We are in the midst of a restructuring of the institutions responsible for regeneration, and the role of local authorities is becoming increasingly unclear. The Government has, implicitly at least, acknowledged that many local authorities are ill-equipped to lead regeneration. Yet it does not seem entirely convinced that strategic authorities are the right institutions either.
At the centre of the Government's plan to renew Britain sit three approaches: first, backing priority industries through its industrial strategy; second, streamlining planning to accelerate housebuilding and infrastructure – from transport to data centres; and third, a ‘devolution revolution' empowering strategic authorities.
In practice, however, regeneration is increasingly being pursued through what I have described elsewhere as ‘zonification', in which regeneration is assigned not primarily to local or even strategic authorities, but to a patchwork of special-purpose vehicles: AI Growth Zones, Industrial Strategy Zones, Mayoral Development Corporations, and Enterprise Zones.
In one sense, this represents a clear recentralisation of regeneration. Although these zones operate locally, they are designed, designated and often managed from Whitehall. Take the emerging AI Growth Zones (AIGZ). The Government has, to date, announced four of them.
The AIGZ in Oxfordshire, for example, will be hosted by the UK Atomic Energy Authority and supported by the AI Energy Council and the AI Growth Zone Delivery Unit – national institutions and civil servants. They are essentially ‘islands', operating outside the formal responsibility of either local or strategic authorities. The establishment of so-called PuFins – Public Finance Institutions – also reflect a similar trend.
It is not yet clear how the £16bn National Housing Bank works with strategic and local authorities, and they have already called for stronger alignment with the £28bn National Wealth Fund, which at least works with them through its Regional Project Accelerator.
The preference for these institutions partially reflects Whitehall's lack of confidence in local government. That scepticism is not entirely unfounded. Many local authorities face acute financial pressures, operate across relatively small economic geographies, and – due to their proximity to communities – find making decisions about large-scale regeneration schemes highly politicised.
There are important exceptions, of course. Southwark LBC's instrumental role in the regeneration of Elephant and Castle is a case in point. Once it is complete, it will have delivered 14,000 homes, new commercial space, a cinema and eateries.
The implicit recentralisation of regeneration also sees responsibility move upward from local to strategic authorities. Under new measures to support building in the capital, the Mayor of London has been empowered to ‘call in' local planning decisions on schemes over 50 units (down from the previous threshold of 150).
Given that London authorities are statistically the least likely to grant planning permission, the rationale for intervention may be particularly strong in London. But the effect is clear: fewer planning decisions will now sit in the hands of local authorities.
Yet the Government's appetite for special purpose vehicles suggests they are not fully convinced by strategic authorities either. In some cases, they are viewed as institutionally immature. The creation of the Cambridge Growth Company last year under the Conservatives can be read partly as a response to poor governance within the Cambridgeshire and Peterborough combined authority. And many of them are still new, with capability and capacity constraints.
That said, the Government continues to expand the number of Mayoral Development Corporations (MDCs). New MDCs in Gateshead and Newcastle, and in Birmingham, are welcome developments. Yet they are attractive to Whitehall precisely because they can transfer responsibility from local to strategic authorities, with development not requiring local consent. Establishing MDCs still requires approval from the Secretary of State.
There is, to be clear, a role for all of these initiatives in boosting the growth-enhancing potential of UK plc. Zones, development corporations and PuFins can bring focus, speed and investment. But taken together, they also point towards a model of regeneration that is increasingly centralised, fragmented and sometimes detached from broader local and regional economic strategies.
I do not oppose this restructuring per se. But it is happening organically and in an ad hoc fashion. At a time when investors value clarity and certainty, as strategic authorities are being established across England and their responsibilities are being codified, and as a new review into the statutory services of local authorities has been launched, there is a strong case for clearly defining who is responsible for regeneration, in what circumstances, and how authorities – local and strategic – intersect with the proliferation of special purpose vehicles.
There is also a case that zonification risks undermining the role that strategic authorities are playing in regeneration. The Adult Education Budget is already devolved to them, and they share responsibility for Local Skills and Improvement Plans with employer representative bodies (often Chambers of Commerce). They are also drawing-up spatial development strategies. Their growing remit suggests they are gradually becoming the primary scale for economic strategy and skills policy – functions closely linked to regeneration – even if the role of green-lighting development remains institutionally fragmented.
If strategic authorities should play a greater role in regeneration, there is a gap in how we think about major developments that fall below national significance but above local capacity. We have a framework for Nationally Significant Infrastructure Projects, but a category of Regionally Significant Infrastructure Projects should be considered. I recently spoke with sporting institutions who described how their assets – stadia and training grounds – often span multiple local authority boundaries.
They described how planning permissions across more than one local authority and relatively small amounts of transport investment could be instrumental in unlocking hundreds of millions in private finance from them. A Mayor with an Integrated Settlement or City Region Sustainable Transport Settlement could fulfil that role. These are decisions which could have an outsized impact on the regional economy and it is easy to see why they sit uncomfortably within a local planning framework.
The Mayor of London, for instance, has been forced by realpolitik to call in major schemes such as Wimbledon's expansion, which includes 38 new tennis courts and an 8,000-seat stadium. It was approved. The Mayor also rejected the 21,000 capacity Madison Square Garden Sphere in Stratford owing to the impact it would have on residential development, but it is noteworthy that it was initially approved by the London Legacy Development Corporation, thereby reinforcing the fragmentation of regeneration.
At the same time, alongside the ambivalence the Government has in local authorities to boost growth, they also are navigating a wide range of public service pressures, which is why the new review into statutory services is timely. That review offers an opportunity to ask a fundamental question: what is the purpose of local government in the 21st century? And should that include a more circumscribed role in regeneration?
Local authorities may still retain responsibilities over certain skills and employment programmes, but these, too, may need clearer alignment with the strategic scale at which labour markets operate.
The risk, if this moment is not seized, is that regeneration happens not because of the system that we design, but despite it: one that is simultaneously centralised, fragmented, and ill-defined – where regeneration is delivered neither with full local consent nor through coherent regional strategy, but through a growing maze of special purpose vehicles, public finance institutions, strategic authorities (with varying competencies) and local authorities with primary responsibility for public service delivery.
Jack Shaw is director of Groundwork Research and Fellow at the University of Manchester
