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British cities need more powers to compete with Europe

British city regions should be given more finance raising powers if they are to compete with their European rivals according to England’s most powerful developers and city leaders.

At a breakfast seminar being held today (Thursday) by the British Property Federation (BPF) and Jones Lang LaSalle in Cannes at the Mipim property expo, city leaders from across the country will say that strong transport links and careful master-planning are also key to their revival.

As the UK economy emerges from recession, it is essential that its cities focus on kick-starting regeneration. However, they will be competing for investment with other European and global cities and the current political uncertainties facing the country are also unnerving investors.

Andrew Gould, chief executive of Jones Lang LaSalle England said:

"The challenge to British cities has never been more acute. Occupiers, money and talent are more mobile now than ever and cities need clearly focused strategies that play to their strengths. There are some great regeneration and renewal proposals - but delivery is the biggest challenge."

Liz Peace, chief executive of the BPF, said:

“Our cities need to be able to take risks, stand on their own two feet and make use of innovative new funding concepts such as tax increment financing, which is widely used across the USA. Britain is still lagging behind parts of Europe as we come out of recession and whatever political party we have in control needs to ensure that cities have the political tools to get on, do their jobs and work closely with the property industry.”

David Partridge, chief executive of Argent Estates, said:

“The cities which will attract most new development are those which have a deep and sustainable proven occupational and investment market They need to ensure that they engender a climate which encourages inward investment – both from a financial point of view and by way of attitude and policy. Look at Manchester for an example of how to achieve this.

“Finance raising powers could make a huge difference – as long as city leaders are strongly tapped into their business community, they could bring forward significant positive investment."

Commenting on proposals from the opposition Conservative Party to reform the planning system, he added: “They are the biggest threat to development this century.”

Further quotes available below from Birmingham, Croydon and Sheffield.

British Property Federation/Jones Lang LaSalle late breakfast seminar, Thursday 18 March 2010, JLL Marquee, La Croisette

• Andrew Gould, Chief Executive, Jones Lang LaSalle English Business
• David Partridge, Chief Executive, Argent Estates
• Tony Kildare, Chief Executive, Croydon Economic Development Company
• Andy Topley, Director of Regeneration, Creative Sheffield
• Cllr Mike Whitby, Leader, Birmingham City Council

Croydon

Tony Kildare, chief executive, Croydon Economic Development Company, said:

’Currently there is a 3.5 billion commercial investment pipeline for Croydon. The huge amount of interest in Croydon is partly due to its location. Being 15 minutes from Gatwick and the West End of London is highly attractive.

’Croydon already draws a massive amount of people because of where it is. It’s a natural economic engine, ranking fourth in retail spending charts with over a billion pounds spent in the town centre alone.’’

’To attract investment we have to think about infrastructure, and investors will see good public transport links as a reason to invest. However, cities also need an integrated strategy and an integrated approach to master-planning and it’s absolutely vital you have business people talking to business people - people who understand the language of business.’

’The area will see a continuation of the master-plan. The first significant development to make a difference to Croydon will be the development of East Croydon Station as it’s going to update an already busy exchange with a mix of retail and business space. It’s going to be the doorway to Croydon

‘’Croydon is one of London’s greenest borough’s with lush, open grassy areas, which even in this current economic climate is still important to investors because people like to live and work in attractive and natural areas."

Sheffield

Andy Topley, chief executive of Creative Sheffield, said:

What are the most important things cities need to have from an investor’s point of view to be considered for new development?

The most important thing is confidence. They have to both display confidence to and engender the confidence of the investor. This means being business-friendly and private sector facing. Cities have to understand the needs and drivers of the private sector and that manifests itself through practical steps such as building relationships and having the offer right. It’s not just about physical assets but also skills and labour market.

What can cities outside of London do to up their chances of attracting the right money?

Setting their stall out in a professional way will always help but it’s a mistake to assume it’s just about inward investment. Around 70pc of cities’ growth comes from businesses that already exist there, so it’s having the balance right. We run a program for those working with the top 100 firms in the city to ensure they’re getting what they want and that their voice is heard. Growing your own is very important. Then there’s the inward investment which is asking have you got the sites available, have you the right workforce with the right skills and are you development ready.

One of the real dangers over the next few years is forgetting the good lessons we’ve learned in regeneration over the last decade. Good master-planning and delivery planning and focused, private sector-orientated delivery agencies with some seed-corn regeneration funding are vital to keep the momentum going.

What difference would it make if city leaders had more finance raising powers and the ability to use TIF as a way of making up the short fall from capital spending cuts?

It would make a big difference, the major cities have changed dramatically in the way they approach economic development over the last five to 10 years, They have a better understanding of what is required by the private sector and their own economies. What’s lacking is the funding to offer help and support in key regeneration schemes. Relatively small amounts of money spent on physical regeneration in the current environment could go a long way to keeping existing schemes moving and helping new schemes come forward. Many projects have long gestation periods and at certain times in the life of those projects they’ll need various forms of support from the public sector and if it’s not available at the right time then those projects can be set back many years and momentum is lost. What the public sector has to do is to look at and embrace new ways of doing things of which TIF is a very important example.

One of the interesting things will be how much central government will be prepared to relax financial controls on major city authorities. Local authorities have very little margin to support regeneration from their own resources, the vast majority of funding comes from RDAs and European Regional Development Funding. ERDF has been hugely important and is available to underperforming economic areas that have lost their traditional industries, so in our case it was steel, engineering and coal.

How has Sheffield overcome the problems of the economic crisis?

It’s very different from the last recession where we went through structural economic change, going from dependence on a few industries to now where the economic sectors resemble much more closely that of the average UK economy. This recession hasn’t hit Sheffield in anything like the way it did in the early 1990s. A lot of this economic change has been supported by key interventions with the public and private sectors working closely together.

Do Tory plans on localism present opportunities or threats for development and the economic revival the regions?

I think the move towards giving greater powers – which the current government has started – has got to be the right way to go in future years. I think the RDA issue is an interesting one because it’s not one size fits all in the UK. We have to be very careful before we consign RDAs to the dustbin there has to be some regional mechanism which represents regional economic thinking rather than nimbyism. However, I don’t think RDAs in the South are held in the same regard as Yorkshire Forward, One North East and the North West Dev Agency who are all very well regarded.

Do poorer areas of the UK face being left behind prime parts of London and Europe?

That’s why the city region idea is much more interesting in that itw ill require economic policy to consider places in the wider context of the core city and for those areas. The role of peripheral, non core cities is to work out with the core cities the economic plans for their areas. There is a role for the smaller towns in the city region debate. Sheffield for example has a big shortage of large industrial and manufacturing sites, so it can’t fulfill a number of those requirements whereas districts outside the centre in Rotherham or Barnsley do have those sites and we’ve got to stop thinking about the economy of cities stopping at the local authority boundary it’s the economic footprint of the areas that’s critical.

Contact Andrew Teacher in Cannes on 07841 732194 or email ateacher@bpf.org.uk  for more information.