Plan for Neighbourhoods

Lord Khan of Burnley Excerpts

Monday 10th March 2025 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, I have relevant interests as a councillor in Kirklees, which includes Dewsbury, one of the towns on the list. I am also a vice-president of the Local Government Association.

I welcome investment in towns across the country that have higher than average levels of deprivation. I hope that the Minister will agree that the regeneration needed by so many towns reflects the many years of neglect by previous Governments in funding and supporting long-term regeneration programmes by local councils for their areas.

I have a number of questions for the Minister. First, as the noble Baroness, Lady Scott, asked, can he confirm that this programme is a continuation of the long-term plan for towns fund, which was introduced by the previous Government? As far as I can tell, the list of towns is precisely the same. Secondly, can the Minister provide detail on the selection criteria, given that, as the Statement says, the towns in the list were all in the bottom 20% of the index of multiple deprivation? Of course, the list does not include them all—it is not an inclusive list—so which towns, under those deprivation criteria, have been rejected and why? If the Minister does not have an answer to that question, which I accept is quite detailed, I would be happy for him to give me a written response.

It is positive that the Government have extended the list of potential uses of the funding, compared with its previous iteration. However, each town is to get £2 million a year for the next 10 years. Does the Minister agree with me that making a sea change in a town will require more than that level of funding? That is not to decry the funding, which will be helpful, but simply to note that this will not make a strategic and long-term difference for those towns as a whole. There will be improvements, given the money available, but that level of funding is inadequate for a major uplift.

I will give the Minister an example. Dewsbury in Kirklees is included in this list. The swimming pool and sports centre that served the town, and which were run by the local council, had to be closed due to RAAC. The council said that it will not rebuild or further provide either a sports centre or a swimming pool, so there will be no other provision of those facilities in that town of, say, 80,000 people, which suffers from considerable deprivation. Replacing them would be a major investment in the health and future of young people, yet the funding provided in this plan for neighbourhoods will not go anywhere near meeting that.

Can the funding available be used as match funding, or provision towards capital spending or revenue spending, for such long-term investment? The funding available is split 75% capital and 25% revenue. Is there flexibility within that? Perhaps the first five years could be capital funding, with revenue at the back end of the scheme. It would be worth knowing from the Minister whether there could be some flexibility there.

Finally, it is good that each town has to create a town board to make funding decisions and that those who serve on that board are committed to the town’s future. However, can the Minister explain the reasoning for excluding local councillors elected to represent the town in making those decisions? Can he say what accountability mechanism there will be for all the funding? Will there be annual reports to the House on the progress being made? Overall, the plan is good, but there is more to do.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Lord Khan of Burnley) (Lab)]

My Lords, I appreciate the support from both Front Benches.

I believe that I speak for us all when I say that promises made to the people of this country ought to be kept. We have a duty to mend the broken physical and social infrastructure of this country. That cannot begin without first turning our attention to rebuilding trust in our democracy. That is why, through the plan for neighbourhoods, the Government have made good on what these 75 places were promised by the previous Administration, but on which they had no idea as to how they would follow through. Now communities can breathe a sigh of relief, before once more rolling up their sleeves and getting on with the job at hand.

Through our three strategic objectives of creating thriving places, building stronger communities and empowering people to take back control, the decade-long plan for neighbourhoods will both drive down deprivation and kick-start growth. The Deputy Prime Minister’s foreword to the prospectus notes that

“deprivation … for too long has been tackled with sticking plaster politics”.

The need for a long-term, holistic, grass-roots programme could not be greater. That has been underscored by the points raised today.

Last week, the Minister for Local Growth announced the plan for neighbourhoods in the other place and first made the Statement we are discussing today. I thank him and his officials for their hard work, which has helped to ensure that we can make good on the promises made to these places, while launching a new programme aligned with the missions of this Government. Places will not be left in the dark at any level. We will shortly also publish further technical guidance, outlining details of the requirements of the neighbourhood boards’ governors, and launch the associated submission process, so that places can swiftly reconfirm their board arrangements and boundaries.

The Government’s plan for neighbourhoods marks a major step in delivering their wider plan for change, with a relentless focus on economic growth to raise living standards. Through the plan for neighbourhoods, the Government will work in partnership with residents, businesses and grass-roots campaigners, alongside local authorities, to deliver for local people.

If we are serious about rebalancing the economy, nowhere can be left behind. As the Deputy Prime Minister wrote in the programme’s foreword,

“everywhere has a role to play in our national prosperity”.

This is just the start—no more sticking plasters, no more short-term fixes. Through the plan for neighbourhoods and the wider plan for change, this Government will fulfil their promise of change and a decade of national renewal.

As to the specific points raised by the noble Baroness, Lady Scott of Byrook, this is a new programme that puts communities at the heart of making these changes. The money will be spent on a broadened set of interventions, and it has completely different objectives. The locations and funding remain the same, because we are delivering on what places have been previously promised. It is the repeated breaking of promises that undermines trust in our democracy. We have doubled the number of interventions that communities can spend the money on. We are focusing on three long-term aims: building thriving places, strengthening communities and empowering people to take back control, instead of sticking-plaster politics.

We are giving local people their say by strengthening our consultations. It is not misleading to claim that this is new money. The long-term plan for towns was an unfunded commitment for which the previous Administration had no plan as to how that promise would be delivered. Our plan for neighbourhoods programme delivers on the Chancellor’s confirmation of funding at the Budget. This Government are committed to making good on what places have previously been promised. It is the repeated breaking of promises that undermines trust in our democracy.

The noble Baroness talked about levelling up. Levelling up failed because it asked communities to beg for funding and then tried to micromanage how it was spent. This is about the transfer of power and investment, so that communities can drive change themselves. In particular, the noble Baroness talked about economic growth in relation to the issues that she raised about tax changes. I cannot talk about tax changes as they are outside my remit, but on the point that the noble Baroness, Lady Pinnock, raised, we want to make it clear that we are putting power in the hands of local people to address deprivation and regenerate their local area. We are unleashing the full potential of places that have for too long been overlooked.

Neighbourhood boards, bringing together residents, businesses and grass-roots people, will draw up and implement plans for how they will spend up to £20 million of funding, whether for repairing pavements and high streets, setting up community grocers, providing low-cost alternatives or for neighbourhood watches to keep people safe.

On accountability, the relevant local authority will act as the accountable body for the funds, with responsibility for ensuring that public funds are distributed fairly and effectively. A monitoring and evaluation strategy will be published in the summer. This will set out the framework for assurance and accountability expected from grant recipients.

On the noble Baroness’s point about match funding and potential borrowing from local authorities, yes, there is clearly the opportunity for neighbourhood boards to make that decision. But the point is clear: no more top-down approach; this is bottom up, with local authorities leading the way and local people deciding what they want most for their communities.

On the places that will get funding, all 75 towns across the UK that were originally selected to receive long-term plan for towns funding will receive the plan for neighbourhoods package. The long-term plan for towns programme was never fully funded. The money was supposed to come from the government reserve, which has been spent three times over. That is why we are making good on those commitments, giving each of the 75 places certainty that they will receive up to £20 million of funding and support over the next decade.

[Baroness Armstrong of Hill Top (Lab)]

My Lords, I thank the Minister for ensuring that we get the chance to speak on this Statement and to ask questions. I am name-checked in the Statement because, in my previous life as a Minister, I introduced the new deal for communities along with my boss, John Prescott. It has been evaluated as the most effective neighbourhood and regeneration programme in the last 45 years.

I now chair the Independent Commission on Neighbourhoods, and I am reliving all that. We are changing what we are looking at, which involves asking how we ensure that the poorest neighbourhoods in our country get the opportunity to develop, find opportunities for the most disadvantaged and build effective partnerships with government, local government, civil society and, very importantly, local people, but also with public services in those neighbourhoods.

Does the Minister see this as the first step, as I hope? We in the independent commission have identified 613 neighbourhoods across the country which are the most deprived but where we know that change can happen. They are the areas that most need the five missions of the Government. With the right support and development, they will be able to bring real growth because they will be able to link economic and structural development with social development and the building of social capital. These are the essential elements to ensure that neighbourhood policy works right across the board. I understand why the Government have made sure that the commitments made to the 75 towns have been respected. However, we can do much more by investing and working with the neighbourhoods that I am talking about.

[Lord Khan of Burnley (Lab)]

My Lords, I extend my appreciation to my noble friend for all the work that she does in this area. She speaks with great experience, skills and depth of knowledge.

I do not want to pre-empt the upcoming spending review by making any commitments to expansion, but I recognise that other places want to join the plan for neighbourhoods—this was raised also by several Members in the other place. While I cannot make any commitments, the Government welcome correspondence from interested parties. We have taken inspiration from the new deal for communities, the work of John Prescott that my noble friend was talking about, which provided the stability of long-term funding, backed by the support of central government. We have learned what has worked well in the past and are utilising that same methodology.

[Lord Young of Cookham (Con)]

My Lords, like other noble Lords, I welcome the Statement, which builds on initiatives from previous Administrations. The noble Baroness, Lady Armstrong, referred to her pioneering work at the beginning of this century. Going back even further, I was a Minister in the Department of the Environment in the 1980s. We had inner-city partnerships, where the Government provided two-thirds of the money and the local authority one third. We funded a range of projects exactly the same as the projects that are hoped for under this programme.

I can see a range of bids coming to the neighbourhood boards. The noble Baroness, Lady Pinnock, mentioned improved recreation facilities. Looking through the Statement in the other place, I see there were demands for community shops. People may want to rescue a theatre. However, the first priority listed in the Statement is the modernisation of social housing. I am all in favour of social housing being modernised, but there is a mainstream programme to do that. To what extent will the smaller projects that I have been referring to and which the programme is aimed at be swamped by the modernisation of social housing? Is that really one of the objectives, or is that put in to patch up a deficiency in another mainstream government programme?

[Lord Khan of Burnley (Lab)]

My Lords, the noble Lord makes a very interesting point. My only answer at this time is that, of course, as a country, we want to see the modernisation of social housing. The Deputy Prime Minister has announced that 1.5 million houses are to be built in this Parliament, and that is still the ambition, but the specifics of what the money can be spent on are entirely up to the local regeneration neighbourhood board—the people. They need to look at what the priorities are for their area and work out how they can put this £2 million a year into various projects. If that means putting some money into modernising housing, it is a decision for them to reflect upon. As central government, we have our focus and manifesto commitments on housing overall, but whatever is needed in the local area is for the board to deliberate and decide upon.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I entirely agree with this Statement that, in the former Government’s levelling-up programme, the Tories’ instinct was to “hoard power”, and that “inflexible restrictions” were placed on how this money could be spent. I entirely welcome what the noble Lord just said: that it is up to the town’s boards and the local communities to decide how money will be spent, which appears to be the opposite of what the Tories were doing. Except that is not what the Statement actually says. It talks about the broadened objectives, which I think are the three long-term aims elsewhere in the Statement:

“These new, broadened objectives will give communities the tools to make informed decisions, with a list of interventions aligned with this Government’s central missions”.


So, which is it? Do they have to be aligned with the central missions—the famous five pillars we have all heard about many times—or with the long-term aims in this Statement, or is it that the communities can decide for themselves what to spend the money on?

[Lord Khan of Burnley (Lab)]

My Lords, I have already spoken about our three main objectives and what we want to do, but it is ultimately up to the local people to decide what they want to do. It is not mutually exclusive for local people to decide areas of improvement in their local communities which are not in our missions. The whole idea is to drive growth, to have safer streets and to have neighbourhoods that people take pride in. That is the focus of this announcement: to ensure that people can feel pride in their area but can also take control and decide for their future.

[Lord Lucas (Con)]

My Lords, I like the idea of the structure very much, as I did with the previous Government, but how do this Government propose that local people will hold the boards accountable for the choices that the boards make? As the noble Baroness, Lady Pinnock, said, there is great potential for all the money to disappear into the local swimming pool because that is what the councillor on the board likes. Is a structure being produced that will allow local people to influence the board’s decisions?

[Lord Khan of Burnley (Lab)]

To reiterate a point I have made before, local authorities are part of the whole process. They will work with central government and my department in particular to have regular, continuous monitoring of how the work is going. That is how we will communicate, but local authorities are heading part of this and they are signing off the board.

[Lord Jamieson (Con)]

As usual, I will have to talk about my interest as a councillor in Central Bedfordshire. Unfortunately, no one in Central Bedfordshire received the money so I do not have the interest that the noble Baroness has. I just wanted to understand the accountability and the structure. We are going to have community boards. Who will the money, and the decisions on it, lie with? Will it be the board or the council? Who will be the accountable body for the money? Who will determine who will be on that community board? Several noble Lords have mentioned democracy and who the representatives of the people are, so can the Minister please clarify that?

[Lord Khan of Burnley (Lab)]

The relevant local authority will act as the accountable body for the funds, with the responsibility for ensuring that public funds are distributed fairly and effectively. A monitoring and evaluation strategy will be published in the summer. This will set out the framework for assurance and accountability expected from grant recipients, so watch this space.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I apologise, I should have declared that I am vice-president of the Local Government Association and the NALC before that last question. I am still looking for a bit of clarity, so perhaps I can come at this question another way. If a local community decides that it wants to prioritise public health, improving its green spaces, or tackling child poverty, then none of those things, without a great deal of verbal gymnastics, appears to line up with the Government’s five missions. Focusing on public health and improving green spaces can be made to look as if they are good for growth, but they are not clearly directed at it. Can the Minister confirm that the Government would consider any of those things entirely appropriate to spend this money on?

[Lord Khan of Burnley (Lab)]

My Lords, I cannot pre-empt what local authorities and local neighbourhoods will want to do in their particular areas. The whole idea behind the exercise is to give more power to local people. However, on the point that the noble Baroness is alluding to, there will be a plan called the regeneration plan, which will be submitted to central government. More guidance and a framework will come out on this. The regeneration plan will set out the board’s vision for the next decade, alongside a more detailed investment plan for the first four years of the programme. The submission window for regeneration plans will open in spring 2025 and close in winter 2025. Further details as to the content, form and submission timetable for the plans will be set out in the forthcoming guidance.

We know that places have worked hard to engage their communities and develop their long-term plans for the previous Administration’s long-term plan for towns. That progress is not for nothing and should not be undone, nor should places undo their governance arrangements. Communities should feel empowered to build and adapt their existing plans. Our reforms seek to build on and improve the previous programme with a new set of strategic objectives aligned to this Government’s plan to kick-start growth to be delivered by a broader range of policy interventions.

[Lord Lucas (Con)]

My Lords, in my area, Eastbourne, the process of going unitary will mean that Eastbourne Borough Council is abolished, and we currently have no town council. Which council will be involved with our neighbourhood fund? Will it be the East Sussex unitary council or some new council created in place of Eastbourne Borough Council?

--- Later in debate ---

[Lord Khan of Burnley (Lab)]

My Lords, the noble Lord asks in particular about an issue of devolution. I say again that whichever council is established through negotiations as per the usual channels, it is up to the local area and the neighbourhood board to establish whether it is to be the recipient of funding. I cannot comment on any individual examples—it would not be appropriate—but it is for whichever area has received the funding to decide how it wants to move forward its proposals. There are boundaries as well, and there is clarification that it can receive about what is and what is not its boundary.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I will follow on from the questions about the membership of the neighbourhood boards. The Statement says that they

“will include representatives from social housing and workplace representatives and, in Scotland, Wales and Northern Ireland, the representative in the devolved legislature”.

I have no objection to any of those, but it is a rather limited list. Does the Minister agree that these neighbourhood boards should have representatives for young people, disabled people and, where relevant, minoritised communities?

[Lord Khan of Burnley (Lab)]

My Lords, the noble Baroness makes an interesting and good point about having diversity and inclusion from a cross-section of society. We will set out further guidance on this issue. I will say again that it is for local neighbourhood boards to come out with proposals that will benefit their area, and the best benefits are where everybody is included as part of the whole deliberation, discussion and finalisation of neighbourhood boards.

[Baroness Scott of Bybrook (Con)]

Can I get some clarification? Are the Government going to clarify in some guidance who should be on these boards, or will the composition of these boards be something that local councils decide? That is very important. I come back to the unions: in some areas of this country there may not be any union representatives who want to be on the board but there may be in others. Will that be something that the Government say has to happen, or will it be purely a local decision?

[Lord Khan of Burnley (Lab)]

My Lords, I said repeatedly in the Statement and say again that it is for the local neighbourhood boards of the 75 places to decide who is on their board, with the guidance of the local authority. Many of those 75 places have already created neighbourhood boards and regeneration plans and, again, it is for them to adapt those. We will be giving more framework guidance—in particular, clarification on the capacity funding.

My noble friend Lady Armstrong talked about the new deal for communities led by John Prescott. It has been clear from the evidence that on the year-zero plan, where local authorities can plan before the funding is distributed, in particular on paperwork and architectural designs for capital projects, there is a lot to learn from the evaluation of the new deal for communities. We are following that plan. We have been inspired by the new deal for communities and what it achieved for our country, and we will implement this plan for neighbourhoods to make sure we give more power back to regional and local areas in the 75 places. I reiterate that it is a local-led initiative—it is bottom-up, not top-down.