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With less than two weeks to go before the deadline for Regional Growth Fund bids, Lee Heley assesses what it can realistically achieve
Money is tight as local government digests the impact of the finance settlement in December. So eyes are watching the Regional Growth Fund (RGF) closely as it bubbles up like a water hole in the parching savannah of local government funding.
The fund totals £495m in 2011; £502m in 2012 and £420m in 2013. The investment aims to support private sector growth and jobs in England, in particular in those communities that are currently dependent on the public sector. In short, in places outside the southeast. The first of three bidding rounds is open but the deadline is fast approaching – 21 January.
If you are putting in a bid, you will already have scoured the dedicated BIS website, and probably attended one the roadshows run by the fund’s advisory panel chair – Lord Heseltine, or vice chair – Sir Ian Wrigglesworth.
Now, public sector investment in private sector growth is – to paraphrase Adam Smith – tricky. And not just due to State Aid rules. We know that that jobs arriving in deprived areas since 2000 came on a rising tide of public sector investment. We know from the Audit Commission’s own work in Surviving the Crunch that the public sector outside London is roughly the same size everywhere – but it looks very big in some places because the private sector is so small.
So, is the fund enough to help ‘rebalance’ the economy towards the private sector? Well, RGF for the next year is less than a quarter of what RDAs spent each year from 2007-2010. And to put the fund into a wider perspective – if government spent its money sequentially by budget line 24 hours a day over the year, RGF would last just six hours and a quarter hours. Or, if we consider the fund as part of total bank finance to business, the same calculation sees RGF last less than two days (42 hours).
So this sort of fund can never be enough to counterbalance the impact of wider government spending, or wider bank lending. But it can help. The pragmatic point is how to make the best of the fund we’ve got.
First, it is not another public sector grant fund. It is money for the private sector. Yes 40% is earmarked as capital funding. And yes that might support infrastructure works. But government wants and expects individual firms based outside the southeast to bid for money to help grow their businesses and employ more staff. The public sector can only bid with private sector partners.
Second, ‘It’s the cashflow, stupid!’. The bones of each bid will hang on the funding proposition – what is the business’s revenue, profit and earnings, and so how many more people it will employ (and where)?
Third, give assurance. How risky is the proposal? Will the new private sector jobs really appear? And how long will they last? For successful bidders, government expects accountants to provide some assurance of the deliverability of the proposal.
And finally, the competition is fierce. The aims are broad, the process encourages bids from individual firms at a time when bank lending is constrained and RDAs are closing. The scale, range and diversity of bids will be unlike anything seen before.
So even in this first round, Lord Heseltine’s advisory panel and Nick Clegg’s ministerial decision making group will have their work cut out come 21 January.
The merger of the Development Trusts Association (DTA) and Bassac will create a new organisation called Locality, it was announced today.
Current DTA director Steve Wyler will lead Locality from its launch in April. Joanna Holmes, chief executive of Barton Hill Settlement in Bristol, will chair the board of trustees.
Bassac’s chief executive Ben Hughes is to move on at the end of this month, something he had planned to do from the outset of the merger process.
Discussions over a merger were announced in August last year and confirmed in November.
It will create a new network of settlements, development trusts and other organisations and Locality plans to work with members on areas including community asset ownership and collaboration.
Mr Wyler said the new organisation would be ‘leading a movement that will truly realise the possibility that exists in every community’.
‘It will transform our sense of what people acting together locally can achieve; it will be a movement ambitious for change,’ he added.
]]>The original aims of Big Society are being sidelined in favour of the ‘contradictory’ pursuit of involving communities in public service delivery, a new report warns.
It suggests a growing gap between the prime minister’s original aims for Big Society and the way it is being applied in practice.
Rather than empowering communities and nurturing personal responsibility, Big Society has become fixated on encouraging social enterprises and third sector groups to run public services.
This not only makes such organisations more dependent on the state, it also fails to recognise that the role of most community groups is to take the pressure off public services and hold them to account – not deliver them.
The report, written by the think tank Paces Empowerment, adds: ‘The aim of strengthening communities is being confused with the running of public services by voluntary organisations and social enterprises… The main vehicle for strengthening communities is the independent activities of the mass of community groups, which are not social enterprises.
‘Community groups are independent of the state, hence are the authentic expression and voice of the community. Whereas social enterprises naturally seek to sell a service at full cost recovery, community groups just need background support in order to make the maximum impact, but only a small minority are getting it.’
Authors Gabriel Chanan and Colin Miller argue that empowering communities should be the main focus of Big Society, backed with ‘reformed community development, better amenities for groups and more widely available grants’.
Commissioning social enterprises and voluntary organisations to deliver public services ‘should be a supplementary policy, including giving the best chance to genuinely local grass-roots groups which can handle the dual roles separately’, they say.
]]>A new service combining the strengths of New Start and the Centre for Local Economic Strategies (CLES) will be launched later on this month. The finishing touches are being made to a new web resource – a flyer outlining some of its features can be viewed by clicking the image on the left.
It’s just one part of a broader, comprehensive membership deal from CLES that includes training, discounts on consultancy, events and the opportunity to take part in research. We’ve produced a leaflet with full details of what’s on offer to members.
Watch this space for updates…
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Ruth Lister has been made honorary president of Child Poverty Action Group. Professor Lister is a former director of the charity and is emeritus professor of social policy at Loughborough University.
The new national director of the Royal Town Planning Institute in Scotland is Craig McLaren. He joins the RTPI from his role as head of Scottish Centre for Regeneration.
The Institute for Fiscal Studies has announced Paul Johnson is to be its new director. He has worked in the economics of public policy for more than 20 years and spent a decade at the IFS from 1988 to 1998. He will take over at the beginning of January.
Housing group A2Dominion has appointed Derek Joseph as its new chair. The former director of Tribal Treasury Services will replace Peter Taylor, who is to retire in March.
The charity Skills – Third Sector has made Graham Leigh its new director of strategic partnerships. He was previously director of development at the Directory of Social Change.
John Cridland is to succeed Richard Lambert as director-general of the Confederation of British Industry (CBI). Mr Cridland, who is currently deputy director-general, will take up the post from the end of January. The CBI has also appointed Sara Parker its regional director for London. She has worked for the organisation for the last four years, most recently as head of its creative industries group.
Chief executive of the National Institute of Adult Continuing Education (Niace), Alan Tuckett, is to retire next summer. He has led the organisation for almost 25 years.
As you will be aware New Start magazine is now part of the Centre for Local Economic Strategies (CLES).
As a result of the coming together of CLES and New Start we are now developing a new service for economic development and regeneration. This will combine the strengths of each organisation and meld together the news and reporting of New Start and the rich policy and practice understanding of CLES and CLES Consulting.
As a valued reader, we are keen to understand what you would like to see from this new service and how we can meet your future needs. Give us your views and ideas in our online survey.
The survey should only take a few minutes to complete and gives you the opportunity to shape our service so that it is valuable for you. It also explores where you might be interested in getting more involved with the activities of CLES and New Start, from joining our 'virtual panel' to working as an associate of CLES Consulting.
]]>Housing bodies urged government to think again after unveiling new proposals to reform social housing, including an end to life-time tenancies.
In his consultation paper on social housing reform, housing minister Grant Shapps announced plans for a ‘more flexible affordable rate’ tenancy - higher rents on a shorter term basis.
Council housing will, under the changes, be offered on a minimum fixed term of just two years, and new tenants will only be able to pass on their tenancies to a spouse or partner when they die.
The plans will apply only to future council housing tenants.
While many welcomed the move towards greater flexibility for social rents, they said they should not be at the expense of tenant security and stability.
Sarah Webb, chief executive of the Chartered Institute of Housing said: ‘Just two years may be appropriate for a small number of tenants going through a short-term transition in their lives, but how realistic is this for most people to be asked to move on from their tenancies after such a short period?’
Brian Johnson, chief executive of Moat Homes, called for a ‘rethink’ of the plans, saying, ‘Moving people from their homes when their circumstances improve is not the way to tackle the pressure on social housing.
‘We are calling on government to reform rents so that people who can pay more do, but that no one is asked to leave their home just because their circumstances have improved. Put simply, we believe that subsidy should follow people rather than bricks and mortar.'
David Orr, chief executive of the National Housing Federation, which represents the UK’s not for profit housing associations, called the proposals a ‘fundamental change to the way social housing is delivered and managed’.
He said that for the plans to work, housing associations would need to be given ‘as much flexibility as possible so that they can make decisions based on the needs of their local market and the homes they manage’.
Included in today’s paper are plans to reform council housing finance, giving greater control to local authorities, and proposals to create a duty on local authorities to publish a strategic tenancy policy.
Many supermarket-led regeneration schemes are failing to create attractive places to live in, a new report from Cabe says.
In a study of 30 major developments it found multi-purpose schemes were built with little relationship to their local neighbourhood, including poorly designed housing and public amenities.
A Tesco development in Bromley-by-Bow, for example, saw a huge store placed alongside an attractive waterside, while housing built as part of the scheme overlooked a busy road and a new primary school was added onto the store’s delivery yard.
With supermarket playing a much bigger role in regeneration, local authorities need to ensure they think beyond the short-term economic gain such schemes can bring, Cabe, the government’s adviser on design and place-making, warns.
Supermarkets often repeat their out-of-town store design – big plain buildings with large car parks – in town centre schemes, ignoring local character and the changing needs of neighbourhoods.
As the government prepares to unveil its decentralisation and localism bill Richard Simmons, chief executive at Cabe, says supermarket schemes will need to improve their design in light of public opposition.
‘With local people given real power to decide what gets built and where, it will be even more in the interests of the supermarkets to propose good schemes which benefit the area.’
The report highlights good examples of supermarket schemes, including a Booth’s store in Garstang, Lancashire which has been designed to integrate with the historic townscape and which includes a new public square in the development.
It calls for councils to play a stronger role in planning such schemes, to ensure that the often competing needs of local economic development, commercial viability for a store and sustainable place-making are balanced.
]]>The government’s Green Deal could fail those homes most in need of energy efficiency measures, a new report has found.
Social housing tenants and those living in fuel poverty may not be helped by the scheme, the New Local Government Network (NLGN) says.
The Green Deal, which forms part of the energy bill , allows householders to install energy efficiency improvements of up to £6,500 to their homes at no upfront cost. The householder will pay back the cost over 25 years, through reduced energy bills.
The scheme includes a ‘golden rule’ which says that it will operate only where the lifetime reduction in bills as a result of energy efficiency measures is greater than the cost of installation of those measures.
But, for the 1.4 million ‘hard to treat’ social homes, the level of energy efficiency measures needed would cost more than would be saved in reduced energy bills.
Poorer households are less likely to want to take on extra debt, while those living in fuel poverty may react to energy efficiency improvements by increasing comfort levels, thus cancelling out any savings and remaining in fuel poverty.
‘The growth of fuel poverty in the social sector is outpacing that in private housing. Recent housing policy changes have the potential to exacerbate the situation, thereby heightening an already disproportionate increase in the number of fuel poor social homes. Pre-emptive action to prevent this is vital,’ the report says.
NLGN is calling for the £6,500 level to be removed and for current obligations on energy suppliers to be radically reformed, and for suppliers to pay grants to cover those homes which will remain in fuel poverty and for which the ‘golden rule’ does not apply.
Gearoid Lane, managing director of communities and new energy at British Gas, said: ‘British Gas is committed to the Green Deal, but this report shows that it is not a panacea – especially for the most vulnerable in our society including many in social housing for whom simple energy efficiency measures can permanently improve quality of life and help
eradicate fuel poverty.
‘We would support a revised and more flexible system of supplier obligations post-2012 that helps us to quickly and effectively target those households in partnership with local authorities and housing associations.’
]]>Ten housing schemes have won accolades in this year’s Building for Life awards.
From a small self-build development to a 1,200 home multi-developer scheme, this year’s winners were chosen from a record number of high quality entrants.
In total, 55 housing schemes achieved a Building for Life standard during the year, a rise of 50% compared to last year. For the first time well over half of all those who entered reached the standard.
At an award ceremony in London last night the ten most outstanding schemes, as chosen by judges, were named.
Ashley Vale, a self-build community in Bristol, is the first project of its kind to win a Building for Life award. Its centerpiece development The Yard, including self-built housing, workshops and a community space, picked up a silver Building for Life award earlier this year and was yesterday named one of the top ten schemes.
Other winners include Cargo Millbay, a housing development in Plymouth's coastal quarter and Stonebridge Hillside Hub, a mixed use project on a housing estate in northwest London, both of which are helping transform deprived areas through housing-led regeneration.
Wayne Hemingway, chair of Building for Life, said: ‘Building for Life has campaigned for good design in new housing for nearly ten years. This work is paying off. We’re finally getting new homes and neighbourhoods that look and work better.’
The Commission for Architecture and the Built Environment (Cabe), which runs the Building for Life programme, lost its funding during the government’s spending review.
Mr Hemingway has said that that he is working with partners to develop new ways to continue the Building for Life work.
]]>The government’s welfare reforms will make little difference to worklessness in the poorest areas of Britain unless they are backed up by substantial investment in job creation programmes.
The claim comes in a report published today which studies the likely demand for jobs in weaker local economies over the next decade.
It proposes job schemes initially be set up in the 100 weakest areas outside London, plus the capital’s 12 worst boroughs.
Commissioned by the National Worklessness Learning Forum, the report predicts there’s ‘little hope’ of cutting the number of workless people on benefits and that the gap between best and worst performing areas is likely to close only marginally.
It says the fact that many local enterprise partnerships are making worklessness a key issue is an encouraging sign that capacity to deliver job creation schemes will be in place – but they need funding to do the job.
In his foreword to the report, forum chair Stephen Houghton, who led a review on worklessness for the previous government, argues these resources could be provided via a levy on the financial sector.
He estimates it could initially generate £1.2bn for an employment programme producing 100,000 jobs for people living in the most vulnerable areas.
‘I believe there would be strong public support for an initiative that ensured that those most at risk from the financial and economic problems the country faces were supported by the institutions that were responsible for those problems in the first place,’ he says.
‘Our aim in commissioning this report was not to criticise the government’s objectives – which we share – or to dismiss its policy initiatives. But we believe the evidence shows they won’t be enough. If many people and places aren’t to be left behind, more must be done.’
Produced by researchers at Sheffield Hallam University, the study suggests the government’s welfare reforms and hopes of a private sector-led recovery are unlikely to deliver the changes needed in Britain’s most deprived communities.
‘The welfare reforms are predicated on an assumption that there are plenty of jobs for people to fill,’ it says.
‘This is a view that may hold in parts of southern England, where even now the economy remains fundamentally strong, but it seems wide of the mark in Britain’s weaker local economies.’
Using case studies on Blackpool and Barnsley to highlight their point, researchers argue the private sector ‘has a mountain to climb to deliver new jobs on the scale that is needed, and it seems unlikely to get much beyond the foothills’.
Instead it advocates the setting up of job creation schemes that fund employment where it would otherwise not exist – similar to those run under the Future Jobs Fund, which is due to end next year.
They would be predominantly focused on supporting those on incapacity benefits (IB). An estimated 800,000 IB claimants want to work again, a figure that researchers say is likely to rise as a result of reforms to the welfare system.
‘What we’re talking about here is not just temporary programmes to provide training or work experience for long-term JSA claimants but sustained job opportunities for a much larger group of men and women, especially incapacity claimants, who would otherwise stand little chance of gainful employment.
‘It is better to pay people to work, especially if they would like to work, than to pay them to stay on benefit.’
]]>Described as the most significant changes to welfare since Beveridge, Iain Duncan Smith today unveiled a new ‘contract’ with the British people.
In the welfare reform white paper he announced plans to simplify benefits into a system of universal credit and new sanctions aimed at ensuring ‘work always pays’.
A universal credit system, to be rolled out from 2013, will unify out of work benefits, housing benefits and tax credits, ending the ‘risk and fear associated with moving in and out of work’, he said.
New sanctions will see those claiming Jobseekers Allowance lose their benefits for up to three years if they fail to take up a job offer, apply for a job or take part in compulsory work activity.
Those out of work will find their benefits stopped for three months the first time they fail to comply, rising to six months for a second failure and three years for the third failure.
Lone parents with young children will be sanctioned for not attending work-focused interviews.
The measures outlined today will reduce the number of workless households by around 300,000 within two to three years of its implementation, the white paper estimates.
Moves to improve the ease with which those on benefits can move in and out of work was welcomed by poverty campaigners, but the chief executive of the Child Poverty Action Group, Alison Garnham, called for stricter targets to ensure government meets its promises.
‘It does look as though the government’s claims may be overinflated as complexity, disincentives and significant barriers to work may largely remain in place,’ she said.
‘We welcome the hope that 350,000 will be taken directly out of poverty, but it must be a guarantee rather than an aspiration.’
He called sanctions an ‘expensive red herring’ with no real evidence they work.
Some questioned the level to which the complexities of the benefit system could be simplified. The charity 4Children said the challenges of helping workless families make the transition to employment ‘should not be underestimated’ and called for the necessary support.
The wider economic situation – high levels of unemployment and public sector cuts – will determine how far today’s plans will reduce benefit dependency.
Previously announced cuts to tax credits and the rising cost of childcare and transport will make work less worthwhile, according to Nick Pearce, director of the Institute for Public Policy Research.
‘Welfare reform must involve widening access to free or affordable childcare if we want to make work pay,’ he said.
Duncan Smith said there will be 'no losers' in his plans for benefit reform, with 2.5m households estimated to be better off under the plans.
But given the context of the £18bn welfare cuts already announced, a spokesperson for the Scottish Campaign on Welfare Reform said that higher entitlements for some ‘should not be achieved at the cost of other poor households losing out’.
The Development Trusts Association and Bassac are merging to form a new organisation from next April.
Members voted in favour of the move to create a new body that will ‘champion social justice, support community enterprise and serve a growing community-based membership’.
The two organisations announced plans to put the proposal to their respective members back in August.
Ben Hughes, chief executive of Bassac (British Association of Settlements and Social Action Centres), said: We are delighted that our members have voted to support the creation of this exciting new organisation.
'By consolidating the expertise and resources of both bassac and the DTA’s members and staff we will be in a stronger position to support and speak up for community organisations across the UK at a time when many of our members are experiencing increasing demand in their work with vulnerable people.’
As well as encouraging members to share knowledge and expertise, it’s expected to focus on areas including community asset development, community enterprise and bidding for contracts.
‘Together we will have an even stronger voice to champion the work of frontline community organisations,’ said Steve Wyler, director of the DTA. ‘The overwhelming support for the merger highlights the value that our combined networks will bring to the community sector as a whole.
'We now look forward to working together to support our members in building resilient community-led organisations committed to driving social change at local level.’
]]>The Social Enterprise Mark Co has appointed a new chair. Dai Powell, chief executive of HCT Group, a social enterprise operating in the transport sector, succeeds Social Enterprise Coalition boss Peter Holbrook.
Laura Ferguson has been appointed as director of the Campaign to End Loneliness. Set up by Age UK Oxfordshire, Counsel and Care, Independent Age and WRVS, the campaign will look at loneliness among older people and the impact of public funding cuts. Ms Ferguson has spent the last five years managing development projects at Volunteering England.
Mike Sudlow is joining Drivers Jonas Deloitte as a director in its local government development team. He currently heads the public sector consulting team at Cushman and Wakefield.
London Funders has appointed Mubin Haq as its new chair. Mr Haq is director of policy and grants at the charity Trust for London and he succeeds Lisa Greenshill, head of the VCS team at Government Office for London, who stepped down following GOL’s abolition.