Since coming to ofÞce, New Labour hasbeen grappling with a dilemma faced byall Western governments. This is the

resistance (real or perceived) of the public topaying more taxes, alongside expectationsthat contemporary social problems will stillbe tackled and the quality of public servicesimproved. The public servicemanagement reforms of thelate 1980s and early 1990swere largely a response tothis pressure.

New Labour has acceptedthe perspective of previousConservative governmentsthat the state has to workwith other sectors in thedelivery of public services,whether through privatisation and regulationor in partnership with private, voluntary andcommunity organisations. However, thedelivery of public policies outside the frame-work of traditional democratic decision-mak-ing has raised questions about the opennessand accountability of new governance struc-tures. A further consequence has been a weak-ening of the stateÕs capacity to handle complexinterrelated policy issues.

The reforms of the past two decadesdecentralised government management

responsibilities to single-purpose agenciesand policy delivery mechanisms. Localdemocratic institutions such as the tradi-tional multi-purpose local authorities (LAs)were stripped of their roles. However, manyof the new devolved structures remain wed-ded to a functional departmental tradition.

They are primarily account-able upwards to Whitehall,from where their budgets arecontrolled and targets set,leaving limited scope for localpolicy discretion. While exec-utive agencies such as theEmployment Service andBenefits Agency havestrengths in focusing on ser-vice delivery, they have little

to offer integrative policy mechanisms at thelocal level.

The dilemmas are no more starkly evidentthan in social exclusion and area regenera-tion policy. Deprived neighbourhoods havebeen a concern for over 30 years with aplethora of solutions being tried. This arti-cle considers the evolving area regenerationapproaches during the 1990s, focusing inparticular on their relationship with NewLabourÕs Ôjoined upÕ agenda at central andlocal government levels.

ÒThe local impact ofdiscretionaryregeneration

programmes isdwarfed by other

areas of publicexpenditureÓ

JOINED-UP REGENERATION 209

Joined-upregeneration

Does the New Commitment toRegeneration signal the way ahead?

STEPHEN HALL

Centre for Urban andRegional Policies,University of Birmingham

JOHN MAWSON

Aston Business School,University of Aston

1070-3535/99/020209 + 05 © 1999 IPPR

210 NEW ECONOMY

The history of challenge fundingThe development of challenge funding byConservative governments in the 1990s waspartly in response to criticism of the organi-sational weaknesses of earlier forms of regen-eration policy which had been highlyfragmented and conßicting.

The Conservative government had seenlocal democracy as an obstacle to its philoso-phy of regeneration through private enter-prise. ÔCentral-localismÕ prevailed as electedLAs and communities were by-passed by civilservice teams (Task Forces and City ActionTeams) and government appointed executiveagencies (Urban Development Corporations).

MajorÕs government introduced a competi-tive dynamic into area regeneration policy,combined with a renewed emphasis on strate-gic management and policy co-ordination.Hence, the creation of the Single RegenerationBudget (SRB) to enable funding to be shapedto local circumstances and to establish an inte-grated government presence at the regionallevel. The SRB merged 20 regeneration pro-grammes from Þve government departments(Environment, Trade and Industry, Transport,Employment and the Home OfÞce). Initially,most of the resources were committed to exist-ing schemes. The uncommitted component,the SRB Challenge Fund, was to be allocatedthrough annual competition to engage urbanand rural partnerships from all areas of England.

A network of ten integrated GovernmentOfÞces for the Regions (GORs) was establishedby bringing together the regional operations ofthe Environment, Employment, Trade andIndustry and Transport departments under asingle regional director. Whilst representing anew multi-departmental government presencein the English regions, the GORs did not rep-resent Agriculture, Health and Social Security.Neither was there a direct line-managementrelationship between the GORs, Next StepAgencies and non-departmental public bodies.

The new approach of the Major govern-ment called for a holistic and integrated strat-

egy, but this increasingly had to be pursuedunder a climate of Þnancial constraint. The1996 Budget provided for a projected valueof the SRB for 1999-2000 of £1.02 billion, areduction of 36.7 per cent from its peak.

The level of co-operation between localorganisations stimulated by the SRB Chal-lenge Fund was without precedent, with 555partnerships established by the end of Round3. However, the partnership approach hasproved problematic. The competitive processdemonstrated the differential capacity of localorganisations to participate, particularly in thevoluntary and community sectors.

In terms of bid leadership, local authori-ties proved the dominant players at a locallevel while LAs, TECs and private sectororganisations maintained a presence in morethan 80 per cent of successful bids in eachround. Most partnerships were consultativerather than participative. In many cases, poorpartnership working arose from the late inclu-sion of partners in the bidding process and thetendency of lead bidders to engage otherpartners merely to add credence to a proposal.

Whilst the bidding and delivery processwas constituted in such a way as to ensureaccountability for the expenditure of publicmonies by local partnerships to the centre,there was no such mechanism for account-ability to their local communities. Further-more, hidden management costs were ÔloadedonÕ to local organisations, evaluation of whichwas studiously avoided by central govern-ment until recently. According to Hall et alÕssurvey (1997), the mean cost, excluding stafftime, of submitting a Round 3 bid was £15,940for LAs and £6,375 for TECs. For the 310 ÞnalRound 3 bids, the non-staff costs alone werealmost seven million pounds.

New Labour, ‘joined-up’ governmentand area regeneration

LabourÕs Comprehensive Spending Review(CSR) presented an opportunity to align pro-grammes with new government thinking Ð

JOINED-UP REGENERATION 211

speciÞcally a manifesto commitment to attackthe multiple causes of social and economicdecline. A DETR review of regeneration poli-cies emphasised the need to optimise main-stream programmes. The local impact ofdiscretionary regeneration programmes isdwarfed by other areas of public expenditure.In 1997/98, £1.3 billion was allocated to theSRB whereas some £183 billion was spent onsocial security, health, local government(including education and social services) andemployment measures and training.

Client-group or spatially-focused programmes alsoneed to be drawn into regen-eration work. These includeEuropean programmes,National Lottery funding,Welfare to Work and theÔZoneÕ initiatives. The SRBhas a particularly valuablerole to play here, in tworespects: it could help to alter(albeit marginally) the prior-ities of main programmeactivities by acceleratingspending on speciÞc regener-ation projects, and it couldenhance the impact of mainprogramme expenditure. While competitioncontributes to galvanising the efforts of localpartnerships, the DETR review acknowledgedthat the bidding process could be time andresource intensive and that the most needyareas could lose out. Accepting competition asunavoidable, the answer lay in a more man-aged process with clearer national and region-al guidance and support to enhanceparticipation by community and voluntaryorganisations.

The CSR made £5 billion available for hous-ing and regeneration, including £2.3 billion fora refocused SRB. In real terms, however, regen-eration funding is still some 30 per cent lowerthan in MajorÕs Þrst government. Whilst thebasic principles of the SRB are unchanged, the

CSR called for clearer guidance to be provid-ed through regional regeneration statementsprepared by the GORs and, as responsibilitydevolved to them, the Regional DevelopmentAgencies (RDAs). Eighty per cent of newresources have been earmarked for the mostdeprived areas, to provide the critical mass offunds thought necessary to make a real impact.The remaining 20 per cent is to tackle smallerpockets of deprivation including those in ruralareas. The relaunched SRB emphasises build-ing the capacity of local partnerships to devise

and implement initiativesthrough dedicated funding.

More widely, the CSRemphasised the Govern-mentÕs intention to tacklesocial exclusion throughimproved co-ordination ofpolicies. One of the Þrst tasksof the Social Exclusion Unit(SEU) was to address theneeds of the countryÕs poorestneighbourhoods. The publi-cation of Bringing Britaintogether: a national strategy forneighbourhood renewal (Cabi-net OfÞce, 1998) completedthe picture of the Govern-

mentÕs response to the challenge of area regen-eration. The breadth of the report was suchthat the proposed solutions extended wellbeyond the immediate focus of regenerationto the whole of the public policy framework.The SEU report highlighted the facts that:● mainstream public spending programmes

(beneÞt payments, for example) represent-ed a high proportion of income in the mostdeprived areas, but these resources wererarely used to secure regeneration objectivesas Whitehall remained organised on verti-cal departmental policy boundaries;

● the proliferation of centrally and separate-ly devised, but locally implemented, ini-tiatives created wasted effort in applying forand running separate schemes;

ÒThe CSR made £5 billion available

for housing andregeneration,

including £2.3 billionfor a refocused SRB.

In real terms,however,

regeneration fundingis still some 30 percent lower than in

MajorÕs ÞrstgovernmentÓ

212 NEW ECONOMY

● disparate national programmes and agencyguidelines had different departmental reg-ulations making cross-cutting co-ordina-tion at local level difÞcult; and

● departmentalism within local governmentand amongst other key local agencies wasa signiÞcant constraint with successful jointplanning of services a rarity and quality ofpartnership varying enormously.

Following on from this, the report set out anational strategy comprised of three strands.First, there was to be continued developmentof national measures such as the New Dealsfor the unemployed, lone parents and the dis-abled. Second, there was to be a continuationof area-based programmes to test out newideas for policy co-ordination in deprivedareas. These included the existing Zones andthe Sure Start programme for the under Þves.The New Deal for Communities (NDC) wasthe Þrst direct outcome of the work arisingfrom the report.

The third element of the report emphasisedimproved policy co-ordination. This includ-ed setting up 18 cross-cutting teams led bysponsor ministers drawn from ten Whitehalldepartments. One of the task forces was man-dated to Ôreach an agreed plan for building onexisting area initiatives and local governmentreforms so that in the long term broad-basedlocal strategies to prevent and tackle socialexclusion become the normÕ. In recognising theproliferation of separately devised govern-ment initiatives, including many establishedby Labour in its Þrst 18 months, the reportcommented that Ômany zones will cover thesame areas. Where they do there will be addedbeneÞts if they are pulled together with a sin-gle overreaching strategyÕ.

It is not yet clear how this local cohesionis to be accomplished, but in working towardsit, a number of Ôtop downÕ and Ôbottom upÕelements are evident. The Cabinet OfÞce Per-formance and Innovation Unit has recentlycompleted a major review of central govern-ment presence at regional and local level.

The newly established RDAs are engaged inconsultation over regional strategies for eco-nomic development and regeneration. In theAutumn of 1998 the Government establishedan inter-departmental group led by DETR toensure that, as new central government areainitiatives are introduced, co-ordination cantake place with existing programmes andlocal partnerships. Moreover a research pro-gramme is being undertaken in six localitiesto explore how greater ßexibility and syner-gy can be introduced in main programmes,to draw them more effectively into localregeneration priorities.

An additional Ôjoined-upÕ measure fol-lowed the White Paper Modern local govern-ment: in touch with the people (DETR, 1998),which indicated that local councils would begiven a duty to promote the economic, socialand environmental well-being of their areas.This included the requirement to produce acomprehensive strategy through a process ofcommunity planning. Community planswould also provide a framework to bids forexternal funding. To consolidate the leader-ship role of local authorities, they were to begiven discretionary powers to participatewith other stakeholders in partnership activ-ities, including pooling resources, accommo-dation, staff and delegating decision-makingresponsibilities.

New Commitment to RegenerationThe New Commitment to Regeneration(NCR) pilot programme, launched by theDeputy Prime Minister in July 1998, presentsthe most obvious mechanism yet for drawingtogether the regeneration initiatives of centraland local agents. It is a formal collaborativepilot programme between central govern-ment, the Local Government Association andother key public, private and voluntary sec-tor stakeholders (Hall and Mawson 1999).

In 22 PathÞnder areas, local authorities areproviding a leadership role in the preparationof comprehensive regeneration strategies.

JOINED-UP REGENERATION 213

This involves participation of all relevantlocal organisations, as well as central gov-ernment (through the GORs). The partnersbecome joint signatories to a comprehensivelocal regeneration plan, committing them-selves to delivering and funding the agreedelements. Central governmentÕs role is as col-laborator and partner, rather than adjudica-tor. Potentially, its most significantcontribution is to provide the scope for mainprogrammes and the activities of variousgovernment agencies to be adjusted locally tofacilitate regeneration strategy. This mayinvolve relaxing controls, and adapting exist-ing regulatory and executive roles.

The New Commitment process is alsoexploring ways in which central govern-mentÕs Zone initiatives and emerging localpartnerships in Þelds such as Welfare to Workand Crime Prevention can be drawn togeth-er. Since the new community planningprocess, Best Value pilots and Agenda 21 ini-tiatives all involve a strategic partnershipapproach and active community participa-tion, there is a need to consider how dupli-cation of effort can be avoided. The NCRapproach Þts within New LabourÕs vision ofthe future role of local government, fulÞllingan enabling and leadership role and workingin new ways with the private, voluntary andcommunity sectors.

Holistic government – from rhetoricto reality?

Whitehall and WestminsterThe momentum behind joined-up local regen-eration is coming from several different direc-tions in the Whitehall/Westminster nexus. Itis too early to say whether the proliferation ofjoined-up solutions will come together. Whatis clear, is the requirement for greater corpo-rate working between departments at the cen-tre. This requires change in the machinery ofgovernment, the culture of Whitehall and inministerial and departmental responsibilities.

The Performance and Innovation Unit

study has looked at various options in thisrespect. Public service agreements betweendepartments and agencies are one way ofmaking Whitehall address Ôjoined-upÕ agen-das. Attention to the way in which depart-mental policies, procedures and financialmanagement systems can be harmonised tofacilitate joined-up working at regional andlocal levels is also required. Whitehall willhave to come to terms with allowing greaterflexibility and administrative discretionamongst government agencies.

The regional levelTo date, the Government OfÞces (GORs) havebeen the pivotal point in managing the nation-al SRB process, providing links to Whitehalland the rest of government. However, not allparts of the centre have fully accepted theirroles. Drawing together key departments inthe GORs has meant that co-ordination ofregeneration activities in general, and themanagement of the SRB process in particu-lar, has worked relatively smoothly. Howev-er, their work has been made more difÞcultby the absence of departments with an impor-tant regional impact, such as Agriculture.Moreover, the lack of a direct line manage-ment relationship with relevant Next Stepagencies and other statutory bodies such asthe Housing Corporation, has compoundedthe difÞculties of linking mainstream regen-eration activity with other parts of govern-ment. This structural weakness must beaddressed regionally and locally.

The GORs have taken steps to developarea-based approaches and foster local part-nerships, developing the local links essentialto the emerging processes of communityplans, NCR and NDC. However, more atten-tion to the organisational capacity of the civilservice to facilitate the management of thesenew approaches at regional level, in terms ofstafÞng levels, training and secondments, isneeded. The Conservative governmentreduced senior posts in the GORs by a third,

214 NEW ECONOMY

making engagement in the full range of newinitiatives difÞcult.

The Regional Development Agencies(RDAs) have taken over administration of theSRB and are working closely with governmentofÞces and other local partners to ensure a com-prehensive approach to local regeneration.Their Þrst step is the preparation of a region-al strategy setting a framework for their activ-ities. Paradoxically, the RDAs may presentsome difÞculties for a joined-up approach toregeneration. Functionally, the SRB processwill be separated from the management of rel-evant main programmes and other activities,such as land use planning and transport, whichwill remain within the GORs. Moreover, thereare uncertainties about how regeneration pri-orities will be developed by the RDAs, giventhat the GORs, Voluntary Chambers and otherregional stakeholders will also have a legiti-mate remit in this domain. The voluntary andcommunity sectors in particular will needtechnical support in whatever is devised.

Regional Voluntary Sector Networks havebegun to appear to fulÞl this role with HomeOfÞce, DETR and National Lottery support.However, they remain seriously under-resourced. At the moment Home OfÞce staffare seconded to the GORs to fulÞl these typesof roles; to date, the activity has been chron-ically understaffed.

The local levelAn increasing premium is being placed onachievement of national policy objectivesthrough inclusive local partnerships. Thisentails responding to the opportunities ofvarious bidding regimes. The growth of com-petition presents difÞculties for local organ-isations, placing pressure on scarce staffresources in competing for funding, engagingin and managing complex partnership struc-tures and responding to requests for data formonitoring and evaluation purposes. Manyregimes operate at different geographicalscales and their boundaries are not always

coterminous. Frequently, a series of sepa-rately devised government initiatives focus-es on the same target groups and area.

The result is confusion, the waste of scarceresources and dissipation of effort on thepart of individuals and organisations. The dif-Þculties are compounded by the differentialcapability of local organisations, particular-ly in the case of the community and volun-tary sectors. Local partnership capacity variesgeographically, placing peripheral areas at adisadvantage in competition for funding.Finally, partnership structures are a challengein terms of leadership mechanisms, reachingagreement, maintaining momentum, open-ness and accountability and ensuring fullengagement in decision-making.

Joined-up local solutionsThese difÞculties are not always acknowl-edged in funding allocation. Recentannouncements of changes in SRB manage-ment methods and the provision for the NDCare beginning to tackle many of the weak-nesses of competitive bidding and are offer-ing greater local flexibilities. Centralgovernment now needs to ensure awarenessof the issues and wide extension of the lessonslearnt to the full range of local partner-ship/bidding regimes tackling the regenera-tion and social exclusion agenda.

Ultimately, no matter how much centralgovernment relaxes constraints and seeks toensure greater cohesion, it is only at the locallevel that the different facets of regenerationcan be brought together in Ôjoined-upÕ solu-tions. The crucial feature of the New Com-mitment process is that it bridges these centraland local dimensions through a strategic part-nership matching national policy prioritiesand resources with local knowledge, exper-tise and commitment. It places a premium onnew leadership and networking skills and theanalytical and strategic management capa-bilities of both local and national partnerorganisations ●