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Gloucester (Regeneration Funding)

Volume 496: debated on Tuesday 21 July 2009

Thank you for calling me to speak, Mr. Martlew; I was just beginning to enjoy the exchanges at the end of the previous debate. It is a real pleasure to serve under your chairmanship for the last time in this Session, before we all retreat to what the newspapers say will be an 82-day holiday. I know that it will not be an 82-day holiday for you, Mr. Martlew, nor will it be for the Minister or myself. In my case, that will be not least because of some of the issues that I will outline in the coming minutes. I am pleased to say, though, that I will not have to go at this debate with as much gusto as I thought I might have to a few weeks ago, when I requested it, because some good progress has been made since then. I am very pleased about that progress and I will talk about it in a moment.

In the past eight years, since I have been the Member of Parliament for Gloucester, there has been a very good story to tell about regeneration in the city of Gloucester. Since I was elected as the MP for Gloucester in 2001, we have seen £35 million spent on a new Gloucester Royal hospital and about £20 million spent on a university campus at Oxstalls in my constituency, with the university of Gloucestershire being given university status for the first time. In addition, we have seen about £20 million spent on creating a state-of-the-art new police headquarters in Quedgeley in my constituency. As part of the urban regeneration in Gloucester, we have seen a £35 million further education college—Gloucestershire college—built on the shores of the Sharpness canal, which was a project that I was intimately involved in. I think that that project has been one of the catalysts for the wider regeneration of the Gloucester docks.

Since 2001, we have also had a very good relationship with the regional development agency. In the past 10 years, we have had about £35 million in capital and revenue expenditure, which certainly would not have happened if we had had a Conservative Government. The Conservatives do not believe in RDAs. That sum of £35 million has made a huge difference, not only because of what one can do with £35 million but because it has acted as a stimulus, working alongside an urban regeneration company that has been set up in recent years to lever in other moneys, not least private sector finance, of which we have had about £300 million. In total, as a consequence of all that investment, we are looking towards a £1 billion regeneration of Gloucester.

We have had our ups and downs in recent years. At a time when the Government are talking about a fiscal stimulus, I would urge my right hon. Friend the Minister to see what we have done in Gloucester. That is one of the biggest ups. The Minister may bring the Secretary of State for Communities and Local Government with her, by all means. I think he would be delighted to see the work that has gone on in Gloucester, in terms of keeping jobs in the construction industry, by building a £140 million designer outlet centre, with 100 new designer outlet shops, in the Gloucester docks. The jobs in that centre and those associated with it probably equate to about 1,000 jobs in total.

In May this year, unemployment actually went down in the city of Gloucester. It was up again slightly in June, but the work that has taken place in and around the regeneration area, including a new Sainsbury’s store that has opened on the other side of the Sharpness canal, has created, as I said, a very significant number of jobs. The designer outlet centre was opened, as I am sure my right hon. Friend the Minister will know, by Gok Wan. She will be very aware of his talents, as I am sure you are, Mr. Martlew; I can see that you are wearing one of your finer suits today, which I am sure that Gok Wan would approve of.

On the downside, however, we know that RDA budgets have been raided by the Government. I understand why that has happened. At a time of recession, it is only right and proper that Governments want to keep people in their homes and want to keep people in work. So we have seen tens of millions of pounds taken from RDA budgets and used in projects based around housing and employment. We in Gloucester have benefited from some of those projects too, so I entirely understand why that has happened.

We have been through a process with the South West of England Regional Development Agency in which it wanted us, with our urban regeneration company, to make a pitch for the key projects that we need to keep money coming into. Today’s debate is actually the second part of a debate that I initiated in Westminster Hall on 13 May, which was with the Under-Secretary of State for Justice, my hon. Friend the Member for Watford (Claire Ward), who was acting as the Minister then. I offer my congratulations to her; she did so well that she is now a Minister in her own right. I am sure that the Minister for Regional Economic Development and Co-ordination, my right hon. Friend the Member for Doncaster, Central (Ms Winterton), who is here today, and I will work so well together, not least with officials at the central project review group within the Department for Business, Innovation and Skills, that it will only mean good news for her, and she will be in the Cabinet in no time at all after this debate, if the precedent of my hon. Friend the Member for Watford is anything to go by.

We made the case in that debate on 13 May and to the RDA a few months ago for keeping four key projects going, because we know that, especially in the midst of a recession, they will make a huge difference. One of them, which I will come back to and speak about in some detail, is the linkages project, which deals with linkages between the Gloucester docks and the conventional and well-known town centre of Gloucester, which includes the cathedral and the shopping centres. It is also where the Four Gates meet; it is the actual town centre. It is important to have a strong linkage between those two areas—the docks and the town centre—because there has always been a fear factor in the town centre, understandably, among small and medium-sized businesses that we would lose jobs and businesses if we regenerate the docks and leave the town centre as it is. Those linkages are absolutely crucial and we made a case for them. I am pleased to say that the RDA board liked the case that we made and approved the linkages project.

We also made a case for Kings square, a 1960s monolith or “carbuncle”, as I think I described it in the debate on 13 May. That project was approved and I am glad that the Department for Communities and Local Government approved of that too. The same was true of a heritage quarter in the town centre, known as Blackfriars. It houses the Dominican priory, which I am told is the most historic Dominican priory anywhere in the country.

I also made a case for the Four Gates centre in the deprived Westgate ward, but I was less successful in that respect. The Four Gates centre was important to me and to many of my constituents, because I think that regeneration should not only be about steel and glass but about social regeneration; it needs to be about child care, community facilities and health provision. Unfortunately, the RDA board did not approve the sum that we were looking for—I think it was a sum of about £2 million—in that particular case. I am still hopeful that that project can go ahead with the support of the primary care trust and I will be working with local community groups to try to ensure that it does happen.

So we heard good news from the RDA board. We had not thought that we would get absolutely everything that we hoped for; we accepted that. We also accept the issue around the Four Gates centre and we will try to find other ways of funding that project. However, we had some bad news when the central policy review group of the DCLG did not approve the linkages scheme. That scheme was No. 1 on my priority list, as it was on the priority list of the urban regeneration company and the city council.

I know that my right hon. Friend the Minister and the Secretary of State are concerned about this process, because we have talked about it, and I know that other Ministers in the DCLG are interested in it, but I am really pleased, especially at a time of recession, that my right hon. Friend the Minister has got hands-on involved with it and engaged her officials with the RDA to take a closer look at these linkages. I hope that we are now making some good progress. From what I have heard, there is a much better level of dialogue between the local urban regeneration company, the RDA and the Department on getting this money in and doing the work. Especially during a recession, we need those linkages and to complete the public realm work done between the Gloucester docks and the town centre. Many businesses—not to mention shopping centres such as the Eastgate and Kings Walk shopping centres—and the Federation of Small Businesses are lobbying very hard for this money, because they think that we will lose a lot of jobs. We already have an issue, as do many town centres, with boarded-up shops, but that will get much worse if we cannot find the resource to do the public realm work.

I understand that part of that work has involved an evaluation by the Department of what can be achieved over three years. I say to my right hon. Friend and departmental officials that, especially during a recession, we need to be more flexible and sometimes look at a longer period. The public realm work will make a difference over a much longer period than three years. During a recession, the RDA, which feels very strongly about this, thinks that we have to be more flexible. A decision approved by its board has never been overturned before, and it has made it clear to all of us locally that this is an important scheme for it and one that it wishes to continue to support.

I am very confident that, within six weeks, we can clear up the detail between the CPRG and the RDA so that the former can formulate the detailed criteria and tell the latter what else needs to be done locally to secure the money. We then need a quick decision. Ministers are right when they talk about fiscal stimuli and bringing forward funding and projects, and I do not believe for a second that they want to be held back by officials. We understand the need to go through due process, but if we can get through this in six weeks, we can ensure that the money is spent, that the work on the ground is done, that the construction jobs are in place and that the town centre remains confident that the project will make a difference, not in isolation in the docks area, but in perpetuity in the rest of the town centre.

This is a very important project for us, and I am pleased with the way in which my right hon. Friend has engaged her Department since my initial concerns were raised. I know that she will not be having an 82-day break or anything like that, although I hope that she gets away and recharges her batteries over the summer—we all need to do that. However, it is really important that her officials, the RDA, the urban regeneration company, myself and her Department continue to engage on this matter. I hope that we can secure a positive solution and return, certainly before October but hopefully quite a bit earlier, so that we can get on with delivering the project and returns and with demonstrating not only that we have started a decade-long regeneration project, but that we are here for the long term, and that we will complete what was started in my constituency by this Labour Government, the RDA and the urban regeneration company.

It is a pleasure to serve under your chairmanship, Mr. Martlew. I congratulate my hon. Friend the Member for Gloucester (Mr. Dhanda) on securing this debate. He has raised this issue before in Westminster Hall, and Parliament more widely, and has made a number of representations to Ministers in the Department for Business, Innovation and Skills in recent weeks. He has also worked very hard to secure regeneration projects in his constituency.

My hon. Friend set out very clearly some of the investment made over the past 12 years to regenerate his area. I would certainly like to take up his offer of a visit to his constituency. I shall be touring the regions in my new role, and it would be a pleasure to return to Gloucester. I think that I am looking to visit at the beginning of September, so if he is around then, which I am sure he will be, perhaps we can find a suitable date. I well remember his area, because of the floods. I was a Transport Minister at the time of those severe problems in his area, and I know that a lot of work was done to try to ensure that the Government could provide assistance.

Gloucester has had more than its fair share of challenges over the years, some of which have their root cause in the current recession. However, it is also true, in terms of regeneration over the past 12 years, that the Government have made a deliberate effort to address some of those problems. There are prosperous areas in my hon. Friend’s constituency, but also areas of quite severe deprivation problems. That is why the Government have tried to use public investment to ensure that so many of the projects to which he referred lead to increased employment and improved services and are effective in regenerating the area.

The current recession has had a major impact on Gloucester’s strong economic base, especially in advanced engineering and manufacturing. I pay tribute to much of the work done—my hon. Friend has been involved in it too—in bringing together local partners in the city, to develop plans to combat the recession and to look at some of the longer-term problems. One of the issues that comes to mind is around skills and how, over the years, there has been a loss of skilled work in the area. Local partners have been considering how to build up that skills base, so that when the upturn comes, manufacturing and engineering can take advantage of the opportunities that come with it.

Some of the decisions made—for example, on the completion of the Gloucester south-west bypass—have not only opened up an opportunity for economic development and growth but, as my hon. Friend said, created a very different environment for the renewal of the city centre. I am glad that he paid tribute to the work of the RDA, especially its championing of the Gloucester Heritage Urban Regeneration Company, which has pioneered regeneration investment in the city area and the area around the Gloucester docks. About £17.7 million has already been invested in bringing parts of the area back into productive use.

My hon. Friend was right to draw our attention to the work of the RDAs, and point out that the Conservative party would do away with them. Both before and during the recession, the RDAs have been one of the delivery agents that have made a real difference to people on the ground. To imagine that Whitehall and Westminster could deliver the type of changes that we have seen without organisations such as the RDAs is living in fantasy land, so it is important that we invest in them.

My hon. Friend was right to say that as part of the fiscal stimulus in which the Government have been involved, we asked the RDAs to accelerate projects that could deliver a short-term boost to the economy. Gloucester docks was one such project that the South West of England Regional Development Agency put forward as part of that stimulus.

In the current economic climate, it is right to ask RDAs to use their funds to maximum effect to help regional economies. My hon. Friend referred to the CPRG, which examines the economic robustness of RDA project proposals. If there are questions over value for money or any other aspect, it is right that officials within my Department work closely with the RDAs to examine the issues that have been raised to ensure that where a case can be taken forward, we work closely together to do so.

My hon. Friend also referred to a number of issues that are perhaps seen as blockages to taking a project forward and ensuring that a case is robust. After representations from my hon. Friend, I have been making inquiries to see that everything possible is being done to ensure that officials work closely with the RDA to iron out some of the concerns about value for money and the robustness of a case. We must do that to ensure that public funds are being well targeted. We are always anxious to ensure that projects offer value for money so that local people can benefit from the best case to secure regeneration.

The South West of England Regional Development Agency made an initial submission to the CPRG in November 2008. A number of key issues were identified as areas that needed further work. A revised business case was submitted in June 2009 following interactions between my Department’s economists and policy officials with the South West of England Regional Development Agency. I understand that a site visit also took place to understand fully the context and project objectives.

Currently, the business case is much improved. There are still some concerns that more work needs to be done, particularly where there are uncertainties about costs and benefits. We want to ensure that the appraisal fully reflects some of the uncertainties and risks inherent in the current property market.

If the Minister is to pay a visit in the first week of September, it would be terrific to resolve the issues before then. If the issues are not resolved and a decision still has to be made, may I suggest that she brings with her an official or two from the CPRG? In that way RDA representatives and urban regeneration company representatives can show them the need for the work. It is all very well listening to me, but if the Minister can see the issues physically it may help to make the difference on the day.

That is an extremely good idea, which I will take forward. In the meantime, I will make some inquiries about the point that my hon. Friend raised on the three-year evaluation. Again, that is something that we will want to discuss at any future meeting.

I want to assure my hon. Friend that officials in the Department are continuing to liaise with the RDA. We hope to be able to take a decision on the matter as quickly as we can. I understand that the RDA is itself reviewing the appraisal, taking into account some of the points that have been raised by the CPRG. I am anxious that any appraisals or reviews of projects take account of the changed economic circumstances. I need to be certain that we are getting good value for money and that we have asked RDAs to bring forward projects that will provide the fiscal stimulus that we need at the moment. Therefore, it is a question of ensuring that those two matters are brought together so that we can be clear—and I know that my hon. Friend will want to see this as the local Member of Parliament—that any project in which we invest will provide maximum value for local people. This project has been identified as a fiscal stimulus project, but before we can take a final decision on it, we need to identify and consider carefully information on the short-term boost to the economy. As I have said, we must get the balance right and ensure that we get good value for money and that we achieve the fiscal stimulus to the economy that I have talked about.

Once again, I want to congratulate my hon. Friend on the way in which he has ensured that the voices of his local constituents, the RDA and the urban regeneration company are heard in this House. I can assure him that Ministers take very seriously the points that he has raised, and that I look forward to visiting Gloucester.