Lords debate on Local Regeneration: Industrial Areas - Mar 7

Moved by

Baroness Armstrong of Hill Top

That this House takes note of the case for local regeneration of former industrial areas across the whole United Kingdom, and the challenges constraining such regeneration, including in relation to local government.

Baroness Armstrong of Hill Top (Lab)

My Lords, it is a great privilege and pleasure to introduce this debate, partly, of course, because it gives me the chance to talk about the north-east again, the contribution that previous generations from that region have made to the prosperity of this country, and what we can do now—in the region and nationally—to give this generation and future generations real opportunity.

I grew up with coal mining, shipbuilding and steelmaking dominating community life. My early working life saw those industries in decline, and I worked with people in communities whose lives were totally changed because of the decline of those industries. I am not necessarily saying I regret the loss of all of them, because people like me—women—were not exactly important in the industry. We were important in terms of looking after the men when they came off their shift, but that was not the sort of life I wanted.

I became Member of Parliament for North West Durham in 1987 and by then all the pits in the constituencies had closed, although we had a lot of open cast mining and the Consett steelworks had closed in 1984. Consett was the largest town in the constituency, built to accommodate the workers at the steel mill. It was seen as the most efficient steel mill in the country at the time of its closure, but accessibility was never as easy and straightforward there as it was for the port in Teesside, so it was closed to keep Redcar steel mills open. Some of the workforce from Consett, particularly from management, was transferred there, as were some of the fittings.

The work to remove the infrastructure in Consett took place very quickly. A lot of the funding from that came from the EU to clear the contaminated land. Steel production delivers very contaminated land. Things were not very sophisticated in those days. Essentially the top soil was buried, meaning that the Environment Agency had to monitor levels of contamination on a regular basis, alongside strict warnings to any local farmer who thought that it might be a good idea to graze his cattle that if he did so there would be no ability to use the milk or the meat from it because of the level of cadmium poisoning that there would be.

We dealt with so many of those aspects. We also dealt with a totally changed population, with more women working than ever before and more women working than men. I and my neighbour and good friend Giles Radice, who subsequently came to this House and died last year—I miss him enormously—worked with the local council on regeneration projects, with new industrial estates being built around Consett and on other land that was not contaminated. We also worked on long-term plans for the main site. Project Genesis is still going. It is a public/private partnership and, yes, it has taken a long time to redevelop that site.

Therefore, noble Lords will understand our disappointment when British Steel decided to close Redcar. When I was Local Government Minister in the 1997 to 2001 Parliament, I knew of the importance of the private sector in local government services and in regeneration projects. I introduced the concept that has been forgotten about, best value—how did we ensure that the public got the best out of partnerships and contracts with the private sector? We legislated on it and so on but, unfortunately, in too many regards it has been forgotten. From the recent report on the Teesworks project—it is on the old steelworks site in Redcar that my folk gave up their jobs for, as they saw it—it is clear that best value has not happened. I regret this enormously and am anxious that the Government address what has gone wrong with governance, the nature of contracts and procurement in what are essentially public/private partnerships, and in transparency of regeneration projects that are as complex as this—and they are complex.

Teesworks was initially, in 2020, a 50:50 joint venture partnership. There were two private sector businessmen who had acquired an option on part of the land at Redcar Bulk Terminal, and they then used that as leverage in the compulsory purchase of the wider set of land. The following month, they became formal joint venture partners with the South Tees Development Corporation; there was no tendering and no procurement process—certainly nobody was told that there were procurement processes, and I am sure they would have been after the complaints.

To cut a long story short, without any public announcement, the joint venture was changed in Companies House in November 2021 to a 90:10 deal in favour of the private businesses rather than the public sector. Difficult stories then circulated about the price of land, the complexity of the deals, the lack of transparency, the apparent substantial profit made without any private investment on a site of such public importance, the size of the public investment with no return at this stage to the public, and the lack of transparency to evidence value for money. The Secretary of State for Levelling Up set up an inquiry that made 28 recommendations, which raised significant questions. I will sum it up with a quotation:

“Based on the evidence from the review the governance and financial management arrangements are not of themselves sufficiently robust or transparent to evidence value for money”.

The mayor has responded to the concerns about governance, but there are, unfortunately, significant gaps in the response, and we now wait for the Secretary of State’s response.

I am devastated that this programme has ended up with so many questions and that there is not a better story to tell. I want the project to succeed; we desperately need regeneration and activity that can tackle the deep problems that the de-industrialisation of our region has caused for so many families. I made a speech here two weeks ago when I talked about the latest report on child poverty from the region that I am involved with. We see the activities of the North East Mayor and the Tees Valley Mayor as critical, in future, to a regional response to the mission of enabling every child to have opportunities to develop to their full potential. The previous debate from my noble friend Lord Blunkett emphasised that it is precisely in these areas that attainment is worst and that the gap between those who do well and those who do badly is biggest. Deindustrialisation has real consequences; in Middlesbrough, which is part of Tees Valley, 41% of children since 2014 are now in child poverty. I am really keen to work with the Mayor of Tees Valley—the noble Lord, Lord Houchen—on tackling these issues, which are partly a consequence of this deindustrialisation. The report must be taken seriously, and the Government need to address some of the ways that systems have failed.

I am sure the Minister will say that she cannot answer my questions until the Secretary of State has replied, but it is really important that if she cannot answer today, she writes to me—she will gather by the end of the questions when I want her to write to me about the answers.

First, will the Government ensure that the terms of their current joint venture partnership with Teesworks are renegotiated, as recommended by the report? Will they also ensure that any future contracts for work are properly procured, with best value for the taxpayer assured? Will the Government consider audit and scrutiny proposals for all combined authorities that secure best value for the public purse? Will they also enable the National Audit Office to further review the activities of the Tees Valley Combined Authority? I hope that the Minister will press on the Secretary of State that we need his response before purdah for the May elections.

Regeneration of difficult, contaminated, former industrial sites is not easy. It takes time and, I am afraid, considerable investment. In regions such as the north-east, however, this is still a major issue years after major industrial works have closed. I understand that democracy demands a level of openness and transparency that some in the private sector find inhibiting; it takes time, because people have to be consulted. However, I genuinely believe that, with proper public oversight, accountability and transparency, we can get economic regeneration that is sustainable.

The effect of deindustrialisation is devastating for the whole community and, if not effectively tackled, can blight future generations. Local, regional and national government all have responsibilities, but we have to work together to meet them. I look for that commitment from the Government today.

3.17pm
Lord Mawson (CB)

My Lords, I thank the noble Baroness, Lady Armstrong, for initiating the debate. I know she cares a great deal about these issues and the local communities they affect, many of which are in very challenged circumstances.

I start with a telling story that encapsulates what happened in one of our former industrial areas. My mother died in Bradford, at 104 years of age, last June. She lived most of her life there, my hometown. Her father ran an ice cream shop in Oak Lane, just below the 27-acre site of what was then Lister Mills. It was originally a sweet shop, but my grandfather was so skilled at making brilliant ice cream, which he sold literally in bucketloads to thousands of workers at the mill, that the sweets and chocolates went the way of the world; he focused on what sold.

Some 150 people, mainly old Bradfordians, turned up at my mother’s 100th birthday party in 2018. She was still well networked from her armchair, through the use of her trusted telephone. The day before the party, I picked up an old brochure in Haworth, Brontë land, about the Bradford festival in 1931. Both my mother and father attended this amazing event in the city when they were at school, but they did not know each other at that time. Everyone was there—the mayor, the council, businesspeople and all the schools. My mother still remembered the excitement of it all.

In the brochure you got a real sense of the dynamic economy in Bradford at that time and a landscape defined by woollen mills and a culture of entrepreneurship. Bradford was described as the second most successful city outside London. I was told that, in 1931, Lister Mills had recently won the order for the velvet curtains for the White House—not bad. In my mother’s lifetime, this former industrial city, largely run by woollen entrepreneurs and successful businesspeople, fell to the position it holds today. What happened in one lifetime?

My colleagues and I have been working in Bradford over the last six years—I declare my interests—and I have returned to have a good look under the carpet. The first thing that strikes you is that there are still some amazing entrepreneurial people in Bradford. Pull back the carpet and you will find the Pakistani-owned cake business, in a back street, which has supplied more than 1 billion fairy cakes to Tesco. This baker then spent more than £1 million trying to restore and maintain a grade 2 listed mill complex of 400,000 square feet—impressive.
Six years ago, I was invited by the dean of Bradford Cathedral to speak at an evening event about our work in the East End of London and the Olympic legacy project, which was focused on the derelict rail and industrial lands in Stratford which I had been involved in from day one for 19 years. I described how in Bromley-by-Bow we had fostered an entrepreneurial culture against the odds in what was originally a failing group of housing estates, opposite what is now the Olympic park. The cathedral was packed. I then invited the massively impressive Bradford architect and business entrepreneur Amir Hussain to join me on stage. Amir had some really inspiring plans for some empty mills in the city, some of them still amazing industrial buildings but derelict. When I had finished my bit, Amir took us all through the list of Bradford’s former lord mayors, an amazing list of successful woollen entrepreneurs who were focused on building high-quality buildings, growing an industry that now had relationships across the world, and making theirs the best city in the country. They were practical Yorkshire people who invested in education, the arts and culture, and improved people’s lives and health. When Titus Salt, the former mayor, died, thousands of Bradfordians turned out for his funeral—again, not bad.

Amir then took us through the list of successful entrepreneurs in the city today, many of them women, many Asian and most of them young. How many of these practical, impressive people who were building and running businesses in the city were on the council today? The answer is none. Amir tells me that they were too busy running their businesses and being practical—very Yorkshire. These are serious questions. Who are we looking to if we want to rebuild our industrial sites and grapple with the broken machinery of the state? It is not the talkers; it has to be the doers. They are committed, practical people and the only ones who understand the real issues, precisely because they have done it. In my experience these people are everywhere, in plain sight, but our systems and processes often do not recognise them and have little understanding of their significance for a city. We need to find them, back them based on their track record and certainly resource them. We need to get interested in people again, not endless processes.

Those who are real doers are often slightly disruptive and, yes, difficult people who ask difficult questions. As a result, they tend not to be the people who are influencing the policies and details of national, regional or local government. As a result, we do not harness those with real skills, innovation and entrepreneurial flair. Therefore, unsurprisingly, government continues to underperform. It is all about people, not structures and policy. It is about those who act.

Amir Hussain, who I mentioned, runs a dynamic and innovative data technology company as one of several businesses in the city. He reflects on Lister Mills today, where an ambitious and incomplete apartment development has done little to stimulate regeneration. Not one new café, office or business can be attributed to the development, and the apartment values have slumped to less than half the original selling price despite many millions of pounds of government grant funding. Yet within this magnificent industrial complex reside sophisticated businesses such as Haddow, run by James Nimmo, producing textile designs for some of the biggest names in the world. Amir relates his shock at finding that there were more than 100 trendy young designers, as he called them, beavering away deep inside the old weaving sheds, in a scene reminiscent of Willy Wonka’s chocolate factory, but no one had noticed.

Compounding this, he told me, is the fact that our approach to data is inadvertently undermining places such as Bradford. During a collaborative meeting with the credit reference agency Experian, Amir had it analyse his own neighbourhood, just a mile away from Lister Mills. The findings were shocking. According to Experian, no one had any money, all were financially stretched and they predominantly shopped at discount stores, and therefore this area should be avoided by brands such as Nando’s, Costa, PureGym, et cetera. It was obvious to the practitioner Amir that something was very wrong, not least because there were people on his street owning brand-new Rolls-Royces. The fact that the area is 70% Pakistani Muslim had gone unnoticed. The data did not recognise that this demographic has different financial habits such as a greater use of cash, buying second and third houses, and building house extensions. In this community, the prevalence of gold shops and dessert parlours would be a far better indicator of financial capacity than credit card use.

Bradford is a success story because these people are there—I have met them, and they care about the future of their city—but I am afraid that the siloed systems and processes of the state are not fit for purpose. This city is not attracting serious, experienced and talented leadership, and when they come, they do not stay long. Who was the last Cabinet Secretary to visit Bradford who got under the carpet and took a look and an interest in these entrepreneurial people and the implementation issues they are facing as they attempt to make their businesses and their city a success? It is all about people and not process; it is about the quality of people such as Alan Bates, who cared for 20 years and got stuck in. There are people like Alan in Bradford, hiding in plain sight.

This all throws up difficult questions for all our political parties about the calibre and experience of the people they are selecting who claim to represent our cities and communities such as this one. What have many of them built? What have they done? What have they achieved in practice? Are they asking the right questions?

These questions also apply, of course, to your Lordships’ House. It has been suggested by the noble Lord, Lord Norton of Louth, that a Peer of the realm should be chosen on “conspicuous merit”—not a bad measure, and a challenge to us all and to our political parties. Is this the benchmark we need for those who would claim to represent us at all levels?

I will finish by taking noble Lords to Fox Valley, in Stocksbridge, on the edge of Sheffield, where the paragon umbrella frame was invented. There, a local family who cared about where they lived—Mark Dransfield and his late wife, Deborah Holmes—took the risk of taking hold of a former derelict steelworks site, put their hard-earned money in, and grappled with the often very unhelpful machinery and infrastructure of the state. Hundreds of new jobs have been created there and many new businesses, new retail space and offices, and 115 new homes, with a thousand more planned. The centre is like a piece of theatre; so many community events happen there. I encourage noble Lords to go and have a look for themselves on the internet at the quality of this development. Go and visit and taste the quality of the food at Ponti’s restaurant—the first outside London. It is a great day out. My mother went, and she loved it.

Someone cared enough, someone took the long view, and someone took risks. It was Mark and Deborah. Joanna Lumley, who opened Fox Valley in 2016, said that she had never seen anything quite like it anywhere in the south of England: the attention to detail; a development that transformed a former steel town; a meeting place where work and leisure engage with high-quality public realm and architecture. Land that had laid derelict for 10 years, deepening the spiralling decline of the town, had become the catalyst for transformation—all down to two practical people who cared about where they lived.

In closing, I ask the Minister: what percentage of levelling-up funding has not actually been spent since its launch in 2020? Why might this be?

3.28pm
Baroness Bennett of Manor Castle (GP)

My Lords, it is a pleasure to follow the brave and challenging speech of the noble Lord, Lord Mawson. He led me to reflect on the impact of the first past the post electoral system in creating one-party states in local government, with some of the outcomes that he outlined. He also inspired me with his wander through the tastes of Yorkshire. I have to mention the wonderful Razan Alsous, a Syrian refugee who came to Yorkshire in 2012 and missed what she describes as her “squeaky cheese”—traditional halloumi cheese that she ate in Damascus. She now has an award-winning company making that cheese in Yorkshire.

I thank the noble Baroness, Lady Armstrong of Hill Top, for securing this debate, particularly for the way she worded the topic—the word “local” in “local regeneration of former industrial areas” is so important here. I thank her also for highlighting the challenges constraining this, particularly local government. I thirdly thank her for her timing, since my visits last weekend to Newcastle and North Tyneside means that I will have the same regional focus as the noble Baroness brought to this debate.

My visit was differently directed towards the Byker Wall estate, a 1970s social housing project with grade 2 listed status that has tried to maintain its existing community from the pre-development streets. There were many issues then and since in making that work. What I saw in my visit to Byker was a real struggle to deal with the problems of litter and isolation and loneliness, but it is also notable that community groups, such as Byker Mutual Aid, Byker Village Tenants and Residents Association, and St Peter’s Neighbourhood Association, have sprung up to try to fill the gaps that have been left by more than a decade of austerity in public services. Byker was the site of the incinerator ash scandal in the 1990s. The incinerator was finally closed due to the action of campaigners at the turn of the century.

Picking up on points that the noble Baroness made, we need to think about the clean-up of industrial and post-industrial areas and to focus on public health. Clean air, clean water and soil are the crucial foundations for a healthy community. We know that, across the UK, we have a major problem with disability and chronic illnesses. Of course individuals need support with that, but what we really need to do is build healthier communities so that people do not get ill in the first place. Figures from the Office for Health Improvement and Disparities show that in the most deprived neighbourhoods in England, which are many of the areas we are talking about, people develop multiple long-term health conditions 10 to 15 years earlier than in the least deprived communities, they spend many more years in ill health and they die sooner.

Another thing we need to focus on in many of these areas around health is warm, comfortable, affordable-to-heat homes. This is a particular issue in Byker, where the cost of heating with a district heating system is considerably higher than in other areas. In so many of these post-industrial areas, the housing stock is poor, yet that is a potential opportunity. The insulation of homes can create a field for many small, independent businesses, provided that they have the certainty of long-term government investment and not the boom and bust that has been induced by see-sawing government policies. I am afraid that the largest current opposition party has see-sawed in its home energy efficiency policies even before it has got into government.

Last month, the New Economics Foundation looked at the data on the Government’s home energy efficiency schemes and showed that, in a single year, rollout had fallen by 40%. The total number of households upgraded by the home upgrade grant—HUG—and local authority delivery schemes has fallen by 40% in the past year. Similarly, the number of households upgraded under ECO, the largest and longest running scheme, has fallen by 55% in the past year. The social housing decarbonisation fund has existed for less than two years, but if we look at the figures quarter on quarter, we find that it is down 41% as well. This is key to Britain reaching its net-zero targets, but it is also crucial to cutting the £2 billion costs for the NHS that come from the poor quality of our housing stock.

Money that has to be spent on heating cannot be spent with local businesses and suppliers. It goes into big multinational pockets. Had the Government brought in community energy schemes, which your Lordships’ House tried to push very hard through the Energy Bill, the money could be returning into communities.

On the importance of local activity, local energy and local decision-making, I want to focus on some good news stories. One of the places I want to highlight is the Valley Project in Holme Wood, Bradford. There was an adventure playground project there, and money was parachuted in from London—the whole plan was parachuted in. Some big high-tech equipment was installed. It lasted a couple of years and then fell apart. Then, a couple of local people, ironically made unemployed by austerity, started small, working with the community. It is now a wonderfully lively, successful project using mostly recycled and donated materials that the children work with to design their own spaces. As a little advert for it, if anyone knows a local source, it is currently looking for some large wooden cable reels for the children to use in their secret garden as tables and chairs. That gives a sense of the kind of project that is working to lift up that community.

I have not yet focused on industrial policy, as I am sure many noble Lords to follow in this debate may well do. To return to Byker, the area has a proud history of glassworks and community artists, a tradition that continues with Mushroom Works, Testhouse 5 and Lime Street. The estate was built with hobby rooms: spaces for people to do activities. The one that I visited used to house a darkroom for the development of photography skills, but they are often not widely used today. We need to see that the resources are there to be put in to work with local people to develop such facilities for modern-day uses. The key has to be to build on what is already there in local communities and focus on their skills, knowledge and capacities, rather than bringing in highly paid outside consultants and grand plans drawn up by them.

Here, I want to draw a real contrast. The noble Baroness, Lady Armstrong, caused me to cross out a significant part of my speech that covered the Teesworks area, so I want to look at the alternative, 180-degrees opposed model. The Preston model of public sector working and community wealth building is focused on the procurement policies of the local authority and other anchor institutions, such as its university and housing providers, to support local businesses, develop new enterprises, encourage better working conditions such as through the real living wage, and increase the socially productive use of wealth and assets, such as local government pension funds. The focus is on genuine prosperity and the creation of wealth in that community, rather than some, often all too artificial, bottom line.

I go back to a figure that I have cited before in your Lordships’ House: 10% of the entire land area of Britain has been sold out of public ownership in the past four decades. That 10% of the entire country was 50% of what used to be public land holdings. We need to see a building up or restoration of public assets, not further privatisation and loss to the public. For example, among the co-operatives in Preston there is the Brookfield retrofit co-operative, led by a community organisation, and a housing co-operative for—and run by—the Traveller community.

What is not the way forward, as the noble Baroness, Lady Armstrong, set out so clearly, are the freeports. That model encourages corruption, tax evasion and criminal activity. Freeports suck businesses and jobs out of other areas; indeed, the evidence from around the world is that it is a model built mostly on relocating existing businesses, not generating anything new.

I conclude with the words of Ruth Hannan, the former director of the People’s Powerhouse in Preston. She told an event last year that the need for local government is to be as flexible as possible, so that it can improve people’s lives. Ms Hannan said:

“Most of the time, we have to fit into the system, rather than the system adapting to us”.

I suggest that that is also a lesson for Westminster. Westminster needs to get out of the road. It needs to stop providing directions and being a backseat driver, to ensure that local communities have the power and resources that they need to make decisions for their own future, not with direction from what is often far, far away Westminster.

3.38pm
Baroness Chapman of Darlington (Lab)

It is a pleasure to follow the noble Baroness, Lady Bennett of Manor Castle. I did not agree with absolutely everything she said but I welcome the fact that she has recently visited the north-east. I am glad that she gets the positive impression of the place that she has rightly conveyed to the Chamber this afternoon.

I congratulate my noble friend Lady Armstrong of Hill Top. She was possibly the first woman politician who I ever heard speak in real life and it is a privilege to join her debate today. I remember that one of the things she talked about—I hesitate to say that she repeated herself today and, rather than talking about men in the steel industry, she was talking about politicians—was how, as a young woman growing up, it was the men who did the standing up and talking and the woman who made the tea. That stuck with me and probably acted as a bit of a spur—and I do not make the tea, as my husband will tell you.

Like my noble friend, my family worked in steel at ICI on Teesside. My great uncle Ken sold veg door to door in South Bank. I have lived in what we now call the Tees Valley for 43 years. My dad was born in Pym Street in South Bank. The noble Baroness, Lady Bennett, spoke about health, and as well she might because our health indicators in this part of the world have not been great over the years.

However, I reject the noble Baroness’s swipe at the previous Labour Government over this. My dad died aged 48 of a heart condition in 1994. Had he lived for maybe another five years to see the election of the Labour Government, when investment and reforms were put into the health service, there was a very good chance he would have lived. There were people dying on waiting lists in 1994, waiting for more than a year and a half for heart treatment. That stopped with the Labour Government. I am very proud of what we delivered, not just in health, but in education and in joining up public services, and in our regional development agency in the north-east during our period in government.

My children were born in Darlington, which is part of what we are now calling Tees Valley. My nana thought that moving to Darlington was the ultimate in going up in the world. That was only until she moved into sheltered accommodation in Marske, because then she had really made it. It is a great place to be from, with a globally significant contribution to the industries of the past and the potential to be the same again today.

Our devolution settlement and the election of the first Tees Valley Mayor was an opportunity to grow our local economy and invest in our people in a joined-up way. Some good things have happened. Our airport is secure, for the time being at least, and our university is thriving. But many are wondering, after six years, where the money has gone and when they and their families will begin to feel the benefit. After decades of industrial decline, unemployment rates on Teesside are among the highest in the country at 4.2%, compared with the national average of 3.7%. Child poverty is at 36%, compared with the national average of 29%. The case for regeneration of this former industrial heartland is overwhelming.

I will not go over everything my noble friend Lady Armstrong said, but we now find that we have a mayoralty—and sadly, by extension, on the world stage, the Tees Valley—that is mired in controversy. At the heart of the accusations lies the deal which saw the creation of an entity called Teesworks in July 2020. It was nominally a 50/50 joint venture partnership. You can argue about whether 50/50 was fair or right at the time the joint venture was established, but you can certainly ask questions about what happened subsequently.

This controversy will never hit our pride in our area—no political shenanigans could do that—but it harms the potential for future investment. That is why I, my noble friend, and others around this House have been repeatedly trying to get answers from Ministers about what has gone on and what the Government intend to do about it.

As my noble friend explained, the 50/50 stake in the joint venture became a 90/10 stake in favour of the businessmen investors. The Government seemed to accept that there was a case worth investigating and Michael Gove commissioned a report. It had some quite worrying findings. It found that it was clear that the Tees Valley Combined Authority had “no sight” of decisions around the joint venture,

“other than specific deals where they may act to provide financial covenants or instruments”.

According to Private Eye, the arrangement for Teesworks to buy land was also changed, and the land purchase cost was reduced by £1 per acre from the previous market value. Why did this happen? There followed a land purchasing at £1 per acre for the freehold at South Bank Quay, and preparation for this land was financed by the public, with a £107 million loan from the UK Infrastructure Bank. Other land was purchased by the developers for less—£100, with complex lease and sale arrangements. Given the complexity of all these deals, the lack of transparency, the apparent advantage shown to a handful of preferred developers and the substantial profits made, without any investment in a site of such public importance, it is absolutely right that the concerns were raised and the inquiry was called.

We find ourselves at the end of that inquiry and reading the report, with so many questions left outstanding. We are concerned about a lack of transparency, inadequate governance and financial mismanagement, as found by the report—not a good deal for the taxpayer, in my opinion. We must make sure that we get to the bottom of all this. It is only fair for the reputation of Tees Valley and for the need for taxpayers locally and nationally to get the best value for their investment. That is why we continue to call for a comprehensive and independent investigation by the National Audit Office to restore public trust and confidence in the project.
I appreciate that some of our questions are a bit technical and detailed. We may have asked them of this Minister; we have certainly asked other Ministers. My noble friend has asked to have a response in a letter, and I add to that a request for a meeting with officials so that we can understand the Government’s reluctance to allow the NAO to investigate. My understanding is that that could be done incredibly quickly—in a matter of days, not weeks or months. It is necessary to have that investigation and a clean bill of health from the NAO so that investors can have the confidence that they need. They will be looking at reputational risk, and they need to know that their investments will be sound.

Tees Valley is a treasured home to us and a place of invention and innovation. Yes we have our challenges, but if our brightest days are to lie ahead we need to lift the lid on this. We need to find out what has happened, remove any stain of suspicion of impropriety and allow ourselves to move forward as the strong community that we are.

3.48pm
Baroness Donaghy (Lab)

I thank my noble friend Lady Armstrong for initiating this debate and for her powerful and moving introduction. My noble friend Lady Chapman referred to listening to her when she was a younger woman and being influenced by her. At the risk of turning this into a sketch by John Cleese, I will say that I canvassed for my noble friend Lady Armstrong’s father, Ernie Armstrong MP, so it is an area that I love very much and am very familiar with. As we are having to establish our regional credentials, I say that my mother’s family comes from Barnsley, and I spent the first 21 years of my life having Christmas there, so it is a town I am extremely fond of—end of John Cleese sketch.

When I think of the wasted years we have lived through—with an absence of government industrial strategy, underinvestment in our transport network and the reduction of local government to virtual serfdom—I could weep. To be fair, one version of this Conservative Government, led by Theresa May and in this House for BEIS by the noble Lord, Lord Henley, did have an industrial strategy. There was support from all sides of the House. However, we woke up one morning and it had been disappeared. Although it was somewhat limited in its scope, it acknowledged the need for co-ordination in support for business, education and skills and local involvement, but it came to nothing.

Indeed, we have witnessed years of so-called levelling up, where a complex maze of funds was created, many with overlapping purposes, and where local and regional authorities were invited to bid for limited amounts and in competition with one another. The Minister, the noble Baroness, Lady Scott, was very frank at the Dispatch Box recently in saying that there was not enough money to support all local authorities, so we endured a giant bingo game, with Michael Gove the chief bingo caller handing out the cash to the lucky winners. Then my imagination started to run away with me, and I was thinking of things like “Clickety-click: new theatre in Clwyd”; “Legs eleven”—well, I will leave the rest to your imagination.
It is calculated that 23 million people live in older industrial areas in Britain—that is one-third of the population. This does not include seaside towns, many of which have similar problems, as outlined in my noble friend Lord Bassam’s excellent committee report on that subject. People suffer multiple forms of disadvantage in those areas, apart from being older on average, lower paid and disabled. The Government take pride in the number of jobs available at the moment, and it is a matter of pride, although I doubt that they had very much to do with it. However, between 2012 and 2019, job growth in older industrial towns was around one-third of the equivalent rate in London—there were 66 jobs for every 100 adults. Commuting to larger towns for work is the norm and sometimes commuting by public transport is not possible. The possession of a car provided access to 28 times more jobs within a 30-minute journey compared with three times in London.

I am a strong supporter of local government, and it is not a perfect system. There will always be a need to moderate between wealthy areas and poor areas to ensure some kind of fairness. Let us be honest: it is how that distribution has been made by successive Governments which determines how really fair the deal might be. We need a return to strong local government, but that requires a step change in funding. It also requires a period of capacity building, given the dire state of affairs in many parts of the country.

The Resolution Foundation and the Centre for Economic Performance produced a report in June 2022 entitled All Over the Place: Perspectives on Local Economic Prosperity. They ran four focus groups in Yorkshire and Humber. The people were from all walks of life, and they talked about their lives in Leeds, Hull, Barnsley and Scarborough. They cared very much about their area but felt strongly that things should get better. In every region of England, more than three-quarters of the population think their area has either trodden water or deteriorated in recent years. The focus groups were aware that their local areas had different routes to prosperity and were alive to the tensions and trade-offs that growth could bring.

All the groups were upset about the degradation of their places and public services—empty shops, unsafe public spaces and weak policing were cited. Although work was readily available, job quality was a pressing concern—low-paid jobs, casual employment, zero-hours contracts, a lack of training and progression, and the sometimes unlawful behaviour of employers.

There is a generation of young people in those areas who do not go into higher education and whose work experience would depress the strongest heart. In the levelling up debates, the Government recognised the criticisms by local government of lack of co-ordination, inefficiencies, complexity of decision-making and reporting burdens. It talked about empowering local decision-makers, local satisfaction and engagement, and a needs-based approach. That is all very good, but it is some time in the future and yet to be delivered. Now the Government are offering a long-term plan for towns. Local government will still need to put in bids and set up town boards, including the local MP, and central government will set up a new towns task force, offering capacity support to town boards. This just sound like the same centralising bidding process—it is just a bigger bingo game.

Yesterday’s Budget covered investment zones, freeports, trailblazer devolution deals and a levelling up fund—even the renovation of local village halls. That is all well and good, but there was no co-ordination to ensure appropriate infrastructure and transport links. It is still a system of handing out the sweeties, along with namechecks for the class favourites—no genuine empowerment.

Finally, the Government have made a big thing about the so-called freeports, to which the noble Baroness from the Green Party referred. A lot more announcements have been made about freeports than actual freeports. I share the scepticism of some commentators about freeports’ potential impact, and I agree with the comment that they are more likely to encourage displacement of economic activity from surrounding areas, rather than increase overall growth. There is no proof that freeports generate high-skilled jobs.

The Office for Budget Responsibility has said that any additional economic activity generated by a freeport would

“probably be difficult to discern even in retrospect”.

It stated that enterprise zone reliefs act more as a reward than an incentive, and that existing infrastructure and transport links are stronger determinants of levels of activity.

In conclusion, the contrast between those with the most opportunities and those with the least opportunities in the UK is shocking and unacceptable. For the Government to start saying some of the right things does not make up for 13 years of not listening, and it is no substitute for a strong and vibrant local government.

3.57pm
The Lord Bishop of Norwich

My Lords, the place that shaped me most as a priest in the Church of England was the parish of Holy Trinity North Ormesby in Middlesbrough at the turn of the millennium, so it was a simple delight and joy to hear the noble Baroness, Lady Chapman, speak about so many places that I know, from South Bank to Maske.

North Ormesby is set among derelict land, chemical plants and the distant smoke, sound and smell of the coke and steel furnaces. It is a place that taught me so much about resilience and survival, as well as about the strength of community, even when the stuffing had been knocked out of it. The people there taught me about acceptance and that each day was filled with little blessings. But I also learned about poverty and the impact of damp houses, as well as about health inequalities that meant that, if you lived six miles away, on average you lived another decade.

In all the indices, that community still comes out as being among the poorest, most ill, most unemployed and most unskilled, as well as having the lowest educational attainment and the worst air quality of wards in this nation. But the people I lived alongside in that community have warm and large hearts, despite the challenging context. The church was at the centre of its long-term regeneration, successfully building the Trinity Centre—a place for support, learning, faith and fun, it said. It was funded by the single regeneration budget and the neighbourhood renewal fund, but also, crucially, by many small grant-making trusts—and a local couple who one day knocked on the vicarage door with £1,000 of their savings because they believed in what we were doing. We gave confidence to the local authority and a housing association to invest in that community when others simply walked away.

What else did I learn in that former industrial community and its regeneration? I learned the need to be with people rather than doing things to people; the need to listen to stories of place, of loss and of hope; the need to recognise that local people are often the experts, as the noble Lord, Lord Mawson, has reminded us; and the need to raise up community leaders of broad consensus, not extreme voices that propagate hatred, division and scapegoating. I learned that there would be setbacks along the way; that generosity wins hearts and minds, as does adding beauty to the built environment; that patience is often in short supply, but you need to have it for the long haul; and that regeneration takes time, over multiple changes in government policy, not five years. As the noble Baroness, Lady Armstrong, said in her excellent opening speech, regeneration is complex.

However, none of that is a substitute for investment—for money—which both signals our priorities as a society and makes up for chronic underinvestment over time. We see that money can be found for some parts of the country, but often not for the north, the south-west, the coastal towns that I serve in Norfolk or our poorest communities. Levelling up is about valuing the flourishing of all people, made in the image of God, valued in God’s sight and created for a purpose.

I saw that on a recent visit to Dumfries House, an incredible place that His Majesty the King has championed. It has been the engine for regeneration and new opportunities in that part of Ayrshire, marked by its mining past. Heritage projects can also play a part in the regeneration of former industrial areas, but, again, it has taken patience, local engagement and money. The extension of the long-term plan for towns in yesterday’s Budget is a welcome and important signal of the Government’s intent, as is the funding for community regeneration around heritage. Yet the scale and speed of delivery is just as important as the aspiration behind the policy. The latter has perhaps been more successful than the former thus far.

As the Chancellor of the Exchequer announced yesterday, more investment in historically underinvested areas is important, and I would be intrigued to know from the Minister what His Majesty’s Government learned from listening to those former industrial communities in shaping their policies. How much of yesterday’s announcement is new money?

In Middlesbrough we were, in a sense, living out the recommendations of the 1985 Faith in the City report, commissioned by Archbishop Robert Runcie and famously described by one Cabinet Minister at the time as “pure Marxist theology”—which was some way off the mark but simply made more people take note and read it. That report concluded:
“Chapter after chapter … tells the same story: that a growing number of people are excluded by poverty or powerlessness from sharing in the common life of our nation”.

If that was true in 1985, it is an indictment that it is still true today in so many former industrial areas. Indeed, the Archbishops’ Commission on Families and Households published a report last year that could have been written 40 years before. It said:

“Increasing interconnected inequalities and discrimination prevent many people from living flourishing lives”.

I would argue that the decades-long failure to invest in our former industrial communities is a form of discrimination that we must commit to putting right together, across government and this House.

Back in 1985, Faith in the City called for

“a deeper commitment to create a society in which benefits and burdens are shared in a more equitable way”.

One of the final lines in the report will resonate with many of us clergy who have lived and worked in former industrial communities and who minister in those communities today:

“to stand more closely alongside the risen Christ with those who are poor and powerless”.

Alongside churches of different traditions, and different faith communities, the Church seeks to do this in every community in this country. We must be a living and breathing Church of and with the poor, not simply an institution for the poor. I ask the Minister what role the Government see for themselves in this context, standing alongside the poor and powerless in these former industrial areas.

Finally, I stress the importance of the household support fund, which has become a lifeline for local authorities to run essential services since it was introduced in September 2021. In Norfolk, the fund is used wisely to give direct support to low-income families, to give grants to libraries to deliver period poverty and hygiene grab-and-go bags, to provide debt and financial advice, and, through a major grant to the Norfolk Community Foundation, to reach often excluded communities—I declare an interest as a patron. The fund is a lifeline for many residents. While I welcome the temporary extension of the household support fund announced in yesterday’s Budget, I ask the Minister to set out the Government’s plans to put local government funding on a sustainable footing. While welcome, these short-term, short-notice extensions provide little time for local councils to plan effectively, as we would all wish and expect them to do.

We owe it to our former industrial areas to champion them, so that all people might flourish and find life in all its fullness. I am grateful to the noble Baronesses, Lady Armstrong and Lady Swinburne, for their advocacy and expertise on these issues and for bringing this debate to our consideration today.

4.07pm
Lord Shipley (LD)

My Lords, I thank the noble Baroness, Lady Armstrong, for enabling us to have this important debate. I remind the House that I am a vice-president of the Local Government Association. It has been a helpful and thought-provoking debate. Some very important points have been made and some very interesting reminiscences shared. The noble Baroness said three words in her speech which struck me as being at the heart of what we are debating: “Deindustrialisation has consequences”. It does have consequences. Things change. Parts of the industrial revolution and our extraction industries have come to an end, but there has to be a plan for coping with that, and the record of the past 50 years has not been entirely good in that respect.

The noble Baroness raised the question of best value. Having been a councillor at that time, I praise her for what she did, because best value is a very good way of operating; the more of it, the better. We also heard quite a bit about the issues in Tees Valley. I hope the Minister will be able to answer the very specific questions that were raised. I have twice spoken on the Tees Valley issue—once when the first press publicity came out and then in a statutory instrument debate on the east Midlands, on whether the scrutiny, audit and risk structures inside combined authorities were fit for purpose or not. That was a general point I was raising about them, and I shall raise it again when we come to the next combined authority statutory instrument.

I hope the Minister will be in a position to respond to that, because, as the noble Baroness, Lady Chapman, said, this needs to be in writing, it needs to be very clear, and it needs to be quick. I think there needs to be an investigation by the National Audit Office. If the Secretary of State is not minded to do that, there needs to be a clear explanation why so that we can debate it on the Floor of the House.

There are some significant examples of success in brownfield regeneration, such as with a number of railway stations. A number of colleagues will be aware of the proposed major development to the west of York station and it was announced only a little while ago that there will be over 1,000 new homes to the west of Newcastle Central station, underpinned by the work of Homes England. According to the press announcement from 15 February, Peter Denton, chief executive of Homes England, said:

“It’s hard to overstate the importance of this acquisition. Not only will the site deliver around 1,100 quality, sustainable new homes, but bringing Quayside West into public sector ownership will act as a catalyst for the wider regeneration of Forth Yards, a key regeneration area for the city that has been stalled for more than 20 years. It’s a complex, challenging brownfield site that could have a transformational impact in the city, but it needs up-front public sector intervention to unlock its full potential … Newcastle City Council and North of Tyne Combined Authority have a clear vision for Forth Yards, and we’re working with them and Network Rail to take a holistic approach and ensure that it delivers for the people of Newcastle. This will include, if necessary, using our statutory powers to make this happen”.

I welcome that, because that is public intervention which will input public cash to deliver that outcome. By the way, it also meets the brownfield presumption recently announced by the Secretary of State and demonstrates that it can be done. It is really good that, of the 18 key performance indicators that Homes England has, the very first is the amount of brownfield land reclaimed. That is a measure we will all be able to see.

As the noble Baroness, Lady Donaghy, said, 23 million people live in older industrial Britain, many with lower-than-average earnings, a higher-than-average amount in manual jobs and many with a lower proportion of degrees and lower jobs growth in their areas. Many of the newer jobs in those areas are in the service sector—retail, warehouse fulfilment, call centres; they do not pay big salaries and they are not high-productivity jobs. As we have heard—and I agree entirely—the Government should encourage local leadership, end competitive funding and put in place single-pot funding. It needs money of the kind we used to have when we had regional development agencies. When I look around the north-east of England at what has happened in, say, the automotive industry, pharmaceuticals and renewable energy, that sectoral approach has worked well.

We will now have the combined authorities and combined counties. I wish them every success. I think they have a capacity problem and do not have enough planners or planning officers. We lack an industrial strategy, which the noble Baroness, Lady Donaghy, mentioned. There needs to be one. We also need pension funds to increase their investment in the UK. I give due credit to Legal & General, which has invested in northern cities in recent years.

Let me move briefly to the impact of HS2. One of my great fears about HS2 was that if the track did not reach the north of England, private sector development money would follow the track. On 20 February, I opened my copy of the Guardianto read the executive chairman of HS2, Jon Thompson, say that:

“For too long the debate on the wider economic benefits of high-speed rail in the UK has relied on anecdotal evidence. This report gives definitive proof that investor appetite, regeneration activity and investment close to HS2’s regional assets has surged”.

It has become clear that there is significant investment into the West Midlands as a consequence of HS2. Of course, the track is now to stop at Birmingham. It is reasonable for anybody in the rest of the United Kingdom to ask: what is the impact on our areas? Are we actually losing investment in the rest of the country as a consequence of what is happening in the West Midlands? Good luck to the West Midlands, but we do not wish to see investment sucked out of the north of England.

This issue is finally about gap funding, and I thank the Library for its brief on this. The brownfield presumption will work only with money to help with infrastructure such as roads, schools, trains and buses, yet the lack of money is plain to see. We saw how much gap funding was needed for urban development corporations. The APPG on Coalfield Communities described this as a Catch-22 situation whereby the private sector will not invest on the speculative basis because the local economy is too weak, but the shortage of good-quality premises constrains local business growth. Stakeholders suggest that gap funding would encourage private sector investment in brownfield sites, new workspaces and historic assets. I hope the next Government will read the report of this debate and then act on it.

4.17pm
Baroness Taylor of Stevenage (Lab)

My Lords, I congratulate my noble friend Lady Armstrong on securing this important debate. I first met her back in 1997, after the general election; she was incredibly kind to me then and has inspired me ever since, so I thank her for that. I thank the noble Lord, Lord Mawson, for the memory of a sweet-shop; my great-great-grandparents had a sweet-shop in the East End of London, which is also a happy memory.

This afternoon, we have heard about Teesside, Barnsley, Newcastle, Bradford, Dumfries, the East End of London, Sheffield, and seaside towns, and I am going to talk about new towns. The debate has demonstrated yet again, as did yesterday’s sticking-plaster Budget, a Government who have no clear plan for the economy or a cogent and comprehensive industrial strategy, or effective national devolution, and will simply fail in their vital task of ensuring that our country achieves its full and very considerable potential. Meanwhile, the so-called levelling-up mission runs into the sand, with cancelled projects, piecemeal funding bids, Ministers who cave in too easily to their Back-Benchers, failure to deliver the skills that business needs, and a devastating failure to deliver infrastructure, which means, for example, developers waiting longer to get a grid connection for one development—in some cases, eight years—than it took to build the whole core of our motorway network in the 1950s and 1960s.

Regeneration is needed across our country, a case clearly set out by my noble friend Lady Donaghy. Many areas are plagued by the sort of inequalities that the right reverend Prelate referred to so powerfully.

Although I do not come from one of the former industrial parts of the country, I can speak about regeneration from first-hand experience. Our new towns—a marvellous innovation of the post-war Labour Government—designed to provide the right conditions for the technological revolution that was taking place, and to provide good-quality, affordable housing for the skilled workforce that would be needed, were delivered over a relatively short timespan. Of course, if you build an entire city or town over a period of little more than a decade, some 50 years later it will need extensive renewal and regeneration all at the same time. I always think of it like putting new light bulbs in your house when you move in; then they all go at the same time.

We also had to create the right conditions to allow the town’s industrial base to move from the heavy manufacturing and engineering in the defence industry, which had provided the employment of the early decades, to developing the life sciences cluster—now the largest in the world outside the USA—and an established space, defence and communications cluster. In case noble Lords did not know, one in three of the satellites up in space, processing our phone and data signals and guiding our GPS and satnavs, is made in Stevenage in Hertfordshire.

We have not dragged our heels on housebuilding either, because we understand the co-dependency between housing and the economy which is deep in our new-town roots. That co-dependency was mentioned by the noble Baroness, Lady Bennett. Our new-town pioneers got their homes and their jobs together, enabling them to truly have a vision of a good life for them and their families.

We have also seen the decline and hollowing out of our town centre. This is the same problem faced across so many of our towns and cities in the UK, but exacerbated for us by the fact that when the development corporation was wound up in the 1980s—and in spite of determined local action to try and prevent it happening—all the property in our town centre was handed over to investment houses and pension funds. We ended up with a complex web of over 60 large landholders, with the council retaining only the expense of the public realm maintenance.

Nevertheless, in spite of one false start which crashed with the rest of the economy in 2008, we put our minds and very considerable efforts to the task of comprehensive regeneration. Helped by the noble Lord, Lord Heseltine, our community, our local enterprise partnership and an amazing collaboration between local leaders across public, private and community sectors, as well as party-political boundaries—there was no one-party state here, as the noble Baroness, Lady Bennett, talked about—we are now in the midst of a successful £1 billion regeneration which is transforming the heart of our town.

We are using town centre development to build a considerable number of the homes we need, which helps us with the constraints of tight town boundaries. We have optimised the opportunities that our east coast fast rail links bring by co-locating a new bus station, and both benefit from being linked into our 45 kilometres of cycleways. We are bringing the success of our cell and gene therapy cluster into the heart of the town, with lab space above the retail area. We set the conditions which enabled us to secure the £65 million European headquarters for Autolus, an American cell and gene research and development company. That scheme was taken from concept, through planning and a land deal, and on to site in eight months, so do not tell me that councils cannot move fast enough when they need to.

However, in the last 14 years it has felt too often that keeping the pace of this regeneration going from local government has been a battle and has been in spite of the conditions set by government, not because of them. The Centre for Cities has identified some of the barriers that areas face, and I recognise many of these. First, on risk, the private sector will lead where it is certain of a clear financial return, but often in the areas in most need of regeneration the risk for the private sector is too great on its own, so some level of public intervention will be needed. Too many government pump-priming funding pots—even where they are available—require sums of local match funding that are just unrealistic, and we do not have a system of local/regional investment funding in this country, as there is elsewhere in Europe, that could help.

Secondly, it must be recognised that social return—jobs, skills, local infrastructure and affordable housing—will need to be realised as well as private return, and that this is likely to need support. Andy Haldane, commenting on yesterday’s Budget, said that until we resolve the issues around millions of our workforce in this country not having the skills needed in our economy, we will not resolve our productivity and growth issues.

Planning and policy uncertainty are a real barrier for the private sector, as is access to essential infrastructure such as grid connections, water and high-speed data. The lack of a proper industrial strategy means that these are a real barrier to growth, and they are a barrier now. I have spoken before in this Chamber of my personal pain at having our local growth plans stalled, as our local plan was held for over a year on a holding direction by the Secretary of State. These kind of interventions really have to stop.

The Centre for Cities put it very clearly when it said that

“public-private cooperation can best maximise the private and social returns from a project”.

This is vital so that the people of the local area benefit, as well as those who have invested for profit. My noble friends Lady Armstrong and Lady Chapman, and the right reverend Prelate, have already mentioned, when they spoke about Teesworks, what happens when this balance gets tilted the wrong way. At the heart of that issue are the people of Teesside and the public assets formerly owned by them that should have been regenerated for their benefit to generate jobs, employment and industry. They should also be receiving sufficient return for their investment of land and the other value of the site. The governance of the project should have ensured an appropriate sharing of the risk taken by private sector partners to justify the returns that they have already accrued, as mentioned in the recent review.

The report’s scathing assessment and its 28 recommendations highlight the need for reviews of financial regulations and the make-up of the board, better oversight and scrutiny, reporting to the board, and for the public interest test being foremost in terms of transparency. The report also highlighted that not enough attention is paid to conflicts of interest, including those of the mayor. Seriously, the report highlights procurement issues, including the decision mentioned by my noble friend Lady Armstrong to change the balance of ownership in favour of the private owners to a 90/10 split, and the balance of risk between the public and the private sector, when to date the public sector seems to have taken the bulk of the risk and been responsible for the costs invested while the private sector has had the benefit of the profits.

There are very serious questions to answer about whether it has all been in the best interests of the people of Teesside. Have they had value for money for their public investment? As my noble friend Lady Armstrong indicated, the report asks more questions than it answers, questions that the people of the north-east deserve and have a right to have answered. As the noble Lord, Lord Shipley, said, why will the Government not accept the offer of the National Audit Office for a forensic financial assessment of what went on?

It is time for a reset on regeneration to ensure that it delivers for people in so many areas across our country who genuinely feel that they have been left behind—because they have been left behind. I hope that the Minister agrees with me on what is needed, a programme that the Labour Party have set out very clearly. We need a stable industrial strategy to create the conditions that businesses need in order to invest. We need to move away from insecure, low-paid jobs and strengthen our programme of apprenticeships, skills and training, and employment rights, to make sure that work pays. We need a national wealth fund to generate the private investment that we need. We need to get to work on building the affordable housing that we know we need as a matter of urgency. We need to speed up our critical infrastructure projects to get Britain moving again. There needs to be a complete reform of the planning system, so that it works for the builders not the bureaucrats, and investment in clean British power for cheaper bills and energy security.

We are all hoping on this side that the general election will come soon so that the British people can decide whether they want more of the decline of the last 14 years or a Britain where growth comes from the grass roots, where growth serves both people and businesses—a Britain with its future back.

4.28pm
The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Swinburne) (Con)

I thank the noble Baroness, Lady Armstrong of Hill Top, for tabling this important debate on local regeneration of former industrial areas across the whole of the United Kingdom. We have visited a very large swathe of the United Kingdom in today’s debate, also talking about the challenges constraining such regeneration. I thank all noble Lords for their considered and insightful contributions today, some of which I agree with—not all, but I am sure that we can work our way through them.

I too grew up in a former industrial area, in south-west Wales. I went to school during the miners’ strike as the granddaughter of a miner. I spent a large number of my years as an MEP supporting Welsh economic developments through the EU’s convergence funds, looking at how you regenerate some of those industrial areas. Therefore, I have some first-hand experience, share your Lordships’ aspirations for these areas and support their redevelopment.

However, as we all know, over the last 50 years the UK has seen fast and extensive deindustrialisation, with a lasting impact in many areas, including, as we have heard, the north, Yorkshire and the Humber, my own country of Wales and certainly the Midlands. That is to name but a few. We have heard today even more examples of where this has happened.

Although London and much of the UK have flourished under the new economic trends, former industrial centres that were once the beating heart of the Industrial Revolution have struggled, and continue to do so. I agree with the noble Baroness, Lady Donaghy, and all sorts of other noble Lords here, that this is not right. According to the Institute for Fiscal Studies, average wages in London in 2019 were 60% higher than those in Scarborough and Grimsby, with the top 10% of earners in London earning nearly twice as much per hour. Half of working-age adults in London and Brighton have university degrees, compared with less than one-fifth in places such as Doncaster or Mansfield. We are under no illusions about the scale of the challenge to regenerate these former industrial areas, and that is precisely why we have made it central to this Government’s levelling-up agenda.

I know that the noble Lords will have heard this before, but it bears repeating: for this Government, levelling up means ensuring that your life chances are not determined by where you grow up. It means addressing entrenched regional disparities to unlock economic growth everywhere and ensuring that people benefit from these rises in living standards and well-being. Nowhere is this more important than in our post-industrial heartlands—places where once, a location meant a life path. Now, while celebrating the cultural history and heritage of these places, we are committed to unlocking their full and wide-ranging potential.

Before turning to specific issues that noble Lords have raised in the debate, I will talk through some of what the Government are doing to try to make this happen. We are rolling out gigabit broadband across the UK; introducing education investment areas; opening freeports; increasing the national living wage; launching the long-term plan for towns and the anti-social behaviour action plan, while recruiting more police officers; and, importantly, delivering through our extensive local growth funds, including the levelling up fund and the UK shared prosperity fund. Through the third round of the levelling up fund, we are investing a further £1 billion in 55 projects across the length and breadth of the UK.

As many noble Lords have mentioned, we are using the levelling-up needs metrics to target funding at the places that need it the most, ensuring that every part of the country benefits. Multiple projects in former industrial areas are benefiting, such as the £20 million South Shields riverside transformation project, the £19.5 million River Tyne regeneration infrastructure project and, as the noble Lord, Lord Mawson, will appreciate, the £19.8 million project in Bradford to support and enhance Keighley’s engineering, manufacturing and economic role in the region, to name but a few. We have granted town deals exceeding £20 million to a number of other former industrial areas. As well as Barnsley, Doncaster and Wakefield, we are including 12 more that were announced yesterday by the Chancellor. They will receive £20 million each to invest in community regeneration over the next decade; it will be led by local people in order to be determined by local need.

Beyond our funds, post-industrial areas in the Midlands, such as Stoke-on-Trent and Mansfield, are being supported by bespoke and intensive levelling up partnerships. Levelling up requires a multifaceted approach, as many noble Lords have said today, from catalysing industrial clusters in the sectors that will drive the future economy to supercharging our city regions, to supporting our struggling towns and local areas.

We know that the challenge is large and recognise that it is not a simple task. It will not be achieved through quick wins. As the right reverend Prelate the Bishop of Norwich said, restoring pride in place across all areas of the UK, including those with a strong historic cultural identity, will take time. The current economic context makes this even harder, but even more essential, and so this is why structural and systemic change is so important, not least the empowerment of local leaders. I agree with many noble Lords who have spoken today that local decision-making is best. To this end, we have set ourselves a clear mission that, by 2030, every part of England that wants one will have a devolution deal, with powers at, or approaching, the highest level of devolution, with a simplified, long-term funding settlement.

Since 2022, we have announced nine new devolution deals, many of which are for post-industrial areas. These include, as many noble Lords know, a new mayoral combined authority deal for York and North Yorkshire, as well as Hull and East Yorkshire, the first ever mayoral combined county authority deal in the east Midlands and a second mayoral combined county authority deal announced with Greater Lincolnshire.

This May, the north-east will become the first region to be entirely covered by a mayoral devolution. A new north-east mayoral combined authority will be established, which will mean that every person in the north-east will have their own authority and elected leader, making decisions in their best interests. English devolution currently covers about 14.2 million people, taking the proportion now covered by a devolution deal to greater than 64%—up from 40% just a few years ago.

I turn to some of the other issues that were raised. We also recognise the challenges facing the local government sector and have committed to reducing the complexity of local government funding. I note the comments from many noble Lords. We have listened to local partners. In July 2023, we published our plan to simplify the funding landscape. Through this, we are delivering a more transparent, simple and accountable approach to funding and we are beginning to put this into action. For example, we have adopted a new approach to the third and final round of the levelling up fund, which has moved away from competition and made use of the large number of high-quality bids submitted in round 2. This was designed to reduce burdens on applicants and maximise efficiency.

Similarly, the UK shared prosperity fund provides local authorities more flexibility with a three-year allocation that they can choose how to spend on local priorities or projects. The most recent local government finance settlement for 2024-25 makes some £64.7 billion available to councils across the country—an increase in core spending power on 2023-24 of up to £4.5 billion or 7.5% in cash terms. We appreciate that they have more work to do and are therefore trying to fund them appropriately.

Baroness Taylor of Stevenage (Lab)

The Secretary of State made an outrageous statement this week about local authorities using consultants. They are used mostly to put together the very bids that the noble Baroness just set out. Can she please take back to the Secretary of State that it is absolutely wrong to criticise local government, which is starved of resources anyway for the reasons we all know about and is desperately trying to get hold of some of the funding to which she referred? The only way that local government can do this is by bringing in consultants to put its bids together; it does not have the resources otherwise. I ask the noble Baroness to take that back to the department and get it to think about this again.

Baroness Swinburne (Con)

I give the noble Baroness that assurance: I will take that back to the department. It is my first week in the department, so I do not have an answer for her now, but I will speak to the civil servants and my Secretary of State.
I will continue. The settlement includes additional measures for local authorities in England, announced on 24 January, which will be worth an additional £600 million. We are trying to provide local authorities with as much bespoke support as possible, knowing that they have more jobs to do to deliver some of these programmes.

The work that we have done to create a climate for investment through the development of our freeports and investment zones programmes will drive up living standards and regenerate selected areas. Unlike the noble Baroness, Lady Bennett, and some others, I think that the freeport initiative will be a source of jobs and investment. So far, we have created 12 freeports, eight of which are in former industrial areas—including in Teesside, the east Midlands, the Humber, Plymouth and the Solent—two are green freeports in Scotland and two are in Wales. All are now open for business and creating jobs.

Freeports are all about securing economic futures, and that of the UK as a whole, by reorienting regional economies towards innovative, low-carbon sectors such as renewables and advanced manufacturing. I believe that we are already seeing some movement here, with 6,000 jobs expected to be created and £2.9 billion of investment promised. They are also creating high-quality jobs across the UK, right in the communities where they are needed most.

Meanwhile, our investment zones programme recognises that the UK has underperformed in leveraging the success of key industries and certain research strengths, so they will be established in places with significant unmet productivity potential, many of which have a rich industrial history. For example, the zones in South Yorkshire, Greater Manchester and the north-east of England are focusing on clusters associated with advanced manufacturing, nodding to their industrial heritage while investing further in high-potential industries of the present and the future.

The Government recognise the crucial role played by the private sector in the levelling-up agenda through schemes such as investment zones and freeports. We aim to enable and empower the private sector to increase investment, jobs and growth at a local level. Good quality, self-sustaining growth will be delivered through capitalising on the growing industries of the future. That includes manufacturing, where our funding is targeted to ensure that UK industry copes with the fundamental changes to remain at the forefront of the global transition to net zero. We are committed to growing the economy and ensuring that funding does not focus solely on the most successful sectors today but looks ahead as we keep pace internationally and build the UK’s expertise for the industries of the future.

In acknowledging many noble Lords’ close ties to the north-east region, I am delighted to draw attention to the recent announcement of a £40 million funding package to accelerate Teesside regeneration. Middlesbrough, alongside Redcar and Cleveland, will receive £20 million each—a total of £40 million—to help ramp up improvements, with targeted projects planned to revitalise high streets, healthcare, transport and education, and to create more affordable housing.
Finally, in County Durham, where I understand that the noble Baroness, Lady Armstrong, served as Member of Parliament, the market town of Bishop Auckland, which expanded to serve the coal industry, has been awarded £53 million from the Government’s future high streets fund and towns fund to support its development as a visitor destination of national significance. I look forward to visiting, given that my grandparents come from there. This investment will help diversify and enhance the town centre, improve transport connectivity and provide new skills and enterprise opportunities for young people. I hope noble Lords will acknowledge that that is a fitting response to celebrate the town’s proud industrial heritage.

I have a very large number of questions that I will try to zip through. My handwriting is appalling, so please forgive me if I stumble. I really empathise with the pride that the noble Baroness, Lady Chapman, has in her home area. It certainly made me think about my upbringing in my area. To date, approximately £1.4 billion in levelling-up funding has been allocated to projects in the north-east and Tees Valley. This funding covers a range of regeneration priorities, including addressing the local skills gap and developing emerging sectors in former industrial areas. Across all three rounds of the levelling up fund, the north-east has received more per capita than any other English region, alongside wider programmes including devolution deals, levelling-up partnerships and our long-term plan for towns. This shows our commitment to level up the region.

I turn to some of the remarks that many noble Baronesses and noble Lords made with respect to the Teesworks controversy. Following the concerns raised about Teesworks and the actions of the Tees Valley Combined Authority, we commissioned an independent external review, which was published on Monday 29 January. This found no evidence of corruption or illegality but made a series of constructive recommendations regarding the governance and transparency of the project. For the two recommendations relevant to central government, we will carefully consider how to support the continued success of the mayoral development corporation across the country and the recommendations regarding the landfill tax. The Secretary of State made a written request to the Tees Valley mayor, asking him to set out how he intends to respond to the panel’s recommendations by 8 March. This has already been done, and we hope to publish all this in a very short time.

I have been asked why the National Audit Office should not examine this. I have a note here to tell me that the NAO’s role is not to audit or examine individual local authorities, and its powers would not normally be used for that purpose. It would therefore be inappropriate to expand its role so significantly by asking it to lead this inquiry.

The panel that did this investigation was made up of individuals with significant experience in assurance and local government. The panel spent months investigating thoroughly, and found no evidence of corruption or fraud. Its report has been published; I am sure noble Lords have all read it, as they have alluded to. It was published a week after we received it. We welcome the constructive recommendations and are actively considering the way in which these relate to central government.
Baroness Chapman of Darlington (Lab)

I in no way wish to besmirch those on the panel that conducted the report—they did what they were asked to do—but the report has raised more questions than it has answered and leaves an awful lot still in doubt. It says that

“the governance and financial management arrangements are not of themselves sufficiently robust or transparent to evidence value for money”.

I completely accept what the Minister says about corruption—I have never made an allegation of corruption—but we deserve better in Teesside than, “At least it’s not corrupt”. We wanted an NAO investigation; my understanding is that the NAO has offered to conduct such a review, so I am slightly confused about what the Minister just said, which she has obviously been advised to say. Can she confirm that she will write to us with detailed responses to the questions we have raised? Can we please have a meeting with her or an appropriate Minister and officials?

Baroness Swinburne (Con)

I will certainly commit to making sure we follow up on this in detail to the noble Baroness. Given that publication is imminent, I hope we can follow up as and when that happens.

Lord Shipley (LD)

My Lords—

Baroness Swinburne (Con)

I literally have only a minute and a half to finish, and I have about seven responses.

Lord Shipley (LD)

I will happily wait a bit longer if that helps. As part of that letter, because the Minister has said that it is not the job of the NAO to audit this body, will she tell the House whose responsibility audit is?

Baroness Swinburne (Con)

As I have just agreed, I will come back to noble Lords with a response on this, and we can follow up in detail.

I will try to flip through a few points; I will not be able to do them justice, given that we have 45 seconds. The reality here is that there are lots of things going on. On the funding allocation through the towns fund, the noble Lord, Lord Mawson, asked how much has been spent. The towns fund, one of our flagship local growth funds, is on track to be spent by 2026, and the rates at which the projects are being completed is consistent with the delivery timelines we have already set out. We are aware that major regeneration projects take time to deliver, and it is expected that all the funds not spent at this point will be on track to be delivered.

The noble Baroness, Lady Donaghy, referred to the long-term plan for towns. Its key features include an allocative rather than a competitive process over a 10-year period, giving local authorities the flexibility to invest in interventions based on evolving local needs and priorities. I hope that helps with that. There were also various comments on transport. With regard to working with others in the community—the right reverend Prelate raised this—we have all sorts of answers we can give noble Lords. I will follow up in writing to many noble Lords.

I will conclude by saying that we recognise the scale of the challenge to regenerate former industrial areas. We believe wholeheartedly in their potential to thrive, not least because of the pride, spirit and resilience that these communities continue to show. I agree with all noble Lords that this is about people. We need to work hand in glove with local communities to make sure we deliver the regeneration they need. I look forward to continuing discussions and working with all noble Lords to deliver for these communities.

Lord Mawson (CB)

Can I just make a correction? I asked about not the towns fund but the levelling up fund. Maybe the Minister can write to us and just tell us what percentage of money has actually been spent, and what that might tell us about the machinery of the state and its ability to deliver on any of this.

Baroness Swinburne (Con)

As a Minister in the department, I want to know that answer, so I will do that.

4.49pm
Baroness Armstrong of Hill Top (Lab)

My Lords, I thank everyone for the debate. It is probably presumptuous of me to say so, but it was refreshing to be in a debate with so many people who found their allegiance to the north-east region. It is unusual in this House so I welcome it, but I also welcome the comments from other parts of the country.

I am really pleased that the Minister has now got this brief and is, I hope, determined to get stuck into it. There is so much to do. I am pleased that she will go to Bishop Auckland. I know it very well, as many of my family live there and were brought up there. She will find that there is a remarkable local benefactor, Jonathan Ruffer, who bought the bishop’s castle and the artwork. I think he says he spends about £10,000 a day. He has done so for the past decade and continues to do so. I know he is pleased about the levelling-up money, but he also thinks that it is not before time. Indeed, at a public meeting he threatened to cease putting any money in unless the Government got serious about the consultation with local people and what goes on with the levelling-up money.

We had some fascinating insights into things that work, but also into things that do not. My good friend—I am sure he does not mind me calling him that—the noble Lord, Lord Mawson, has done some remarkable work on rebuilding communities. I do not agree with everything because I think that if systems do not work, like they are not working in Tees Valley, people suffer. We need systems and processes that recognise who people are, where they are from, what they can do and what they can contribute. That is what I call for and what I am keen to see.

Regeneration in post-industrial sites is complex and difficult. The noble Lord, Lord Shipley, gave an interesting and important example from Newcastle city centre of just what it takes to redevelop a brownfield site, but we have to get on with it and find ways to have public sector investment and understanding of how to make sure that these things are accountable, in a way that local people understand alongside private investment that they can benefit from. That has got unbalanced in Tees Valley. I think Tees Valley is part of the north-east, which is why I was a bit confused when told that we are going to have a new mayor for the whole of the north-east. We are actually having a mayor for the bit of the north-east that is not Tees Valley, but Tees Valley is still technically part of the region.
I hope that the Minister will go away, think about these things and come back to us with real ways in which we can move forward together so that people around the country get the benefit they need. I will send her a copy of our child poverty report because, unless the Government address that, they will not get good regeneration.

Motion agreed.