| Regeneration funding called into question |
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| Friday, 09 November 2007 | |
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British towns and cities in receipt of substantial urban policy funding designed to bring them up to the economic standard nationally are declining when judged by a whole range of indices.
That is the worrying conclusion of ‘Cities Limited’, a report by Policy Exchange, the UK’s leading centre-right think tank, which calls into question the value of the plethora of urban regeneration schemes delivered by a myriad of different agencies. Spending on the 14 core urban regeneration schemes in the last decade totals £30 billion of public money. Rather than looking at the merits of individual programmes, the research team examined the overall impact of urban policy funding on a representative sample of 18 British towns and cities, including Sheffield, Liverpool, Hull, Southampton, Coventry, Leicester and Glasgow, which have been in receipt of substantial urban renewal funding streams over the last decade. Gross value added The sample covered a wide geographical range and towns and cities of different sizes. These ‘urban policy towns’ were judged against the national average and a smaller sample set of successful towns - Edinburgh, Windsor-Maidenhead, Peterborough, Bristol, Milton Keynes and Swindon. The Policy Exchange team, led by Dr Tim Leunig of the London School of Economics, looked at the towns’ and cities’ performance on a range of measures, principally gross value added (GVA) which details the contribution people are making to the economy, personal income, and unemployment. On GVA, the gap between ‘urban policy towns’ and the national average has widened from them being 9 per cent behind in 1997 to 13 per cent behind in 2004, the latest year for which figures are calculable. The successful towns sample set, conversely, increased their lead over the national average. Marked pockets of unemployment On personal income, the ‘urban policy towns’ began 17 per cent behind the UK average in 1997 and ended 18 per cent behind in 2005. Again, successful towns which do not receive substantial urban regeneration funding improved on their position of a decade ago. The authors claim that there has not been any improvement in unemployment levels in the urban policy sample since 1997, relative either to the national average or to the sample of successful towns. Unemployment is still a stubborn 50 per cent higher in ‘urban policy towns’ than it is nationally or in successful towns. They say that this suggests that Britain does not have an economy-wide unemployment problem, but rather quite marked pockets of unemployment in some big cities. The research team also found that urban policy towns are showing no signs of improvement in terms of other indicators such as house prices, business start-ups, life expectancy or educational attainment relative to the national levels. No effect Policy Exchange’s chief economist, Dr Hartwich, who commissioned the research, said that towns which receive large amounts of urban policy funding are not converging to the UK average. If anything, they are slipping farther behind while successful towns are stretching their lead. Rather than poor cities and rich cities converging economically, they are doing the opposite. He added, “While we should not give up on urban policy, much of the £30bn spent in the last decade appears to have had no effect. Britain needs to consider policies that will make it easier for people to work in places that have high productivity and therefore offer high wages. Urban policy should provide towns and cities with incentives to grow, prevent ghost towns from appearing, and give towns and cities much more freedom to decide how to use regeneration money.” Local Government Minister John Healey said he “totally” rejected the claims made in the report. He added that life chances in areas receiving neighbourhood renewal funding continue to improve with mortality rates from heart disease falling by 27.5 per cent since 1997, crime rates by 15 per cent between 2003 and 2007 and the coalfields programme creating 16,000 jobs since 1996. "The scale of positive change is clear, however deep-rooted pockets of deprivation still exist which no one single approach can tackle," Healy said. He highlighted the £2.2bn so-called Pathfinder investment in housing renewal to which the Government has committed itself under the comprehensive spending review announced in October. High risk approach However, Sir John Bourn, head of the National Audit Office, said on Thursday that housing market renewal is “a radical programme but a high risk approach”. He added that, while there have been physical improvements in some neighbourhoods, it is unclear whether intervention itself has led to improvement in the problems of low demand and that in some cases intervention has exacerbated problems in the short-term. “The Department for Communities and Local Government needs to make sure that pathfinders not only delivers its regional development plans, but also complements the broader regeneration of areas contributing to better schools and transport links,” Sir John said. Related articles Related links |
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