Billions spent fail to save inner cities: Flagship schemes founder, but smaller towns benefit. Nicholas Schoon reports

URBAN DEPRIVATION and decay in the core of England's largest cities worsened through the 1980s, despite billions of pounds of public expenditure on inner-city programmes, a government-sponsored study has concluded.

As reported in the Independent last week, the 445-page study, published yesterday, revealed that one of the Government's flagship policies - rebuilding the inner cities - has failed in its objectives and wasted huge sums of money. The researchers criticised the Government for failing to make partnerships with local councils and communities in trying to solve the deep-seated problems of inner-city decay.

But in the smaller conurbations and outlying areas, taxpayers did get a positive return for the huge sums spent on tackling decay. By the end of the decade conditions were not as bad as they would otherwise have been, researchers at three universities found.

Sir George Young, Minister for Housing and Planning, said that recent policy changes had dealt with the problems criticised.

The study by the universities of Manchester and Durham and John Moores University, Liverpool, led by Professor Brian Robson and Professor Michael Parkinson, looked at 57 local government districts defined by the Government as urban priority areas. These were compared with 40 'marginal' districts, which suffered similar problems but did not qualify as priority areas, and 26 better-off towns and cities.

Sir George said the report showed that the 57 urban priority areas had become relatively less deprived compared with the others, 'notwithstanding some deterioration in the core areas facing the most intractable problems'.

Professor Parkinson of John Moores University, said: 'There's good and bad news. The smaller conurbations getting these funds did improve their relative position. But in the big seven areas - Birmingham, London, Leeds, Manchester, Merseyside, Newcastle and Sheffield - we found that by and large social and economic conditions didn't improve and social polarisation increased.'

Professor Parkinson, who heads the university's European Institute for Urban Affairs, said the reorganisation of inner-city policy was 'a move in the right direction - now we'll see if it works'.

Researchers had a tough task in trying to analyse whether spending of more than pounds 10bn between 1979 and 1991 could be shown to have bought any improvements for local people. They looked at unemployment levels, the creation of jobs and small firms, house prices and whether young adults (aged 25 to 35) were moving in or out of the areas.

In some areas the Government was giving inner-city grants with one hand and taking away money with the other through cuts in central government funding for local councils.

'It is clear that there were considerable reductions (of resources) to many Urban Priority Area authorities,' the report said. 'There are indications of deteriorating economic conditions in the Urban Priority Areas over the period as a whole.'

Yet in most of them the deterioration would have been worse but for government help.

Of the 57 areas, 18 were deemed to have 'mainly positive outcomes' and 21 to have poor outcomes. The failures included nine districts and cities judged to have relatively high amounts spent on them by the taxpayer - Newcastle, Liverpool, Coventry, Hull, Sunderland, Knowsley and, in London, Hackney, Lambeth and Newham in the docklands. The areas that showed best value for money were Bristol, Burnley, Middlesbrough, North Tyneside, Sefton, Walsall and Wolverhampton.

Late last year, the Government brought all the English inner-city funding schemes under one budget running at pounds 1.4bn a year, and combined the regional officers of five of its departments most involved with inner-city policy to offer employers and local communities a 'one-stop shop'.

It has also run two rounds of City Challenge - a competitive scheme granting large sums to councils which, in partnership with local businesses and communities, drew up the best schemes for regeneration.

Assessing the Impact of Urban Policy; HMSO; pounds 40.