Community, Public Policy

In the first flush of victory after the 1987 General Election, Mrs Thatcher declared that next time "those inner cities will be ours". Five year on, after the £3 billion pa Action for Cities programme, she has gone and the Conservatives won again - but without appreciable change in the voting behaviour or the quality of life in urban areas. So what is the government's policy now, what is it trying to achieve, and will it work?

History

A recent Policy Studies Institute report(1) (see Community Affairs Briefing Issue 5) concluded that fifteen years of urban policy, starting in 1977 with the then Labour government's Inner City Partnership, had failed. Having systematically tracked key indicators of social deprivation over the period, the PSI discovered no noticeable improvement in inner urban areas - infant mortality remains above average, pupil/teacher ratios have worsened, homelessness is higher, the proportion of families in poverty has increased. Having examined the symptoms, their prescription was a radical shake-up of existing programmes and a real increase in resources devoted to them.

The key elements of the present government's Action for Cities policies are summarised in the panel below. The last fifteen years has seen frequent changes in the tools of government urban policy. For example, in 1987, the number of local authorities participating in the urban programme was cut from over 150 to 57 of the worst affected areas, a decision which still rankles with those deemed less deserving. Urban Development Grant, started in 1981 and administered by local authorities, was centralised in 1987 and renamed Urban Regeneration Grant. Relaunched again in 1988 as City Grant, it is now to be taken over by the new Urban Regeneration Agency (see What's New? page ? above).

Two predominant features stand out from the history of the last decade and a half - the plethora of agencies and initiatives, and the frequency of change.

Public criticism

In recent years, the government's programmes have been criticised from three public sources. In January 1990, the National Audit Office(2) questioned the value for money offered by the Urban Programme and the cost/benefit of Enterprise Zones. It called for a systematic assessment of need and greater coordination between programmes. In July 1990, the House of Commons Committee of Public Accounts(3) examined the NAO report and broadly concurred with their findings, adding its own concerns about lack of evaluation of schools/industry compacts. Prior to these reports, in 1989 the Audit Commission(4) examined the role of local government in urban regeneration and warned of the serious consequences of continuing to undervalue it. The Audit Commission characterised government support as a "patchwork quilt of complexity and idiosyncrasy".

In the light of this barrage of criticism, many observers welcomed Michael Heseltine's announcement of City Challenge in 1991. This was seen as a mechanism to put local government in the driving seat, so it could build (with something approaching a reasonable level of resources) a partnership with business and community to tackle the problems of specific localities.

Optimism

Six months ago, optimists were hopeful. The first round of the City Challenge programme was just starting, with round two open to competitive bids from all 57 urban programme authorities. The Conservative Party's election manifesto promised a new Urban Regeneration Agency, headed by the notorious 'wet' former cabinet minister Peter Walker. Spending in the inner cities would be brought into one budget and regional government departments integrated. Moreover the manifesto declared its focus was "not just on physical regeneration" but wanted "more opportunities for training, more encouragement to enterprise, better education and more measures to tackle drugs and crime".

In local government, most Labour politicians were talking the language of partnership and co-operation, having at last accepted that private sector-led growth must be the main driving force behind urban regeneration and that sufficient commonality of interest exists to work together.

Furthermore, the previous five years had seem a real increase in central government funding, even after allowing for inflation. For example, Department of Environment spending on inner cities doubled in cash terms, from £442 million in 1986/87, the last full year before the 1987 election, to £892 million in 1990/91, with the majority going to UDCs. Likewise spending on housing rose from £2,978 million in 1986/87 to £7,611 million in 1991/92.

Doubts

But now, even incurable optimists must be having doubts. First, City Challenge round three has effectively been cancelled (all that seems to be lacking is the formal announcement). Threatening noises are emerging from the Department of the Environment (DoE) about funding for projects in rounds one and two that are falling behind. The problem is essentially one of money - the current spending round is the most difficult in the government's 13 years - although the sheer scale of the needs revealed by the process so far seems to have overwhelmed the DoE's ability to cope, struggling as it is with council tax, local government reorganisation and the whole range of environmental issues.

Second, hopes that the Urban Regeneration Agency would be a unified driving force for the inner cities were dashed when the plans were put out for consultation in July. No indicative funding figures are available. Peter Walker may be able to use the provision for local boards to develop partnerships at local level, but currently the URA concept amounts to little more than the existing English Estates plus a roving urban development corporation shorn of the UDCs' responsibilities to ensure housing and social facilities are improved.

Third, the longstanding inter-necine disputes between government departments continue unabated. Certainly, responsibility for Task Forces has passed from the Department of Trade and Industry (DTI) to the DoE, but the jockeying for position has intensified following the announcement in July by President of the Board of Trade, Michael Heseltine, of "first stop shops" to offer advice to small businesses.

Fourth, profound questioning of the mechanisms of urban policy is, by necessity, underway in government departments. The results of the 1991 census (due in NOvember) and the cuts wrought to the Urban Programme in particular through top-slicing for City Challenge, on top of recent studies questioning its effectiveness, makes that both inevitable and desirable. Yet despite the government's declared policy being one of partnership, there is no sign of any consultation with business, voluntary and local council partners on the timetable or process, still less on the substance of a radical review.

It is hard to escape the conclusion that a combination of financial constraints and other priorities means that this government will not take the lead in reviving our decaying inner cities. Indeed arguably other government policies - the continuing squeeze on local government autonomy, the squeezing of welfare benefits, the massive backlog of social housing improvements, the free-market "survival of the fittest" approach in education - all mean that the current trends of decay in the inner cities will continue.

Alternatives

So what should companies and their community affairs managers do? The first and biggest single need is to foster civic leadership in our great industrial cities. The most striking contrast between the UK and US is the enfeebled condition of our local government. Britain is historically more centralised than the States and distrust of local government by central government, sometimes justifiably so, means that this has worsened. City Challenge can help to reverse the process, but only 31 towns are benefiting. So community affairs managers should read the Coopers & Lybrand report (see What's New? page ) and get involved in building up powerful partnerships for regeneration at a local and regional level.

The second deficiency of urban policy to be addressed is the over-concentration on bricks and mortar schemes. Some of the existing UDCs have been successful in using (quite considerable) public resources to lever in additional private money for physical regeneration. But buildings then lie empty because the people to create the businesses and do the jobs have not had support nor been trained. Companies can therefore direct their community activities increasingly towards 'people-orientated' schemes to improve the life chances of inner city residents.

Finally community affairs managers with the ear of ministers should be pressing them to implement the ideas in their manifesto and to increase the resources available in real terms to urban schemes. The Policy Studies Institute is surely right: we now know how to regenerate urban areas - what is lacking is the scale of public resources properly organised and delivered at local level. Regrettably the absence from central government's agenda of the reform of local government at a political rather than purely structural level, so that it could be trusted again, robs the inner cities of the obvious agency to form and lead partnerships for urban regeneration at grass roots level.

Action for Cities

Department of the Environment - Urban Development Corporations: first two founded in 1981, 13 will be active by end of 1992; annual cost exceeds £500m; aims to regenerate a designated area, with planning powers taken from local councils, City Challenge: eleven schemes started in 1992/93, costing £82.5m pa (top-sliced from existing budgets); 20 further schemes due to start in 1993/94; business/community/council partnerships to regenerate a small designated area through a comprehensive action.

Urban Programme: grant aid to projects in 57 local authority areas, increasingly focused on economic rather than social projects (£250m pa). 

Task Forces: founded in 1986, 16 operate at any one time to stimulate economic development, enhance skills and build the capacity of local communities (£23m pa).

City Action Teams: brings together central government departments in 8 locations with a small grants programme, also coordinates the City Challenge programme (£8m pa). 

City Grant: for private sector capital projects in the 57 urban programme areas (£55m pa), to be run by the new URA.

Derelict Land Grant: part-funds land reclamation for development use (c£75m), to be run by the new URA.

Enterprise zones: 12 areas with simplified planning controls and tax breaks.

National Garden Festivals: five so far, latest in Ebbw Vale.

Housing: Housing Action Trusts, Estate Action,

Priority Areas Projects (not confined to inner city areas). 

Department of Employment TECs (LECs in Scotland), training programmes (not confined to inner city areas, although incidence of unemployment and low skills is more acute). Department of Trade and Industry.

Assistance to new and small businesses (not confined to inner city areas).

Department for Education

City Technology Colleges

Home Office

Safer Cities Initiative, to reduce crime and the fear of it, with grants for local projects

Section 11: part-funding to local authorities to help the special needs of communities originating in the Commonwealth. (1) Urban Trends 1: a report on Britain's deprived urban areas; edited by Peter Willmott and Robert Hutchinson; PSI.

(2) Regenerating the Inner Cities; National Audit Office; HMSO.

(3) Regenerating the Inner Cities: Committee of Public Accounts Thirty Second Report; HMSO.

(4) Urban Regeneration and Economic Development: the Local Government Dimension; Audit Commission; HMSO.

Corporate Citizenship Briefing, issue no: 6 - October, 1992