The financial pressures councils are facing during a period of political uncertainty have interrupted the progress of many much-needed regeneration projects. Complex and competitive bidding processes are also making it difficult for councils to secure the funding they need.
Despite these ongoing challenges, councils know that the social, economic and environmental benefits that regeneration projects can bring for local communities are worth fighting for. Completing projects won’t come easily though, and councils must ensure they carry out the necessary due diligence early if regeneration is to reach fruition.
Barriers to regeneration
Councils face several hurdles when it comes to regeneration, such as squeezed budgets and the general lack of resources stemming from funding cuts and redundancies. Whilst hiring external consultants can reinforce staff efforts, it brings additional costs that some councils simply can’t afford. In some areas of the country, local authorities with borders or ports are having to prioritise emergency housing for homeless people and asylum seekers, pushing regeneration to the wayside.
In the last six months, 77 per cent of councils cancelled, postponed and/or scaled back regeneration projects, and nearly half expressed concerns about their capacity to secure funds in the year ahead. The Government’s Levelling Up Fund (LUF) has supported the development of several regeneration projects, but this is a small comfort given the high level of demand and the location-dependent availability of LUF monies. To be eligible for funding, councils must secure match funding of between 10 and 40 per cent of the total bid cost, and gap funding may also be required to complete projects.
What approach should councils take to regeneration?
Successful regeneration projects can restore local economies by driving employment, attracting inward investment and restoring valuable community hubs. However, to get plans off the ground, councils must prepare with care.
They should start by assessing local planning policy frameworks and identify areas that might be ripe for regeneration. Even if seed funding is obtained, the planning, procurement, subsidy control, and construction requirements of specific projects can be challenging to navigate for councils. Forming joint ventures with private sector parties is a potential solution but it’s important to comply with subsidy controls, and contracts awarded to private sector organisations must represent the best value for taxpayers.
Before seeking funding, councils should undertake a thorough scoping exercise, including an assessment of the available funding options. For instance, if LUF monies are not available, could grant funding be obtained through Homes England or other similar avenues? Third-party investment is more likely to be secured if due diligence has been carried out thoroughly as this will encourage lender, developer and market confidence. Local authorities with a sound and well-considered plan, who can demonstrate ROI, will stand a much better chance of securing the buy-in and funding required to get their plan underway.
Councils should assess suitable sites with care when developing a business case for regeneration. Although Brownfield regeneration is often portrayed as an environmentally friendly option, councils may lack the resources to support these schemes, which can take years to deliver if land remediation work is required at the outset. Considering the common law principle, ‘polluter pays’, councils should aim to identify who is responsible for cleaning up the site and where the required funding will come from.
Key takeaways
Taking a proactive approach and seeking specialist support can make all the difference when it comes to realising your regeneration vision. With a legal expert on board, councils will be able to develop a robust and well-considered plan, which is more likely to secure the buy-in and funding needed to get off the ground.
Here are some tips to guide local authorities looking to realise their regeneration vision:
- Prepare a robust plan and consider potential governance control issues.
- Ensure detailed and comprehensive due diligence is completed at the outset.
- Seek specialist guidance to steer the project’s delivery.
- Consider local planning policy frameworks when looking for suitable sites.
- Assess prospective sites with care.
For more information
For more information, contact Emma Lloyd.