Urban Programme Funding

HC Deb 03 December 1992 vol 215 cc489-98

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wood.]

10.2 pm

Mr. Clive Betts (Sheffield, Attercliffe)

I wish the House to consider the urban programme and its termination by the Government for reasons that are so far unexplained to the House. The urban programme began in its present form with the Inner Urban Areas Act 1978. That was preceded by a White Paper which is the only in-depth review of the needs of inner urban areas for the past 20 years.

Under this Government in the 1980s, there was a shift in emphasis from social and revenue-based programmes to economic and capital schemes. There was stricter monitoring of the schemes and programmes introduced in the 1980s. Detailed guidelines were introduced in 1985, and further management controls were introduced in 1990.

I take Sheffield, my city, as an example of what has been achieved under the urban programme, although I know that my remarks will be applicable to many other urban programme authorities. Sheffield happens to be the largest recipient this year, with £5.894 million under the urban programme. The programme is an important source of Government funding, especially in view of the reductions that local authorities have suffered.

The Government, when reviewing urban programme spending in Sheffield, found high-quality schemes which were precisely targeted, well developed formal assessment and appraisal arrangements, clearly defined and precisely stated objectives and an outturn performance that was delivered significantly well against allocations. That is not the normal picture of Sheffield city council which the Government like to paint.

In particular, I want to deal with the schemes that address and assist the problems of the unemployed and which come within the economic category of the programme. There has been a switch of emphasis during the 1980s, and I want to deal with the issue on the Government's terms. However, the social, housing and environmental aspects of the scheme are also important. The purpose of the Inner Urban Areas Act 1978 and the White Paper that preceded it was to highlight the issue of multiple deprivation in our inner cities and to produce new initiatives to tackle that problem.

The problems of unemployment have worsened since the urban programme began. While the programme has done much to assist the fight against unemployment, because of the wider economic difficulties we can see the horror of unemployment becoming worse in our urban areas.

The essential question must be: if the programme was designed to remove deprivation in inner cities; if unemployment is a key part of that deprivation—no one would challenge that—if, despite some successes, because of the wider issues, the problem of unemployment has grown worse, why should the urban programme be abandoned at this stage? If anything, the case is more obvious for an expansion of the urban programme to deal with those growing problems.

In the 1970s in Sheffield, unemployment varied between 10,000 and 15,000. By 1986, it had risen to more than 45,000. It had increased threefold. There was a slight recovery in 1990, but in the past two years it has risen by 44 per cent.

In Darnall in my constituency, one third of the people are out of work. Job losses have been greatest among the less skilled, the ethnic minorities and manual workers. They are the very groups that comprise large parts of the population in inner urban areas. In Sheffield in 1992, it is interesting to note that the unemployment levels in the most prosperous parts of the city have almost returned to the levels of the 1970s.

However, unemployment in the inner city is three times as high as it was in the 1970s. In other words, relative deprivation has grown. There must therefore be a need for more targeted resources. The logical view is that we need more schemes like the urban programme, not fewer.

No doubt the Government will respond by saying that other schemes have been introduced. Sheffield has no city challenge, despite an obvious need and despite, in our view,'the quality of the bid. The Minister will probably say that the rejection letters become more pleasant each year, but that still does not give us the money.

We have an urban development corporation; we did not necessarily want it in the form given, but we accepted it. We asked for certain assurances, one of which was that there would not be a reduction in the urban programme to reflect the increased money through the urban development corporation. That assurance was given by the then Minister of State. To take a wider view of the problems of inner-city Sheffield, the people who live in the area have a life expectancy six to eight years less than those who live in the outer parts of the city.

I want now to consider some of the schemes that we have undertaken. Some £2 million from the urban development programme in addition to funding from the European regional development fund was devoted to a technology park. Some £4 million was spent on improving the appalling environment after the collapse of the steel industry in the lower Don valley to make it attractive for inward investment.

In addition, £1.5 million was devoted to the cultural industries quarter, which helped to create 300 to 400 jobs. There is on-going funding in relation to the black economic development fund and improvement grants to firms in improvement areas. There are business support schemes and a wide variety of schemes concentrating on the economy, regeneration, training and development. Partnership between the private and voluntary sectors is very much a feature of Sheffield life.

In Tinsley, schemes involving housing action money and transport supplementary grants have been used with urban programme funding to improve the environment of an area which had been neglected. That area has been improved and assisted by urban programme funding.

I will not quote from the city council or its officers to prove the scheme's success. However, particular credit should be paid to Phil Nuttall, the urban programme co-ordinator in Sheffield. Much of the success is due to him. Instead, I will quote from the audit review: The Council's allocation for 1990–91 was £6 million. About 55 per cent. of the programme is for economic development. Officers from the DoE's regional office in Leeds were very positive about the Council's approach. Their opinions were that the Council's programmes are of excellent quality, are submitted promptly and are monitored well by the Council. Also, the Council has more projects planned than resources are available from the DoE. Hence, more resources can be taken easily by the Council at short notice, which DoE officers thought to be very good practice. Looking forward to next year, officers and councillors were planning as usual. In February 1992 came 44 pages of DoE guidance for the 1993–94 programme. In June 1992, a letter came inviting bids, with seven further pages of guidance. There were 51 pages of guidance in all for a programme which was to become non-existent.

Following this, the council produced an action statement for 1993–94, which was submitted to the Department of Environment in August and approved formally by that Department in September. The only information that the council had was that funding was likely to be 7 per cent. lower because of top-slicing of city challenge.

The implication was clear that the schemes would continue next year, including new schemes which had been submitted. In October, the submission was made with the scheduling of projects with regional officers of the DoE.

More important than all the work of the councillors and the council officers is the fact that the people of Sheffield in the urban areas have been actively involved in consultation about the projects and have had their hopes and expectations raised.

Then came the autumn statement, with the Government's emphasis on unemployment. Apparently it was no longer to be the price worth paying to ensure lower inflation. Capital investment was top of the agenda for spending. Some of us might have questioned whether that was just talk, or whether the Government were about positive action.

Some of us even welcomed some of the initiatives on private investment alongside public investment but also recognised that, in inner urban areas, it is much more difficult, because of their nature, to attract private sector funding unless public sector pump priming is there as well, but to us the urban programme criteria seemed to fit exactly with Government objectives: targeted spending on Government priorities; Government monitoring of performance; partnership with the private and voluntary sectors, Government and local authorities; increasingly economy-related, dealing with training and jobs; assistance to the poorest areas; new initiatives and innovations; successful projects approved by the Government's own monitoring; and infrastructure development. They were all key issues.

Shortly after the autumn statement, however, a letter arrived on the doorsteps of leaders of local authorities. It began by saying: we have been able to maintain the Urban Programme at £176 million for 1993/4". In itself, that was a misleading statement, as maintaining it would have meant £250 million, not £176 million. This will allow some £20 million for new projects which we have decided will form the urban element of Capital Partnership. That is a minuscule and inadequate response to the real needs of urban areas. These arrangements will therefore supersede the Urban programme guidance issued in February, although we will continue to meet UP commitments arising from approvals in. this and previous financial years. The urban programme has been terminated by the back door without reference to this House in mealy-mouthed words. They did not even have the honesty to admit what they meant.

To say it was an unexpected letter would be an understatement: it was received with amazement and incredulity. In my view, it was contrary to the autumn statement. It is a disaster for the poorest communities—a hidden cut which the Government was trying to sneak through the back door in an effort to keep within the public spending total, while allowing high-profile projects like the Jubilee line to proceed. This means that the poorest of my constituents are being asked to pay for a train ride to docklands which they do not want to take. The Government make no attempt at explanation.

To say that existing projects will be honoured is not true. Capital schemes which are committed to spend beyond March 1995, councillors and council officers have been told, will not be supported or funded after that date. Even commitments which have already been entered into will not be funded after March next year, even though commitments. I look to the Minister for a response on those important points. There has been no explanation for this fundamental change of policy.

In the meantime, the problems of our inner-city areas remain. Local authorities will be left to pick up the pieces. The same local authorities which have just been rigidly capped by the Government, and which will have to make cuts in their expenditure because of that capping regime, will have to curtail expenditure in areas that need it most. Councils cannot possibly redirect the main thrust of their mainstream programmes when they are under attack because of Government actions. It is impossible for councils and councillors to cope with the situation, and those same councillors are continually denigrated by Ministers for failing to cope with the impossible task that the Government have set them.

The other day, someone asked me the difference between being an Opposition Member in Westminster and the leader of a city council in the current climate. I replied that it was essentially the difference between throwing the hand grenades and having to catch them. Many councillors feel that way, given the present situation.

The need still exists, and people in inner-city areas should be our main interest and our main commitment in terms of assistance. There is still bad housing, a poor environment, poverty, unemployment and the multiple deprivation which the Inner Urban Areas Act 1978 was meant to help remove.

The urban programme has had some successes. It has not solved all the problems of inner-city areas, but it has improved on a desperate situation for many people. Are the Government serious about tackling unemployment? If they are, they have to be serious about tackling it where it is greatest—or is it still a price worth paying for those who live in our inner cities?

The urban programme will not remove the tragedy, waste and hopelessness of unemployment in the inner urban areas, but its removal will only make unemployment that much worse. I hope that the Government will accept their mistake in abolishing the programme, will accept that they have got it wrong, and—for the sake of £80 million in the next financial year—will restore it immediately and commit themselves to a major review of the needs of such areas. That review would prove the need for a significant expansion of schemes like the urban programme.

Yesterday evening, Sheffield city council unanimously, with all-party support, expressed its concern over the termination of the urban programme. It considered the action unacceptable and called on the Secretary of State to review the situation and to meet a delegation from the city. I hope that he will meet that delegation, to give it the good news that the programme is to continue.

10.16 pm

The Parliamentary Under-Secretary of State for the Environment (Mr. Robin Squire)

The hon. Member for Sheffield, Attercliffe (Mr. Betts) has raised a subject which I know is of concern and interest to many. I want to get to the issues of policy eventually, but I must respond to his account of the way in which we introduced changes to the urban programme and introduced the urban partnership fund.

My right hon. Friend the Secretary of State for the Environment announced the new capital partnership initiative on Friday 13 November—there is no significance in that date—and on the same day I wrote to all 57 urban programme authority leaders, to tell them about the implications of my right hon. Friend's announcement for the programme and our proposals for the urban partnership fund. That letter was copied to each and every local Member of Parliament. We followed that up with further guidance from Department of the Environment regional directors on 20 November, and my officials met about 50 local authority representatives including someone from Sheffield council, at the Association of Metropolitan Authorities headquarters on 26 November.

I hope that, on reflection, the hon. Gentleman will agree that that was a rather public way of "sliding an announcement out through the back door", to quote his earlier comments. I am also very aware of the work which local authorities and their partners have put into working up their urban programmes. The timing of the autumn statement and the decisions on relaxing the rules on useable capital receipts inevitably meant that work on urban programmes for 1993–94 was well advanced before we announced changes. I repeat that we took the first opportunity to let local authorities know the position.

Outside this Chamber, I was criticised by the hon. Member for Blackburn (Mr. Straw), the Opposition spokesman on local government matters, because the letters were not signed by me. I was in a provincial town at the time and was anxious for the information to go to all the councils affected as quickly as possible.

I would also like to scotch the rumour that all urban programme expenditure is ceasing as of now. I know that some voluntary organisations have been uncertain about this and I am grateful to the hon. Member for giving me the opportunity to clarify the position. I must make it quite clear that we have made provision to meet in 1993–94 and 1994–95 urban programme commitments which have already been entered into in 1992–93 or earlier.

With regard to the point which the hon. Member made about years after 1995–96, there is certainly provision to meet revenue commitments for that year. Individual projects commitments should be discussed with regional offices. I know that there has already been some discussion between council officers and my regional office officials on this point, and I would expect that to continue.

Where projects have already been given a three-year approval, or four-year approval in the case of some voluntary sector projects, provision has been made for these commitments to be met. There is no question of our having cut off funding to existing approved projects. Indeed, some projects, because of the nature of their approvals, will continue to receive funding into 1995–96.

The hon. Gentleman naturally concentrated his remarks on the urban programme. The UP was for a long time the mainstay of urban policy. Originally conceived as a social programme in 1968, it has been steadily adapted and developed over the years. It assumed roughly its current shape after the 1977 inner cities White Paper. It has therefore had a very long run, and over its life tens of thousands of projects have been supported in urban areas. I fully recognise the contribution which the programme has made to urban regeneration over the years.

It would be unrealistic, however, to think that the urban programme is the sole answer to urban problems. Since 1979, we have developed a range of instruments alongside the UP to improve the competitiveness of our cities and the lives of local people. Urban development corporations, including the very active one in Sheffield, have attracted some £12 billion in private sector investment and created or attracted over 69,000 jobs. City grant and direct land grant have also levered in substantial private investment, and their approaches will be incorporated and carried forward in the Urban Regeneration Agency. On the housing side, initiatives such as estate action have made a tremendous impact on inner city and peripheral areas of problem housing.

I therefore think that the hon. Gentleman took a rather selective view of the resources which we are putting into urban areas. He did not mention, for instance, that we have secured an extra £93 million for the urban block as a whole for 1993–94 over the previously published plan. Taken together, total urban programme and city challenge resources will increase from £319 million in 1992–93 to £408 million in 1993–94. I would have thought this maintained commitment to urban areas in a tough economic climate would receive at least a flicker of acknowledgement from the hon. Gentleman.

On top of this, local authorities will have extra spending power in 1993–94 as a result of the changes in the capital receipts rules that I have mentioned. If authorities continue to realise capital receipts at the same level as they are forecasting for 1992–93, we estimate that the 57 urban authorities will have extra spending power of around £500 million as a result of the change in the capital receipts rule.

It is, of course, for each authority to decide how and when to use this extra spending power, but the urban partnership fund will help make these receipts go even further and directly support urban regeneration. The urban partnership fund will use uncommitted urban programme resources of up to £20 million. As the hon. Gentleman said, details of how the fund will operate have been placed in the Library of the House.

There is one change to our earlier advice to local authorities which I should mention to the House. In response to representations from the AMA, we have extended the deadline for bids to be submitted from 31 December 1992 to 15 January 1993. This will give authorities more time to prepare bids and to weigh up the use to which they intend to put their capital receipts.

The point of the urban partnership fund is to work alongside and complement other initiatives in urban areas. Anyone who is involved in the inner cities knows that each city has a different spectrum of problems and characteristics which call for a range of measures to tackle them. Hon. Members will be familiar with the combination of problems which come together in many urban areas such as the decline of traditional industries, unemployment, which the hon. Gentleman rightly highlighted, low skill base and educational achievement, crime, poor housing. That is why the drive to regenerate our cities calls for an effort across Government Departments and agencies and closely involving the private sector and local communities.

The hon. Gentleman mentioned city challenge. I was closely involved in looking at city challenge bids. What struck me above all else was the diversity of the problems that faced the different areas, matched by an equal diversity in the solutions and initiatives which were developed to address them. There is some force in the argument that we could do more to simplify and streamline urban policy, but the fact remains that we need a flexible and responsive set of instruments to tackle urban needs.

Even more important than getting the instruments and structure right is engaging the commitment and enthusiasm of local people and local businesses. Here, we have learnt from the urban programme and other initiatives. Partnership was built into city challenge from the word go, not grafted on as an afterthought. Ted Cantle, chief executive of Nottingham, wrote in the Local Government Chronicle of 4 September this year: No other regeneration project has, in my experience, ever created the same spirit of partnership and concentrated determination. Ted Cantle also said: attempts by local authorities to involve others in the process of change and to actually devolve power can strengthen, rather than weaken, local government. That was a key message. Public money goes a great deal further if it is backed by local effort. Even old urban hands have told me that they have been astonished by the enthusiasm which has been unleashed by city challenge. In many ways, city challenge draws out and applies best practice from the urban programme.

Of the 57 urban programme authorities, 32 currently benefit from city challenge, and as the hon. Gentleman pointed out, his city is not yet among them. We are fully committed to the approach embodied by city challenge of a locally devised and applied strategy, partnership with the private sector and the local community and effective management.

Even in areas which have not yet been successful with their city challenge bids, the whole process of bidding and putting together partnerships has yielded some valuable results. In Plymouth, for example, the local partnership responsible for the bid will, as "Plymouth 2000", seek to take forward major investment proposals. Burnley is exploring with my Department and other partners how major development projects contained in its bid can be supported. Through the city action teams and the Department's regional offices, we will do all we can to support and encourage such initiatives.

We shall be looking closely at the performance of the first two rounds of city challenge in deciding if and when to have a third round. The early results are encouraging. We shall also be looking at the outcome of the 1991 census in deciding the shape of urban policy for the next few years.

The hon. Gentleman drew attention particularly to the problems of unemployment and deprivation in Sheffield. I assure him that the review that I have in mind for early next year will be a thorough review of urban needs, drawing on the results of the 1991 census. It will cover multiple deprivation and will inform policy decisions for 1993–94 onwards. Among other things, it will cover unemployment, housing and dereliction. The results of the 1991 census should be available in January or February 1993. Only then shall we have a clear picture of how urban needs have shifted since 1981.

There are some measures we can take which do not depend on the census results. We need to simplify further the administration of support for urban areas. That is why, for areas of derelict and vacant land, the Urban Regeneration Agency will, at a stroke, bring together three existing instruments: derelict land grant, city grant and English Estates. We have already simplified procedures for city challenge and are looking at the potential for further rationalisation. The aim must be to make our programmes accessible to local people and local businesses while maintaining a proper regard for value for money.

The hon. Gentleman invited me to receive a deputation from Sheffield. I assure him, and other hon. Members, that my door is always open to authorities which want to discuss constructive ways to promote urban regeneration.

As the hon. Gentleman may know, I paid an early visit to Sheffield after the city challenge announcement, specifically to meet the partners behind the unsuccessful bid. I remain available to discuss with other authorities how we take forward the many exciting initiatives that are now available.

Mr. Betts

I have listened to the Minister with great interest. I understand that he is undertaking a review and examining many new initiatives. However, I have not yet heard an explanation why, while the review is taking place, the urban programme, with its proven success, has been effectively terminated and replaced by new schemes. Why was the urban programme not continued until the review had been completed and we had examined other schemes to see whether they were more suitable to achieve the success that we wanted?

Mr. Squire

The hon. Gentleman will be aware of the background to the autumn statement, in which my right hon. Friend the Chancellor said that, against tight controls on public expenditure, we would emphasise capital projects. As I made clear, the total urban block has been not merely preserved, but marginally increased. Within that block, we have emphasised capital projects, which is why the urban programme has been reduced.

I did not come here to be controversial. I hesitate even to mention the subject, but I find it a bit rich that the Government are blamed for the revenue problems that Sheffield city council faces at present. Any problems that the council faces—I have considerable sympathy with it—did not arise primarily from any Government actions. They arose from past leadership of the council and decisions taken by it. I have much sympathy with the people of Sheffield, who must now pay the price. It is not fair or reasonable, but untrue, to suggest that the problems resulted from Government decisions. It is important to put that on record.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes to Eleven o'clock.