Catching up on some reading - specifically, the report on Regenerating the English Coalfields by the Committee of Public Accounts. Its conclusions on the effectiveness of interventions make for depressing, although not totally surprising reading.
The interventions have spent £630m so far on bring 54 coalfield sites back in to working use. But the committee "[has] serious concerns about the value for money of the coalfield initiatives. The Department does not know what improvement the initiatives had made to the lives of people living in the coalfield areas, as it does not have a robust assessment to prove to us the true number of additional jobs created. Nor does it know the business occupancy rates for employment space on the redeveloped sites, or the number of people from former coalfield communities who have benefited. The number of jobs the initiatives had helped to create could be anywhere between 8,000 and 16,000. We are concerned that public money has been invested to create jobs that would have been created anyway."
As I said, depressing - but not that surprising - once again lots of money on new buildings (physical regeneration represents a disproportionate amount of the money) has very unclear impacts on individual deprivation.
I am not that surprised about the fact that net job creation is poorly documented - this problem bedevils the assessment of RDA spatial interventions as well.
CEP Urban and Spatial Programme Blog (formerly SERC)
Tuesday, 13 April 2010
Thursday, 1 April 2010
Public Sector Relocation
It's been a very busy few weeks and I am only now getting the chance to catch up with a number of things, including the budget.
One of the big spatial issues was the decision to continue the process of reallocating jobs out of central London.
This may well deliver long term cost savings (although the case is often overstated by muddling in efficiency savings with relocation savings) but the evidence on its impact on regional economies is essentially non-existant.
The direct impact on local economies come from the "multiplier" effects of civil service expenditure on local suppliers (including that of civil sector employers). These effects are clearly positive. Offsetting this are the indirect negative effects from the fact that relatively high public sector wages mean that public sector employment crowds out private sector employment. Early reports assumed this crowding out would be complete, later reports assume it will not be. But these are simple assumptions backed up by some multiplier modelling. As far as I can see systematic ex-post evaluation of the local impact of previous relocations is not available. More on this once I have had a chance to dig a little deeper.
One of the big spatial issues was the decision to continue the process of reallocating jobs out of central London.
This may well deliver long term cost savings (although the case is often overstated by muddling in efficiency savings with relocation savings) but the evidence on its impact on regional economies is essentially non-existant.
The direct impact on local economies come from the "multiplier" effects of civil service expenditure on local suppliers (including that of civil sector employers). These effects are clearly positive. Offsetting this are the indirect negative effects from the fact that relatively high public sector wages mean that public sector employment crowds out private sector employment. Early reports assumed this crowding out would be complete, later reports assume it will not be. But these are simple assumptions backed up by some multiplier modelling. As far as I can see systematic ex-post evaluation of the local impact of previous relocations is not available. More on this once I have had a chance to dig a little deeper.
Friday, 12 March 2010
High Speed 2
In September last year, I commented on what I felt we would know after the various studies for HS2.
My starting point was that: "The direct user benefits (i.e. the benefits to people making journeys) are potentially quite large. Unfortunately, so are the costs. Both costs and benefits are highly uncertain." The government has now placed numbers on this suggesting that the project will generate £2 for every £1 spent. That might sound like a good return, but the Eddington report found "transport schemes can deliver overall benefits averaging £4 per £1 of government expenditure". So there are certainly many alternative projects which would generate better returns.
Next, I suggested that: "the wider benefits - e.g. 'regenerating the north' - are even more uncertain. I suspect the only thing we can say with any certainty is that they are likely to be overstated." Claims that Birmingham's economic output will increase by 6% suggest this process has already started.
Finally, I pointed out two certainties. First, the environmental impacts are not large and could well be negative (HS2 predict a change in average annual emissions in a range from -0.41 to +0.44 million tonnes, equivalent to just +/-0.3 per cent of current annual transport emissions) The second certainty is that any new route will not be commercially viable and will need large government subsidies (HS2 predict the cost is £30bn). The government suggest they will expect fair contributions - and point to developers and local government. Of course, most of the benefits are to passengers experiencing faster journeys so fair contributions means higher fare contributions (no pun intended). We shall see, but I can't imagine higher rail fares being that popular with voters ...
My starting point was that: "The direct user benefits (i.e. the benefits to people making journeys) are potentially quite large. Unfortunately, so are the costs. Both costs and benefits are highly uncertain." The government has now placed numbers on this suggesting that the project will generate £2 for every £1 spent. That might sound like a good return, but the Eddington report found "transport schemes can deliver overall benefits averaging £4 per £1 of government expenditure". So there are certainly many alternative projects which would generate better returns.
Next, I suggested that: "the wider benefits - e.g. 'regenerating the north' - are even more uncertain. I suspect the only thing we can say with any certainty is that they are likely to be overstated." Claims that Birmingham's economic output will increase by 6% suggest this process has already started.
Finally, I pointed out two certainties. First, the environmental impacts are not large and could well be negative (HS2 predict a change in average annual emissions in a range from -0.41 to +0.44 million tonnes, equivalent to just +/-0.3 per cent of current annual transport emissions) The second certainty is that any new route will not be commercially viable and will need large government subsidies (HS2 predict the cost is £30bn). The government suggest they will expect fair contributions - and point to developers and local government. Of course, most of the benefits are to passengers experiencing faster journeys so fair contributions means higher fare contributions (no pun intended). We shall see, but I can't imagine higher rail fares being that popular with voters ...
Thursday, 4 March 2010
The rural economy
The Rural Advocate has published his 2010 report. It focuses on how to keep young people in the countryside and includes a number of recommendations including around affordable housing, employment and skills, transport and communications.
I have written on rural housing and Digital Britain before and there is nothing new in the report that has changed my thinking on that.
My more fundamental question around this year's report is why should it be a policy objective to keep young people living in the countryside? It is hard to create jobs in rural places because they are less productive (if they were as productive as jobs in urban areas, then why would firms ever pay downtown rents?). Overcoming this productivity disadvantage requires more than just (very expensive) investment in broadband and more mobile coverage. More (heavily subsidized) public transport can only do so much to allow people to commute to jobs - rural areas close to bigger cities are usually expensive, while smaller towns struggle to generate large numbers of jobs for surrounding rural areas.
In short, we can spend a large amount of money to equalizing coverage of broadband, mobile networks and public transport but (likely) failing to generate significant numbers of rural job opportunities. Alternatively, we can recognize that, at least since the industrial revolution, rural to urban migration has played a crucial role in improving many young people's life chances. Perhaps we should be focusing on what we can do to help encourage and support it.
I have written on rural housing and Digital Britain before and there is nothing new in the report that has changed my thinking on that.
My more fundamental question around this year's report is why should it be a policy objective to keep young people living in the countryside? It is hard to create jobs in rural places because they are less productive (if they were as productive as jobs in urban areas, then why would firms ever pay downtown rents?). Overcoming this productivity disadvantage requires more than just (very expensive) investment in broadband and more mobile coverage. More (heavily subsidized) public transport can only do so much to allow people to commute to jobs - rural areas close to bigger cities are usually expensive, while smaller towns struggle to generate large numbers of jobs for surrounding rural areas.
In short, we can spend a large amount of money to equalizing coverage of broadband, mobile networks and public transport but (likely) failing to generate significant numbers of rural job opportunities. Alternatively, we can recognize that, at least since the industrial revolution, rural to urban migration has played a crucial role in improving many young people's life chances. Perhaps we should be focusing on what we can do to help encourage and support it.
Friday, 26 February 2010
Conservative plans for planning
The Tories quietly published their Green paper on planning earlier in the week.
On the plus side, more local control over planning ("local decision over local plans") allows local authorities to better match local preferences. On the minus, this creates problems of coordination when costs and benefits are felt beyond local authority boundaries. There are two big areas where these problems arise - infrastructure provision and the overall supply of commercial and residential space.
On infrastructure provision, they plan to scrap the infrastructure planning commission and to go back to ministerial approval albeit with some tinkering aimed at speeding things up. So that's one step back (which may surprise some in light of the claim on an earlier page that: "Given the scale of the problems we face, piecemeal reform of the planning system is simply not an adequate response.")
On the supply of commercial and residential space they are being more radical. Out go top down (regional) regional plans and targets and the huge number of guidance notes; in come presumed consent for "sustainable development" (e.g. projects in line with the local plan and national guidelines) and financial incentives to allow more development.
The later issue will be key because the financial incentives will need to be large enough that local plans actually allow for development (presumed consent won't mean much otherwise). The financial incentive will come through the already announced council tax matching incentive. Given current local government financing arrangements it is not clear that this will be sufficient to encourage much increase in development land.
The other side to this coin is that you need to provide some kind of financial compensation to neighbours directly affected by new development. The green paper envisages this happening through private developers negotiating with neighbours. It will be interesting to see whether these financial incentives are sufficient to offset the greater power that local people will now be given to block new development (through their input in to the local plan).
If either sets of financial incentives (to local authorities or neighbours) turn out to be too small, then it will be important that upward adjustment is quick if these reforms are to seriously address the supply problems that bedevil the current system.
On the plus side, more local control over planning ("local decision over local plans") allows local authorities to better match local preferences. On the minus, this creates problems of coordination when costs and benefits are felt beyond local authority boundaries. There are two big areas where these problems arise - infrastructure provision and the overall supply of commercial and residential space.
On infrastructure provision, they plan to scrap the infrastructure planning commission and to go back to ministerial approval albeit with some tinkering aimed at speeding things up. So that's one step back (which may surprise some in light of the claim on an earlier page that: "Given the scale of the problems we face, piecemeal reform of the planning system is simply not an adequate response.")
On the supply of commercial and residential space they are being more radical. Out go top down (regional) regional plans and targets and the huge number of guidance notes; in come presumed consent for "sustainable development" (e.g. projects in line with the local plan and national guidelines) and financial incentives to allow more development.
The later issue will be key because the financial incentives will need to be large enough that local plans actually allow for development (presumed consent won't mean much otherwise). The financial incentive will come through the already announced council tax matching incentive. Given current local government financing arrangements it is not clear that this will be sufficient to encourage much increase in development land.
The other side to this coin is that you need to provide some kind of financial compensation to neighbours directly affected by new development. The green paper envisages this happening through private developers negotiating with neighbours. It will be interesting to see whether these financial incentives are sufficient to offset the greater power that local people will now be given to block new development (through their input in to the local plan).
If either sets of financial incentives (to local authorities or neighbours) turn out to be too small, then it will be important that upward adjustment is quick if these reforms are to seriously address the supply problems that bedevil the current system.
Wednesday, 17 February 2010
(A lot) more evidence on New Deal for Communities
The NDC evaluation process launched a plethora of new publications last week. "Neighbourhood projects make a difference" was the spin CLG put on the findings. As with the last NDC report, however, the details don't make for such happy reading. Quite simply, at the individual level, there is very little evidence that NDC is making much of a difference.
Starting with that headline: "After controlling for base characteristics, residents in NDC areas have on average seen statistically greater positive change in relation to their satisfaction with the area compared with comparator residents, (significant at a 0.05 level), when the starting position is not included in the model. This is not, however, the case when a respondent’s initial level of satisfaction is included."
On health:"This lack of marked positive change relative to other benchmarks is perhaps a little disappointing, given that the case study NDC partnerships have devoted considerable effort and resources to improving health outcomes amongst local residents, and these sorts of efforts have been replicated across the NDC Programme."
On education:"The research team found little statistically significant variation in outcomes for the whole cohort between NDC and comparator areas, even after controlling for the differences between these areas and NDC areas." Or put another way: "Educational performance has improved faster than the national average for pupils from disadvantaged backgrounds and in deprived areas generally, including non-NDC areas. What this means is that for the NDC Programme as a whole, there is no evidence that the presence of the NDC partnerships has made a decisive difference: other disadvantaged areas did broadly just as well." There has been improvement in key stage 3 Science - but when you look across such a huge range of indicators you are going to find some significant differences even when there is no effect.
As I said before, what I take from this is the following: Based on the best evidence that we have available a reasonably well funded ABI has not, on average, improved individual outcomes in targeted areas. You can read the (7) reports yourself for the "wriggle room disclaimers".
Starting with that headline: "After controlling for base characteristics, residents in NDC areas have on average seen statistically greater positive change in relation to their satisfaction with the area compared with comparator residents, (significant at a 0.05 level), when the starting position is not included in the model. This is not, however, the case when a respondent’s initial level of satisfaction is included."
On health:"This lack of marked positive change relative to other benchmarks is perhaps a little disappointing, given that the case study NDC partnerships have devoted considerable effort and resources to improving health outcomes amongst local residents, and these sorts of efforts have been replicated across the NDC Programme."
On education:"The research team found little statistically significant variation in outcomes for the whole cohort between NDC and comparator areas, even after controlling for the differences between these areas and NDC areas." Or put another way: "Educational performance has improved faster than the national average for pupils from disadvantaged backgrounds and in deprived areas generally, including non-NDC areas. What this means is that for the NDC Programme as a whole, there is no evidence that the presence of the NDC partnerships has made a decisive difference: other disadvantaged areas did broadly just as well." There has been improvement in key stage 3 Science - but when you look across such a huge range of indicators you are going to find some significant differences even when there is no effect.
As I said before, what I take from this is the following: Based on the best evidence that we have available a reasonably well funded ABI has not, on average, improved individual outcomes in targeted areas. You can read the (7) reports yourself for the "wriggle room disclaimers".
Monday, 1 February 2010
Green belt
I enjoyed Centre for Cities' comment on the CPRE report on the Green Belt.
CPRE argue that we should do more to maintain and improve existing Green Belt land. Centre for Cities respond that building on a relatively small amount of it could do a lot to help solve housing supply problems (and provide some nice football pitched based statistics to make this point). Unsurprisingly, I am with Centre for Cities on this one.
One, minor disagreement: Centre for Cities suggest "Green belts have largely succeeded in their primary aim, to contain urban sprawl". While that may be true at the level of individual areas there is an argument to be made that looking more widely Green belts encourage leap frog development and longer commutes - i.e. the fast growth of satellite towns simply gives us sprawl by proxy.
CPRE argue that we should do more to maintain and improve existing Green Belt land. Centre for Cities respond that building on a relatively small amount of it could do a lot to help solve housing supply problems (and provide some nice football pitched based statistics to make this point). Unsurprisingly, I am with Centre for Cities on this one.
One, minor disagreement: Centre for Cities suggest "Green belts have largely succeeded in their primary aim, to contain urban sprawl". While that may be true at the level of individual areas there is an argument to be made that looking more widely Green belts encourage leap frog development and longer commutes - i.e. the fast growth of satellite towns simply gives us sprawl by proxy.
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