Communities and Local Government

• Cities and regions
• The proposed Urban White Paper

Cities and regions

The proposed Urban White Paper

SELECT COMMITTEE ON ENVIRONMENT, TRANSPORT AND REGIONAL AFFAIRS: ELEVENTH REPORT

PROPOSED URBAN WHITE PAPER

1. The Government welcomes the Committee's report on the proposed urban white paper. The report helpfully analysed many of the issues which need to be addressed, and made a number of important recommendations.

2. The White Paper "Our Towns and Cities: the Future - Delivering an Urban Renaissance" has now been published. It sets out the Government's goals and policies for town and cities. It reflects and carries forward many of the recommendations made by the Committee, and is therefore effectively the response to the Committees report.

3. This formal response to the Report therefore refers to the White Paper where that deals substantively with the issues raised by the Committees recommendations. It deals more fully with those recommendations which are not covered in the White Paper.

4. The Response has been structured in the same way as the Committees report with responses to each of the Committees recommendations. The recommendations have been grouped into common themes.

Scope of the White Paper

We commend the Urban Task Force Report. The evidence we have received shows its publication has generated a sense of excitement and an eagerness to see its recommendations implemented. It should form the basis of those parts of the Urban White Paper which deal with urban design, management and regeneration (paragraph 11).

The Deputy Prime Minister stated in his preface to the Task Force report: "There is no single solution and we need co-ordinated action based on the joint principles of design excellence, economic strength, environment responsibility, good governance and social well-being." The White Paper should cover all these areas (paragraph 14).

The essential task of the Urban White paper should be to set out the Governments vision for cities and towns. It should describe what it would like our towns and cities to be like in 20 years time and state what principles must be followed and what mechanisms, resources and policies are a priority for achieving that vision. We expect the vision to be bold and long-term. It should not just reflect what can be achieved with the resources immediately available from the Comprehensive Spending Review or the Treasurys review of the Rogers recommendations (paragraph 15).

The Urban and Rural White Papers should stress that the patterns of development characteristic of most of the last century cannot continue. They have been: socially unstable, concentrating the poor in inner city areas; environmentally damaging, destroying the countryside and creating a car-dependent society; economically harmful, since they have undermined our core urban areas which remain the essential centres of the English economy; and wasteful because schools, shops, even houses, lie waste in urban areas while new infrastructure is provided at great expense outside. An Urban Renaissance should provide the best way of reversing these trends, creating more sustainable, mixed neighbourhoods, economically powerful and competitive cities and towns, and preserving the countryside and protecting the environment (paragraph 17).

5. The White Paper sets out the Government's goal - that all urban areas should offer their residents a good quality of life and enable them to achieve their full potential. It represents a strong, long-term commitment to the future of urban areas. It is comprehensive in scope, dealing with environmental, economic and social issues.

6. The White Paper takes forward the vision of the Urban Task Force. It stresses the need to make all urban areas places for people, through better designed and maintained urban environments. It also deals with the need to create and share prosperity, and provide services that meet peoples needs and will help build an inclusive society. It recognises the changes which have shaped our towns and cities over recent years, and the need to learn from successful places to create the condition for success in all urban areas. It recognises that an urban renaissance is needed, for the reasons the Committee has identified. But it also recognises that to achieve this will require strong and effective local leadership, and close partnership working both locally and between tiers.

Planning

Cities and towns should be compact and built to high densities. If this is to be done successfully, high quality urban design is essential with particular attention paid to public spaces and lay out. Buildings, in particular supermarkets, should be in keeping with the scale and character of the surrounding areas. We must avoid the mistakes of the past when large sums of public money were spent on buildings, but too little attention was paid to appropriate design, management and running costs. Developments should contain a mix of uses, homes, shops and work places. Better public transport and making walking and cycling easier must be a priority. Historic buildings and parks have a most important role to play, not least in fostering a sense of place (paragraph 28)

Greenfield sites should be the location of last resort for development. We see no compelling reason for changing policy on the green belt (paragraph 61).

Once urban capacity studies have been completed in the light of PPG 3s insistence on higher densities, the Government should review the 60% target for building housing on brownfield sites. Its aim should be to concentrate development on brownfield sites in appropriate urban locations. Accordingly, as we have frequently recommended, it should set a target for the use of brownfield sites in urban areas. It must reject unacceptably low figures set for brownfield use by regional planning conferences. We are particularly disappointed by the proposals for the east midlands and the north east. The Government should report at the earliest opportunity on its review of allocations of greenfield land for housing and should continue to press councils to de-allocate where the locations are inappropriate. New greenfield development should cover the full cost of necessary associated services such a schools. The Government must remain steadfast in its determination not relax PPG 6. The forthcoming guidance note on clusters must similarly discourage out-of-town development (paragraph 159).

To encourage more compact and sustainable towns and cities, the White Paper should emphasise the Governments priorities to:

• ensure that the principles put forward in PPG3 are implemented by providing adequate funding for planning departments to administer the new arrangements and by rejecting unacceptable low density or badly designed schemes;
• bring about a more creative and less reactive planning system, encouraging innovation and streamlining the slow and rigid system of local plan production and revision;
• place more emphasis on good design by improving training for professionals working in urban design and adopting the recommendations of the Task Force including establishing Regional Resource Centres and making greater use of master plans;
• make improvements to public transport and pedestrian access a priority for public expenditure and local transport plans; and
• make better use of historic buildings, parks and public spaces to achieve urban regeneration (paragraph 83)

7. The Government shares the Committees approach. Chapter 4 of the White Paper deals with these issues. It stresses the importance of better planning and design, of bringing previously used land and empty property back into use, and of looking after the existing urban environment better. It recognises the need to use land well, and to avoid low density development and to make public transport, walking and cycling attractive options. It recognises the need to promote good design and improve the skills of planners, designers and developers. It sets out a comprehensive range of measures to achieve these aims.

Local authorities have a key role to play in ensuring that all Government planning policies, including PPG3, are implemented fully. New planning policies need to be disseminated and embedded in the planning system. We will be working with local authorities and key partners to ensure that this happens. We are already supporting delivery by issuing a new Greenfield Housing Direction and with good practice guidance ("By Design" and "Monitoring and Provision of Housing through the Planning System"). Government policies and initiatives are aimed at getting more out of existing resources and hence improving local authority planning performance. In particular, the duty of Best Value applies to all local authority services, and Modernising Planning has as one of its objectives raising local authority performance. Among matters currently being pursued are: improved use of ICT; streamlining planning procedures; and better training for councillors.

The Government will continue to monitor the re-use of previously developed land and conversions of buildings for housing, and progress towards the recycling target it has set. Where there is evidence that insufficiently demanding targets are being brought forward at regional or local levels these will be challenged.

The Greenfield Housing Direction, promised by PPG3 and issued last month, requires authorities to notify the Secretary of State before giving planning permission for major housing developments on greenfield land allocated in their plans. Local authorities are in no doubt that the new approach to planning for housing introduced by PPG3 will mean that, for most authorities their development plan will require an early review or alteration in respect of housing.

Design

The rules which prevent good design and inhibit development, including overlooking distances, road lay outs and visibility splays are often inappropriate. We recommend that the deregulation unit of the Cabinet Office review the various rules used by planners and highway engineers which have now become an obstacle to good quality urban design (paragraph 68).

We strongly endorse this approach of sensitive interpretation of central guidance rather than slavish adherence to it (paragraph 70).

8. The Government agrees that the inflexible application of rules and standards can prevent good design and inhibit development and has taken significant steps to promote more innovative and responsive approaches.

PPG3 sets out guidance on improving the quality and attractiveness of residential areas and avoiding the profligate use of land. PPG3 requires local planning authorities to adopt policies which focus on the quality of places and living environments being created and, in doing so, avoid reliance on inflexible planning standards. Specifically, they are required to examine critically the standards they apply to new development, particularly with regard to roads, layouts and car parking.

Good practice guidance has been issued to encourage greater sensitivity in design. "Places, Streets and Movement" (the Companion Guide to Design Bulletin 32), published by the DETR in 1998, encourages a greater emphasis on place, community and context in the design of housing layouts, and promotes a move away from overly prescriptive standards. "By Design", published in May and produced by DETR in partnership with the Commission for Architecture and the Built Environment, also encourages a move away from negative reliance on standards (such as minimum distance between buildings) towards a more positive emphasis on place-making. The guide is intended to stimulate thinking about urban design and avoids prescription.

DETR has also supported the recent (September) report by the Princes Foundation, in conjunction with English Partnerships and the CPRE, on "Sustainable Urban Extensions: Planned through Design". This describes a participatory approach based on the pursuit of good design which has been tested in case studies and shown to produce new ways of thinking about the planning and design of sustainable developments.

In the light of the guidance that has been produced, and the steps being taken to promote sensitivity and flexibility in design, the Government does not consider there is a need for a review by the deregulation unit.

We are disappointed that the DfEE is not taking steps to improve and better co-ordinate training and education for professionals in the various urban design disciplines. We recommend that the DfEE together with DETR undertake a major review of this matter (paragraph 73).

9. DfEE is actively involved with partners in improving training and education for professionals in various urban design disciplines. Close working on this by DfEE, DETR and CABE means that a major review is not the way forward as so much is already developing. The Government has already initiated research on training provision for urban design; a seminar, earlier in the year, brought key players at a top-level skills seminar and promoted new multi-disciplinary training approach training approach in design to be driven forward by CABE. Chapter 4 of the White Paper deals with centres of excellence for improving skills in urban design disciplines.

Regeneration/co-ordination

In many urban areas the urban renaissance will not happen without measures such as fiscal incentives or regeneration initiatives to promote it. In run down inner city areas, especially where crime is high, sometimes the only profitable uses are retail sheds or warehousing, and in some places only car parking. More desirable uses require Government assistance. The State also has to fund improvements in skills and other people-based initiatives (paragraph 50)

10. The White Paper sets out the full range of action the Government is taking, covering the economic, social and environmental issues which need to be addressed if all urban areas are to be successful and offer a high quality of life. Significant resources are being invested in improving services and in regeneration. The Chancellor of the Exchequer has announced a number of new fiscal incentives to encourage urban regeneration and brownfield, described in paragraph 19

The action plan for Neighbourhood Renewal due to be published later this year, will deal more specifically with the action needed to tackle the problems of deprived areas.

In England we have had a long experience of regeneration initiatives. The evidence is that to be successful they should:

• co-ordinate economic, social, environmental and design concerns;
• be on a large scale and be long term;
• involve all the concerned parties local authorities, other public and private sector bodies and local communities;
• integrate the work of different providers of services, in particular reducing the number of and getting better co-ordination of the local programmes of government departments; and
• make better use of mainstream funds (paragraph 52)

The White paper should set out that it intends to ensure that urban regeneration is well co-ordinated, carried out on a large scale and over a long period by:

• strengthening the New Commitment to Regeneration; and
• establishing Urban Priority Areas and Urban Regeneration Companies as recommended by the Task Force, with the appropriate powers to ensure they do not increase duplication; Urban Regeneration Companies should employ masterplans to ensure developments are well-designed.

Government should introduce an improved CPO procedure to facilitate land assembly. The current review should be completed as a matter of urgency (paragraph 130).

11. The Government accepts the thrust of these recommendations. The Government believes that "Local Strategic Partnerships" provide the basis for community involvement and the local co-ordination of regeneration activity. A consultation paper on LSPs was issued on 10 October. They will bring together all interested parties local authorities, key service providers, businesses and the community and voluntary sectors. They will work together to ensure that the delivery of public services reflect the needs of the local people.

The Government recognises the need for better targeting of mainstream funds. A cross-cutting review on government intervention in deprived areas concluded that main public services such as schools and tackling crime should be key tools in tackling deprivation. In Spending Review 2000 the Government announced that by 2003/04 there would be an additional £43 billion made available for public services. These funds were backed by stretching Public Sector Agreements to ensure effective and efficient use of these resources. For the first time the Government set floor targets so everybody can expect a minimum level of public services. This will ensure that an adequate proportion of resources are allocated to deprived areas and help to narrow the gap between our most deprived communities and the rest of the country. In addition the Government has announced a new Neighbourhood Renewal Fund worth £800 million over the next three years. This will be allocated to Local Authorities in the most deprived areas to help kick start the process of narrowing the gap.

The LSP approach will build on the strategic partnership models that the Local Government Association's New Commitment initiative has established.

The Government agrees that it is important to target resources effectively at key priority areas and already adopts this approach in existing regeneration programmes. It has concluded, therefore, that it is not necessary to set up Urban Priority Areas to achieve this aim. Chapter 4 sets out the package of measures and incentives, each of which addresses particular regeneration objectives. Since the Urban Task Force Report, three urban regeneration company (URC) pilots have been established, in Liverpool, Manchester and Sheffield. They have been established by the local authorities, the Regional Development Agencies, English partnerships, the private sector and other key local partners. They will deliver a comprehensive and co-ordinated approach to the problems and opportunities in these areas. We see URCs as an important mechanism for delivering regeneration in major cities and towns. An initial evaluation has already been published. We are proposing a rolling programme of 10-12 new URC over the next few years with up to 2 per region. We will be discussing proposals for new URCs with the RDAs and their partners and will be issuing guidance and criteria to guide the setting up of further URCs.

We have undertaken a comprehensive review of the CPO system. The report of the Advisory Group that has undertaken a fundamental review of the laws and procedures relating to compulsory purchase and compensation was published on 27 July. Comments on the Advisory Group's report were invited by 13 October. Government will prepare a formal policy response, early in 2001, including proposals for eventual legislative change.

The Group recommended that, in addition to some short term improvements achievable through guidance provided to acquiring authorities, action should be taken as quickly as possible to consolidate, codify and simplify the law in ways which should ensure a quicker and fairer approach to land assembly.

The Government recognises that there is a need to improve the efficiency and effectiveness of the compulsory purchase order system, whilst ensuring that the interests of those from whom property is acquired are properly safeguarded. Chapter 4 therefore sets out proposals for action in the short and longer term. In the short term we consider it important to ensure that local authorities (and the RDAs) are fully aware of the scope of their existing powers and are given sufficient freedom to use them, consistent with the need to protect the interests of those affected by such orders. Up-dated guidance will be issued to local authorities on the use of their powers, together with a comprehensive manual on how to undertake Orders, to tackle the problem of loss of skills in bringing forward CPOs. In the longer terms primary legislation will be required to implement the comprehensive overhaul of the system advocated by the Advisory Group. This can include consideration of the scope to widen local authority powers in relation to compulsory purchase for regeneration purposes.

The European Commissions ruling against gap funding, the main instrument to promote urban regeneration, makes the introduction of these measures all the more urgent. Regional Development Agencies should have access to sufficient funds to undertake direct development to compensate for this decision (paragraph 149).

12. The Committee has report subsequently and in greater detail on the implications of the Commissions ruling on gap funding (Sixteenth report published 14 September). The Government will be publishing a formal report shortly.

The Spending Review 2000 significantly increased the resources for RDAs. The combined budget will rise from £1.2 billion this year to £1.7 billion in 2003/04. The Spending Review also announced the introduction of a Single Programme Budget for the RDAs starting in April 2002. As announced in the November 2000 Pre-Budget Report the Government will be introducing greater budget flexibility for the RDAs, from April 2001. Further details are included in Chapter 5 of the White Paper.

The majority of the poorest people in England live in cities, often concentrated in deprived areas. Many on higher incomes have left. The White Paper should promote the establishment of socially mixed communities in urban areas. Policy should promote economic, cultural and ethnic diversity and should seek to attract middle income earners back to the inner cites. Services in urban areas require major improvement. The levels of crime, the fear of crime, and anti-social behaviour together with poor schools, and the perception of poor schools, are the main causes of concern. To bring about improvements mainstream funds need to be better targeted and managed (paragraph 40).

Big improvements can be brought about by better targeting of mainstream funds. However, the urban renaissance will not take place without additional spending on urban management, the urban environment and public transport (paragraph 62).

As the Task Force told us, bringing about an urban renaissance will require better use of public funds, and significant increases in some areas. Priorities are:

• most importantly, better use of mainstream funds;
• increased funding for urban regeneration programmes;
• major increases for the relatively small budgets for investment in the urban environment and infrastructure, including investment in people and institutions; and
• substantial increases for public transport (paragraph 164).

Some of the money could be raised to pay for this by a number of additional fiscal measures, which we have already discussed, and which would be beneficial. Careful consideration should be given both to finding a means of taxing the large windfalls gains made by landowners when they sell land which receives planning permission for development and to a vacant land tax. Funds can also be found from the significant sums raised from urban development activity by increases in Stamp Duty (paragraph 165).

13. The Government shares the Committees view that cities must be attractive places for all, and that economic, social and ethnic diversity need to be encouraged.

The White Paper recognises the importance of public services in making towns and cities places in which people will choose to live and sets out the steps to improve them. See 11 for further details on better targeting and management of mainstream funds.

Transport 2010 - The 10 Year Plan includes £180 billion of public expenditure and private investment for transport. Some of this money will be channelled through the new statutory Local Transport Plans, funding for which has been increased by 21% this year and will approximately double to £1.3 billion (outside London) in 2001/02.

See 17 for the urban environment matters and 19 for fiscal measures.

Historic Buildings

Better use of historic buildings could be achieved by ensuring that:

• development takes account of the historic nature of areas by undertaking what has been inelegantly called a characterisation-based master plan;
• English Heritage is adequately funded to undertake regeneration;
• more Lottery Funds are available for spending on historic buildings in view of the small funds currently available for this important task; and
• English Heritage and local authority conservation officers do not impose rigid conservation philosophies on developers, but work sympathetically with them to facilitate re-use; a training programme should be introduced.

However, PPG 15 on conservation does not need to be changed (paragraph 84)

14. Chapter 4 of the White Paper recognises the contribution which historic buildings make to the character of our urban areas.

English Heritage currently receives over £110 million annually in Government funding, to which it adds some £30 million per year in self-generated income. Distribution of all available resources across its activities is a matter for English Heritage. English Heritage spends £65 million annually on conservation grant schemes, all of which may contribute to regeneration, in particular the Heritage Economic Regeneration Scheme.

The Government has commissioned English Heritage to carry out the first stage of a review of policies relating to the historic environment. The review will address a number of key issues including the historic nature of areas, the need for a training programme and whether PPG 15 needs to be revised although the Government has already made clear that it retains its general approach in PPG 15 to the identification and conservation of the historic environment. English Heritage will report at the end of November, paving the way for a major Government statement on the historic environment next year.

Within the period of its Strategic Plan 1999-2002, the Heritage Lottery Fund has allocated 28% of its total resources for the historic buildings sector, and intends to review the Plan in 2001. Heritage Lottery Fund has committed £24 million in Conservation Area Partnership grants for inner/urban schemes over the period 1997-2000, and will make available up to £60 million between 1998-2001 for the Townscape Heritage Initiative. In addition the Urban Parks Programme provides capital grants to restore urban parks and is currently targeting areas of high social deprivation. To date 284 historic parks projects, totally over £157 million, have been funded.

Housing

The Government should implement the recommendations made by the Urban Task Force to create mixed income neighbourhoods and diversify tenure. It should ensure new social housing is not built in areas where there are already large numbers of such houses or where there is low demand for social housing. Good design can turn cities round; cheap, shoddy social housing is unacceptable. The White Paper should indicate how the Government will improve the quality of services in urban areas by emphasising the need for mainstream services to concentrate on producing better outcomes. The Government should also implement many of the measures proposed by the Social Exclusion Unit on neighbourhood renewal, in particular on neighbourhood management, and should introduce new measures to deal with anti-social behaviour (paragraph 111).

15. The Government believes that it is important to create mixed and inclusive communities. Planning Policy Guidance Note 3 sets this out. Local planning authorities should encourage the development of mixed and balanced communities; they should ensure that new housing developments help to secure a better social mix by avoiding creation of large areas of housing of similar characteristics.

Chapter 6 of the White Paper explains how the Government is seeking to improve the quality of services in urban areas, through increased investment and through achieving better delivery and outcomes. The action plan on Neighbourhood Renewal, due to be published before the end of the year, will set out comprehensive proposals, including proposals to pilot neighbourhood management. A key decision of the Spending Review and a central component of the action plan will be need for mainstream services to achieve better outcomes, particularly in deprived areas.

The Housing Green Paper, published on 4 April, set out a range of proposals for improving the quality of housing and housing services, and for delivering new affordable housing in ways that promote sustainable communities. Following the 2000 Spending Review, we have announced an extra £1.8 billion investment in housing over the next three years to deliver the commitments in the Green Paper, including:

• extra resources for local authority investment and an expansion of the stock transfer programme and Private Finance Initiative to bring all social housing up to a decent standard within ten years;
• over £1 billion extra to provide additional social housing and to help key workers to buy homes under the Starter Home Initiative;
• increased management allowances and a new Major Repairs Allowance for council housing;
• an £11 million fund to support pilot schemes which take a customer focussed approach to letting social housing, offering tenants greater choice;
• a new £137 million Safer Communities Supported Housing Fund to provide new housing for young people at risk and other vulnerable people, such as those seeking refuge from domestic violence;
• £150 million extra to implement the Supporting People programme, ensuring effective support services for the vulnerable.

The Green Paper has been widely welcomed. More than 1,000 respondents commented on the Green Paper, with only 7 disagreeing fundamentally with our aims and principles. Several had specific concerns on some of our proposals and we are considering those carefully now. We will announce our plans for taking forward our proposals later this year.

Some estates, albeit a minority, are beyond any incremental revival, suffering from low demand and without a realistic likelihood that they will recover in the long term. Here the best option may be large scale demolition and re-construction as mixed communities, following the design principles laid down by the Task Force, especially in areas where there is a strong demand for housing in the wider conurbation. This might be called the Hulme solution, after the area of Manchester where this approach has been successfully implemented. The Government should encourage local authorities and Regional Development Agencies to consider whether areas should be re-developed in this way. It should ensure that RDA strategies take account of the Task Forces proposals. Before its final report the Social Exclusion Unit should be asked to consider how the Task Forces recommendations should be integrated into its strategy (paragraph 112).

16. Strategies for dealing with low demand must be made according to local issues and requirements. Low demand is a complex problem with a variety of interconnected causes, and as such requires a toolkit of responses. Local authorities must therefore develop strategies for dealing with low demand that respond to local issues and requirements. The Government included a range of proposals for tackling low demand in the Housing Green Paper "Quality and choice: a decent home for all". The Government has issued guidance to local authorities on tackling low demand, which includes advice on the demolition and disposal of housing. We have also published a research report on "Demolition and new building on local authority estates", which reviews data on the nature and scale of demolition on LA estates and provides a range of examples where demolition has been a successful strand of a wider regeneration strategy, allowing authorities to achieve objectives such as tenure diversification and securing a better match of dwelling size and demand through redevelopment. The Government encourages this option only where it is part of a long term strategy for tackling low demand in the neighbourhood, set within a robust strategy for the area at a district level. Where large scale demolition and re-construction as mixed communities is considered the most appropriate option this is for local decision.

The Social Exclusion Unit has worked closely with the Department of the Environment, Transport and the Regions to ensure that work on the National Strategy for Neighbourhood Renewal and on the White Paper have been coordinated. The Government is about to publish an action plan setting out how it intends to implement the proposals for a National Strategy.

Management of the Urban Environment

The urban environment strewn with litter and graffiti creates an appalling impression in many urban areas. In comparison to the large funds spent on mainstream services, management of the urban environment is significantly underfunded. The powers and mechanisms to deal with anti-social behaviour are inadequate (paragraph 45).

The Government should stress the importance of improving the state of the urban environment, including simple measures such as more effective litter collection. The Government should provide additional funds for managing the urban environment and should implement the proposals of the Task Force to give local authorities greater powers to tackle those who damage it (paragraph 115).

17. Chapter 4 of the White Paper stresses the importance of caring for the urban environment. It sets out number of measures designed to improve the management of the public realm, and identifies a number of potential additional sources of funding, including the New Opportunities Fund, the possible introduction of the Town Improvement Schemes and the Local Tax Reinvestment Programme.

Local authorities already have significant powers available to them in relation to a number of environmental offences such as dog fouling and litter. We have created Anti-Social Behaviour Orders as a new weapon to help the police and local authorities tackle anti-social behaviour in the community without resorting in the first instance to criminal law. The Home Office recently set up a "Disorder and anti-social behaviour" Unit which will take forward the Social Exclusion Units recommendation on anti social behaviour.

Economic Development

The White Paper should acknowledge the economic importance of cities and towns, and the Government economic policy must take account of its effects on them. It should be the aim of economic policy to concentrate economic development in cities and towns while having regard for rural needs. Urban economic policy should be about creating prosperous and competitive towns and cities, and not just about a matter of providing palliatives for run down areas. Towns, cities and conurbations have very varied economies and there can be no one solution for all. However, if the evidence we received that the economy will be increasingly knowledge-based is right, successful conurbations will have good universities and research institutes and will be places which attract skilled mobile workers. Not all cities will be able to benefit from these changes, and many suffer from the weaknesses of their regional economy. To meet their needs Government will have to tackle these weaknesses (paragraph 34).

The Government should seek to ensure that economic development is concentrated in urban areas, including market towns, whilst having regard to rural needs:

• The DTI should re-examine its policies to ensure that they take account of spatial policies and priorities. It is not just sufficient to get economic development. It matters where it is. Out-of-town development should be an exception. This principle has been accepted in PPG 6 and should be included in other government policies, including guidance on business clusters.
• DTI and DETR should seek to ensure that urban and regional policy are complementary through getting better co-operation between regional institutions.
• Government should encourage knowledge and innovation-based industries to locate in northern and midland cities and towns by stimulating in these areas: the expansion of universities, the location of research and development institutions, and spin-offs from these institutions.
• The Government should review the location of many of its own agencies, with a view to moving them, in the longer term, to towns or cities in need of significant regeneration (paragraph 97).

18. Chapter 5 of the White Paper deals with economic development. It recognises that successful towns and cities have always been at the heart of the creation of prosperity. The Governments aim is for all towns and cities to build on their economic strengths, and to make sure that everybody has the ability to make the most of their opportunities and share in success. It identifies factors which are crucial to economic success, and the policies and programmes for achieving them. It recognises that there is no single solution, and that regional and local strategies need to be tailored to local circumstances.

The Government is committed to a joined-up approach to the future of our towns and cities. DTI and DETR will continue to work closely together and the enhanced role of the Government Offices in the regions will help with effective delivery of co-ordinated policies at regional level, providing the strategic context for towns and cities, and working closely with the key regional organisations. In order to establish a more effective partnership between the regions and the centre a new Regional Co-ordination Unit has been set up. The Regional Development Agencies (RDAs), whose key strategic purpose is to create sustainable economic growth and regeneration in their region, work in partnership with the regional Chambers, Regional Planning Bodies and other regional organisations. These institutional reforms will deliver continuing improvements to co-ordination and co-operation at regional level.

On the location of knowledge and innovation-based industries, the White Paper sets out the Governments aim to support innovation, competitiveness and economic development in all regions. One way of doing this is through encouraging support for cluster development and creating the conditions in which clusters can thrive. Government is actively pursuing its clusters agenda via Lord Sainsburys Clusters Policy Steering Group. The Government has announced a new Regional Innovation Fund to facilitate the development of clusters. This will be distributed by the Regional Development Agencies to support projects which further the objectives set out in their Regional Strategies. The White Paper also sets out policies and programmes aimed at ensuring that all regions capitalise on the excellence of the UK research base by encouraging links between local businesses and Higher Education Institutions.

The Government has already considered the location of Departments and Agencies. Following the 1994 Review of the Management of the Governments Civil Estate, individual Departments are responsible for managing their property portfolios. This was an in depth review, and remains the current policy. There is already in fact a considerable spread of Executive Agencies locations throughout the country, and significant government offices in each of the region.

Fiscal Instruments

If we are to get an Urban Renaissance, the Government will have to introduce a "new set of financial instruments to attract large-scale private investment into towns and cities". In addition fiscal measures should be introduced to discourage landowners from holding onto derelict land held for speculative purposes and preventing development (paragraph 55)

The "new set of financial instruments to attract large-scale private investment into towns and cities" should include:

• national and regional public-private investment funds and a revolving fund for land assembly and the recycling of derelict buildings. The English Cites Fund should be set up as a matter of urgency. In the meantime regional development agencies should have sufficient funds to tackle dereliction and land assembly.
• further fiscal incentives for developers, house owners and house buyers in areas of low demand, in particular:
• a reduction of VAT on the refurbishment of housing to 5%;
• a reduction of stamp duty on developments on brownfield sites;
• A vacant land tax to encourage development on derelict land and the re-introduction of a Development Land Tax should be considered. We are concerned that the valuation system overestimates the value of inner city properties for both the Business Rate and the Council Tax. This should be reviewed (paragraph 147).

We are appalled by the slow progress made by the Treasury in evaluating such important matters. The Task Force reported in June 1999, but the Treasury will not have completed an evaluation of any recommendation until November 2000 ie almost 18 months later (paragraph 148).

19. Chapter 4 of the White Paper describes the steps being taken to promote investment in regeneration, including the proposals for an English Cities Fund and through new fiscal incentives. Chapter 5 discusses the Government's response to the recommendations in the Ronald Cohen's Social Investment Task Force report 'Enterprising Communities: Wealth Beyond Welfare'. It also discusses a range of policies and programmes aimed at increasing private investment.

Regional Development Agencies through the Land and Property budget are already assembling and disposing of sites and recycling the receipts for further regeneration projects.

The November 2000 Pre-Budget Report announced a comprehensive package of measures worth an accumulative £1 billion over five years. This package represents a major step forward in bringing about an urban renaissance. It will go a considerable way towards harnessing the potential of derelict and under-used buildings and sites and bring them back into productive use, easing the pressure for development on greenfield sites. Helping to make towns and cities better places to live and work will stimulate enterprise, employment and wealth creation.

The Government plans to introduce a number of measures in Budget 2001 in response to the Urban Taskforce:

• an exemption from stamp duty for all property transactions in disadvantaged communities;
• accelerated payable tax credits for cleaning up contaminated land;
• 100 per cent capital allowances for creating 'flats over shops' for letting; and
• package of VAT reforms to encourage additional conversion of properties for residential use.

The Government will also:

• monitor the development of Urban Regeneration Companies and keep under review the case for how a tax relief may help; and
• explore with the European Commission the scope for reducing VAT for listed buildings that are places of worships to help restore our national heritage.

In addition the Government's Modernising Local Government Finance : A Green Paper is consulting on a number of local fiscal measures including:

• rate Relief for Small Businesses;
• the introduction of a supplementary business rate as one option for funding Town Improvement Schemes; and
• the introduction of a Local Tax Re-investment Programme allowing local authorities retain additional council tax and business rate income resulting from successful regeneration.

The Government has welcomed the Social Investment Taskforce and the response announced in the November 2000 Pre-Budget Report includes:

• working closely with the venture capital industry and others on setting up the first Community Development Venture Fund; and
• consulting widely on the proposal for a new Community Investment Tax Credit, designed to encourage private investment in enterprises in under-invested communities.

All non-domestic properties are assigned a rateable value on the basis of their assumed annual rental value on a given date. That rental value is a reflection of their value in the property market, taking account of all the circumstances, including its locality. We do not believe that this system over-values inner city properties. We have recently held a review of the revaluation of non-domestic rates, the outcome of which was included in our green paper Modernising Local Government Finance. We have no plans for another review of non-domestic rates. As for council tax, all dwellings are assigned to one of eight valuation bands according to what each dwelling might have been sold for on the open market on 1 April 1991. The object is to determine the relative value of dwellings within a particular area as at a particular date. We are not aware of any evidence which suggests that the valuation process over estimates the values of dwellings in inner city areas compared to those in other areas.

The announcement of the above fiscal measures package has taken some time due to the complex issues which need to be analysed when analysing tax proposals. It is important to get this right and not rush into announcing measures. The targeted tax cuts announced complement and build on the measures we have already put in place to revive our most disadvantaged communities.

Co-ordination

Currently intervention is confused and badly co-ordinated. The White Paper should set out a framework indicating the role of each part of government. It should clearly lay out the roles of:

• national government;
• regional organisations, including Regional Development Agencies, Government Offices in the Regions, Regional Planning Conferences and Regional Assemblies/Chambers;
• sub-regions;
• local authorities;
• neighbourhoods and local communities.

There should be fewer initiatives and they should be better co-ordinated locally (paragraph 51).

The White paper should indicate the role of each aspect of Government in urban regeneration. In particular, it should stress that:

• local authorities should "lead the urban renaissance" by devolving powers and resources to them, in particular by providing long term funding and giving local authorities more freedom to raise and spend money;
• local authorities should be permitted to have a stake of over 19.9% in companies without any financial penalties to enable them to play a significant role in regeneration;
• there should be clarification of the relationship between local authorities, national Government, regional and sub-regional institutions; and of the role of regional development agencies, regional planning conferences, regional assemblies and government offices in the regions;
• local authorities need to work closely with local communities, voluntary groups and private sector organisations;
• local strategic partnerships have an important role to play, but care must be taken in constructing them to ensure they have the right powers, duties and resources;
• neighbourhoods are important as the key building blocks identified by the Urban Task Force; measures to turn round neighbourhoods in decline should be a priority, while recognising that local authorities will also need to take decisions on a city-wide basis; and
• there is a need to reduce the number of area-based initiatives of central Government Departments and get better co-ordination of them (paragraph 129).

20. The White Paper sets out roles and responsibilities, at the national, regional, local and neighbourhood levels. It represents a clear commitment to better co-ordination, with Local Strategic Partnerships having the key role locally in helping to identify priorities for action.

The Regional Co-ordination Unit was established in April and is a powerful piece of machinery within Whitehall to ensure that we avoid the mistake of pursuing too many initiatives in a fragmented way. Its Action Plan was published last month and sets out the steps we intend to take to ensure the better consideration, and strengthen the regional dimension of policy making. In addition to our objective that there should be more effective co-ordination of area-based initiatives, we have focused on three other key objectives: firstly, that Government Offices for the Regions should be more involved in policy making in Whitehall; secondly, that Government Offices should be strengthened so that they can speak authoritatively as the voice of Government in the regions; and thirdly, that the RCU should operate as an effective 'Head Office' for Government Offices

The action plan on Neighbourhood renewal will bring together the measures to tackle "neighbourhoods in decline".

The Government is currently consulting (Modernising Local Government Finance: A Green Paper) on the scope for replacing the existing borrowing controls on local government with a prudential system which would allow more local flexibility to borrow for capital investment, subject to controls which would ensure that borrowing was affordable, consistent with the Government's fiscal rules and delivered investment priorities. Transactions by local authority companies would still need to be regulated under any new system of capital controls, since their expenditure has the same impact in the national accounts as that of authorities themselves. The current method of control, if not the classification of companies, is closely integrated with the overall capital finance structure and the likely changes to the latter mean that new arrangements for companies would be needed. However even when the current regime does have an effect, it does not impose "financial penalties" on local authorities and does not prevent their companies from borrowing to finance investment. Rather, its broad effect is that where the company borrows, the authority gives up an equal amount of its own borrowing power. The prudential system will not change that principle, but will increase the overall scope for local authorities to use their own resources to finance additional borrowing and therefore enhance local decision making and accountability.

In parallel the Government is also looking at the boundary between local authority companies whose investment is subject to the capital finance rules, and those, which fall outside. This is to ensure that the categories given to local authority interests in companies does indeed reflect the classification of public expenditure, does not impose unnecessary controls, and can be applied practically. However, even under the categories of local authority companies, authorities are able to have equity stake over 19.9% in companies without them being subject to the local authority capital finance regime, as long as they do not either have "effective control" over the operations of the company or retain a majority equity or voting stake.

The White paper should set out how the Government proposes to ensure that there is proper involvement of, and consultation with, local communities in taking forward its vision for Britains cities (paragraph 135).

21. Local authorities new powers include a duty for community planning which will involve working closely with the local community. The White Paper stresses the need for proper involvement of local communities. The consultation document on Local Strategic Partnerships also stresses that the involvement of local people and local communities is central to the achievement of neighbourhood strategies and the key to long-term sustainable change.

The Government prides itself on its cross-cutting approach to government. Unfortunately there is too little evidence of this in preparing the Urban White Paper. Some policies are in place which will assist the urban renaissance.

• The DETR has made an excellent start with the publication of PPG3.
• The DTIs work on business clusters recognised the vital importance of cities.
• Its aim of a sustainable economic policy is a reason for optimism.

Elsewhere the picture is more depressing.

• As the report of the Performance and Innovation Unit in the Cabinet Office showed, there is a lack of co-ordination between local, regional and national government. The new Regional Co-ordination Unit has been set up to address this problem, but we are concerned that it will not be able to.
• The quality of services provided to urban neighbourhoods is very poor despite the large amount of mainstream funds spent. The Social Exclusion Unit and the Performance and Innovation Unit pointed out that there were too many local initiatives. The available funds for urban regeneration should be seen more clearly co-ordinated and focused.
• Most parts of Government appear to see urban policy, not like the Urban Task Force as a means of transforming our cities and of bringing about an urban renaissance, but as a way of tackling the problems of deprived urban neighbourhoods. This is important, but this approach must not dominate the Urban White Paper. We are disappointed that the Government has given the Social Exclusion Unit a remit which means that it has all but ignored the work of the Urban Task Force, and so has little to say about the key Rogers recommendations on the need to create mixed communities. We need an urban policy, not a neighbourhood policy.
• DTI and DETR do not appear to have the same views about the role of cities in the regional economy. The economic prosperity of cities and regions are tied together. The Government must decide what its policy on the north/south divide is.
• The quality of people and institutions involved in urban design are of critical importance, but the funding by the Department of Culture Media and Sport to support them is inadequate.
• Worst of all the Treasury appears to have kicked the Report into the long grass. It is disgraceful that over a year after the report was published, the Treasury has come to no conclusions about the proposed fiscal measures put forward by the Task Force, and will not come to any until November at the earliest. The Financial Secretary may be a fan of the Urban Task Force Report, but there is as yet no evidence of this in the actions taken by the Treasury (paragraph 167).

The poor co-ordination of Government policy strengthens the Task Forces recommendations for ensuring that its proposals are taken into account by all parts of Government. In particular, to ensure progress is to be made the Government should:

• establish public service agreements with performance indicators for the urban renaissance as part of the Comprehensive Spending Review;
• establish an Urban Policy Board;
• publish an annual State of the Cities and Towns Report (paragraph 168).

22. The White Paper is a comprehensive statement of the Governments commitment to the future of towns and cities, it is clearly not just about deprived areas but about maximising potential of all urban areas.. It shows the wide range of policies and programmes being put in place to achieve an urban renaissance, backed up by significant increases in the investment in people and in places to enable this to happen. It tackles the issues comprehensively, with a focus on people and local action to meet their needs.

Chapter 5 of the White Paper deals with the economic importance of cites within their regional context.

The White Paper explains (Chapter 7) the arrangements to achieve better integration of policy as it effects urban areas, including a new Cabinet Committee, and the arrangements for monitoring and reporting on progress towards achieving an urban renaissance.