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Last Updated: Thursday, 8 November 2007, 05:47 GMT
30bn 'did little to boost towns'
The exterior of a Jobcentre
The government has adamantly denied the report's findings
Some 30bn spent on regeneration schemes in UK towns and cities over the past 10 years has had no real impact, a centre-right think tank has claimed.

The Policy Exchange report compared key economic indicators from towns that had received substantial funding, with the national average.

It found there were "no signs of improvement" in unemployment or income in the towns that had received funding.

The government said the majority of big cities had seen improvement since 1997.

Economic performance

Local Government Minister John Healey said: "We totally reject these claims.

"Our towns and cities have overcome years of decline and decay with economic performance rising in six out of eight of the largest cities in England since 1997."

The LSE-affiliated think tank said that over the past 10 years there have been 14 core urban regeneration schemes, which have received a total 30bn in public funds.

Unemployment rates graph

For its report, entitled Cities Limited, the think-tank selected 18 towns and cities targeted for investment by between four and eight of the 14 schemes.

They then compared the economic performance of these "urban policy towns" with the national average, and with six towns that have not received funding but have economically out-performed the national average.

The urban policy towns include: Sheffield, Liverpool, Hull, Southampton, Coventry, Leicester and Glasgow.

The high-performing towns were: Edinburgh, Windsor-Maidenhead, Peterborough, Bristol, Milton Keynes and Swindon.

Gap 'widening'

The study used key economic indicators such as personal income, unemployment levels, and a factor known as "gross value added" (GVA) - a cash figure showing the per-capita contribution people make to the economy, personal income and employment.

The big picture is the same: towns which receive large amounts of urban policy funding are not converging to the UK average
Dr Oliver Marc Hartwich
Policy Exchange

The report found that for personal income, urban policy towns began 17% behind the UK average in 1997, and ended 18% behind in 2005.

For unemployment, by the end of the decade there were still 50% more people out of work in urban policy towns than the national average.

And for the GVA, the gap has substantially widened, the report found.

In 1997, urban policy towns were 9% behind the national average, but this had reached 13% behind in 2004 (the most recent year for which figures are available).

Policy Exchange's chief economist, Dr Oliver Marc Hartwich, said: "The big picture is the same: towns which receive large amounts of urban policy funding are not converging to the UK average.

"If anything, they are slipping farther behind while successful towns are stretching their lead."

Average income graph

But the Department of Communities and Local Government, which heads urban regeneration funding, vigorously rejected the claims made by the report.

Mr Healey said: "Life chances in areas receiving neighbourhood renewal funding continue to improve with mortality rates from heart disease falling by 27.5% since 1997, crime rates by 15% between 2003 and 2007 and the coalfields programme creating 16,000 jobs since 1996.

"The scale of positive change is clear, however deep-rooted pockets of deprivation still exist which no one single approach can tackle."

He said there would be continued investment in deprived areas, with 2bn announced in October through the comprehensive spending review.

He said: "It's alarming that this think tank is arguing that we should do otherwise by targeting less effort and resources at turning round deprived areas when those that have received government funding have shown the greatest improvements."

Mr Healey's comments were echoed by Glasgow City Council, one of the cities deemed by the Policy Exchange report to be lagging behind.

A council spokesman said: "This report seems to be at odds with the vast majority of examinations of Glasgow's economic performance over the past decade."

The spokesman said there were about 80,000 more jobs in the city in 2005 than there had been ten years earlier.

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