BIDDING FOR THE FUTURE
The challenge with funding
The first two funding rounds have focused on three investment themes – transport projects, town centre and high street regeneration and cultural investment. Details have yet to be released about the third round.
The fund has the potential to support Essex County Council’s development strategy, which has identified five economic sectors with significant growth potential: Construction and Retrofit; Clean Energy; Advanced Manufacturing & Engineering; Digi-tech; and Life Sciences (including med-tech and care-tech).
Essex’s challenges and opportunities tend to cut across a north-south divide in the county, with the north more rural but seeking to build on notable areas of strengths.
These are led by a creative cluster in Colchester, advanced manufacturing around Braintree, and energy generation off the Tendring coast.
South Essex has similar challenges and ambitions but is starting from a larger economic footprint.
With a business base of over 32,000 enterprises providing more than 354,000 jobs, it’s a sizeable economy in its own right, comparable in scale to the Combined Authority areas of West of England, North of Tyne or Tees Valley.
The close proximity of South Essex to London is also significant, with around 80,000 people commuting to the capital for work.
South Essex has long been celebrated for its rich culture of entrepreneurialism and is the UK home of major such brands Ford, Amazon, National Westminster Bank and Olympus among others.
Industry sectors and clusters are already firmly established around Advanced Manufacturing, Logistics, Creative industries and Health.
South Essex also has some notable infrastructure relevant to the wider UK economy, including four major ports; an international airport; a Crossrail terminus and the proposed the Lower Thames Crossing.
Southend, in south east Essex, has both won and lost Levelling Up Fund (LUF) bids. In the first round of LUF the council secured £19.9 million for projects to support heritage, infrastructure and tourism.
The bid was focused on the renovation of Leigh Port, on the north side Thames estuary and improvements in Southend city centre, especially refurbishing The Cliffs Pavilion theatre and upgrading flood prevention measures.
The business case built on our heritage and the economic value the fishing industry brings to Leigh-on-Sea. While in general terms a LUF funding award can unlock projects, it’s not a silver bullet for growth and regeneration."
Having been successful in the first round of LUF, the challenge the council now faces is cost inflation.
“By the time the LUF process had run its course and the funding was awarded there was a need to re-price all of the works,” he said.
“In the case of The Cliffs Pavilion, the project must be completely redesigned. There’s several million pounds that needs to be engineered out and then obviously we’ve got to rematch against the outputs that we’ve been funded to deliver. So that’s been really challenging.”
LUF requires matching funding, which is not of course immune to cost inflation.
The same challenges apply - the cost goes up, the balance goes up, the match goes up. So, most of those projects we’re borrowing to meet the match costs. It puts real pressure on our budgets.”
On the second round of bids for the Levelling Up Fund, Southend lost out on an ask for £26.5 million of support for a raft of road and city centre improvements.
We felt the main reason we lost out with LUF 2 was because we were successful with LUF 1. There was some frustration around the energy we put into the bid, but we are considering LUF 3.”
Southend-on-Sea City Council remains ambitious about regenerating its city centre.
In 2020, for instance, the Council acquired the Victoria shopping centre for £10 million and is working to diversify its uses, including the possibility of relocating its own civic offices there.
“We’re looking at ways in which we can rejuvenate and sustain the area through a whole range of measures,” said Alan Richards.
“We recognise the importance of the core retail, but also that we’ve got far too much empty space.”
We’ve got some of the most affluent wards in the country and some of the most deprived.”
The criteria for the Levelling Up Fund placed Basildon in Tier 3, outside of the priority Tier 1 and 2 areas that are most likely to secure support.
“We put in a bid but got nothing back, which was very disappointing.
When you consider future rounds, you have to think about the costs and level of resource required for bidding. Are you ever going to get any funding?”
He pointed out that Tier 1 local authorities may even get financial support to the tune of circa £125,000 to put the bid together.
“So, if you're in Tier 3, you haven't got that. If people are spending that sort of money, it's got to be a high-quality bid to be competitive. Do you invest that sort of money and resource if you think the deck is stacked against you?”
He cited examples of where Basildon has used other funds to achieve breakthroughs.
The Council has, for example, secured a grant of £1.8 million from the government’s Brownfield Land Release Fund, which seeks to support the use of council-owned land for housing.
The award is being deployed against two housing schemes - including building more than 100 homes on an abandoned town centre car park, while another 34 homes will be constructed where a nursing home once stood. Both elements contain a significant percentage of social housing.
Owen Sparks spoke the need to avoid a one-size-fits-all approach as towns have unique characteristics. In the case of Basildon, it’s a 73-year-old ‘new town’ where all the infrastructure “gets tired and starts falling apart at the same time.”
Andy Harper-Rowe of Morgan Sindall recognised the issue and spoke of the challenge of Harlow bus station. “It’s over 50 years old – very tired and designed and planned out for a different era, with the entrance to the car park barely sufficient for modern vehicles.”
Stuart Graham said that Chelmsford faced the same hurdle of being considered too prosperous to help. “We’re Tier 3 and took the conscious decision not to apply for LUF support. You need a significant resource to prepare for funding bids and we chose to focus on other priorities.”
Chelmsford has also found other ways to progress.
For example, construction of a railway station at Beaulieu in the city’s Chelmsford Garden Community, the first new station on the Great Eastern mainline in more than 100 years is now underway.
The new station and connected transport links, such as the new Beaulieu Parkway relief road and the Chelmsford North-East by-pass, will help relieve pressure at the existing Chelmsford train station, reduce car journeys into the city, and therefore tackle congestion on local roads, reduce pollution and encourage more Chelmsford residents to use public transport for short journeys.
The project is being funded by nearly £160 million, which includes £124 million from the Government’s Housing and Infrastructure Fund (HIF), £12 million from the South-East Local Enterprise Partnership and £22 million from the developers of Beaulieu, Countryside and L&Q.
Chelmsford also secured £14 million from HIF to help convert the former Chelmer Waterside gas works into land for housing. Stuart says;
For many years, much of this land was inaccessible to the public but this area faces directly onto three waterways, namely the River Chelmer and the Chelmer and Blackwater Navigation. It's less than a five-minute walk from the city centre. This makes it a very attractive and sustainable place to build new homes. The site has the potential to deliver up to 1,100 new homes.”
The council also used the Community Infrastructure Levy (CIL), a charge applied to new developments, to help to fund infrastructure improvements.
Chelmsford still uses classic S106 agreements, but only for site specific requirements and to secure affordable housing.
Since 2014, he said the Council has pulled in £34 million from CIL. “We deliver about 1,000 homes a year, but we use that delivery to secure funding from development.”
Like Basildon, Chelmsford retained a degree of frustration with the tier system that underpins LUF. “We've got a big issue with temporary housing, as I’m sure everywhere else does."
We understand why we are put in Tier 3 but this is one of the challenges Essex has as a region. There are six key towns/centres, all a similar size. We're all chasing the money. Prioritising is always a challenge, but we're all competing for a limited pot of money. I would hope that devolution maybe presents an opportunity to address this overlap.”
