Evaluation of the National Strategy for Neighbourhood RenewalFinal report: Summary

www.communities.gov.ukcommunity, opportunity, prosperity

AMION Consulting

March 2010Department for Communities and Local Government

Evaluation of the National Strategy for Neighbourhood RenewalFinal report: Summary

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ISBN: 978-1-4098-2271-4

The findings and recommendations in this report are those of the authors and do not necessarily represent the views of the Department for Communities and Local Government.

Summary | 3

Summary

1. Introduction

The National Strategy for Neighbourhood Renewal (NSNR) was launched in 2001 with the vision that:

“within 10 to 20 years no-one should be seriously disadvantaged by where they live.”

It set itself two long-term goals:

“in all the poorest neighbourhoods to have common goals of lower worklessness and crime, and better health, skills, housing and physical environment”; and

“to narrow the gap on these measures between the most deprived neighbourhoods and the rest of the country”.1

The Strategy marked a shift from previous regeneration programmes (such as City Challenge and the Single Regeneration Budget). It was a comprehensive England-wide strategy which was explicitly focused on tackling deprivation at a neighbourhood level. While it was supported by dedicated finance – principally the Neighbourhood Renewal Fund (NRF), subsequently reformed as the Working Neighbourhoods Fund (WNF) – the Strategy also placed a significant emphasis on the role that ‘mainstream’ public services should play in addressing neighbourhood deprivation. NRF was originally allocated to the 88 local authorities that were deemed to contain the most severe concentrations of neighbourhood deprivation. It was intended to be a flexible resource with the responsibility for determining its use vested with local areas.

While NRF (and subsequently WNF) have been the most significant spending elements, during its period of operation the Strategy has also encompassed a number of other programmes – such as New Deal for Communities (NDC), Neighbourhood Management Pathfinders (NMP) and Neighbourhood Wardens (NW).2

In 2005 AMION Consulting were commissioned to evaluate the implementation of the Strategy. The aim of the evaluation has been to provide evidence on the extent to, and ways in, which the NSNR has worked and to generate constructive and practical advice to inform future policy. This report summarises the main findings from the evaluation.3

1 SEU (2001) A New Commitment to Neighbourhood Renewal: National Strategy Action Plan. www.cabinetoffice.gov.uk/media/cabinetoffice/social_exclusion_task_force/assets/publications_1997_to_2006/neighborhood_action_plan.pdf

2 These programmes have been subject to separate evaluations that have informed this strategy evaluation. Details of the NDC evaluation can be found at http://extra.shu.ac.uk/ndc, the NMP evaluation at www.sqw.co.uk/nme and the NW evaluation at www.communities.gov.uk/publications/citiesandregions/neighbourhoodwardensscheme2.

3 The detailed findings are contained in: CLG (2010) Evaluation of the National Strategy for Neighbourhood Renewal: Final Report.

4 | Evaluation of the National Strategy for Neighbourhood Renewal – Final report: Summary

2. The nature of deprived neighbourhoods varies

Deprived neighbourhoods exist in all parts of the country, although there are particular concentrations in the major conurbations. The spatial distribution varies within local authority areas – in some deprivation is concentrated in highly polarised ‘pockets’ surrounded by other significantly less deprived areas; in others it is both extensive and intensive.

There is also no single ‘model’ of deprived area – they vary in terms of for example geography, demographic profile, socio-economic role and relationship to wider housing and labour markets. There are, however, certain broad commonalities (e.g. concentrations of vulnerable groups) and characteristics (e.g. high levels of social renting) that set them apart from less deprived areas.

The evaluation looks at one approach to categorising different types of deprived area based on the different roles that they perform within wider housing markets. This can assist in analysing and interpreting conditions and help inform the development of appropriate policy responses. Using this approach, four types of neighbourhood can be identified reflecting population movements into, and out of, areas – ‘escalator’, ‘transit’, ‘gentrifier’ and ‘isolate’.4 Very high levels of deprivation may occur in all the neighbourhoods and all present particular policy issues, but some of the biggest policy challenges will be presented by the ‘isolate’ areas. These areas are characterised by residents moving from, or to, areas that are at least as deprived. They tend therefore to be ‘isolated’ from wider housing markets and to exhibit limited mobility.5

3. According to most indicators, the long-term trend of a widening gap between the most deprived neighbourhoods and the rest of England has been stemmed

While between 1971 and 2001 there was steady improvement across key deprivation indicators6 at a national level, there is also evidence that the gap between the most deprived neighbourhoods and the rest increased.

There are indications that this trend was stemmed and, to a degree, reversed during the first six years of NSNR (2001 to 2007). Changes in the conditions of the more deprived neighbourhoods were largely positive and the gap with the national average – with regard to, for example, the key indicators of worklessness and educational attainment –

4 Full details of the typology are given in CLG (2009) Understanding the different roles of deprived neighbourhoods: a typology – research summary. www.communities.gov.uk/publications/communities/differentrolesdeprived

5 Although data on household movements is limited, analysis of schools’ pupil (PLASC) data confirms the more restricted mobility associated with isolate areas.

6 Based on the Townsend Index that uses four key indicators – (a) the percentage of unemployed people; (b) overcrowded households; (c) households with a car; and (d) households not owning their house.

Summary | 5

narrowed. However, deprived neighbourhoods remained a long way behind and there are signs that towards the end of the period, slowing economic growth was beginning to have a negative effect.

Deprived neighbourhoods in NSNR districts7 performed better than those in non-NSNR districts – particularly in terms of worklessness. Moreover, although within local authority areas there continued to be a general widening of the gap, this was less evident in NSNR districts.

The picture on education is also generally positive. While the vast majority of neighbourhoods have improved, the greater improvement has been in NSNR districts and particularly in the most deprived neighbourhoods. There was therefore a more marked narrowing of the gap between the poorest performing neighbourhoods and the rest within NSNR districts.

However, the evidence of gap narrowing on other indicators – such as health and crime – is more mixed. There has been narrowing of the gap for burglary, but a widening for violent crime (although less so in NSNR districts). There also has been a slight widening of the gap in mortality rates8 between the most deprived neighbourhoods and the national average.

Although evidence is limited, within NSNR districts there appear to have been improved outcomes for black and ethnic minority groups living in the 10 per cent most deprived neighbourhoods – particularly in terms of educational attainment.

4. Conditions in deprived areas are strongly influenced by the wider sub-regional economy and housing markets

Neighbourhood conditions are affected by a complex array of factors including their internal characteristics and roles, external factors and their own internal change dynamics.

Using an econometric model of neighbourhood change,9 the evaluation has identified a number of factors that can have a powerful effect on the probability of a neighbourhood improving or declining (in terms of its relative worklessness levels). Significant factors include:

• housing tenure

• skill levels

• population churn

7 Defined as those areas which were in local authorities in receipt of Neighbourhood Renewal Fund (NRF).8 Standardised Mortality Ratio (all causes).9 For more detailed findings see: CLG (2010) Evaluation of the National Strategy for Neighbourhood Renewal: Econometric modelling

neighbourhood change.

6 | Evaluation of the National Strategy for Neighbourhood Renewal – Final report: Summary

• economic performance in the wider sub-regional economy; and

• accessibility to lower skilled jobs.

Where factors combine, the probability of an area improving or declining can be significantly increased. Figure 1 shows that when four of the most consistent factors impacting on the probability of change – access to low skilled jobs, the area being in the bottom 10 per cent on the Index of Multiple Deprivation, a high level of publicly rented housing and low skill levels – are all present in an area, the chances of that area improving in terms of its worklessness rate are reduced from 23.7 per cent to only 0.7 per cent.

Figure 1: The impact of key factors on the probability of an area improving

Base probability of an area improving from the worst 10% (worklessness)

Probability if:

A Minimum access to low skilled jobs within 5km

B In bottom 10% IMD

C Maximum level of publicly rented housing

D Minimum % of population with skills at L1/2 and/or L3/4

Probability in area with factors A-D combined:

23.7%

0.7%

21.4%

17.3%

3.8%

10.0%

5. The NSNR is positively associated with improved conditions

The modelling also suggests that the presence of NSNR has been associated with a limited but sustained reduction in worklessness levels. It is estimated that over the period 2001 to 2007 worklessness was reduced by some 70,000 more in these areas than would have been the case in its absence. About half of this ‘additional’ reduction was in the 20 per cent most deprived neighbourhoods. While these figures are relatively modest (equivalent to an added reduction of some 3 to 4 per cent in the number of workless individuals), it should be noted that they will probably be understated due to the loss of some benefits as a result of people securing work and moving out of the neighbourhood.

There has also been greater improvement in educational attainment in NSNR areas than in non-NSNR areas and particularly in the most deprived neighbourhoods. There has been, for example, an estimated average improvement per pupil in the most deprived 15 per cent neighbourhoods of about 6 points (equivalent to a GCSE grade) at Key Stage 4.

Summary | 7

Other evaluation and case study evidence10 also suggests a positive NSNR impact in terms of crime and the environment. Many residents in NSNR areas considered that the streets were cleaner, that the quality of parks and open spaces had improved and that environmental conditions were better. Overall, the evidence suggests that there has been strong association of NSNR with improvement on crime indicators. The evidence of impact on health outcomes is more mixed, although there appears to be a strong relationship between perceptions of positive health impacts and evidence that Primary Care Trusts have pro-actively engaged with NSNR structures.

6. While NRF has been an effective mechanism for supporting policy in the most deprived areas, evidence suggests that minimum levels of intervention are required

The Neighbourhood Renewal Fund is the principal funding source introduced by NSNR.11 Despite what seems to have been an early lack of strategic guidance, overall a positive picture of NRF effectiveness emerges. It has given local authorities (working with local partners) increased flexibility to spend and experiment across thematic areas. It also appears to have played a key role in bringing partners (including mainstream agencies) together; in increasing the visibility of neighbourhood renewal as a priority for service providers; and encouraging greater, and different forms of, investment by mainstream agencies in deprived areas. NRF has contributed very significantly to the impact of the Strategy as a whole. About two-thirds of the outputs and outcomes from NRF supported projects are estimated to be ‘additional’ to the local area (i.e. would not otherwise have occurred), which compares favourably with other regeneration programmes.

Improvements in levels of worklessness have been most marked in areas receiving substantial allocations of NRF. In general, improvement increases with spend but a minimum level of intervention may be necessary to secure improvement. As Figure 2 shows, the greatest reductions in worklessness have been achieved with per capita NRF spend of over £300 per head, whereas the change associated with per capita spend of under £50 is disproportionately low. This is confirmed by the economic modelling which showed for example that the probability of a neighbourhood in the most deprived 5 per cent neighbourhoods improving was between 2 and 2.5 times greater in a high intervention NSNR area than in a non-NRF area.

10 Including case study research and individual programme evaluations. See in particular: CLG (2010) Evaluation of the National Strategy for Neighbourhood Renewal: Local research project. Health, crime and environment domains were not included in the econometric model due to the absence of comprehensive data at the neighbourhood level.

11 In 2008 the NRF was reformed as the Working Neighbourhoods Fund (WNF).

8 | Evaluation of the National Strategy for Neighbourhood Renewal – Final report: Summary

Figure 2: Change in worklessness in relation to NRF spend per capita

-0.6 -1.5 -1.8 -1.9 -1.6 -2.5 -3.3 -1.2

-3.5

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

Impr

ovem

ent

(%)

Absolute change in worklessness by area type and NRF spend per capita, 2001 - 2007 Source: SDRC, IMD 2004

S p e n d p e r c a p i t a b a n d s i n N S N R L S O A s

Band

1:

£0

-£

49

Band

2:

£50

-£

99

Band

3:

£10

0 -

£14

9

Band

4:

£15

0 -

£19

9

Band

5:

£20

0 -

£24

9

Band

6:

£25

0 -

£29

9

Band

7:

£30

0 +

Non

-NRF

LSO

As

-bo

ttom

20

% (n

atio

nally

defi

ned)

1

7. NSNR has also introduced new ways of working, against a background of local flexibility

NSNR has been instrumental in establishing a number of new elements or emphases in local renewal activity including:

• Local Strategic Partnerships – which have been fundamental to the planning and delivery of neighbourhood renewal. They have delivered a range of outcomes in terms of partnership working and strengthening local governance and, indirectly, are likely to have contributed to the delivery of service improvements. LSPs should provide an effective mechanism for the delivery of initiatives in the future.

• A framework of targets to reflect the goals of the Strategy. This has evolved over time and is now embodied in Local Area Agreements (LAAs). LAAs are increasingly recognised by strategic stakeholders as the key driver of service provision.

Summary | 9

• The use of neighbourhood management as a ‘joining-up’ mechanism at the local level. Its benefits seem clear, if difficult to fully quantify, and the concept has been widely taken up across the country.

• The NSNR had a strong focus on community engagement, and case study evidence suggests that the strategy has helped create “a greater number of opportunities for residents to get involved in the process of neighbourhood regeneration than ever before”.12 However, while stakeholders generally consider that the engagement of local residents remains important and that the benefits outweigh the costs, there has been some confusion as to its purpose and limited involvement of residents in meaningful decision-making.

8. Many mainstream services have been increasingly tailored to meet the needs of deprived neighbourhoods

A key emphasis of the Strategy has been on using NRF and other mechanisms to influence the extent to which mainstream budgets are used to improve services in deprived areas. Relatively high numbers of interventions funded by NRF have been taken forward by mainstream providers. There is evidence that NSNR has acted as a catalyst in the adoption of new modes of delivery by mainstream providers but the extent to which this has happened varies significantly across the domains, with greatest impact in those of the environment and crime/community safety. To a lesser extent NSNR can be seen to have resulted in the redirection of discretionary13 mainstream funding to deprived neighbourhoods and in the investment by mainstream providers in new and/or innovative activity.

9. Overall the NSNR appears to have delivered reasonable value for money

There are considerable difficulties in estimating the value for money that NSNR has delivered given the wide range of benefits that are associated with the Strategy. However, the value of the reduction in net worklessness alone in deprived areas between 2001 and 2007 that can be associated with NSNR is an estimated £1.6bn. This represents over five times the estimated direct cost (c.£312m) of NRF interventions specifically focused on worklessness. While this undoubtedly underestimates certain costs (e.g. diverted mainstream expenditures) and takes no account of displacement; it also excludes the value of consequential benefits, of benefits lost as a result of population movements and of continuing benefits in subsequent years.

12 CLG (2010) Evaluation of the National Strategy for Neighbourhood Renewal: Local research project.13 In other words moneys that do not automatically follow need (such as benefits expenditure).

10 | Evaluation of the National Strategy for Neighbourhood Renewal – Final report: Summary

There are also other significant benefits that have derived from NSNR. These include not only those in other themes, such as education where some quantification is possible, but also non-quantified ‘process’ outcomes – such as the Strategy’s role in leading to the establishment of new tools and structures – and wider ‘non-monetarised’ benefits relating, for example to the extent to which the Strategy has impacted upon long-term processes of neighbourhood decline. The latter, if not addressed, can lead to wide-ranging costs – from, for instance, additional service delivery costs in the present through to the future costs of making replacement housing and other provision elsewhere. The overall cost of NRF over the period 2001-07 was some £2.4bn. Taking these broader benefits into account as well as the value of the estimated worklessness impacts would suggest that the Strategy has delivered at least reasonable value for money.

10. A number of implications for policy in the future emerge

The NSNR has led to some narrowing of the gap between deprived and less deprived areas – although this has occurred at different rates in different places. The Strategy has also laid many of the foundations necessary for future action – not least in terms of establishing the processes and structures through which continued joint working can be undertaken. The evaluation has identified a number of key principles that could usefully be incorporated into future policy so that the gains achieved by NSNR since 2001 can be built upon. In particular:

• neighbourhood regeneration policies cannot be developed and implemented in a vacuum – they need to be linked with wider policies operating at a broader spatial scale – particularly in the areas of housing and economic development

• interventions need to reflect and be tailored to the individual characteristics of areas and their roles within wider housing, labour and product markets

• neighbourhood regeneration is a long-term objective – continuing commitment is essential

• an additional flexible pot of money is needed to bring partners together and provide flexibility, but resources should be carefully targeted and not spread too thinly

• a continuing emphasis on worklessness is justified, though this needs to be addressed by interventions that also target broader barriers; and

• mechanisms to ensure a continuing and increasing emphasis on deprived neighbourhoods by mainstream providers must be a priority.

ISBN: 978-1-4098-2271-4

ISBN 978-1-4098-2271-4

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