Communities and Local Government

• Cities and regions
• City Challenge: interim national evaluation

Cities and regions

City Challenge: interim national evaluation

Although this report was commissioned by the Office, the findings and recommendations are those of the authors and do not necessarily represent the views of the Office of the Deputy Prime Minister.

Regeneration Research Summary No. 9 1996
CITY CHALLENGE INTERIM NATIONAL EVALUATION

City Challenge allocated £37.5m each over five years to 31 Urban Programme authorities to achieve self-sustaining regeneration of their designated City Challenge areas on the basis of two competitions. In the first round, 17 local authorities covering 15 areas were invited to compete for City Challenge status. They were chosen to represent the wide range of circumstances across the country and their ability to work up imaginative plans quickly. Bids were submitted by cross-sectoral Partnerships. Eleven areas were selected as Pacemakers to pilot the initiative. For Round 2, starting in April 1993, all 57 of the then Urban Programme Authorities were invited to bid There were twenty winners out of fifty tour bids. City Challenge was innovative because it was competitive; it adopted a comprehensive and strategic approach; it was targeted upon specific areas, time limited, output driven and based upon partnership.

Key findings City Challenge is the most promising regeneration scheme so far attempted. There is widespread support from players across the range of sectors for most aspects of City Challenge's design. They see it as an advance on previous urban regeneration initiatives particularly because of its partnership basis, community and private sector involvement, strategic and targeted approach and its implementation by dedicated, multi-disciplinary teams. In the period of the study, City Challenge nationally more than met its leverage and output targets. Individual Partnerships varied considerably both in the level of their targets and the extent to which they met them. Competition has advantages as a management tool. It galvanises cross sectoral involvement, requires commitment to future delivery, produces more positive and imaginative proposals for change. For some people, it is more problematic as a basis for allocating urban resources in being potentially divisive and penalising areas without conspicuous development opportunities or the capacity to deliver. The scale of the City Challenge resource and its areal targeting makes possible a more strategic, integrated approach to regeneration. City Challenge allows developments requiring substantial pump priming to take place. It speeds up developments which would otherwise be slower and more piecemeal. It triggers further investment and related activity. It adds value by linking separate programmes, agencies and types of expertise. The study found that City Challenge is influencing more widely the way in which organisations work together. It encourages cross-sectoral understanding. It stimulates more corporate working within local authorities. It leads to tighter project management. Partnership at programme and project level is bringing new alliances in other areas.

The Department of the Environment commissioned this interim national evaluation of City Challenge in 1993.

The study's main aims were to:

• provide practical results which could inform continuing implementation;
• assess the specific elements which distinguished the initiative as a national strategy for urban regeneration.

The research methodology combined quantitative and qualitative data:

• baseline data for all 31 City Challenges;
• expenditure and output data for all 31 City Challenges for years 1-3 for the Pacemakers and 1-2 for Round 2s;
• case studies in 14 City Challenge areas;
• a postal survey of key partners in all 31 City Challenges;
• case studies of 2 areas which bid for but failed to win City Challenge status.

A national framework

City Challenge is a national initiative implemented in different local circumstances. Its aim is to bring sustainable and integrated regeneration to areas of widespread and multiple deprivation. It is intended to be different in terms of its values, organisation and priorities; in the scope of the regeneration sought and in the way in which it is delivered.

It emphasises not just physical regeneration but improving economic and social infrastructure and local quality of life. All the areas have the needs associated with Urban Programme authorities. Bids had to demonstrate the opportunities and strategies to tackle severe problems on a significant scale. They had to define the intended beneficiaries.

All City Challenges had the same timescale with the same level of grant allocated in equal annual instalments. The five year period was good for demonstrating commitment. But a longer lead-in time would have been helpful for more effective consultation, planning and partnership development.

There is a strong emphasis on delivery and, therefore, on measuring progress. A tight management framework includes setting five year and annual targets for standard outputs, project appraisal and monitoring systems and an annual review procedure involving Government Ministers. Outputs are a valuable management tool as well as a means of accounting for public money. They need to be seen in the context of the wider goals and strategy, not as ends in themselves, but they help towards clarifying objectives as well as measuring effectiveness.

Local autonomy

A key principle is that it was not central government that identifies the areas and target groups, but local partnership bodies including public, private and voluntary sector players and the local community. They define an end state vision and linked programmes and resources to that vision in a strategic way. Whether or not these Partnerships have company status, local authorities have a key role. Implementation by dedicated, multi-disciplinary teams is a significant strength. Working groups and forums extend the partnership to more agencies and individuals.

In relation to key partners, in particular the local authority, attitudes to co- operation at every level are more important to smooth running than the precise managerial arrangements. A variety of structures and mechanisms can serve equally well as long as there is clarity and consensus about the roles, responsibilities and relationships of different bodies. Quality of leadership on the Board, the Team and in the local authority is crucial.

Local diversity

Spatial targeting makes possible a concentration of resources and an integrated approach. The 31 City Challenge Partnerships are spread across seven regions. The areas vary in size and type. All face a range of economic, social and environmental problems, but vary in the mix and severity of these problems. Strategies vary in relation to the nature of the area and its problems and opportunities. Overall resources depend upon the amount of public and private leverage the Partnership can achieve and the extent to which it can persuade agencies to bend their mainstream activities to target the City Challenge area.

Partnerships have difficult choices between alleviating immediate and obvious need and trying to pull key levers of longer term change. Although all attempt to address a wide range of policy goals, they have different emphases. Categorising strategies is difficult, especially as they evolve over time. They range along a continuum. At one end are those which mainly focused upon physical development opportunities, often flagship based and requiring substantial private sector investment. At the other end are those concentrating upon housing and social strategies.

These extremes face different risks. The former are more sensitive to market conditions. Their potential impact is greater but so was the risk of failure and the risk that local people will remain excluded from the benefits. Those with largely social goals are more likely to make an immediate impact but achieving lasting change is more doubtful without accompanying economic revival. Most programmes contain a more balanced spread of economic and social goals.

City Challenge spend and outputs

City Challenges overall are more than fulfilling expectations on outputs and spend. In the first three years of the Pacemakers and first two years of the Round 2 programmes, the 31 City Challenges had:

• levered in nearly £1.3 bn private sector funds;
• completed/improved nearly 39,200 dwellings;
• created/preserved over 53,500 jobs;
• reclaimed/improved nearly 1,900 ha derelict land;
• created/improved over 1,257,400 sq.m floorspace;
• promoted nearly 3,150 business start-ups.

These, plus other outputs not included in the measures, were achieved for the expenditure of nearly £546,000,000 City Challenge funding.

Individual Partnerships vary in their targeted spend and outputs and in their success in meeting their targets. Overall, they exceed their target spend, usually because private sector investment is over target and more than compensates for some shortfall from other public sector sources.

Amongst the case study Partnerships, there is a high correlation between the achievement of private sector leverage and reaching total targeted spend. There is a different balance of public and private sector resources between different types of City Challenge programme . Those at either end of he economic development-led/ social-led spectrum are more dependent upon public sector funding. On the whole, those with mixed programmes, especially with a town centre focus, tend to have greater private sector leverage potential, at least in the early years.

There is no correlation between the level of targets and success in meeting them. The variation of outturn against targets undermines the value of targets as a predictive tool. Partnerships vary in the extent to which they have progressed towards their five year targets. For some, targets have been backloaded leaving a lot to he achieved in the final years.

The average targets and outturns for the Round 2 Partnerships are mainly higher than those of the Pacemakers. This supports fieldwork findings that Round 2s benefit from a longer lead-in time and learning from the Pacemakers' experience.

Additionality and impact

Numerous benefits stem from the level of City Challenge funding, its timescale and the design features of the initiative. As well as allowing a greater scale of activity to take place, it brings better decision making, a more integrated approach to regeneration, greater synergy. The case studies of the areas which failed to win City Challenge show that other substantial public sector resources over and above mainstream budgets are required to advance their plans. Without City Challenge, much of the physical development and environmental work either would not have occurred at all or would not have been done to the same standard. Similarly, many of the more innovative revenue projects would not have been possible.

It is premature to look for significant measurable change in socio-economic conditions attributable to City Challenge. But there is already marked visible improvement in the Challenge areas with environmental and housing development having a particularly strong impact. The MORI survey shows that local players give City Challenge much of the credit for these and other beneficial changes, such as more training opportunities, a better external image, greater agency collaboration and greater community participation. Most players also feel that neighbouring areas stand more to gain than to lose from City Challenge.

The interim evaluation largely focuses on the design of City Challenge. A final evaluation will spend more time on additionality and displacement through project analysis which is outside the scope of this study. Examination of progress during the early years raises a variety of data issues in relation to tracking the progress of individual Partnerships and comparing achievements across City Challenges.

The study underlines the diversity of City Challenge areas, goals, programmes and delivery arrangements. This variation is reflected in the data. Baseline studies vary in their coverage and the measures used.'Success' means different things to different people. Most local players are more interested in impact and outcomes than in outputs.

Partnership

City Challenge increases levels of trust and understanding between different sectors. Private sector players have been won over to a comprehensive approach and the value of community involvement. The inclusion of the voluntary/community sector in regeneration is more novel. How far community participation can be made a reality depends a lot on the existing community infrastructure. Experience shows that continuing capacity building is required, as well as accessible City Challenge structures and processes. It has implications for the content of programmes and the style of delivery. The interface between economic development and community development needs to be explored. There is a close relationship between the steps needed to overcome the lack of confidence of individuals in multiply deprived areas and ones to strengthen community organisations.

City Challenge organisation is tailored to facilitate inter-sectoral partnership at programme and project level. Partnership is visible in the jointly owned and developed visions and strategies. It is institutionalised in its structures and working practices. It brings legitimacy in relation to different constituencies of interest. It includes resource sharing with different partners bringing a variety of financial human and physical resources. It is changing partners' behaviour.

Central-local partnership

City Challenge also looks for collaboration between local players and central government. Departments vary in their degree of involvement. They are brought round the table but no sanctions are attached to contributing funding or changing behaviour. Regional officials are mainly seen as supportive despite their ambiguous position as both local player and central government agent, which also means that there are differences in the way they interpret their role. The introduction of Government Offices for the Regions helps towards greater inter-departmentalism.

A learning process

As the City Challenge form of management and delivery of regeneration is new, the DoE has reviewed and refined its procedures on the basis of early experience. Exchanges of underspends between Partnerships give greater flexibility in shaping the spend profile of the City Challenge grant. Consultants are used to audit financial and appraisal systems and disseminate good practice. The broader basis of the annual reviews marks an advance on measuring progress solely in output terms.

Further information

• This study was carried out by the European Institute for Urban Affairs, Liverpool John Moores University.
• A full report is published as:
  City Challenge: Interim National Evaluation, Hilary Russell, Jon Dawson, Peter Garside, Michael Parkinson.
  HMSO 1996, ISBN 0 11 753321 1, priced £27.00.