Regeneration

Bob Blackman Excerpts

Thursday 19th April 2012 Westminster Hall

[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.

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 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.

--- Later in debate ---

[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 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.”

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.

--- Later in debate ---

[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 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.