7/26/2019 BRIT3

1/13

Inner Cities

1

7/26/2019 BRIT3

2/13

Inner Cities

Leon BrittanThe problems of Britains inner cities are far from new. They are

complex, interrelated and deep-seated. They cannot be solved by neat

solutions, nor by a quick fix. For the problems in our cities have a

variety of symptoms and causes, requiring a long, hard grind of

comprehensive and varied responses.

The symptoms of inner city decline are all too clear --

unemployment; crime; crumbling buildings; filthy streets; vandalised

public services. Similarly, the general nature of what has to be done

to revive them is clear. There are two central objectives in inner cityregeneration:

(i) to rebuild local enterprise;

(ii) to re-establish local self-respect.

Civic pride is a crucial feature of those American cities, like

Baltimore and Boston, that have come through difficult times

successfully. The key to reviving the cities is to recognise that neither

self-respect nor enterprise can be instilled single-handedly by the

public or the private sector.Difficult questions have to be asked about what should be done in

the main areas where action is needed: economic development;

education; crime; physical environment. But I would suggest that the

main areas of current controversy are:

(i) the priority that the problem as a whole should be given;

(ii) the balance between the public and the private sector, and the

relationship between the two;

(iii) the roles, tasks and interrelationships that should exist between

the agencies deployed to remedy the cities problems.

34

7/26/2019 BRIT3

3/13

The priority given to the inner cities has been steadily growing and

since the 1987 election the government has identified the cities as a

top priority. As prosperity has grown in the suburbs, so the contrastwith declining inner city areas has become starker. The scope of

government action outlined in the White Paper Action for Cities is

formidable: new Urban Development Corporations (UDCs); a new

simplified City Grant; inner city roads; managed workshops; greater

links between schools and industry; new City Action Teams.

With this range of activity and degree of importance given to inner

city problems, questions inevitably arise over the adequacy of

ministerial co-operation and the extent to which there is a coherent

organisational structure between the Department of the Environment,the Department of Trade and Industry and the Department of

Employment. Although the organisational issue is now often raised,

the division of responsibilities is not wholly logical. However, to

impose a new departmental superstructure would be worse than

useless. For it would extract the inner cities from the rest of the

country. The present system of coordination can work if there is

someone at the top prepared to knock ministerial heads together when

differences arise.

On the question of the relationship between the public and theprivate sector, I share the governments view that local authorities

have acted in the past in a way that has discredited them. Throwing

money indiscriminately at problems is widely accepted to have made

the position worse. Heavy expenditure, for instance, on vast housing

estates which local authorities cannot manage, created dependency,

required high rates which produced a flight from the cities, and

dissuaded private sector involvement. The government has

consequently by-passed local authorities and enlisted the private

sector, creating new public bodies like the UDCs. That trend wasbound to happen and the UDCs have succeeded in bringing together

the public and private sectors, not just in the London Docklands, but

in areas like Teesside, Tyneside, Sheffield and Leeds.

However I would make two important qualifications to this

analysis. First, while the problems in the cities provide a justification

for focussing on them, the inner cities are not the only problem areas.

There is also significant regional dereliction in areas like Cleveland,

Lancashire, Durham and South Yorkshire and there are dangers in

diverting attention exclusively to the cities. For the establishment of

Inner Cities

35

7/26/2019 BRIT3

4/13

bodies like the UDCs may stand in the way of the creation of English

Regional Development Agencies, which while not being inconsistent

with the UDCs would have much greater scale, scope and powers todeal with larger geographic areas.

Secondly, while local authorities have brought on themselves their

present position, it ought not to be, and need not be, permanent. The

Community Charge will make local government more accountable

and responsible, and with a local government more accountable and

responsible and a broader base of rate payers the changes in

expenditure will have a direct impact on the whole community. When

this happens, local authorities can be brought in from the cold and

made full partners in local government. It is not too early to preparefor that event now. In re-establishing local self-respect, there is no

substitute for involving in a positive way directly elected local

representatives. Action cannot be imposed from the outside forever

and no local body can claim the same local authority and mandate as

a directly elected council.

What local authorities should actually do within the total equation

is a different question. I welcome the change from local authorities

as universal providers to enablers and facilitators. In the field of

housing, for instance, there is no excuse for monolithic council-runestates but every reason for local authorities to have a proper interest

in ensuring provision, working with Housing Associations and

forming proper planning policies. However, in the field of education

I am less sure about replacing local authorities role as universal

providers and believe that opting out should be a spur to better local

authority provision rather than a means of breaking things up.

Yet even if local authorities are brought back as major partners,

the private sector will remain crucial, if not paramount. The avowed

aim of inner city renewal should be the rebirth of civic activism. Thisobjective is feasible and practical; there are plenty of examples already

-- the designation by the CBI of Newcastle and Birmingham as targets

for business-led experiments in regeneration; the venture capital funds

now targeted at inner cities, like the Lloyds of London 50,000 fund

for East London; Whitbread and Laings partnership with the London

Enterprise Agency in the development of the London Compact

designed to improve standards in inner city schools.

The scope for further private sector involvement is immense.

Comparison with the Victorian age and the Industrial Revolution

Discussions on Policy

36

7/26/2019 BRIT3

5/13

suggests that although civic pride did not emerge at the start of the

Industrial Revolution, when businessmen were too busy making

money, once their fortunes had been made they began to show greaterconcern for the community. The same process should begin to emerge

now.

There should be several elements in this new environment and

commercial attitude. First, greater encouragement of closer linkage

between particular companies and certain towns, as American firms

have done: Pilkington in St Helens, the building societies of Norwich

and Halifax and Rowntree in York are obvious existing examples.

Secondly, better examination of ways in which industry can invest

specifically in projects that make the cities places where the middleclasses want to live: the experience of cities like Halifax shows how

the arts can be crucial in stimulating urban renewal and reviving

enterprise through making inner cities more vibrant and acceptable

places in which to live. Thirdly, the involvement of business in

education: businessmen understand the value of good education as a

self-interested priority and should be galvanised to become more

involved in schemes, like the City Technology Colleges, which are

modelled on the Boston Compact and American Magna schools

scheme, aimed to provide ladders of opportunity.Nevertheless, the government and local authorities have a

continuing and major responsibility for the infrastructure and public

services, so that private sector development can take place in a way

which deals with the cities central problems. To bridge the gap

between public and private provision I believe that we should

encourage the creation of genuinely local initiatives, modelled on the

Local Employment Initiatives (LEIs) suggested by James Robertson

and David Cadman. LEIs cover many types and size of enterprise and

encompass co-operatives and community businesses. Their aim is toorganise local work to meet local needs with local resources, while

establishing local investment funds, development units and enterprise

agencies. Existing examples of non-profit-making community

development banks, like the American Institute for Community

Economics and the South Shore Bank in Chicago, suggest that the key

element is local participation and involvement rather than the

bringing-in of outsiders. The stepping-up of local authority

franchising and contracting-out would be an important factor in the

Inner Cities

37

7/26/2019 BRIT3

6/13

development of LEIs and would encourage public authorities to pay

community enterprises to provide services.

One immediate and fundamental change that the governmentcould make which would directly effect the inner cities and enhance

the process of their revival would be the abolition of the Dock Labour

Scheme. Large areas of former dockland which have been

anaesthetised would be liberated for development. For the Dock

Labour Scheme has made the development of wharves and new

enterprises uneconomic and has driven work away to non-scheme

ports.

Inner city revival will also be hastened by sensible tax policies.

The Uniform Business Rate (UBR), set nationally and applied in everylocal authority, should provide a strong incentive to business in the

north and in the cities. Manchesters UBR will be 37 per cent less than

the rates, Sheffields will be 29 per cent less, Newcastles 32 per cent

less and Liverpools 30 per cent less. This change will provide a major

stimulant to business.

It seems strange to say so little about crime. I of course favour

Neighbourhood Watch and adequate and sensitive policing. But at the

end of the day crime is the product of other factors -- environment;

employment; above all, social and family cohesion -- and it is bytackling these that crime will be reduced. We need a comprehensive

approach to the whole problem which will not produce a dramatic

transformation but a significant trend towards progress.

Summary of discussion

The role of business

Exactly what, it was asked, are business people being called on to do

in the inner cities? To provide a new form of voluntary service or to

take an interest as investors? One very useful contribution which

businesses could make would be to release staff to serve on local

councils. But, if business people are to be involved as councillors, with

the arts, in housing, as school governors and so on, is this not a lot to

ask of them when their primary function is to make money? Are we

telling them to go in and make money, and in that way contribute to

Discussions on Policy

38

7/26/2019 BRIT3

7/13

inner city revival, or to make money and then do something else --

supply new civic energy? How far, in any case, is it possible to

generalise about the role of private enterprise, since the private sectoris not monolithic?

Might we, one speaker asked, get to the point where, as in the USA,

one of the performance indicators set by firms for their local managers

may be their contribution to the community? But another warned

against over-estimating social responsibility as a reason for the

contribution of American business to inner city redevelopment. There

was, certainly, a great deal of private sector involvement in the USA,

but the driving force for this was commercial gain, not social

responsibility, which in America was more rhetoric than substance. Itwas the prospect of commercial gain which pulled businesses in, and

programmes for the inner cities must include this. What, as another

speaker asked, is Rupert Murdochs commitment to Wapping?

Actually, Leon Brittan said, we are asking business people both to

take an interest as investors and to provide new types of public service.

It is perfectly normal for them to have both functions, so long as they

distinguish clearly which function they are performing at a given time.

There is a second stage of economic development, as nineteenth

century history showed and as is apparent now after the recession,when it is reasonable to expect business people to become more

involved with civic affairs. In this second stage they can afford to do

so, and to take a longer term view of what is desirable for their

company, recognising that its future is bound up with that of the

locality and that they are thereby protecting their investments. But we

must not ask too much from too few. It is a good thing to release staff

for service on councils, but just how is this to be done?

But, more than one speaker noted, time is needed to make the most

of the contribution from business. One said that the scale of the privatesectors interest in inner city problems was still insignificant compared

to the size of these problems. Another replied that it was easy to be

scornful about the private sectors contribution but it was amazing how

far it had come, for example in Newcastle, considering where it had

started from. But the private sector still needed to get its act together.

Another, while recognising the potential of the private sectors

contribution, warned against accepting too easily the private sectors

own view. A good planning authority was from the private

developers point of view one which let my scheme through. Leon

Inner Cities

39

7/26/2019 BRIT3

8/13

Brittan underlined that the role of the private sector is in fact of central

importance: it was wrong to suggest that when he spoke about this he

was focussing on a marginal factor.

The role of local authorities

What should be the role of local authorities in inner city development?

There was more discussion on this than on any other issue.

In the 1970s, it was said, partnership seemed a good way of

tackling inner city problems and there was good cooperation between

central and local government, but private business was left on one side.

Now it was a case of cooperation between central government and the

private sector with local government left on the side. It was too harshto say that local government had brought this on itself. The idea of

discriminating between those authorities with which it is and is not

possible to collaborate had not been pursued. All three parties had their

part to play, and, if mistakes had been made in the past, central

government and business had colluded in them, as for instance over

housing. The governments idea of the relations between local

government and private business was said to be out-dated. As seen

from both the local authority and the business side, the two are now

coming together and it is easier than in the past for business to dealeven with the more awkward local authorities. There is a rhetoric of

antagonism to local authorities in the CBI and other business

organisations over issues like rates and planning delays, but when

business people are talked to individually it is clear that they do not

want to be in conflict: they want peace and quiet to make money, and

they can live with regulation.

One speaker said that he had indeed been appalled at the behaviour

of some local authorities in the 1970s, but in the last nine years these

authorities had been not reformed but abandoned. Instead of reformingthem to make them more accountable, providing them with new

finance and restructuring them to make them more effective, we had

been sending in a lot of the great and the good to solve the problems

of their areas, with not a word about the local community. What had

happened to the concept of the city? People are consumers, managers,

and so on: once, they used also to be citizens of a community, and to

behave differently as such. Another speaker said that he was worried

at seeing the demise of local authorities. A lot of good people worked

hard in them and had relevant skills, but the government did not respect

Discussions on Policy

40

7/26/2019 BRIT3

9/13

local authorities as it should. Another insisted that it is impossible to

recreate civic pride without putting a self-respecting local authority at

the centre.Local authorities, others pointed out, are not only on the scene but

one of the biggest, if not the biggest, businesses in their area, and are

also uniquely placed to reach down to the worst-placed groups.

Trickling down, as argued for by the Institute of Economic Affairs or

the Centre for Policy Studies, may reach some, but not the people at

the bottom: they are missing out, and life for them is getting worse. If

local authorities do not provide housing and social services, who will?

The Secretary of States emphasis on housing associations in rural

areas or in inner cities was welcome, but he was turning his back onlocal government as an agency which can get through to where the

market will not reach. Or should we use a wider range of voluntary

agencies?

There were also comments on local government finance. A survey

in one London borough showed that 80 per cent of the people left in

the borough had incomes of under 150 a week. The Community

Charge might make local authorities more accountable, but with

incomes at that level many would not be paying it in full -- and

two-thirds of that authoritys budget was for housing and socialservices. There was a bill, another speaker said, for 20 billion for

housing repairs: how will this be financed, and will we pay it at all? It

was sad that local authorities were not trusted to use the money they

obtained from sales of housing and land. A contributor from the private

sector argued that more power should be devolved to local

government, including more funds and a bigger share in government

expenditure: meaning, not more government expenditure in total, but

a bigger share for local government.

All this having been said, however, a number of speakers agreedthat local government does indeed need to change its structure and

practice in order to contribute to inner city development effectively.

Its competence and constitution need to be examined. Local authority

management and committee structures are not designed to deal with

the situations now facing local government. There is a lack of

entrepreneurial management and of accountability at all levels, and it

has often been necessary to persuade and bribe local authorities to

move into the twentieth century. A new theory of planning was

needed, based not on allocation but on harnessing market demand for

Inner Cities

41

7/26/2019 BRIT3

10/13

the general good and so creating development and spin-offs. Local

authority and university planning departments were the last redoubts

of socialism. Why not look at planning as a creative activity, usingassets to get something to go ahead? Local authorities still have great

powers to create development: they tend to equate powers with money,

but what about using their assets and the market, changing their

attitudes and developing more creativity? But, though there can indeed

be an entrepreneurial role for local government -- planning gain, rather

than simply regulating or servicing delivery -- how do we change local

authorities to get this out of them? Leon Brittan was right, one speaker

said, about the relief to local authorities from not having to manage

vast housing estates; and if, as another had suggested, the Secretary ofStates ideal was for local authorities to meet once each year to sign a

set of contracts, that could be a line for a chief executive to go along

with.

Several speakers referred to the example of local government in

the USA. American local authorities were more pragmatic than in

Britain, whereas in the UK there was a strong touch of ideology. They

also had a strong incentive to drive forward with development, since

they created more revenue by doing so, whereas in Britain the rate

support grant system worked against this. Under the RSG, it was said,we have traded equity in the delivery of local authority services against

initiative. The statistical basis of RSG is in any case curious: what are

we to make of educating the average child? But another speaker

warned against easy acceptance of glowing accounts of American

local government. Consider, for instance, the homelessness scene,

with tens of thousands sleeping over the gratings in the streets.

Replying to this part of the debate, Leon Brittan insisted that, while

the rhetoric is that local government has no place in the sun, the truth

is that there is constant cooperation between local and centralgovernment. People in local authorities are not talking as if they were

an endangered species. Local authorities still have plenty to do and

can be brought back into the picture in future as the community charge

increases their accountability. But they will come back in a different

role. They are not designed as engines of enterprise, but it depends on

what you want them to do. Perhaps they should be doing something

else, as facilitators rather than direct providers. Maybe local

government should be government rather than an entrepreneur: it is

possible to have entrepreneurial atti tudes without being an

Discussions on Policy

42

7/26/2019 BRIT3

11/13

entrepreneur. On issues like housing and social services, who should

act if not the local authority? But by facilitation rather than direct

provision, at which others are equally good. And there are other publicagencies which have responded to the needs of people at the bottom.

He too had heard that even the bad local authorities are now easier

to deal with, and at least one Labour-controlled authority represented

in the seminar was not on his list of baddies. But it is difficult for the

government to discriminate among local authorities, as he used to find

in government during arguments over RSG. In this country, by

contrast with the less ideological USA, there has been the idea of the

primacy of the public sector, which has naturally made others

suspicious. Perhaps it is only when the last redoubt has been removedthat we can be pragmatic.

The power to use finance for development had not been taken away

from local authorities, but the pace of release, for example of the

proceeds of asset sales, depends on policies for public expenditure. If

local expenditure matters as part of public expenditure, there must be

some control of it. As the country becomes more prosperous, the

government is convinced that it should concentrate more on the inner

cities: but there is competition for resources, and the share of the inner

cities has to be determined through the democratic process.

The role of the central government

The government was right, a speaker said, to work through co-

ordination between departments rather than concentrate responsibility

on one Ministry. Another argued that it was only in the last eighteen

months that the government had arrived at the idea of the dependency

culture and that this accounted for the falling away in the role of local

authorities. But, it was asked, was its policy too much governed by

fashion? Last year ideas about integrated development, employmentgeneration, using local labour and so on were swept aside if mentioned

at all. It took time to learn the necessary lessons and apply critical

judgement. The planning mistakes of the past were made by people

who were paternalist, informed and of good will. More and more

power was being given now to people who were supposed to know

what is good for the consumer. Can we be sure that they will do better

than in the past?

A fair warning, Leon Brittan commented: we should not overstress

current policies as a panacea. Neither, however, should we let doubts

Inner Cities

43

7/26/2019 BRIT3

12/13

about them degenerate into a recipe for inaction. While it was true that

policy changed with fashion, and that this could be dangerous --

consider the case of the diagnostic test for child abuse in Cleveland --it was also to some extent inevitable, and there was equally the danger

of being too agnostic about it and so doing nothing or bits of

everything. The choice might be between fashion and cynical

world-weariness.

There was general agreement that, whether for historical reasons

or as a matter of deliberate judgement, we were likely to end with what

was called an eclectic-pluralist model of inner city development,

involving a number of parties and different approaches. Leon Brittan

agreed. He had not come up with a grandiose and comprehensive planand doubted whether that would work.

There were, however, a number of comments on particular aspects

of the governments approach.

How effective, one speaker asked, was the pragmatic and diverse

approach likely to be in stimulating action? Monolithic policies did

encourage people to go out and do something. Current policies

required action by a vast array of people: were the necessary stimuli

and structures available? And, another asked, was there enough talent

to go round?In any case, though concentrated management attention, as

through Urban Development Corporations, is helpful in solving inner

city problems, it was pointed out that this type of action raises

problems of its own both locally and more widely. The current use of

inner city task forces is in a sense a throw-back to the older concept

of a list of assisted areas: useful, but only one element in an eclectic

policy. A recent Docklands study had pointed up problems over

education (especially secondary education), roads, and the relation

between what was happening in Dockland and in the areas just overthe boundary. There are problems of under-employment in whole

cities and regions, not only in inner cities, and despair in the South

East over what is happening there. In the absence of regional

government, it was said, we are not doing so well on long-term

planning on these wider issues in successful or in unsuccessful areas.

What kind of cities and regions do we want? Many business people

were said to be interested in addressing issues like these, but frustrated

by the lack of vision in government and of government finance for

infrastructure development. Accepting the need for regional, not only

Discussions on Policy

44

7/26/2019 BRIT3

13/13

inner city, policies, Leon Brittan pointed out that the next seminar

would be precisely on this issue.

Impacts on local people and on ethnic groups

Were we, some speakers asked, solving the problems of inner cities

or simply displacing them -- sending the poor out to the fringes of the

cities, a programme for people removal? Two views were expressed

on this. One was that it is an advantage to break up big concentrations

of the poor on large estates. When people are displaced, they live closer

to those better off and that creates new opportunities for trading skills.

The other view, however, was that poverty needs to be tackled on the

spot, not by displacement. Physical renewal was not enough; there wasa danger that, as in some cases in America, the inner cities programme

would become a programme for people removal. The answer to

poverty, however, Leon Brittan commented, must lie in creating

enterprise which pays enough to lift people over the poverty level.

Finally, it was asked how far members of ethnic minorities, four

out of five of whom live in inner cities, are involved in inner city

strategies, able to articulate their needs and listened to. Employing

local labour was an excellent idea, but employers tended to prefer

whites: Asian and Afro-Caribbean unemployment was two and a halftimes that of whites. Ethnic representative organisations were pushing

for contract compliance. Or again, for helping ethnic minority

members to develop their own businesses: Asians tended to be

concentrated in trade and commerce, and very few had made their way

into industry. And what exactly was meant by the idea that the culture

of Afro-Caribbeans was responsible for their limited contribution to

inner city development? Family, temperament, or what?

On culture Leon Brittan pleaded guilty to vagueness, not to being

wrong. If two groups come into the country at the same time and beginby being equally disadvantaged, and one advances while the other does

not, then culture is shorthand for the factors underlying this. He had

no hang-ups about contract compliance, and members of ethnic groups

should certainly be involved, though as residents, not as members of

those groups. As for Asians being specialised in trade and commerce,

consider the analogy of the Jews. The key is to get started in some area

of entrepreneurship. Once people are in business, the nature of their

business will change as opportunities change: start with the corner

shop, then go on into services, property development or industry.

Inner Cities

45