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CHAPTER THREE OVERVIEW OF THE COMPANIES

Introduction

3.1 This section, by way of background to the study, sets out a brief overview of each of the URCs in Scotland, concentrating on the three URCs established in 2004 - Raploch, PARC in Craigmillar and Clydebank re-built in Clydebank. This overview includes a description of the area each URC covers; their role and function; structure and funding; together with details of the progress they have made to date. It also includes a brief overview of the two newer URCs that have recently been established in Inverclyde and Irvine Bay. We also highlight details of the emerging URC at Clyde Gateway.

Raploch

The Area

3.2 Despite being situated within the economically thriving city of Stirling, Raploch is one of the most deprived areas in Scotland. The area has been in steady decline over a number of decades and compares unfavourably in terms of key indicators such as educational attainment, health, employment and housing in Stirling and in a national context. Raploch has suffered from a poor image and reputation, and from negative publicity.

3.3 However on the positive side, many families in Raploch have strong roots in the area, sometimes dating back generations and the community has previously been highlighted as a key strength of the area. Raploch is strategically placed with regard to employment opportunities including the nearby Castle Business Park, Craigforth and Back o'Hill industrial estate, as well as opportunities within the wider Stirling area. Good road and rail access to the rest of the Central Belt, including Glasgow and Edinburgh, provide significant employment and leisure opportunities further afield. The area is also surrounded by attractive countryside and famous visitor attractions including Stirling Castle - which overlooks the area - and the Wallace Monument.

3.4 Raploch is predominantly a housing area, dominated by a high level of social housing, offering limited housing choice. As a result, much of the land within the Raploch URC area is in the ownership of Stirling Council. Earlier regeneration programmes involved the building of new social housing and the demolition of a number of houses in the Glendevon area of Raploch.

3.5 The scale of the regeneration area is relatively modest. The URC programme involves the delivery of 900 houses - 250 for social rent and 650 for sale. The other facilities to be provided include a new community education campus, funded through Stirling Council's PPP scheme and a new community health campus, funded by NHS Forth Valley.

3.6 The current population of the area is 3,850. The regeneration programme is anticipated to raise the population to 6,260 by 2012.

Role and Function of the URC

3.7 The aim of the URC is to bring about a new beginning for Raploch which will change the area for years to come. This it is seeking to do by creating a more sustainable and desirable neighbourhood which successfully links into a prosperous and growing Stirling and attractive surrounding country. The URC's vision is:

'To develop a 21 st century connected community, consulted at every step of the way. Through effective partnership working, we wish to build a community where people choose to live, work and visit, with new homes, education and health facilities, within an economically sustainable environment'.

3.8 The regeneration programme has two aspects - physical activities and people-based activities, with a strong community focus running through both. The physical programme concentrates on the built environment, urban design and infrastructure and seeks to create a more attractive, mixed and sustainable neighbourhood. Specifically it focuses on housing development, with public realm and infrastructure improvements with two major complementary public service facilities (health and education campuses) delivered alongside the URC programme.

3.9 However, the programme is not just about physical change. The URC is seeking to improve economic opportunities for the people and businesses in Raploch, which will make it an attractive community. This holistic approach is reflected in the URC's five strategic objectives embracing:

• Property
• Place
• Partnerships
• Prospects
• People

3.10 The programme has a major emphasis on engagement and their approach stresses a core principle of community benefit. Many of the community and employability initiatives are supported by European funding.

Structure, Governance and Funding

3.11 Raploch URC Limited is a company limited by guarantee. A company limited by guarantee is an alternative type of corporation used primarily for non-profit organisations that require legal personality. A guarantee company does not have a share capital, but has members who are guarantors instead of shareholders. The guarantors give an undertaking to contribute a nominal amount (typically £1) towards the winding up of the company in the event of a shortfall upon cessation of business. It cannot distribute its profits to its members, and is therefore eligible to apply for charitable status if necessary.

3.12 Raploch URC was incorporated in June 2006 and secured charitable status in July 2006. A land acquisition and development company - Raploch URC Landholdings Ltd - has also been set up and was incorporated in August 2006.

3.13 Raploch URC Landholdings Ltd - the land holding subsidiary of Raploch Urban Regeneration Company Ltd - will eventually own the 60 acres of developable land in the Raploch Area. This land will be transferred at various stages in the development programme, by Stirling Council to the URC at less than best value, effectively at nil cost. The structure of the various companies is shown in Figure 3.1 below.

Figure 3.1: Raploch Structures and Relationships

3.14 The Development Agreement between Stirling Council and the URC sets out the terms on which the land is to be transferred and the Regeneration Agreement sets out the terms under which the developer has access to that land for development purposes. At no time does the ownership of land transfer from Landholdings to the development partner. The developer only has access to the lands under licence. Ownership of the lands will only transfer from Landholdings to the third party house purchaser, with the development partner acting as the seller's agent.

3.15 If the URC or its landholding subsidiary were to go into receivership, the Development Agreement ensures that the local authority has first ranking security over the lands, by placing an obligation on the URC to transfer any undeveloped land back at the value at which it was originally transferred. Similarly, if a site is being developed, ownership of the land under development would transfer to the development partner in order for them to complete that particular build phase.

3.16 This agreement is seen as an important mechanism for protecting public sector assets, and one which is likely to be of interest to other companies.

3.17 Both companies have the same Board of Directors. There are six board members with representatives from:

• Stirling Council lead member and Director of Regeneration Services
• Scottish Enterprise Forth Valley
• The local community, via Raploch Community Partnership and local elected member
• NHS Forth Valley
• In addition, Communities Scotland is represented but with observer status only ( i.e., no voting rights)

3.18 Currently, three of the board members are new - one of the councillors as well as the Scottish Enterprise Forth Valley and NHS Forth Valley representatives.

3.19 The Board's role is to govern the strategic direction, co-ordination, implementation and further development of the regeneration programme.

3.20 The URC employs 12 staff. A core executive, including a Chief Executive is responsible for the implementation of the masterplan and investment plan and reports directly to the Board. The Chief Executive, who joined from Stirling Council, was Acting Chief Executive for two years and was officially confirmed as Chief Executive in December 2006. Seven of the twelve of staff are ESF/ ERDF funded, on temporary contracts. They are responsible for the delivery of the community based programme. The URC works closely with the Council's Community Services Department. The URC has an operating budget of £450,000 which covers staffing, overheads, project development, marketing and consultation costs.

3.21 The two community representatives are Councillor John Hendry and Jim Grant - they are respectively the local councillor and Chair of Raploch Community Partnership. The two Council representatives are Councillor Corrie McCord, the leader of the Council and vice president of COSLA, and Brian Devlin (Head of Regeneration Services).

3.22 NHS Forth Valley is represented because of their involvement in the redevelopment of Orchard House health centre. Scottish Enterprise Forth Valley is also represented, although they play a minor role in the current URC proposals. They contributed a small amount of funding for consultancy work at the outset. Their role may increase if - as requested by the URC - the nearby Back O'Hill Industrial Estate is transferred from the Council to the URC. This would then allow the URC to work with SEFV on developing the Estate and the businesses.

3.23 The Board meets once a month for three hours. The Board relies on the Chief Executive to make decisions on day to day matters and report back to them - there is not the time to leave all decisions to Board meetings. When the Board is required to make strategic decisions, the Chief Executive will make a recommendation to the Board, but the Board would ultimately make the decision.

3.24 Partners are fully empowered to make decisions at the Board meetings. The company secretary explained to all Board members that they were Board members of Raploch URC, and not representatives of their organisations. The Company Secretary is developing a Trustees handbook.

3.25 The transfer of the land from the Council required Council Committee approval. No other Raploch URC issues have had to be referred to Council Committee for approval before the Council representatives made a decision. A detailed agreement has been signed with the Council covering the land transfer. This smooth decision making process is indicative of an effective structure.

3.26 The Chief Executive meets the head of development services regularly to ensure close liaison with the Council. There are sub-groups of the Board, which deal with issues such as remuneration. There are also some advisory groups. The IT advisory group has for example included external representation, involving Cisco and Siemens.

3.27 The core partners have been working together on the regeneration of Raploch for about six years - there has been a longer standing desire to improve the area. Stirling Council hopes to replicate best practice from Raploch elsewhere in Stirling.

3.28 The URC initially had a presence in Raploch, but in unsuitable premises. It is now based in the nearby Castle Business Park, with an aspiration to have a presence back in Raploch if suitable space became available.

3.29 There are no private sector representatives on the URC Board - there had historically been a view that private sector expertise was available through the URC's advisors e.g. Turner & Townsend, Atkins, Ernst & Young. The Board is currently exploring the issue of private sector representation, and is likely to make a private sector or external appointment.

The URC has been successful in securing additional funds - predominantly European - to enhance the community benefits. This has allowed additional staff to be employed on short-term contracts to deliver a range of complementary employment, training and community engagement initiatives.

3.30 The company is responsible for implementing a 10 year (2004-2014) regeneration programme. The total identified cost of the programme is £115m in real terms. This cost will be met by income from house sales following redevelopment, a NHS contribution towards a new Community Health Campus at Orchard House, and public sector gap funding of around £15m to kick-start the project from the Scottish Executive, and a small ERDF contribution.

3.31 The total public sector cost of the project for the period 2004-2014 is of the order of £63 million. (There were some earlier sunk costs, including expenditure by Scottish Enterprise Forth Valley, Communities Scotland and the East of Scotland European Partnership, which amount to around £600k). All these figures are exclusive of the value of the land on which the new houses will be built. The value of the land contribution on a residual value basis was stated to be £5.7 million.

Table 3.1: Raploch Funding by Source 2005- 2012
(£millions)

Progress and Achievements to Date

3.32 A physical masterplan, a design guide and a Local Community Plan have all been agreed with key stakeholders and funders. R3 - a consortium involving Crudens and George Wimpey - has been selected as the lead developer and a Regeneration Agreement has been signed with the URC. Under the terms of the Agreement contracts will be signed for the development of specific sites as the regeneration programme is implemented.

3.33 R3 will build houses under licence. The land stays in the ownership of the URC and will be transferred on the sale of each house to the new homeowner. Crudens and George Wimpey will build a mix of social rented housing and houses for sale. Timber off-site construction is being used, and the Building Research Establishment ⁴ is involved.

3.34 The contract with the developers is based on joint and several liability. ⁵

3.35 The procurement process began at the end of 2004 with the publication of an OJEU notice asking for expressions of interest from bidders. The draft development brief was issued in August 2005, and we understand that contractual close was about to be reached earlier this year. Thus, the entire procurement process took over two years from the OJEU Notice to contractual close. The original timetable for the selection of a preferred bidder was just over 6 months from the issue of a development brief, with a further 4 months to contractual close. However the appraisal process took around six months, with a number of different appraisal panels, which included community involvement, and the contractual close took over a year.

3.36 The length of time taken to select a developer was a consequence of the appraisal procedures and the requirement for community benefit and variant bids to be assessed. The duration of negotiations to contractual close was a consequence of the scale of the project, and the critical nature of the negotiations where there is reliance on one single joint venture partner.

3.37 The regeneration agreement is based on developers paying a fee for the right to build houses on the URC's land. How much the developer pays is determined by the quality of the developments e.g. the level of IT provision or extent of public realm work, is reflected in the values paid for each development site. The URC opted to retain ownership of the land to maximise control - so that it could determine what was built.

3.38 The deal involves overage whereby the URC will receive a guaranteed minimum land value and share in the sales receipts over a certain value, set at the start of each site specific contract (Figure 3.2) That minimum land value will be dictated by the developer's build costs and their assessment of likely sales values, as will the overage ratio. Negotiations have recently been concluded regarding commercial / legal close.

3.39 There is clearly a fine balance in setting the house prices - setting the price low may be attractive to the developer if quick sales are achieved and project finance costs are minimised. Setting prices low in the first phases also makes the developments more affordable for local people who will be given a 28 day priority purchase on the sales before they go on the open market. In the longer term, much depends on the true profit rate, taking into account actual build costs. However, the developer stands to lose overage by setting prices too low. The financial risk is with the developer.

Figure 3.2: Regeneration Agreement Transactions

3.40 The use of Community Benefits in Procurement ( CBIP) clauses has been piloted in Raploch and has been included in the Regeneration Agreement between R3 and Raploch URC. Holyrood legislation ⁶ made such a clause a legal possibility when previously agreements were voluntary and based on 'best endeavours'. Raploch is one of five pilot programmes set up in Scotland. The CBIP pilots outwith Raploch are only concerned with training and employment whereas in Raploch, R3 has also signed up for small business and community business elements, detailed below.

3.41 Use of the Community Benefits in Procurement ( CBIP) clause in Raploch was tested in Stirling Western Access Road ( SWAR) contract. There were seven bidders. The URC firmly emphasised the importance of the CBIP clause - bidders had to submit a method statement to prove they were committed to it and they were told that bids would not be opened if they were not satisfactory.

3.42 The URC wanted the bidders to embrace the concept, and so also offered support to them. The successful bidder worked with the Sustainable Community Enterprise ⁷ project to provide 13 weeks training for four New Deal eligible residents (three from Raploch, the fourth from another deprived part of Stirling) with a guaranteed job interview at the end of the period. All four secured permanent jobs. The URC met weekly with the developer to support them. They then took on another four trainees with three gaining employment. The URC was very encouraged by the CBIP pilot for the SWAR contract and it encouraged them to use it throughout the programme - they could anticipate substantial impact over the life of the programme.

3.43 As a result of the success with the SWAR contract, a CBIP clause was included in the OJEU Invitation to Negotiate ( ITN) for the main developer partner. The URC did not wish their demands to be excessive as they wanted developers to sign up to the concept and did not want to discourage bidders from completing the ITN. The target set was for the developer to ensure that 10% of the workforce or 157 jobs were 'new entrants'. The figures were generated from research undertaken by Glasgow University's Training & Employment Research Unit ( TERU) into the employment and training potential in the Raploch Regeneration project. It was estimated that each £1 million construction costs had the potential to unlock 8 new jobs.

3.44 It had originally been proposed that if the preferred bidder defaulted on the clause, they would be charged an amount equivalent to training a resident. The URC then decided against that on the grounds that if they got the procurement right they would select a developer who would be signed up to CBIP. The penalty for failure to deliver therefore became exclusion from future contracts.

3.45 Agreement has been reached with R3 to ensure a maximum number of jobs and training places will be available to new entrants to the labour market from the local community, using a Community Benefits in Procurement ( CBIP) clause. Projected outputs are:

• 25 apprenticeships for young people and adults
• 100 operative permanent full-time jobs
• 100 training placements

3.46 Aside from training and employment, the Raploch developer has agreed two other strands to the CBIP clause. R3 will provide a programme of support to assist small businesses to tender for contracts and thereby maximise opportunities available as a result of the regeneration programme. R3 envisage that five contracts worth approximately £2m will be awarded to local small businesses. Working with Forth Construction, a programme of seminars, workshops and meetings will assist small businesses to bid for the contracts and ongoing support to successful sub-contractors will also be provided. In addition, R3 has set aside £900,000 to support the Sustainable Community Enterprise project. R3 will mentor, provide expert advice and where appropriate award contracts to this community business which provides training and employment opportunities in the local community.

3.47 Sustainable Community Enterprise is working with R3 to create a maintenance and landscaping company to maintain the public realm as there was consensus that the quality of the improvements had to be maintained. This is an innovative business model with local ownership and community benefits and will be of interest to other URCs.

3.48 Sustainable Community Enterprise is well known to local people and as a result demand for places is high - there are 43 applicants for the current intake of 12 places. Training targets have been achieved and unexpectedly good job outcomes (21 of the 30 trainees secured employment) have also been achieved as the project manager has made excellent contacts with local employers. ESF funding has been secured for 12 months, over which period the aim is to make it sustainable without competing with the private sector, as required by EU regulations. The objective is to secure local contracts.

3.49 In addition, Raploch URC has secured ERDF funding for the Enhanced Community Support Project. The project aims to facilitate community engagement via grant making to small community based projects. Grants are cascaded via the Raploch Community Partnership and 17 projects have been implemented to date including Ochil Play Area, Community Renewal Listening Surveys and Community Signatures. A project manager, participation officer and admin worker are employed by the project.

3.50 Following the issue of an OJEU notice for private sector external advisers, a number of advisers were commissioned in August 2006 on four year contracts.

3.51 Detailed negotiations have taken place to transfer land to Raploch URC (Landholdings) Ltd at less than best value. Other land acquisitions to date include:

• Site 13: Stirling Western Access Road
• Site 14: Housing demolitions to Drip Road and Raploch Road
• Site 15: Riverside Walkway Phase 2

Craigmillar

The Area

3.52 Craigmillar is a suburb of Edinburgh, in the south east of the city. It is a peripheral housing estate consisting mainly of social rented housing. It is one of the most deprived neighbourhoods in the City and indeed in Scotland as a whole. It is a much larger area than Raploch - at one point it had a population of 25,000. Its population in 2004 was 7,500 and the objective is to grow it back up to 15,000.

3.53 It is a mark of the degree of stigma from which Craigmillar suffers that despite the overheated Edinburgh housing market, and the severe shortage of social housing in particular, the City of Edinburgh Council has had high void levels in Craigmillar, and has found it hard to attract new tenants there.

3.54 There have been a number of significant attempts to regenerate Craigmillar in the past, but none have succeeded in addressing the area's multiple problems, turning the area around or generating a sustainable neighbourhood. The Design Framework drawn up by PARC is the third of three masterplans for the regeneration of Craigmillar in the last ten years. It follows a masterplan by CZWG commissioned by the City of Edinburgh Council which also involved an extensive consultation exercise.

Role and Function of the URC

3.55 Promoting and Regenerating Craigmillar ( PARC) is a joint venture set up in 2003 between Edinburgh City Council and the EDI Group (an arms length property company set up by the City Council in 1988). It is responsible for implementing a 15 year mixed development programme of which the main elements are:

• 2,200 houses
• 30,000 sq. metres of commercial
• 3 new primary schools
• 1 new high school
• 3 new parks totalling 150 acres
• and 1 new public library

Figure 3.3: PARC Structures and Relationships

3.56 The programme aims to double the population of the area and to create a more balanced tenure mix. It includes the enhancement of the town centre of Craigmillar with new, improved and refurbished facilities, and the creation of 2 new parks and an arboretum. The programme will also seek to achieve better linkages into Edinburgh. Employment linkages with the nearby new Edinburgh Royal Infirmary, the relocating Queen Margaret University and the Bio Park are to be targeted.

3.57 PARC's role includes assembling most of the land within the URC area ⁸. The land and property in the project area fall into three parts:

• Land and property that will be transferred by CEC
• Land that will be acquired by the JV by way of a willing seller or through CPO
• Land and property acquired by EDI to inject into the JV

3.58 PARC is responsible for delivering approximately 2,200 new homes on its land, and a further approximately 1,000 homes will be delivered on land owned by other developers within the design framework area.

3.59 On PARC's land, the JVC will either carry out or project manage the following activity:

• Housing development for private and social rented purposes
• Commercial development
• Educational and Library development
• Transportation
• Parks and other landscape works

3.60 As well as driving forward and enabling development, a key role for the URC is to capture and link the income arising from private development to contribute to the funding of the public and amenity projects.

Structure, Governance and Funding

3.61 PARC is a 50:50 joint venture company between City of Edinburgh Council and EDI Group Ltd, a separate development company, wholly owned by the City. The JV partners have equal shareholding and investment. EDI receives interest payment on its investment and the City of Edinburgh Council will receive new facilities. EDI was selected by the Council as the preferred joint venture partner - in preference to a house builder partner - after consultation with the local community.

3.62 The company Board consists of four representatives each from Edinburgh Council, EDI and community stakeholders. Only the Council and EDI have voting rights. The chair rotates annually from both voting parties and has no casting vote - the Company can only proceed by agreement. The company has the power to co-opt additional directors, should this be considered beneficial - currently one from SEEL and one from the Health Trust.

3.63 An Executive Committee meets monthly and reports directly to the Board. This Committee is made up of a directive from EDI and the Chair. The Committee oversees the day to day management of the programme which is carried out under contract by EDI on behalf of PARC.

3.64 There is no dedicated executive team within PARC. PARC has appointed the EDI Group to carry out its programme. A project manager is the only member of EDI's staff who works full time on Craigmillar. He has a particular focus on community engagement.

3.65 The regeneration initiative is a £300m+ overall regeneration plan, with approximately £180m of investment coming from the URC. This funding will come from various sources - including grants and loan stock. The City of Edinburgh Council provides the land assets, and facilitates the accessing of development funding for social housing in the form of HAG. An equivalent amount in cash or income producing assets is to be provided by EDI, to match CEC's land assets. There is further conventional project finance from private loan finance to the JV or via 3rd party sales, and the housing association development will also be backed by conventional loan finance. PARC will provide further contributions to help HAG deliver the numbers of social houses required in the area.

3.66 The business plan is based on the assumption that early investment in private sector housing and other amenities will result in a steady rise in house prices and commercial rents. The return on loans and investments will therefore be secured against delivery of higher house prices and commercial rents. The loan stock is interest bearing and provides part of the overall return to shareholders.

Table 3.2: PARC Funding by Source (£millions)

3.67 The JV has a 15 year time frame. After this point they wish to create a 'Community Legacy' initiative - to ensure continuous community development and ensure future sustainability on completion of the project. They will explore models including Community Foundations, Regeneration Trusts and Community Associations to deliver the legacy.

Progress and Achievements to Date

3.68 PARC has funded and completed a Baseline Study, together with Craigmillar Partnership. An Urban Design Framework ( UDF) has also been drawn up by the CEC Planning Department, with input from PARC, other stakeholders and community representatives. Consultation on the UDF was completed in April 2005 and subsequently adopted by Council in Sept 2005. In total, the UDF took around a year to prepare. The UDF sets a specific planning agenda for Craigmillar that can be considered alongside other key planning documents. It aims to ensure that proposed developments plans for the area are compatible with the overall agenda of PARC.

3.69 In terms of project delivery the following progress has been made:

• The City of Edinburgh Council has emptied and demolished housing in the Wauchope Square area. Phase 1 will start in June 2007 with a small development of 63 houses, largely for sale, in Wauchope Square and the joint primary schools campus in the same area.
• Several strategic sites for redevelopment of the town centre have been acquired on behalf of PARC.
• The £16m joint campus schools started on site in January 2007.
• The first community facility started on site in April 2007 - a £1m+ floodlit all weather football pitch and pavilion.
• Infrastructure works have begun in Greendykes North masterplan area.
• New bursary scheme launched with secondary school to enhance opportunities in property-related professions.
• Design team appointed for secondary school.
• Consultation started on town centre masterplan.

3.70 PARC has, via the OJEU process ⁹, appointed a panel of consultants to help it deliver projects over two years. In August 2005 a programme was developed to appoint a sustainability consultant to deliver an Environmental Impact guide to inform the PARC delivery programme. A project risk register was also established which is updated and assessed as part of each business plan review. It is the responsibility of Executive Team to identify, document, manage and review risks.

3.71 The URC has a research programme for professionals and local community to observe best practice regeneration projects, and to help inform the development of the programme and approaches in Craigmillar.

3.72 The URC brand name has been established - PARC ('Promoting and Regenerating Craigmillar') - and is widely used in company literature and advertising, which has recently developed to include advertising on buses and taxis in Edinburgh and a new website, with the objective of promoting the area as a residential location.

3.73 PARC appointed consultants to prepare a Monitoring and Evaluation Framework ( MEF), which has defined parameters to evaluate itself as a delivery vehicle for the regeneration process and how it can be measured against targets.

3.74 It is widely accepted that achieving sufficient critical mass of housing development is very important to the success of Craigmillar's regeneration strategy. There is recognition that it is important to ensure that the level of house building for sale is substantial enough to give confidence to potential purchasers, thus raising values, as required by the business plan.

3.75 The progress of the large housing project in Craigmillar on land which is not under the direct control of PARC or the Council - the Persimmon scheme - is important in creating this critical mass. In a URC environment, the Council as planning authority remains responsible for resolving the very complex Section 75 ¹⁰ issues which in this case are a significant obstacle to development. In situations such as this, the URC is dependent on its local authority partner to resolve the issues. This contrasts with the Urban Development Corporation model, where the UDC commonly has full planning powers.

3.76 URCs may thus be dependent on the skills and resolve of their local authority partners in securing developer contributions and negotiating equalisation payments between different land owners who may benefit from infrastructure projects.

3.77 The Craigmillar experience is that a URC which is set up in an area where renewal and redevelopment has been under discussion for a very long time may find that the community is cynical about the likelihood of positive change, and many residents may be reluctant to engage in the consultation process. In these circumstances, early delivery is particularly important.

3.78 Progress with new social rented housing is also important to the local community, so that Craigmillar people are not decanted out of their area for long periods while demolition and rebuilding takes place.

3.79 In conjunction with CEC's Planning Department, PARC has piloted the new pre-planning application consultation proposals, which are soon to become mandatory through new planning legislation (to be introduced instead of a third party right of appeal). PARC has taken this approach with all applications over the last two years. The new consultations have presented some challenges in a regeneration area - some of the public have found it difficult to understand the distinction between these pre-planning application consultations and the consultations about the wider regeneration process.

3.80 The PARC proposals have been subject to strong opposition from some local residents, while other local people are keen to see the renewal process move forward. Engagement methods which reach out to all residents, such as house to house surveys have particular value in allowing URCs to have confidence that they have a balanced view of public opinion.

Clydebank

The Area

3.81 The designation of a URC was triggered by the closure of the UIE/ Kvaerner shipyards - the former John Browns shipyard - which left behind a substantial area of derelict and contaminated waterfront land. Clydebank, some 20 minutes by car or train from the centre of Glasgow, has classic post-industrial problems arising from the decline of heavy industry. Formerly a major centre of ship building and engineering - the birth place of the Queen Mary, the Queen Elizabeth and the QE2, it has now lost all employment in ship building and lost several other major employers such as the Singer sewing machine factory.

3.82 From the 1960s onward, Clydebank has been the subject of a range of economic development approaches, from the Enterprise Zone (now the Clydebank Business Park) and the RSA supported private hospital, which has now been acquired by the NHS. It is now known as the Golden Jubilee hospital.

3.83 The final closure of UIE/ Kvaerner coincided with the departure of a number of major employers on the Clydebank Business Park such as Thomas Cook and Vodafone, which although not giving rise to dereliction, impacted on unemployment and deprivation. Unemployment in April 2003 was 7%, almost twice the national average (4%). Some 24% of the working age population claim key benefits, compared to 18% nationally. Average gross weekly earnings were 75% of the national average. Tenure is weighted towards social renting and almost 70% of dwellings were in the lowest Council Tax band, indicating a high proportion of small/ low value housing.

3.84 The URC area covers the whole of the town of Clydebank but the business plan indicates a limited number of priority areas, including the town centre and waterfront. It differs from the other two URCs in that there was very little publicly owned land within the URC area and that it is less of a residential-led regeneration programme and more concerned with a mixture of uses.

3.85 Strategically, the URC area is positioned as a key part of the Clyde Waterfront initiative and the Glasgow City Region.

Role and Function of the URC

3.86 The URC is responsible for a seven year programme, although regeneration is estimated to be a 20 year over all process. This programme is to large extent about place-making to enable the area to achieve a competitive advantage in terms of attracting investment, employment and residents. Environment, jobs and training are all key to this programme, which seeks to improve competitiveness, inclusion, connections and quality (of place and of employment).

3.87 Priority actions for the URC include:

• Masterplanning & guidance
• Enabling and infrastructure works
• Public realm
• Workspace development
• Social/education programme

3.88 The URC's legal structure allows it to hold and trade in land and property. The URC can also undertake development directly or enter into JVs with others, though to date this has not happened. They also act as agents for the public and private sectors in negotiating development funding and grant support.

3.89 Their facilitation role is crucial, and primarily involves working closely with public and private owners to bring sites forward. They also assist landowners and developers with design strategies for their sites.

3.90 To date Clydebank re-built has had three main roles:

• acting as a developer of business space and public realm schemes
• preparing sites for business and college use
• acting as a standard bearer for design quality through the masterplan and through its own developments which have included public realm work, lighting schemes and the provision of business space

3.91 One of the main challenges for CR is the fact that they did not own any land. There are several key sites which fall within the URC's operational area. The largest development site is the former Kvaerner site itself, owned by a private company known as Clydeside Regeneration Company, which in turn is owned by a number of investors, including Central Demolition Ltd. (With hindsight, it might have made more sense if, when the site was marketed at the time of the yard closure, the whole 100 acre site could have been acquired by the public sector - this would have given a much greater degree of control over the use of the land).

3.92 The other key location of interest to CR is Clydebank Town Centre, which is owned by CIS Ltd. It is transacted by the Central Scotland canal (Millennium Link) which is in the ownership of British Waterways.

3.93 In terms of outputs, over a 10 year period the URC is seeking to deliver nearly 1 million sq ft of business space, 2,400 residential units, nearly _ million sq ft of educational property and over 110 acres of public amenities.

3.94 A flagship element of the regeneration work of CR is the restoration of the Titan Crane, Clydebank's only 'A' listed structure and an icon of Clydebank's great industrial shipbuilding past. The crane towers over the area, and when opened to the public will provide a unique visitor experience and fine views of the river.

Structure, Funding and Governance

3.95 Clydebank Rebuilt ( CR) is a company limited by guarantee with charitable status.

3.96 The members of the company are the two principal stakeholders, West Dunbartonshire Council and Scottish Enterprise Dunbartonshire. It has a subsidiary company (Clydebank Property Company), which is a company with shares and in which all property transactions are vested. Profits realised from commercial activities undertaken by the property company can be recycled back into the 'parent' charitable company through the Gift Aid mechanism.

Figure 3.4: Clydebank Rebuilt Structure

3.97 Other key structures in decision making are the Finance Sub Group of the Board, and a Senior Officers' Working Group of the company's main stakeholders.

3.98 The Board has 14 members. The Board representation is as follows:

• 2 x West Dunbartonshire Council
• 2 x Scottish Enterprise Dunbartonshire
• 4 x private sector
• 2 x community representatives
• 1 x Communities Scotland
• 1 x MP
• 1 x MSP
• CR Managing Director

3.99 There are two private sector members on the board of the subsidiary property company (five strong, chaired by a councillor and with an SED board member).The convenor of the finance sub group is a private sector member.

3.100 The Board is chaired by the local MP (John McFall) and the MSP (Des McNulty) is also an ex officio member. The Board meets quarterly, the Property Company monthly. Although large and recently affected by a fair amount of turnover, the Board appears to work well. The meetings move at a fairly brisk pace, mainly because a great deal of preparatory work is done before the Board. The Senior Officers Working Group meets a month before the Board, and there is a meeting between the Managing Director, the Chair and the principal stakeholders before board papers go out. This assists in the smooth running of the meeting on the day. The board meeting we attended struck an appropriate balance between pace and discussion and feedback.

3.101 The wider structure feeding up into the Board has at various times included:

• Three Sub-Groups (Employment & Finance; Development; and Communications & PR) - these each include several Board Directors as well as the Managing Director and key CR officer.
• Place Working Group, Senior Officer Working Group and Local Design Forums - these include CR officers and representative officers from key partner organisations.
• Urban II Project Groups; Area Regeneration Strategy Groups; SIP Community Forum; SED Officer Group; and Greenspace Group - these include CR officers, representative officers from key partner organisations and key stakeholders.

3.102 CR has a managing director who is a Board member, and five full time staff (projects director, planning manager, community economic development officer office manager and admin officer). The finance manager works one day a week for the company. The team has been very stable since the outset, but the director expressed concerns about the potential for salary inflation and 'poaching' of staff, if recent recruitment trends in the latest round of URCs continue and if there are further URCs. This concern was echoed by an SED consultee, who felt that the pool of people with appropriate experience was limited in Scotland.

3.103 The small executive team draws on the resources of consultants and designers, using them as project managers where appropriate. This appears to have worked well, and certain consultants - particularly architects Page and Park - have played a key role.

3.104 The Managing Director, Eleanor McAllister, joined the company from Glasgow City Council, where she was regeneration team leader with a staff of 50. A former depute director of Glasgow 1999: UK City of Architecture and Design and prior to that, employed by the Glasgow Building Preservation Trust, she has considerable experience of commissioning building and projects. Her considerable managerial experience, her experience of public relations and her passion for design quality have had a very positive impact on the direction of the programme, its pace and its effectiveness.

3.105 The URC is currently exploring options to develop a Community Trust to own and operate the Titan Crane.

3.106 In 2004, the Scottish Executive agreed to provide an initial grant of £7 million for CR for 2004-06, with a provisional allocation of an additional £6.8m for 2006-08 subject to satisfactory progress being made. The URC secured this additional funding in 2006. The overall funding package in the current (November 2004) 2003- 2010 business plan is as follows:

Table 3.3: CR Funding by Source 2003- 2010
(£millions)

3.107 Other funding involved in the regeneration of Clydebank, but not directly controlled by CR, includes an estimated £255 million, largely in land remediation and private house building, some £8 million from Communities Scotland and RSLs, some £19.2 million for the Clydebank College relocation to the waterfront (largely funded by the Funding Council, but also with a substantial input from SEP), and some £1.78 million from the NHS on the hospital site.

Progress and Achievements to Date

3.108 The Clydebank Plan (the business plan produced by CR) has been approved by the Council, Scottish Enterprise and Scottish Executive. The Plan received a 'Commendation for Outstanding Performance and Quality' in the Scottish Planning Awards. The Council has adopted the Design Guidance (produced by Page and Park for CR) as SPG for developers. CR has also, through OJEU, procured a contract for the design of a new riverside sports venue to be funded by West Dunbartonshire Council, and launched an international design competition to design a new canopy for the canal bridge.

3.109 CR has been successful in achieving initial targets for decontamination, enabling works, infrastructure and public realm improvements. It has remediated the 6.5 ha Queens Quay site.

3.110 In terms of land acquisition, CR has acquired John Knox Street (the site of their award winning business space development), and the Titan crane. Significantly, CR now has control over 20 of the 100 acres of the former Kvaerner site as a result of developer contributions negotiated as a condition of the outline planning consent for housing secured by the Clydeside Regeneration Company. This came about because West Dunbartonshire Council had determined that they would grant consent for housing subject to suspensive conditions, which required the developer to provide certain agreed amounts of business space before the next phase of the housing development commenced. The Council's head of regeneration and planning offered the option of a straight land transfer as an alternative and this was accepted by the site's owners.

3.111 This land is now being used for two purposes:

• The relocation of Clydebank College to a quayside site - the college received the site at zero value.
• Office space and land for business at Queens Quay. The first phase of the office space will soon be complete and CR will move in to the building. They may act as developers or enter into a joint venture for subsequent phases of business space on the Queen's Quay site.

3.112 Different views were expressed about when Clydebank College decided to move to the waterfront site, with the landowner stating that negotiations were in progress before the URC was established, but nevertheless the progress made to date in establishing the Waterfront as a business, education and employment location is impressive and will help to support market interest in the wider Clydeside Regeneration site. As elsewhere in Clydebank, the URC has been able to build in design quality to the early stages of the development.

3.113 CR has also undertaken a number of environmental and public realm improvements itself in Clydebank with public sector funding and has delivered new business premises on certain sites, such as the JKS Workshops.

3.114 CR is monitored internally and externally. The Finance sub-group and partner agencies meet quarterly and two projects have been externally audited. Monitoring is conducted on a project by project basis and includes output and impact indicators along with social justice measures and regeneration measures. CR reports good performance in achieving its financial targets for investment and expenditure, and has achieved funding commitment from public sector partners. However its success in attracting the private sector is so far unclear.

3.115 CR itself is likely to raise loan finance for subsequent phases of business space at Queen's Quay. The main element of private sector funding will come from house builders on the part of the site currently being prepared by Clydeside Regeneration Ltd.

New URCs

3.116 Two further Pathfinder URCs were designated by the Scottish Executive in 2006 - Riverside Inverclyde and Irvine Bay Regeneration Company. These URCs are in the Executive's regional priority areas for regeneration.

Riverside Inverclyde

3.117 Riverside Inverclyde is similar in structure to Clydebank rebuilt and is also a company limited by guarantee with charitable status, which has a subsidiary property trading company. Founder members of the company are Inverclyde Council and Scottish Enterprise Renfrewshire.

3.118 The URC is responsible for the bringing forward, assisting and enabling development of a range of sites to the North of the A8 on the River Clyde waterfront, stretching from Port Glasgow to Greenock, over a 12 year programme. It has a key brokering role working with Inverclyde Council and private partners Clydeport - who own about 70-80% of the land within the URC's remit. The URC is not operating from a standing start, as there is already significant development underway in the area.

3.119 The current focus is on riverside development areas accessed by the A8 trunk road. However, the URC is also concerned with linking the opportunity that exists along the waterfront with the significant need which exists in much of the adjoining area on the other side of the A8.

3.120 The URC is also exploring a different governance approach to some of the existing URCs, which are required to go to their funders (such as Scottish Enterprise and the local authority) on a project by project basis. Riverside Inverclyde hope to negotiate a three year rolling funding plan instead, which is approved on an annual basis, with decision making devolved to the board in return for achieving target outputs and outcomes.

3.121 The Board membership consists of representatives from the following:

• Inverclyde Council
• Scottish Enterprise Renfrewshire
• Clydeport
• Greenock Chamber of Commerce
• Communities Scotland
• Prince's Scottish Youth Business Trust
• James Watt College
• Community Representative

3.122 The company currently has four staff, including a newly appointed Chief Executive, but hope to increase that to seven or eight staff in the near future. In 2006, Riverside Inverclyde took around six months to select consultants for three fixed term contracts and four framework panels. The assessment of the 220 bidding organisations was carried out at a time when the organisation had only three full time staff, and made considerable demands on the organisation.

3.123 Innovation is an important part of the approach the URC is taking to delivering its programme and it is exploring public/private partnerships, single point service delivery, streamlining planning and linking skills and employment opportunities with economic and physical development, amongst other things. It is also seeking to learn lessons from a wide variety of sources including: the Scottish Pathfinder URCs; Irvine Bay; Strategic Partnerships; Hamilton International; Clyde Waterfront; and English URCs. The URC's property development company will allow it to enter into joint ventures with development partners, enabling it to capture the value uplift resulting from its interventions.

3.124 The Riverside Inverclyde Strategic Regeneration Framework, commissioned by the Economic Regeneration Theme Group of the Inverclyde Alliance, was produced in April 2005. Riverside Inverclyde has built on this work, producing a first draft business plan in January 2007.

Irvine Bay Regeneration Company

3.125 Although Irvine, when designated a new town, was a driving force in the economic and social growth of North Ayrshire over the last 30-40 years, changes to the economy have affected all the settlements in North Ayrshire and contributed to higher levels of deprivation, often concentrated in localised pockets. Furthermore, the economic shifts away from manufacturing and local specialisms such as vehicle engineering and computer assembly, have led to an outmoded employment infrastructure and, potentially, skills set. This has also been accompanied by an inheritance of inappropriate sites and premises, predominantly geared to serve the needs of the industrial and manufacturing economy between 1960 and 1990.

3.126 Despite a number of important regeneration projects, such as Ardrossan Harbour phase one, a need was identified for a more concerted transformational effort to achieve greater economic and social prosperity across this arc of settlements.

3.127 As a result the URC was set up in 2006 with the aim of employing contemporary regeneration best practice to deliver genuinely transformational outcomes for the communities of Irvine Bay. The communities which the URC covers are spread over a large geographical area known as the Irvine Bay Regeneration Area ( IBRA), which is formed from the arc of settlements around Irvine Bay - namely Irvine, Kilwinning, Stevenston, Saltcoats and Ardrossan, together with the land at Ardeer.

3.128 An 11-strong board has now been established, with representation from the key partner bodies. Six of the 11 are private individuals with a private sector background (importantly they are on the board in an individual capacity, rather than representing their businesses). An interim executive team was initially put in place, and in July 2006 a Chief Executive was appointed, with further appointments to follow in due course.

3.129 The URC is to be set up, following legal advice, as a company limited by guarantee, with charitable status. A subsidiary property company is also being considered, and the URC is currently taking advice as to the most tax efficient legal structure for that company.

3.130 Initially the URC has prepared a comprehensive regeneration framework for the IBRA. The foundation for this, and one of the URCs early pieces of work was to develop a clear understanding of the economic drivers for the Irvine Bay Area and build the economic case for the physical masterplan for the URC.

3.131 A masterplan for the whole Irvine Bay area was prepared between September 2006 and February 2007 - a tight and demanding timescale, given the need for extensive consultation - but one which the consultants succeeded in meeting. The URC developed a first draft of their business plan early in 2007. This is now being refined and developed into an operating plan.

3.132 There are 5 themes that make up the masterplan strategy for the area, which are used as a basis for developing a series of projects:

• iWork - creating and spreading wealth
• iLive - quality of life for existing and new residents
• iSea - rediscovering the sea
• iPlay - making Irvine Bay a good place to spend time
• iBay - transforming the Bay's image

3.133 The URC is currently seeking expressions of interest from potential development partners for bringing forward the comprehensive development of Irvine Harbourside, a key site on the town's historic waterfront. The 4.5 ha Harbourside is the first in a series of opportunities, identified in the masterplan, to be brought to the market. The URC is also currently marketing land at the southern part of the Beach Park for the development of a world class links golf course and associated development, including a landmark hotel.

Emerging URCs

Clyde Gateway

3.134 The Clyde Gateway is a multi-agency project and was set up to tackle the physical and economic decline of a large part of the East End of Glasgow and South Lanarkshire. It stretches between Bridgeton Cross, Parkhead Cross and Farme Cross, focusing on the Dalmarnock area south of London Road. The East End of Glasgow, together with adjoining parts of Lanarkshire, contains some of Scotland's most deprived communities and has suffered from persistent physical, social and economic decline. Population is declining faster than in the rest of the city-region, economic activity is extremely low, and there are low levels of employment. The areas also contain almost 30% of all the derelict and contaminated land in Glasgow and South Lanarkshire and there are significant drainage, infrastructure and contamination constraints.

3.135 The Clyde Gateway project has been developed by Scottish Enterprise, Glasgow City Council and South Lanarkshire Council to exploit the economic development potential of the proposed M74 Northern Extension and the East End Regeneration Route. When implemented, these improvements to transport infrastructure will make the Gateway area one of the best connected urban centres in Scotland, particularly in relation to Glasgow city centre. Subsequent physical infrastructure works, to be undertaken principally by public sector partners, will help create a new and highly accessible business location.

3.136 Currently it is being led by the Clyde Gateway Partnership until an Urban Regeneration Company is established. The Partnership includes Glasgow City Council, South Lanarkshire Council, Scottish Enterprise National, Scottish Enterprise Glasgow and Scottish Enterprise Lanarkshire and Communities Scotland. Given the scale and complexity of the Gateway initiative and its current state of development the Scottish Executive believe that the best way of harnessing the efforts of all the partners to deliver the vision is by the creation of a dedicated URC for the Gateway to drive the initiative forward and provide the long-term certainty needed by private sector investors.

3.137 Consultants were appointed to complete a development framework in 2004. The development framework aims to:

• Create a lasting transformation of the area
• Increase economic activity and job opportunities
• Develop community well-being and culture

Summary points

3.138 In all there are now five URCs formally established in Scotland. The sixth, Clyde Gateway, is being actively developed and due to be formally established in 2007. The review and commentary provided in this section highlights that:

• All of the Companies have adopted designs and programmes for themselves that actively mirror the underlying aspirations of the Scottish Executive, as articulated at the outset of the URC "movement". Specifically, all five of those now formally established are working to ensure that they achieve the six purposes articulated by the Scottish Executive and summarised in section 2.2.2 of this report.
• That said, whilst all of the Companies are pursuing similar overall objectives, they have all established designs for themselves that are different. This degree of variation - as section 4 of the report will highlight - should generally be seen as a "good thing". It exemplifies how the Companies are creating innovative structures that creatively balance an alignment with the national policy objectives with the need to address issues that are contingent to individual localities.
• In a procedural sense, all of the Companies are operating in a similar way. Generally, each company has worked to establish a regeneration strategy or framework, which has been followed by a spatial plan / masterplan. The relevance of the former is to set a socio-economic context for the area, whereas the latter sets out a spatial development framework for its regeneration, that is based on that context (and the needs / opportunities articulated therein).
• Levels of private sector representation on the Boards of the URCs are variable. This degree of variation is mainly attributable to the choices made by the individual companies (and specifically their members) at the outset for forming the Companies. One of the five Pathfinder Companies has no private sector representation, while another has a very strong representation (five out of eleven) of local authority members and officials as a result of the nature of city's joint venture partner ( a wholly city council owned development company). Whilst not a criticism per se, the fact that the Companies operate on this basis does beg questions about the appropriateness of the "brand" in these instances. PARC have made the point that that their local authority members are board members of a private limited company, which operates on a commercial basis, albeit with the local authority as its one shareholder. However, some partners feel that the independence, experience, and 'constructive challenge' which these members bring is not the same as that which external private sector board members would bring to the Board.
• Without doubt all of the Companies have recognised that community involvement is important. The models that have been adopted to reflect that recognition vary. That variation is in part attributable to the specific situations that characterise the Companies area of operation. Raploch and Craigmillar for example are both predominately residential areas. The models through which the community is involved in these areas generally reflect links back into well established community groups. To an extent, Clydebank reflects a greater variety of interests (specifically landowners, businesses, other stakeholders and so on) and the models for engagement reflect that additional dimension, which has necessitated the formation of new groups. This has taken time, but the experience of doing so is itself valuable for other URCs.

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