Where will the money come from?

Local government funding has taken a 60% hit over the last decade. Economist Alexander Jan looks at how can the landscape sector can innovate to find finance for projects, and what issues – and opportunities – other sources of funding create.

For many who work to improve the urban and natural environment in Britain, it’s been a torrid time.

The financial crisis of 2008 precipitated austerity. The government aimed to eliminate the use of public borrowing to pay for day-to-day services. Because of sluggish economic growth and, at times, lower than expected tax receipts, that process is taking longer to achieve than was anticipated.

More recently, things have been aggravated by uncertainty associated with Brexit. The British economy has not recovered to its pre-2008 trend levels of growth which, in turn, has reduced tax yields.

To make matters worse, austerity has been skewed. Healthcare and pensions expenditure have largely been protected whilst other parts of the public sector have seen disproportionately large reductions. The NHS in England experienced a real-terms cash increase of nearly 13% between 2009/10 and 2018/19. But total funding for local government sees a corresponding reduction of 60% over a similar period – between 2010/11 and 2019/20.

Spending on things such as the public realm – trees, streets and parks – have borne the brunt of cuts, as councils have done their best to protect statutory service provision for the elderly, children and other vulnerable groups.

So austerity presents real challenges to those professions and sectors that have traditionally been funded from the public purse. But, alongside some painful choices as to where to allocate increasingly scarce resources, it has perhaps stimulated public players to look to more innovative, efficient delivery models that allow the harnessing of resources from third parties.

BIDs and the great estates have delivered greening programmes like Wild West End, which includes beehives on the roofs of business properties

© Wild West End

Examples include the growing role of business improvement districts (or BIDs). In London’s Holborn and West End areas for example, BIDs, plus the great estates, have been involved in paying for and delivering programmes of work to tame traffic and restore traditional patterns of movement on the city’s streets.

One-way systems and gyratories have been stripped away; greening initiatives such as Wild West End have been put in place. There is even a programme of beehives on the roofs of business properties to help boost bio-diversity and pollinators.

Outside of central London, in Birmingham, Staffordshire and Hackney for example, Friends Groups have been set up to help manage local council parks and other green areas. After a reversal in policy to sell off some sites, Knowsley council in Merseyside promised to set up a charitable trust to administer its parks and open spaces. And the lottery recently launched a £2m fund to support “parks innovators” across the UK.

Not all these initiatives are without their critics. Some have argued that private sector resources are, more often than not, channeled into those areas that are already successful.

Public realm improvements lead to better commercial returns for property owners, fuelling concerns over gentrification. Some politicians and council leaders fret that community-based approaches erode democratic legitimacy and cannot substitute the need for civic leadership. And moving public assets to social enterprises or charitable trusts that then bid for money from national funds risks creating winners and losers.

It might also result in prioritising investment in space with heritage and history rather than securing resources to tackle the effects of climate change or provide greenways for people to get to work.

The Portman Estate is encouraging wildlife back into the West End, including Portman Square gardens

© Wild West End

Dealing with the public finance problem in non-statutory service provision was always going to be challenging. And this is set to continue.

Increases in public expenditure announced by the Chancellor last year will once again be targeted at a select group of public services (including the NHS and pensions) and also provide for a handful of large capital major projects. The effect will be anaemic expenditure growth (or even further reductions) for many other parts of government.

In the world of landscape design and its associated fields, that means innovation, private finance and partnerships with business and community groups and charities are here to stay. For all the concerns with these approaches, the alternative – even less investment – is likely to be far worse.

Perhaps inadvertently, the UK now finds itself at the forefront of new and innovative ways to deliver improvements to green and public spaces.

A decline in the landscape sector’s dependence on traditional funding means that it is probably more be able to withstand future shocks to public finances. And new and different ways of doing things here might well be transferable to other countries that are also struggling to improve their urban environments as they wrestle with pressures on their public resources.

That provides an alternative avenue for growth in some parts of the UK sector. As long, of course, as Brexit doesn’t get in the way.

Alexander Jan is chief economist at Arup.