The Scottish Government

« Previous | Contents | Next »

Listen

Urban Regeneration Companies: A Consultation Paper

4. Experience across the UK

Urban Regeneration Companies - UK analysis and recommendations

In England, Lord Rogers 1999 Urban Task Force report recommended an innovative new delivery model called Urban Regeneration Companies as 'dedicated arms-length bodies to co-ordinate the delivery of urban regeneration projects'. The Task Force was clear that although the organisational structures of URCs would differ according to local circumstances, the longer-term goal of all would be to use public sector investment in such a way as to maximise a 'positive market response'. In short, a vehicle through which the public and private sectors combine effectively to create growth and add value for both.

Three pilot URCs in Manchester, Liverpool and Sheffield were cited by the Task Force as evidence of the potential of this model. In response to the Task Force, the UK Government's Urban White Paper of November 2000 proposed that a further 12 URCs would be set up by 2003/4. Summaries of the three early pilot URCs are attached at Annex A.

In Scotland, the Cities Review report concluded in January 2003 that there is potential in introducing key elements of the URC approach in Scotland to provide a new impetus for regeneration efforts in areas of Scottish cities where existing initiatives are failing to deliver.

The team also argued that the promising start made by URCs potentially offers:

Urban Regeneration Companies - What are they and how are they funded?

This section describes how the URC model has developed in England. We will also explore what the URC model might mean in a Scottish context.

URCs are set up by, and with the agreement of, local partners - not imposed by central government. National URC designation and branding provides a focus for regeneration and a useful and productive vehicle for attracting external funding, but the URC does not, in itself, receive any additional funding beyond that committed by its contributing parties.

Additionally, as a consequence of the April 2003 Budget, businesses that make contributions towards the running costs of URCs will be able to treat these contributions as a deductible expense when computing their business profits. Relief is available for contributions made on or after 1 April 2003. The current Finance Bill provides that the Treasury will define URCs by listing them in a statutory instrument. The Bill was given Royal Assent on 10 July 2003. A statutory instrument will now be laid, listing current URCs. It will have retrospective effect so that businesses can get relief on contributions made on or after 1 April 2003. Any new URCs that are created can subsequently be added to this list by statutory instrument (this would also apply to any URCs set up in Scotland). Criteria to be used by the Treasury to define anURC include:

URCs can be independent companies with the liability of the contributing parties limited by guarantee and not by shares. The contributing parties channel resources into the company, but the company is independent from them all. So it can, for example, hire new staff or develop and implement its own investment strategy for the area without seeking agreement from all the contributing partners to those actions.

Although a company limited by guarantee is the accepted structure for URCs, not least because it is the model most readily understood by the private sector, there are other ways in which they could be constituted. Two alternatives are the IPS (Industrial and Provident Society) model and Development Trusts. Further information on these models is attached at Annex B.

URCs have a board and a small, dedicated, executive team. In England, board membership generally consists of the Local Authority, the Regional Development Agency (RDA), English Partnerships, and the private sector. For ease of understanding, if such a structure was mirrored in Scotland that would mean a board including the Local Authority, the Enterprise Networks, Communities Scotland, and the private sector. There is no reason, however, why other partner organisation such as communities themselves, the voluntary sector, police, fire, or NHS interests could not be involved.

It is also possible that a URC could be set up by public sector partners alone in order to enter into a subsequent joint venture with a private sector partner - for example to show clearly to potential private partners that the group was committed and 'serious' in its long-term commitment.

New guidance issued in England in March 2001 by the then Department of Environment, Transport and the Regions (DETR) suggested a number of key issues should be considered by partner organisations interested or considering forming an URC. An extract from this guidance is included at Annex C.

It is also important to be clear about the differences between URCs and Urban Development Corporations (UDCs). UDCs were established under the Local Government, Planning and Land Act 1980. A number of UDCs were set up in England during the 1980s and '90s tasked with a broad remit to secure regeneration of their designated areas by:

For this purpose, UDCs were given a comprehensive range of powers, covering land and property transactions (including extensive compulsory purchase powers), building, infrastructure and other works, planning control, and a general power 'to do anything necessary or expedient' in the interests of their objective. They were set up as limited life organisations and were run by boards appointed by, and accountable to, latterly, the Secretary of State for the DETR, with grant aid from Central Government as the main source of public finance.

UDCs are identified as having brought a single agency focus to major regeneration challenges and have delivered land into productive use, created jobs and local economic activity. However, in many cases the investment has failed to deliver tangible benefits for local communities, with the new opportunities being taken up by incomers and commuters. An independent evaluation for the DETR in 1998, ¹ suggested that this can be addressed if UDCs are more firmly anchored in policy objectives and strategies for the wider areas of which they are part and more closely integrated with other agencies tackling problems related to social exclusion. Community involvement was not ignored by all UDCs, a report published by Joseph Rowntree Foundation ² in 1998 highlighted that Tyne and Wear Development Corporation's Community Development Strategy had produced significant gains for local communities and had made the corporation's work more effective as well as making it more acceptable to local residents.

^1.Urban Development Corporations: Performance and Good Practice - DETR, 1998.
^2.A place for the community? Tyne and Wear Development Corporation's approach to regeneration - JRF/The Policy Press, May 1998.

The Office of the Deputy Prime Minister is currently consulting on new UDCs for Thurrock and the London Thames Gateway.

To summarise, the advantages of adopting the UDC approach include:

But it is clear that to be successful, UDCs must be properly connected to local partners and the community and structured in such a way as to ensure that wider regeneration and anti-poverty outcomes are achieved so that the local community does not miss out on the benefits of the investment.

« Previous | Contents | Next »