of the contributions from across the Chamber, my blood was starting to boil. The description of the housing market renewal programme that I heard this afternoon was so distant from the reality on the ground over the 13 years for which it was in place—in fact, it was slightly less than that—as to be a grotesque bending of the truth.

This is what one independent group called Save Britain’s Heritage highlighted about the housing market renewal programme. It said that Government inspectors condemned whole rows of terraced houses based on 10-minute visual inspections, even though it would have been cheaper and much more sustainable to refurbish those houses. In fact, the Select Committee in, I think, 2005 said that the designation of areas for demolition in effect increased deprivation in those areas. Many social landlords prepared the ground by voiding and boarding up properties. In turn, that undermined the housing market values. My hon. Friend the Member for Rugby (Mark Pawsey)referred to the hope value—he did not quite describe it in that way—of the private sector waiting for the public sector to come in and improve its returns. The Select Committee describes that as deliberately managing decline to make the notional benefits of wholesale demolition and redevelopment more attractive, ensuring larger windfall gains for the state.

Managed decline was precisely the right description of the housing market renewal programme, which I believe was a national scandal. In fact, I would go as far

19 Apr 2012 : Column 184WH

as to say that the housing market renewal programme was ultimately a huge disappointment. I have the figures with me. It destroyed 10 times more homes in this country than it built. Nothing—no programme—did more to destroy homes and communities in this country than the Luftwaffe in the second world war, but the housing market renewal programme did more housing destruction and community destruction than there has been at any time since the war.

Mr Betts: I want to say how fundamentally I disagree with the Minister. I just wish that he would make the visit that I made to Merseyside and talk to people about how the programmes there were developed in consultation with and with the agreement of the local community. The problem, of course, is that before we do the rebuilding that the Minister is talking about, we have to do the demolition. The rebuilding has been stopped to a large extent because the Government have now cut off the funding. That is the reality of the situation, is it not?

Grant Shapps: The reality of the situation is that more than 10,000 homes were destroyed by the housing market renewal programme and just 1,000 homes were built. That is the reality of the programme. The Chairman of the Select Committee should be aware that I have visited Liverpool, Sefton, Hull and Stoke-on-Trent on numerous occasions. I went to Stoke-on-Trent to launch the £35 million, doubled up by local spending to £70 million, in order for there to be an exit from the housing market renewal programme. I recall that I met a woman there who described the programme: how people had come in from outside, it was called a consultation, but the community hall was so full that the meeting had to be broadcast outdoors. They were told that their streets would be knocked down. They are still suffering to this day from the damage that the housing market renewal programme did. It was a national disgrace, and I was pleased to bring it to a close. The programme was an enormous mistake.

Heidi Alexander: The Minister talks about a national scandal. Does he agree that it is a national scandal at the moment that people are living in homes on streets where houses have been knocked down? They are living in blighted communities. Although the Government have put forward a transition programme, it is a drop in the ocean compared with the resources needed to deal with the problems that exist today in those communities.

Grant Shapps: Perhaps the hon. Lady is not aware of just how much time I have spent with and energy I have expended in these communities over the five years for which I have been either the shadow or the actual Housing Minister. I appreciate that she is right to say that people were left abandoned and stranded in empty streets after the disastrous demolition and managed decline programme that was housing market renewal. The Government managed to bring in money to close that programme and ensure that anyone who lives in a street that is largely empty will now be rescued from that situation. It was very much a rescue programme for a disastrous Government scheme.

I disagree with the conclusion that some people have drawn that the toolkit of different methods available—now open—to all local areas to manage the problem left by housing market renewal and failed regeneration in the

19 Apr 2012 : Column 185WH

past can be ignored. I am talking about the heart of where these problems exist—places such as Sefton—where at local level people have decided to use programmes such as the new homes bonus so that they can borrow against that money, flatten an area and bring in developers to create new housing there. That is being done not through some enormous Government scheme, with money that we cannot afford, but by using the initiatives that are in place. The initiatives are in the toolkit—initiatives such as TIF 1 and TIF 2.

Another initiative is the regional growth fund, much discussed this afternoon. I noticed that it was entirely dismissed by Opposition Members. That is quite bizarre. We know that, for example, both Hull and Wakefield—housing market renewal areas—have been specifically helped by that funding. It is not true to say that only 20% of that funding has been pledged or allocated; £1.7 billion has been allocated or is under provisional allocation, so that figure is entirely inaccurate.

Roberta Blackman-Woods: I want to clarify that I was not suggesting that round 1 money had not been allocated. I was pointing out that although the money has been allocated, it has not necessarily been received by the intended recipients.

Grant Shapps: I can bring the hon. Lady right up to date on this. There have been 176 bids in relation to the first 2 rounds, and conditional allocations of £1.4 billion. She may well be right to say that not all the money has been paid out. Just as it takes time, as she argued earlier, to do regeneration, it also takes time, as she well knows, to spend money even on very worthwhile causes. None the less, the purpose of the regional growth fund is of course to try to rebalance the economy. If people do not accept, as the Government do, that we have to fundamentally shift and change the dynamics of the economy to make areas that have been regenerated continue to work in the future, perhaps it is difficult for them to understand why we think that the regional growth fund is essential.

It does not stop there, however. We have talked about the £35 million doubled up to £70 million of public money that has gone into bringing the disastrous HMR programme to an end. We are in the process of legislating to localise business rates. That is an enormous potential benefit for towns, cities and areas across the country. It will not, as it has sometimes been characterised, disadvantage deprived areas of the country. In preparation for the debate, I got hold of this list. We can look back at previous changes that would have occurred if business rates had been localised and look at the additional power that the measure will therefore give local areas. It is interesting to note that Liverpool would have had a 37.2% change in its business rates from 2005-06 to 2009-10. If it were able to keep that money, it would be 37% better off than under the old system, whereby all the money is centralised and then doled out. The figure is 38.2% for Knowsley, 36.3% for South Tyneside, 31.1% for Manchester, 26.9% for Sunderland, 26.8% for Sefton, 26% for Doncaster, 25.1% for Middlesbrough. The point that I am trying to make with those figures, very graphically, is that another policy that will provide the tools to local areas to enable them to regenerate in a manner appropriate to them is the localisation of business rates. It is absolutely critical to regeneration and, for some reason, entirely overlooked in the response.