1. Governance
June 29, 2015updated 19 Jul 2021 2:59pm

Government regeneration schemes add to productivity and growth. The Gorbals proves it

By David Pendlebury

Urban regeneration, as one of the tools in the armoury of the professional planning community, has perennially been adopted as a solution to social problems within the UK’s main population centres.

In times of austerity, budgets considered “non-essential”, including spending on social policy and planning, have been cut drastically. But by doing so, policy-makers risk losing out by overlooking policies which have the ability to cut the welfare bill and recoup returns from taxes and productivity gains.

A new research paper from the Royal Town Planning Institute suggests that such impressive economic improvements should lead policy makers to reassess the importance of planning and regeneration. They should consider it as a policy tool that can deliver significant economic returns on top of the social policy goals with which it is traditionally linked.

During the 1980s, partially as a consequence of rapid de-industrialisation, poverty and inequality rapidly increased in the UK’s old industrial cities; and the pressure generated by deprivation and exclusion occasionally boiled over in violent outbursts of discontent, as in the Toxteth and Brixton riots in Liverpool and London. Before its regeneration scheme, the Gorbals area of Glasgow had also traditionally been plagued by similar social problems.

Such challenges related to urban decline led successive governments to develop evolving regeneration policies In England and Wales – from the Thatcher Government’s Urban Development Corporations (UDCs), through to the New Deal for Communities (NDC) programme of the New Labour Government. In Scotland, parallel schemes such as New Urban Life in Scotland and Social Inclusion Partnerships pursued similar objectives.

Nevertheless, despite occasionally spearheading central government policy for addressing social challenges, the efficacy of regeneration programmes has never been universally accepted, even after numerous academic evaluations. A 2010 Sheffield-Hallam led analysis of the outcomes of the NDC programme was largely inconclusive; so was an earlier Cambridge University review of the Major government’s Single Regeneration Budget policy.

Combining the poor evidence base with the budget cuts, implemented by the coalition government since 2010, perhaps explains why government regeneration schemes have been few and far between in recent years. (There have been a few major exceptions, like the 2012 Olympic site in London.)

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So the RTPI’s research paper takes a scheme- and policy-specific approach to analysis which might challenge the current, relaxed approach to divestiture in regeneration. Adopting the kind of market-oriented approach demanded by HM Treasury’s public expenditure rules, the RTPI looked at the effects of the regeneration scheme launched in the early 1990s in The Gorbals.

The paper considered two key economic indicators – employment deprivation and income deprivation – in the years between 2004 and 2012. Over that period, unemployment in the area fell by 31 per cent; meanwhile the percentage of people classed as “income deprived”, including those on welfare benefits, also fell by 35 per cent.

These figures are significantly better than the average data for Glasgow. The city as a whole saw only a 16 per cent drop in unemployment and a 21 per cent drop in income deprived citizens over the same period.

The stark improvements of these indicators lead us to hypothesise that such projects should be considered as investments delivering positive economic returns, rather than a social policy expenditure. By proactively and positively using the full extent of the modern planning toolkit – including urban design, good public consultation, competitive design tendering, and land assembly mechanisms – regeneration has the potential to deliver significant economic benefits to individuals and areas.

In this sense, the 46 per cent budget cuts that Local Authority planning departments have seen since 2010 seem highly illogical: they are saving money only to choke off future returns from investment.

Real long-term savings would actually be more effectively gained by using planning and regeneration to provide individuals with physical environments in which they are encouraged to take a full and active participation in the economy. Adopting planning tools to make places safer, healthier, more inspiring, and community-oriented can increase the chance of individuals achieving economically successful life outcomes. The Gorbals case shows that investment in planning and regeneration has delivered lower outlays on income support, and reaped returns from the higher productivity and tax receipts associated with higher employment.

It is time that investment in regeneration and planning found its way back into the policy portfolios of growth-seeking governments.

David Pendlebury is an economic research officer at the Royal Town Planning Institute.

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