EXCLUSIVE: How to regenerate a city when times are hard

Wednesday, May 27, 2009

Newcastle is one of four cities planning on using bonds to fund major regeneration projects and pay the money back using future business tax revenue. Council leader John Shipley describes the challenges the city faces

As elsewhere in the country, the past 18 months have been hugely challenging for Newcastle.

Yet our ambitions for sustainable growth and regeneration remain undiminished. A key reason for our optimism lies in the fact that we seem well placed to create and expand new industries and jobs, particularly in the fields of energy, marine engineering and life sciences.

Newcastle has performed strongly in recent years. Once the decline of our heavy engineering and extraction industries had bottomed out, our investment in business services, retail, leisure and cultural regeneration has led to substantial growth.

We have a strong exporting base, helped by the weakness of the pound. The strength of the euro also means we are welcoming increasing numbers of international tourists to our shops and cultural venues. The investment in that infrastructure in recent years is clearly paying dividends with more and more UK visitors coming to visit.

Central to our ambition is a determination to lay the foundations for the next generation of jobs. We may have become a vibrant regional capital but we cannot rest on our laurels. We understand the need to innovate. Exciting developments are planned for the Stephenson Quarter behind the Central Station, the Discovery Quarter (the heart of Science City) and East Pilgrim Street (right in the retail heart). The higher education and further education sectors continue to grow very successfully and will help us to lead regeneration.

Despite difficulties caused by current market conditions, we need faster sustainable growth in our private sector to balance the size of the public sector in the city and region. New initiatives like our joint City Development Company with Gateshead and our Local Housing Company status are key to unlocking new forms of private investment.

Capital investment in a better transport network – particularly high-speed rail – is now of crucial importance. The greater powers of Transport for London have shown what can be done if government lets go of the reins; the North needs similar powers.

The growth of Newcastle as a vibrant, attractive city will inevitably be a product of the extent to which it can become a centre for sustainable urban living. This fundamental principle was a cornerstone of our successful bid, along with Gateshead Council and Bridging NewcastleGateshead, our housing renewal pathfinder, to become one of the new national housing growth points.

The city council's capital programme continues at over £200m a year. Our ability to bring development finance to bear is becoming increasingly important. We need to maintain the momentum in regeneration schemes not only to support those communities that are in transition but also to ensure that the development industry does not go into hibernation resulting in a major lag in activity when the market finally picks up.

By 2021, we know 15,000 new homes will be needed in the city to meet demand. We believe this total is attainable even though we have been forced to revise downwards our net annual completion rate over the next three years. The lack of movement within the housing market has put additional strain on a pressured social housing market. We are hugely fortunate to have a three star ALMO 'Your Homes Newcastle' (YHN) working alongside us. There is now real pace around establishing a direct development role that will see new homes for rent built very soon.

We are also directing capital investment towards site preparation, infrastructure works and highways (with partners), to remove future barriers to development and ensure that the city is well placed for an upturn in the market. We are also working with developers to establish long-term models that allow for a different distribution of risk as well as a fair share of the financial return.

Finally, I hope we now all understand that cities drive regional economies and can deliver to a higher level of sustainability than eco-towns. Building more homes in them enables people to live closer to where they work. With our colleagues elsewhere in the region and across the Core Cities network, we must continue to drive the 'city' agenda forward.