UK urban policy - Business Environment

The urban ‘problem’

The progressive decline and decay of urban areas with its associated unemployment amongst the low paid, unskilled and ethnic members of the population first came to prominence in the 1960s and gave rise to an Urban Program aimed predominantly at funding capital projects and education schemes in deprived inner-city locations. Implicit in this program was the view that the urban ‘problem’ was largely one of physical decline coupled with failings on the part of individuals which could be corrected by selected government intervention, designed to improve the prospects and environment faced by local citizens. This largely ‘pathological’ perspective was ultimately exposed by both academic research and community projects undertaken in the 1970s, with the result that government came to see the problem as one of economic and social change, and its impact on the local environment. This ‘structuralist’ view suggested that policy should be directed towards economic development through partnership between the center, the localities and the private sector, with the emphasis on schemes to overcome structural weaknesses. Riots in several large UK cities in the 1980s served to emphasize that the problem was particularly acute in those inner-city core areas that had suffered a significant loss of industry and population over a number of years.

The focus of policy implementation: 1970s–2000
Whereas regional policy is managed centrally through a single government department, urban policy has traditionally operated through a variety of agencies including local authorities, voluntary organisations, quangos and a number of independent bodies set up by central government. The relative importance of theseagencies in implementing government policy has changed significantly over time.

The initial focus of policy implementation under the Urban Program was thelocal authorities which acted as a channel for central government funds into projectsdesigned to regenerate economic activity (e.g. by providing premises), toimprove the physical environment (e.g. by clearing land or renovating buildings)and to meet social needs (e.g. by providing community facilities for deprived groups). This role was further enhanced by the Inner Urban Areas Act 1978 whichconferred wide powers on certain designated local authorities to assist industrywherever a need was felt to exist and where government help was seen to be appropriate.Central to the government’s strategy was its attempt to regenerate inner-cityareas through capital investment and through environmental improvement, someof which was to be funded from the private sector. To encourage private sector investment, local authorities in the designated areas were allowed to declare industrialand commercial improvement areas and to give financial assistance tocompanies which located in such areas.

With the election of the Conservative government in 1979, a number of new initiatives were introduced which indicated a move towards an even more spatially selective policy for urban areas. These initiatives which included Enterprise Zones,
Urban Development Corporations, free ports and City Action Teams frequently by-passed local authorities or reduced their powers over the allocation of resources and/or land use, and were seen by many commentators as a vote of no confidence in local government’s ability to stimulate urban regeneration. At the heart of the new approach lay an attempt by central government to turn inner-city areas into investment opportunities for the private sector by clearing dereliction and improving infrastructure. The basic idea, as the Financial Times (30 October 1990) pointed out, was to reduce downside risk to a level where private investors would see enough potential to develop in cities rather than take softer profits else where.

In March 1988 the government launched its ‘Action for Cities’ initiative which covered a range of program administered by different government departments that were designed to promote industrial and commercial investment and hence create employment in the inner-city areas. Program under this initiative were co-ordinated by a special unit located at the Department of the Environment and local co-ordination occurred through City Action Teams. After 1994, in an attempt to achieve greater co-ordination in policy and to introduce competition for resources, the government began to amalgamate a wide range of inner-city program under the Single Regeneration Budget (SRB), with the funds initially being administered by the newly integrated regional government offices which brought together the existing regional offices of a number of major government departments (e.g. Environment, Trade and Industry, Transport, Employment). It also established a new development agency (English Partnerships) that was to draw its public funding from the SRB. From April 1999 English Partnerships’ regional functions and the SRB Challenge Fund became the responsibility of the newly established Regional Development Agencies. The latter have been set up to take the lead in delivering more effective and integrated regeneration program which promote sustainable economic, social and physical regeneration within the regions. They are seen as a key actor in developing and delivering partnership based regeneration strategies at sub-national level.

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