Select Committee on Transport, Local Government and the Regions Memoranda



  The following three projects which were approved in a northern urban local authority area before the Partnership Investment Programme (PIP) was outlawed in December 1999, and are now being implemented. All three include derelict listed buildings.

  Project A will provide 21 integrated live-work units, the development cost was £1,900,000 and the end-value £1,100,000; the gap of £800,000 (42 per cent of cost) was met from the European Union's Urban Pilot Project, the Single Regeneration Budget (SRB), and English Partnerships' PIP.

  Project B will create 17 apartments, 8,000 sq ft of offices and three restaurant/shop units. The cost is £2,950,000, the end value £2,500,000 and the gap £450,000 (15 per cent of cost). Grant is being met by SRB and English Heritage through a Conservation Area Partnership (CAP).

  Project C will result in eight apartments, and 5,500 sq ft of offices. The gap between cost (£720,000) and end value (490,000), is £230,000 (32 per cent of cost) and is being funded by SRB, CAP and the Council.

  It is difficult to see how projects like the three described above could have taken place under the five new, EU approved, land and property regeneration schemes, for the following reasons:

    (a)  All three include an element of housing, which is ineligible under the new regime. It is very disappointing that housing is now ruled out, given the emphasis in the Urban White Paper and national planning guidance on the re-use of brownfield land and buildings, mixed-use development, and encouraging more people to live in towns and cities;

    (b)  For only one of the projects, B, is the gap within the limit of 15 per cent of project cost, that applies under the new arrangements in Objective 2 areas. More derelict properties, with higher abnormal development costs (of the type of projects A and C) could not be made viable at the 15 per cent limit;

    (c)  English Partnerships' funds for property investment have passed to the Regional Development Agencies, and in this particular area the RDAs priorities lie generally outside this urban area and towards the scale of project that will have a regional, rather than local impact. Thus, the RDA in question is unlikely to fund schemes like projects A, B and C that nevertheless are very important in meeting the needs of the local economy, community and environment;

    (d)  The SRB programmes which have helped to meet those local needs in this particular area are now coming to an end;

    (e)  The CAP in respect of historic buildings has also ended, and has been superceded by the Townscape Heritage Initiative (THI), but there is some evidence that this might now be considered to constitute "state aid" (Regeneration and Renewal, 11 January 2002, page 1);

    (f)  The area in question is now in part an Objective 2 area and partly a transitional Objective 2 area, under the European Regional Development Fund (ERDF). Only eligible public bodies can access the funds for employment—generating elements (not housing); grants to private developers are ruled out, so private schemes can only be assisted in respect of off-site works, not the development of the sites and buildings themselves. With ERDF grant of no more than 40 per cent, the Council does not have the 60 per cent match funds required to implement property developments itself.

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Prepared 25 February 2002