82m pounds public money lost on inner-city land deals: Development corporations 'wasted' funds
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Your support makes all the difference.EIGHT Urban Development Corporations have lost more than pounds 82m of taxpayers' money on land deals since they were set up by Margaret Thatcher to spearhead the drive for inner-city regeneration.
Analysis of replies to parliamentary questions from Stephen Byers, Labour MP for Wallsend, reveals that eight out of the 10 corporations in England have come unstuck on the property market. Mr Byers looks at the amount spent acquiring land; receipts, if any, from land sales; and, based on present property prices, the value of land held.
The worst offender is Trafford Park, in Manchester, which has lost pounds 20.2m from buying and selling land since its creation in 1987. Sheffield, which is a year younger, fared little better, losing pounds 19.4m.
Mr Byers says the deficits warrant investigation by the National Audit Office, the public spending watchdog.
Over pounds 2bn of government money has been poured into corporations to enable them to buy land, to develop it and build roads. They have also been given special planning powers and can offer incentives to businesses moving in. But they bought land at the wrong time, at the height of the property boom. Since then, the corporations have had to contend with falling prices and lack of customers. The recession has stopped companies expanding and moving. At the same time, competition from new towns, development agencies and enterprise councils in this country, and from overseas, for inward investment has intensified.
A report last year found performance measures for the corporations were poorly defined and questioned whether the bodies were really necessary.
Corporations were counting on providing 5.5 million square metres of new floor space - at a time when 14 million square metres of industrial space, including 1.6 million square metres in new buildings, was already vacant.
At Trafford Park and Central Manchester, the corporations had identified demand for 840,000 square feet and responded by building 1.29 million square metres.
Labour has long been critical of the corporations, claiming they suck investment from surrounding areas, ignore local needs, and spend money on creating new offices and industrial sites that could be better used on training people.
Mr Byers says the figures are proof that buying and selling land is not the answer to urban blight. 'The corporations were set up to bring badly-needed employment into some of the most rundown and economically depressed areas of the country. Instead of investing in people and jobs, they have put public money into property speculation. As a result, over pounds 82m of public money, which should have been used to get people back into work, has been wasted.'
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