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Barrow-in-Furness. Blackpool. Grimsby. Great Yarmouth. The list of 100 places set to benefit from 拢3.6bn of government regeneration money includes many of the towns most synonymous with the 2016 vote to leave the EU. The Towns Fund, launched at the start of this month by Boris Johnson in Manchester, is very consciously designed to appear to address those 鈥渓eft-behind towns鈥� 鈥� the prime minister鈥檚 words 鈥� where the argument to leave the EU most clearly struck a chord. The folk of Boston, Lincolnshire, are rated as the Brexitiest in the entire country 鈥� the only place where more than three-quarters of people decided to vote to leave. Their reward, seemingly, is not yet the UK actually leaving the EU, but at least a chance to bid for a share of this cash.

The money, according to the government, is to ensure these places have 鈥渁 prosperous future鈥�, by developing 鈥渋nnovative regeneration plans鈥�, in particular to support challenged high streets and town centres. But the money comes against a backdrop of town halls starved of almost all regeneration funding for a decade, and amid furious political positioning for an imminent general election. From the industry鈥檚 perspective, the 100-strong list of places is hardly a catalogue of the most desirable investment opportunities. So could this funding make a difference to those areas, and does it mark a return to the generous 鈥渞egeneration鈥� spending that sparked development in deprived areas during the New Labour years? Could it be enough to tempt the development industry outside its more traditional stomping grounds?

Yes, we鈥檙e interested, but so far we don鈥檛 really understand how to access it [鈥�] we鈥檙e seeing it as a political announcement rather than something with substance

Chief executive of a listed developer

 

Left behind

If some places in the UK are now 鈥渓eft behind鈥� 鈥� to use the current parlance 鈥� there is an argument that it is no accident but rather a conscious outcome of government policy. From the 1980s onwards, both Conservative and Labour governments directed large amounts of money to the most deprived parts of the country in an effort to turn them around. It was when Gordon Brown became prime minister that this commitment to 鈥渁rea-based鈥� regeneration waned. Then, in 2010, the incoming coalition government abolished regional development agencies alongside nearly all remaining regeneration-linked funding streams including the Neighbourhood Renewal Fund and Housing Market Renewal programme. 

A 2015 study of regeneration funding by the Centre for Analysis of Social Exclusion found the result was that New Labour鈥檚 annual spend of circa 拢1bn on neighbourhood renewal collapsed by 97% to an average of 拢32m under the coalition government, while spending on regeneration overall 鈥� including housing, infrastructure and community programmes 鈥� fell from more than 拢11bn in 2009 to 拢4bn by 2011. Chris Brown, chief executive of regeneration developer Igloo, says: 鈥淕ordon Brown turned off the tap in 2008 鈥� that was the last time the UK government did anything significant in regeneration.

鈥淚 personally believe strongly that this decision is what led pretty directly to people in low-income areas concluding they weren鈥檛 getting anything out of the political process.鈥�

At the same time, the capacity for local authorities to fund these kinds of programmes themselves reduced as council funding fell by an average of 40% under coalition government austerity programmes. Councillor Sean Fielding, leader of Oldham council, which has seen funding more than halved, says councils have no obligation to continue to spend in this area. 鈥淩egeneration is not a statutory service,鈥� he says. 鈥淚n theory we could de-establish our town team tomorrow 鈥� it鈥檚 only because we believe it is so important that we carry on doing it.鈥�

Fixing economic fundamentals

In this funding context, therefore, any money from the government is welcome. The government has pledged to publish a prospectus setting out the exact criteria under which towns will be able to bid for funding, and over what time frame. So far it has made clear it will be prioritising issues such as broadband infrastructure, transport links, local skills and culture. Jackie Sadek, chief executive of developer UK Regeneration and an adviser to Bill Grimsey鈥檚 landmark town centres review, describes the money as 鈥渋ncredibly welcome. There鈥檚 a new understanding that town centres are important.鈥� 

Rebecca McDonald, analyst at the Centre for Cities think tank, says: 鈥淚t is great to have the investment, and when you see where it鈥檚 going, it鈥檚 definitely welcome.鈥� She says her research demonstrates that the broader health of the local economy is the most important issue. 鈥淵ou鈥檝e got to fix the more fundamental economic problems of these areas by thinking beyond the high street. The focus on skills and transport here is one of the reasons we think this intervention has a better and broader scope than many.鈥�

UK Regeneration鈥檚 Sadek says the money should be used to implement the conclusions of the Grimsey review, to diversify towns away from the current reliance on retail and towards leisure, restaurant and office uses. 鈥淣o one鈥檚 going far enough to really look at a future which is not, not, not about retail. It鈥檚 got to be experiential 鈥� people won鈥檛 be coming into towns to buy stuff.鈥�

However, while the 拢3.6bn overall figure may sound large, does it really mark a return to an old-style regeneration programme? Though it is not known what period it will cover, it is unlikely to match the 拢1bn spent annually on neighbourhood renewal before 2010 鈥� equivalent to 拢1.3bn once inflation is factored in. 

Tom Russell, the former boss of the New East Manchester development company, says there is little evidence of the long-term and focused programmes which he says have proven to be effective. 鈥淢ichael Heseltine was right when he said you have got to be clear about your objectives and long-term funding to make a difference, particularly if you鈥檙e trying to draw in private investment. The private sector has got to be convinced there鈥檒l be a sustainable improvement.鈥�

Moreover, some doubt how much, split between at least 100 places, the money will be able to achieve. Just 拢241m will be made available in the 2020/21 financial year, suggesting each authority will receive on average a little over 拢2m. Igloo鈥檚 Brown says: 鈥淭here鈥檚 not much you can do with just a couple of million.鈥� Lyn Fenton, a consultant and former development director at the Ancoats area regeneration in Manchester, says: 鈥淢y first reaction is this is it鈥檚 papering over the cracks. 

鈥淚t is getting a little bit back of what local authorities have lost under austerity, and of course if local authorities can take it and do good with it, then all power to them. But it is only a little.鈥�

To give a scale of the challenge, in just one of the 100 areas 鈥� Oldham 鈥� the council鈥檚 masterplan for regenerating the town centre requires a 拢350m investment. Oldham鈥檚 Fielding says the council has already been working hard to identify the money itself, and that any extra from the government, while welcome, is not likely to make the difference. 鈥淎ll of our plans are there anyway,鈥� he says. 鈥淚f there鈥檚 extra government money, that鈥檚 welcome, but really it will just free up money to spend on other things. It鈥檚 local leadership that makes the difference.鈥�

Moreover, Fielding rejects the 鈥渓eft behind鈥� label that is so liberally bandied around. 鈥淗aving a struggling town centre is bad for the local economy and bad for civic pride. It knocks people鈥檚 confidence. 

鈥淏ut the phrase 鈥榣eft behind鈥� implies we want to end up being like somewhere else, if only we could catch up. Actually, we鈥檙e quite proud of our identity; we don鈥檛 want to be a clone.鈥�

Marginal constituencies

And if the overall amount is not sufficient, the money is also tainted by the suspicion it amounts to pork barrel politics 鈥� buying votes 鈥� amid a splurge of election-friendly cash promises made by the prime minister since taking office. In 94 of the 100 towns identified as recipients of the fund, residents voted to leave in the 2016 referendum 鈥� making them places where the Conservatives may be vulnerable to voters opting to support the Brexit Party in the upcoming general election. 

While it could be argued that these towns were picked just because they are also the most in need of help, what has particularly aroused suspicion is the inclusion of very marginal constituencies such as Cheadle, Manchester, on the list, despite being much wealthier than neighbouring areas that didn鈥檛 make the cut. Sean Fielding describes the Cheadle allocation as simple 鈥渆lectioneering. It鈥檚 relatively affluent.鈥� Tom Russell describes the whole exercise as 鈥渇eeling like another Brexit bribe for parts of the country that need to be kept in line鈥�.

Overall, an analysis by the Manchester Evening 好色先生TV shows that one-quarter of all allocations are in Conservative 鈥渟uper-marginal鈥� seats 鈥� where a swing of 1% either way could make all the difference between winning and losing 鈥� despite such seats making up just 3% of constituencies overall. Moreover, nearly two-thirds of allocations are in constituencies with majorities of less than 5,000 votes.

Martin Curtis, associate director at public affairs consultancy Curtin & Co, says this is a reasonable conclusion: 鈥淲e all know we鈥檙e heading toward an election and the government will be looking to distinguish itself from the Brexit Party in marginal seats.鈥�

However, a spokesperson for the government said that the initial 100 towns were chosen using a genuine methodology based on 鈥渁nalysis of deprivation, exposure to Brexit, productivity, economic resilience and investment opportunities鈥� and that 鈥渨ider eligibility criteria and the procedure for funding鈥� would be set out in 鈥渄ue course鈥�. 

Political instability

Either way, the idea of places that have struggled most from poor productivity and declining high streets getting a bigger share of public funds seems a likely outcome, whatever the colour of the government after the election. Igloo鈥檚 Brown says: 鈥淚f we have another PM and another government and a new Queen鈥檚 speech, this might be in another wrapper but this priority will likely remain.鈥�

But the political instability and lack of clarity so far as to exactly how and where funds will be allocated is so far limiting the private sector鈥檚 ability to get involved. One listed developer chief executive says: 鈥淵es, we鈥檙e interested but so far we don鈥檛 really understand how to access it and how we might get involved. It鈥檚 not a sudden yippee 鈥� we鈥檙e seeing it as a political announcement rather than something with substance.鈥�

Brown says: 鈥淚t鈥檚 just not clear enough yet for the private sector to benefit from this. The people who will know about this are those on the ground involved in those specific areas already 鈥� it won鈥檛 be easy for other landowners and property developers to move in and get involved.鈥�

The construction industry will be hoping that the government鈥檚 promise to unveil more detail 鈥渟hortly鈥� doesn鈥檛 get sucked into the Brexit vacuum and delayed until after the election.