2011 words

Critically assess the potential impact of the current economic and political context on
urban regeneration and economic development in the UK.













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This paper will provide an overview of the current economic and political context in the
UK and assess central Governments policy and legislative interventions. It will draw on
key points and evaluate the impact of regeneration and provide a conclusive response.
Economic Context
The current UK economy is reported to be suffering the longest recession since records
began in the1950s (BBC, 2012). The UK economy emerged from a double-dip
recession in the third quarter of this year, when the economy grew by 1%, but (Sir
Melvyn) King warned that this was driven by one-off factors. (Guardian, 2012). Public
spending restraints and cuts to regeneration funding will provide a difficult environment
for regeneration projects to be developed. The All Party Urban Development Group
(APUDG) state that Significant cuts in public sector capital spending means that cities
will have significantly less resource to partner up with the private sector to fund
regeneration. (Regeneration and the recession, 2009)
A few months after the start of the recession in 2008, unemployment started to rise
sharply. When the global financial crisis hit, the unemployment rate was at 1.6 million.
(BBC, 2012) The Office of National Statistics (ONS) reported that unemployment levels
have increased dramatically since 2008. In the 12 month period between May of 2008
and 2009: a staggering 770,000 people were forced into unemployment through the
closure of businesses and the collapse of industries such as manufacturing and retail. In
October of this year the number or people unemployed was calculated as 2.5 million, a
56% increase on the 2008 official figures. The APUDG report Building Local Jobs
mentions the importance of creating jobs and training opportunities for local people
before, during and after physical regeneration projects.
The UK economy has had a profound impact on the housing market. The National
Housing Federation reported in 2001 that the average house price was 121,769,
reflecting an average annual income of 16, 557. However in 2011 house prices rose by
94%, and the average salary only increased 29%. Mortgage lending now requires a 20%
minimum deposit, private renting is at a record high and 1.8 million households are
waiting for social housing. Future regeneration projects that include residential
provisions must be suited to local affordability.

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Political Context

The Coalition Government has adopted a strategy of promoting growth and localism to
ensure economic recovery. Their aim is to give communities and businesses the power
to make and have involvement in the decisions which impact their local areas, and be
genuinely plan-led. The National Planning Policy Framework (NPPF) underpins these
ambitions as the Coalition perceives planning impedes growths vital to economic
recovery (Regeneration and Renewal, 2011). The NPFF condenses over a thousand
pages of national planning policy guidance into 50; with the intention of making the
planning system more transparent, accessible and responsive. Reactions have been
varied between industries; The reaction from the business community has been broadly
positive. (Planning Resource, 2012) The pro-growth emphasis of the framework and
acknowledgement that planning must operate to encourage and not act as an
impediment to sustainable growth. (NPPF, 2012) has proven to be a success amongst
businesses related industries. However there has been a high profile campaigning from
critics who believe that the framework does not provide a coherent or practical national
strategy for regeneration or housing in the UK.
At the heart of the National Planning Policy Framework is a presumption in favour of
sustainable development. (NPPF, 2012) The framework states; This approach for
determining planning applications has been adopted so development proposals that
accord with the development plan, and proposals which are sustainable; can be
approved without delay. Local authorities are to set out a clear economic visions and
strategies and identify priority areas for economic regeneration.
Paragraph 22 of the NPPF states: that a local authority should now regularly review land
allocations to reduce investment barriers. Employment land uses should not be given
long term protection if there is not a suitable prospect for the land use being retained.
Local authorities are advised to welcome alternative land or building use proposals and
be considered based on merit, market signals and local demand. This will now ensure
that suitable land is made available for regeneration projects and economic
development. Alternative proposals can now be considered on their merits rather than
simply to not being consistent with site allocations in the development plan.
The Localism Act sets out a series of measures with the potential to achieve a
substantial and lasting shift in power away from central government and towards local
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people. - - Rt Hon Greg Clark MP, Minister of State for Decentralisation (A Plain English
guide to the Localism Act, 2011) The Act provides powers to local communities by
means of neighbourhood plans. Communities can now be at the forefront of
development decisions in their area, which can be achieved through different measures.
Neighbourhood forums and parish councils can use new neighbourhood planning
powers to establish general planning policies for the development and use of land in a
neighbourhood. These are described legally as neighbourhood development plans.
Neighbourhood development orders will provide the powers communities need to
determine development in their areas, giving them an opportunity to approve
development that is relevant to the local supply and demand needs. (Planning Portal,
2012). The Localism Act (2011) states A neighbourhood development order is an
order which grants planning permission in relation to a particular neighbourhood area
specified in the order. It may make provisions to:
(a) all land in the neighbourhood area specified in the order,
(b) any part of that land, or
(c) a site in that area specified in the order.
Although neighbourhood plans are primarily about the use of land and other planning
matters, they are also an opportunity to establish community priorities, improve service
delivery and enhance local regeneration initiatives. (Leeds City Council, 2012)
The Community Right to Build Order is a type of neighbourhood development order;
allowing communities to plan for smaller scale development without the need of planning
permission. A small scale development is deemed as development which does not
require an Environmental Impact Assessment. This provides communities the
opportunities to maintain affordable housing stock and introduce amenities that have
previously been lacking. The Localism Act (2011) states the difference between the two
orders as A neighbourhood development order is a community right to build order if
(a) the order is made pursuant to a proposal made by a community organisation,
(b) the order grants planning permission for specified development in relation to a
specified site in the specified neighbourhood area, and
(c) the specified development does not exceed prescribed limits.
These measures will assist in ensuring regeneration projects are suited to the localities
in which they are proposed and therefore gain approval. The power remains with the
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communities who are most impacted - ensuring that regeneration projects are
sustainable and will promote economic growth specific to the area.
The Growth and Infrastructure Bill (2012) seeks to speed up the decision making
process for large scale commercial and business development. The bill insists that
decisions be made within a 12month timeframe, and provides the Secretary of State new
powers in determining these applications. (Local Government Association, 2012) The
Coalition government abolished the Infrastructure Planning Committee, claiming that it
was not in line with their localism agenda. However major projects will still be determined
centrally with National Infrastructure Directorate within the Planning Inspectorate.
Regeneration projects will certainly benefit from the reduced decision timeframes of
major projects, however it is viewed that the existing decision making process cannot be
attributed totally to the lack of regeneration.

Chairman of the Local Government Association Sir Merrick Cockell states; The big
problem is that developers cant borrow to build and first-time buyers cant get
mortgages. Taking planning decisions away from local communities and placing them in
the hands of an unelected quango isnt going to fix that. Nor is allowing developers to go
back on promises to provide much-needed affordable homes and local infrastructure.
This will only undermine communities confidence in the planning system and make
them less likely to accept development in future. (Planning Resource, 2012)
Rachel Fisher; head of homes and land at the National Housing Federations agrees that
there are usually other, more significant issues holding up development. In many cases,
constraints and costs of development finance and mortgage availability, as well as sales
risk, are more fundamental stumbling blocks. (National Housing Federation, 2012)






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Regeneration Funding
The Coalition state they have provided over 25 billion of central government
investment in infrastructure and growth that is supporting regeneration. (DCLG,2012)
The Communities and Local Government Committee report that the economics paper:
Valuing the Benefits of Regeneration (2010); estimated that regeneration programme
spending in 2009/10 was 11.189 billion. Further data provided by the Department of
Communities and Local Government showed that funding the following year decreased
by nearly 30% and forecasted further reductions in 2011/2012 to 3.872 billion.
Funding cuts from regeneration initiatives such as the Pathfinder Scheme have left
ghosts streets in cities such as Liverpool and Manchester. Residents are forced to
continue living in these areas despite the majority of homes being boarded up or
demolished. (Planning Resource, 2011) The document Regeneration to Enable Growth-
A toolkit supporting community-led regeneration provides a toolkit for communities and
local governments, and indicates funding programmes available to support regeneration.
The Regional Growth Fund and Local Enterprise Fund are both centred on achieving
economic growth and specifically aimed at tackling the lack of money available to fund
regeneration. Similarly. The Joseph Rowntree Foundation concluded in their response to
this document was that it lacked detail and clarity, particularly in terms of the delivery
arrangements at local level.
There is also concern with the lack of a national regeneration strategy. It is yet to be
determined how regeneration will seek to improve the UKs most deprived areas (such
as the Pathfinder ghost streets) and reduce regional disparities. Professor Michael
Parkinson suggests "The Government is primarily concerned about economic growth
and that will go to more privileged parts of the country. It has taken its eye off the ball in
areas with long-term deprivation. The price will be paid by those people in those areas
that find themselves trapped and abandoned (Liverpool John Moores University, 2011)





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Conclusion
It is difficult to predict whether the policy and legislative interventions will promote growth
and resolve our economic condition at this early stage. The government are confident
that it is indeed the planning system which has slowed down development and
prevented the country from meeting critical demands such as housing. However it is
viewed that whilst the current recession is at its worst since the 1950s, economic
downturns are cyclical and therefore will once more improve.

A national regeneration plan has not been implemented and the necessary funding is not
available in todays economic climate. This could lead to the most deprived areas being
overlooked as local authorities concentrate on regenerating areas more likely to attract
investment. New planning policies will certainly assist in the revival of regeneration;
financial assistance from central government and the relaxing of planning obligations will
make projects more economically viable for developers. Furthermore neighbourhood
plans and devolved planning powers will encourage community involvement in the
development process. This local level involvement will establish development that
matches the needs of the community and thus development is less likely to be
discouraged. However whilst the recession continues political and social hindrances will
not be the blocks to regeneration it will be the economy.









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