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 Deprivation-not being targeted well enough,‘slush fund’ for statutory agencies!

CymunedolThese are some of the findings that are highlighted by a recent survey into the governments policies that show that the neighbourhood renewal fund (NRF) still faces major hurdles in reducing the gap between the most deprived neighbourhoods and the rest.

The £2.9bn neighbourhood renewal fund has not significantly shifted the spending patterns of local authorities, research by New Start and the Centre for Local Economic Strategies has found. The research, revealed in this week’s new start magazine, shows the neighbourhood renewal fund (NRF) still faces major hurdles in reducing the gap between the most deprived neighbourhoods in England and the rest.

Whilst Wales follows it's own furrow in the guise of Communities first, this data is disturbing especially when you consider that the Neighbourhood renewal scheme in England is about two years more mature than that in Wales, and has consumed considerably more in public funding.

Is this a warning for us in Wales, or a foretaste of the fallout we may encounter in a few years time?


Community involvement is not strong enough; small pockets of deprivation are not being targeted well enough; and working practices are not changing fast enough, the study found. The research, by policy analysts at Cles, was based on a survey of local authority officers and community empowerment networks across England.

The study followed the announcement in July of the allocation of £1.05bn of neighbourhood renewal funding for 2006-2008. Those surveyed generally welcomed the new money and were positive about the fund, but had reservations about its application in practice.

There was applause for innovations such as local area agreements, which give local authorities more flexibility about how money is spent and allow priorities to be set locally. But some respondents felt the wide focus of the funding prevented partnerships from zeroing in on specific local needs.

There were continuing concerns about the quality of community involvement, with some community empowerment networks feeling they had little influence on local strategic partnerships’ priorities. In some cases it was felt NRF had been used as a ‘slush fund’ for statutory agencies.

But a large majority of respondents still felt NRF had a positive impact. It had enabled different agencies to discuss challenges effectively, take joint responsibility for spending decisions and draw in match funding from other sources.

However, knowledge of the specific impacts of the fund was limited in some areas because not enough data was being collected. In many cases the fund was being used simply to pay for services rather than to change the way statutory agencies worked.

For full details contact victoriabradford@cles.org.uk, tel: 0161 233 1927


Here is some more detail -
In July the government announced how it was allocating £1.05bn for the fund over the next three years - a clear vote of confidence in the policy, which lies at the heart of the national strategy for neighbourhood renewal introduced in 2001.

But do the people who have to administer the fund think it is working, and are local communities getting a real say in where the money goes? Do they regard the new allocations as fair? Where is there room for improvement?

To find out, the Centre for Local Economic Strategies surveyed managers responsible for neighbourhood renewal funding, and community empowerment network representatives. The survey is the second conducted via the CLES/New Start rapid research service.

The study provided a valuable insight into the workings of the neighbourhood renewal fund (NRF) at a local level. We found:

Most respondents were satisfied with the organisation, allocation, and flexibility of the fund. But there was room for improvement and challenges remain in ensuring the fund operates and is distributed effectively
The impact at local level was generally positive but it was felt there was room for significant improvement There were mixed reactions to the allocations for 2006-08. Many felt the renewed funding highlighted the government’s continued support for local decision-making, public service reform and closing the inequality gap. Local area agreements were generally welcomed Many felt the focus of the fund was too wide, preventing partnerships from tackling difficult issues in deprived areas appropriately. It was also felt that the application of the NRF to a wide range of themes did not necessarily relate to floor targets or reflect local needs in small neighbourhoods Sometimes analysis of needs was based on districts rather than the ‘super output areas’ that inform the index of multiple deprivation.
It was felt that the fund, in many places, did not allocate significant resources towards mainstream service provision in the most challenging areas; nor was it was being used to change working practices,
Changing priorities for 2006-08, however, generally reflected an understanding of these findings and of the need to connect neighbourhood renewal themes.
It was felt that community involvement could be stronger

What has NRF achieved?

The national strategy for neighbourhood renewal seeks to focus on key areas of decline across the country by attempting to address six key domains: employment and economies; crime; education and skills; health; poor housing and liveability. The neighbourhood renewal fund has provided a combined total of £1.875bn to the 88 most deprived local authorities from 2001 to 2006.

Local authorities have had the flexibility to allocate these funds to the neighbourhoods in the greatest need and to tackle the issues most relevant to those neighbourhoods.

The 2004 spending review extended the lifespan of the NRF with a further £1.05bn for 2006-2008. On 21 July the Office of the Deputy Prime Minister published local authorities’ allocations.

There is early evidence to suggest that neighbourhood renewal funding is already having a positive impact:

Education - the gap between the average pass rate for five GSCEs (grades A*-C) in the NRF districts and England as a whole has narrowed from 10.2 percentage points in 1997/98 to 8.3 in 2002/03 Employment - in the 88 NRF districts employment has increased by 1.7 percentage points since 1997/98 compared with 1.4 points nationally. This represents an extra 500,000 people from deprived areas in work. Crime - there has been progress in reducing certain aspects of crime in the 88 NRF areas. For example, the gap between the average burglary rate for the 88 NRF districts and the average for England fell by a fifth, from 10.3 percentage points to 8.1 percentage points, between 1999/2000 and 2003/04. Health - research suggests that improvements are being made; however the gaps between the most deprived areas and the rest of the country continue to increase or remain static. For example, the gap for male life expectancy between the national average and the 88 NRF areas is almost static at 1.5 years.

Delivering the neighbourhood renewal fund

Local area agreements (LAAs) are designed to improve the relationship between central and local government and local strategic partnerships. They are expected to focus on local solutions to local problems and needs, through partnership working, as well as meeting national priorities and standards.

Community strategies, developed by LSPs, play a key role in allowing LAAs to reflect local as well as national priorities. All additional funding streams from central government, including the NRF, will flow through the LAA and its four blocks: children and young people, safer stronger communities, healthier communities and older people, and enterprise and economic development, except in areas that are piloting the ‘single pot’ LAA. This allows public services more flexibility to provide local solutions to local circumstances.

The local enterprise growth initiative (Legi) is also set to be channelled through LAAs in the fourth block. Community empowerment networks (CENs) are the formal vehicle linking the community and voluntary sectors with local strategic partnerships. They are responsible for getting information about LSPs out to all sections of the community and providing ways in which people most affected by poor service delivery can get involved in discussing and planning how services should be changed.

Results and analysis

As part of this study we sought the opinions of 26 local authority officers and community empowerment network officers, distributed equally through the English regions

Satisfaction with NRF since 2001

Each respondent was asked to rate their satisfaction with NRF. The majority were satisfied for a number of reasons, including the additional money it provides to tackle deprivation at neighbourhood level (see Fig. 1).

Several noted that mainstream funding alone would not tackle these issues in sufficient depth. Other respondents, particularly those from community empowerment networks, were pleased with the funding available to the voluntary and community sector.

However, others questioned the process through which the LSP distributed the money. Some respondents felt CENs and the voluntary and community sector as a whole had little influence over LSP priorities, while others complained that at times the NRF had been used as a ‘slush fund’ for the LSP and other statutory agencies.

Impact of NRF

The vast majority of respondents felt NRF has had a positive impact in their area (see Fig. 2). Respondents also mentioned additional ways in which they felt NRF had improved the quality of life in the most deprived neighbourhoods. These included:

enabling effective discussion of the challenges facing certain areas in order to effect significant change allowing partners to take joint responsibility for local issues drawing in significant amounts of match funding increasing community involvement, allowing residents’ groups and the community sector more widely to understand the issues and influence public policy However, although 80% of respondents said NRF has had and will continue to have a positive impact, several also mentioned continuing challenges, including:

little overall impact despite some good projects little data collection and therefore little evidence of the impact of NRF in specific areas limited movement towards mainstreaming - in some cases NRF has been treated as just another fund outcomes have been limited because there is little focus on floor targets and reducing the inequality gap Allocation of funds

Two thirds of respondents were very pleased or pleased with the allocation for 2006-08 (see Fig. 3). Positive themes included:

increased funding is an acknowledgement of the issues and demonstrates confidence in the ability of the local partnership to effect change funding to new NRF areas illustrates an understanding of small areas of deprivation the consultation document indicated the likely levels of funding for several authorities, meaning that changes were not a major shock where decreases in NRF occurred in some areas, additional funds such as the SSCF cushioned losses and will enable progress to continue Although two thirds of respondents were pleased with their allocation, several authorities and CENs voiced concerns. These included:

despite demonstrable evidence of continued deprivation, removal of the NRF raises concerns about how to tackle deprivation and inequality in future CENs in particular were worried about their sustainability without the single community programme, which was a cornerstone of NRF and a key source of CEN funding. Some respondents noted a contradiction between the allocation of the NRF and the government’s agenda - government priorities would have suggested more funding for a smaller number of extremely deprived areas, yet a large number of authorities (86) continued to receive NRF money.

Prioritisation of neighbourhood renewal themes

We asked the respondents to identify which themes of neighbourhood renewal were given most funding. However, many were unable to highlight one specific theme, and often explained that they focused on two or three themes or looked at neighbourhood renewal in an integrated manner.

A significant number felt that neighbourhood renewal presented an opportunity to address a mixture of local issues in a holistic, joined-up approach. They felt NRF enabled partnerships to address what would initially appear to be separate problems in a connected manner and look at linkages between issues such as worklessness and ill health, or teenage conceptions and education.

Others felt neighbourhood renewal funding allowed them to focus on a particularly prevalent issue in their neighbourhoods. The most common themes identified were education and crime.

Changing priorities for 2006-08

We asked respondents if they planned to change their priorities in 2006-08. Nearly half said they did.

Some local authorities had recently reviewed their NRF priorities. The advent of local area agreements in some areas had led local authorities and LSPs to reassess particularly challenging issues and set local targets.

Some respondents intend to focus on mainstreaming projects previously funded through NRF, while others said there would be a renewed focus on meeting floor targets and reducing the inequality gap.

Some said the new funds would enable them to focus on far smaller geographical neighbourhoods with the greatest challenges.

Of those who stated that they would not change their focus, some said they would continue to prioritise the same themes because of continued underperformance and a mismatch between floor targets and actual levels of deprivation. Others said NRF was not a great deal of money compared with mainstream funding.

Community empowerment networks and the NRF

We asked respondents whether they were satisfied with community involvement in the NRF process (see Fig. 4). The vast majority were satisfied or very satisfied, but some did identify key challenges:

there is still a way to go in ensuring effective community engagement in strategic decision-making. the voluntary and community sector is often outnumbered; there are more partners from statutory agencies. However, these partners are beginning to realise it is better to have community involvement at an early stage there is currently little evidence of the local achievements of NRF, which means communities are reluctant to become involved
Despite these challenges some CENs have been awarded ‘excellent’ status by the Audit Commission for their integration in the NRF process; the voluntary sector leads on certain projects; and CENs are involved in thematic as well as area partnerships. Many respondents also welcomed local area agreements as a further way to foster community involvement.

Of the respondents who were dissatisfied, many felt CENs were not sufficiently in touch with the communities they serve and that many residents remain distant from the NRF process, with little to motivate them to become involved.

The geographical nature of neighbourhood renewal funding

Although NRF is allocated in a fair way based on the indices of deprivation, concerns have been expressed that certain areas are allocated far more funding than others.

Many local authorities concentrate on one or a few neighbourhoods, so others with similar levels of inequality and deprivation are often left out. Funds are also often concentrated on relatively large neighbourhoods, missing smaller pockets of deprivation.

Some respondents felt a focus on the smallest, most deprived, neighbourhoods would be a more beneficial use of the NRF. However, such areas might no longer match local authority or ward boundaries.

The core metropolitan councils tend to receive far more funding than smaller authorities. In the north west, Manchester and Liverpool, despite a drop in NRF over 2006-08, receive far more than authorities such as Wigan, Burnley and Preston, which face similar challenges.

There are also major regional and local variations. The north west will receive by far the most NRF - more than £143m, split between 21 local authority areas. Liverpool and Manchester will receive more than £30m, while Preston and Tameside will receive just over £2m. London will receive more than £100m for 2006/07.

In the south east, only Brighton and Hove, and Hastings, will receive a total of £3,375,618 for 2006/07. Rural areas in the south west such as Kerrier receive less than metropolitan areas. This may cause additional problems as European structural funds are withdrawn from 2006.


A key concern highlighted by the research was that NRF is not helping significantly to realign mainstream resources in deprived areas; nor is it facilitating new ways of focusing on key challenges in small or particularly challenging areas.

Some respondents suggested this round of the NRF should have taken on more of a neighbourhood focus. Some even felt that in failing to do this, the government was contradicting its own guidance.

Many felt mainstream statutory authorities, rather than the NRF, should probably fund certain projects that were currently receiving neighbourhood renewal funding. Others felt that some people involved in the process merely saw NRF as an additional fund, similar to the single regeneration budget or European programmes, to finance projects rather than alter working methods.

Elected members

Concerns were raised about whether local elected members fully understand the processes surrounding NRF or appreciate the importance of community involvement and priority setting, as well as the focus on super output areas and specific issues. It was felt elected members needed more training on these issues.


Some people we spoke to also suggested that the timeframes involved in NRF were unhelpful - they were too long to focus on very short term aims such liveability, but too short to effect change in long term problem areas such as housing.

Respondents raised several key questions to be considered when spending the new funds for 2006-08:

who suffers deprivation and inequality, where, and how? are statutory agencies meeting NRF objectives? should there be a further focus on smaller pockets of deprivation or particularly challenging issues? are local authorities and LSPs the appropriate distributors of NRF? What role do local area agreements have to play? how do you identify key challenges? how do you ensure effective evidence collection and how do you feed this into policy making and strategy development? should there be an enhanced role for the voluntary and community sector?

find out more

Analysis of consultation responses on the allocation of the new Neighbourhood Renewal Fund resources for 2006-07 and 2007-08, www.odpm.gov.uk

Government allocates £1.3bn to over 100 local authorities in greatest need to improve quality of life. ODPM news release: www.odpm.gov.uk/pns//DisplayPN.cgi?pn_id=2005_0142

Neighbourhood renewal fund allocations 2006-07 and 2007-08. ODPM news release: www.odpm.gov.uk/pns//pnattach/20050142/1.doc

Source- New start



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