UK Tourism Policy – A Punctuated Equilibrium view

Based on our ongoing research into tourism policy in the UK, Dr Samantha Chaperon and I recently gave this presentation at the International Conference on Tourism in Naples, Italy.

In our presentation, we present research where we tested the utility of the concept of punctuated equilibrium, for understanding recent changes in UK tourism policy.  Punctuated Equilibrium draws our attention to two different groups of people and organisations in understanding change and continuity in tourism policy.  Firstly, the policy community involved in framing, creating and implementing tourism policies in the UK.  Secondly, the role of issue networks in attempting to shift the tourism policy agenda – broadly speaking, this would be activity by non-governmental interest groups, such as lobbying and campaigning.

In our presentation, we presented two brief case studies.  Firstly, we explained how the conservative elements of the UK’s coalition government, which was elected in 2010, slowly worked to change the composition of the tourism policy community until they were able to achieve their ideological goal of significantly reducing public sector support for tourism, despite this having no real support from the broader tourism sector in the country.

Secondly, we discussed how a campaign with very broad support from industry, and from many politicians and organisations outside of this policy community had failed to achieve their aims of achieving a reduction in sales tax (VAT) on the tourism and hospitality sector.

We concluded that the perspective of punctuated equilibrium was helpful in explaining why a long period of stability in tourism policy and been broken by a series of quite dramatic changes in tourism governance in the UK.  Punctuated Equilibrium suggests that we should be able to explain the evolution of tourism policy through analysing the tension between policy communities and issues networks – our initial investigations have led us to conclude that, in the case of the UK, the policy community is the dominant part of this equation.  We plan to develop this further for a paper next year….



Backing the Tourism Sector? The UK Government’s new tourism policy

The UK Government recently published their new ‘five point plan’ for the tourism industry.  You can download it from here.  In this post, I’m going to have a critical look at this new policy, which actually contains very little policy at all…

As Kurt Janson, the policy director of Tourism Alliance, has pointed out, it is a good sign for the sector that the Government is at least talking about tourism as a policy area in a time of public sector spending cuts.  Despite the rumours that were circulating before the recent election about further cuts to public support for tourism and the gloomy future for the Department for Culture Media and Sport (where tourism sits in government policy), it seems as though this Government is continuing to say the right kinds of things about the UK tourism industry, which contributes around £60bn a year to the economy.

Click on the image to read the policy in full
Click on the image to read the policy in full
Despite this optimistic view, it is worth considering the detail of this policy, to see what it offers to tourism businesses, local government and the nearly 10% of the workforce who are employed in tourism-related jobs.   The problem is, there really isn’t much detail here to go on.  With a colleague, Samantha Chaperon, I published this paper on the last UK Tourism Policy, and in this paper I reviewed the tourism policies of successive Labour Governments, from 1997-2010.

The lack of detail in this new policy document, which is only 6 pages long, makes it difficult to engage with in the same way.  The policy sets out five key areas, and in this blog post, I’m going to say something about each of them.

  1. Tourism Landscape

This first area of the policy is about the governance of Tourism in the UK, or, actually, in England.  As we’ve pointed out before,  tourism in Wales, Scotland and Northern Ireland is dealt with by their own, devolved governments.  The last tourism policy seemed to ignore this fact, and it is good to see the Government acknowledge this issue in this new document.

This section starts from the premise that the governance of tourism in the UK is fragmented and confusing, and that the mix of relationships between DMOs, local government, national bodies and tourism businesses needs to be simplified.  This seems-self evident.  Certainly the industry will welcome a simplification in this area.

This is clearly an example of this new Government attempting to make up for some of the hasty mistakes of the last one.  The cuts in public funding for tourism, including for the national tourism bodies, regional development agencies and for local government, directly contributed to the fragmentation that this policy aims to address.  Hopefully this Government has learnt from its mistakes in this area as part of the 2010-2015 coalition.

   2.  Skills and Jobs

Again, after cutting funds for, or completely removing, specialist sources of support for the tourism sector in the UK, the government is now emphasizing the support that is available to tourism businesses.  There is no new support announced in this policy, but the Government is right to point out that there are a wide range of business support services available to all businesses, and that it is important to communicate this effectively to the tourism sector.  This is especially important for micro-businesses and SMEs, many of whom were previously able to access specialist support through  Regional Development Agencies, local authorities or DMOs.

The policy then goes on to talk about jobs in the industry.  There are no new initiatives mentioned, but the aspiration to help to create and support apprenticeships in tourism and to raise the status of jobs in tourism is a welcome one – organisations like the British Hospitality Association are already taking the lead in this area and should expect more support from the Government following this policy.

   3. Common Sense Regulation

This area of the policy contains nothing new for the tourism industry, despite a brief mention of the sharing economy.  The policy makes a commitment to reducing unnecessary regulation – which all governments say at the start of their terms – something that most businesses see as a priority.  It is not clear which regulations they think are a problem, but it will be interesting to see whether European Working Time Directive is on the list when Britain attempts to renegotiate its membership of the European Union this year.  It is hard to be against something that calls itself ‘common sense’, but not all regulations are a bad thing and it remains to be seen where this policy aim will lead.

   4. Transport

The Davies Commission recently recommended that the Government builds a new runway at Heathrow.  This is the big decision on travel that the tourism industry has been waiting for.  This policy gets us no closer to finding out what the Government will do about that recommendation, and instead seems to concentrate on how the train network can better support tourism outside of London.  This seems like an idea that is hard to disagree with – who doesn’t want faster, cheaper, cleaner and more dependable trains? Unfortunately,within the constraints of a privatised rail industry, it seems unlikely that Government has the right levers to pull to achieve any of these things.

  5. A GREAT Welcome

The word GREAT in this area is a reference to the GREAT Britain destination marketing campaign that was launched following the last tourism policy, in 2011.  The policy extends the concept to the welcome that is provided to tourists arriving in the UK. However, this area of the policy isn’t really about the welcome.  It is about the visa application process for tourists.  Of course, applying for a visa is an important part of the way that some tourists form their perceptions of the UK as a tourist destination.  I’ve never heard of the Visa process being reported as a big problem by our most valuable tourist markets – the USA, France, Germany and Australia.  It is a much bigger issue for emerging tourism markets, such as China.  At the moment, China isn’t even in our top ten source markets -the new policy may go some way to addressing this.

The welcome provided to tourists in the UK has often been rated poorly, especially compared to many of our competitors.  I don’t think that changing the visa process for some tourists will make a major contribution to solving this problem, which requires training, partnerships with industry, investment in facilities and a long term culture-change.

This new policy doesn’t really contain many policy initiatives.  Compared to previous policies it is very light touch, which some parts of the industry will welcome.  Many others however, will be concerned with the lack of any content on sustainability, the outbound sector, domestic tourism or the ongoing campaign to cut tourism VAT.  As with the last policy, it is probable that the real action on tourism will come from the planning and actions of Visit England and Visit Britain.

We are getting closer and closer to the point where the UK Government doesn’t feel the need to publish its own policy on tourism any more.  Some people would say that this is no bad thing.  In a few year’s time, we will be able to see whether this non-policy has helped the tourism industry in the UK, or held it back.

Tourism Policy in the UK – do we really need one?

Despite writing and teaching about tourism policy, I do sometimes wonder about whether we need tourism policy at all, at least in the UK.

The classical arguments for why we need tourism policy are fairly convincing: The industry is incredibly complex and fragmented and benefits from structure and leadership; The environmental impacts of tourism require management; Tourism, left unchecked, can have severe social consequences in destinations; The high growth potential of tourism means that governments would be wise to support and nurture it and, most frequently, tourism suffers from the problem of market failure.


There are at least two questions worth asking in response to all of this.  Firstly, do all of these arguments really carry weight in the UK?  Secondly, what would happen if we didn’t have a tourism policy?

The complexity of tourism was described perfectly by Bob McKercher in the first issue of the Journal of Sustainable Tourism in 1993: “Tourism is a multi-faceted industry and, as such, it is almost impossible to control”. This is certainly true, but begs the question of why we need to control tourism at all.  In the UK, with a strong and stable government, the tourism industry is regulated and monitored through a range of legislative measure, guidelines, NGOs, partnerships and communities.  Concerns about the control of tourism are caused by the bogey-man of tourism businesses running out of control and seeking profit at the expense of everyone else, but it is very hard for anyone to do that in the UK without running up against some pretty big obstacles, none of which are tourism-policy specific.

This first issue of control helps us to understand the arguments about the impacts of tourism.  Clearly, tourism has a range of impacts and some of these can be very negative.  Tourism Policy in the UK, however, doesn’t actually put any limits on the activities of tourism businesses – limits come from more general legislation such as planning and employment law.

As I’ve argued in this article, although previous UK tourism policies did make the case for sustainable development, this has been dropped from the current policy in favour of economic growth, in any case.

The market failure argument is a difficult one to evaluate, especially given the success of the tourism industry in the UK.  Of course, problems of free-riding mean that it is true that non-contributing tourism businesses can benefit from the destination marketing activities funded by their competitors, but most tourism marketing is funded by the public sector, or in partnership with the public sector.  Aside from that example though, it is hard to see real problems of market failure in the UK tourism industry – the industry makes a large contribution to GDP, is dominated by SMEs, offers huge diversity to customers and has low barriers to entry.

Tourism's Contribution to GDP in the UK (Visit Britain)
Tourism’s Contribution to GDP in the UK (Visit Britain)

So what would happen if we didn’t get a new tourism policy in the UK after the general election in 2015?

Let’s assume that Visit Britain would continue in some form.  Despite having its funding slashed in half since 2010 and becoming a public-private partnership in all but name, it has continued to carry out the international destination marketing campaigns that an NTO should.  With reduced government support and, potentially, no government department overseeing it, it would probably be wrapped up with UK Trade and Investment and Higher Education as a PPP with a relationship to the Department for Business Innovation and Skills, much as happened when Visit London became part of the new London and Partners, the ‘official promotional company for London’.  International destination marketing would almost certainly carry on as before.

At the local government level, it would become harder to justify support for tourism activities without it being endorsed by a specific government policy area.  But tourism has always been an area of discretionary spending for local government and has already seen huge cuts at this level.  A new breed of Destination Management Organisations is emerging, outside of local authority structures, and it is likely that these private-sector-led bodies would take on destination management and marketing roles, as they already are.

And I don’t think it would make a difference to the day-to-day running of tourism businesses, who spend large amounts of their time grappling with employment law, taxation, health and safety regulations and the like, but very little struggling with the implementation of government tourism policy.   At events over the last few years, I’ve heard tourism business leaders and small businesses arguing for reduced regulation, improved employment legislation and a reduction in VAT.  I haven’t heard anyone calling for an improved tourism policy.

This is the second in a series of posts about UK Tourism Policy in the run up to the 2015 General Election.  You can read the first post here.  Over the next couple of months I’ll be reviewing each of the main parties’ proposals for tourism policy, but I don’t think it is impossible to imagine the UK without one.

UK Tourism Policy and the 2015 General Election

As the 2015 general election in the UK draws nearer, the tourism industry will look with interest to the manifestos of the major parties to see whether tourism gets a mention.   Despite none of the parties mentioning tourism in their manifestos for the election in 2010, tourism was the subject of one of the first policy statements by our Prime Minister, David Cameron, in August 2010.

uk tourism image

I posted a series of blog posts in the run up to the publication of the 2011 UK Tourism Policy, which you can read herehere and here. In these posts, I suggested that the government needed to develop a serious industrial policy for tourism, cut VAT on tourism, invest in skills development and education for tourism professionals and create tourism enterprise zones. Over the last few years, I’ve written (mostly with my colleague Dr Samantha Chaperon) a few papers that evaluate the UK Government’s recent approach to the tourism industry along similar lines.

In 2010, we published this paper on the prospects for English Seaside Towns in the context of the closing down of the Regional Development Agencies and their replacement by new Local Enterprise Partnerships (LEPs). We concluded that the LEPs did not place sufficient emphasis on tourism and that they did not recognize the challenges to developing seaside towns associated with their peripheral locations.

In 2013, we published this paper critiquing the UK Government’s 2011 Tourism Policy. In the paper we outlined the major changes that had taken place in the governance and public funding of tourism following the publication of this policy and suggested that the policy did not offer a clear vision of how the government would support the industry in a period of public sector austerity.

Screen Shot 2013-05-29 at 17.11.43
Click on this image to read the current UK tourism policy

Also in 2013, I published this paper, which reviewed the tourism policies of successive UK Governments from 1997-2010 in terms of their relationship to local economic development. This paper shows that, although the current government’s tourism policy continues with many of the assumptions of previous policies about the links between tourism and economic development, it does introduce some new thinking that may create an environment in which the tourism industry can contribute to local economic development.

Thanks to pressure from industry groups such as the Tourism Society, British Hospitality Association and the Campaign to Cut Tourism VAT, it is likely that all of the main political parties in the UK will make statements about the plans for tourism in the run up to the general election.

I think the chances of tourism making it into the published manifestos are pretty slim – tourism isn’t really a doorstep issue. However, we should expect to hear something like this statement from the Labour Party from all of their rivals over the next few months. As they do so, I’ll be reviewing them on this blog and trying to get a sense of what the post-election tourism landscape will look like.

Tourism and Local Economic Development: ITSA presentation

The ITSA conference venue

This is the presentation that I gave at the 4th Biennial International Tourism Studies Association conference in Indonesia last month.  It was broadly based on this paper about Tourism and Local Economic Development in England.  I’m planning to carry out some interviews with LEP representatives, local authorities and tourism businesses this year and to write-up the whole thing as a journal article in early 2013.

Some conferences give you certificates, but this mask is my favourite ever conference gift

Some advice for the government on their new tourism policy Pt. 2 – support for the tourism industry

British governments operating under the neoliberal consensus of the last thirty years or so have avoided developing industrial policy, believing that it is not the job of governments to ‘pick winners’ (see the recent Forgemasters furore), but that markets will select those business and sectors most deserving of reward.  This approach has not been universal however, and it may be that the time has come for our government, not just to promote the interests of the tourism industry, but to learn from the role tourism  has played in development and economic growth in countries operating outside of the narrow policy horizons of Westminster. 

Spain has used tourism in two ways since the fall of Franco that might be constructive when thinking about the role of tourism now in the UK.  Firstly, tourism was a key way of bringing foreign exchange and investment into the country when it was close to economic collapse.  Taking advantage of innovations in travel, especially air travel, and construction technology, the Spanish government built resorts and supported a tourism industry with preferential taxation and legislative treatment , succeeding in positioning Spain as a mass tourism destination.  Secondly, the Spanish government and the European Union have funded the development of agro-tourism in the country, attempting to diversify economies where agricultural production has become economically unsustainable.  This has been achieved not through the market mechanism, but by the diversion of public funds to support specific policy aims in tourism and economic development.  We know that these development haven’t been unproblematic – resort development in the south of Spain has been an environmental nightmare in places, and supporting farming communities to develop facilities and skills for a new tourism sector has been costly – but they show how government can support tourism directly.  In the first example, taxation and legislation regimes were implemented that favoured tourism development creating a medium-term economic fix.  In the second example, tourism has been used as a development mechanism, helping the transition from and old economic model to a new one.

Looking more widely across Europe, it is clear that the majority of countries have viewed tourism as a high value industry, worthy of specific state support.  Only the UK, Denmark and Germany apply to the top rate of VAT (sales tax) to their tourism industry.  This puts tourism service providers in the UK at a competitive disadvantage from the start.  The majority of countries in Europe, for example, have a rate of 0-8% tax on accommodation – in the UK it is now 20%.   A reduction in taxation on key elements of the tourism industry would increase demand, but also support vital secondary spending in destinations, which would ensure that the positive impacts of this tax change would be felt by businesses and citizens more widely.

Taylor & McGlynn published a fascinating article in 2009 called ‘International Tourism in Cuba: can capitalism save socialism?’ – this begs the question, of whether tourism can save the capitalist economy of parts of the UK? 

image from:

Following the collapse of the Soviet Union and the communist bloc in 1989, Cuba lost 75% of its international trade.  Faced with this, Fidel Castro said “‘‘We have to develop tourism. It is an important source of foreign currency. We do not like tourism. It has become an economic necessity.”  This turn to tourism, supported by a relaxation on development laws and new initiatives supporting entrepreneurship and destination development and marketing, took place at the same time as the government implemented severe austerity policies to rein in public spending – hoping that this new sector would grow, create jobs and save the country from economic crisis.  Sound familiar?

 By 2000, tourist arrivals to Cuba had doubled, and revenues from tourism grew from $1.1bn to $2.25bn per year.  By 2003, tourism was responsible for more than 50% of Cuba’s exports and was the main engine of a newly resurgent economy.  “Cubanos used to declare, sin azucar, hay no paı´s (without sugar, there is no country). Now, they say, sin turismo, hay no paı´s (without tourism, there is no country)”.

So, what advice am I offering here?  Well, we know that Eric Pickles, Secretary of State, has a picture of Che Guevara on his wall.   

 It is almost unbelievable that for the last fifteen years the tourism industry has failed to spark the imagination of government.  In a period where radical thinking is needed to recalibrate the relationship between the state and the economy in many areas, there is an opportunity to develop a form of industrial policy that benefits the tourism industry and places it at the center of both growth and sustainable development.

Some advice for the government on their new tourism policy pt.1

There will be a new tourism policy launched by the UK government at some point in the next few months.  This will supersede ‘Winning: a strategy for 2012 and beyond’, an artefact of the previous administration, and will complement the new tourism framework that is being produced by Visit Britain.  You can see the Culture Secretary, Jeremy Hunt, talking about this in this video:

Most coalition policy so far has been put together at speed, based as it is on a document written in haste to cement a coalition between two parties with, at the time, very different agendas.  I’m hearing rumours however, that ministers and officials are now beginning to devote more time to meetings and consultation and that there is an acknowledgement at a high level that ministers need to invest more time in developing policies with depth and buy-in from the people and organisations that they affect.   This may explain the long delay between David Cameron’s very early announcement that tourism would be a key industry in the recovery and the eventual production of a policy to support this aspiration.  Let’s hope so. 

Tourism policy in the UK has often fallen between departments and has meant that the tourism industry has often struggled to be heard in the cacophony of industry voices expecting to have the ear of government.  A strong policy statement on tourism, supported by departmental commitments would help to position tourism in the public eye and help organisations and individuals working the industry to contribute to the growth that our economy so desperately needs.   When Labour came to power in 1997 on a wave of Cool Brittania excitement, it was clear that they were championing the cultural and creative industries, which had a galvanizing effect on that sector, which saw employment growth, led by creative industries exports and underpinned by state support for training, networking and promotion of creative producers.   This government’s new tourism policy should be equally bold – situating tourism as a key industry for sustainable economic growth and championing the success stories of UK tourism to domestic and international markets. 

My next few posts on this blog are going to be suggestions for where the state can intervene effectively in the tourism industry to support entrepreneurial, sustainable growth, led-by SMEs in the  private sector, but supported by an enabling state.

Tourism and the Economic Crisis: Where are going?

I’ve posted on here about tourism and the economic crisis, and have taught about it this year as well.  One of the things that strikes me regularly about the crisis is the unsystematic way in which it tends be analysed – one day a report of bankrupt airline, another day stories of industrial action or falling visitor numbers

I’m going to use this post to apply David Harvey’s ‘seven moments’ model of the economic restructuring process that I heard him speak about here and that he has most recently outlined in an essay for the Monthly Review that you can read online here.  I have adapted these seven moments to analyse the tourism industry in this period of restructuring; it will be interesting to see whether this adds some clarity or helps us to think about how the tourism industry will emerge from the crisis.  

Some of these topics I’ve already written about, some have suggested new areas of investigation.  Over the next few months I’m going to post on each of these topics and then, eventually, bring them all together to summarise this period of restructuring in the tourism industry.

1. The organisation and technological forms involved in producing tourism products and services

It is likely that technological changes within the tourism industry will accelerate during this period of restructuring.   The effects of an increasingly competitive marketplace and problems of over-supply are combining to produce a favourable climate for innovations in the online packaging and knowledge-gathering aspects of the industry and  price-concious customers are driving an increase in competition between web sites, which seems to be providing a stimulus for big providers to move into web 2.0 provision, so as not to lose their competitive advantage.  Where the previous waves of web development have increased efficiencies for tourism businesses and helped to reduce prices for consumers, it is likely that this next wave of web 2.0-style developments will illuminate differences between providers and give new prominence to tourists as expert reviewers of tourism products.

Another aspect of tourism development that it might be interesting to focus on here will be the emergence of new destinations.  This will be driven by three factors, as we have seen in previous crises:

  1. Decline within specific resorts and regions, as part of the fall-out from the economic crisis
  2. The growth of new tourism markets, as the national and regional ‘winners’ of the crisis emerge
  3. Socio-cultural changes that occur as a consequence of the restructuring and as a way of integrating it into pre-existing cultural frameworks.

2. The relationship to the environment

From the mid-1990s onwards, the concepts of sustainable development and eco-tourism have been central to debates about the future of tourism and have provided acres of newsprint for the broadsheets’ travel supplements as middle-class tourists have differentiated themselves from the masses by seeking our ‘responsible’, ‘ethical’, ‘sustainable’, or ‘green’ holidays.  With predicted declines in the market for organic food, ethical fashion and fairly-traded products – has this mode of tourism development also suffered and what is the future for this sector after the downturn?

3.  Social relationships within tourism

Along with the rising importance of green perspectives on tourism, ethical concerns over the social relationships brought about through tourism have been a key element of tourism discourse since the 1990s. 

This area has mainly been focused on the nature of the host-guest interaction within destinations, but has also included concerns over representation in and governance of tourism destinations, authenticity and exploitation.  As with sustainable / eco-tourism, it remains to be seen how organisations that work in this area will fare during a depression.  Recent problems at Tourism Concern are hopefully not indicative of a gradual lessening of support for ethical tourism initiatives from the public and the tourism industry.

4.  Conceptions of tourism and its values

The core question to be answered here is ‘what is tourism for?’  Historically, tourism has been seen variously as a privelege, a human right, a leisure activity, a cultural form and as a social practice.  I wrote here about contemporary developments in the relationship between tourism, social policy and regeneration.  The current crisis provides two non-exclusive conceptions of tourism within the public sphere. 

Firstly, and most likely to gain prominence quickly, is the assertion of the direct and indirect economic benefits of tourism.  In a period of a weak national currency tourism can be a key export for the UK economy and a parallel rise in domestic tourism places tourism in a position of potential growth, even if that growth is relative rather than absolute.   This potential could see tourism taking a stronger role in economic and regional development strategies, perhaps displacing retail and creative industries development in the development zeitgeist.

Secondly, it is possible that the new economics of tourism, if coupled with a sense of corporate social responsibility or development levies of some kind, could create a more favourable climate for social tourism in the UK.  In many European countries, tourism plays an important role in social policy.  Social tourism can take many forms: In France, subsidised tourism channels tourism spending to particular destinations whilst in many part of Scandanavia tourism is seen as a human right, creating obligations on the state to secure this right for its citizens.  In the UK, organisations like the Family Holiday Association have a history of providing tourism opportunities for disadvantaged groups, but this approach has never been mainstreamed into public policy. 

5.  Industrial relations within tourism

We have seen a sharpening of industrial relations within many sections of the economy over the last twelve months.  Disputes at Visteon, Vestas, Lindsey and the Royal Mail appear to be the harbingers of a new period of renewed labour militancy in the UK, but the mixture of compromises and legalistic disputes that have postponed resolution of the BA strike and the Royal Mail strikes mean that it is unclear as yet whether unions are likely to become more or less powerful through the restrucuring currently underway in response to the economic crisis.  The activities of unions in the travel and public sectors are likely to have the greatest impact on the tourism industry, but rising worker militancy generally could lead to changes in the way that non-unionised workers (the majority of tourism employees) react to threats of closures, job losses, pay cuts and work intensification, as the employees of Thomas Cook in Dublin show in the video below:

6.  Tourism policy and politics

In the UK, most public agencies are in a state of paralysis at the moment as they wait for an election and the almost inevitable period of regime change that will follow it.  The smart money seems to be on an early election in March, so until then it is going to be very difficult to get a feel for how tourism policy in the UK is going to develop.  The incoming conservative party have let it be known through various outlets that they plan a ‘bonfire of the quangos’ and no doubt this will hit our tourism agencies.  However, every incoming government since 1979 has promised exactly this and then, faced with the prospect of losing control over spending or developing truely accountable structures of governance, has tended to spend a lot of money on the restruturing and rebranding of the quangos instead.

7.  The social reproduction of tourism

Within Harvey’s model, this seventh term relates to the social reproduction of labour within capitalism and the way in which systems of production are maintained and developed through social processes.  Within this adaptation, I will develop the final category as a synthetic product of the preceding areas of analysis.  Once the 6 areas above have been considered dialectically, it will be possible to draw some initial conclusions about the ways in which the tourism industry is being maintained and developed as the crisis progresses and the strategies of restructuring become more clear. 

Each of these seven areas will provide material for blog posts throughout 2010, with a final article being produced towards the end of the year.


Chris Harman 1942-2009

This is a recording of Chris Harman, the influential British Marxist and SWP activist who died suddenly this weekend in Egypt, speaking at Marxism 2009  in the summer.  Chris will be greatly missed by the left for his activism and inspiration.   You can read a tribute to Chris written by Alex Callinicos by clicking here.

Impacts of the economic crisis on regeneration

Brendan Nevin has written a gloomy article in the April edition of New Start, looking at the likely impact of the current economic crisis on regeneration policy in the UK.

Nevin starts with the (reasonably conservative) prediction that the UK’s annual budget deficit may reach £200bn by 2011, 12% of GDP and the highest in the developed world.  The financing of this debt, during a period of recession when government receipts will fall, will be a huge burden on the economy, leading to pressure on “the structure of state expenditure” or, in other words, large cuts in public spending.  Could this involve the intervention of the International Monetary Fund, recently re-capitalised with $1.3 trillion by the g20 to support countries struggling in the downturn?  In 1976, when the UK government turned to the IMF during a period when it could no longer service it’s debts, a 25 year period of belt-tightening followed.  Now, with the IMF at the vanguard of globalised neoliberalism, would the IMF impose the same ‘structural reforms’ on the UK as it has on ‘developing’ nations seeking it’s help over the last twenty years?  This could be a trigger for the extension and deepening of the privatisation of UK public services and the capitalisation of the public sphere that has been the main goal of the neoliberal project here since 1979.

So how might this likely squeeze on the public purse effect regeneration policy?  Nevin argues that the coming period should see a re-evaluation of the generic finance and property development-led economic regeneration strategies that many of our urban areas have chosen since 1997.  As these sectors become less obvious drivers (i.e. funders) of regeneration, government subsidies will need to be re-targeted to other sectors, perhaps producing more local / regional diversity in regeneration policy with more sustainable future outcomes.

Paradoxically, the only way to maintain current levels of spending within regeneration may be to provide a greater role for the private sector in funding projects, at a time when private sector investment is grinding to a halt.  To do this will mean promoting more obvious returns on private investment, privatising the benefits of regeneration by  increasing the private ownership of new assets and revenue streams and probably by reducing the levy on private sector profits that has recently delivered an income stream for projects without an obvious profit-rationale, such as community facilities and social infrastructure.  We can expect to see the value of Section 106 and other ‘developer contributions’ falling as a way of incentivising private sector investment in development.  This will reduce the funding available for social infrastructure, while the need for strong social supports continues to increase as this recession bites.

So long as we continue to attempt to shore up existing models of regeneration funding, it is hard to see how the current, historically high, levels of spending on regeneration can continue.  The great danger is that in an attempt to carry on regardless, we slip into a more private sector-led mode of development that deepens inequality rather than addresses its causes.  New thinking about regeneration funding and policy is needed to avoid reversing the significant improvements made to our declining towns and cities over the last ten years.

Share this:    Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to Ma.gnoliaAdd to TechnoratiAdd to FurlAdd to Newsvine