Regeneration

Simon Danczuk 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 ---

[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 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.

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[Simon Danczuk]

The figures that the Minister presents show those cities during a period when they were being regenerated by a Labour Government, and that is why they were successful in increasing the business rate take—they were being helped and supported in regenerating by a Labour Government.

[Grant Shapps]

I am grateful to the hon. Gentleman for his intervention, which may just describe a fundamental difference in belief and understanding between the Government and the Opposition about what drives an economy. If by regeneration, the hon. Gentleman simply means how much public money we can pump in to create public sector jobs in order to continue to sustain an unsustainable future, then perhaps he makes a point. My understanding of economics and the economy says that unless we are able to create wealth in this country and produce jobs that are not simply the Government employing people but the private sector employing people, we will never see real growth.

It is good to see that 500,000 new jobs have been created in the economy since the election and that unemployment has fallen this week. That shift is fundamental; it is important and it happens through regeneration, which excludes things such as the regional growth fund. It includes the enterprise zones, to which hon. Members have referred. The hon. Member for City of Durham (Roberta Blackman-Woods) made some good points about whether such schemes can end up displacing activity, but I do not believe that that will be the case. Hertfordshire, in my part of the country, does not have an enterprise zone, and I do not think that all of our businesses will get up and move to an area that does. Enterprise zones are about creating the right economic dynamic for new businesses, which is really important.

Local enterprise partnerships are a really important driving factor. In trying to understand our approach to regeneration, hon. Members talk about having some big Government document. Essentially what the Select Committee report says is that our document is too thin. From what I have heard and read in the report, it says, “What we need is a big document. If we had a big document somehow the country would regenerate better.” That has been tried and it has failed time and again. What we are giving the communities in this country is the ability to run their own regeneration policy and to do it through schemes such as the enterprise zones and the local enterprise partnerships, which make a real and sustainable difference.

I have heard some very impassioned speeches this afternoon about what is happening in different parts of the country, including Northampton Alive, which shows how communities can and will, if they have the leadership and determination, come together to regenerate.

--- Later in debate ---

[Grant Shapps]

My hon. Friend is absolutely right and completely gets it. The point is if this country is to thrive and survive it needs inward investment. It is a fantastic example of how a community can get together and work right the way across the local economy to bring in people from all different aspects—the local council, the county council, the MPs, the councillors, the business people, the academics—and actually grow an economy.

I am only a third of the way through the list of different things that I wanted to highlight let alone the many pages that are highlighted in this toolkit. UK Regeneration is a private enterprise that is able to raise money from the private sector and then get involved in regeneration. It is raising £30 million from Barclays Capital to regenerate areas in Nottingham. I understand that some people find it difficult to appreciate that to invest privately can be good not just for private investment but for regeneration. It is absolutely working and it is happening on the ground and we have heard the scale of ambition from UK Regeneration. The Empty Homes Agency is working hard to fill empty homes. In the context of regeneration, I am surprised not to hear from Her Majesty’s Opposition, or perhaps in the report, more of a welcome for the fact that 20,000 homes that were empty are now full. Since the election, the number of empty homes has fallen faster than at any time since 2004, because our regeneration policy, which says, “Let’s stop knocking down homes and instead fill the ones that are there,” is starting to work.

City deals—one has just been agreed in Liverpool, and more are coming along—are enormously important in delivering exactly the kind of localism that I know the Committee welcomes, because it has investigated how localism, which did not exist previously, could operate. When one adds up things such as local enterprise partnerships, enterprise zones and city deals, one starts to appreciate that it is a massive transfer of power. I know that it is difficult to lose the idea that everything must point to Whitehall and Westminster: “When is the Minister going to come up with an enormous report to back all this up?” Actually, transferring those powers to our great cities will enable a lot of regeneration to be done much nearer the ground.

[Simon Danczuk]

rose—

[Grant Shapps]

I want to finish, if the hon. Gentleman does not mind.

The Portas pilots were touched on but not mentioned in great detail. They are an attempt to get behind the regeneration of our town centres. Again, interestingly, the Select Committee Chairman did not refer to retail regeneration of run-down town centres large and small throughout this country. To me, that is what regeneration is all about, which is why I am proud that we have launched the Portas and that 371 towns have applied. They will have the opportunity to be Portas winners, and even if they are not, they will have the opportunity to take part in their own regeneration.

Brief reference was also made to the national planning policy framework, which is an enormous fillip for those who are keen for regeneration to take place in this country and who want to make it much easier. We have the get Britain building fund for housing and the Growing Places fund. My hon. Friend the Member for Harrow East (Bob Blackman) mentioned a road in Park Royal that was driven through, enabling much more private sector investment. That is the fund available. It is large—hundreds of millions of pounds—but again, the report barely refers to it.

Decent homes funding was mentioned by several hon. Members, including the Opposition Front-Bench spokeswoman. I absolutely agree that it is a huge priority. That is why, given that the decent homes programme failed to finish on target for 2010, I am proud that we have put another £2.4 billion into finishing the task. It still will not be quite finished, but given the overall economic circumstances, I would have thought that that said a huge amount about our approach to improving homes and regenerating communities. I have discussed how the new homes bonus can be used.

I had hoped to have time to mention all the comments made by hon. Members that I thought were good, but I see that time has beaten us. This Government are absolutely passionate about regenerating this country. We could not be more attached to its importance. We have considered what happened in the past; I think that my earlier comments show that I have considered in great detail the No. 1 so-called regeneration programme in this country, the disastrous housing market renewal programme. If Her Majesty’s Opposition’s response to the report is to call for more of the same, I say no, absolutely not. We will not continue to devastate communities in that way. Instead, we will hand them the power, the tools, the knowledge and, for many of the schemes that I have described, the money to get on and do it themselves.