Select Committee on Transport, Local Government and the Regions Memoranda


Memorandum by Stevenage Borough Council (NT 10)

SUMMARY

  The first generation of new towns were arguably the most successful examples of social engineering in the 20th century. They demonstrated what could be achieved by robust national land use and planning policies, proactive economic development and a strongly community based Council administration. The London ring new towns today represent the best option on which to concentrate residential and economic development in the South East and Eastern Regions. But in order that they can fulfil this role, they require urgent and decisive action. In particular Government must recognise that:

    —  new towns have the potential to be the major economic drivers in their region and are the appropriate location for expansion to meet future housing need; however

    —  they have been systematically asset stripped over a 20 year period by English Partnerships and the former Commission for the New Towns in order to meet Treasury targets; and

    —  as a direct consequence of disinvestment and lack of Government attention, they now face substantial and unique physical, social and environmental problems.

  In order to redress this situation, urgent Government action is required to:

    —  provide an integrated and coherent system of social administration by designating the new towns as unitary authorities;

    —  review the way Standard Spending Assessments are calculated for the new towns;

    —  invest capital funds in the new towns now in order to meet the physical regeneration requirements of their town centres, neighbourhood centres, housing stock and public buildings;

    —  provide additional social regeneration funds to ensure continuity of area based initiatives such as the SRB programme and widen their remit to underwrite a more comprehensive town-wide neighbourhood renewal programme;

    —  transfer the remaining English Partnerships assets in the new towns to the appropriate local authority, preferably free of any obligations but failing this with an arrangement for clawback by the Treasury on disposal;

    —  pending completion of the transfer of assets a major proportion of the income from sales of EP assets should be directly reinvested in the new towns from which it has been derived- the RDAs do not represent an acceptable intermediary for this process.

BACKGROUND

  The London ring new towns developed out of the 1944 Abercrombie Plan for the regeneration of London. Eight "first generation" new towns were created around London up to 1950. Development took place from the 1950s onwards by Development Corporations specifically set up for that purpose. The aim was to create good living and working environments that would attract investment and facilitate continuing economic health. The new town movement is arguably the most successful example of social engineering of the 20th century and the towns represent relatively prosperous, well-developed communities.

  Stevenage was designated a New Town in 1946 and underwent significant growth from the 1950s to the 1970s, with residential areas of largely public housing developed on the neighbourhood principle, a fully pedestrianised sub-regional shopping centre and a large industrial area with a strong manufacturing base. When first built, the town was a model of good practice, attractive and successful and the envy of surrounding towns, but today it faces substantial physical, social and environmental challenges.

  Stevenage Development Corporation had high levels of funding from Central Government but little accountability to local people. When the Corporation was wound up, its role was passed to the Borough Council, with increased accountability, but Government funding was withdrawn leaving the town with a deteriorating physical and social infrastructure and no means of funding renewal.

CURRENT ISSUES

Unitary Local Government

  Since the winding-up of the Development Corporation the social administration of the town has been delivered through two tier local government. In 1993 the Council presented a strong but ultimately unsuccessful case to the Local Government Commission for the town to be designated a unitary authority. This case was based on the towns clearly defined boundaries and consistent urban form; the wish to provide a "one stop shop" for all local government services; the positive "can-do" approach to physical and economic development inherited from the former Development Corporation; and the subsequent experience of community leadership, co-ordination and partnership established by joint working with the private and voluntary sectors. The case for unitary status is even stronger today, and the Council's determined efforts to establish a Local Strategic Partnership are, in part, evidence of its commitment to fulfil its role as a "unitary authority in waiting".

The Regional Role

  The new towns have the potential to be the major economic drivers in their region. They have strategic advantages over traditional locations in attracting inward investment, relating in the main to advanced infrastructure, access to modern communications systems and the positive approach to development of their local authorities. Stevenage in particular has a strong representation of leading-edge companies in the aerospace and life science sectors. It also has a growing representation of SME's as a direct result of the local authority working in partnership with larger firms to promote a raft of initiatives to stimulate business start-up, growth and innovation. But this success has been hard fought in the face of cyclical and structural changes in the local economy particularly associated with the decline in manufacturing and the defence related industries. During the early 90s, Stevenage lost over 6,000 jobs from the local economy and had to redress this without assistance from Government agencies.

  The London ring new towns are also the appropriate location for expansion to meet future housing need in a sustainable way in line with recent planning guidance (PPG3). This is because of their position in relation to the capital, the existence of relatively accessible shopping and employment areas and the existing pattern of neighbourhood development which is readily transferable to new urban extensions. These factors have led to the designation of an area immediately to the west of Stevenage as a strategic housing allocation in the 1998 Hertfordshire County Structure Plan. Applications for planning permission for up to 5,000 new homes, 3,600 to be constructed before 2011, are currently under consideration by the Council. Despite efforts by the current County Council administration to change their policy, the Borough Council considers urban extensions to the new towns are a correct response to Government policy.

The Financial Regime

  As a first generation New Town, Stevenage has a range of inherent factors that generate a need to incur higher levels of expenditure than would be the case for other Shire districts. These factors in particular relate to areas such as infrastructure and asset maintenance issues; extensive leisure facilities; neighbourhood-based community facilities; extensive urban green spaces; and inherited discretionary spend pressures.

  Despite repeated lobbying over the years, these factors have not been taken into account in the distribution of central government resources through the local government finance system. Some elements of the pressures facing New Towns may emerge through the general indicators used in the calculation of Standard Spending Assessments, but the overall issue of the special characteristics of New Towns have been ignored. For authorities such as Stevenage, the SSA calculation remains a crude, population-based measure that is an inadequate assessment of the actual need to spend.

  The situation is exacerbated for Stevenage specifically in that it is a tightly bounded urban shire district. Consequently, the Council, and the town itself, provides services to a rural hinterland population that is included in neighbouring district council areas. These authorities then obviously receive the council tax income and grant distribution associated with this population. Comparisons with other local authorities indicate that Stevenage Borough Council provides services commensurate with a larger population, say, 130,000.

  In addition, since the national pooling of business rates was introduced in 1990, the local government finance system has not recognised the Council's need to provide services to maintain the sub-regional employment base within the town, redistribution of Business Rates to local authorities being purely population-based.

  Discretionary funding sources, particularly those which rely on deprivation indicators, tend to be skewed against new towns and are also subject to a pattern of changing rules and, moreover, are limited to one or two neighbourhoods, whereas more general intervention is warranted.

  Government should recognise the need to invest capital funds in the first generation new towns now in order to prevent decline and the need for higher investment in the future and should review the way SSAs are calculated for the new towns.

The Maintenance Deficit

  As a direct consequence of the financial regime referred to above, lack of specific Government aid and systematic disinvestment (see later) the new towns have accumulated a substantial maintenance deficit which is manifested in:

    —  Deteriorating infrastructure, all of which was built at the same time and is now in need of replacement, ie mains services installations, unadopted sewers, private roads, car parks and recreational parks.

    —  An accumulating maintenance burden for replacement of public buildings of poor quality, system built housing and other non-traditional built housing.

    —  Town centres and local neighbourhood centres characterised by tired infrastructure and a generally shabby urban realm.

    —  The sheer scale of routine maintenance problems arising from large acreages of grass verges and open spaces, paths, playing fields, woodland and large numbers of road side trees.

  In Stevenage, the issues outlined above have led to substantial liabilities in relation to its public buildings.

  Leisure Buildings were surveyed in 1997-98 (prior to the transfer to an arm's length company) and found to have a maintenance backlog of about £2.2 million. This survey excluded the Swimming Pool due to its impending refurbishment, which subsequently cost a further £2.5 million. The Council has had to fund all of this from its own resources. Other operational and non operational buildings ranging from Civic Offices through commercial premises to community buildings were surveyed in 1999 and showed a maintenance deficit of £6.7 million at today's prices. This figure increases to over £13 million when estimates are added for car parks, external areas, works to sewers, garage compounds and external plays areas. Of this, the Council is struggling to cover barely one half from its own resources within a five-year programme.

  Currently some 8,500 Council homes fall short of the Government's own "Decent Homes Standard". The stock condition survey in 2000 showed that the backlog of repairs to all the stock required a ten-year investment of £60 million. Of that, £40 million alone is required to bring all dwellings up to Decent Home Standard. At the current level of Council resources available, this would take between 18 and 20 years to achieve.

  By way of further illustration of how the Council depends on its own resources, the first full year of improvements to the stock will cost over £7.5 million. Of that, only about £2.5 million is funded from the MRA (major repairs allowance). The rest is funded from capital receipts.

  Virtually all the Council's Capital resources are therefore committed to meeting the maintenance deficit left by its new town heritage and it is almost impossible to fund new capital projects and new or replacement buildings. The Government should make capital funds available for investment in the new towns now, in order to meet the physical regeneration requirements of their town centres, neighbourhood centres, housing stock and public buildings.

Promoting Social Inclusion

  The breakdown of the extended family network when newcomers relocated from London to the new towns in the 50s and 60s has been well documented. During the 80s and 90s this process of fragmentation has continued in some areas with the nuclear family being replaced by concentrations of non-traditional family units, single parent families etc. This has resulted in weakened community networks and greater dependency on the welfare services for support. Stevenage has amongst the highest rates of teenage pregnancy in the Eastern Region (23 per 1,000 in 1996-97), it ranks 49th out of 366 districts for lone parents and has low rates of educational attainment at GCSE.

  The Council has addressed these problems by working in partnership with the public, private and voluntary sectors to stimulate community activity and provide support for local organisations. This process is being continued today through the establishment of a Local Strategic Partnership for the delivery of mainstream services within the framework of an evolving Community Plan.

  Analysis of social exclusion at the neighbourhood level tends to mask the pockets of acute deprivation and disadvantage which exists within some of them. Two wards are in the top 10 per cent of the Index of Multiple Deprivation for the Eastern Region, and these problems are being successfully tackled by an SRB5 programme but long term social planning is hampered the current lack of certainty over continuity funding. Moreover acute problems also exist in pockets elsewhere in the town for which no comparable programmes exist. Notwithstanding the Council's commendable track record (past Beacon for Community Safety and currently shortlisted for Neighbourhood Renewal) the current allocation of resources for neighbourhood renewal is inconsistent and arguably socially divisive.

  Government must provide additional social regeneration funds to ensure continuity of area based initiatives such as the SRB programme and widen their remit to underwrite a more comprehensive town-wide neighbourhood renewal programme

The Development Agencies

  The Commission for the New Towns (CNT) was established to take over and manage the assets of the New Towns in England and Wales, on the wind-up of the Development Corporations. With the advent of the Government's privatisation policy in 1979, the CNT was charged with undertaking an accelerated and expanded disposals programme of its commercial and industrial property to raise capital, reduce the public sector borrowing requirement and extend private ownership. CNT completely ignored its social responsibilities and provided no assistance in dealing with the fragile economy it left behind.

  Following a reorganisation in 1999, CNT was absorbed into the Government's Regeneration Agency, English Partnerships. The vision of the enlarged organisation is to be ". . . the national force for regeneration and development (working) in partnership to create new jobs and new investment through sustainable economic regeneration and development in the English Regions". The remit, as set out in the English Partnerships Corporate Plan for 2001-02 to 2003-04 is, amongst other things to ". . . complete the development of the new towns for the benefit of all those who live and work in them".

  In practice, English Partnerships has proved to be an unhappy marriage between CNT and the Urban Regeneration Agency giving rise to a corporate schizophrenia which has acted against the interests of the new towns. English Partnerships has a contradictory brief. It is required to dispose of the EP assets at the best price for land and property and return the government's investment to the public purse—ie act in the interests of the Treasury and the Taxpayer. At the same time it is required to take into account the interests of the local community—ie people living, working or carrying on business in the New Towns. In practice EP has satisfied the first part of the brief and disregarded the second. The new towns have effectively been asset-stripped as a result.

  The former CNT's property disposal policy has created situations of multiple ownership which make it extremely difficult for the local authorities to undertake development-led regeneration. The clearest example is in the town centres. They are suffering from the decline brought about by out of town shopping developments, but this cannot be addressed easily when property is now in the ownership of many different organisations creating almost insuperable problems when trying to negotiate redevelopment schemes.

  A number of specific difficulties have been experienced in dealings with EP and the former CNT:

    —  In most cases, the normal principles of selling land do not seem to apply and deals are generally on inflexible terms, which may be difficult for local authorities to comply with.

    —  Negotiations between the local authorities and CNT can be unreasonably prolonged. During such negotiations personnel and targets change, preventing quick resolution.

    —  The remaining EP assets are now of minimal commercial value but the CNT owns clawback, restrictive covenants and ransom strips which severely inhibit the work of the Local Authorities in developing their towns.

    —  EP tends only to invest in areas from which it derives income. This is despite that fact that the majority of the profit from sale of land in the towns has gone to the Treasury over the years. In Stevenage, EP now holds very little land of any significant value.

  The following action is now needed from Government:

  1.  Disengage EP from the new towns and transfer the property assets in them to the appropriate local authority preferably free of any obligations, but failing this with an arrangement for clawback by the Treasury on disposal.

  2.  Pending completion of the transfer of assets a major proportion of the income from sales of EP assets in the new towns should be reinvested in new town renewal.

  It should be noted however, that because EP has virtually completed its disposal programme in Stevenage, the funds that would be released by any asset transfer would not be sufficient to finance the Council's maintenance deficit or its regeneration programme.

  The East of England Development Agency (EEDA) as the Regional Development Agency provides welcome assistance to parts of Stevenage through its administration of the SRB programme. EEDA could also have a role to play as an intermediary in providing the capital investment needed to support physical regeneration initiatives in the new towns, given a sufficient allocation of resources by Government. There are, however, two major constraints. First, EEDA is under-funded in comparison to other RDAs. Secondly, Stevenage is peripheral to the eastern region and it is clear that, with limited resources available to it across a large region, the EEDA's current priorities lie elsewhere. In the event of a major restructure of English Partnerships, the Council therefore prefers the options outlined above to a transfer of assets to the RDA.


 
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Prepared 16 April 2002