Local authorities have been charged with bringing the Government’s levelling-up agenda to fruition.
The intention is for long-term partnerships with institutional investors to be the driver of regional regeneration.
With more than £10 billion invested, including £130 million in the UK’s largest urban regeneration project at Wirral Waters, in North West England, the company I lead, Pension Insurance Corporation (PIC), is very familiar with the benefits of this type of partnership, and the difficulties of achieving it.
Wirral Waters is a three-way partnership between experienced regeneration company Peel L&P, Wirral Metropolitan Borough Council, and PIC.
The project will redevelop the former docks into a new waterfront neighbourhood, creating up to 20,000 permanent jobs.
While initially made viable by central government intervention, this redevelopment would not have been possible without local vision, drive, and the ability to engage with long-term investors. But across the country, these types of projects are few and far between.
So, while the Government has committed to invest £200 million in high-quality local regeneration projects, and £400 million for new levelling-up partnerships – and Labour has set out its vision for regional economic plans in its report ‘A New Britain’ – it has become clear that regional growth and regeneration can only, ultimately, be delivered at the regional and local level.
Central government has a role to play – for example, by incentivising comprehensive town centre redevelopment. But the real drivers of change must come at the local level.
This creates its own issues. What we have discovered is that, despite significant capability and expertise, many local authorities lack the first-hand experience of bringing forward transformative regeneration projects of the size and scale that would attract significant long-term funding and improve the lives of local people.
We expect more than £100 billion of funding for these types of projects flowing from long-term investors such as PIC over the next decade, so the prize for those who get it right is significant.
This is why I am delighted to be chairing a new organisation, the Purposeful Finance Commission (PFC), which has been established specifically to help regional and local authorities identify, understand, and overcome the challenges they face in regenerating local areas, including attracting long-term investment.
With the support of combined authorities in Greater Manchester, Liverpool City Region, Tees Valley and the West Midlands, and the LGA, we will be hosting events across the UK to examine issues such as the ‘viability gap’ – where the cost of the building works is greater than the value of the completed development, one of the key issues we faced at Wirral Waters.
This problem was cracked using a long-term regeneration lease structure, of which PIC is a leading proponent, to bridge unlocking the rest of the 30-year redevelopment project.
I’m sure that shared understanding of how we tackled the viability gap, and how others have addressed their challenges, will allow many other local and regional authorities to develop their own areas.
So, as well as creating new connections and allowing the sharing of ideas and expertise at our regional roundtables, the commission will be producing two reports this year, outlining potential solutions, which will be freely available to those who are interested.
Only by increasing knowledge and skills will we really start to achieve levelling up.
- For more information about the PFC, please visit www.purposefulfinancecommission.com