Government Policy and Regeneration

This lesson examines the role of government policy in driving, shaping and funding regeneration across the UK. It addresses the Edexcel Enquiry Question: "How is regeneration managed?" and covers the key policy instruments, institutional frameworks and infrastructure investments that determine where, how and for whom regeneration occurs.

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The Role of Government in Regeneration

Government at both national and local level plays a central role in regeneration because:

1. Market failure: Left to the market alone, investment flows to places that are already prosperous. Deprived areas cannot attract private investment without public intervention.
2. Public goods: Infrastructure, education, healthcare and environmental quality are public goods that the private sector will not provide adequately without government action.
3. Redistribution: Government can use taxation and public spending to transfer resources from wealthier to poorer areas.
4. Planning and regulation: Government controls land use through the planning system, determining what can be built where.
5. Democratic mandate: Elected governments have a mandate to address inequality and promote the wellbeing of all citizens.

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Enterprise Zones

Enterprise Zones (EZs) are designated areas where businesses receive tax breaks and simplified planning rules to encourage investment and job creation.

History and Evolution

Generation	Period	Key Features	Example
First generation	1981–1996	Tax relief, simplified planning, rates exemption	London Docklands EZ (1981), Corby EZ
Second generation	2012–present	Business rate discounts (up to £275,000 over 5 years), simplified planning, superfast broadband	Sheffield City Region EZ, Liverpool Knowledge Quarter EZ

How Enterprise Zones Work

graph TD
    A[Government Designates Enterprise Zone] --> B[Tax Incentives for Businesses]
    A --> C[Simplified Planning]
    A --> D[Infrastructure Investment]
    B --> E[Businesses Relocate or Start Up in EZ]
    C --> E
    D --> E
    E --> F[Job Creation]
    E --> G[Increased Business Rates Revenue]
    F --> H[Reduced Unemployment]
    G --> I[Revenue Retained Locally for 25 Years]
    I --> J[Further Investment in Area]

Evaluation

Strengths	Weaknesses
Attract private investment to areas that would otherwise be overlooked	May simply relocate businesses from nearby areas rather than creating new activity ("displacement")
Create jobs — second-generation EZs claimed 72,000+ jobs by 2020	Jobs may be low-paid, temporary or not accessible to local residents
Generate business rate revenue that is retained locally for 25 years	Tax breaks represent foregone public revenue
Simplified planning speeds up development	Simplified planning may override community concerns and environmental protections
Provide a clear geographic focus for regeneration	Boundaries are arbitrary — businesses just outside the zone receive no benefits

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City Deals and Devolution Deals

City Deals and Devolution Deals transfer powers and funding from central government to local areas in exchange for commitments to economic growth.

City Deals

• First introduced in 2012 under the Coalition government.
• Each deal is bespoke — negotiated individually between central government and a city or city-region.
• Deals typically involve commitments on infrastructure, skills, housing and business support.
• Wave 1 (2012): Deals with the eight largest English cities outside London (Manchester, Birmingham, Leeds, Sheffield, Bristol, Liverpool, Newcastle, Nottingham).
• Wave 2 (2013–14): Extended to 18 smaller cities and city-regions.

Devolution Deals and Combined Authorities

The most significant development has been the creation of combined authorities with elected mayors, given substantial devolved powers:

Combined Authority	Mayor (2024)	Key Powers
Greater Manchester	Andy Burnham	Transport, housing, planning, police, fire, health, skills
West Midlands	Richard Parker	Transport, housing, planning, skills, business support
Liverpool City Region	Steve Rotheram	Transport, housing, planning, skills, energy
West Yorkshire	Tracy Brabin	Transport, skills, housing, planning
South Yorkshire	Oliver Coppard	Transport, skills, housing
Tees Valley	Ben Houchen	Transport, skills, housing, planning, investment

Evaluation

Strengths	Weaknesses
Local leaders can tailor regeneration to local needs and priorities	Powers remain limited compared to devolved governments in Scotland, Wales and Northern Ireland
Elected mayors provide visible, accountable leadership	Deals are negotiated behind closed doors — limited democratic scrutiny
Combined authorities can coordinate planning across local authority boundaries	Not all areas have combined authorities — creating a patchwork of uneven devolution
Local retention of business rate growth incentivises investment	Fiscal powers remain very limited compared to international comparisons

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Local Enterprise Partnerships (LEPs)

Local Enterprise Partnerships (LEPs) were established in 2011 to replace the Regional Development Agencies (RDAs) that the Coalition government abolished.

Role and Structure

• LEPs are voluntary partnerships between local authorities and private sector businesses.
• They cover a functional economic area (often larger than a single local authority).
• Their role is to set local economic priorities and direct investment towards economic growth.
• They manage government funding programmes including the Local Growth Fund and Getting Building Fund.

Evaluation

LEPs have been widely criticised:

• Lack of democratic accountability: Governed by boards with significant private sector representation; limited public scrutiny.
• Uneven capacity: Some LEPs (e.g. Greater Manchester) have strong leadership and resources; others are weak and ineffective.
• Limited funding: LEPs have far less funding than the RDAs they replaced.
• Overlap with combined authorities: In areas with elected mayors, LEPs have been increasingly marginalised.
• The government announced in 2023 that LEP functions would be transferred to local authorities and combined authorities by March 2024, effectively ending their independent role.

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Planning Policy

The planning system is one of the most powerful tools of regeneration, controlling what can be built, where, and to what standard.

National Planning Policy Framework (NPPF)

The NPPF (first published 2012, revised 2023) sets out the government's planning policies for England. Key principles relevant to regeneration:

• Presumption in favour of sustainable development: Planning authorities should approve development that accords with the local plan without delay.
• Brownfield first: Priority for development on previously developed land.
• Affordable housing: Developers must provide a proportion of affordable housing in new residential schemes (typically 20–40%).
• Heritage protection: Historic buildings and conservation areas must be respected.
• Environmental sustainability: Development should minimise carbon emissions, manage flood risk and protect biodiversity.

Section 106 Agreements