Challenge Funding (Hansard, 2 July 1996)

§ 3. Mr. Jacques Arnold
To ask the Secretary of State for the Environment if he will make a statement about his plans to extend challenge funding. [33934]

§ Mr. Gummer
We announced on 15 May the Government's decision to proceed with a pilot scheme for the allocation of local authority credit approvals through competitive bidding.

§ Mr. Arnold
My right hon. Friend will know that there are no greater fans of the Government's challenge fund than the people of Gravesend. For years, we waited for our county and borough councils to bring about urban regeneration and the relief of the ancient area of Old Denton. Now, the Government's challenge fund is bringing together voluntary organisations, companies and the local councils to find a solution in that urban area. So great is that enthusiasm, that Gravesham borough council is putting in a new application for improvements along the riverside, on which I hope my right hon. Friend will look benevolently.

§ Mr. Gummer
I cannot prejudge what the decision will be, but it is interesting that Labour councils such as Gravesham are beginning to realise that the challenge fund is a way of bringing together need and the ability to meet that need, instead of making decisions according to need. In the past, we wasted a great deal of money by allocating it to areas that were in need, but were unable to use the money effectively. By using the challenge fund, we ensure that they can meet the need, and they do so in partnership with the private sector, voluntary organisations and other agencies. That is the way to regenerate our cities, not the old-fashioned, socialist manner.

§ Mr. Vaz
Why does the right hon. Gentleman not accept what everyone now realizes—that competition, the policy principle at the heart of his regeneration strategy, has been totally discredited? Is it not patently absurd to set towns and cities against each other to compete for diminishing regeneration funds? Will the right hon. Gentleman therefore publish what Labour has requested for the past two years—comprehensive regional statements on which councils can bid for regeneration funds against an understandable, clear and coherent criterion of need?

§ Mr. Gummer
The hon. Gentleman has already lost the argument. The Environment Select Committee has said that the competitive system, the single regeneration budget, is extremely successful. Labour council leaders around the country tell me that they like the competitive system because it shows them to be successful when they do it well and it shows up their Labour neighbours when they do it badly. The only people who do not like the competitive system are bad Labour councils and those dominated by trade unions who do not want any competition. As usual, the hon. Gentleman is out of date. New Labour not only means a new attitude; it means a new attitude to measures that have been good—that is, to deny them and destroy them.

§ Sir Irvine Patnick
As my right hon. Friend will be aware, Sheffield city council made two successful bids in city challenge amounting to £74 million. That is to be commended, as it has brought in £140 million from external funding, including £90 million from the private sector. Some of that money will be used to improve property and assist with training and business start-ups. Is it not the way forward? Should not cities such as Sheffield—even Sheffield—be commended?

§ Mr. Gummer
Oh, yes. My hon. Friend will accept that, when I want to Sheffield, the Labour council leader had no complaints about his success. His only complaints were about the two previous leaders, both of whom sit in the House, who had run Sheffield into the ground so that it now needs urban regeneration. He is still paying the debts left by previous council leaders. He is still paying debts on the backs of the people of Sheffield because such a capital system did not exist.