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A new approach to local regeneration and economic development

Date of speech	11 May 2009
Location	Cavendish Conference Centre, London
Event summary	British Urban Regeneration Association (BURA) Conference

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Draft text of the speech - may differ from the delivered version.

Introduction

Thank you for that introduction; it's a pleasure to be here, and I'm only sorry we couldn't be meeting under happier circumstances.

The global economic crisis is having an impact on every family, every business, every public service.

I recognise that those involved in regeneration have been hit harder than most, with private sector partners in particular needing to reorganise, consolidate, or restructure. Many projects are struggling or have come to a stop for the time being.

No-one would pretend that these are not challenging times. However, we must not lose sight of some essential facts.

A strong base to build on

First, the transformation of run-down city centres and estates is one of the most remarkable success stories of the past ten years.

I think of the regeneration of Manchester, with iconic buildings such as the Beetham Tower summing up a new sense of confidence, Birmingham with the Bullring, or Leeds with Clarence Dock.

I also think of places outside the centre, the suburbs and estates, which have begun to change for the better. I've seen that change when I've visited places like the social enterprise called Shine at Harehills, Leeds, or the Bunny Hill Primary Care Centre in Washington, Tyne and Wear.

So though we face tough times, we are starting from a position of strength. And though money is in less ready supply, town halls, development agencies, regeneration firms and social enterprises are rich in the expertise and experience of the dedicated men and women who have helped us come so far.

Ongoing progress and promise

The second point to remember there are points of light among the gloomy news. Last week I visited the Olympic site and saw how one of the most ambitious regeneration projects the country has ever seen remains on track. My Department retains a very significant budget - some £6.5bn over the next 2 years - channelled through the Regional Development Agencies, the Homes and Communities Agency, the Working Neighbourhoods Fund and more besides - to support the creation of new homes, new offices and new jobs. By using these resources wisely there is a huge amount we can achieve.

Time to be pragmatic

The third point is that the right response to tough times is to be pragmatic. Instead of despairing at the turn events have taken, you do what you can.

On one hand, Government is taking active steps to mitigate the worst effects of the downturn and to get people the real help they need now. That has guided everything from Government's work with the banks to make repossession a last resort, to the tough decisions made in the budget about tax. In regeneration, it has meant the £180m brought forward in the pre budget report to support mixed-use schemes; and, more recently, the additional £500m confirmed in the budget for struggling housing projects.

Town halls, too, have been thinking creatively about how to keep regeneration on track. Some have pioneered the use of 'meanwhile' leases, allowing community groups to use empty shops until the local economy picks up again, keeping the high street busy. Others have been considering innovative financial models to keep building projects on course. And some have refocused their work at a sub-regional level on retraining and jobs as the key to locking in the progress of the past decade.

Thinking long-term

But as well as responding to the short-term challenges, this is also, I believe, the right time to think about the long-term opportunities. Professor Parkinson's report found that many private developers are doing so already by restructuring projects and reinforcing their relationships with the public sector.

We in Government have been taking a fresh look at our approach to regeneration. For many years, different projects and funding programmes - from the New Deal for Communities, to Coalfield Regeneration, to Housing Market Renewal - have made a practical and lasting difference to some of the most deprived places in the country. But the fact is that the Government has not always expressed the overall purpose and principles behind that investment with the clarity and force you might expect. By adding that clarity, we can give a new focus not only to public investment, helping the money go further, but it will also make it easier to coordinate efforts with private sector partners: all pulling in the same direction to greater effect.

Regeneration framework

That is why, last summer, we began consultation on a new regeneration framework. We had a constructive response from a wide range of councils, regeneration professionals and private firms alike. Many of them are in the room today, and I want to say thank you, because your responses were extremely useful in helping us refine and strengthen plans.

Needless to say, the downturn has given fresh urgency to some of the questions the framework considers. In others, those original questions may seem less relevant right now because of these tougher times. But it's important to remember that the upturn will come: and when it does, we can bounce back quicker by being ready to seize the opportunities.

So I am pleased to announce that we will be setting our next steps in taking forward that framework this week. Government is in this for the long term. Where market forces can't reverse economic, social and physical decline, government is ready to provide support. We will set out the principles which will guide that support in future. I want to highlight 3 of the key ideas.

Focussing resources where it counts

First, it's important to get smarter at how we focus our effort. Instead of spreading resources over a wide range of different places, we can make a bigger difference to people who need it most by really homing on in the areas which need it most.

These are the kind of places where young people can still reach their 16th birthday without ever going further than the six streets around their house. The kind of places where signing on has more or less become a way of life. And where a poor physical environment compounds low aspiration - and vice versa.

I believe there is nothing inevitable about any of this, but it takes real effort to make a difference. By sharpening our focus, we can do just that. And through the regional strategy, we can make sure that not just 'regeneration' funding but all public money is co-ordinated and prioritised effectively. At a time when efficiency is the watchword - with the budget calling for an extra £5bn of savings over the next year, beyond the already ambitious existing targets - making the most of 'mainstream' funding in this way matters more than ever.

Local economies - jobs

The second major principle in the framework is a renewed emphasis on the economy. The idea of regeneration should be to encourage self-sustaining change, to enable places and people to thrive independently - not forever relying on large-scale investment from outside. And the best way to do that is by kick-starting the economy, creating jobs and prosperity. Indeed, in the short term, while large-scale physical projects will face major obstacles, this focus on jobs and economic outcomes could not be more timely.

The Budget announced substantial funding to tackle worklessness. Last week James Purnell and I opened consultation local authorities on the development of an important part of that package - the new £1bn Future Jobs Fund. We intend that at least a third of that investment should go to deprived areas, supporting 50,000 jobs for the short term, but helping people acquire the skills and confidence they need to get along in the labour market in the long term. I hope plenty of people in the room will be ambitious and creative in their bids for that fund.

Community involvement and engagement

Third, the framework makes clear that regeneration needs to happen at the right level, and more often than not, as close to the community as practicable. I've seen myself that regeneration doesn't work as well or last as long when it's seen to be imposed from the outside, remote, or distant. And the most impressive transformations often occur when people feel involved, engaged and in control of what happens. In my own constituency it took 20 years, 2 failed attempts and millions of public money to get the transformation of Ladywell Estate, today called Canterbury Gardens, right. The solution lay in getting that sense of ownership, so that people felt proud of and looked after the new buildings.

Today, there is a wealth of good practice and experience to draw on now, from NDCs to neighbourhood management. The Homes and Communities Agency will have an important role making sure it gets taken into account.

Conclusion

These, then, are the key principles behind the framework.

Putting it into practice will take partnership: between Whitehall, RDAs, the Homes and Communities and Councils. These are difficult times, as you all look to get through the downturn and plan for the longer term. But I'm committed to listening, learning and doing what I can to help you achieve more for the people we all serve. Thanks for listening, I look forward to your questions and comments.