cities in transition stakeholder briefing materials final

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CITIES IN TRANSITIONYear 1: Shrinking Cities

a 3 - y e a r i n i t i a t i v e o f t h e G e r m a n M a r s h a l l F u n d s u p p o r t e d b y t h e S u r d n a F o u n d a t i o n a n d t h e K r e s g e F o u n d a t i o n

d e s i g n e d t o c r e a t e a s u s t a i n a b l e n e t w o r k o f l e a d e r si m p l e m e n t i n g s o l u t i on s i n U . S . c i t i e s i n t r a n s i t i o n

Stakeholder MeetingDetroi t , Michigan

October 7 8, 2010


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The German Marshall Fund of the United States (GMF) is a non-partisan American public policy andgrantmaking institution dedicated to promoting greater cooperation and understanding between the UnitedStates and Europe. GMF does this by supporting individuals and institutions working on transatlantic issues, byconvening leaders to discuss the most pressing transatlantic themes, and by examining ways in whichtransatlantic cooperation can address a variety of global policy challenges. In addition, GMF supports a numberof initiatives to strengthen democracies. Founded in 1972 through a gift from Germany as a permanentmemorial to Marshall Plan assistance, GMF maintains a strong presence on both sides of the Atlantic. Inaddition to its headquarters in Washington, DC, GMF has seven offices in Europe: Berlin, Bratislava, Paris,

Brussels, Belgrade, Ankara, and Bucharest.

GMFs Comparative Domestic Policy (CDP) Program empowers local leaders to introduce innovative strategiesto their communities by connecting practitioners who can share insights about policy successes and challenges.The program works primarily through the Transatlantic Cities Network, whose activities are supplemented bytools including research fellowships, study tours, issue-specific local workshops and researched multimediaweb content.

The Cities in Transition initiative is made possible by the generous support of the Kresge Foundation and theSurdna Foundation.


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Table of Contents

1. Introduction and WelcomeFrom Tamar Shapiro, Director of Comparative Domestic Policy .2

2. Cities in Transition Program Summary .3

3. EUROPEAN UNION CONTEXT3.1 EU-Level Funding Overview : EU Report on Promoting Sustainable Urban

Development, Chapter 1 5

3.2 EU Vision for Cities : The Leipzig Charter ..15

4. MANCHESTER4.1 Overview : Manchester City P rofile...24 4.2 Ramifications of Shrinkage : Regrowth of a Shrinking City...28 4.3 The Role of Music and Culture : Manchester England.. .414.4 UK Urban Policy Innovations & Lessons for the U.S : A Brookings Study..474.5 Excerpts from the Manchester Unitary Development Plan (UDP) 644.6 In the Media : Chips, Will Alsop and the Re development of Manchester.76

5.

LEIPZIG5.1 Leipzig History and Context : Leipzig City Repor t...805.2 Leipzig Economic Strategy : Leipzigs Municipal Job Agency99 5.3 City of Leipzig Urban Development : Residential Space, Urban Renewal, and the

Economy..105

5.4 Funding at the Federal Level: Soziale Stadt: A Program Summa ry.1125.5 Funding at the Federal Level: Urban Redevelopment in East and West

Germa ny...119 5.6 Current Programs : Interim Use: Opportunity for New Open Space Quality in

Leipzig ....125

6. APPENDIX: Shrinking Cities in a US Context : How to Shrink a City138


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Cit ies in Transi t ion: Shrinking Cit ies A sustainable network for leaders

from Flint, Detroit, Cleveland, Youngstown, and Pittsburghsupported by the Surdna Foundation and the Kresge Foundation

and organized by the German Marshall Fund of the United States

The Cities in Transition Initiative is a three-year project designed to build a sustained network of policymakers, practitioners, and civic leaders in five older industrial U.S. cities: Detroit and Flint,Michigan; Cleveland and Youngstown, Ohio; and the greater Pittsburgh, Pennsylvania region.Participants in this network will work together closely to articulate critical policy challenges facing theircommunities and to identify and adapt innovative solutions that European older industrial cities haveimplemented to address the myriad challenges associated with urban disinvestment and economicrestructuring. In each of its three years, the project will zero in on a different policy area affecting thesecities: respectively, land use; manufacturing; and workforce development.

Ye a r O n e : S h r i n k i n g C i t i e s

In 2010-2011, the Cities in Transition Initiative will focus on the challenges that arise from physicaltransformations occurring in a built environment that has been left behind by rapidly shifting settlementpatterns. In cities in the United States Rust Belt and elsewhere, trends of decreasing population andsuburbanization have sapped the vibrancy of many core city neighborhoods, leaving them vulnerable toblight and not dense enough to support a healthy civic life.

Program SummaryGMF will bring together key leaders in land use planning and vacant property management for a one-day kick-off meeting in Detroit in October 2010 to identify desired outcomes early in the process, and to

identify key questions to be answered about the European case studies. The cornerstone of the projectwill then be a study tour to Leipzig and Manchester in December 2010, during which the delegation willhave an opportunity to meet with leading policymakers, examine the why and how of approachesthat have been implemented successfully in these cities, and identify strategies for adapting those ideasto address challenges in their home cities.

Study tour participants and other decisionmakers in the participating U.S. cities will then be convenedfor a series of charrettes in spring 2011 to explore how best to apply key elements of the successfulpolicies and practices identified abroad to pressing challenges in their home communities. Study tourparticipants will also work together to identify state and federal policy changes necessary forimplementation of these policies, important steps in facilitating the transferability of policies from theEuropean to American context, as well as potential limits of policy transferability.

ParticipantsParticipants in Year One programming will be selected from Flint, Detroit, Youngstown, Cleveland, andPittsburgh with an emphasis on developing a strong, diverse group of political, business, non-profit, andphilanthropic leaders with a high potential for influencing the design and implementation of successfulsolutions. Additionally, recognizing that pioneering initiatives at the municipal/regional level must becomplemented and supported by federal leadership, staff from relevant federal agencies will also beinvited to participate.

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The initiative will be guided through its three-year implementation period by a group of keystakeholders representing place-based foundations, civic organizations, policy organizations, and projectfunders. Project activities will also be guided and coordinated by a senior fellow each year whose deepexpertise and regional networks will contribute high-level policy analysis and help ensure that thelessons learned from European cities can be and are translated into innovative new policies in the

participating U.S. Cities. In 2010-2011, the Cities in Transition Fellow is Lavea Brachman, ExecutiveDirector of the Greater Ohio Policy Center.

Leipzig and ManchesterFollowing the reunification of Germany, Leipzig experienced a dramatic collapse of its industry andsignificant population loss due to rapid suburbanization as well as migration to western Germany. Toaddress the overwhelming vacancy levels, misalignment of infrastructure and population, and fiscalcrisis that resulted, city leaders are implementing an integrated, cross agency strategy that combinescenter city revitalization with the targeting of funds to key neighborhoods, the innovative reuse of former industrial spaces, the development of new housing and homeownership models for urban areas,and the creation of strategically placed green space through targeted demolition. Though significantchallenges remain, Leipzig is now experiencing an increase in population and key neighborhoods havestabilized.

Manchester has also undertaken a comprehensive approach to revitalization, not driven by one projector circumscribed by a single strategy, but by citywide planning and intermunicipal as well as public-private cooperation. A major focus of this effort has been on rebuilding Manchester as an internationallycompetitive city, reflected in th e citys focus on building up its airport and high-tech sector. Greatemphasis has still been placed on place-based regeneration, encompassing both repopulation andredevelopment of the city center (including the rebuilding after the IRA bombing in 1996), as well as anetwork of other major neighborhood revitalization strategies. The city has created a number of innovative place-based public-private entities to lead these efforts.

Participants in the first year of the Cities in Transition project will examine these and other successfulEuropean examples closely in order to identify key policy elements that are relevant to the complexchallenges facing their own communities.

The German Marshall Fund and the Comparative Domestic Policy ProgramThe German Marshall Fund of the United States is an American public policy and grantmaking institutiondedicated to developing ideas, leaders and institutions necessary for an effective, long-term partnershipbetween North America and Europe. Recognizing the similar policy challenges that cities in the UnitedStates and Europe face as well as the necessity for communities to collaborate in crafting approaches tolocal problems that have global implications, GMFs Comparative Domestic Policy (CDP) programprovides a framework for dialogue between individuals and groups who make, influence, and implement

urban and regional policy on both sides of the Atlantic.

The Cities in Transition project is made possible through the generous support of the Surdna Foundationand the Kresge Foundation.

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The dynamics o cities in Europe 1

Currently over 70% of Europeans live in urban areas. Most the EUs population, just over 60%, live in medium-sized citiewith more than 50 000 inhabitants. There are around 6 000towns or cities with over 5 000 people and almost 1 000 citieswith over 50 000 people in the EU, in which economic, sociaand cultural activity is concentrated. However, only 7% of theEU-27 population live in metropolises o over fve million(against 25% in the US)2.

Cities are engines of economic growth for Europe: those withmore than one million inhabitants generate 25% more GrossDomestic Product (GDP) than the EU average, as well as a 40%higher GDP than their home nations national average. In virtually all EU Member States, urban areas are the chie producerof knowledge and innovation.

Because they concentrate economic added value, urban areasare the chief producers of knowledge and innovation. As driverso competitiveness, cities are the plat orms o technologicalinnovation and multinational activities, ranging rom primaryresearch at universities to cutting-edge research or high-techbusinesses.

The service sector is the most important source of employment in European urban economies. For example, in London,Paris, Berlin, Madrid and Rome the service sector accounts fobetween 80% and 90% of total employment.

STRENGTHENED CITIES,GROWING REGIONSCities play a vital role for the development of European regions. They are key to increasing the European Unions worldwide com-petitiveness. Cities are home to the majority of jobs, rms and highereducation institutes and their action is decisive in bringing aboutsocial cohesion. They are also the focal point of innovation, entrepre -neurship and economic growth, areas in which the EU has ambitiousobjectives. Where cities and neighbourhoods are strong, the regionsaround them show stronger growth and are more competitive.

Since 2005, the renewed Lisbon Strategy for Growth and Jobs has

made a strong contribution to Europes economic growth3

. In thecontext o Cohesion Policy, this means or example that between2007 and 2013 certain proportions of the Policys 347.41 billionbudget (35.7% of the total EU budget) will be earmarked for invest -ments that boost economic growth in the EUs Member States,regions, towns and cities 4.

European cities are key to reaching the Lisbon goals, since they actas the motors or regional growth, innovation and employmentcreation 5. It is crucial that towns and cities of all sizes become orremain attractive, both to residents and businesses. This is importantnot only or big agglomerations and global nodes, but also or small

and medium-sized towns, since their health is often crucial for thewell-being of their regions. Their capacity to innovate and createnew economic opportunities is a prerequisite to ensuring that theseregions do not lose out in global competition. Furthermore, strongregional economies, driven by competitive cities, are better able toa ord social inclusion and to maintain and protect the physical andnatural environment.

In times o economic crisis, cities must use their innovative andintegrative potential to play a proactive role. Indeed, di cult cir -cumstances might even open up opportunities or them to intro-duce structural re orms and accelerate the necessary adaptation

to changing economic and social realities, which under normalconditions would be more di cult to achieve.

All over Europe, cities are a nexus for needs and opportunities. They o er exceptional possibilities or economic development,social inclusion and well-being, and they have unique cultural andarchitectural sites. At the same time, pockets of deprivation (socialexclusion, poverty and crime) still persist. The disparities withincities are o ten much larger than the regional or national averageperformance might indicate.

As economic development can only be sustainable when it is ac-companied by measures designed to reduce poverty, social exclusion

and environmental problems, the integrated approach not onlyencourages growth and jobs throughout Europe, but also pursues

i l d i l bj i 6 Cities a motor for economic growth


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Cities play a vital role or the developmento European regions

The diversity across and within European cities some acts and gures 8

The patterns of urban population change in European cities are complex and very diverse. In the period from 1996-2001, a third of cities grew at a rate in excess of 0.2% per year; a third saw their populations remain stable (rates of population changing between-0.2 and 0.2%), and a third experienced a notable decline in population.

Highly quali ed people are over-represented in cities, as are those with very low-level skills and quali cations. Cities o er exceptionalpossibilities for economic development, social inclusion and well-being and have unique cultural and architectural sites. At the sametime, pockets of multiple deprivation (i.e. social exclusion, poverty and crime) are still apparent. The disparities within cities are oftenmuch larger than the regional or national average performance may suggest.

Unemployment rates tend to be higher in cities, although the concentration of jobs in cities is even stronger than that of residentsand many of Europes main employment centres are within cities. Europes largest cities are truly economic powerhouses. However,within cities, between city districts, very large di erences in unemployment rates remain visible.

Together with natural population growth, migration is a crucial determining factor for urban population change. The share of new -comers in European cities (i.e. people that have moved to the city in the previous two years) varies widely across Europe. A highproportion of newcomers (5% or more) can be observed in cities in for example Ireland, France, Denmark and Germany.

Many cities located in the EU face problems related to inner-city decay. This is the result of development during which the historicalcore o the city gradually lost its traditional role and where both economic activity and many original inhabitants moved towardsmore outer-lying areas. This trend has led to urban sprawl, exacerbated by weak urban-planning mechanisms.

Cities throughout the EU are facing pressures and challenges related to road congestion, air and noise pollution. These problems

have been aggravated by, amongst other things, the steady growth of many southern European cities in recent years (e.g. Athens, Thessaloniki, Madrid, Barcelona, Lisbon and Porto).

The bene ts o economic growth should be extended to the poorest

and most vulnerable in society. Social cohesion, and tackling pov -erty, joblessness and social alienation are all important EU priorities. The less- avoured social groups include not just the poor and thelong-term unemployed, but also immigrants, ethnic minorities andyoung people in deprived areas. Inclusion in the labour market anda ordable access to basic services are there ore speci c goals orEU Structural Funds. Towns and cities play a decisive role in br ing -ing about social cohesion 7. This is particularly true for cities thatare exposed to problems o social exclusion and social inequalitiesbetween di erent groups of people.

Moreover, politicians o all nationalities and political parties recognise

the importance of urban issues. Successive presidencies of the EUhave recognised urban issues, particularly at the In ormal MinisterialMeetings on Urban Development in Lille in 2000, in Rotterdam inNovember 2004, in Bristol in December 2005, in Leipzig in May 2007and in Marseille in November 2008. These were occasions whenMinisters rom around the EU orged a new culture o cooperationon urban a airs with the European Commission, the EuropeanParliament, the Committee o the Regions and other EuropeanInstitutions. On the strength of this cooperation, they committed tosupporting the development o strong European cities and regions,

Greening the city economic development mustbe sustainable.


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Cohesion Policy plays, and will continueto play, an important role in this process o supporting the development o Europe's townsand cities

based on new and sustainable strategies. With the Leipzig Charter

on Sustainable European Cities, they recommended:making greater use o integrated urban development policyapproaches (by creating and ensuring high-quality public spaces,modernising in rastructure networks and improving energye ciency, proactive innovation and educational policies);

paying special attention to deprived neighbourhoods within thecontext o the city as a whole (by pursuing strategies to upgradethe physical environment, strengthen the local economy andlocal labour market policy, instigate proactive education andtraining policies, and promote efcient and a ordable urbantransport).

Building on the experience of previous Community initiatives andprogrammes to support urban development and regeneration(like the URBAN Community Initiative), this process of creating newdevelopment strategies has led to the emergence o a commonEuropean Acquis Urbain.

Cohesion Policy plays, and will continue to play, an important role inthis process o supporting the development o Europe's towns andcities. This role has expanded in the 2007-2013 programming period,as the urban dimension is now ully integrated into programmes andprojects that are co- nanced by the European Regional DevelopmentFund (ERDF). This has given Member States and regions the possibil -ity to design, programme and implement tailor-made, integrateddevelopment operations in all European cities on the basis o theso-called integrated approach 9. An approach of this kind combineselements such as cross-sectoral coordination o actions, stronghorizontal partnerships, increased local responsibilities and theconcentration o unding on selected target areas that orm the keyelements of this common European Acquis Urbain 10.

The integrated approach is in line with the renewed Lisbon Strategyo 2005, which ollowed the goal o the EU becoming the mostcompetitive and dynamic knowledge-based economy in the world,capable o sustainable economic growth with more and bet ter jobsand progressing towards economic and social cohesion by 2010,through the renewal of Europes competitiveness. This approachaims at increasing Europes growth potential and its productivityand strengthening social cohesion, building on the Strategy's threedimensions (economic, social and environmental aspects) 11.

The environmental and sustainability aspects o the integratedapproach build on the 2001 European Sustainable DevelopmentStrategy (the Gteborg Strategy). Dealing with multiple aspectso sustainable development, the Strategy proposes measures totackle threats such as climate change, poverty, social exclusion andthe ageing population, as well as issues such as public health andtransport. On the basis of a review of the Gteborg Strategy thatstarted in 2004, the European Council adopted the EU Sustainable

and clean energy, sustainable transport, sustainable consumption

and production, conservation and management o natural resources,public health, social inclusion, demography and migration as wellas global poverty 12.

Milestones in Cohesion Policy supportfor urban development

Although there is no legal basis or urban policy in the treaties es-tablishing the European Union (EU) and the European Communities(EC), the EU has a long tradition of being active in the eld of urbandevelopment and regeneration and has taken on a major role in

supporting cities and regions in their quest or competitiveness andcohesion. It is widely recognised that there is a strong need to takeinto account the urban dimension o EU policies and especially o Cohesion Policy. That is because not dealing with urban issues ata European level and the absence o a common understanding o urban development policies at European level, a European AcquisUrbain, would endanger the achievement o the objectives o theEUs Lisbon and Sustainable Development Strategies.

Over the last two decades, the EU has produced a number o majorpolitical documents, Community initiatives and programmes tosupport urban regeneration, innovation in urban policy and the

exchange of experience and good practice; in addition, the paceand complexity o change has quickened 13. The initiatives and prgrammes mainly ocus on our political objectives:

Strengthening economic prosperity and employment in townsand cities;

Promoting equality, social inclusion and regeneration in urbanareas;

Protecting and improving the urban environment, in order toachieve local and global sustainability;

Contributing to good urban governance and local em-powerment.


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There have been several key milestones in Cohesion Policy to supporturban regeneration and sustainable urban development 14:

The Urban Pilot Projects 1989-1999 The Urban Pilot Projects marked a signi cant development in urbanpolicy and were designed to pave the way or many ar-reaching urbanregeneration projects 15. The Urban Pilot Programme was initiated by theEuropean Commission after various networks, such as the Quartiers enCrise European Regeneration Areas Network 16, had received undingrom the RECITE I Programme17 to exchange know-how and innova-tion and develop new European standards in urban policy. During theperiod 1990 to 1993, a total of 33 Urban Pilot Projects were launched. They were implemented in 11 Member States. Some were sustainedbeyond the unding period while others acted as catalysts or urtherregeneration in the target areas concerned.

In July 1997, the Commission approved the Second Phase of theUrban Pilot Programme. Out of the 503 proposals that were receivedrom local authorities, 26 projects rom 14 Member States were se-lected for funding during the period July 1997 to December 1999. They ocused mainly on the ollowing topics:

Economic development in areas with social problems;

Environmental action linked to economic goals;

Revitalisation of historic centres;

Exploitation of the technological assets of cities.

The URBAN Community Initiative 1994-2006 Two generations of URBAN Community Initiative programmesh ll d th U b Pil t P d th h t i l

knowledge and innovation in urban development and regenera-

tion. The URBAN Initiative aimed at drawing up and implementinginnovative strategies for regeneration in small and medium-sizedtowns and cities or o run-down urban neighbourhoods in largercities. In addition, URBAN sought to enhance and exchange knowl -edge and experience rom sustainable urban regeneration anddevelopment in the EU.

The URBAN I and II Community Initiatives have put the integrated ap -proach into practice in around 200 cities around Europe 18. They mainlyocused on physical regeneration o deprived urban neighbour-hoods, local economic development, environmental issues, mobilityand public space, local employment and cultural initiatives.

Between 1994 and 1999, the URBAN I Initiative nanced programmesin 118 urban areas with a total o 900 million o Community assist-ance. Around 3.2 million people lived in the supported areas andprojects ocused on the rehabilitation o in rastructure, job creation,combating social exclusion and environmental improvements 19.

Between 2000 and 2006, the URBAN II Initiative continued this ef -ort and commitment to support European cities in their search orthe best development and regeneration strategies. A total of 730million was invested in sustainable economic and social regenera-tion in 70 urban areas throughout Europe with the support o thisCommunity Initiative 20.

Resulting in a common European Acquis Urbain and URBAN main -streaming, the URBAN Community Initiatives emphasised a concen -tration o unding on selected target areas, the increased involvementof citizens and local stakeholders (shared responsibility), as well as astronger horizontal coordination of urban regeneration measures asmain elements o an integrated approach towards urban develop-ment. This approach is continued in the period 2007-2013.

Social and economic regeneration is part of thepackage.

Cl i d i hb h d


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Urban Pilot Projects and URBAN I and II programmes in the EU-15

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Urban Pilot Projects (1989-1999)

URBAN I programmes (1994-1999)

URBAN II programmes (2000-2006)

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For the rst time in the history o CohesionPolicy, all cities are potential bene ciaries o ERDFunding

The URBAN mainstreaming of 2007-2013For the programming period 2007-2013, and with the end o the Community Initiatives, the guiding principles of the URBANCommunity Initiative were included in the regulatory ramework for the Operational Programmes (OPs) of the Convergence andRegional Competitiveness and Employment Objectives (mainstream -ing)21. This important change allows for an integration of di erentsectoral and thematic policies in all cities throughout Europe inthe context of the Lisbon Strategy, the Sustainable DevelopmentStrategy and other EU priorities. It means that Member States andregions can continue to apply the success ul integrated approachof the URBAN Community Initiatives and invest in towns and cities

through mainstream Cohesion Policy Programmes 22. For the rsttime in the history o Cohesion Policy, all cities are potential bene -ciaries o ERDF unding23.

By now, European regions and Member States have already de -veloped their Operational Programmes, which provide a basis orthe strategic use of EU Structural Funds in 2007-2013. A substantialpart o the Operational Programmes include a strong element o sustainable urban development, which builds on experience gainedin this eld in Europe in recent years 24. The Operational Programmesnanced by the ERDF may also include in ormation on the approachto sustainable urban development, the list o cities chosen or ad-

dressing urban issues and the procedures or sub-delegation tourban authorities.

important to capitalise on these oppor tunities in the coming years.

The ERDF Operational Programmes make provision or a great varietyo actions, with ar-reaching scope, clearly responding to widely vary-

ing needs on the ground and the di erent economic backgroundsand historical contexts of Europe's cities. More urban operations willbe involved in Cohesion Policy projects in 2007-2013 than in previousprogramming periods. Over half of all ERDF Operational Programmescontain an explicit urban dimension, while around one quarter o all OPs have introduced speci c urban priority axes 25.

In the 2007-2013 ERDF Operational Programmes, three di erentgroups o measures can be identifed 26. The rst group aims topromote the regeneration o deprived and disadvantaged urban

neighbourhoods (URBAN-type actions). A second group of meas -ures relates to sustainable urban development in various thematicfelds: increased competitiveness, innovation, job creation, physi-

cal rehabilitation o urban areas and city centres, improvement o urban in rastructures such as transport and waste-water treatmentas well as housing in new Member States. The third group aims topromote a more balanced, polycentric development. It seeks todevelop networks o cities and to create links between economicallystrong cities and other urban areas, including small and medium-sized cities. Other actions can relate to metropolitan governance

or urban-rural linkages.

In over 300 Operational Programmes o Cohesion Policy that arenanced by the ERDF in the period 2007-2013, around 3% of totalplanned EU investment is clearly earmarked as urban (around 10billion). In absolute terms, in comparison to regions that fall underthe Regional Competitiveness and Employment Objective, almostthree times more money will be invested in cities and towns inregions that fall under the Convergence Objective. Around onethird o the Operational Programmes under the European TerritorialCooperation Objective address urban governance related to cross-border agglomerations, transnational urban systems and improvedterritorial governance 27.

The URBACT Programme 2002-2013With the Urban Development Network Programme, URBACT, the

tradition o the RECITE Programme has been continued to supportthe exchange o know-how and experience between key playersin urban policies across Europe 28. The objectives of the URBACT Programme are:

To provide an exchange and learning tool or policy decision-makers, practitioners and other actors involved in developingurban policies;

To learn from the exchanges between URBACT partners thatshare experiences and good practice;

Linking Berlin to Germanys smaller cities will helpensure a more balanced development.


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To support city policy-makers, practi tioners and Managing

Authorities of Operational Programmes in de ning action plans. The URBACT I Programme that was conducted between 2002 and2006 under the URBAN II Community Initiative was open to all townsand cities that had implemented either an Urban Pilot Project or anURBAN I Programme. In 2004 it was opened to all cities from the newMember States, as they needed guidance and knowledge to con rontthe vast challenges they were facing in urban development. A totalof 24.76 million was made available, of which 15.9 million camefrom the European level and 8.86 million from the Member States.In total URBACT I rallied 217 cities to work in 38 projects.

With the URBACT II Programme, the EU has expanded its support for

exchange between European cities during the programming periodof 2007-2013. With its total budget of almost 69 million (of which77% is co- nanced by the European Regional Development Fund),the URBACT II Programme will nance a total of 46 thematic networksand 14 working groups. To date, after a rst round of calls for propos -als in 2007/2008, 21 thematic networks and six working groups havealready been approved for funding under the URBACT II Programme. These projects involve 253 partners, o which are 181 cities (some o them being involved in two projects simultaneously).

Bringing together national authorities, regional authorities andcities from the 27-EU Member States, Norway and Switzerland, theURBACT II Programme is focused on improving the e ectivenesso urban development policies in Europe and strengthening thecommon concept of integrated urban development. With a view toactively contributing to the implementation of the (renewed) Lisbonand Sustainable Development (Gothenburg) Strategies, URBACT IIconcentrates on themes such as entrepreneurship, innovation, theknowledge economy, employment and environmental issues. EachURBACT II project is linked to one of the three main themes:

Cities, Engines of Growth and Job Creation; Cities, Social Inclusion and Governance;

Cities and Integrated, Sustainable Development.

The URBACT II Programme focuses clearly on taking advantageof and spreading knowledge. Several new features facilitate thissharing o in ormation:

The active involvement of Managing Authorities in URBACT IIthematic networks and working groups (to date, already morethan 200 Managing Authorities across Europe are a liated withthe projects, highlighting their interest in working together withcities on urban issues);

The obligation for each participating city to set up a LocalSupport Group to widen and deepen the involvement o localkey players in area-based regeneration;

The obligation for all participating cities to develop a Local

The Regions for Economic Change InitiativeSince 2006, the Regions for Economic Change Initiative (RFEC) haimed to speed up the implementation of sound ideas. It seeks tostrengthen exchange o experience and best practice in innovationamong European regions by introducing new ways to stimulate notonly regional but also urban networks like the URBACT projectsUnder the European Territorial Cooperation Objective, the initiativallows good innovative ideas to be disseminated rapidly into theOperational Programmes under the Convergence and RegionalCompetitiveness and Employment Objectives. One special feature of the Regions or Economic Change Initiative is the option o granting aso-called Fast Track Label to regional or urban networks. This label given to networks which intend to make a vital contribution to one o the 30 priority themes o the Initiative and provide a smooth testingground or policy ideas, and which have expressed their interest inworking closely with Managing Authorities and Commission Serviceand have ( nally) been assessed by the European Commission.

The Fast Track Networks (FTN) can address one of the followinseven themes among the 30 under the RFEC which are covered bythe URBACT Programme:

Managing migration and facilitating social integration; Integrating marginalised youth; Building healthy communities; Designing integrated policies on urban transport; Developing sustainable and energy-e cient housing; Achieving sustainable urban development; Re-using brown eld and waste disposal sites.

Every year, the most innovative regional projects in Europe thatwould also be inspiring to other regions are awarded by the EuropeanCommission with a prize, the so-called RegioStars. From 2010 on, theRegioStars Awards will also include a special category or innovativ

The URBACT II Programme focusesclearly on taking advantage o and spreadingknowledge

Sharing knowledge at the URBACT annual conference.


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EuroG eographi cs As sociati on f or the ad minis tra ti ve boun d aries

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Reg i o n s f o r E c o n o m ic C h a n g e : U R B ACT II Fa s t T r a c k N e two r ks

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Distribution of the networks partner cities and their regions, as coveredby their respective ERDF OPs (March 2009)

Building Healthy Communities - urban health network

HerO - Heritage as Opportunity : Sustainable management strategies for vital, historic urban landscapes

MILE - Managing migration and integration at local level

OpenCities - Openness and the competitive advantage of diversity

RegGov - Regional governance of sustainable integrated development of deprived urban areas

UNIC - Urban Network for Innovation in Ceramics

URBAMECO - The urban, social, economic and cultural regeneration of public housing estates in urban areas


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RegioStars will be joined by CityStars in 2010.

The Urban AuditLaunched by the European Commission in 1998, the Urban Auditaims to enable assessment o the state o individual EU cities andto provide access to comparative in ormation rom those cities 30.Following a pilot project or the collection o comparable statisticsand indicators or European cities, the rst ull-scale European UrbanAudit took place in 2003, for the then 15 Member States of the EU.In 2004, the project was extended to the 10 new Member States

plus Bulgaria, Romania and Turkey. Under EUROSTAT coordination,the work o the Urban Audit involves all national statistical ofcesas well as some of the cities themselves.

The second ull-scale Urban Audit took place between 2006 and2007 and involved 321 European cities in the EU-27, along with 42additional cities in Norway, Switzerland, Croatia and Turkey. The UrbanAudit contains data across the ollowing domains: Demography,

Social Aspects, Economic Aspects, Civic Involvement, Training a

Education, Environment, Travel and Transport, In ormation Societand Culture and Recreation. With its broad collection of comparabledata or European cities, the audit delivers a sound statistical basisfor urban policy-making.

By 2010, the Urban Atlas 2008-2010 will o er detailed digital mapof more than 300 Urban Audit areas based on satellite images. Theobjectives are to acilitate the comparison o di erent urban areasin the EU and to provide a better insight into the urban structure o the EU. At the local level the Urban Atlas will provide city plannewith up to date spatial in ormation on land use and land cover, o -ering new tools to assess risks and opportunities and to monitor

development trends in their wider regions.

Regions or Economic Change seeksto strengthen exchange o experienceand best practice in innovation amongEuropean regions


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Manchester City Profile

From Shrinking Cities Working Paper Series, March 2004 pp. 32-34

By Phil Misselwitz

In this city profile, the author balances enthusiasm about Manchester s relatively

rapid image makeover due in large part to the influx of an artistic community

into the inner city when space was cheap and readily available- with warnings

about the potential polarizing economic and social effects of a branded city.

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Regrowth of a Shrinking City


By Ed Ferrari and Jonathan Roberts

Using a range of economic indicators, this article explores the social and economic

ramifications of city shrinkage, including the effects of population and industrial

decline on regional migration patterns, public and private transportation, the

shape and size of the workforce, and the housing market. It concludes that, whileManchester is impossible to think of in any other terms than as an urban

success, it has proven difficult to distribute the benefits of the citys success

uniformly across its population.

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Manchester England


By David Haslam

In this short and conversational piece, Manchester native and former HaciendaClub DJ David Haslam argues that Manchester owes much of its resurgence to thealternative artistic and cultural scene that centered around the grew inManchester in the mid to late 1980s. Haslam encourages policymakers and cityofficials to cultivate cultural activity by providing ongoing opportunities andresources (including space) for cultural actors.

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Smarter, Stronger Cities: UK Urban Policy Innovations and Lessons for the United

States

Report issued by the Metropolitan Policy Program at the Brookings Institution

By Chris Webber and Alan Berube

This report highlights the relevance of recent urban policy successes in the United

Kingdom for US policymakers. The UK, in no small part due to strong national

leadership, has taken the lead in promoting innovative workforce and sustainabledevelopment strategies, including congestion pricing, to boost the economic

vitality of urban areas. The authors account for differences in government and

funding structures when outlining useful takeaways for US officials.

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1

Despite the clear

differences

between the UK

and the US,

there are ample

opportunities for

policy learning

between the two

countries on

issues of concern

to cities and

urban areas.

GLOBAL INNOVATIONS IN METROPOLITAN POLICY| THE METROPOLITAN POLICY PROGRAM AT BROOKINGS

Executive Summary A decade of policy innovation in the UK has stimulated population and economic growth in manyof its cities and urban areas, helping them outpace the performance of most US counterparts. Thecombination of active leadership from the UKs central government on issues like making work payand reducing poverty, greater flexibilities for cities and regions on issues like regeneration andtransportation, and a national bully pulpit strongly supportive of urban areas, stands in contrastto the lack of bold, strategic thinking at the US federal level that could unleash the potential of American cities and metropolitan areas. Yet despite the governmental and cultural differencesbetween the two nations, the past several years of US policy exports adapted and improved inthe UK suggest the potential for enhanced transatlantic exchange. This brief points to severalareas in which US federal policymakers might now import lessons from the UKs efforts to build

smarter, stronger cities.

Smarter, Stronger Cities:UK Urban Policy Innovations andLessons for the USChris Webber, Centre for Cities (UK)Alan Berube, Metropolitan Policy Program at Brookings

BROOKINGS | June 2008

Introduction

M any of the UKs cities have experienced a renaissance over the past ten years. Large-scale investment has transformed city centers in places like Birmingham andManchester; Sheffield and other former industrial cities have enjoyed strong employ-ment growth; and many cities, such as Bristol and Brighton, have seen steady

population growth. The UKs national government has played an important role in this revival, withmore investment and smarter policies. Though disparities remain, cities are now seen as positive eco-nomic drivers of, rather than drags on, the national economy. Today, UK policymakers are focused on

addressing these disparities by boosting basic skills, increasing housing supply, improving public trans-portation, and dealing with economic inactivity in disadvantaged groups. 1

Some US cities have done better in recent years as well, attracting new jobs, new residents, and newinvestment. Progress remains elusive in many others, however, and suburbs continue to dominate thegrowth and development landscape. Variation abounds, and almost no metro area has performed wellacross a full complement of economic, social, and environmental benchmarks. Yet unlike in the UnitedKingdom, the national government in the United States has largely failed to play a constructive role inadvancing the fortunes of the nations major cities and urban areas. 2

Behind these comparisons, the UK and US systems of government differ substantially. In the UK,central government collects and distributes around 95 percent of all public funds. 3 Historically it has

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taken the lead on all major policies affecting cities, including health, education, crime, transport andeconomic development. The last 10 years have seen a partial devolution of power to Scotland, Wales,Northern Ireland and Englands regions, but central government still holds most of the cards on policy,funding and decision-making. Overall, the UK remains one of the most highly centralized countries inthe industrialized world.

In the US, by contrast, the federal system limits the national governments capacity to influencepolicies and conditions within cities. In many of the policy areas noted above, the US national govern-ment takes a back seat to state and local governments in funding and implementation. But thereremains considerable scope for Washington to shape the development of US cities through its myriadinvestments, rules, and information tools.

Despite the clear differences between the UK and the US, there are ample opportunities for policylearning between the two countries on issues of concern to cities and urban areas. In recent years, theflow of ideas has mostly gone in one direction. The UK has borrowed and adapted several economicpolicy innovations developed in the US, such as the Earned Income Tax Credit, the New Markets TaxCredit, and Business Improvement Districts. Few innovations have traveled in the opposite direction.

Building more prosperous cities and metropolitan areas is a central concern of the Blueprint for American Prosperity, an initiative launched by the Metropolitan Policy Program at Brookings. The ini-

tiative seeks to inform decision-makers at the US federal level about what innovations at the state andlocal levels, and internationally, can teach the US about efforts to secure greater prosperity throughstrengthening the performance of metropolitan areas. Given its recent success in revitalizing many ofits urban areas, and its efforts to match metropolitan governance structures with functional economicareas, the UKs experiences in this area offer some useful lessons for US policymakers.

This paper explains how a combination of strong leadership, better coordinated funding, and inno-vative policies have helped to support positive change in the UKs cities and city-regions over the past10 years. It then reflects on the implications of several of these UK policies for a US federal policyagenda to achieve robust economic, socially inclusive, and environmentally sustainable growth in UScities and metro areas.

2 BROOKINGS | June 2008

0

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14

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

UK

France Germany

US

U n e m p

l o y m e n

t r a

t e

Figure 1. Unemployment rates in the UK, US, France, and Germany, 19902007

Source: HM Treasury (2008)

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Recent economic performance in the UK and its citiesThe UK economy overall has performed relatively well over the past ten years. Growth has beenstronger and more stable than for key trade partners, such as France and Germany. Unemploymenthas also fallen significantly, though it has risen slightly since 2005 (see Figure 1). However, the currentslowdown in the international economy, continued financial market turbulence, and uncertainty in thehousing market are all likely to curtail growth over the next few years. 4

Cities are Englands residential and economic hubs, with 58 percent of people living in recognizedcities and 63 percent of people working in them. 5 But in England, as in the US, the functionaleconomies of cities tend to stretch far beyond their political boundaries. Nearly 75 percent of Eng-lands population lives in city-regions (metro areas in the US), while nearly 80 percent of people workin them (see Figure 2). 6 Though more suburban in its orientation, the US is just as metropolitan anation as England, with 83 percent of people living in US metro areas, and 85 percent of peopleworking there. As in the US, however, fragmented governance structures across the UKs wider city-regional areas have led to policy coordination problems that have acted as barriers to effective

decision-making.7

The UKs national growth story has been reflected in the revitalization of its urban areas, withmanybut not allseeing major improvements in their economic performance. London and the SouthEast of England in particular have surged ahead, with the benefits of Londons strong performance(especially in financial services) felt in many of the smaller cities surrounding the capital. 8 In the widerSouth East region, cities like Reading (about half an hours train journey to west of the capital) andBrighton (about an hour to the south) have seen strong growth, with employment in both cities up bymore than 20 percent since 1995. 9 And some large cities in the North of England have also experi-enced significant improvements, with employment growing strongly in ex-industrial cities like Leeds(15 percent) and Sheffield (25 percent) since 1995.

3BROOKINGS | June 2008

Population of England(2006)

less than 50,000

50,000 100,000

100,000 250,000

250,000 500,000

500,000 1 million

1 million 3 million

3 million +

Lee d s

L ondonBr is tol

L iver pool She ffi e ld

Newc a s tl e

N otting h a m

B irm ing h a m

M an ches t er

Figure 2. Major Population Centers in England, 2006

Source: NOMIS

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Patterns of growth have been uneven in the UK, both between and within cities. 10 In particular,many smaller cities in the North have struggled, with places like Bradford and Burnley experiencingemployment growth of less than 5 percent since 1995. Meanwhile, even seemingly high-performingcities continue to suffer from serious deprivation. For example, although Manchester is frequentlyseen as the best example of the UKs urban renaissance, it is also home to many of the UKs poorestneighborhoods. 11


98.0

98.5

99.0

99.5

100.0

100.5

101.0

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102.0

2000 2001 2002 2003 2004 2005

Manchester Sheffield Newcastle Liverpool Birmingham

P o p u l a t i o n ( 2 0 0 0 = 1 0 0 )

88.0

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2000 2001 2002 2003 2004 2005

Chicago Pittsburgh Philadelphia Baltimore Detroit

P o p u l a t i o n ( 2 0 0 0 = 1 0 0 )

Figure 3. Population Trends in Selected UK and US Cities, 20002005

UK Cities

US Cities

Source: State of the Cities Database

Source: US Census Bureau Population Estimates Program

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Yet the population rebound of the UKs large, older industrial cities in recent years, after decadesof decline, has been quite impressive compared to some US counterparts. After steady decreasesthroughout most of the 1990s, cities such as Manchester, Sheffield, Newcastle, Liverpool, and Birming-ham have all experienced up-turns in population since the late 1990s. US cities such as Chicago,Pittsburgh, Philadelphia, Baltimore, and Detroit are largely on better footing now than 15 years ago,but have not experienced the same magnitude of population revitalization as their UK cousins (Figure

3). Moreover, some of these US cities and their wider regions have shed jobs in the 2000s, particularlyin the manufacturing sector. 12

It bears asking then, what policy choices the UK has made that have contributed to the improvedsituation of its cities and urban areas. The following discussion highlights six key areas in which the UKcentral government has implemented policies that have enhanced, through both direct and indirectmeans, the fortunes of cities.

Using the bully pulpit: Blair, Brown, and PrescottUntil the 1990s, the UKs major cities received relatively little attention from central government. Theindustrial decline of the post-war years created serious economic and social problems that wereandmostly still aredeeply entrenched. Central government had not rolled back urban programs to thedegree that the US federal government did during the 1980s, but the economic health and perform-ance of UK cities was not considered a top-level political priority. 13

Building on the city development efforts initiated by Michael Heseltine under the previous Conser-vative government, the Labour government made physical regeneration, poverty and economicgrowth in underperforming areas major policy priorities. The government has placed greater emphasison promoting regional economic growth, dealing with social disadvantage, and regenerating the physi-cal environment, all of which have fed into a stronger focus on cities and urban areas.

Gordon Brown, first as chancellor and now as prime minister, has promoted policies to boostproductivity and enterprise, and to reduce child poverty, issues that have direct implications forUK cities

As prime minister, Tony Blair established the Social Exclusion Unit, which introduced a major focuson stimulating the renewal of deprived inner-city areas, and developed a range of policies aimed athelping socially excluded groups, such as disadvantaged young adults

John Prescott, the former deputy prime minister, set up an Urban Task Force of experts to advisethe government on the physical aspects of urban renewal; promoted billions of pounds worth ofinvestment in housing, transport and the built environment in distressed (mostly urban) areas; andhosted major national Urban Summits to report on the progress of cities and foster a network ofcity-builders across the UK

The personal commitment of national leaders like Blair, Brown and Prescott to urban areas signifi-cantly strengthened the position of cities in public policy. Dealing with issues of poverty and socialexclusion in deprived neighborhoods has become more embedded in central, regional and local gov-ernment policies. Cities are now seen as positive economic drivers of, rather than drags on, thenational economy.

Progress has been uneven, however. Efforts to promote enterprise in deprived areas have had onlymarginal impact, with no clear rise in the number of business registrations per head. Although citieshave risen up the political agenda, progress on empowering and raising the profile of city leaders hasvaried significantly. With the exception of the Mayor of London, a post created in 2000, city leaders

still have limited power over spending decisions and tend to have a relatively low media profile. As aresult, both the Labour government and Conservative opposition are currently considering the meritsof a new generation of big-city elected mayors outside of London.

Recent years have not seen similar engagement by the US federal government in promoting thehealth of the nations cities. The US cabinet agency with the ostensible goal of strengthening citiesand urban areas, the Department of Housing and Urban Development, has shrunk greatly in size andinfluence over the past decade. Stronger leadership from key decision-makers in Washington on pro-moting the health and vitality of US cities and metro areas could help them overcome barriers togrowth and development, and bolster the national economy in the process. 15



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Making work pay: Tax credits, minimum wage, and support for the unemployedLike many other countries, the UK struggles with the interrelated problems of unemployment andpoverty, especially child poverty. During the 1980s and 1990s, unemployment and poverty increasedsignificantly. 16 By 1996-97, 34 percent of the UKs children were living in relative poverty, the highestrate in Europe. 17 These issues are particularly salient for urban areas, as both unemployment andpoverty are heavily concentrated in the UKs cities. For example, of the 89 most income-deprived localauthorities (cities and towns) in England, 87 are located in cities. 18

Over the last decade, the Labour Government has made reducing long-term unemployment andpoverty key policy objectives, and has introduced an ambitious target to halve child poverty by 2010.The government has introduced a number of welfare and labor market reforms under the banner ofmaking work pay, including a national minimum wage, a more comprehensive range of active labormarket policies, and a system of in-work tax credits.

The UK introduced a national minimum wage in 1999. The independent Low Pay Commission ana-lyzes the impact of the minimum wage and makes an annual recommendation to government onwhere the rate should be set. The current rate is 5.52 per hour (roughly $11 at current exchangerates), substantially higher than the US federal minimum wage (currently $5.85 per hour). Increasesare not required by law, but the rate has been increased every year since its introduction, withincreases well above the rate of average earnings growth between 2004 and 2006. As yet, research

has detected little or no negative impact on unemployment.19

The idea for in-work tax credits was borrowed from the Earned Income Tax Credit (EITC) system inthe US, but there are significant differences between the US and UK models. In the UK, there are twoseparate credits, a Working Tax Credit and a Child Tax Credit. The UK system is considerably more gen-erous (and more complex) than the EITC, and provides stronger support for low-to-middle incomefamilies. 20 Moreover, the UK credits are paid on a monthly rather than an annual basis, helping familiesto meet ongoing expenses during the year.

The UK government has also introduced New Deal programs to provide tailored advice and sup-port for hard-to-reach unemployed groups, including young people, single parents, and the disabled.

Labor market performance in UK metro areas has improved considerably over recent years, and


10

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199697 199798 199899 199900 200001 200102 200203 200304 200405 200506

Children

Working-age parents

Working-age non-parents

All

P e r c e n

t a g e

b e l o w 6 0 % n a

t i o n a

l m e

d i a n

i n c o m e

Figure 4. Relative Poverty Rate by Group, UK, 1996-97 to 2005-06

Source: M. Brewer and others, Poverty and Inequality in the UK: 2007

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this has helped to reduce poverty. Part of this should be attributed to the UKs economic growth overthe past 10 to 15 years, but the governments policies have played an important distributional role.

The minimum wage has increased incentives to work and helped to bring down poverty,ensuring that the lowest income groups have achieved above-average earnings growth. 21

New Deal programs have also done quite well; research has shown that the New Deal forYoung People increases chances of finding work by 20 percent. 22 Tax credits for lower-

income families have also achieved success, with evaluations showing that they havehelped increase the supply of single parents and childless adults in the labor market by 5percent and 2 percent, respectively. 23 In part as a result, the UKs overall employment ratehas recovered strongly since the recession of the early 1990s. And although the UK looksunlikely to meet its target to halve child poverty by 2010-11, relative poverty has declinedsignificantly since the late 1990s (Figure 4). 24

Despite this progress, there remains much to do to fully address unemployment andpoverty in the UK and its cities, with low employment rates still a major problem in manyareas. The UK government is now considering giving cities more power to deliver thisagenda through more flexible government grants (see section below on Flexible Fund-ing). Still, central government in the UK has taken a leading role by addressing theseproblems with national policies, which in turn have redounded to the benefit of cities andtheir residents.

US cities suffer similar, well-known problems of long-term unemployment and poverty.While a majority of Americas metropolitan poor now live in suburbs, poverty rates in cen-tral cities remain twice as high as in suburbs. US federal policymakers have shown lesswillingness to aggressively expand income and employment support for poor and working-poor families. The EITC was last enlarged significantly in 1993 and remains small forworkers without children; the minimum wage was increased in 2007 but was not indexedto inflation, ensuring that its value will erode in future years; and funding to support thehard-to-employ has fallen in real terms in recent years. 26 US policymakers would benefitfrom taking a look at how their own ideas have been adapted and improved in the UK, toprovide a more targeted approach to dealing with long-term unemployment and poverty, and ulti-mately to improve the social and economic health of the cities and metro areas where economicallydisadvantaged populations reside.

Growing sustainably: Cities and planningLike the US, the UK has struggled with the growth and development patterns of its cities and regions. 27

Improving the planning system and the capacity of city government planners remains a major chal-lenge for UK policymakers, but the approach adopted over the past two decades has helped to containsprawl and has prevented cities like Birmingham and Leeds from experiencing the sort of massivedecentralization evident in cities like Atlanta and Houston.

Throughout the 1990s and 2000s, successive governments have issued planning statements, whichtogether set out the planning policy framework for the UK. While local planning officials assess spe-cific cases, they receive a strong national policy steer from these planning statements, which haveincreasingly focused on promoting smarter growth.

One of the most successful of these statements established a town center first development prin-ciple, and was issued in 1996 by the Conservatives. This policy aims to limit the number of out-of-town,

big-box retail developments. Retailers and developers first have to prove that an in-town develop-ment is not viable, before they can develop edge-of-town or out-of-town sites. Out-of-town sites areseen as the last resort, whereas in the US they remain the norm for new retail developments.

The town center first principle has been widely acknowledged as a success, and has played animportant role in limiting urban sprawl and underpinning the physical regeneration of city centers.Research shows that the policy significantly reduced the number of planning approvals granted to out-of-town planning applications, and helped increase the proportion of total retail floor space found intown and city centers from 25 percent in the mid-1990s to 34 percent in 2003-04. 28

In a similar vein, the UK government has also increased housing density and brownfield develop-ment. The housing density targets stipulate that new housing developments should be at a minimum


Over the last decade,the UK government

has made reducing

long-term unemploy-

ment and poverty key

policy objectives.

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density of between 12 and 20 units per acre, depending on the character of the area in question. Onbrownfield land development, the government introduced a target to have 60 percent of all new resi-dential developments sited on brownfield land by 2008. The UK has made excellent progress againstboth of these targets. The brownfield target was met in 1999, and by 2006, 74 percent of new develop-ments were taking place on brownfield land. On the density target, by 2006 new dwellings were beingconstructed at an average density of 40 units per hectare nationwide, much better than in 2002 when

all regions except London were registering density figures of below 30 units per hectare. 29The UKs planning system is far from perfect, and is still very complex. For example, businesses and

policymakers frequently complain that it takes too long to get planning consent, especially for majordevelopments and infrastructure projects. The 2006 Barker Review (see below) recommended numer-ous changes to the planning system, including the creation of an Infrastructure Planning Commission(IPC) to oversee major projects such as airports and power stations.

Across the US, metropolitan jurisdictions continue to employ traditional land-use regulations likezoning and comprehensive planning. However, other tools associated with land-use reformssuch asgrowth management and infrastructure regulationare less common. This may reduce affordablehousing opportunities, compromise sustainability, and fuel rapid growth in unplanned, low-density, car-dependent suburbs. For US states, the English example shows that clear guidelines and targets can beeffective in controlling sprawl and shaping development: by prioritizing downtown development; pro-moting building at higher densities; and insisting that land is recycled more efficiently. Nationalgovernment in the US has less scope to engage directly in planning decisions, but has other significantpolicy tools at its disposal that shape metropolitan growth, including its investments in transportation,affordable housing, and economic development. It should use these levers to encourage cities andstates to adopt smarter growth planning principles like those seen in the UK.

Flexible funding: The move to smarter grantsCompared to cities in the US, the UKs cities have very little financial independence from central gov-ernment. For every 1 spent by Bristol City Council, for instance, only 25 pence comes from localtaxpayers, with the remainder of their budget handed down through central government grants. 30 Inthe US, for every $1 spent by cities, 70 cents comes from local sources, with an average of 5 cents

from the federal government and 25 cents from states. 31

In both countries, however, grants from the national government have historically comein numerous individual packages, each with its own targets and reporting requirements.Local and regional decision-makers have faced a bewildering array of funding pots that aretoo complex and inflexible to meet their needs.

To combat the fragmentation of funding in urban regeneration, the UK government hasprogressively simplified its regeneration funding processes over a number of years.Instead of having numerous departments make separate, uncoordinated investments, cen-tral government has recently taken steps to pool some grant funding and started todelegate greater spending decisions to cities and regions. Regeneration financing hasbecome more responsive to local needs, and helped cities lever in additional funding fromother public, private and European Union (EU) sources. 32

One of the first examples of this smarter approach to funding was the Single Regenera-tion Budget (SRB), which was established in 1995 and ran until 2007. Over this period, theSRB channeled more than 5.7 billion of public money into regeneration schemes, and

leveraged in an additional 18 billion from other public, private and EU sources.SRB funding was relatively small-scale, but it was an important first step towards thesimplification of central government funding for cities. It combined 20 funding streamsfrom several government departments to target issues like skills, business growth, commu-nity safety, and public space improvements. In Greater Manchester, SRB investmentshelped to revive rundown residential areas, and played a key role in regenerating the East-side area of the city in preparation for the 2002 Commonwealth Games. 33 In Sheffield, SRBmoney was used extensively in the revitalization of the city center, both as a means ofdirect investment in the physical environment and as a tool for leveraging other public andEU monies. 34


Local officials in the

UK receive a strong

national policy steer

from planning state-

ments, which have

increasingly focused

on promoting smarter

growth.

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The process of funding simplification has now evolved further. Local Area Agreements (LAAs)were introduced in England in 2006, and all principal local authorities now receive funding via thischannel. By 201011, approximately 5 billion in grant funding per year will be channeled throughthese arrangements. 35 LAA funds are drawn from numerous government departments, including edu-cation, health, transport, and local government. 36 The UK government is now introducing Multi-AreaAgreements (MAAs) in England. These will allow groups of local authorities in city-regions to poolfunding and decision-making powers in key policy areas, such as transport and skills, and improvethe efficiency of their strategic decision-making and spending across functional economic areas.This could help to overcome some of the policy coordination problems that have held back growth inEnglands urban areas.

The UKs experience suggests that pooling and simplifying central government grant funding cangive metro-level actors the flexibility needed to use investment more effectively. The US might con-sider how its funding for physical and economic development could better empower metro-leveldecision-makers to deliver improved outcomes across related policy areas.

Combating congestion: Road pricingLike many other major cities, London suffers from serious traffic congestion. In order to combat con-gestion, and to raise money for investment in public transportation, Londons former Mayor, Ken

Livingstone, introduced the Congestion Charge in 2003 amid widespread skepticism. The charge wasimplemented with reluctant support from central government, which paid the set-up costs for the sys-tem, and increased bus subsidies to give Londoners more transportation options ahead of the chargesintroduction. The charge is part of a wider transport strategy with economic, social, and environmen-tal objectives. 37

Currently, the Congestion Charge requires motorists to pay a levy when entering the Cen-tral/Western London area between 7 am and 6 pm on weekdays. The most recent figures show thatthe scheme generates 213 million per year in revenue, with 90 million going to administration andthe remainder invested in public transportation, especially the bus network. 38 Recent research byTransport for London shows that the number of commuters entering central London by car during the


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Figure 5. Commuters Entering Central London by Bus and Car During Morning Peak(7 am to 10 am), 1991-2006

Source: Transport for London

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morning peak has fallen by 35 percent since 2002, while the number entering by bus has increased by24 percent (Figure 5). 39 The distribution of the economic costs and benefits of the Congestion Chargeis complex, but the most recent assessment finds that the scheme has created a small net benefit forthe London economy. 40

A few other UK cities are now exploring the idea of introducing some form of road pricing. GreaterManchester and Cambridge have progressed the furthest; both cities are considering schemes which

charge for the use of main roads into the city at peak travel times. There are many different models ofroad pricing in cities, and there is a debate to be had about how Londons charge might be furtherreformed to increase the benefit it brings to the economy.

Many of the largest cities and metro areas in the US suffer from chronic traffic congestion. 41 To date,five urban areas (Miami, Minneapolis, New York, San Francisco, and Seattle) have entered into partner-ships with the federal government to explore congestion pricing; New Yorks state assembly has,however, blocked Mayor Bloombergs plans for the city of New York, and some of its funding has beenredirected to Chicago. 42 These and other US cities might learn from Londons experience when settingout their objectives, particularly with regard to increased investment in transit, and making a case forfederal government support.

National policy reviews: Developing an evidence baseOne of the defining characteristics of the Labour government has been its emphasis on evidence-based policy. Gordon Brown has been the driving force behind the governments use of large-scale,independent policy reviews, commissioning about 30 of them during his time as chancellor.

These reviews have usually been in step with government thinking, and have been a useful way ofaccelerating policy development. They have been led by respected business leaders, academics orother high-profile public figures, giving them focus and momentum. They have also been staffed bycross-departmental teams of civil servants and experts, usually based inside the Treasury, helpingthem to avoid getting bogged down in inter-departmental inertia.

Several major reviews have reported over the past two years and have helped to shape UK urbanpolicy:

Eddington Transport Study (2006) 43Sir Rod Eddington, former Chief Executive of British Airways, led this report which emphasized theimprovements that could be made through smart transportation investments at key urban pinchpoints rather than in expensive, large-scale projects such as high speed rail links

Leitch Review of Skills (2006) 44Lord Sandy Leitch, a high-profile businessman who has been heavily involved in national skillsdebates, focused his review on the need for local, city and regional decision-makers to addresstheir basic and intermediate skills shortages by making skills provision more demand-led

Barker Review of Land-Use Planning (2006) 45Kate Barker, former Chief Economist for the Confederation of British Industry and member of theBank of Englands Monetary Policy Committee, led this review which looked at how the UKs plan-ning system could be improved by making it more efficient and responsive

Lyons Inquiry on Local Government (2007) 46Sir Michael Lyons, a former Chief Executive of Birmingham City Council, and now Chairman of theBBC Trust, led an inquiry which examined how local and city-regional financing and governancesystems could foster better public services and infrastructure

Sub-National Review of Economic Development (2007)47

Treasurys review reported on how different levels of governmentlocal authorities, regional agen-cies and central governmentcould deliver stronger economic growth in cities and regions aroundthe UK

These reviews and others were further supported by an extensive series of in-depth economicreports issued by the Treasury under Chancellor Gordon Browns leadership, including examinations ofthe role of the UK in the global economy, skills needs in the UK workforce, and the importance of city-regions to UK economic growth. All fed into the governments wider 2007 Comprehensive SpendingReview, the governments budgetary template for the period from 2008 to 2011. 48 The reviews haveplayed an important role in analyzing challenges, evaluating options for change and informing discus-

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sions about spending and public service reform. Importantly, they have also helped to reshape therelationship between Whitehall and the regions, adopting a stronger metro/city-regional focus ontransportation and skills, for example. Given the scale of challenges facing US cities and regions on awide range of issues, the US could gain from a similar series of independent, evidence-based policyreviews to drive forward reforms in the next presidential administration and Congress.

Implications for the United StatesAfter a decade or more in which transatlantic policy transfer has largely moved west-to-east, now is anopportune time for the United States to learn from the policy experiences of the United Kingdom. Thisbrief suggests multiple ways in which UK efforts to build stronger city-regions might guide a US fed-eral policy framework for maximizing the performance of its metropolitan areas.

Using the bully pulpitIt is still unclear whether the upcoming US presidential and Congressional elections willyield vocal champions for cities and metropolitan areas like Blair, Brown, and Prescott inthe UK. Though 83 percent of Americans live in cities and suburbs that contribute an evengreater share of the nations economic output, the small-town/rural idyll in American poli-tics and governance still holds great sway, and urban policy most often implies narrowstrategies to help impoverished inner-city communities.

Yet all US communities and their residents would benefit from a smarter metropolitanpolicy. That does not mean pouring or redirecting massive new resources into our cities.Rather, it entails investing wisely in the assets that drive our economy forward and helpensure we grow in more inclusive and sustainable ways: innovation, human capital, infra-structure, and quality places. 49 Because US metropolitan areas gather the bulk of theseassets, they have much to gain from a new partnership in which the federal governmentleads on issues of national importance like immigration, climate change, and critical infra-structure; and empowers city-regions to tackle their own specific challenges in areas suchas education, cluster-led economic development, and affordable housing.

In that sense, a new Administration and Congress in 2009 focused on enhancing the fundamentaldrivers of American prosperity would not necessarily look like the UKs urban champions, but theiractions could yield similar benefits for urban places.

Making work payThe UKs policies to enhance incomes for low-wage workers effectively imported elements of, and thenimproved upon, US policy innovations like the Earned Income Tax Credit (EITC) and welfare reform.Today, a low-income working parent with two children could earn more than three times as much viathe Working and Child Tax Credits and Child Benefit in the UK as a comparable parent would in the USvia the EITC and Child Tax Credit. 50

If America hopes to achieve progress similar to the UK in reducing childhood poverty or engaging alarger share of its adults in the labor market, it should follow that nations lead in boosting supportsfor low-income workers. 51 For instance, the federal government could expand the EITC to reach morechildless workers, relieve the marriage penalty on dual-earner low-income couples, and provide addi-tional assistance to low-income workers with three or more children. It could also deliver the credit ona periodic basis, as the UK does, to more workers in order to help them meet the day-to-day, week-to-

week costs of raising a family. Such changes would have direct benefits for major US city-regions,where about 60 percent of EITC recipients live today. 52

Growing sustainablyThe United Kingdom has moved aggressively to address sustainability challenges through housing,land use, and transportation policies. As the worlds largest per-capita emitter of carbon dioxide, theUnited States must respond to the challenges of climate change in a much more serious way than ithas to date. Certainly, pricing carbon to reflect its full range of economic and environmental costs,through a nationwide tax on emissions or a cap-and-trade system, could go a long way toward re-ori-enting development in support of quality, sustainable places.


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America could also borrow from the UKs recent moves to favor denser development in existingplaces as a mechanism for reducing its own carbon footprint. The sort of centralized density andbrownfield targets and town center first rules employed in the UK have little chance of beingadopted at the national level in the United States, where land-use planning is much more localized. Yetthe federal government could use its considerable leverage to put transit and highway investments ona level playing field, to bend housing growth toward corridors served by transit, and to require housing

planning to be joined up with transportation planning at the metropolitan scale.The United States should also, as the UK has, embrace transportation pricing and related market

mechanisms to achieve sustainable growth goals, and enhance economic efficiency. The US federalgovernment has begun to stimulate these schemes in a handful of metropolitan areas through theUrban Partnership Congestion Initiative (though it unfortunately used existing federal transit funds tohelp pay for the initiative). Based on positive experience abroad, the next Administration and Congressshould lay out a bold, flexible policy for metropolitan road pricing that includes a range of strategies,permitting US city-regions to experiment with the best mix of pricing tools for their areas. 53

Funding FlexiblyThe UKs success with the Single Regeneration Budget has helped pave the way for further simplifica-

tion of central government funding for its city-regions. Yet in areas such as economicdevelopment, workforce development, housing, and transportation, US federal policies,rules, and stances remain rigidly stovepiped despite the fast-paced, integrated nature ofour metropolitan economies. 54

US federal policy must do more to empower metropolitan decision makers to resolvetheir own specific challenges, backed by clear outcome-based targets to ensure that flexi-bility and accountability go hand in hand. In the transportation realm, for instance, asignificantly greater share of federal dollars should be delivered directly to MetropolitanPlanning Organizations (MPOs), in recognition of the economic primacy of metro areasand growing analytical capacity of MPOs. This increased spending authority should also beaccompanied by increased measurement and accountability for how funds are spent withan eye toward growing the analytical capacity of MPOs.

Rather than funding highways and transit

cities in transition stakeholder briefing materials final

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