Regeneration plans could be hit by credit crunch

29 May 08
The government has admitted that plans to regenerate local communities could be thwarted because of the global credit crunch.

30 May 2008

The government has admitted that plans to regenerate local communities could be thwarted because of the global credit crunch.

It has now commissioned 50 experts to examine the impact of tighter credit terms and uncertainty in the housing market on regeneration projects.

Local government minister John Healey told a conference in London on May 27 that it was important to maintain the momentum built up over the past decade, while understanding the risks posed by the slowdown in economic growth.

'While we need to assess the influence of the current market sentiment, we also need to recognise that regeneration is a long-term process and investment horizons are likewise long-term,' he said.

'I will be looking for the study to ensure we can both cope with any short-term consequences and maintain investment confidence for the longer term.'

The study will be led by Professor Michael Parkinson, director of the European Institute for Urban Affairs at Liverpool John Moores University, who produced a major report on the state of English cities in 2006. It coincides with consultations by the Department for Communities and Local Government on a new regeneration framework, due to be published this summer.

Earlier this year, the DCLG announced that 12 areas in the North and Midlands of England would receive more than £1bn over three years as part of the housing market renewal programme.

John Perry, policy adviser at the Chartered Institute of Housing, said: 'The housing market renewal areas have always acknowledged that their housing market recovery might be vulnerable to market swings, so it is logical that the government reviews the situation.'

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