In the first of a series on policy options in the run up to the General Election, John Griffiths examines company involvement in regeneration schemes and the wider ‘social inclusion’ agenda, should Labour win an expected second term.
Business involvement in local communities can be vital to successful regeneration. Businesses themselves have an interest in this area both as corporate citizens, but also for their long-term commercial advantage through the development of new products and more robust markets.” (Social Exclusion Unit: Enterprise and Social Exclusion)
Across the UK, the once distinctive roles of the public, private and voluntary sectors have become increasingly blurred. This has been happening apace since May 1997. Prior to the election, “New Labour” went to great lengths to woo business, not least in its pledge to practise fiscal prudence. In office, the government’s continuous courting of private enterprise has been indicative of how far Labour’s intentions extended beyond getting elected, not only to winning a second term, but also to reshaping the political landscape of the UK. Nowhere has this been more apparent than in its ambition to partner business in the regeneration of deprived communities.
Profiting from Partnership
The government has put company involvement at the heart of its flagship regeneration programmes; everything from supporting childcare (Sure Start), sponsoring failing schools (Excellence in Cities) and delivering jobs for the unemployed (New Deal), to regenerating inner cities (National Strategy for Neighbourhood Renewal). For companies with even a modest commitment to community involvement there have been unprecedented opportunities to work in partnership with the public sector, and to reap the rewards. A recent report by the Local Government Information Unit shows that Labour, rather than abolishing the ‘quango state’, has made business-led quangos in regional development, housing, education and training even more central to the government of England and Wales. (For a guide to government regeneration programmes see http://www.regen.net or http://www.regeneration.detr.gov.uk )
“New Labour Isn’t Working”
Recent headlines, such as the announcement that the pre-election pledge to get 250,000 young people off welfare and into work has been achieved, hide disturbing facts about the ineffectiveness of regeneration programmes. This achievement of the New Deal is only true if one defines a job as anything lasting 13 weeks, as the government does. In spite of such modest goals, even the most economically buoyant regions of London and the South East only report a New Deal job-entry rate of around 25%.
Major regeneration programmes, including both Sure Start and the £800m New Deal for Communities, are struggling to spend the budgets allocated to them. This may owe something to the government’s introducing no fewer than 48 different schemes since May 1997. Action Zones for Employment, Health and Education have all failed to achieve the levels of private sector leverage for which the government had hoped.
Bombarded by initiatives, each with its own rules, requirements and terminology ( gateways, pilots, pathfinders, prototypes, deals, zones , even trailblazers ), some businesses have understandably retreated, baffled by the bureaucracy and apparent duplication.
What Works?
In spite of these weaknesses, the government has stuck firmly to its mantra ‘ What Works? ‘ Paradoxically the raw pragmatism so characteristic of New Labour has brought almost as many pickings for business as the ideological fervour of previous Conservative administrations. Markets that remained the preserve of the state under the Conservatives (eg. the benefits system) have been thrown open to different public-private partnerships under Labour.
•Manpower and Cap Gemini/Ernst and Young joined forces with the Employment Service to create a new company – Working Links Ltd ( http://www.workinglinks.co.uk ) – to win major welfare to work contracts in seven cities around the UK. This private/public hybrid is a harbinger of future delivery agencies. Reed, Nat West and the Shaw Trust won contracts to deliver the new ONE Benefits Agency pilots.
•ScottishPower has become a powerful advocate and practitioner of business involvement in developing locally-based learning centres which engage its workforce, their families and the wider community in learning.
• Major technology companies including Cisco, FI Group, Sema and Microsoft , are taking a leading role in the Digital Exclusion Task Force, to ensure that the benefits of IT reach throughout society.
•Lloyds TSB have invested in the Portsmouth Reinvestment Trust – a new community financial institution – not through its charitable foundation, but through the mainstream business.
The unifying feature of these examples is that they are driven by hard-nosed business priorities. Americans are already calling this ‘venture philanthropy’, where businesses test new products and services in partnership with other sectors. It generates an energy and innovation which the government is keen to harness in a second term.
What Next? – Drafting the manifestos
The clearest pointers to Labour’s thinking on future regeneration policy are found in two new documents, the Urban White Paper and the National Strategy for Neighbourhood Renewal (see http://www.detr.gov.uk and http://www.cabinet-office.gov.uk/seu/ ). Among the ideas bubbling up in the manifesto drafting process are:
•Coordination and coherence – the government is committed to rationalising its regeneration initiatives and achieving greater coherence between the work of different departments. The new Regional Co-ordination Unit is intended to deliver more joined-up action across government. Labour strategists have also floated the idea of carving a new Social Inclusion Ministry created from John Prescott’s overblown ‘super ministry’, the DETR.
• The welfare-to-work programme is already undergoing changes to make it more employer driven. This shift is arguably the most important change in 25 years of employment policy. Welfare to Work Mark 2 will involve a much greater engagement by employers, working with dedicated or sector-specific ‘intermediaries’ (modeled on US-style labour-market organisations) in finding, training and keeping the workforce they need (see http://www.newdeal.gov.uk ).
• Changes are also likely to the fiscal and funding instruments which have hitherto been deployed to deliver regeneration, including an English Cities Fund to provide venture capital for mixed use developments in run-down areas. The Social Investment Task Force (an initiative of the Development Trusts Association and the New Economics Foundation ( http://www.neweconomics.org) ) recommends a number of new tax incentives to lever more private investment in regeneration areas, modelled on aspects of the Community Reinvestment Act in the United States. The think tank DEMOS ( http://www.demos.co.uk ) has proposed a Corporate Freedom and Responsibility Act, gearing tax liabilities to the degree to which a range of environmental and social costs are already paid for by a company – eg tackling pollution, developing employees’ skills, providing staff benefits, supporting community projects, etc.
• The new Urban White Paper proposes to introduce Town Improvement Zones (a variation on another American model, the Business Improvement District) which gives businesses the incentive to lead in both shaping and delivering regeneration of inner-city areas.
Looking beyond Labour to the other parties, the Conservatives say they would scrap New Deal and set up several privately-led regeneration companies (Urban Development Corporations revisited?) to address inner-city issues. The Liberal Democrats (more significant in the context of coalition in Scotland and Wales than in UK government terms) favour a simplified funding mechanism, the Single Regeneration Grant, and Site Value Rating to incentivise the clean-up of derelict areas.
Whatever the political hue of the next government, pressures and incentives for companies to partner with public and voluntary organisations in the regeneration of Britain will remain unrelenting.
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