Centre for Cities

Brown and Cameron: "out of office" messages

The last week has been completely dominated by speculation on the Labour leadership, topped off by this Miliband article. Polly Toynbee this week added her voice to the growing calls for Gordon to quit ("I personally think that for the survival of the Labour Party, he has to go".)

But as August approaches, the feverish debate over the Labour leadership is likely to abate - as Nick Robinson suggests. And as Michael White says, no-one really knows what will happen next. We'll just have to wait til September, for the next serious instalment.    

Meanwhile, Gordon B and David C are both on holiday this week - which got me wondering what their "out of office" messages would say. Not that they have such things, I'm sure - but it's fun to speculate...

Gordon: "THANK YOU FOR YOUR EMAIL. I AM OUT OF THE OFFICE THIS WEEK. BUT NOT OUT OF OFFICE. IF IT'S URGENT, PLEASE CALL ME - NOT HARRIET, OR DAVID." (He usually types in upper case)

David: "Cheers for the email. Am spending quality time out of the office this week. But hope to be in office soon. If it's about my bike, I've got it back thanks."

PS Nick Clegg is spending his hols in Spain with the in-laws 

Eco-towns progress report

Announcing her progress report on eco-towns last week, Caroline Flint reassured us that "there will be no compromise on quality with eco-towns". Her promise that only the best schemes will go ahead, is welcome. But the road ahead for eco-towns is still uncertain.

The proposed new sustainability standards for eco-towns include: zero carbon status across all a town's buildings; a minimum of 30% affordable housing; 40% green space; and average homes to be within 10 minutes' walk of public transport. That's all fine, so let's make sure that the final shortlist meets all these new standards.   

In response to my comment piece in The Guardian in April, Caroline promised that every eco-town would have "outstanding public transport". So it's good to see these standards, and her emphasis on quality.
As I say in The Economist this week, eco-towns will work only if the very best schemes are picked.

The big uncertainty is the credit crunch. Eco-towns were announced a year ago, before the housing market entered its current downturn. They are now likely to be delayed by the housing slump. Some eco-town developers have already pulled out, and the shortlist is now 13 rather than 15. And the final shortlist has been pushed back to early 2009.

Caroline should use this delay, to get the eco-town model right. She should also avoid the numbers game - one excellent scheme is better than ten average ones. If the final shortlist next year contains only the best schemes, then eco-towns could work. But with all new homes due to be carbon neutral by 2016, eco-towns are only going to be a modest contribution to reducing carbon emissions - and only a small fraction of the new homes we need to build over the next decade.

The other uncertainty is political. The Tories don't like eco-towns, and would almost certainly drop them at the first opportunity.

The Apprenticeships

Apprenticeships are all the rage these days. The Government and the Tories are trying to out-do each other on how to have more of them - which will no doubt please Sir Alan. Numbers have increased over the last decade, to around 100k per year - but only 6% of young people become apprentices right now.

So how do the two main parties' Apprenticeship plans compare?

In January, the Government published World-Class Apprenticeships - its strategy for expanding apprenticeships in England. Here's a quick summary.

Ministers want 20% of young people to be doing an Apprenticeship, within the next decade. By 2013, all suitably qualified 16-18s will be entitled to an Apprenticeship place. And there should be 400k Apprenticeships per year by 2020. A new "National Apprenticeships Service" will be set up, to coordinate employers and training providers. And more places will be made available in the public sector - starting with Skills Secretary, John Denham, who will be offering an apprenticeship in his office this September. Well done, John.

The Tories published their plans yesterday, in their Skills Green Paper - "Building Skills, Transforming Lives". They are promising 100k new additional apprenticeships every year, by shifting £775 million from the current Train to Gain scheme. SME employers will get a £2k bonus for every apprenticeship that they take on and complete. The Tories also plan to shake up further education colleges, with a streamlined funding model and lighter inspection regime. And under a future Tory government, there will be a £100 million NEETs fund - to target support at young people not in any kind of education, training or employment.

This Skills Green Paper is the second in a series of Policy Green Papers that the Tories are producing, as part of their "Opportunity Agenda". More will follow in the autumn, including ones on Localisation, Housing and Enterprise.

It's hard to tell which one of these two approaches will work better. Labour says their plans are more ambitious, while the Tories say they will deliver more apprentices. Rather than get bogged down in the numbers, let's just welcome the cross-party consensus on the need for more. The bigger challenge over the next couple of years will be to find lasting jobs for these young people.

Regeneration Framework

You might have missed it, but CLG last week published its new Regeneration Framework - which is now up for consultation, and will be launched in early 2009.

The Framework - "Transforming places, changing lives" - will influence how and where £billions of regeneration funding is spent in future. It aims to focus funding on three priorities: (1) improving economic performance in deprived areas, (2) improving rates of work and enterprise in deprived areas, and (3) creating places where people want to live and businesses want to invest.

So what's new? First, it includes a stronger focus on improving the performance of local economies - not just on giving buildings a facelift. And there's a more rigorous approach to prioritising regeneration funding. For too long, regeneration has been too much about shiny new buildings and physical makeovers. (We've all seen the powerpoints.) It's time for regeneration funding to be more aggressively targeted on improving the economic performance of deprived areas, based on a better understanding of each local economy. We're doing some work on this with the Housing Corporation. And with public spending getting tighter, prioritisation will be essential. The Framework nudges us in that direction, which is good.

Second, there's a big emphasis on jobs - with more of a local dimension to tackling worklessness. This picks up on our recent Worklessness report. The Framework usefully encourages housing associations and local authorities to do more to tackle worklessness in social housing. Our recent report, Home Economics, highlighted the impact of housing on wider city economies. Barnsley leader, Steve Houghton, is also leading a review of how local authorities can tackle worklessness - using the new Working Neighbourhoods Fund. (OK, this was announced in May - but it is still kind of new.)

Third, CLG have commissioned a study on "The Impact of the Credit Crunch on Regeneration" - to be led by Mike Parkinson. (This was announced in May, too.) We'll be doing our own work on this, over the next six months - looking at the likely impact on financial services, retail and construction.

Fourth, the Framework also includes a welcome devolution flavour, with repeated references to devolving regeneration funding and decisions to the local level. It also promises "a massive reduction in the number of targets" for local partners. You might think you've heard this before - and you'd be right. But let's hold CLG to these promises.

Welfare Reform Green Paper

Welfare reform is a big issue for UK cities - they contain 59% of our population, but 68% of benefit claimaints and 64% of the workless. The Government is aiming for a national employment rate of 80% - but cities like Liverpool, Hull, Sunderland and Birmingham currently have an employment rate of less than 70%. You get the picture - worklessness is concentrated in our cities.

So James Purnell's announcement today is big news. The Welfare Reform Green Paper - No one written off: reforming welfare to reward responsibility - includes a much-needed set of proposals to tackle worklessness. There are currently 2.7 million people on incapacity benefits. Purnell wants to reduce that by 1 million, by 2015.

• The Government plans to abolish Income Support and Incapacity Benefit by 2013, and replace them with a new Employment & Support Allowance - for those who have a medical condition that prevents them from working. ESA will be phased in from this October, starting with new claimants. It will be based on a new medical check called a "work capability assessment", focused on what claimants can do work-wise (rather than on what they can't), and carried out by a doctor who is not the claimant's own GP.  

• Meanwhile, Jobseeker's Allowance will continue for all those who are actively seeking, and fit to do work. The big change here is that the long-term unemployed people will be required to do community work.

Much of this is inspired by David Freud's review of welfare back in March 2007. He famously said that fewer than one-third of the 2.7m IB claimants were legitimate - and it was "ludicrous" that medical checks were carried out by a claimant's own GP. The new "work capability assessment" is clearly designed to steer existing and new claimants back to work much quicker than before.

Much of this is welcome. But there's one snag, and one area where Purnell could have gone further.

First, unemployment is likely to go up in the next year or two. Ernst & Young today predicts that unemployment will rise steadily to top 2 million by 2010. That means it will be more difficult to shift IB claimants back into work, at least in the short-term.

Second, DWP needs to do more to localise its approach. The Centre for Cities last month called on the Government to pilot a new devolved approach in one or two UK cities, to allow them to keep and reinvest any benefit savings. Our report, "Worklessness: a city approach", sets out why.

If you have any views on this, James Purnell has written this Comment is Free piece today, and is doing a live webchat tomorrow afternoon at 4pm.

Greening UK cities' buildings

The debate on climate change and the built environment has so far focused mainly on new housing. Just look at all the noise around eco-towns.

Much less attention has been focused on our existing commercial buildings - offices, shops and factories - which together account for about one-fifth of carbon emissions in the UK. That's about the same as 90m people's annual car use.

The Government aims to make new commercial buildings carbon-neutral by 2019. Which is fine, but only about 1% of buildings are replaced each year - and most of our existing offices and shops will still be with us in 2050.

This week's report from the All Party Urban Development Group called for more action now to green our existing commercial buildings. Instead of focusing on making new buildings carbon-neutral, the Group said we need to shift the focus to existing buildings. A lot can be done fairly easily and cheaply. The Group, chaired by Clive Betts MP, made these recommendations:

• Central government should lead by example, and do more to reduce energy use in their own buildings. (Switch the lights off, Ministers.)
• Whitehall should also streamline the 160 different bodies that are involved in delivering the green agenda.
• Introduce one single measurement framework for energy use in commercial buildings, so that businesses can compare one building with another.
• Clearer advice for landlords and tenants, on how to reduce energy use and make easy savings. And tighter building regulations.

David King - the Government's former chief scientific adviser - offered up some intriguing ideas at the Group's report launch this week. He said that reducing carbon emissions was as important as controlling inflation, and called on Mervyn King to take charge of the Government's target of 60% carbon reduction by 2050. And he called on Whitehall to introduce an internal cap and trade scheme between departments. Tongue in cheek, I'm sure, but not bad ideas.

More seriously, King praised Gordon Brown's big speech on climate change last November - when he pledged to put the UK at the forefront of the global fight against climate change. But King was now worried about the Government's ability to deliver.  

Mind the cities gap, says The Work Foundation

The Work Foundation today highlighted the wide and growing gap between "resurgent" cities like Bristol and Newcastle, and "stuck" cities like Stoke and Hastings. Their report How Can Cities Thrive in the Changing Economy? - part of their Ideopolis work - includes this league table of the productivity of different cities across the UK.

The differences are striking. For example, Manchester's productivity (GVA per head) was about the same as the England average in 2005, Cambridge was top of the pile (over 50% better than Manchester), and Barnsley was bottom (about 50% worse than Manchester). See the reaction from Hastings and Norwich in today's Guardian.

TWF makes some important points, many of which chime with our own work:

• Cities have become more important to the UK economy over the last 10 years.
• "Resurgent" cities like Manchester and Reading have achieved economic growth, by building up their university and healthcare sectors and attracting higher-value, "knowledge-intensive" industries and highly-skilled people.
• "Stuck" cities like Barnsley and Burnley have not yet found their niche in today's economy, and are dominated by the public sector. Their economic future will often depend on closer trade links with more thriving nearby cities like Leeds and Manchester. See our City Links report.
• Many cities are overly-reliant on financial services, and so could be vulnerable to the credit crunch - they could see cutbacks in call centres, for example.
• Cities need more financial powers, plus elected mayors and stronger accountability.

I agree with all that. Co-author Alex Jones will also hit a few raw nerves with her comment that "stuck" cities are "often blighted by either chaotic or complacent leadership". I wonder who she means exactly...

The Work Foundation is one of the five partners taking part in this year's Urban Hub, at all three party conferences. So we'll look forward to debating these points with them then.

Urban Hub

As Parliament wraps up for the summer next week, the focus will shift to this year's party conference season - just two months away. The LibDems will still be at the seaside, in Bournemouth - but Labour and Conservatives are going to Manchester and Birmingham - a real endorsement for both cities.

For the first time, there will be a co-ordinated programme of fringe events at all three on urban issues. Urban Hub will bring together the Commission for Architecture and the Built Environment, the Royal Institute of British Architects, Core Cities Group, Work Foundation and Centre for Cities. The Hub will be sponsored by Westfield, with the Times Public Agenda as media partner.

We'll all be running a series of panel discussions on issues like housing, transport, and city leadership. Speakers at each conference will include:

• At LibDems: Lembit Opik MP and Lord Tom McNally - and city leaders John Shipley (Newcastle) and Carl Minns (Hull)
• At Labour: Ministers including Ruth Kelly, John Denham, Hazel Blears, John Healey and Iain Wright - plus David Frost (British Chambers), Richard Leese (leader of Manchester) and the historian and broadcaster Tristram Hunt
• At Tories: MPs Eric Pickles, Grant Shapps and Ed Vaizey - plus Mike Whitby (leader of Birmingham), Simon Milton (new Deputy Mayor of London) and Steve Norris (Transport for London)

With UK cities now facing their most testing time for ages, we're expecting a lively set of debates. My only concern will be how to survive three weeks of sausage rolls, and other assorted party conference food...

Hazel and mayors

Hazel's empowerment white paper, Communities in Charge, was very cautious on mayors this week. She only promised to consult on making it easier to hold referendums for elected mayors, via on-line petitions and a lower threshold. Big deal.

But she went much further in her interviews with regional journalists. Speaking to the Birmingham Post and Coventry Telegraph, Hazel hinted that she might just end up ordering councils to hold a referendum. She also reportedly backed city-regional mayors for areas like the West Midlands - with powers over skills, transport, planning and housing. Which is exactly what the Centre for Cities has been calling for, since early 2006.

The first few Multi Area Agreements will be announced on Monday - and are likely to include Greater Manchester, Tyne & Wear, Tees Valley, South Yorkshire, Leeds and Southampton/Portsmouth. Here's what Hazel said about MAAs:

"If you create such a body, and you give them powers, and they have got big budgets, you have got to have governance that's accountable for spending that money. And you have got to have transparent governance if you are creating a big organisation. We are a little bit away from it, but I think we are on that journey."

In other words, she sees MAAs as a stepping-stone towards directly-elected city-regional mayors. That's not official government policy - yet - but clearly the way Hazel sees it.

Labour would love to force an elected mayor on Birmingham and the West Midlands. After losing Birmingham to the Tories in 2004, and slipping further behind in this year's local elections, it will take Labour years to claw back their position through the current local election system.

So the mayoral route looks quite attractive for Labour, as a fast-track way of winning back the city and its surrounding councils in one go. That's if they can find the right candidate, and become more popular, of course. Birmingham's Tory leader, Mike Whitby, hates the idea of elected mayors, by the way. And the West Midlands isn't in line to be included in the first round of MAAs. So this is still a long way off.

Right homes, right places

The housing market just keeps getting worse. The Bank of England kept rates on hold today at 5%, but the cost of taking out a new two-year fixed rate mortgage has risen to 6.63% - the highest rate in 8 years. New housebuilding this year is unlikely to exceed 100k units - well below the 240k that the Government wants. And it's been a dreadful week for UK housebuilders - Taylor Wimpey, Barratts, Bovis, etc have together announced almost 5,000 job losses in the last few days.

Good timing, then, for our latest housing report. Home Economics calls on the Government to stick to its pledge to build 3 million new homes by 2020. But we can't just build new houses anywhere - we need to build the right homes in the right places, by tailoring new housing to the needs of individual city economies.

We don't dispute the need to build more new homes, but we do think that the Government bangs on too much about the national 3m target. Instead, we need to see local authorities and housebuilders develop new housing supply based on a better understanding of local demand. Councils now have to base their new housing plans on detailed assessments of local housing need, but there are real concerns about the capacity of all local authorities to do this.

Caroline Flint today defended the 3m target, saying it was "still valid". Look out for some new announcements in the next week or so, aimed at easing the plight of the housebuilders and aspiring first-time buyers. And listen to Caroline's rather testy interview with Evan Davis on the Today programme this morning.