You are here News bites: POWER TO NEIGHBOURHOODS: THE NEW CHALLENGE FOR URBAN REGENERATION
SPEECH BY THE RT HON DAVID MILIBAND
TO THE BURA ANNUAL CONFERENCE,
12TH OCTOBER
Fifteen years ago, when BURA was created, the economic and social environment of urban life was at best challenging and at worst bleak: population, employment and confidence were declining, while crime, disrepair and social exclusion were on the rise.
Your founders were brave and even visionary in standing up for two big ideas, both of them deeply contested, and both of which I think are profoundly important. First, that urban life did not need to be this way – we are not powerless and we should not be fatalistic, especially in towns and cities that have powered economic growth and social progress over the last century; and second, that an active role for government was essential to turning things round.
Today I want to reflect on what has changed since 1990, the problems that have been overcome, but also the challenges that lie ahead. I would summarise my argument as follows:
- first, our urban areas are once again the locomotives of economic and social progress in this country. Where once, economic decline and government neglect meant the challenge was rescuing towns from decline and decay, now, thanks to the longest period of economic stability and growth for 200 years, new government funding and institutions, and visionary leadership at local level, the entire context for urban investment and development has changed.
- Second, this urban renaissance is far from finished. In a world where the challenge for our core cities is not just how to secure a competitive advantage over Frankfurt and Chicago but increasingly, Shanghai, Beijing, and Bangalore, the question is how can we sustain progress and create truly world class towns and cities. That does require big projects and decisions about the strategic direction of cities - like the decision for London to expand eastwards through the Thames Gateway where we are meeting today.
- Third, while for some the challenge is accelerating progress, in some parts of the country - the one industry towns - the challenge is more fundamental. It is to find a new raison d'etre in a changing economic order. One based on collaborating with the major cities rather than competing with them, and based on the particular assets of the town.
- Fourth, urban regeneration needs to address economic and social division within our towns and cities, the concentrations of poverty that can be hidden by average figures on income, wealth and public services. We need to address the underlying barriers that prevent fantastic examples of neighbourhood regeneration - in NDCs, in housing pathfinders, in Neighbourhood Management programmes - from being spread across the country. I believe that means addressing the 'plumbing' of our public services - the targets, funding, and institutional fragmentation that too often means that resources going into a poor neighbourhood add up to less than the sum of the parts; fail to leverage investment from the private sector or mobilise most valuable asset of all in a community - the community itself.
It is this final challenge - renewing our poorest neighbourhoods to create a society where nobody is disadvantaged by where they live that I want to focus on today. It is not just disadvantage that we are fighting; it is powerlessness. People in deprived neighbourhoods feel powerless to stop the anti-social behaviour of their neighbours; powerless to challenge the council and the police if their services are poor; powerless to get access to the skills they need to get a job. This sense of powerlessness - most acutely felt in our poorest neighbourhoods - is the regeneration challenge of the next fifteen years.
The good news is that on education, employment and crime, we have narrowed the gap between outcomes in the 88 most deprived local authorities and the population as a whole, with overall performance moving in the right direction.
• the gap for the average pass rate for five 'good' GCSEs has narrowed by a quarter from 10.2 in 1997/98 to 7.6 in 2003/04;
• the gap in achievement of Maths, English and Science for 14 year olds also decreased by almost a third for Maths;
• on employment, the gap has fallen from 6.1 in 1997/98 to 5.3 in 2004/05.
• the gap has also narrowed in burglaries, robberies and vehicle crime from 6.9 in 1999/00 to 4.4 in 2004/05.
In some areas, the progress is even more striking. In employment, the last census showed major progress between 1991 and 2001: for instance, in the North East, the number of wards with more than 40 per cent of people out of work nearly halved.
But there are still pockets of acute deprivation within towns and cities. In around 3500 Neighbourhoods (so-called super output areas of around 1500 people) populated by 4.4 million people an estimated:
• 1 in 4 adults in deprived areas are out of work.
• Three out of five adults have no or very low qualifications.
• Two out of five adults feel there is a high level of disorder - almost twice the national average.
• And just over a third of people living in the poorest fifth of areas trust their neighbour - half the proportion found in richer areas - even though people in deprived areas are much more likely to speak to their neighbours.
First, we need to ensure every town and city has a clear economic role. So in one industry towns where the economic base of the town has collapsed, we need to reconnect the town to the growth hubs within each region. That means that in the North West, we need to ask how can the growth of Manchester and Liverpool be the ally of economic prosperity in Salford, Bootle, Blackburn and Burnley. Will a high speed transport link from a smaller town to the city create a new commuter belt, which in turn will generates a whole new layer of new service industries? Do we need major changes to repopulate the heart of towns by altering the mix of private and social rented housing on peripheral estates.
But building the economic base of the town and city is necessary but insufficient. Look at Tower Hamlets. Or Look at Gipton in Leeds - just a couple of miles from the booming city centre. We need to ensure every neighbourhood is not just near a thriving business, but contributing to it and benefiting from it. That means helping people adapt to economic change by investing in education, training, childcare and transport in deprived neighbourhoods. But we should look at more direct ways of ensuring growth benefits deprived areas. We should build on examples like Sunderland's New Deal for Communities which included the recruitment and training of local people in the contract to build a flagship school and as a result ensured a quarter of construction was undertaken by previously unemployed residents of the NDC area. Here in East London, the Olympics are a huge opportunity to attack the high levels of worklessness.
Second, unless you get the basics right in an area - decent homes, an attractive layout, and a safe, clean, well managed neighbourhood - people who do get jobs will simply leave and be replaced by more vulnerable tenants. That's why physical improvements to change the layout and introduce caretakers, wardens or safer neighbourhood police teams are essential. It is also why our commitment to mixed communities - of income and tenure - is so important.
In Longsite in Manchester, homes that were boarded up and at risk of being demolished, are now thriving thanks to a Home Zone that has transformed property prices and pride in the area. In other areas, the fundamental viability of the area - the over supply of social rented accommodation and the under-supply of attractive owner-occupied housing has to be addressed - and the neighbourhood has to find a different place in the housing market with refurbishment and demolition creating more private housing and less social rented accommodation.
Third, we know that where there is a sense of community - where residents are bound together by shared activities, shared public spaces and shared institutions - trust is generated amongst residents and norms of decent behaviour and respect are established.
For example, I recently met the Chief Executive of Sherwood Energy Village in Nottinghamshire. Following the closure of the mine in 1994, the local community bought the 91 acre derelict site for £50,000, from British Coal in 1996. It is now owned by a social enterprise co-operative business, Sherwood Energy Village, who are developing the site. Plans are now well advanced for a mixed-use development including new employers, recreational centres and 186 new homes.
Fourth, public services are a driver of economic renewal and mixed communities, not just a safety net. Poor schools, transport and health services drive residents away from areas and reinforce concentrations of poverty. But develop a high quality primary or secondary school in the area, and you attract a more mixed community, property prices rise, teachers are no longer overwhelmed with acute need, and results improve.
Finally and perhaps more intangibly, what characterizes the best regeneration programmes is leadership - people with ambitious visions who are prepared to take risks and make tough choices. Leadership comes from multiple sources - not just the public sector but entrepreneurs in the private and voluntary sectors. Headteachers. Tenant reps in the Sunderland NDC. The Chief Executive of Sherwood energy village. And also the visionary elected politician.
But the problem with regeneration funding is that the millions in regeneration funding are dwarfed by the hundreds of millions we spend in mainstream public service budgets. If we are serious about addressing deprivation across the country, we have to harness the big funds in mainstream departments so that they deliver the boost in the areas that are most challenging. All departments not just ODPM should be regeneration departments. The challenge is to use mainstream funds, but capture the flexibility, transparency, clear leadership and community involvement of regeneration programmes such as NDC.
To do this, we need to rationalise the 'plumbing' of our public services - the targets, funding and institutional responsibilities - so that we can make mainstream funding more focused on deprived areas; more flexible and devolved to the level of neighbourhoods.
First, if we are to get mainstream services focused on neighbourhood renewal, we must incentivise them not just to increase average national performance, but also narrow the gap between deprived neighbourhoods and the average. The first generation of floor targets had to be at the local authority level because we lacked sufficient data to set ward or super-output area targets. But in the last Spending Review, as data improved, we set an employment target focused on the bottom 900 wards. We will look closely at the impact of this approach and consider whether it can be applied further in SR2007, and whether we need a tougher failure regime to ensure floor targets bite and resources are distributed more progressively.
Second, funding. We have made a start through Local Area Agreements to rationalise the plethora of initiatives and ring-fenced grants and give local authorities more flexibility over where and how this money is spent. Some places such as Sheffield are translating the flexibility we give local government down to neighbourhood level through neighbourhood level budgets - creating the sort of transparency and flexibility seen in NDCs but through mainstream funding. I am keen to explore how - in our most deprived 10 per cent of super-output areas - we can deliver more transparency over what funding goes down to the neighbourhood level, and more flexibility so that money can be pooled and focused on residents priorities.
Third, we are seeing local government take on a more strategic role. A role whose starting point is the overall interests of an area rather than the delivery of particular services, galvanising all the resources across the public, private and voluntary sector towards a clear vision. Local Strategic Partnerships are an attempt to pull all these partners together and develop a clear action plan for each deprived neighbourhood.
But while LSPs can join up strategy and commissioning, they are not operational bodies. I am keen to develop models that build on examples such as INclude - a non-profit company jointly owned by Liverpool City Council and an RSL which does a variety of regeneration activity - from utilising housing staff, environmental rangers, and fire safety officers to get the basics right on the estate, to more long term change to shift the balance of social housing to owner occupation from 80/20 to 50/50. Not only has it been a cost effective delivery vehicle - buying up and refurbishing housing more quickly than statutory bodies - but it has delivered real change in resident satisfaction. The City Council satisfaction survey showed that 80 per cent of residents were satisfied compared with 54 per cent across the city.
We need to ask whether LSP's could pull together some of their budgets and assets and contract with a single delivery vehicle to ensure clearer leadership, quicker decision-making, and ensure the synergies across neighbourhood renewal are captured? Could funds be devolved down to Neighbourhood Manager to commission service provision?
In the labour market, reform of Incapacity Benefit is vital. Some one in ten people in deprived neighbourhoods are on IB, and in some neighbourhoods, this figure rises to more than a quarter. That's why programmes like Pathways to Work - which provide sharper financial incentives, support to address the health barriers to work, combined with tougher responsibilities are critical. Later this Autumn, we will set out further proposal in our Welfare Reform Green Paper.
In retail markets, we need to address some the barriers that prevent entry. That's why are we are working with Business in the Community on our Under-served Markets project, which is encouraging retailers and other businesses to invest in deprived areas. Retailers can underestimate purchasing power within an area because average income figures do not take into account the size of the informal economy, the population density, or assess the amount of money spent by consumer outside the local area because of under-supply. That means we must do more with business to address information barriers that leave markets under-served. And we must do more to ensure tackling business crime is given higher priority where it is a barrier to neighbourhood renewal.
In property markets, we will work closely with the Property Consultative Group to examine changes in the leasing system and design coding to tackle the causes of market failure. How can it be right that in areas where market rents are falling, if a commercial tenant cannot make a property work, and wants to sub-let it, the tenant cannot lease the property at the current market value so the property lies vacant.
In investment markets, the Treasury and ODPM are looking closely at the potential to develop Real Estate Investment Trusts to attract more institutional investment and equity finance into the property market, and create a property investment vehicle that will attract funding into deprived towns and neighbourhoods. Our Community Investment tax credit is aimed at building the capacity of Community Finance Intermediaries to help entrepreneurs become investment ready and connect them capital, networks of suppliers and angel investors.
Economic renewal also requires a new role for local government. There are market failures which the state can and must address. But this requires economic renewal to be someone's job with the incentives, powers and capacity to act. That's why we are investing up to £1 billion in the Local Authority Business Growth Incentives Scheme which will mean that if local authorities invest in supporting wealth creation, some of the dividends of business rate growth will accrue locally and can be reinvested in supporting enterprise. It is also why we have set up the Local Enterprise Growth Initiative which worth £300 million over three years to support proposals in Neighbourhood Renewal Areas that stimulate new business start ups and franchises, grow existing businesses or attract inward investment. It is also why we need to look closely at the potential for Urban Development Corporations to provide the leadership, faster decision making, and consistency that can define the vision for an area and create confidence among the private sector to invest.
One way to help this is to promote the development of an asset base - land, buildings, money - by community groups. Assets enable them to borrow money, leverage private finance, and generate new social enterprises which generate revenue. For example, many of our New Deal for Communities have bought land and constructed buildings such as health centres and will now earn rent many years after the ten year programme has finished. The result is more independence and more social and economic life in the community.
That is why in 2003, the DPM gave a general power of consent to local authorities to enable them to dispose of assets at less than best value to organizations such as community trusts that serve the local community. The ODPM and the Local Government Association are working jointly to promote take-up.
It is also right to look at more radical options. In Scotland, legislation has created a 'Community Right to Buy'.
It is focused on rural communities, and allows voluntary organisations to establish an interest in land or buildings - be they owned by the public or private sector - so that if the asset comes up for sale they have first refusal, subject to a community ballot.
The proponents of Community Right to Buy argue that it would represent as big a transfer of wealth and power to communities as housing Right to Buy represented for individuals. We are not talking about an alternative to major development. We are talking about the potential of the voluntary and community sector to take disused or under-used land and buildings - youth or community centres, unoccupied housing, and undeveloped land - and turn it into a vibrant resource for the community, raising not just morale but the value of other properties. We are determined to look at this issue as we develop our vision for sustainable communities.
We know what works. Communities attached to a strong economic base. Communities with an attractive physical layout, a mix of tenures, and free from crime and disorder. Communities bound together by shared values, activities and institutions not divided by crime and disorder. Communities with high quality public services. Communities with strong leaders.
But if progress is to be accelerated, we must continue to remove the blockages. We must take the benefits of regeneration funding - flexibility, transparency, clear leadership - but apply it to the hundreds of billions of pounds of public service funding. We must mobilize the energy of the voluntary and community sector not by perpetuating their dependence on grant funding, but transferring assets that enable them to become independent social enterprises. And we must raise economic activity by supporting employees and entrepreneurs, through an enhanced strategic role for local government.
These are challenges for Government. But they are also challenges for you as a sector, and for BURA as an organisation.
Help us to grow the skills, capacity and diversity of the regeneration sector, to develop innovation and spread learning, to champion the formation of joint ventures between private, public and voluntary organisations.
The prize is a historic one. Creating a society where nobody is disadvantaged by where they live. A society where power is in the hands of the many not the few. It is one I am confident we can deliver together, and secure a legacy of which the BURA pioneers would be proud.
Ends
- first, our urban areas are once again the locomotives of economic and social progress in this country. Where once, economic decline and government neglect meant the challenge was rescuing towns from decline and decay, now, thanks to the longest period of economic stability and growth for 200 years, new government funding and institutions, and visionary leadership at local level, the entire context for urban investment and development has changed.
- Second, this urban renaissance is far from finished. In a world where the challenge for our core cities is not just how to secure a competitive advantage over Frankfurt and Chicago but increasingly, Shanghai, Beijing, and Bangalore, the question is how can we sustain progress and create truly world class towns and cities. That does require big projects and decisions about the strategic direction of cities - like the decision for London to expand eastwards through the Thames Gateway where we are meeting today.
- Third, while for some the challenge is accelerating progress, in some parts of the country - the one industry towns - the challenge is more fundamental. It is to find a new raison d'etre in a changing economic order. One based on collaborating with the major cities rather than competing with them, and based on the particular assets of the town.
- Fourth, urban regeneration needs to address economic and social division within our towns and cities, the concentrations of poverty that can be hidden by average figures on income, wealth and public services. We need to address the underlying barriers that prevent fantastic examples of neighbourhood regeneration - in NDCs, in housing pathfinders, in Neighbourhood Management programmes - from being spread across the country. I believe that means addressing the 'plumbing' of our public services - the targets, funding, and institutional fragmentation that too often means that resources going into a poor neighbourhood add up to less than the sum of the parts; fail to leverage investment from the private sector or mobilise most valuable asset of all in a community - the community itself.
It is this final challenge - renewing our poorest neighbourhoods to create a society where nobody is disadvantaged by where they live that I want to focus on today. It is not just disadvantage that we are fighting; it is powerlessness. People in deprived neighbourhoods feel powerless to stop the anti-social behaviour of their neighbours; powerless to challenge the council and the police if their services are poor; powerless to get access to the skills they need to get a job. This sense of powerlessness - most acutely felt in our poorest neighbourhoods - is the regeneration challenge of the next fifteen years.
The good news is that on education, employment and crime, we have narrowed the gap between outcomes in the 88 most deprived local authorities and the population as a whole, with overall performance moving in the right direction.
• the gap for the average pass rate for five 'good' GCSEs has narrowed by a quarter from 10.2 in 1997/98 to 7.6 in 2003/04;
• the gap in achievement of Maths, English and Science for 14 year olds also decreased by almost a third for Maths;
• on employment, the gap has fallen from 6.1 in 1997/98 to 5.3 in 2004/05.
• the gap has also narrowed in burglaries, robberies and vehicle crime from 6.9 in 1999/00 to 4.4 in 2004/05.
In some areas, the progress is even more striking. In employment, the last census showed major progress between 1991 and 2001: for instance, in the North East, the number of wards with more than 40 per cent of people out of work nearly halved.
But there are still pockets of acute deprivation within towns and cities. In around 3500 Neighbourhoods (so-called super output areas of around 1500 people) populated by 4.4 million people an estimated:
• 1 in 4 adults in deprived areas are out of work.
• Three out of five adults have no or very low qualifications.
• Two out of five adults feel there is a high level of disorder - almost twice the national average.
• And just over a third of people living in the poorest fifth of areas trust their neighbour - half the proportion found in richer areas - even though people in deprived areas are much more likely to speak to their neighbours.
Where we want to get to
Success in these neighbourhoods require progress on five fronts.First, we need to ensure every town and city has a clear economic role. So in one industry towns where the economic base of the town has collapsed, we need to reconnect the town to the growth hubs within each region. That means that in the North West, we need to ask how can the growth of Manchester and Liverpool be the ally of economic prosperity in Salford, Bootle, Blackburn and Burnley. Will a high speed transport link from a smaller town to the city create a new commuter belt, which in turn will generates a whole new layer of new service industries? Do we need major changes to repopulate the heart of towns by altering the mix of private and social rented housing on peripheral estates.
But building the economic base of the town and city is necessary but insufficient. Look at Tower Hamlets. Or Look at Gipton in Leeds - just a couple of miles from the booming city centre. We need to ensure every neighbourhood is not just near a thriving business, but contributing to it and benefiting from it. That means helping people adapt to economic change by investing in education, training, childcare and transport in deprived neighbourhoods. But we should look at more direct ways of ensuring growth benefits deprived areas. We should build on examples like Sunderland's New Deal for Communities which included the recruitment and training of local people in the contract to build a flagship school and as a result ensured a quarter of construction was undertaken by previously unemployed residents of the NDC area. Here in East London, the Olympics are a huge opportunity to attack the high levels of worklessness.
Second, unless you get the basics right in an area - decent homes, an attractive layout, and a safe, clean, well managed neighbourhood - people who do get jobs will simply leave and be replaced by more vulnerable tenants. That's why physical improvements to change the layout and introduce caretakers, wardens or safer neighbourhood police teams are essential. It is also why our commitment to mixed communities - of income and tenure - is so important.
In Longsite in Manchester, homes that were boarded up and at risk of being demolished, are now thriving thanks to a Home Zone that has transformed property prices and pride in the area. In other areas, the fundamental viability of the area - the over supply of social rented accommodation and the under-supply of attractive owner-occupied housing has to be addressed - and the neighbourhood has to find a different place in the housing market with refurbishment and demolition creating more private housing and less social rented accommodation.
Third, we know that where there is a sense of community - where residents are bound together by shared activities, shared public spaces and shared institutions - trust is generated amongst residents and norms of decent behaviour and respect are established.
For example, I recently met the Chief Executive of Sherwood Energy Village in Nottinghamshire. Following the closure of the mine in 1994, the local community bought the 91 acre derelict site for £50,000, from British Coal in 1996. It is now owned by a social enterprise co-operative business, Sherwood Energy Village, who are developing the site. Plans are now well advanced for a mixed-use development including new employers, recreational centres and 186 new homes.
Fourth, public services are a driver of economic renewal and mixed communities, not just a safety net. Poor schools, transport and health services drive residents away from areas and reinforce concentrations of poverty. But develop a high quality primary or secondary school in the area, and you attract a more mixed community, property prices rise, teachers are no longer overwhelmed with acute need, and results improve.
Finally and perhaps more intangibly, what characterizes the best regeneration programmes is leadership - people with ambitious visions who are prepared to take risks and make tough choices. Leadership comes from multiple sources - not just the public sector but entrepreneurs in the private and voluntary sectors. Headteachers. Tenant reps in the Sunderland NDC. The Chief Executive of Sherwood energy village. And also the visionary elected politician.
Removing the barriers
So the challenge for the future is how we take these examples and spread the best. My argument is that if good practice is to be scaled up and replicated, we need to mobilise the billions of pounds in public sector spending; we need to stimulate the energy and innovation of social entrepreneurs to flourish rather than trap them in dependency on grant funding; and we need to find ways of leveraging in private resources.Public sector reform
Let me turn first to the public sector. Regeneration funding such as NDC and NRF has major advantages. It is flexible so it can be spent on addressing the specific barriers of the neighbourhood, sequencing changes in the local environment, and intervening intensively if necessary. There are also clear delivery vehicles for the programme - involving or led by the community.But the problem with regeneration funding is that the millions in regeneration funding are dwarfed by the hundreds of millions we spend in mainstream public service budgets. If we are serious about addressing deprivation across the country, we have to harness the big funds in mainstream departments so that they deliver the boost in the areas that are most challenging. All departments not just ODPM should be regeneration departments. The challenge is to use mainstream funds, but capture the flexibility, transparency, clear leadership and community involvement of regeneration programmes such as NDC.
To do this, we need to rationalise the 'plumbing' of our public services - the targets, funding and institutional responsibilities - so that we can make mainstream funding more focused on deprived areas; more flexible and devolved to the level of neighbourhoods.
First, if we are to get mainstream services focused on neighbourhood renewal, we must incentivise them not just to increase average national performance, but also narrow the gap between deprived neighbourhoods and the average. The first generation of floor targets had to be at the local authority level because we lacked sufficient data to set ward or super-output area targets. But in the last Spending Review, as data improved, we set an employment target focused on the bottom 900 wards. We will look closely at the impact of this approach and consider whether it can be applied further in SR2007, and whether we need a tougher failure regime to ensure floor targets bite and resources are distributed more progressively.
Second, funding. We have made a start through Local Area Agreements to rationalise the plethora of initiatives and ring-fenced grants and give local authorities more flexibility over where and how this money is spent. Some places such as Sheffield are translating the flexibility we give local government down to neighbourhood level through neighbourhood level budgets - creating the sort of transparency and flexibility seen in NDCs but through mainstream funding. I am keen to explore how - in our most deprived 10 per cent of super-output areas - we can deliver more transparency over what funding goes down to the neighbourhood level, and more flexibility so that money can be pooled and focused on residents priorities.
Third, we are seeing local government take on a more strategic role. A role whose starting point is the overall interests of an area rather than the delivery of particular services, galvanising all the resources across the public, private and voluntary sector towards a clear vision. Local Strategic Partnerships are an attempt to pull all these partners together and develop a clear action plan for each deprived neighbourhood.
But while LSPs can join up strategy and commissioning, they are not operational bodies. I am keen to develop models that build on examples such as INclude - a non-profit company jointly owned by Liverpool City Council and an RSL which does a variety of regeneration activity - from utilising housing staff, environmental rangers, and fire safety officers to get the basics right on the estate, to more long term change to shift the balance of social housing to owner occupation from 80/20 to 50/50. Not only has it been a cost effective delivery vehicle - buying up and refurbishing housing more quickly than statutory bodies - but it has delivered real change in resident satisfaction. The City Council satisfaction survey showed that 80 per cent of residents were satisfied compared with 54 per cent across the city.
We need to ask whether LSP's could pull together some of their budgets and assets and contract with a single delivery vehicle to ensure clearer leadership, quicker decision-making, and ensure the synergies across neighbourhood renewal are captured? Could funds be devolved down to Neighbourhood Manager to commission service provision?
Private sector incentives
We need to make private sector investment and employment part of the life of all communities and not just some. That comes down to changing the economic incentives in our disadvantaged areas. It requires the creation of more flexible markets in labour, retail, property and investment, and action to address the causes of market failure.In the labour market, reform of Incapacity Benefit is vital. Some one in ten people in deprived neighbourhoods are on IB, and in some neighbourhoods, this figure rises to more than a quarter. That's why programmes like Pathways to Work - which provide sharper financial incentives, support to address the health barriers to work, combined with tougher responsibilities are critical. Later this Autumn, we will set out further proposal in our Welfare Reform Green Paper.
In retail markets, we need to address some the barriers that prevent entry. That's why are we are working with Business in the Community on our Under-served Markets project, which is encouraging retailers and other businesses to invest in deprived areas. Retailers can underestimate purchasing power within an area because average income figures do not take into account the size of the informal economy, the population density, or assess the amount of money spent by consumer outside the local area because of under-supply. That means we must do more with business to address information barriers that leave markets under-served. And we must do more to ensure tackling business crime is given higher priority where it is a barrier to neighbourhood renewal.
In property markets, we will work closely with the Property Consultative Group to examine changes in the leasing system and design coding to tackle the causes of market failure. How can it be right that in areas where market rents are falling, if a commercial tenant cannot make a property work, and wants to sub-let it, the tenant cannot lease the property at the current market value so the property lies vacant.
In investment markets, the Treasury and ODPM are looking closely at the potential to develop Real Estate Investment Trusts to attract more institutional investment and equity finance into the property market, and create a property investment vehicle that will attract funding into deprived towns and neighbourhoods. Our Community Investment tax credit is aimed at building the capacity of Community Finance Intermediaries to help entrepreneurs become investment ready and connect them capital, networks of suppliers and angel investors.
Economic renewal also requires a new role for local government. There are market failures which the state can and must address. But this requires economic renewal to be someone's job with the incentives, powers and capacity to act. That's why we are investing up to £1 billion in the Local Authority Business Growth Incentives Scheme which will mean that if local authorities invest in supporting wealth creation, some of the dividends of business rate growth will accrue locally and can be reinvested in supporting enterprise. It is also why we have set up the Local Enterprise Growth Initiative which worth £300 million over three years to support proposals in Neighbourhood Renewal Areas that stimulate new business start ups and franchises, grow existing businesses or attract inward investment. It is also why we need to look closely at the potential for Urban Development Corporations to provide the leadership, faster decision making, and consistency that can define the vision for an area and create confidence among the private sector to invest.
Voluntary and community sector empowerment
All of this requires the voluntary and community sector to be viewed as an ally and partner rather than a threat. Some of the best regeneration in this country is through social entrepreneurs within communities spotting untapped opportunities and generating value out of assets which were previously under-utilised. That means more than tokenistic community representation, but also avoiding the trap of a community sector as dependent on state funding as the long term IB claimant. In other words we need to support social enterprise and not just social service.One way to help this is to promote the development of an asset base - land, buildings, money - by community groups. Assets enable them to borrow money, leverage private finance, and generate new social enterprises which generate revenue. For example, many of our New Deal for Communities have bought land and constructed buildings such as health centres and will now earn rent many years after the ten year programme has finished. The result is more independence and more social and economic life in the community.
That is why in 2003, the DPM gave a general power of consent to local authorities to enable them to dispose of assets at less than best value to organizations such as community trusts that serve the local community. The ODPM and the Local Government Association are working jointly to promote take-up.
It is also right to look at more radical options. In Scotland, legislation has created a 'Community Right to Buy'.
It is focused on rural communities, and allows voluntary organisations to establish an interest in land or buildings - be they owned by the public or private sector - so that if the asset comes up for sale they have first refusal, subject to a community ballot.
The proponents of Community Right to Buy argue that it would represent as big a transfer of wealth and power to communities as housing Right to Buy represented for individuals. We are not talking about an alternative to major development. We are talking about the potential of the voluntary and community sector to take disused or under-used land and buildings - youth or community centres, unoccupied housing, and undeveloped land - and turn it into a vibrant resource for the community, raising not just morale but the value of other properties. We are determined to look at this issue as we develop our vision for sustainable communities.
Conclusion
So today, we can be clear about the next challenge - renewing our poorest neighbourhoods.We know what works. Communities attached to a strong economic base. Communities with an attractive physical layout, a mix of tenures, and free from crime and disorder. Communities bound together by shared values, activities and institutions not divided by crime and disorder. Communities with high quality public services. Communities with strong leaders.
But if progress is to be accelerated, we must continue to remove the blockages. We must take the benefits of regeneration funding - flexibility, transparency, clear leadership - but apply it to the hundreds of billions of pounds of public service funding. We must mobilize the energy of the voluntary and community sector not by perpetuating their dependence on grant funding, but transferring assets that enable them to become independent social enterprises. And we must raise economic activity by supporting employees and entrepreneurs, through an enhanced strategic role for local government.
These are challenges for Government. But they are also challenges for you as a sector, and for BURA as an organisation.
Help us to grow the skills, capacity and diversity of the regeneration sector, to develop innovation and spread learning, to champion the formation of joint ventures between private, public and voluntary organisations.
The prize is a historic one. Creating a society where nobody is disadvantaged by where they live. A society where power is in the hands of the many not the few. It is one I am confident we can deliver together, and secure a legacy of which the BURA pioneers would be proud.
Ends
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