City Challenge (de Groot, 1992) was formally announced by Michael Heseltine, the then Secretary of the State for Environment, in May 1991. In the first round of the event, 15 au thorities from the 57 with urban programme status were invited to bid competitively for a five year programme, amounting to nearly £40 million per project. In the end 11 authorities were successful, while money allocated was £37.5 million for each local authority, over 5
years.
Public-Private Relations In Two Major Station Redevelopments
The rules of the competition required local authorities to outline a vision and five year strategy for the transformation of a defined inner city area, putting in the bid on behalf of a partnership of organisations including the community, public and private sectors, demon strating leverage of private sector funds and proposing a mechanism for managing and delivering the programme at “arms length” from the local authority. An urban programme status was essential to be eligible to participate.
However, de Groot observed that one of the anomalies over the approach is that a num ber of urban authorities, for instance Ealing and Slough, despite having high indices of deprivation, were excluded from the programme.
The second disadvantage of the programme is that it is a competition, hence there are bound to be winners and losers. How do the losers meet their community requirement in terms of infrastructure and services thereafter?. What are the chances that the loser Authority this year would become the winner Authority next year?. The danger is that thoe'e Boroughs that have money to spend on project preparation, and that have the potentials for cost recovery mechanisms and profit generating capacities, would most likely emerge as winners. The rich could become richer and the poor poorer.
Another constraint about the approach is that as the number of winner authorities increase each year so will the Government commitment and allocation of resources to the programme increase considerably. The danger is, there is likely to be a shortfall in the allo cation of funds in the event of deficit budgeting arising from the hard hitting recession. Coupled with this is the fact that projects associated with urban renewal or inner city infras tructure provision often involve high costs and a risk of insufficient returns on investment. This varies from issues such as site decontamination (if a derelict land), resettlement of
displaced occupants, to relocation of on-site infrastructure, or even negotiating certain aspect of the development with neighbours in order to provide the required services.
Eventually, the scope for capturing land value increases is very poor when compared to the green field alternatives. ‘As a result the property market has often pursued the sectors
which realise higher values’. (SERPLAN, 1989).
Public-Private Relations In Two Major Station Redevelopments
On the other hand, the distinguishing features of the approach are that it demands a high profile public bidding competitive process, it is a five year programme, success is directly linked to perceived strength and breath of the partnership and leverage demonstrated. The local authorities were given lead role and the delivery mechanism for the programme had to be at arms length from the council, (de Groot 1992).
2.5: CONCLUDING REMARKS
In recent times, however, the Government has begun to modify or reverse some of its “controversial” policies on public establishments and investments. For instance, the ear lier decision to close down 31 coal pits has been reversed and the number brought down to about eleven. The spared ones are also to benefit from subsidies that would enable their productions to compete with foreign productions. Besides, the Secretary of State for Transport (King’s Cross Railway Lands Group, 1992) Malcom Rif kind, in October 1991, announced that it was the Government’s aim that the Channel Tunnel Rail Link should be financed, built and operated by the private sector. Whereas, on March 22, 1993, the Secretary of State for Transport, John MacGregor ‘gave the green light to the £2.5 billion Channel Tunnel Rail Link and the International Passenger station at Ashford, Kent. He made it clear that the Government was fully committed to having the Station completed at the earliest possible date and confirmed that £30 m illion had been given to BR to carry out all the track, signalling and platform works. He also clarified that responsibility for the remaining work will be transferred to the private sector*.(Journal of the RTPI, April 1993, Vol. 79, No 4 p.6). Could these steps mean that market-based solutions and com
petitions have their limitations, or that with time, policies have to be reviewed?. King’s Cross/St Paneras redevelopment proposals and the related negotiations are significant in the sense that they have proved to be a victim of some of these practices. It is in this con text that the thesis attempts to examine where the practices could be improved upon, in the redevelopment of inner city centres, such as King’s Cross.
Public-Private Relations In Two Major Station Redevelopments