In this first of a series of articles public sector real estate partner, Chris Plumley, explores the role of the Towns Fund and how to make the most of this important funding stream.
Local Government has always played a crucial part in shaping our built environment. How we feel about the places where we live and work plays a major role in the economic, social and political success of a location. Regeneration and the obvious links to the prosperity of our towns and cities is a long established part of the public sector’s contract with those they serve. In this series of articles we are going to look at public sector real estate starting with the Towns Fund and, for those successful applicants, how to get the most of this much anticipated £3.4bn funding pot.
Let’s first remember the context in which this fund is operating. Before the covid crisis councils were already gearing up to promote and enable prosperity. Covid has added "recovery" to that mandate. The fund was originally launched with a much smaller available figure for councils to use but this was hugely increased into the billions as in late 2019 the Government further recognised the value of that kind of investment. In September last year the Government published the prospectus for the towns fund with some very clear targets. That started a flurry of activity with council's seeing this application process as a "must" win.
The fund was always designed to promote growth and to address any constraints councils were encountering which were impacting on their ability to achieve that. The fund is designed to promote urban regeneration through a number of matrix including increased density of the town centres, strengthening local economic assets; including cultural assets. It can be used for site acquisition, preparation and remediation and development etc. But it's not just about physical assets. The fund can be used to create skill and enterprise infrastructure to help promote investment in those areas. On top of that there is also scope to develop local transport schemes and the delivery of improved digital connectivity. So it has really wide application with creative and well advised councils primed to make excellent use of the funds.
The pandemic has, of course, massively heightened the pressure for councils to be successful in their bids. It’s certainly true that the worst impacted areas are likely to be those areas facing the most acute deprivation. Readers will no doubt be aware of the recent controversy, following a report from the National Audit Office, over the selection of the 101 towns to go forward, with some of England's most deprived towns left out. That is a discussion for another day!
The government have extended the deadline for the submission of business cases and it will be an important part of the approval process to now assess how the funds can be used to promote post-pandemic recovery.
Since its launch councils have been putting in place their Town Deal Boards and working up their Town Investment Plans and will shortly be submitting to MHCLG their initial Business Cases. This is a critical gateway to unlocking access to the money. A lot of work has gone into this stage and, once through the next round, it will be crucial that councils develop their detailed projects and detailed business cases. Those detailed business cases will need to be worked up through the local accountable body or with the support of the Government’s advisory group – the “Towns Hub” for support with any novel forms of investment. That approval process is essentially the final hurdle in what has already been a long and resource intensive route to robust funding solutions.
In future articles we will explore this crucial next phase in more detail. We will be suggesting methods and approaches designed to support councils looking at how projects will be properly structured, procurement, resourced, implemented and delivered. We understand that MHCLG will be looking particularly at confirmation and delivery assurances in this phase. Based on client feedback and the advice we have given so far we will focus on physical regeneration projects first. In the meantime if you are heading into the next phase for your council and you would like us to highlight specific areas to help with your detailed proposals please get in touch and we can cover those points in this article series.
