Chief Executive, Harworth
With the government money tap firmly off, how do we progress the levelling up agenda? Do we need to take a different approach to keep up momentum?
The reality is we are in economically challenging times. We’ve had two years of Covid, inflation is high and interest rates continue to rise, and we’ve got an energy crisis, a cost-of-living squeeze, supply chain issues and cross border trading difficulties because of Brexit.
Some of these issues may be short term, but regardless, there is a lot for the Government to focus on. And inevitably, minds will be on the next election.
But we can’t stop thinking about long-term investing and levelling up while these broader issues are worked through. These communities can’t wait.
While the Government is focused on election cycles and soundbites, tinkering around the edges with headline grabbers, we need to take the regeneration bull by the horns.
When there are challenges, a business doesn’t put things on hold, it finds a different way. We need to bring this ‘go get it’ attitude into public-private collaboration to drive regeneration and levelling up.
There is a lot outside our control, so we need to come up with new and different ways to deliver regional growth; otherwise, how can we ensure that our businesses are growing sustainably in the long term? We simply can’t wait for Government to lead the way or offer additional funding.
And funding is the toughest nut to crack. But there are smart minds in the public and private sectors who understand existing funding mechanisms and potential new models. And it is ‘models’ plural as there isn’t a one size fits all solution.
Every regeneration project is different, just as specific local needs are different and funding models to be flexible and agile to reflect that. Devolved authorities need to be allowed the freedom to put together the right mix of funding structures that work for public and private sector partners.
This means sensible funding solutions that are equitable, ensuring local authorities don’t have to wait too long for an economic return on investment while at the same time not disincentivising the private sector.
Private sector investors want a fair return for the risk investment being made. If you start on that basis, there have to be workable new mechanisms that suit all those who are putting in money.
Take land value capture around infrastructure. The problem is if you model highway requirements on just one developer’s scheme, that requirement could be consumed by competing land requirements while it’s still being delivered.
In some instances, it would be better for the public sector to fund more of the up-front infrastructure costs, with the developer effectively paying the public sector back in stages as phases are developed.
Harworth works with around 40 local authorities, and we have seen first-hand the benefits that this collaborative approach can bring. For example, our Gateway 36 site in Barnsley, South Yorkshire, received over £3 million of funding from the Sheffield City Region Investment Fund to build vital road infrastructure. This enabled Harworth to develop much-needed logistics and manufacturing space, supporting jobs and further investment in the local economy.
How we raise funding and then deploy it is really important. No developer can deliver optimum infrastructure investment from day one, but from a public sector expenditure perspective, it’s probably more efficient to do that.
Devolved powers are critical. Regeneration takes decades, and the process needs to transcend political cycles and colours to fully work. The private sector needs the consistency and certainty that comes with long-term planning and having a robust framework in place.
A 30-year plan has a completely different lens than a 5-year plan. Economic modelling perhaps needs to reflect that, and taking a long-term view means putting very different funding structures in place.
Levelling up has to be a collective responsibility with collective buy-in – can we organise ourselves to do that and get on with it?