Inner Cities

Inner Cities

Leon Brittan
The problems of Britains inner cities are far from new. They are
complex, interrelated and deep-seated. They cannot be solved by neat
solutions, nor by a quick fix. For the problems in our cities have a
variety of symptoms and causes, requiring a long, hard grind of
comprehensive and varied responses.
The symptoms of inner city decline are all too clear -unemployment; crime; crumbling buildings; filthy streets; vandalised
public services. Similarly, the general nature of what has to be done
to revive them is clear. There are two central objectives in inner city
regeneration:
(i)
to rebuild local enterprise;
(ii) to re-establish local self-respect.
Civic pride is a crucial feature of those American cities, like
Baltimore and Boston, that have come through difficult times
successfully. The key to reviving the cities is to recognise that neither
self-respect nor enterprise can be instilled single-handedly by the
public or the private sector.
Difficult questions have to be asked about what should be done in
the main areas where action is needed: economic development;
education; crime; physical environment. But I would suggest that the
main areas of current controversy are:
(i)
the priority that the problem as a whole should be given;
(ii) the balance between the public and the private sector, and the
relationship between the two;
(iii) the roles, tasks and interrelationships that should exist between
the agencies deployed to remedy the cities problems.
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Inner Cities

The priority given to the inner cities has been steadily growing and
since the 1987 election the government has identified the cities as a
top priority. As prosperity has grown in the suburbs, so the contrast
with declining inner city areas has become starker. The scope of
government action outlined in the White Paper Action for Cities is
formidable: new Urban Development Corporations (UDCs); a new
simplified City Grant; inner city roads; managed workshops; greater
links between schools and industry; new City Action Teams.
With this range of activity and degree of importance given to inner
city problems, questions inevitably arise over the adequacy of
ministerial co-operation and the extent to which there is a coherent
organisational structure between the Department of the Environment,
the Department of Trade and Industry and the Department of
Employment. Although the organisational issue is now often raised,
the division of responsibilities is not wholly logical. However, to
impose a new departmental superstructure would be worse than
useless. For it would extract the inner cities from the rest of the
country. The present system of coordination can work if there is
someone at the top prepared to knock ministerial heads together when
differences arise.
On the question of the relationship between the public and the
private sector, I share the governments view that local authorities
have acted in the past in a way that has discredited them. Throwing
money indiscriminately at problems is widely accepted to have made
the position worse. Heavy expenditure, for instance, on vast housing
estates which local authorities cannot manage, created dependency,
required high rates which produced a flight from the cities, and
dissuaded private sector involvement. The government has
consequently by-passed local authorities and enlisted the private
sector, creating new public bodies like the UDCs. That trend was
bound to happen and the UDCs have succeeded in bringing together
the public and private sectors, not just in the London Docklands, but
in areas like Teesside, Tyneside, Sheffield and Leeds.
However I would make two important qualifications to this
analysis. First, while the problems in the cities provide a justification
for focussing on them, the inner cities are not the only problem areas.
There is also significant regional dereliction in areas like Cleveland,
Lancashire, Durham and South Yorkshire and there are dangers in
diverting attention exclusively to the cities. For the establishment of
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Discussions on Policy

bodies like the UDCs may stand in the way of the creation of English
Regional Development Agencies, which while not being inconsistent
with the UDCs would have much greater scale, scope and powers to
deal with larger geographic areas.
Secondly, while local authorities have brought on themselves their
present position, it ought not to be, and need not be, permanent. The
Community Charge will make local government more accountable
and responsible, and with a local government more accountable and
responsible and a broader base of rate payers the changes in
expenditure will have a direct impact on the whole community. When
this happens, local authorities can be brought in from the cold and
made full partners in local government. It is not too early to prepare
for that event now. In re-establishing local self-respect, there is no
substitute for involving in a positive way directly elected local
representatives. Action cannot be imposed from the outside forever
and no local body can claim the same local authority and mandate as
a directly elected council.
What local authorities should actually do within the total equation
is a different question. I welcome the change from local authorities
as universal providers to enablers and facilitators. In the field of
housing, for instance, there is no excuse for monolithic council-run
estates but every reason for local authorities to have a proper interest
in ensuring provision, working with Housing Associations and
forming proper planning policies. However, in the field of education
I am less sure about replacing local authorities role as universal
providers and believe that opting out should be a spur to better local
authority provision rather than a means of breaking things up.
Yet even if local authorities are brought back as major partners,
the private sector will remain crucial, if not paramount. The avowed
aim of inner city renewal should be the rebirth of civic activism. This
objective is feasible and practical; there are plenty of examples already
-- the designation by the CBI of Newcastle and Birmingham as targets
for business-led experiments in regeneration; the venture capital funds
now targeted at inner cities, like the Lloyds of London 50,000 fund
for East London; Whitbread and Laings partnership with the London
Enterprise Agency in the development of the London Compact
designed to improve standards in inner city schools.
The scope for further private sector involvement is immense.
Comparison with the Victorian age and the Industrial Revolution
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Inner Cities

suggests that although civic pride did not emerge at the start of the
Industrial Revolution, when businessmen were too busy making
money, once their fortunes had been made they began to show greater
concern for the community. The same process should begin to emerge
now.
There should be several elements in this new environment and
commercial attitude. First, greater encouragement of closer linkage
between particular companies and certain towns, as American firms
have done: Pilkington in St Helens, the building societies of Norwich
and Halifax and Rowntree in York are obvious existing examples.
Secondly, better examination of ways in which industry can invest
specifically in projects that make the cities places where the middle
classes want to live: the experience of cities like Halifax shows how
the arts can be crucial in stimulating urban renewal and reviving
enterprise through making inner cities more vibrant and acceptable
places in which to live. Thirdly, the involvement of business in
education: businessmen understand the value of good education as a
self-interested priority and should be galvanised to become more
involved in schemes, like the City Technology Colleges, which are
modelled on the Boston Compact and American Magna schools
scheme, aimed to provide ladders of opportunity.
Nevertheless, the government and local authorities have a
continuing and major responsibility for the infrastructure and public
services, so that private sector development can take place in a way
which deals with the cities central problems. To bridge the gap
between public and private provision I believe that we should
encourage the creation of genuinely local initiatives, modelled on the
Local Employment Initiatives (LEIs) suggested by James Robertson
and David Cadman. LEIs cover many types and size of enterprise and
encompass co-operatives and community businesses. Their aim is to
organise local work to meet local needs with local resources, while
establishing local investment funds, development units and enterprise
agencies. Existing examples of non-profit-making community
development banks, like the American Institute for Community
Economics and the South Shore Bank in Chicago, suggest that the key
element is local participation and involvement rather than the
bringing-in of outsiders. The stepping-up of local authority
franchising and contracting-out would be an important factor in the

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Discussions on Policy

development of LEIs and would encourage public authorities to pay

community enterprises to provide services.
One immediate and fundamental change that the government
could make which would directly effect the inner cities and enhance
the process of their revival would be the abolition of the Dock Labour
Scheme. Large areas of former dockland which have been
anaesthetised would be liberated for development. For the Dock
Labour Scheme has made the development of wharves and new
enterprises uneconomic and has driven work away to non-scheme
ports.
Inner city revival will also be hastened by sensible tax policies.
The Uniform Business Rate (UBR), set nationally and applied in every
local authority, should provide a strong incentive to business in the
north and in the cities. Manchesters UBR will be 37 per cent less than
the rates, Sheffields will be 29 per cent less, Newcastles 32 per cent
less and Liverpools 30 per cent less. This change will provide a major
stimulant to business.
It seems strange to say so little about crime. I of course favour
Neighbourhood Watch and adequate and sensitive policing. But at the
end of the day crime is the product of other factors -- environment;
employment; above all, social and family cohesion -- and it is by
tackling these that crime will be reduced. We need a comprehensive
approach to the whole problem which will not produce a dramatic
transformation but a significant trend towards progress.

Summary of discussion
The role of business
Exactly what, it was asked, are business people being called on to do
in the inner cities? To provide a new form of voluntary service or to
take an interest as investors? One very useful contribution which
businesses could make would be to release staff to serve on local
councils. But, if business people are to be involved as councillors, with
the arts, in housing, as school governors and so on, is this not a lot to
ask of them when their primary function is to make money? Are we
telling them to go in and make money, and in that way contribute to
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Inner Cities

inner city revival, or to make money and then do something else -supply new civic energy? How far, in any case, is it possible to
generalise about the role of private enterprise, since the private sector
is not monolithic?
Might we, one speaker asked, get to the point where, as in the USA,
one of the performance indicators set by firms for their local managers
may be their contribution to the community? But another warned
against over-estimating social responsibility as a reason for the
contribution of American business to inner city redevelopment. There
was, certainly, a great deal of private sector involvement in the USA,
but the driving force for this was commercial gain, not social
responsibility, which in America was more rhetoric than substance. It
was the prospect of commercial gain which pulled businesses in, and
programmes for the inner cities must include this. What, as another
speaker asked, is Rupert Murdochs commitment to Wapping?
Actually, Leon Brittan said, we are asking business people both to
take an interest as investors and to provide new types of public service.
It is perfectly normal for them to have both functions, so long as they
distinguish clearly which function they are performing at a given time.
There is a second stage of economic development, as nineteenth
century history showed and as is apparent now after the recession,
when it is reasonable to expect business people to become more
involved with civic affairs. In this second stage they can afford to do
so, and to take a longer term view of what is desirable for their
company, recognising that its future is bound up with that of the
locality and that they are thereby protecting their investments. But we
must not ask too much from too few. It is a good thing to release staff
for service on councils, but just how is this to be done?
But, more than one speaker noted, time is needed to make the most
of the contribution from business. One said that the scale of the private
sectors interest in inner city problems was still insignificant compared
to the size of these problems. Another replied that it was easy to be
scornful about the private sectors contribution but it was amazing how
far it had come, for example in Newcastle, considering where it had
started from. But the private sector still needed to get its act together.
Another, while recognising the potential of the private sectors
contribution, warned against accepting too easily the private sectors
own view. A good planning authority was from the private
developers point of view one which let my scheme through. Leon
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Discussions on Policy

Brittan underlined that the role of the private sector is in fact of central
importance: it was wrong to suggest that when he spoke about this he
was focussing on a marginal factor.
The role of local authorities
What should be the role of local authorities in inner city development?
There was more discussion on this than on any other issue.
In the 1970s, it was said, partnership seemed a good way of
tackling inner city problems and there was good cooperation between
central and local government, but private business was left on one side.
Now it was a case of cooperation between central government and the
private sector with local government left on the side. It was too harsh
to say that local government had brought this on itself. The idea of
discriminating between those authorities with which it is and is not
possible to collaborate had not been pursued. All three parties had their
part to play, and, if mistakes had been made in the past, central
government and business had colluded in them, as for instance over
housing. The governments idea of the relations between local
government and private business was said to be out-dated. As seen
from both the local authority and the business side, the two are now
coming together and it is easier than in the past for business to deal
even with the more awkward local authorities. There is a rhetoric of
antagonism to local authorities in the CBI and other business
organisations over issues like rates and planning delays, but when
business people are talked to individually it is clear that they do not
want to be in conflict: they want peace and quiet to make money, and
they can live with regulation.
One speaker said that he had indeed been appalled at the behaviour
of some local authorities in the 1970s, but in the last nine years these
authorities had been not reformed but abandoned. Instead of reforming
them to make them more accountable, providing them with new
finance and restructuring them to make them more effective, we had
been sending in a lot of the great and the good to solve the problems
of their areas, with not a word about the local community. What had
happened to the concept of the city? People are consumers, managers,
and so on: once, they used also to be citizens of a community, and to
behave differently as such. Another speaker said that he was worried
at seeing the demise of local authorities. A lot of good people worked
hard in them and had relevant skills, but the government did not respect
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Inner Cities

local authorities as it should. Another insisted that it is impossible to

recreate civic pride without putting a self-respecting local authority at
the centre.
Local authorities, others pointed out, are not only on the scene but
one of the biggest, if not the biggest, businesses in their area, and are
also uniquely placed to reach down to the worst-placed groups.
Trickling down, as argued for by the Institute of Economic Affairs or
the Centre for Policy Studies, may reach some, but not the people at
the bottom: they are missing out, and life for them is getting worse. If
local authorities do not provide housing and social services, who will?
The Secretary of States emphasis on housing associations in rural
areas or in inner cities was welcome, but he was turning his back on
local government as an agency which can get through to where the
market will not reach. Or should we use a wider range of voluntary
agencies?
There were also comments on local government finance. A survey
in one London borough showed that 80 per cent of the people left in
the borough had incomes of under 150 a week. The Community
Charge might make local authorities more accountable, but with
incomes at that level many would not be paying it in full -- and
two-thirds of that authoritys budget was for housing and social
services. There was a bill, another speaker said, for 20 billion for
housing repairs: how will this be financed, and will we pay it at all? It
was sad that local authorities were not trusted to use the money they
obtained from sales of housing and land. A contributor from the private
sector argued that more power should be devolved to local
government, including more funds and a bigger share in government
expenditure: meaning, not more government expenditure in total, but
a bigger share for local government.
All this having been said, however, a number of speakers agreed
that local government does indeed need to change its structure and
practice in order to contribute to inner city development effectively.
Its competence and constitution need to be examined. Local authority
management and committee structures are not designed to deal with
the situations now facing local government. There is a lack of
entrepreneurial management and of accountability at all levels, and it
has often been necessary to persuade and bribe local authorities to
move into the twentieth century. A new theory of planning was
needed, based not on allocation but on harnessing market demand for
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Discussions on Policy

the general good and so creating development and spin-offs. Local

authority and university planning departments were the last redoubts
of socialism. Why not look at planning as a creative activity, using
assets to get something to go ahead? Local authorities still have great
powers to create development: they tend to equate powers with money,
but what about using their assets and the market, changing their
attitudes and developing more creativity? But, though there can indeed
be an entrepreneurial role for local government -- planning gain, rather
than simply regulating or servicing delivery -- how do we change local
authorities to get this out of them? Leon Brittan was right, one speaker
said, about the relief to local authorities from not having to manage
vast housing estates; and if, as another had suggested, the Secretary of
States ideal was for local authorities to meet once each year to sign a
set of contracts, that could be a line for a chief executive to go along
with.
Several speakers referred to the example of local government in
the USA. American local authorities were more pragmatic than in
Britain, whereas in the UK there was a strong touch of ideology. They
also had a strong incentive to drive forward with development, since
they created more revenue by doing so, whereas in Britain the rate
support grant system worked against this. Under the RSG, it was said,
we have traded equity in the delivery of local authority services against
initiative. The statistical basis of RSG is in any case curious: what are
we to make of educating the average child? But another speaker
warned against easy acceptance of glowing accounts of American
local government. Consider, for instance, the homelessness scene,
with tens of thousands sleeping over the gratings in the streets.
Replying to this part of the debate, Leon Brittan insisted that, while
the rhetoric is that local government has no place in the sun, the truth
is that there is constant cooperation between local and central
government. People in local authorities are not talking as if they were
an endangered species. Local authorities still have plenty to do and
can be brought back into the picture in future as the community charge
increases their accountability. But they will come back in a different
role. They are not designed as engines of enterprise, but it depends on
what you want them to do. Perhaps they should be doing something
else, as facilitators rather than direct providers. Maybe local
government should be government rather than an entrepreneur: it is
possible to have entrepreneurial attitudes without being an
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Inner Cities

entrepreneur. On issues like housing and social services, who should

act if not the local authority? But by facilitation rather than direct
provision, at which others are equally good. And there are other public
agencies which have responded to the needs of people at the bottom.
He too had heard that even the bad local authorities are now easier
to deal with, and at least one Labour-controlled authority represented
in the seminar was not on his list of baddies. But it is difficult for the
government to discriminate among local authorities, as he used to find
in government during arguments over RSG. In this country, by
contrast with the less ideological USA, there has been the idea of the
primacy of the public sector, which has naturally made others
suspicious. Perhaps it is only when the last redoubt has been removed
that we can be pragmatic.
The power to use finance for development had not been taken away
from local authorities, but the pace of release, for example of the
proceeds of asset sales, depends on policies for public expenditure. If
local expenditure matters as part of public expenditure, there must be
some control of it. As the country becomes more prosperous, the
government is convinced that it should concentrate more on the inner
cities: but there is competition for resources, and the share of the inner
cities has to be determined through the democratic process.
The role of the central government
The government was right, a speaker said, to work through coordination between departments rather than concentrate responsibility
on one Ministry. Another argued that it was only in the last eighteen
months that the government had arrived at the idea of the dependency
culture and that this accounted for the falling away in the role of local
authorities. But, it was asked, was its policy too much governed by
fashion? Last year ideas about integrated development, employment
generation, using local labour and so on were swept aside if mentioned
at all. It took time to learn the necessary lessons and apply critical
judgement. The planning mistakes of the past were made by people
who were paternalist, informed and of good will. More and more
power was being given now to people who were supposed to know
what is good for the consumer. Can we be sure that they will do better
than in the past?
A fair warning, Leon Brittan commented: we should not overstress
current policies as a panacea. Neither, however, should we let doubts
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Discussions on Policy

about them degenerate into a recipe for inaction. While it was true that
policy changed with fashion, and that this could be dangerous -consider the case of the diagnostic test for child abuse in Cleveland -it was also to some extent inevitable, and there was equally the danger
of being too agnostic about it and so doing nothing or bits of
everything. The choice might be between fashion and cynical
world-weariness.
There was general agreement that, whether for historical reasons
or as a matter of deliberate judgement, we were likely to end with what
was called an eclectic-pluralist model of inner city development,
involving a number of parties and different approaches. Leon Brittan
agreed. He had not come up with a grandiose and comprehensive plan
and doubted whether that would work.
There were, however, a number of comments on particular aspects
of the governments approach.
How effective, one speaker asked, was the pragmatic and diverse
approach likely to be in stimulating action? Monolithic policies did
encourage people to go out and do something. Current policies
required action by a vast array of people: were the necessary stimuli
and structures available? And, another asked, was there enough talent
to go round?
In any case, though concentrated management attention, as
through Urban Development Corporations, is helpful in solving inner
city problems, it was pointed out that this type of action raises
problems of its own both locally and more widely. The current use of
inner city task forces is in a sense a throw-back to the older concept
of a list of assisted areas: useful, but only one element in an eclectic
policy. A recent Docklands study had pointed up problems over
education (especially secondary education), roads, and the relation
between what was happening in Dockland and in the areas just over
the boundary. There are problems of under-employment in whole
cities and regions, not only in inner cities, and despair in the South
East over what is happening there. In the absence of regional
government, it was said, we are not doing so well on long-term
planning on these wider issues in successful or in unsuccessful areas.
What kind of cities and regions do we want? Many business people
were said to be interested in addressing issues like these, but frustrated
by the lack of vision in government and of government finance for
infrastructure development. Accepting the need for regional, not only
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Inner Cities

inner city, policies, Leon Brittan pointed out that the next seminar
would be precisely on this issue.
Impacts on local people and on ethnic groups
Were we, some speakers asked, solving the problems of inner cities
or simply displacing them -- sending the poor out to the fringes of the
cities, a programme for people removal? Two views were expressed
on this. One was that it is an advantage to break up big concentrations
of the poor on large estates. When people are displaced, they live closer
to those better off and that creates new opportunities for trading skills.
The other view, however, was that poverty needs to be tackled on the
spot, not by displacement. Physical renewal was not enough; there was
a danger that, as in some cases in America, the inner cities programme
would become a programme for people removal. The answer to
poverty, however, Leon Brittan commented, must lie in creating
enterprise which pays enough to lift people over the poverty level.
Finally, it was asked how far members of ethnic minorities, four
out of five of whom live in inner cities, are involved in inner city
strategies, able to articulate their needs and listened to. Employing
local labour was an excellent idea, but employers tended to prefer
whites: Asian and Afro-Caribbean unemployment was two and a half
times that of whites. Ethnic representative organisations were pushing
for contract compliance. Or again, for helping ethnic minority
members to develop their own businesses: Asians tended to be
concentrated in trade and commerce, and very few had made their way
into industry. And what exactly was meant by the idea that the culture
of Afro-Caribbeans was responsible for their limited contribution to
inner city development? Family, temperament, or what?
On culture Leon Brittan pleaded guilty to vagueness, not to being
wrong. If two groups come into the country at the same time and begin
by being equally disadvantaged, and one advances while the other does
not, then culture is shorthand for the factors underlying this. He had
no hang-ups about contract compliance, and members of ethnic groups
should certainly be involved, though as residents, not as members of
those groups. As for Asians being specialised in trade and commerce,
consider the analogy of the Jews. The key is to get started in some area
of entrepreneurship. Once people are in business, the nature of their
business will change as opportunities change: start with the corner
shop, then go on into services, property development or industry.
45