York Big Ideas Festival report 2 (ECONOMIC AND PHYSICAL REGENERATION (in partnership with Aviva)).
View the other York Big Ideas Festival reports HERE.
Chair: Jonathan Cowap, formerly BBC Radio York.
- Charlotte Jones, Chief Financial Officer, Aviva.
- Sir Vince Cable, former Business Secretary.
- Cllr Pete Kilbane, deputy leader, City of York Council.
There is a sort of political polarisation, a tendency to think Private is good and Public is bad or vice-versa – whereas a sensible sharing of risks between the public and private sectors is the essence of successful regeneration.
Pete Kilbane added the controversial statement that excess profits belong to the society that they are created in. At the moment, businesses make full use of the social infrastructure – for example, waste management, roads, socialisation, etc. – for free, and so repaying society for all the benefits provided by the state to enable the business world to operate is quite justifiable.
Even so, he doubted that the forces of global capitalism would ever make such a change possible, as their prime concern will remain the maximisation of any return on investment. Further, asset managers dominate, extracting value from projects that they then pass on to outsiders, their shareholders.
Vince Cable warned of inherent difficulties in running hybrid models such as a socially minded transport scheme. Without a substantial equity base to deal with the unforeseen the banks are quick to call in loans when things go wrong. He agreed that partnering with private businesses to share the risks is often a necessity. Another crucial factor is the price of land, communities just cannot afford it any more.
Private capital investment is the only game in town, particularly now, when regeneration schemes are hampered by the constraints on council spending. However, private investment can lead to “big slabs of development” where the higgle-de-piggle-ness of town centres that people love, such as York is lost.
Public spaces are turning into private squares that are not owned by the community any more. Why have do we not seem to learn from what other countries are doing? Why are there not more meaningful levels of “impact investment” being done here?
Why can’t we appreciate that there is greater value for everyone in purposefully making investments that bring about social and environmental benefits and also generate financial returns, he asked?
For the meeting sponsors, Aviva, Charlotte Jones said: “The private sector is not the panacea, but I firmly believe we have a big role to play that goes beyond our core business function, to deliver for our communities.
‘If we want the level of investment we really need to transform our communities, the money has got to come, in part, from the private sector,” she said. “It has to be about where the capital comes from, and whether it is invested for the long term, and to deliver the outcomes that align with the community.”