Jock's Place - "Cities Unlimited": who would be an economics boffin? - Comments

You're missing my point.

Jock — Sat, 16 Aug 2008 16:06:40 +0000

You're missing my point. FE delivering HE courses generally have them validated, and even sometimes taught, by universities, usually in their own area. Since you mentioned Reynard, for example, his "alma mater" is pretty well capped by local planning policies and prevented from taking terribly many extra "live in" traditional undergraduates away from home. A lot of the expansion of our numbers therefore is actually through validating and sometimes even teaching courses at sub-regional FE colleges - whose students are not likely to have come terribly far.

But as I said, I agree with your point that there is a contradiction in current policy. It is meant to widen horizons and increase social mobility. They ought not be too surprised if it actually has that effect!

Not decided yet

Charlieman — Sat, 16 Aug 2008 15:49:19 +0000

Jock, I work in a city with two Universities and am employed by one of them. Universities take the brightest (who are most likely to pick a far away establishment) and FE/HE take the rest. Amongst "the rest", you have have people who can do "wow" things (eg Adrian Reynard, a racing car designer).

All the same, we have to accept that the most bright youngsters move on. In my example above, Adrian Reynard lived in the right place to pursue his career. You are much more likely to become a successful racing car designer if you live in Oxford than almost anywhere else on this planet.

Yes, I suppose there is that

Jock — Sat, 16 Aug 2008 15:06:23 +0000

Yes, I suppose there is that existing contradiction. Although I tghink you might be surprised at how much of the additional HE is actually relatively local - HE award level courses at local franchised FE colleges validated by a local or regional university and so on. But yes, the whole policy is about encouraging flexibility and extending people's horizons.

Contradictions in existing policy

charlieman — Sat, 16 Aug 2008 14:22:51 +0000

Surely government policy already encourages intranational migration? The HE policy ideal is for 50% of young people to enter higher education, and most youngsters pick an institution that is not in their home town. Some stick in the city where they were educated, others move to different cities, and relatively few return to their home town. Indeed, the whole point of getting a better education was to get a job that they could not see in their home locality.

Thus we have a very basic contradiction in policy. Government wishes to rejuvenate local economies, for which it provides grants, but a different policy (HE) encourages the brightest young employees to move elsewhere.

Or even for us all to find

Jock — Sat, 16 Aug 2008 01:23:17 +0000

Or even for us all to find bits that interest us and add a bit more reasonableness to the ideas by suggesting ways they would not be so threatening ?

Isn't that however precisely

Jock — Sat, 16 Aug 2008 01:19:36 +0000

Isn't that however precisely the job of the politicians rather than the academics who provide the source material. This is not policy, not Tory policy and not our policy. It is a think piece. In the "Overton Window" scale of influencing things it is one step in from moonbattery, deliberately so.

Maybe so, but then wouldn't

Oranjepan — Sat, 16 Aug 2008 00:35:31 +0000

Maybe so, but then wouldn't be more advisable to identify and articulate the simple message behind these ideas that 'regeneration' is a cynical exercise by cynical Labour politicians to artificially rebalance the inequalities created by cynical Conservative politicians where one area of the country is favoured over another to the cost of us all - that the political system isn't broken, just that it harms everyone because the dominant forces are illiberal, and that it is therefore no wonder that the public are tired of cynical illiberal politicians!

The above comments show that there is some traction to be had in pointing out that the claims of 'regeneration' are overhyped and that this can be done effectively by calling for stronger scrutiny of the processes which justify spending money on projects where there is little evidence the benefit is not as high as the cost.

It needs to be asked with more force what additional wealth is generated by specific regeneration projects, whether certain uneconomic regeneration decisions are not actually at the cost of growth and don't therefore have negative consequences for collective democracy and individual liberty by favouring vested political interests.

As LibDems we need to argue that the political choice between wealth generation and civic regeneration is a false choice because the two are inextricably connected: to separate the two concepts is divisive, illiberal and harmful - that they can only be combined healthily by decentralising policy-making and focussing on the detail and merit of each plan while maintaining an understanding of how they each form part of the greater whole.

A centralised national policy of 'regeneration' is as much of a tax-grab and power-grab by political forces as a lack of any policy of 'regeneration' is a transfer of profit and power to corporate forces - both disproportionately reward the favoured few while punishing the deserving many.

And actually, I couldn't be

Jock — Fri, 15 Aug 2008 12:43:50 +0000

And actually, I couldn't be doing more for "communities affected by poverty"; in my case it's the development of Community Land Trust housing for the many people in Oxfordshire who, thanks to current planning policies, have no hope of owning their own homes. Were this policy to be implemented I'm rather glad to say I'd be able to dump that cause pretty quickly, and perhaps be able to afford one myself of these new million homes.

But actually Nick, we're not

Jock — Fri, 15 Aug 2008 12:40:22 +0000

But actually Nick, we're not talking about "forcing people away" so much as not assuming that regeneration's only outcome ought to be "forcing them to stay". I know which appears more liberal.

Oranjepan, I just think it's

Jock — Fri, 15 Aug 2008 12:35:59 +0000

Oranjepan, I just think it's such a difficult and counter-intuitive idea that's it's incredibly difficult to get it across without upsetting a whole bunch of people in areas you are not meaning to criticise but that it comes across as you are denigrating them.

Counter-intuitive or just bad regional policy?

Nick Perry — Fri, 15 Aug 2008 12:31:49 +0000

There's nothing particularly inspiring or seminal about a report that demonstrates no understanding of Northern community heritage and advocates bad regional policy. You might think it's clever to be counter-intuitive about regeneration. Why not spend some time getting involved with a community affected by poverty. Do some qualitative research on whether people want to be forced to move away, or whether they want their area to improve. And then re-read your blog. Best wishes from Hastings!

Jock, you positive appraisal

Oranjepan — Fri, 15 Aug 2008 00:45:32 +0000

Jock, you positive appraisal comes closest to a lot of my feelings on the subject, but naturally much better articulated. I love the description of our beloved capital as a singularity, I guess that's what gives it its' edginess.
One question: Is Leunig being devious, being over-complicated, suffering from bad communication or a combination of all of the above?

Yeah - the report does go

Jock — Thu, 14 Aug 2008 16:31:51 +0000

Yeah - the report does go into some detail about the problems with Pathfinder - and especially that it has been a goldmine for speculators betting on the next place they can pick up a £20k house and get the government to pay them £80k or whatever.

The real message appears to be that we are just *so bad* at centrally managed "regeneration" (even though so many of them have local "control" it points out that in many cases this is tied up writing up the outcomes for the funders in London) that it should be given to local authorities. Some of them may well demolish and rebuild where their housing stock really is a problem - perhaps in the process reversing the trend for ever smaller houses.

I have to say I always took a different view of where the epochal change driver that is the internet would drive cities. I preferred to think that we could all one day work where we choose, whilst being physically located where-ever we get the most social benefits to suit us - if we like isolation, a fiber optic to South Uist might do us, but for many it will be the bright lights and entertainment and other opportunitites of cities, but that they would not necessarily be the place the firm that employed us was based.

But I see from this report really that that's possibly not the outcome - that this agglomeration effect does make it attractive, as the report mentioned, for Nissan to move its design people from Sunderland to London because Ford's and other manufacturers' designers are there too.

I think harder to predict are the Oxford & Cambridge issues. It is I suppose possible that in the world of global academe, the internet will be enough to bring the best brains together wherever their home institution to collaborate on the great new era of rapidly increasing innovation. But with that scenario, all we are doing is missing out on the benefit of having those brains here and having all the knowledge transfer potential here, and not in someone else's home institution on the other side of the world.

Pathfinders

Paul Lockett — Thu, 14 Aug 2008 15:58:58 +0000

I've been involved a fair amount with people campaigning against the Pathfinder schemes and my experience is that they are nothing short of a con trick which has, in many cases, permanently lost Labour votes in areas which would have once been considered Labour heartlands.

They were promoted as a way of improving the housing market, but were frequently targeted on areas where there were reasons to believe that the market was about to surge anyway. In Oldham and Rochdale, the lion's share of the work was concentrated on areas surrounding railway stations which were due to be converted into tram stops and would become prime commuter locations for Manchester.

I'm aware that, on more than one occasion, Pathfinder Boards have claimed to have a funding shortfall because increasing house prices in an area have resulted in scheme costs exceeding their initial estimates. The irony of needing more money from the government, because the cost of regenerating a housing market had increased due to the housing market regenerating itself, was lost on them.

The real absurdity is that once one area has carried out the Pathfinder approach, neighbouring areas try to follow suit, because they don't want to be seen as the area in the region with the weakest housing market. Bury pursued a “CPO and demolish” scheme, even though the area had a fairly strong housing market, on the basis that if they didn't respond to the Pathfinder in neighbouring Rochdale, they could end up looking like the poor relation and suffering market failure. The only logical result of that mentality is a perpetual Mexican wave of compulsory purchase and demolition.

No -I get the impression he

Jock — Thu, 14 Aug 2008 14:16:39 +0000

No -I get the impression he feels his ideas supercede LVT, but the whole report is based on the signals from land values in a way, so it's a natural leap to make for those of us who are!

"Cities Unlimited": who would be an economics boffin?

Jock — Thu, 14 Aug 2008 12:00:20 +0000

When I saw the first press mention of the "Cities Unlimited: making urban regeneration work" report from the Policy Exchange think tank in the Oxford Mail yesterday screaming that "Oxford should get a million new homes" and I noticed prominent Lib Dem economics boffin Tim Leunig was involved I'm afraid I at first reacted with my heart, yelling "Not In My Back Yard, you heartless economist you" before engaging my head.

You see, all too often Tim has come out with some great ideas that have been instantly presented as the works of the devil himself. There were "community land auctions" which, for those who didn't think about it too much, was presented as the state confiscating land from private owners at a fraction of its value. Then more recently his idea for allowing people to sell the social housing home they rent in order to buy another one of their choice elsewhere which would in turn become a social housing home. Even I had to think about that one for a while before I thought it was anything other than a great council house give-away scam. Such is the fate, almost inevitably I suspect, of people who write about "agglomeration economics" and "gross value added" measures of local economic activity.

And so it is also with this report. It is, despite the economic jargon at times, quite an easy read, with what I find to be compelling arguments. It is counter-intuitive for sure, for anyone who has worried about what to do about the "North South divide" and traditional regional policy which has been focussed on using regeneration money to try and repopulate declining towns, to keep people where they are and bring the economic prosperity to them. It has enough controversial suggestions for any mischievous media outlet or politician in denial to pick out the one that seems to say most about their area and have a go at it.

And boy, have they had a field day with it. If you're vaguely northern, or Welsh, you are to be outraged that the report says regeneration has failed, and not only failed but unlikely ever to recover your town's fortunes. If you're in Oxford or Cambridge you've got a million new homes to get outraged about. If you're anti-Tory you will like the portrayals of it as demanding no more money should go to Labour heartlands in the north. It is, in some senses, a perfect storm - there's something for absolutely everyone to criticize about it. But I would suggest they read it first as it is apparent that many who have commented on it, from John Prescott down, have not.

Yes, it does say that the regeneration money lavished on declining cities and towns (and over the past four decades not just Labour's tenure) has been wasted. Of course, the Labour ministers and MPs who championed this money more recently going into their heartlands are outraged. But the report, or rather its predecessor data collection exercise, "Cities Limited", shows pretty conclusively that this failure is real - that, whilst they may be declining slightly less slowly in comparison with more prosperous areas than before the money was spent, they are certainly not catching up, or keeping up. But it does not, as Adam Bienkov writes at Liberal Conspiracy, call for that money to end, for the rest of the country to just "fuck off".

Actually quite the opposite. Anticipating an incoming Tory government will naturally be likely to have fewer "champions" of these northern former industrial towns, it suggests instead of these grand technocratically led regeneration projects controlled from the [London] centre, government should give pretty well the same total amount of money to the local authorities based on need but for them to spend on what they see fit for improving the quality of life in their own towns and cities. This, it says (or rather another predecessor report called "Cities for Success" said) will lead to stronger, better scrutinized and more responsive local government producing "quality of life" projects that people actually want, rather than what some central planner looking at house prices from Whitehall thinks is good for them.

So it's a document about devolution and decentralization of regeneration. About freeing those local authorities in declining areas to choose how they respond to that depopulation rather than how the centre says they should. It is not that spending money on a place always fails, it is that the over-riding concern of regeneration money and regional policy to date has been that these places need to be repopulated by that money, people actively encouraged not to up sticks and leave, despite the obvious fact that they stand to have greater opportunity and more possibilities for increasing their wealth by moving, when in fact the money might be best spent making the quality of life for those who remain far higher.

In fact, it says that this current regeneration policy has even worse effects. Because regeneration areas are still, despite the billions, growing at a slower rate than the successful areas, in insisting that they should be repopulated come what may, regeneration policy is "condemning" the people it persuades to remain or return there to a slow lane of growth. And that because the exodus is led by the more mobile, enterprising, adventurous and usually better skilled parts of the population, it means that what is being left behind is denuded of its greatest assets - the skilled people that might make it attractive for new businesses to set up there.

And of course, the other main controversy is about what those skilled people wanting to better themselves should do. Clearly, London is a huge draw - I always think if it personally as a black hole with government and the City at the singularity and threatening to swallow anything that falls into its event horizon which has been expanding for centuries. Others of course say they like London. So why would they want to prevent others having the same standard of living and opportunities as they do.

Adding an extra million homes around London, says the report, would be the equivalent of adding an extra two miles to the outskirts. Traveling along the M40 at Hillingdon at 70mph for example this, he says, would mean that it would take someone an extra two minutes to reach the countryside. Are we [in London that is] so selfish that we would deny that opportunity to others from "up north" for the sake of it taking an extra two minutes to get to open countryside? Conveniently, the response from the Lib Dem PPC for Hastings yesterday, reveals the answer:

Nick Perry, Lib Dem parliamentary campaigner for Hastings & Rye said, “I am a Northern lad hailing from St Helens, and our move to Hastings last year was a dream come true, however the calls from this Tory think tank are nothing short of bizarre."

So that's it is it. What's good for Nick Perry, indeed a "dream come true", is too bizarre to contemplate for everyone else who may want to better themselves. Ironically, had the Hastings Lib Dems read the report first they'd notice that Hastings is actually one of the exceptions in the South East. That it suffers by being connected only to the periphery of London's orbit and so would not be an ideal place for adding lots of people unless there was significant increased connectivity.

So, perhaps I can get more worked up about the section that talks about a million homes for Oxford and Cambridge, if I can't get excited about the thought of London expanding by two miles in each direction. Well actually, whilst personally I am in Oxford precisely because it is small, and probably would be one of those who would leave if it became terribly much bigger, that's because I can. My IT skills can be put to use anywhere. I could move to Liverpool and get similar pay in a similar academic institution to what I'm in here. But for others it's harder. Oxford and Cambridge, outside of London, are the only two UK academic institutions that get more in research money than they do for teaching students. On the global scale they are our only two really big knowledge generators. Leunig's position seems to be that if they are to remain it that position globally, and they'd damned well better as there is precious little else our economy will thrive on if not knowledge generation in the new global village, they too have got to capitalise on "agglomeration economics", to attract a real thriving community from around the world and the UK that services the expansion of the best brains in Britain in their subjects.

Of course here in Oxford, we can't even agree on whether it is right to have four thousand extra new homes, let alone a million. Our heads are simply not in the right place to hear the logic of what Leunig is telling us. But even if it does become someone's policy, should we be so scared of it? On the one hand, yes, clearly haphazard development of a million homes in a rural county is not on. But if we're looking at a new world order, with population migrations the like of which Britain has not seen since the Industrial Revolution urbanized Britain's population and gave rise largely to those northern towns, then we ought to be looking at new urban forms as well.

Here's a model from a book called "Car Free Cities" by a chap called J H Crawford I came across a decade or so ago in my reading up for the last Oxford Local Plan, that shows how a city of a million population can be fitted into a ten by ten mile area with development on only 20% of the square, where, thanks to rapid transit systems every home is no more than thirty five minutes traveling distance from any other location in the city, every home is less than five minutes walk from open countryside and which could be developed in phases linked into or threading between existing communities.

So, the worst I can say about the report is that "the truth hurts". The truth is that current regeneration projects have and continue to fail to bring less well off former industrial areas up to the standard and the ability to match in future seen in the more prosperous south east. It is cruel and heartless in the light of this to prevent people migrating from those areas to where their skills will be better rewarded and it would be but a small imposition on London in particular to host another million or so homes. We risk our place in the global future if we fail to recognise this reality and grasp the opportunities it presents to make more people better off than regeneration ever can. At the same time we need to make local authorities and local people in declining areas responsible for their own projects to make their quality of life better, whether in decline or otherwise. We need to empower them and finance them, and watch them compete with each other for the best ideas.

At the same time we need to free up from planning constraints land in the south east to accommodate inward migrants. We need to ensure also in the process that space is made for semi-skilled and unskilled also to come from those declining areas so that the balance of people moving out of them is not skewed too heavily towards the skilled sectors.

And all the signals that make this apparent are related to land value. That London is not yet at its optimal size is proven by the fact that people still pay more for their home than the capital cost of the home - ie that land still has some residual value that people are prepared to take a gamble on rewarding them by more than it has cost them to move. That some of the "Pathfinder" areas should not have housing replaced is indicated by the fact that housing costs less than it costs to build. We'd be better buying spare houses and allowing families in the neighbouring houses to expand into hem than knocking them down and replacing them, hoping against hope that they will fill up with bright young things who do not want to join the London black hole.

But there must be something I would criticize the report for, surely, and yes, there is indeed. Tim is always saying that his ideas are a new way of thinking about land, superior to and more suitable for the modern world than that other suggested reform a hundred years ago, Land Value Tax. But the report opens with a complaint that despite trying everything regeneration has failed. Well we haven't tried everything - we haven't tried land value tax. And if any of this report is to be taken on board and implemented we need LVT first. To ensure the timely release of non-housing land for housing, to ensure that Oxford is developed to its current optimum level before adding more, and so on. If Burnley has, as the report suggests, a negative residual land value, then people settling there under my suggested system of land tax and citizens' income , are going to actually be paid for living there. Any firm setting up there will face no taxes, either on its workers, profit or its location; it's going to be around 30% better off just for that and may indeed help attract skilled work back into tax free areas.

The report praises the London Docklands development. Docklands was primarily initially successful (key to regeneration is getting a critical mass of occupiers into a newly regenerated area quickly so it can start to form a community) because the LDDC declared a rates holiday for a decade. Rebasing our tax system to land values rather than incomes or productivity would help focus sustainable communities and give massive incentives, natural incentives, for communities to attract new settlers, especially in jobs that are not necessarily competing on a global scale. With that caveat, that full scale LVT should predate any of the changes suggested in this report, I think I support virtually everything else in it.

It's not comfortable reading necessarily, but I've long held that the rise of global communications and the internet is an epochal change the likes of the printing press or the steam engine. When the steam engine came along it reshaped Britain. Why should we expect, Cnut-like, to stand in the way of the next epochal technology changing the way we live on these islands?

One thing I would say though, Tim, if you read this - I reckon calling your own report "barmy" probably makes for worse press!