Select Committee on Transport, Local Government and the Regions Memoranda


Memorandum by John Walker (NT 30)

1.  INTRODUCTION

  This memorandum is submitted in a personal capacity. My relevant background is as the former Chief Executive of the Commission for the New Towns (1992-99), and before that I was the Planning Director (1980-87) and then Deputy Chief Executive (1987-92) of the Milton Keynes Development Corporation. I am now the Chief Executive of the British Urban Regeneration Association (BURA), though the views expressed below are submitted in a personal capacity. This note has been assembled at speed, and probably bears the marks of a quick brainstorm rather than a structured argument. However I would be delighted to expand on it should that be of interest to the Committee.

  The Inquiry is expected to look into various aspects of the New Towns. My comments address some of these, but also suggest other areas that the Committee might wish to explore.

2.  THE NEW TOWNS PROGRAMME WAS EXCEPTIONAL

  The New Towns programme was the largest and longest running government sponsored urban development initiative that this country has ever seen. Both the legislation and the main vehicle for delivery of the programme (the New Town Development Corporation) were purpose designed for the task. In combination they delivered enormous progress, in physical, economic and social forms which would have been regarded as highly "sustainable", "joined-up" and "holistic", had those terms been in use at the time. Even by todays different standards, reflecting massive changes in economic, social and environmental conditions, the New Towns display most of the essential qualities of sustainable development, with a few notable exceptions. One such is public transport, but this failing owes more to the attitude of central and local government over 20+ years towards investment, and a weakness in the integration of public investment programmes, as it does to any aspect of layout and density of development.

  It is my strong belief that much could be learned from the New Town experience which would be of great value in today's search for sustainable approaches to the delivery of urban economic development, housing provision, mixed use and the urban renaissance across Britain. It is regrettable that very little attention has in fact been paid to identifying these lessons. I would commend this additional line of enquiry to the Committee most strongly.

  The lack of previous review may be largely due to ignorance, which gives rise to indifference, since many of the government officials who were involved in administering new town policy retired or moved on long before the programme was completed. Those who replaced them were more interested in "new" ideas rather than learning from old ones; ie the widespread existence of the "not-invented-here" syndrome.

3.  LESSON WHICH COULD BE LEARNT

  Below I offer my own perspective on some of the lessons, though this is not an attempt to produce the conclusions of review called for above.

(i)  The Urban Renaissance

  In terms of the "urban renaissance" it would be particularly timely to look at New Towns, because several years of urban renaissance policy and programme review have now led to an inevitable and essential focus on delivery. The New Town Corporations delivered holistic development and private investment on a massive scale rarely seen before or since. Current delivery agents, such as URCs would have much to learn.

    —  Their development was driven by locally based, but relatively independent, single-minded agencies. The Development Corporations had special powers, to acquire land, gain planning permissions and carry out development. They were able to demonstrate enormous success in attracting private investment, particularly inward investors, but also small enterprises. They provided a framework within which the private sector could invest with relative confidence. They could take a long term strategic view. They were engines of real economic growth. The "single door" capability of the Development Corporations was immensely attractive to investors of all kinds.

    —  Collectively they learnt from their own mistakes, and in later phases took an approach to development which recognised many key ingredients of "sustainability" before that term was in general use. These include

    (i)  Local access to facilities,

    (ii)  cycleway networks,

    (iii)  Mixed tenure housing, at a fine grain.

    (iv)  Low energy buildings,

    (v)  Facilitation of community development and voluntary sector activity. Milton Keynes is an excellent example

    (vi)  Balance between jobs and economically active population, which is such an obvious contribution to sustainability, yet so rarely articulated elsewhere.

    —  They dealt with, and provided valuable examples of both new development and re-development, on both "green field" and "brown land". For the latter, see for example the experience in new towns such as Corby, Washington, Warrington and Telford.

(ii)  Public funding of development projects

  Full use was made of the ability to invest in land and property at or close to existing use values, thus securing much of the increase resulting from public investment for wider public benefit, in the form of community facilities and returns to the Exchequer.

  The New Towns Programme was the only urban programme (to the best of my knowledge) which relied almost entirely on loan (rather than grant) finance from government. Moreover, it has repaid the loans to government, with interest, nearly 40 years before they were due, leaving residual assets in government ownership worth well over £1 billion. In a very real sense the government has made a direct profit from the New Towns programme, in addition to the many economic, social and physical benefits that it was seeking at the time, such as better housing, job growth, inward investment etc. Of how many other urban programmes can we say that? This financial performance was, in part, a result of that powers given to the Corporations to acquire land on specific terms, to develop directly or in partnership with the private sector, and to apply to government for large scale outline planning consents with the ability to settle the detail directly. Such concentration of delivery powers seems unthinkable now, but, with suitable governance owing more allegiance to the local community, it is exactly what is needed to stimulate delivery in many areas in need of large-scale change, and is not a million miles away from the URC model.

  There were also negative lessons to learn, including some features of asset transfer to Local Authorities, which relate directly to many of the problems now perceived by those Local Authorities in New Town areas. Another was the way the local community shared in the increased values which were created.

  There were several different regimes over the years under which assets were transferred from Development Corporations (and latterly the Commission for the New Towns) to Local Authorities and others. I don't claim to be expert in all of them, but it is clear to me that their impact on Local Authority finance varied widely. Some New Towns did extremely well out of transfers (and generally kept fairly quiet about it). Others did less well. One of the major flaws was that the lump sum endowments, often handed to local authorities, were not ring fenced for the use intended; ie the long term maintenance of the assets. This appears to have taken place by common consent of central government and local authorities, and led to the latter typically spending the endowment on other services, often over a very short period. As a result, many Local Authorities now feel burdened by maintenance costs of facilities for which they have already been funded; though I doubt that many of their councillors even understand that this is so.

  Arguably the more reasonable concern of Local Authorities is that they do not share fairly in the value created by government's development of land in their towns. I state above that government has done well financially out of the new towns (despite a loan write off which I would be happy to deal with, but don't want to waste space on here). There is therefore a common sense and a moral argument that says the local communities ought to benefit more directly from value released by the further development and sale of the remaining assets, which vary tremendously in scale and value between the various new towns.

(iii)  You are "in" or you are "out"

  A further lesson to be learned is the danger inherent in the "on-off" attitude which has characterised policy. There was a "turning off the tap" by central government. This was not so much the restriction of capital funding, which could have been expected as the towns became better able to, and did attract private investors. It was a 180 degree change of attitude, from that of Government as promoter and guardian of the long-term welfare of the town, to detached landlord with no apparent policy interest in long-term success.

  For over 30 yrs governments of both parties pursued a positive policy of new towns development, taking an interest both in the new communities, which they were helping to create, and in the older conurbations whose problems they were helping to alleviate. This was immensely helpful to such large projects. Fairly suddenly from the late 1970s onwards governments lost interest in the development of their new towns, and began to see them purely as a source of capital receipts.

  This change gathered force in the 1980s, and was epitomised by the rapid closure of the remaining Development Corporations. The handover of assets from Development Corporations was mainly to The Commission for the New Towns rather than to the local authorities. That in itself could have been seen as good sense; cutting overhead costs by administering the final phases of growth from a centralised agency, with ever closer involvement of the local authorities. However the legislation under which CNT was set up gave it a much narrower role that the Development Corporations, and Government policy narrowed this view much more. Government took it as an opportunity to turn its back on new towns, and regard them primarily as a source of income from asset sales. This policy was well illustrated by the Department of Environment's own Annual Reports, which, in the mid 1990s, contained numerous sections on urban policy, then moved finally to a separate section on new towns. This section dealt only with how much money had been raised from sales of property and how much property had been sold in that year. The fact that the sales were mainly of land, and that these sales were facilitating what was still one of the biggest government sponsored development programmes in the whole country (5,000 homes and 10,000 jobs per annum) was nowhere mentioned!

(iv)  Who gains from further receipts?

  Examination of government accounts show that a large portion of their expenditure on "inner city" programmes has been funded from new town receipts. In many ways this is to be applauded, as recycling of the returns from one urban programme to help fund the next. If this were a transfer from rich areas to poor it would be even more laudable. However, no one has looked at this transfer in terms of its fairness, or in terms of the needs of the donor areas and recipient areas. There are real needs arising in the New Towns that are due to their unusual history. For instance nearly all their infrastructure was built within a relatively short period. When new this was a great advantage, but now much of the infrastructure in the older new towns is ageing, and it's all happening again in a short period. There needs to be a proper consideration of how much of the value remaining in government assets (now vested in EP) should be channelled directly back into those new towns to cope with these unusual problems, and how much should be returned to the Treasury.

  The owner of the assets is EP, formerly CNT. As the previous Chief Executive of CNT I believe that government policy has paid little attention to the needs of the new towns for many years. The legislation under which CNT was set up and operated was focussed initially on guardianship of the assets, but then became more focussed on 'disengagement from public ownership' and recycling of receipts to government. The guidance and direction to CNT, via management statements, financial memoranda and annual corporate plans was ever more narrowly focussed. Despite this, CNT's Board and staff took a real interest in the welfare of the towns, and still possesses skills of great relevance to their future prosperity.

4.  CONCLUSION

  I believe there is a real danger that 50 years of investment; financial, social, physical and economic; by public and private sector could be undermined by neglect. Also the lessons available from that unique experience are in danger of being lost. The existing new towns ought to be used as a firm basis for continuing progress in urban development, but will fail do this if their vitality is undermined. In this respect government should

    —  Recognise the unique nature of new town infrastructure, which though relatively new, will all reach the point at which major re-investment is needed within a short period.

    —  Re-examine the relationship between receipts from further sales of government owned land, benefits to the local areas and benefits to the Exchequer.

    —  Recognise that new towns are the product of government policies and investments, and that such a major programme should not be allowed to fade without a serious attempt to understand and benefit from lessons learnt. In my opinion many lessons could be used to speed delivery in current policy areas.

    —  Recognise that it possesses, in what is now EP, some valuable and scarce skills in the delivery of integrated and sustainable communities making best use of public and private expertise.


 
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