Reviving coal mining areas lacks value for money

• Report: Regenerating the English Coalfields
• Public Accounts Committee

Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:

"It is extremely doubtful whether the three initiatives by the Department for Communities and Local Government to regenerate the former coal mining areas are achieving value for money.

"The challenge is undoubtedly enormous. The closure of 124 pits since 1981 has left a legacy of derelict land, some of it highly contaminated, which is low in economic potential; and of high unemployment allied with a weak culture of enterprise.

"But, despite spending £630 million so far, and 13 years after the launch of the initiatives, the Department still does not really know what improvement it has made to the lives of the people living in these areas.

"Taxpayers will want to know how the Department could spend many hundreds of millions of pounds without having sophisticated measures of the direct effects of that expenditure: such as the number of jobs that would not otherwise have been created and the business occupancy rates on redeveloped sites.

"The Department still has £450 million to spend under the initiatives. It must start afresh, with a proper assessment of the needs of the former coalfield areas in 2010 and the articulation of a clear and time-bound objective, with sophisticated means of measuring progress, and an overarching strategy.

"It must also start to do what it has failed to do so far and take the lead in coordinating the efforts of all government departments to ensure a concerted approach to revitalising coalfield communities."

Mr Leigh was speaking as the Committee published its 16th Report of this Session which, on the basis of evidence from the Department for Communities and Local Government (the Department) and the Homes and Communities Agency, examined the lack of coordination demonstrated by the Department, information the Department collected to judge performance, and the need to consider future direction in the light of the economic downturn.

Regeneration challenge

Reviving the former English coalfields is one of the largest regeneration challenges to face the country over the last 30 years. Between 1981 and 2004, over 190,000 people lost their jobs in coal mining. The speed and extent of pit closures resulted in severe economic, social and environmental deprivation in many communities. In response, the Department developed three specific initiatives to regenerate coalfield areas, involving a commitment of almost £1.1 billion of public money.

As of July 2009, the three initiatives had spent £630 million and had brought 54 former coalfield sites back into working use, enabled private development of 2,700 houses and 1.1 million square metres of employment space, and provided financial support to around 3,000 community projects. Despite the initiatives, 37 per cent of coalfield areas continued to be ranked amongst the most deprived in England in 2007.

Clear Vision

Thirteen years after the start of the initiatives, the Department still lacks a clear vision and has no overarching strategy for the regeneration of these areas, has not sufficiently coordinated the three strands of the regeneration, and has failed to coordinate wider Government activity. In consequence, training and support to help former coalfield communities find employment has rarely been linked to job opportunities created on coalfield sites.

We have serious concerns about the value for money of the coalfield initiatives. The Department does not know what improvement the initiatives had made to the lives of people living in the coalfield areas, as it does not have a robust assessment to prove to us the true number of additional jobs created.

Jobs

Nor does it know the business occupancy rates for employment space on the redeveloped sites, or the number of people from former coalfield communities who have benefited. The number of jobs the initiatives had helped to create could be anywhere between 8,000 and 16,000. We are concerned that public money has been invested to create jobs that would have been created anyway.

While progress has been made, coalfield regeneration has cost the taxpayer much more than originally expected, and it has taken much longer than planned. The Department needs to develop more sophisticated benchmarks that take into account the different levels of contamination on a site and allow separate evaluation of the incremental costs to develop housing and employment space.