Economic regeneration

Background

Economic regeneration refers to the reinvigoration of local and regional economies, and associated improvements in economic competitiveness and prosperity. It is often linked with increased inward investment and the relocation of businesses and households in areas of decline. It aims to increase, among other things, business start-ups and growth, employment, earnings and skills development.

The Audit Commission (2006) has produced a suite of indicators of economic regeneration (PDF-286K). Economic regeneration is closely linked to the concept of liveability, which is about creating places in which people want to live and work. It is closely associated with social, cultural and environmental improvement and wider processes of neighbourhood renewal. Economic regeneration usually occurs in the urban/peri-urban environment in areas that were once economically prosperous, but have experienced a downturn in economic (and usually also social) well-being. This is often due to the decline of particular sectors of the economy, for example manufacturing industries.

It is widely recognised, for example in the State of the English Cities research study, that economic performance is related to the condition of the physical (including environmental), social and cultural infrastructure. Good quality greenspace can make an important contribution to these bases of regeneration. It can improve the image of an area and build the confidence and pride of communities, making them attractive places for households and businesses to invest and locate in, and for tourists to visit. The Urban Greenspace Task Force report Green Spaces, Better Places cites as particular benefits the creation of community enterprises and new jobs. Greenspace projects can also contribute to economic regeneration by providing employment and volunteering opportunities, which enable skills development in a practical, work-based environment. These are sometimes well suited to the long-term unemployed and those with physical and mental health problems. But poor quality greenspace can have adverse effects on economic performance and on the wider well-being of communities.

One study of CEOs ranked quality of life as the third most important factor in shaping their investment decisions, after availability of skilled labour and access to domestic markets. Greenspace Scotland (2004) noted the importance of the quality of the working environment for job satisfaction, recruitment and retention of staff. It makes a connection between quality of life, greenspace and business, citing as benefits the provision of places for staff to relax and meet with others and take physical exercise; reduced stress; and improved cohesion and morale among employees. The role of greenspace in enhancing creativity and productivity and providing places for meetings and events is also highlighted.

Practical considerations

Green infrastructure is an important component of economic renewal. This is reflected in forestry policy, where there is a strong focus on the use of woodlands for urban regeneration and enhanced economic performance.

Implementing a land regeneration project is likely to involve identifying and conserving features of the historic environment, many of which will be referred to as ‘archaeological sites’, in accordance with national and local government policy. Planning legislation and guidance provide helpful advice on how to address historic environment issues in land-use change, regardless of whether or not a project requires formal planning permission.

An understanding has been reached of both how, and how far, greenspace contributes to economic regeneration and sustained economic prosperity, as well as how its role can be enhanced in the future. There is particular knowledge and evidence of its ability to attract inward investment and businesses, leading to new jobs being created, improved creativity and productivity, increased land and property values and workforce well-being (as well as other impacts, such as providing opportunities for training and skills development). Programmes to sustain and develop existing and new urban greenspace, have the potential to tackle economic disadvantage, and promote the economic performance of local and regional economies. A better understanding of the extent to which these impacts vary between different types of greenspace would help in targeting resources.

Establishing a baseline (a counterfactual without the greenspace) and demonstrating the ‘additionality’ of economic activities associated with the greenspace are key issues. Creation of greenspace in one location may cause displacement of economic activities from other areas, with relatively small overall impact on the economy. For example, a business may decide to locate near the greenspace rather than in another area, but unless more jobs are created as a consequence, the resulting employment would not be additional. Additionality can be easier to show at local or regional levels than at national level – but it is impacts on the national economy that are of interest to HM Treasury.

Case studies

Tees Valley

The Tees Valley region in north-east England encompasses five large towns and the Borough of Sedgefield, and has a population of 875,000, of whom 650,000 live in the five authorities of Darlington, Hartlepool, Middlesbrough, Redcar and Cleveland, and Stockton on Tees. Having the largest integrated heavy industrial complex in the UK, the local economy has three main components: the petrochemical cluster at Wilton, Billingham and Seal Sands (which contributes £3.5 billion to the UK economy and on which 70,000 jobs in the UK depend); Redcar Steel Complex; and Teesport, which is the second largest port in the UK and the only deep-sea port on the east coast. The region contains two universities – the University of Teesside in Middlesbrough and the University of Durham with a base in Stockton – considered crucial in promoting skilled, knowledge-based economic regeneration.

As a consequence of the decline of heavy industry, the area has experienced a downturn in economic prosperity, with the economic performance of the Tees Valley being relatively poor compared with the UK average. In 2003, for example, gross value added per head in the Tees Valley was £12,280 compared with the UK average of £16,845. (GDP per head is also relatively low by European standards, being around 88% of the EU average). In addition, entrepreneurship is reported to be at relatively low levels, as are some measures of the economically active population (e.g. the percentage of the population in receipt of incapacity benefits is above the national average).

An ambitious City region development programme (PDF-1320K) aims to promote economic development and diversification of the area and improve the cohesion and vitality of local communities. Regeneration schemes will provide new spaces for business, living and leisure, and greenspace has been placed at the heart of the regeneration process. According to the Tees Valley Green Infrastructure Strategy (PDF-2440K) ‘One of the greatest challenges faced by the Tees Valley is to create attractive places and an environment with the quality of life that makes people want to stay and attracts investment and entrepreneurs. Green infrastructure is seen as a key element in helping to achieve the economic and sustainable vision for the Tees Valley.’

The green infrastructure is expected to deliver wide-ranging benefits:

  • Provide an enhanced image and environmental setting that will promote the subregion as a high-quality place to live, work, invest and visit
  • Promote a sense of community and place
  • Maintain and enhance biodiversity and help to reverse habitat fragmentation by improving the links between sites and areas
  • Provide better opportunities for exercise and sport, and consequently improve health
  • Improve recreational opportunities, and help rehabilitate landscapes, open spaces, historic sites, and habitats damaged or lost through development or other changes
  • Provide opportunities for enhanced community involvement
  • Encourage good design and high-quality developments
  • Enhance opportunities to connect new communities with existing neighbourhoods
  • Contribute to environmental sustainability through opportunities for improved flood-risk management and air and water quality.

The strategy stresses that the need for the green infrastructure network should be integrated with initiatives on improving water quality and managing flood risk, and vacant and derelict land restoration, as well as addressing emerging environmental and social issues such as climate change, renewable energy, changing lifestyles and sustainable transport alternatives. It establishes a set of overarching planning and delivery principles to guide the provision of green infrastructure.

Covering 44% of the area of the Tees valley region, forest is a major element of the green infrastructure. Encompassing countryside around the Teesside conurbation, the main towns of Darlington and Hartlepool and a number of smaller settlements, the boundaries of the Tees Forest include many ‘green wedges’. These areas of open space extending from the countryside into the built-up areas provide excellent opportunities for enhancing existing green infrastructure and improving accessibility, and a number of ‘gateways’ have been established to provide access points for the community. Forest cover grew by 2% between 1992/93 and 1999/2000 as consequence of 756 ha of new plantings under The Tees Forest Plan. This represents the largest environmental initiative in the region, with investment of over £40 million, and aims to create a well wooded landscape both for work and for living in. Covering an area of around 352 km2, the Tees Forest is viewed as a vehicle for promoting economic development and new business activities such as wood-fired power stations and green business centres.

Forestry Commission Wales Objective One programme: Cydcoed

Figures from the Office for National Statistics show that areas of Wales, in particular the South Wales Valleys, are lagging behind the rest of the UK in terms of economic activity. Overall economic activity rates in Neath Port Talbot stand at 67%, while the county also has one of the highest rates of long-term illness and disability in the UK. The Afan Valley, in particular, within the largest urban forest in Western Europe, is an area of high unemployment, low educational achievement and a high rate of out-migration. Glyncorrwg is an ex-mining village in a hidden valley, which has seen the majority of working-age people unemployed since the collapse of the mining industry. In 2001, a community based cooperative, the Glyncorrwg Ponds Cooperative, successfully bid for funding through the Forestry Commission Wales Objective One programme Cydcoed for a project utilising the urban forest to contribute to economic regeneration in the area by providing jobs, volunteering opportunities and related training.

Within Cydcoed, the use of woodland close or adjacent to communities is a key element in helping to achieve sustainable community development. The overall, long-term objectives of the Cydcoed programme have been to help create and maintain:

  • High-capacity community groups able to influence decisions about their locality
  • Woods that provide long-term local social, economic and environmental benefits
  • Individuals able to play a positive role in their local community.

The Afan Trails Centre project was granted over £650,000 by Cydcoed in 2001, and drew in match funding from the then Wales Tourist Board (now VisitWales) of a further £175,000. A further £20,000 was provided by the Glyncorrwg Ponds Cooperative. The project has built a forest outdoor pursuits centre accommodating 30 people, which can double as a bunkhouse for visitors; created a visitor centre to improve the quality of the forest experience, and constructed three world-class mountain-bike trails.

The objectives of the Afan Trails project have been to attract an increased number of visitors to the area, increasing visitor spending in the locality; to provide training in a woodland setting; and to provide high-quality forest-based recreational activities. These outputs aimed to help create new and sustainable jobs and bring in increased trade for local businesses, while increasing community capacity, encouraging local use of the woodland for recreational purposes, and linking local schools and educational establishments with the provision of outdoor education facilities aligned to the national curriculum.

Direct outputs of the project include bringing 2600 ha of urban greenspace into sustainable management, with three separate management schemes in place: two fixed-term appointment posts have been directly created, a further post directly safeguarded, and one local timber business directly supported. Importantly, the Afan Trails Centre has had a far reaching effect on the economic viability of the area in general, and has been instrumental in drawing in further investment from both public and private sectors.

As a direct result of the project, the Afan Forest Park area was granted ‘tourism growth area’ status by VisitWales, which made available a further investment of over £1.3 million aimed at local tourism-related businesses for capital improvements. This improvement in the physical environment has been important for both residents and visitors to the area, contributing to a revived sense of place and community confidence:

‘The communities themselves have benefited in the fact that they have seen a lot of their derelict and substandard properties improved. All the derelict properties now in the whole Glyncorrwg or the Corrwg Valley have been sold, done up and basically the whole area now has an air of substantial improvement about it, whereas it had a real air of deprivation and neglect and dereliction really before. In the community there is a rediscovered sense of pride.

The annual visitor-monitoring programme, carried out since the inception of the project and funded through the Tourism Growth Area (TGA) programme, shows clear evidence of benefit correlating with the longer-term desired outcomes of the Cydcoed programme and the Afan Trails Centre project. Breaking down the 2007 sample to look at those visitors to the Glyncorrwg area of the Forest Park, it is evident that more local people are using the woodlands for a variety of activities – 43% of visitors live within a 30-minute drive of Glyncorrwg, as opposed to 34% in 2005; and 73% spend over 3 hours in one visit there. In line with the growth in more local visitors, those citing walking as the main activity undertaken have risen from 19% in 2005 to 26% in 2007. While 66% of visitors to Glyncorrwg were on a day trip from home, 23% were on a short break of three nights or less – the highest percentage in the park area; 8% were staying four nights or more. While figures are not available for the local expenditure of staying visitors to Glyncorrwg, other VisitWales research shows that 25% of all holiday trips to the south-west Wales region were short breaks of three nights or less, and average spend in 2005 was £36 per night, indicating a significant additional input into the local economy from staying visitors in Glyncorrwg area.

The effect that the Afan Trails project has had on the local economy and the confidence and pride of the local community is evidenced in an interview carried out in August 2007 with a funding partner:

‘Contrast would be two newspaper articles. One of them in 2001 when I went to speak to the community group after an article in the local paper from a councillor at the time who said you can forget Glyncorrwg it’s a dead-end valley and since mining went in 1970 nothing can be done… to an article which I saw last year which said ‘Glyncorrwg Tourism Village’. Now that sums it up to me, what’s happened there’ (interview, August 2007).

Services

Forest Research has developed expertise in socio-economic research. The Social and Economic Research Group provides advice to the Forestry Commission and forestry or greenspace sector on social and economic issues related to woodlands and greenspaces.

The Group can provide:

  • Advice on the design and conduct of social research
  • Research project design and management
  • Advice on social and economic issues in forestry
  • Evaluation of social and economic programmes
  • Advice on the design and conduct of research exploring governance and public involvement.

The Methuselah framework has been developed by Forest Research and can be used as a strategy for monitoring the sustainability of urban greenspaces in the UK and to assess their effectiveness in delivering economic benefits.

Further information

Audit Commission (2006) Economic Regeneration. A Guide to National and Local Indicators. Audit Commission, London.

CABE (2004). The value of public space. Commission for Architecture and the Built Environment, London.

CABE (2009). Grey to green: how we shift funding and skills to green our cities. CABE, London.

CLES (2007). The contribution of the local environment to the local economy. Research report. April 2007.

Cousins, P. and Land Use Consultants (2009). Economic contribution of green networks: current evidence and action. North West Development Agency.

DTLR (2002) Green Spaces, Better Places. Final report of the Urban Green Spaces Taskforce.Department of Transport, Local Government and the Regions, London.

ECOTEC (2008). The economic benefits of green infrastructure: the public and business case for investing in green infrastructure and a review of the underpinning evidence. Report for Natural Economy Northwest (NENW).

Greenspace Scotland (2004) Making the Links – Greenspace and the Partnership Agreement.  Greenspace Scotland.

NENW (2008). The economic value of green infrastructure. Natural Economy Northwest (NENW).

ODPM (2006) State of the English Cities. Office of the Deputy Prime Minister, London.

Snowdon, P. and Thomson, M. (2005) Forestry’s Role in Rural and Urban Development. Forestry Commission, Edinburgh.