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How well-planned regeneration boosts economic opportunity

01 July 2015

David Pendlebury

A new working paper from the RTPI suggests that we may need to fundamentally review whether we think about regeneration and planning as a necessary 'public cost', or as an essential form of economic investment in people in places.

Urban regeneration has often been supported as a social policy, designed to help provide opportunity for individuals whose life chances are dented by virtue of residing in socially excluded communities. In this sense it has been about ‘closing the gaps’ between economically poor performing areas and a cities’ average economic performance.

However, the RTPI’s report shows how regeneration in The Gorbals area of South Glasgow has been so successful in helping to turn around the lives of residents that the area hasn’t just ‘closed the gaps’ but, measured against key economic indicators, overtaken the city's average performance.

Urban regeneration, as one of the tools in the armoury of professional planning, has often been adopted as a solution to social problems in the UK’s main population centres. During the 1980s, partially as a consequence of rapid de-industrialisation, poverty and inequality rapidly increased in old industrial cities, with the pressure generated by deprivation and exclusion occasionally boiling over in violent outbursts of discontent as in the Toxteth and Brixton riots in Liverpool and London respectively. The Gorbals itself had also traditionally been plagued by similar social problems before the implementation of a successful regeneration project starting in the early 1990s.

Such challenges related to urban decline led successive governments to develop evolving regeneration policies, from the Thatcher Government’s Urban Development Corporations (UDCs), through to the New Deal for Communities (NDC) programme under 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 in addressing social challenges, after numerous academic evaluations the success of regeneration as an effective method has never been universally accepted. For example, both a 2010 Sheffield-Hallam led analysis of the outcomes of the NDC programme, and an earlier Cambridge University review of the Major Government’s Single Regeneration Budget policy, were largely inconclusive.

Combining this variable evidence base with the coming to power of the Coalition Government in 2010, and the realisation of imminent budget cuts, perhaps explains why large-scale regeneration programmes (with a few major exceptions like the 2012 Olympic site in London) have been few and far between in recent years.

The RTPI’s working paper examines a scheme and an approach to analysis which might challenge the current divestiture in regeneration. Adopting the kind of market-oriented approach demanded by the HM Treasury’s public expenditure rules, we looked at the effects of regeneration in The Gorbals on two key economic indicators – employment deprivation and income deprivation - over an eight-year period, commencing twelve-years after the start of the regeneration in 1990.

This analysis shows how, after two decades of regeneration unemployment in The Gorbals fell by 31% between 2004 and 2012, whilst the percentage of people "income deprived", including those on welfare benefits, fell by 35% in the same period.

This compares significantly better than the average of Glasgow as a whole, which saw 'only' a 16% drop in unemployment and a 21% drop in "income deprived" citizens between 2004 and 2012.

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 evaluation of this data leads us to hypothesise that such projects should be considered as an investment that can deliver positive economic returns rather than (just) a social policy expenditure. By proactively and positively utilising the full extent of the modern planning toolkit, including urban design, public consultation, competitive design tendering and land assembly mechanisms, regeneration has the potential to deliver significant economic benefits both to individuals and areas.

In this sense, the 43% cuts to local authority planning departments over the past few years seem highly illogical, 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 the physical environment in which they are encouraged to take 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, whilst returns are garnered from higher productivity and tax receipts associated with higher employment.

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

About David Pendlebury

David Pendlebury is Economics Research Officer at the RTPI, working on the value of planing agenda. His other interests include transport planning, international affairs, and public sector finance. Before joining the RTPI, David worked in public affairs in Brussels and also as an analyst within the management consulting industry.