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Economic Regeneration (Plymouth)

1 pm

Mrs. Linda Gilroy (Plymouth, Sutton): Plymouth is the largest city on the south coast, and the second largest in the south-west. The city's population is 250,000, but its influence spreads further. Some 330,000 people live in Plymouth's travel-to-work area. Plymouth's shopping catchment area includes more than 400,000 people. Its economic health and well-being are therefore important to a substantial number of people.

Economic regeneration is being led by the 2020 partnership. Founded in 1993 as the Plymouth 2000 partnership, the Plymouth 2020 partnership promotes regeneration, social inclusion and economic development across the city. It is made up of representatives from the public, private, voluntary and community sectors, and is jointly chaired by a senior elected council member and a nominee from Plymouth chamber of commerce and industry. It provides the overall lead and direction for the pathfinder initiative, and co-ordinates other partnership work in the city, including employment, education and health action zones, the single regeneration budget programme, and links to environmental and community safety partnerships.

Historically, Plymouth has been greatly dependent on employment in defence-related industries, particularly the dockyard. Some 15,000 people worked in the dockyard in 1981, but that figure had dropped to 3,500 by 1997. Despite growth in some sectors over the 10 years to 1996, a net 4,000 jobs were lost to the city. As a consequence, Plymouth saw a sharp rise in unemployment and poverty, and a fall in incomes. The response of the city was to diversify while seeking successfully to consolidate naval and other Ministry of Defence activities.

Plymouth has been fairly successful with inward investment. Some 25 major foreign-owned manufacturing companies in Plymouth employ more than 12,000 people. Tourism employs a similar number, and call centres are a recent, fast-developing sector, which now employs over 4,000. The city has important health and higher education sectors, with some key centres of excellence. High-tech firms, such as JDS--manufacturers of fibre optic cable who moved to the city last year--and existing employment, such as BAE Systems, need access to skilled and well-trained people, which our university, with its traditions of science and engineering, is well placed to develop.

The recent go-ahead given by my right hon. Friend the Secretary of State for Trade and Industry for the development of the Langage energy park on the outskirts of Plymouth by Wainstones is hugely important. The investment of more £600 million--twice the value of objective 1 to Cornwall--has the potential to increase the Devon population's GDP by nearly £180 per person each year. I am sure that my hon. Friend will be surprised to learn that some leading local Conservatives have been lukewarm in their encouragement of that investment, and in some cases downright hostile. The extension of the high-pressure gas pipeline, which is part of the project, will bring opportunities for combined heat and power generation in other parts of the far south-west peninsula. All four

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Labour Members of Parliament in Devon and Cornwall, including my hon. Friend the Member for Falmouth and Camborne (Ms Atherton), were enthusiastic and active in their support for that important investment.

A significant dimension to Plymouth's regeneration is the release of MOD property. Work on the site of the Seaton barracks in the constituency of my neighbour, and hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson) is well under way. We hope that other major developments will follow the announcement last summer that the Phoenix trust, headed by the Prince of Wales, is to develop an important part of the Royal William yard site. I am currently making representations to the MOD that large parts of the dockyard wall, which run along the south yard of Devonport dockyard, should be knocked down.

Access to some land and buildings, especially some of the historic parts such as the old market and the ropery, are needed for community economic regeneration.That is important for the new deal for communities project, "Devonport people's dreams". There was a time when someone from every house in every street of a 4,000-strong community was employed in the dockyard. Few are now so employed, so it is important that they should have the best chance of using the £30 million investment from the new deal for communities to build new opportunities on their doorstep, where the unemployment rate is one of the highest in the city.

Unemployment in Plymouth has fallen, which is one of the key success stories for partnership working. Led by the Employment Service, Plymouth has made the most of various new deal programmes. Long-term adult unemployment has plummeted by more than 60 per cent. since May 1997, and youth employment by a staggering 90 per cent. Unemployment is below the national average for the first time in 20 years. The quality of our partnership approach to regeneration has ensured that Plymouth has seen some of the most significant improvements in employment in the country.

We are fortunate that our local Evening Herald supports the new deal programmes. Under the leadership of editor Rachel Campey, the paper has featured success stories of what young people, lone parents, and, more recently, older people have achieved through the new deal. The paper has played a key part in helping Plymouth people to see their city as a can-do place, in which the success stories of individuals add up to something better for everyone. Such positive reporting has not done the paper's circulation any harm--perhaps because a more prosperous city buys more newspapers.

Plymouth, however, still tells a tale of two cities. In May 1997, unemployment in the poorest inner-city wards was six times greater than in the affluent suburbs of Plympton. In seven wards, 25 per cent. of the community lives in poverty. There is a 700 per cent. variation in coronary heart disease across the city. The legacy left by my Tory predecessor included the poorest ward in England.

Many of Plymouth's housing issues are linked with wider problems of deprivation: the sale of council housing has left the authority with a stock of which half are flats, although most people would prefer a house. In the more deprived areas, the choice of housing type is

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severely restricted and the turnover high. More than 20 per cent. of the privately rented stock is unfit, as are 10 per cent. of owner-occupied homes--twice the national average. Tackling fuel poverty is important to how we improve housing stock.

The range of issues that need tackling in the city has attracted six rounds of single regeneration budget support, largely focused on 90,000 residents living in the most deprived waterfront communities. At long last, in SRB round six, Prince Rock and Cattedown are getting attention. Alongside employment, leisure and healthy living projects, improvements to housing stock will be an important part of the east end renewal project that residents are working hard to develop.

The new commitment to regeneration is a Local Government Association initiative, developed with other public, private and voluntary sector partners, which has the full backing of the Government. In July 1998, the Department of the Environment, Transport and the Regions announced that Plymouth unitary authority was to be one of 20 pathfinder local authorities that would lead the initiative.

Some £1 billion of public money is spent in Plymouth. Of course, we would like more money, but we welcome what comes our way. Health service expenditure at Plymouth Derriford hospital trust is set to increase by 30 per cent. in real terms during the next three years. Expenditure at the trust has already increased by one third since Labour took office. The new Peninsula medical school will train more than 100 new doctors as part of the Government's nationwide investment in 1,000 extra doctors, and we are campaigning vigorously for a new £50 million planned health care centre.

Those developments will have wider significance in Plymouth's regeneration, as will investment in 41 extra police officers in Plymouth, made possible by additions to the Devon and Cornwall police authority budget. Health, education and employment action zones have brought several million pounds in extra income to the city's coffers each year. An above-inflation standard spending assessment has been boosted by £2 million more than the Tory-invented formula would have given the city. Little thanks has been forthcoming from the Tories, but I hope that the Minister will convey my thanks and those of my hon. Friend the Member for Plymouth, Devonport to the Secretary of State for responding to our representations and those from other parts of the country. The floor that he introduced protects Plymouth from the full impact of growing prosperity, as reflected in the new earnings survey which affects how the local government finance cake is divided. The city has had an inflation-busting 14 per cent. increase in funds for education and social services, a doubling of the proposed neighbourhood renewal allocation for the coming year, and the biggest local transport settlement in recent memory with the go-ahead for an £8 million investment in the northern corridor, which will allow for the all-important protection and development of the city airport.

My hon. Friend the Minister may be surprised to learn that the Conservative leader of Plymouth city council repeatedly says that Plymouth is always at the bottom of the pile. This year, the council claims that there is a £20 million shortfall in its budget. That, of course, is a fantasy figure that can quickly be reduced to a more manageable proportion of the city's £250 million

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budget; my hon. Friend will be familiar with such claims. In Plymouth's case the Minister may find those claims surprising, considering the special attention given to the city.

Granting zones status to Plymouth and giving it special pots of money was intended to ensure that public money was spent to achieve value and effectiveness across the normal public service boundaries. Those involved in the partnership working, including the city council, can claim considerable success in respect of the employment outcomes to which I referred, and in matters such as the recent reported success of the health action zones in stopping people smoking. If sustained, that will help to tackle the terrible coronary heart disease figures that I mentioned earlier. The added value is evident from the first year's activity of the education action zone on standards in schools, and in the joint tackling by health and social services of pressures on bed blocking in hospitals by ensuring that adequate support is available for people coming out of hospital.

With her experience in local government finance, the Minister will recognise the challenges and choices that councils throughout the land have to make. She may also share my view that it is a bit rich of a Tory council to say that it cannot manage on Labour's above-inflation settlement after year-on-year cuts in expenditure by Tory Governments. She may consider, as I do, that axing car parking charges at a full-year cost to the council's budget of £800,000 might not be the right priority for a council so challenged. She may consider, as I do, that cutting £1 million from the housing budget in the SRB east end renewal project to finance swimming pools, which may be expensive to build and to run in future years, is not the right priority. She may consider, as I do, that precipitate proposals to cut money from the highly successful welfare rights unit are inappropriate, when that unit has brought more than £500,000 to some of the most vulnerable people in the city.

The Minister may share my anger and fear that such priorities place question marks over the council's understanding of and support for our successful partnership work. Alarm bells ring; I hope that such foolish proposals are born of inexperience. Perhaps the council will realise that wrongful penny-pinching can mean thousands of pounds down the drain and misery for people at Granby and Torybrook when the homes in which they thought they would end their days are threatened with closure without proper examination of whether and how that could be avoided. When one resident is approaching 100, one might think that someone, somewhere, should have asked those questions first, but no one did, so callow inexperience becomes callous indifference to people who deserve better.

It is not the Minister's place to determine the detail and priorities of local council budgets--if it were, there would be no point in having local councils. There are, however, challenges in sustaining Plymouth's partnership work that fall within the remit of the Minister's Department and which I want to flag up for her attention. The 2020 partnership is preparing plans to be among the first communities to have approval as a local strategic partnership. Sustaining partnership is an instant challenge for the public, private and voluntary

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sectors. To support and participate in initiatives such as "Devonport people's dreams" and the east end renewal project, means that, city-wide, the community-based partnership work needs constant motivation, refreshment and resourcing. I hope that the Minister will share her observations on how to maintain the momentum. What scope is there for bringing some focus to the plethora of area-based and city-wide initiatives, particularly on funding?

My hon. Friend the Minister will be aware that some good projects continually lose out in the competitive bidding process. I recognise the merits of bidding--the most project-ready groups secure what will always be scarce resources--but some groups miss the boat time and again, sometimes right in the heart of the most deprived areas. Will local strategic partnerships have the tools to take important decisions about resourcing and identifying gaps? Can some separate funding streams be joined up to complement the joined-up thinking and action exemplified by the partnership projects?

Finally, what links will there be between local strategic projects and regional development agencies regarding such important matters as transport? I refer not just to air but rail links, which have been in the news so often in recent weeks. My hon. Friend the Minister will know that outrage has been expressed the length and breadth of the peninsula in response to the proposal to use 40-year-old rolling stock on intercity links to benefit services in Wales. Keeping the air link to Gatwick is vital, and it would be good to restore some links to Heathrow, if only one or two per week. That would be important to businesses such as Gleason's, Kawasaki and Toshiba, which have far-eastern links.

I pay tribute to the Minister and her colleagues for the Department's work on regeneration. In our short debate, I have left out many initiatives--the urban and rural White Papers, the 10-year transport plan, the regional development agency, the housing Green Paper and much else. My hon. Friend will forgive me and know that I did that because I wanted to highlight local hopes and fears and celebrate some important successes. I thank her for recognising our needs, our challenges and our ability to respond positively to the opportunities that come our way.

1.16 pm

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes ): I congratulate my hon. Friend the Member for Plymouth, Sutton (Mrs. Gilroy) on securing the debate and on her comprehensive and informed speech about the importance of partnership in her area. I hope that my short reply can do justice to it. My hon. Friend's speech demonstrated her commitment to her area, and I acknowledge her important role as a local Member of Parliament. She has been an assiduous campaigner, working with Ministers to secure the best for Plymouth. The catalogue of benefits gained since 1997 is as much a testimony to my hon. Friend's highlighting of Plymouth's needs as it is to the Government's commitment to such areas.

My hon. Friend outlined Plymouth's strengths and weaknesses. She spoke about the city's ability to respond to economic change and to diversify. She spoke, too, of the skills and experience of Plymouth's people,

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and the city's resource strengths, including its industrial and economic base, excellent training facilities and transport. Those factors help to position Plymouth now and in the future. My hon. Friend also rightly identified key problems and highlighted areas of Plymouth that suffered more than most from long years of neglect under the previous Government. She drew attention to pockets of significant disadvantage, which must be tackled.

I was pleased that my hon. Friend referred to the Government's various commitments to Plymouth--partly through the RDA, but also more directly as the city has benefited from a number of Government initiatives. Certainly the RDA is working closely with local partners and the community in Plymouth, and RDA investment commitments are approximately £18 million currently. These include expansion of the hugely successful Tamar science park, which the Prime Minister opened last year, and several other important initiatives for economic development.

My hon. Friend touched on Government support in several areas. Time does not allow us to go through them individually, but some important direct assistance from Government is provided through the single regeneration budget. Plymouth won nearly £24 million in SRB funding in recent rounds, helping some of the most deprived communities in the area. It was also successful in securing continued objective 2 status within the south-west programme, which is worth a total of £108 million in European grant over the period.

However, my hon. Friend also identified area-based initiatives that have been a hallmark of what the Government have tried to do on regeneration. Plymouth is one of a small number of areas across the country that has secured a "full house" in terms of employment, education and health action zones. There are sure start and new start programmes too, and I am delighted to be able to tell my hon. Friend--she probably already knows--that Plymouth is one of the 66 areas recently invited by my right hon. Friend the Secretary of State for the Environment, Transport and the Regions to bid in round 4 of sure start 2, something for which she has campaigned for some time.

We look forward to receiving, next month, a full delivery plan for the local new deal for communities, which the partnership has been putting together. That could bring up to £50 million of funding to the area for regeneration, again tackling some of the areas that most need help. My hon. Friend mentioned the new deal, and I think that it has had tremendous success in Plymouth. It has helped more than 2,150 people aged between 18 and 24 into work, and has, very importantly, a retention rate of approximately 70 per cent. That has made an important contribution to the fall in unemployment, particularly among young people.

Last October, we announced the neighbourhood renewal fund. Among areas with a multiplicity of difficult issues to tackle, Plymouth became one of four areas in the south-west that will benefit from neighbourhood renewal funding. That will help to improve housing, raise school standards, reduce crime and improve health in some of the most deprived communities. My right hon. Friend the Secretary of State announced in January an increase in Plymouth's funding under the neighbourhood renewal fund to £4.8 million over three years. Clearly the NRF will play a key

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role in the Government's wider strategy to improve prosperity, tackle poverty and create opportunities for all.

As my hon. Friend has said, a great deal has already gone into Plymouth, and rightly so. Further regeneration opportunities will continue to come from the Government, but it is gratifying to see that we are already able to demonstrate--and my hon. Friend is able to talk about--the effects of what we have done so far. The Employment Service in Plymouth has placed more than 6,800 people in work since April, of whom 2,500 were long-term unemployed.

That incredible achievement will make a lasting difference to the vitality of the economy of Plymouth, not just helping individual families, though that is important, but maintaining stimulation of the local economy, which will benefit everyone. I am delighted that unemployment in Plymouth has fallen to 3.2 per cent., a reduction of nearly 30 per cent. over the past 12 months. The rate is now below the national average for the first time in many years in Plymouth. Real measurable improvements in performance are having an impact on people's lives and on the local economy.

My hon. Friend touched on the importance of partnership in stimulating and sustaining that kind of progress, and I agree with her on the importance of partnership between central and local government and the strengths of local partnerships. I welcome my hon. Friend's eagerness for Plymouth to be at the forefront of developments in partnership. On the neighbourhood renewal fund, the requirement to have a local strategic partnership to administer the fund is an important step. Local strategic partnerships should build on existing good practice to rationalise existing partnerships, to improve on working practices and to cut down on bureaucracy.

We expect local strategic partnerships to rationalise some current processes and to create savings in the work involved in sustaining a number of partnerships. They will have scope to join up funding in creative ways and to decide priorities, so long as they meet targets on four big issues: crime, housing, health and jobs. It will be up to the local strategic partnership to decide the priorities for how that money is spent. It is implicit in what my hon. Friend says, and I agree that we need mature local authorities to fulfil the strategic roles that we have given them in leading and nurturing effective partnerships, both locally and between the local area and central government.

I want to refer to funding, which my hon. Friend raised. Plymouth has received funding through the local government settlement, and I am disappointed by erroneous accounts that have appeared in the local press. Plymouth will receive more than £5.5 million more in general grant this year than it did last year. That position has been protected by the introduction of the floor. In addition, there will be a 12 per cent. increase for education and nearly 21 per cent. more for social services, giving a total increase in ring-fenced grants of 4.5 per cent., which is twice the rate of inflation. That should give substantial assistance to the council.

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I cannot comment on the council's priorities; I do not have the total picture. I think that my hon. Friend was right to question some of those priorities. There may be a case for doing so, in certain circumstances.

Mrs. Gilroy : Does my hon. Friend agree that, in addition to the substantial above-inflation increase that she has mentioned, the other pots of money for the health action zone, the education action zone, the employment action zone and winter pressures in the NHS are also relevant?

Ms Hughes : Of course, all those things provide additional funding, which Plymouth would not have received if the present Government were not in control. Those funds are additional to what was already a generous local government settlement. My hon. Friend is quite right to point that out.

In terms of priorities, my hon. Friend was right to question whether it is a good idea to forego £800,000 of income to cut parking charges. There may be an economic case for that; I do not know. In another of the examples she pointed out, however, it is rarely economic to cut welfare benefits advice services. We know that, across the UK, money invested in that advice increases the amount that people receive in benefits. Many people are unaware of what they can claim, and welfare benefits advice can help them to receive what they are entitled to. Again, there is an economic case for welfare benefits advice, and I suspect that it is short-sighted to cut the service.

I repeat that we need mature local authorities that are willing to put aside political issues, about which they may feel strongly, to work with the Government and local partners to benefit the community. I hope that the ruling group on Plymouth council will not use these issues as a political football but will, as my hon. Friend suggests, work with others to benefit her constituency.

In conclusion, the Government are committed to working in partnership with the council and communities in Plymouth. The debate demonstrates the enormous progress that the partnership and the additional resources have already achieved in my hon. Friend's constituency. I look forward to that continuing with the support of my hon. Friend and the local partners.

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