Regeneration

Mark Pawsey Excerpts

Thursday 19th April 2012 Westminster Hall

[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 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.

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[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 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. 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 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.

--- Later in debate ---

[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.

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 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 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 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.