The Government’s efforts to level up deprived communities are unlikely to be successful without devolution of power to local neighbourhoods.
Today we publish Turnaround: How to regenerate Britain’s less prosperous communities by helping them take back control. The report analyses the record of different regeneration schemes since the 1960s. It finds that the most successful schemes focused on smaller geographic areas such as neighbourhoods, invested in community capacity over the long-term, and helped communities take ownership of local assets.
The analysis of the New Deal for Communities (NDC) programme, which ran from 1998 to 2011 and was broadly successful in improving relative deprivation, reinforces these findings:
- Of the 39 local areas that were part of NDC, 30 (77%) saw levels of deprivation fall relative to the national average between 2004 and 2019, and 20 (51%) saw deprivation fall faster than the surrounding local authority. But this improvement slowed after the programme ended in 2011.
- The areas that experienced the greatest improvement under NDC were those with the strongest base of civic assets, such as community shops and charities, and the most engaged communities, suggesting fostering local civic culture is important. There is a statistically significant (R2=0.51) relationship between the strength of community engagement and falling levels of deprivation.
- Improvements in the lived environment were most correlated with falling levels of deprivation, with NDC areas outperforming their local authority by an average of 18 percentage points on the living environment deprivation measure. In contrast, NDC areas which suffered poor housing and access to services tended to fall behind their local area.
- The most successful regeneration schemes ensure communities have a stake in the regeneration process, including by putting local people in charge of priorities, devolving budgets, and building new community-level institutions, such as Neighbourhood Councils in Berlin and “Pacts of Collaboration” in Turin.
These lessons have not yet been adopted by the Government’s approach to levelling up, which has been focused on centralised funds – including the £4.8 billion Levelling Up Fund, £3.6 billion Towns Fund and £220 million Community Renewal Fund – which local authorities competitively bid into.
The risk is that even if the funding has a positive impact in the short-term, it is unlikely to build capacity in the places that need to be levelled up the most to drive longer term improvement. In addition, Treasury data suggests that community development funding is currently around £1 billion a year lower in real terms than they were before the financial crisis, or around a third lower as a share of total managed expenditure.
The paper argues that the Government should take steps to ensure neighbourhoods can take a more active role in supporting local regeneration through the levelling up agenda. At present, the Government’s funds are set up as central funding streams, focused at town and local authority level, using short-term and mostly capital-heavy funding. It recommends that the Government takes steps to empower communities to take control of their place and to drive the pace of local change. These should include:
- The establishment of Community Deals to allow local communities to take greater control of their area. These would put forward a long-term improvement plan for the local community, funded through the Community Renewal Fund and Shared Prosperity Fund. They would be encouraged to set up local endowments – in the form of a community trust – to take ownership of local buildings that would be sustained by and for the community.
- Funding for capacity building in the communities least able to exploit national funding. This would ring-fence a small share of existing funding streams to support the areas most in need to identify the key challenges they face, design and manage interventions, and apply for different streams of funding.
- Introduce a comprehensive measurement of community strength to create a gold-standard dataset on social outcomes in every local area, to both improve the evaluation of interventions and support a much more sophisticated debate about what is happening in different communities in different parts of the UK.
- Develop a detailed understanding of what works in regeneration to guide future policy. This could take different forms, but the most promising would be to found a new institution to develop and promulgate evidence-based practice, building on the success of the Education Endowment Foundation.
Will Tanner, Director of Onward and author of the study, said:
The Treasury will not level up left behind places using the same top-down policies that left places behind in the first place. If Ministers are serious about levelling up in the long term, they need to build local capacity that can endure – and help local people take back control of their communities.
The Government should use neighbourhoods – the most effective organising unit in society – to drive levelling up in the places that need it most, working with local communities to build new institutions, invest for the long term and better use local assets.