To property developers, local authorities are often a big headache – they create barriers to major urban regeneration projects, it’s argued, because they lack the people, resources and vision to ‘make it happen’. In the eyes of public sector stakeholders, private interests are driven only by visions of profit, rather than strategic local economic development and community needs.

The Centre for Cities has consulted extensively with developers, investors, and city leaders in recent months. We’ve found that the gulf between public and private sector players remains a serious problem, despite two decades of government initiatives designed to encourage partnership and investment in our cities. Our City Leadership project aims to uncover some of the key barriers encountered by city leaders and development partners in Birmingham, Barnsley and Liverpool – and will recommend changes that help to unlock key urban assets and improve economic performance.

It’s no secret that city governments and developers often engage in ‘dialogues of the deaf’. The negotiation of Section 106 agreements – where developers agree to fund urban improvements requested by the local authority – is often the stuff of nightmares.

Developers – with their responsibilities to investors, shareholders, and the generation of profit – are often frustrated by the social and community duties held by city leaders, as well as the financial and bureaucratic constraints of government agencies. At the same time, public-sector players do not always appreciate the financial gambles and tight timescales that developers and investors must face.

In April, I participated in a Mixed-Use Forum event, which brought together a wide variety of regeneration professionals to discuss the challenges posed by large-scale, multi-use regeneration projects. Many of the private sector players made the usual gripes about the pitfalls of large-scale projects: lack of planning capacity in major cities, the difficulty of understanding grant and incentive regimes, and the uncertainty and risk that they are forced to accept in order to proceed with development. Strong partnerships remain the exception rather than the rule – and public and private stakeholders still need to work harder to understand each other.

Our own consultation over the past three months has uncovered similar frustrations – as well as examples of exemplary public-private collaboration on transformative projects. We’ve visited a dozen cities across the UK – developing a valuable evidence base through conversations with key stakeholders. For example:

• Grosvenor – who are building a massive £920 million retail-led project in Liverpool’s Paradise Street area – told us that a strong informal partnership between their project team and Liverpool City Council allowed both sides to overcome obstacles as they emerged, understand key risks, and complete the planning process efficiently. Public sector players also said that leadership, engagement and commitment were the key factors that have kept the development on track. Strong city leadership is better able to articulate local aspirations – and to work better with developers on transformational projects.
  
• In Birmingham’s Eastside area, where a number of government stakeholders (city council, RDA, English Partnerships, etc) have overlapping interests, the city council explained the difficulty of convening public sector decision-makers and funding streams in order to convince developers to commit to projects in the area. Despite the City Council’s efforts at joining up, the complexity of public sector decision-making has contributed to a stop-start pattern of development – which has slowed Eastside’s emergence as a new extension to Birmingham’s city centre. Too many public agencies and funding streams can slow development and hamper economic growth – cities need greater control.
  
  
• The 1249 Regeneration Partnership – which is presently raising finance for the redevelopment of Barnsley’s Markets area – noted that the involvement of central government agencies generated uncertainty and risk, despite 100% Council and RDA commitment to the project. Strong local leadership isn’t enough – central government fragmentation and lack of coordination can create private sector uncertainties.

The gap between public and private sector views on major regeneration projects has a huge impact on Britain’s cities – where the drive to unlock key urban land assets is slowed or blocked when local government, regional agencies, quangos, Whitehall departments, developers and investors fail to agree. So what needs to change?

It’s clear that public involvement remains crucial. In smaller cities across the North and Midlands, property and investment markets are not strong enough to sustain major regeneration projects without public support. And in areas where the private sector will invest without pump-priming, public sector commitment remains key to getting the job done.

We’re learning a great deal about the design of policy tools and funding streams – and their real-world impact on the regeneration of our city centres. City Leadership will make concrete recommendations for changes that give cities the financial and political flexibility to reduce fragmentation, overcome risks, unlock private investment, and bridge the public-private divide.

Adam Marshall is Head of Policy at Centre for Cities.