Smart spending can keep regeneration on track

Amid the doom and gloom there are positive signs for regeneration in Wales, argues Dave Adamson

Although the detail of the comprehensive spending review and the Welsh Assembly Government’s budgetary response is slightly better than the most feared scenarios, we nevertheless face a period of extreme austerity and restrictions on public expenditure. For regeneration, the headline was the 41% reduction in capital expenditure in Wales, higher than both Northern Ireland and Scotland.

Clearly, large scale regeneration is highly dependent on capital expenditure and there will inevitably be a significant impact on projects throughout Wales in the next few years. Of equal concern was the scrapping of the defence training facility at St Athans and the prospect of a Severn Barrage. Continued uncertainty over the electrification of the Swansea to Paddington line also underlines the loss of the employment and economic development potential of such major projects.

Concerns inevitably turn to how we might plug these huge gaps which were seen as of critical importance to the Welsh economy. Perhaps the most encouraging development has been WAG’s launch of its regeneration framework by deputy minister, Jocelyn Davies, at the Regenerating Wales conference last October, the day that the comprehensive spending review was announced.

Despite the cutbacks many regeneration schemes are continuing, such as the 15-year Heads of the Valleys programme in South Wales.

Maintaining WAG’s commitment to the seven regeneration areas, the framework sets out a structured response which advocates better connections between different policy streams. The Centre for Regeneration Excellence Wales (CREW) will support the sharing of best practice advocated in the framework by developing its thematic networks throughout Wales. You can find descriptions of these cross-policy and inter-professional networks and join them at www.regenwales.org.

Currently in the recruitment stage of membership, we will be launching a programme of activities in early 2011 to support regeneration professionals in Wales. We have also seen increasing confidence in the continuation of the Communities First Programme post 2012, the current period of funding. While no announcements about its future shape and structure have been made, conference contributions by deputy minister Carl Sergeant have been encouraging. 

Organisations are also looking for innovative financial models to fund future regeneration activities. The launch of the Jessica programme and its implementation in Wales through the Regeneration Investment Fund Wales (RIFW) points the way to innovative lending models and a more sustainable use of European funding which can be continuously recycled as loan payments return to the fund.

One major advantage is that once cycled through the system, funds can be used for areas of spending that are not eligible in the direct grant programmes of ERDF. Interest is also developing in local asset-based vehicles (LABV) and TIF (tax increment financing), innovative models which bypass some of the current funding difficulties. CREW will be holding a joint seminar with Wales Institute of Social and Economic Research, Data and Methods on 3 March which will explore this increasingly complex funding environment.

Perhaps more important than any of these initiatives is how we spend the mainstream budgets of the Welsh public services. With a £14bn spend, the potential regenerative impact of public expenditure in Wales is vast. The social housing sector has led the way in demonstrating how ‘smart procurement’ can develop local supply chains, create targeted recruitment and training opportunities and contribute significantly to local economies. There is growing interest in the Can Do Toolkit approach throughout the public sector and if similar achievements can be realised as those in the social housing sector, we could see a major boost to economic development in Wales.

As always keeping an eye on the opportunities during a crisis is the only way forward and adversity can promote innovative solutions to long-standing problems.

This article first appeared in issue 81 of Welsh Housing Quarterly, go to www.whq.org.uk to find out more.