Clyde Gateway (URC) Primer #1

Clyde Gateway Area map

Clyde Gateway (URC) Primer #1

Urban Regeneration Companies and the government

Urban Regeneration Company’s (URC’s) are organisations that combine the economic and political interests of the private sector and the local state. They are established by national governments but are run at ‘arms length’ from the elected powers that first incorporated them. As such, URC’s reflect a general shift in British politics since the mid 1970’s into the 1980’s, a period which saw rapid de-industrialisation of the economy, and consequently the move away from a redistributive, cohesion oriented,  centralised form of state led capitalism, towards a more entrepreneurial ethos which has seen local and national government enhance and enable  the position of corporate capital. Private business interests now routinely participate in both the ideological direction and the day to day activities of governing society and space.

A key consequence of this in terms of Glasgow’s East End is the manner in which geographic space and social life  are-reshaped, re-scaled, and altered according to the needs of  capital investment, rather than being prioritised as somewhere that people live and feel a sense of belonging and security within. A tension between these contradictory aims is apparent in the words of jubilant local councillors and MSP’s following the announcement that Clyde Gateway had been incorporated in December 2007. At one and the same time Clyde Gateway is described as being “ all about people…bringing about genuine regeneration…enhancing life chances…bringing substantial social and economic benefits for thousands of people”. It is also described as “wholescale [sic] transformation of the area… removing barriers to market opportunities and securing major private sector investment”.

In 2007, the Scottish Government published Best Practice in Establishing Urban Regeneration Companies in Scotland. It suggests:

“The emphasis of Scottish URCs is on their “catalytic” abilities. The Companies are expected to deliver outcomes across economic, social and environmental as well as physical regeneration”. In other words, they are set up to facilitate business development through urban redevelopment.

Clyde Gateway Urban Regeneration Company (CGURC)

The Scottish Government set up Clyde Gateway in December 2007. It is a Limited Company , as well as an Urban Regeneration Company (URC). It is also listed as an Arms Length External Organisation (ALEO) by Glasgow City Council. ALEO’s have been heavily criticised for tax dodging, fragmenting local governance structures, and opening up the possibility for privatisation of local services. In Glasgow, cronyism, political patronage and conflicts of interest have also been widely condemned. Regeneration Companies resemble the Urban Development Corporation model set up by the Thatcher Government in the early 1980’s. In which private and public funding is made available to create the conditions in a region, city or town for investment in the form of attracting construction, business premises and sometimes housing. The description of CG URC given to Companies house is :

“A group engaged to develop large sections of the East End of Glasgow extending into Shawfield and Rutherglen in South Lanarkshire. A registered charity, limited by guarantee”.

The main areas that Clyde Gateway (URC) are operating in are Bridgeton, Dalmarnock, Shawfield, Farme Cross and Rutherglen. The total site area is 2,070 acres (See map above). The company works alongide The Commonwealth Games 2020 organisers, but they are different entities.

Clyde Gateway Developments Limited (CGDL)

Clyde Gateway Developments Limited is a subsidiary of Clyde Gateway URC. The company is described in their own Financial Statement 2012 – 13 as being “established as the main delivery vehicle for commercial property projects within the Clyde Gateway operating area particularly the acquisition and subsequent development of land and buildings for these purposes” (1). In another primer we will look at the way public funding is being used by Clyde Gateway  - on a massive scale –  to buy and remediate vacant and derelict public land in the East End, largely for business purposes. Robbing Peter to pay Paul.

Clyde Gateway and Housing – a market led gamble?

The choice has been made to allow market logics to lead decision making in civic government. We can explore some of the consequences of this by looking at Clyde Gateway and particularly, its position on housing. Whilst CG are not a construction firm, they describe their role as facilitating investment. Their 20 year plan is to:

“create 21,000 new jobs, construct 10,000 new homes, increase the population by 20,000 and deliver £1.5 billion of private sector investment.”

This apparent long term planning and the impressive numbers of jobs and houses promised above begins to look very different upon closer inspection. Firstly, the lifetime of the organisation itself appears to be decided on a fairly contingent basis. According to annual financial statements, CG URC appears to operate on a rolling basis of two to three years. In 2009, the financial statement refers to “agreeing a three year operating plan”(6), in 2012, Clyde Gateway Developments Limited reflect on the confirmation of funding from the Scottish Government and their accumulated reserves, and suggest “the directors have a reasonable expectation that Clyde Gateway Developments Limited has sufficient resources to continue its regeneration activities during this two year period” (7). However, not all long terms plans come to fruition, especially not in a recessionary environment.

Secondly, their commitment to 10,000 homes over the 20 year period is questionable. According to Clyde Gateway’s annual report from 2013–14, a total of 1189 housing units have been built in its remit area since 2007. Whilst a specific breakdown of the numbers built in each area has not been provided, the geographical spread and tenure is as follows:

1. Richmond Gate, Oatlands : Private sector housebuilding being undertaken by Bett Homes

2. Dunn Street/Main Street/Rumford Street, Bridgeton : Social Rented new build by Thenue Housing Association

3. Camlachie, Glasgow : Social Rented new build by West of Scotland Housing Association

4. Baltic Street/Albany Street, Bridgeton : Social Rented new build by Thenue Housing Association

5. Belvidere Village : Private sector housebuilding being undertaken by Keir Homes

When we made enquiries with Clyde Gateway management early in 2013, we were told that the figure of 10,000 was “aspirational”, and that it was raised to secure government funding. We have asked CG throughout 2013 for an indication as to what the revised figure for homes will be, this has not been forthcoming as yet, but it will almost certainly be downgraded from the original 10,000 figure. This is the reasoning of Clyde Gateway:

There are a number of reasons for [the need for the overall housing target to be revisited] not least being a move away from the high-density multi-storey approach that was in vogue when the Business Plan was put together to a trend for low-rise, front and back door properties which of course has an impact on the number of houses that can be accommodated on a given site.”

As well as what is ‘in vogue’ at any one time, the international banking crisis of 2007/8 with strong roots in property, will certainly have helped reduce the number of houses planned under CG. Another indication that housing numbers will inevitably get smaller is that according to our very latest contact with Clyde Gateway, we know that some of the land previously anticipated as sites for housing development have been “brought back into use for business/industrial usage [...] perhaps at Farme Cross, bounded by Cambuslang Road/Farmeloan Road.”. The actual space where housing could be is fast disappearing for business and industrial use.

Clyde Gateway is a body incorporated by the Scottish Government, funding has and continues to be provided by Scottish Government and Glasgow and South Lanarkshire Councils. When asked about the Scottish Government’s responsibility in this area In November 2013, Regeneration Investment Manager for the Scottish Government, Billy Love, stated that as far as housing provision in Clyde Gateway’s remit area was concerned, they were under no obligation from the Scottish Government to provide housing. Instead, he said, the aim of Clyde Gateway is to:

“bring derelict/ vacant and contaminated land back into use. That in turn would stimulate the introduction of new jobs and subsequent investment by the private sector and in doing so attract house builders”.  He also stated that when, or we should say if, these houses are built, “The majority of this would be private sector – owner occupied homes” (5).

The above statement makes it clear that in general private housing will be prioritised. We do not know how much social housing will be built – there are no figures for social housing in the plans. This despite the fact that the East End is one of the poorest, most disadvantaged areas in Scotland.

While the Commonwealth Games is related to the Clyde Gateway project, as we noted before, they are not the same thing. However, Clyde Gateway seem to include the Games in in alleged benefits to the local community. In terms of houisng, initially 1,400 homes were promised for the Athlete’s Games Village, but this has been revised downwards for the first phase. 700 houses are being built in the first phase, and one manager at Clyde Gateway has said he “can’t say when the second phase will even begin, far less completed”. City Legacy have recently told us that the first phase will create 400 socially rented houses and 300 for private sale, and that “Phase 2 will not commence until sales of the 300 units are well underway”.

In other words, this is a market led programme of public subsidy and there is no guarantee that it will pay off – it is a gamble. Clyde Gateway are dealing in land as a commodity, so when they look at a person’s house, a GP’s surgery, a small business, a day- care centre, they don’t see that building on the same terms as the people living, working, and using that building, that is in terms of its use-value as a place to dwell, to provide healthcare services, to make a living, and maintain a sense of community life, what they perceive first and foremost is an obstacle to the potential value of the land, which, if that obstacle could be disposed of, the land could be sold as part of a package of larger land to private land developers. This is happening with no public mandate, yet it is happening at the expense of the public purse.

Meanwhile, the ‘aspirational’ 10,000 figure remains in the latest Annual Report albeit with a disclaimer that:

the 20-year target figures from KPIs 1-4 are taken from the 2008 Business Plan which provided the basis for the formal establishment of Clyde Gateway”.

Public Subsidy

Public bodies have so far given Clyde Gateway nearly £163 million in grants according to the annual reports (See Appendix 1 below notes). Meanwhile, the FAQs page on the website updates that figure, claiming that over £200 million of public money has been spent on Clyde Gateway so far. The company is planned to continue until 2028, which means that if investment rates remain at a similar level, not factoring in inflation, we can expect the amount of public money as grant funding to be paid to Clyde Gateway by the end of its lifetime to be well over £500 million.

We also know that Glasgow City Council have spent public money on what they call “land preparation” in Dalmarnock and Rutherglen whereby the public purse is used to cover the massive cost of cleaning some of the most polluted land in Glasgow in order that it is ready for private land developers to go in and start building business premises.  This is a well know process of ‘public pain, private gain’ – a socialisation of risk (the public pats for all the dirty non-profitable work), and privatisation of profit (business garners whatever gains arise).

Local and national government now share the dogma of the private sector; that the motivation behind decision making is to monetise as much space in as little time as possible. This is the logic that brought about a national and international housing crisis and the worst economic recession since the 1930s, and this same logic is being applied again.

Notes


(1) Clyde Gateway Developments Limited Annual Accounts 2012 – 13

(2) It is also important to add here that the pervasive narrative put forward that Dalmarnock was, prior to the Clyde Gateway’s intervention ‘derelict land’, in fact it was the site of community of people, there were  residential properties, a GP surgery, shops and the only day facility in the East End for people with disabilities and their carers to seek respite. This was the site of key services in the community which were compulsory purchased, demolished and now lie derelict or tarmacked over.

(3) Clyde Gateway consolidated financial statement to 31st March 2009

(4) Clyde Gateway Developments Limited Annual Accounts 2011 – 12

(5) All quotes in this paragraph. Billy Love, Housing Regeneration and Welfare Directorate, the Scottish Government. Personal communication, November 13th. It is important to add here that the pervasive narrative put forward that Dalmarnock was, prior to the Clyde Gateway’s intervention ‘derelict land’, in fact it was the site of community of people, there were  residential properties, a GP surgery, shops and the only day facility in the East End for people with disabilities and their carers to seek respite. This was the site of key services in the community which were compulsory purchased, demolished and now lie derelict or tarmacked over.

Appendix 1

Clyde Gateway: Subsidy Junkies?

Below is a breakdown of the capital grant funding Clyde Gateway has received from different public authorities since 2007, as published in their own annual reports.

Scottish Government grant funding (million)

2007 –   09 £13.666
2009 –   10 £26.176
2010 –   11 £15.405
2011 –   12 £13.057
2012 –   13 £21.502
2013–14 (projected) £ 31.205
Total so far £121.011

Scottish Enterprise grant funding (million)

2007 –   09 £3.348
2009 –   10 £4.8
2010-   11 £8.252
2011-   12 £6.8
2012 –   13 Not   mentioned as a funder in this period
2013–14 (projected) Not   mentioned as a funder in this period
Total so far £23.2

Glasgow City Council grant funding (million)

2007 –   09 £0.036
2009 –   10 £0.005
2010 –   11 £2.238
2011 –   12 £1.703
2012 –   13 £3.045
2013–14 (projected) £2.760
Total so far    £9.787

South Lanarkshire Council (million)

2007 – 09 £0.040
2009 – 10 Not mentioned as funders in this period
2010 – 11 Not mentioned as funders in this period
2011 – 12 £0.516
2012 – 13 £1.050
2013–14 (projected) £1.815
Total so   far £3.421

European Regional Development Fund

2007 – 09 Not mentioned   as funders in this period
2009 – 10 Not mentioned as funders in this period
2010 – 11 £0.314
2011 – 12 £0.671
2012 – 13 £0.175
2013–14 (projected) £4.028
Total so   far £5.188

Other Capital Grant Funding from charities, public bodies (Including the Heritage Lottery Fund, the Forestry Commission, Glasgow City Heritage Trust, Sport Scotland)

2007 – 09 Not mentioned as funders in this period
2009 – 10 £0.042
2010 – 11 Not mentioned as funders in this period
2011 – 12 £0.229
2012 – 13 £0.607
2013 – 14 Not mentioned as funders in this period
Total so   far £0.878

Grand Total                               £163.485.00 million