Regeneration revisited
Author: Alex Thomson, Localis, in Public Finance |
Councils have to look for new ways of regenerating our towns and cities and should consider alternatives to the Private Finance Initiative such as Local Asset Backed Vehicles.
Can a price be put on successful regeneration? The numbers of jobs created, increased gross domestic product per capita, rises in business rates and improved health and well-being are all more or less tangible indicators that might demonstrate successful regeneration.
But can we truly comprehend the value of a transformed place? Probably not. However, the tangible benefits are enough to encourage the public sector to keep trying, despite the scarcity of public sector finance that for a long time underpinned the recent history of regeneration programmes; and the sneaking suspicion that some of these programmes did not achieve value for money.
With the abolition of regional development agencies and the government’s drive to devolve responsibility to the lowest level, councils are now the fulcrum of regeneration efforts, but are there enough tools for regeneration available?
Finding new sustainable funding sources has to be the number one priority. Localis will be publishing a major report shortly on funding for local infrastructure, which will address this burning issue. One of the options that we touch on is Local Asset Backed Vehicles (LABVs), which could have more potential than the Private Finance Initiative.
Councils offer up public assets and the private sector brings in the skills and finance needed to develop it through a partnership arrangement. Both reap the benefits of successful development. The concept is not new, but when funds are scarce, a model that doesn’t require upfront cash from the public sector may become increasingly popular.
LABVs also avoid some of the worst excesses of PFI – high start-up costs, bureaucracy and the impression that the public sector doesn’t get ‘good value’. They follow an increasing trend for councils to work in partnership with the private sector on delivery, rather than wholesale outsourcing of a service or objective.
However, access to financially viable regeneration vehicles is one thing; steering such vehicles in a direction that the community would approve of is a very different matter. Councils are better placed than most public agencies to take the pulse of local people, but they themselves would accept that community sentiment is not always easy to capture and that, occasionally, negative interests can stymie schemes with wider-reaching benefits.
Council leaders have a democratic mandate to support their decisions, and this mandate will be clearer still in areas with directly elected mayors. If a council administration goes against the wishes of a community, at the very least it can be held accountable through the ballot box – much more than can be said for central agencies. Councils should relish this opportunity (and the associated risk), not flee from it.
And indeed, despite this time of austerity, many councils are pushing ahead with major regeneration schemes. For instance, the London Borough of Barnet is promoting a major multi-dimensional programme for a new town centre at Brent Cross Cricklewood. This will include enhanced transport facilities, new Northern Line and Midland Mainline stations, a new high street and significantly improved green space, thousands of new jobs and new housing.
Cheshire West & Chester Council has also embarked on a major regeneration scheme, just having finished consulting on its One City master plan, setting the direction for public and private development in the city over the next 15 years. The plan covers a number of schemes, including the development of the historic city centre and the repurposing of land on the eastern edge of the city into a new business quarter.
Chester also has an opportunity to think creatively about alternative investment opportunities as the city has been announced as one of the government’s community budget pilots, meaning a potential alignment of public agency budgets totalling £3-4bn.
The desire to regenerate communities remains, quite rightly, at the top of local government’s agenda. But, if councils are to lead the charge on regeneration, they must get to grips with a different set of tools.
Clamouring for multi-million pound grants from central government has never been less likely to bear fruit. Instead, ambitious councils should embrace their role as local brokers for regeneration – the government has never been more willing to listen.
This means councils making the most of the public assets at their disposal, being open to supporting alternative vehicles of private investment and linking these to national policy opportunities such as city deals and funded strategic infrastructure programmes. However, when chasing after scarce funding, they must be careful not to let down their key shareholders: local communities.