Reviving the cities: past programmes, future hopes
February 01, 1996
It is in the inner cities that companies have been most exhorted to get involved. With the general election approaching, this first article in a series examines the prospects for urban policy.
Urban policy in Britain has been characterised by special initiatives and frequent changes. Research has shown a short-term impact from particular schemes, but with only limited lasting change. The patterns of deprivation in urban areas have not significantly changed in 30 years.
The Urban Programme was launched in 1968, the first programme targeted specifically at inner cities. Resources were limited to ?30 million and centred on Home Office. Changed in 1976, Inner City Partnerships were the vehicle, focussed on economic as well as social issues. Resources grew and the larger government main programmes ‘bent’ towards urban areas. But getting the local community and the private sector involved proved difficult, as to getting agreement between central and local government.
Change of government
1979 saw a change of government and a change of emphasis, with Action for Cities. The urban programme remained but new a plethora of new initiatives were launched: task forces, city action teams, enterprise zones, development corporations. Spending rose gradually during 1980s and the grant funding regimes, such as urban development grant, regeneration grant and city grant, focused on encouraging partnership with the private sector. Greater success in getting private and community involvement did follow, but difficulties were still encountered with confusion due to the number initiatives, the lack of a regional focus, and poor coordination between government departments.
In 1988, a white paper on training started the long process of setting up training and enterprise councils, TECs, (Local Enterprise Companies in Scotland). They were named to symbolise their remit was not just running government training schemes locally but economic too. Most have succeeded in developing good links with education, the European Commission, Business Links and other partnership initiatives. However their resources are overwhelmingly linked to training, not economic regeneration, so few really succeeded in driving forward economic development. The government’s decision to exclude elected local council leaders from their boards did nothing to foster good relations with local authorities.
Partnership and competition
From 1991 onwards policy was focused on achieving partnership and competition for funds. City Challenge was intended to ‘bend’ main programme spending, and attract private funding, to a specific geographic area for five years. They have very clear output targets and local authorities were given a strategic role in setting them up. They are now nearing the end of their lives, along with the Urban Development Corporations. But again difficulty is experienced in getting a coordinated approach from separate government departments; ‘annuality of funding is too constrained; and large needy areas are left out.
The Single Regeneration Budget (SRB) has sought to address these concerns, but the regional government offices which administer it are now being criticised for lack of transparency and consistency in decision-making. Resources are spread too thinly, the long term strategic dimension is more difficult.
Under the government’s ‘challenge’ approach, competition is used to allocate resources and leverage is the main criterion for success. This is now being extending to local authorities main capital allocation (permission to borrow). Already a 10% top slice is allocated competitively from the European Regional Development Fund, worth ?150-?200 million, through Regional Challenge; the government is seeking EU Commission approval to increase this percentage.
Total spending on urban programmes in 1995/96 is ?1.3 billion, with the SRB taking 10%, but due to rise to half over four years as other programmes wind down. SRB Round One started in April 1995; Round Two has just been announced; Rounds Three and Four are promised. Local authorities submitted just over half of the 329 bids in Round Two, with the private sector in the lead in just 19 (although involved in 236).
Which way forward?
The central question of urban policy is how to allocate the extra funds which are available for redistribution between prosperous and poorer areas. How much should be given to those with the most objective need and how much to those who can make most effective use of it. Competition is not the real issue, but criteria, as there will always be competition for scare resources.
With political change in the air, Labour’s plans are under scrutiny. Indications of its approach are emerging from City 2020, an initiative by Keith Vaz MP. The main elements are:
maximise use of existing resources, do not assume more;
equal partnership between the three sectors at local level;
basic resource allocation on objective measures of need, sufficiently sophisticated to spot ‘pocketed deprivation’ within more prosperous areas;
a people based, bottom-up approach;
an attempt again to ‘bend’ main spending to target areas, especially on transport, housing, education, industry, employment and environment
government regional offices to be kept, with a minister for urban regeneration;
SRB to become Civic Grant;
each local area applying for Civic Grant must establish Civic Forums, serviced by local authorities but independently constituted, with equal representation from all three sectors
these will prepare a Civic Plan, and then allocate funds and monitor performance;
Diverse influences
However a different emphasis is emerging from the Labour-dominated local government associations. They see local regeneration strategy as the primarily responsibility of local councils, albeit drawn up in partnership with the private sector. There is also more emphasis given to the regional dimension.
Should the Liberal Democrats have any influence, the differences with Labour are of emphasis, not substance:
greater willingness to give power to partnership bodies, such as neighbourhood development agencies;
a stronger regional focus;
less wedded to universality and so prepared to target resources only on people on need;
keener on education and the environment than job creation.
Unanswered questions
There are still many unknowns
how much will local authorities be in driving seat?
what is the role of the regional tier – will the proposed new regional development agencies be restricted to venture capital for small businesses or how do they fit with the regional committees, Labour’s first step, if demanded, to elected regional government?
what is the intended role of TECs, the police, opted-out schools and health authorities?
How is greater private sector involvement going to be achieved, as most business people are already too busy running their companies?
similar problems existing with greater local community participation
The biggest unknown is the impact of Gordon Brown’s ‘big idea’ to eliminate youth unemployment and long term unemployment. One school of thought is that getting people back to work and so putting money into people’s pockets is the most effective to revive inner city areas. And it’s true that the big capital regeneration schemes of the 1980s have benefited few local residents. The logic is then to sweep away all the special schemes and channel all resources into the one objective.
Whatever the precise policy prescriptions, all parties are now singing in chorus the praises of private sector involvement. The pressures on companies to work in partnership with government is likely to get stronger, not weaker, if a more interventionist but still resource limited new government takes over.
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