Christine M. E. WHITEHEAD

Professor Emeritus in Housing Economics, London School of Economics.


Urban Renewal in UK : Area-based or more general approaches

The UK like many other countries in Europe have gone through a number of phases with respect to urban renewal policies over the last six decades. The majority of approaches have been housing-led but with increasing emphasis over the years around enabling increased economic activity and thus sustainable local economies.

The initial approach to urban renewal concentrated on slum clearance and the replacement of old, low quality housing in major cities. Between 1950 and 1985 some 1.5 million dwellings in England and Wales were demolished and replaced, usually by lower density often high rise flats in place and by low rise low density suburban estates. This policy impacted on maybe one in seven of the population (Tunstalll and Lowe, 2012) and although housing conditions were improved the approach was increasingly seen as highly disruptive to communities. In 1968, a gas explosion at Ronan Point, a high rise block in Newham, East London led to three deaths and an immediate shift towards rehabilitation rather than the replacement of substandard housing together with low rise new development.

In the early 1970s government policy started to introduce a number of initiatives aimed at small scale area based renewal and rehabilitation, notably Housing Action Areas and General Improvement Areas. These were seen as cost effective and generally successful in improving neighbourhoods while keeping communities in place (Short JR and Bassett K, 1978). But by the late 1970s it was increasingly obvious that urban renewal policy needed to tackle far large problems arising from large-scale de-industrialisation, especially around dockland areas but also derelict and often contaminated sites in central city areas. Such areas were not only physically in need of regeneration but local economies also needed to be rebuilt. As a result policy shifted towards much larger scale interventions not just housing but job creation and urban services, but still property led.

The role of development corporations

The instrument chosen was the Urban Development Corporation, based on the successful model used for new towns. It involved master planning and co-ordination; compulsory purchase powers to acquire land and thus also the benefits arising from increased land values; access to government grants; and the capacity to borrow to ensure effective infrastructure provision. There have been sixteen such corporations set up by central government. The first, and best known, set up in 1981, was the London Dockland Development Corporation whose role was to ensure the development, not just of the infrastructure but also of offices, retail and housing for Canary Wharf. The process was slow and hindered by the fact that the corporation did not have powers over transport. In the early days housing was the main driver and it was not until new public transport lines were fully in place that commercial activities in Canary Wharf started to compete effectively with more established areas. Nowadays it is seen as a success story based on effective co-ordination adequate funding but also because of London’s economic growth particularly in finance and business services. Even so, critics regard the LDDC as too heavily focussed on physical change, while disregarding social regeneration and integration and there remains continued concern that poorer households living in the surrounding area do not access available jobs and services (Imrie and Thomas, 1999).

At the same time as the LDDC was put in place there was a similar large scale initiative in Merseyside. This was similarly based on finance and business services but took longer to reach fruition with many of the projected benefits only realised after an IRA bomb destroyed parts of the city centre made redevelopment imperative. The success of other smaller corporations has generally been more dependent on housing investment as well as the strength of local economies.

Most of the Urban Development Corporations were wound up in the 1990s. Only three have been set up this century - the most important one in the Lower Lee Valley associated with the Olympics. However in 2011 the Localism Act gave the London Mayor power to set up Mayorial Development Corporations, although with far fewer powers. So far only two have been designated - the London Legacy Development Corporation to oversee continued regeneration in the Olympic Park and one in North West London based around new Cross Rail infrastructure. But they may be the beginning of a new tread as devolution gathers pace (Adamson, 2010).

Currently, there is also considerable pressure to revive the concept of development corporations better to utilise the potential of large scale new infrastructure provision and to capture the resultant land value increases for the public good. This initiative is not however directed at regeneration but rather at new settlements to provide for the growing population.

Area Based Policies

Under the Conservative government in the 1980s and 1990s the overarching policy objective was privatisation and liberalisation, especially of finance markets. There was thus growing emphasis on public interventions levering in not just private finance but also greater efficiency incentives. Urban renewal policies in the 1980s fitted into this model and also bypassing local government. Instead specialist agencies were set up and a whole range of selective subsidies put in place to support firms and developers to invest in Area Based Initiatives. Over the years local authorities regained their central role in urban renewal initially in the early 1990s (still under a Conservative government) through a series of Single Regeneration Budget (SRB) programmes which brought together a large number of government funding streams and so concentrate support on a small number of highly deprived areas. Successful bidders had to put forward a clear business case, demonstrate partnership arrangements with local stakeholders and lever in significant additional funding. This approach appeared to create more jobs than earlier models but still had more effect on housing and place than on people. The same criticism was levied at the many subsequent area based programmes that ran through to the mid-2000s: there was strong evidence that well -coordinated and neighbourhood focussed housing investment generated positive impacts on asset values, crime, occupancy and household satisfaction but little to show that they addressed the economic drivers of deprivation (Harding A and Nevin B (2015).

Two important questions arise from programmes concentrated on a small number of areas. First what happened in similar deprived areas not included in the programme and second which type of area is likely to benefit most from concentrated support. How other areas fared depended crucially on the extent of general funding made available. Under the Conservative government these areas tended to decline; under the more generous broader based approach put forward under the Labour government from 1997 there was more general improvement.. But then the areas that received specific grants appeared to do little better than those benefitting only from general support (Harding and Nevin, 2015). On the second question there appears to be a deprivation threshold below which little happens as a result of intervention - suggesting that funding should be concentrated on areas where there is clear potential and the private sector is prepared to take some responsibility (Meen et al, 2005).

Financing urban renewal

Until the 1980s the main sources of funding were central government grants sometimes with support from local authority taxation. Thereafter there was an increasing move towards levering in additional funding based on increasing property values, profitable land uses and debt finance secured by future cash flows. Affordable housing was supported by market sales but also initially by office development. However in the decade before the financial crisis retail investment started to dominate especially outside the major cities. Since the crisis the more usual approach has been around housing cross subsidy through the densification of areas dominated by social housing built in the 1950s and1960s. The mechanism is to enable owner-occupation and intermediate submarket housing to be provided while ensuring that the quantum of social housing is not reduced. The profits from the market housing are then employed to enable renewal to take place (Crook et al, 2015). The latest policy approach set out in the government’s Estate Regeneration National Strategy in December 2016 (DCLG, 2016) looks not only to improve or replace existing social housing stock but to provide many thousands of additional units over the next decade.

Conclusions: Area based or more general policies?

The UK government has developed more and more sophisticated approaches to property led area based policies that aim to improve the physical attributes of deprived areas. Equally they have increasingly emphasised the need for these initiatives to improve the economic opportunities of those who live there not just to put physical investment in places. Monitoring and evaluation has helped to embed many important aspects of good practice - clear and achievable business plans; local partnerships and involving the community; tight financial controls and the use of mixed funding which gives stakeholders a role in risk-taking as well as in resultant profits.

Looking back over sixty years of urban regeneration policies it can be argued that, while area based policies have done a great deal both to add to the housing stock and to improve the quality of existing units, evidence of increased economic prosperity in these areas remains relatively limited. This is in part because households who succeed often move out of the area - so the impact of renewal policies on individual life chances is probably underestimated. But it is also because property based policies do not, of themselves, necessarily impact strongly on economic opportunities. It is too early to say whether outcomes have improved with growing emphasis on strategic plans under the auspices of Local Economic Partnerships which have a broader spatial remit.

A more fundamental question is whether area based policies have been more effective than more general policies which of themselves have local impacts. Indeed it can certainly be argued that these more general policies, starting from slum clearance but including policies such as the Decent Homes programme, which brought much of the social housing stock across the country up to acceptable standards with the help of large scale central government subsidies, have had a more direct impact on urban renewal than specific area based programmes. Equally the brownfield first policy, by which the vast majority of new housing must be built on previously developed urban land, has probably provided a far greater incentive to the private sector to be involved in urban renewal than any specific area based initiative. Finally the provision and improvement of urban and transport infrastructure has clearly played a major role in regenerating areas as the private sector responds to increased demand to live in these more accessible areas. Yet, while success undoubtedly depends as much on economic opportunity as it does on government initiatives of all types, it is the preparedness of government to put in up-front investment that makes much urban renewal viable.

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  • Crook A et al (2015) New Housing Association Developments, Measures of Deprivation and the Creation of Mixed Communities in England, Urban Studies, November
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