Getting connected – the vital role of infrastructure in regeneration

Infrastructure projects, whether big or small can be transformative, acting as catalysts for greater change and regeneration, writes Tim Reade, head of property advisory services, Chartered Institute of Public Finance and Accountancy (CIPFA).

When it comes to regeneration, it is not only our town centres which must be reinvented but also the infrastructure that connects and supports them.

Hand in hand with the development of new housing and business districts go the transport systems that connect them, the schools and parks where communities can come together, and the public amenities and broadband that allow new businesses to flourish.

Infrastructure projects, whether big or small can be transformative, acting as catalysts for greater change and regeneration.

For local authorities or private developers drawing up business cases for investment, making these links is increasingly part of the process. The impact on the bottom line is often not sufficient to justify a project, and the expected impact on the wider community and local economy needs to be taken into account.

Expanding the scope of infrastructure projects to include such considerations as the number of jobs added, reduced travelling times, increases in productivity, and environmental benefits, has the potential to unlock new public support and government funding.

These opportunities aren’t just present in major projects like HS2or bridges to connect Ireland and Britain, but in the smaller projects unfolding every day where there are opportunities for collaboration between developers, employers, and government.

The Joseph Rowntree Foundation report, Major development projects: connecting people in poverty to jobs, highlights how you can create wider regeneration opportunities during the infrastructure planning process. The report draws out the way different councils have used Section 106 powers to help residents from disadvantaged communities gain skills and find jobs.

This includes securing backing from private developers on infrastructure and services, as well as other outcomes linked to regeneration, such as employment and training programmes.

Through the flexibility of Section 106, many local authorities have secured private sector contributions to public transport, education, community and cultural facilities, green infrastructure, environmental mitigation and affordable housing.

We tend to find the most successful councils are taking a partnership approach, bringing together businesses, government, and the community around a joint vision for inclusive growth.

One great example of a local infrastructure public sector partnership comes from Cheshire West and Chester Council, who we will be hearing from at the CIPFA Property Conference on 10 July. Working in partnership, the authority secured £5m investment in 2018 to fund the expansion and rejuvenation of a local industrial park. The modernisation project includes a retail scheme, a new central business district, and new theatre in a prominent location, creating up to 1,500 jobs.

This sort of cooperation between developers, local authorities and businesses demonstrates confidence in the local economy, and unlocks economic benefits for both the town and the borough as a whole. In combination with well-defined governance and leadership arrangements, as well as innovative delivery mechanisms, such as the Community Infrastructure Levy (CIL) in 2017, the council and their partners are poised to bring growth into the area and drive prosperity across the region.

However, regeneration is a fast-moving area. With existing mechanisms around the Community Infrastructure Levy Section 106 agreements under review by the Communities and Local Government Select Committee, more changes could be on the way. One point of particular concern for the committee was the variability in local planning authority competence, particularly in negotiating with developers.

While there are plenty of local planning authorities with well-defined local plans that set out clear expectations for developers and the skills and professionalism to ensure follow through, this is not the case across the board. Such variance could be partially attributed to resourcing pressures currently being faced across the public sector.

While it will still be some time before any reforms find their way through Westminster given the current climate, it is important for the industry to share its infrastructure success stories. Working together in a community of practice will help us overcome challenges, create better partnerships, and enhance prosperity and places.

CIPFA’s Public Finance Live 2019 takes place on July 9-10.