A strong economy offering sustainable growth is seen as essential to maintaining Britain's effectiveness in a fast-changing world. In the current global economic conditions, maintaining a stable economy is the government's primary concern. Continuing to build a strong economy must remain a key goal of all partners engaged in building sustainable communities.
Every place should have an economic purpose that can be identified and described. It is increasingly being understood that the quality of a place and its 'residential offer' is a key factor in helping or hindering economic performance. Confidence in an area makes a huge difference as both workers and business leaders in the knowledge economy look for environments that can offer a good quality of life to locate themselves and their businesses.
The persistence of deprived areas, that don't have an obvious economic purpose, is holding back the economy. People living in these areas often find it harder to flourish as individuals and are less likely to be economically active. The place-shaping agenda is an inclusive one and will orchestrate a concerted effort to develop the local economy of these areas as well as those that are more prosperous.
It is crucial that those involved in building new communities ask themselves the question where will people work and play?. It is also important for them to recognise that thinking around the interplay of housing and economic growth is still in its infancy and has tended to be relatively narrowly focused on housing markets and particularly around the supply of housing and affordable housing to support economic growth.
Housing supports people and economies in many ways. Fundamentally, decent homes in well managed, safe and cohesive communities that themselves have a recognised identity can inspire confidence in an area. They can provide a secure base that offers real opportunities, enabling people to lead fulfilling lives. This sort of positive residential experience is more likely to deliver economically active residents able to engage with wider market activities and opportunities. This in turn supports productivity as well as consumption as people have higher disposable incomes and more reasons to spend on improving and maintaining their homes. The range and mix of housing available is important in order to provide accommodation that suits different elements of the labour market.
One of the Homes and Communities Agency's roles will be to work with Local Authorities and Local Enterprise Partnerships to gain a better understanding of the interplay between housing, regeneration and economic growth, and to deliver better outcomes for communities as a result.
updated June 2011
In 2007, the Treasury published a Sub-national Review of Economic Development and Regeneration (SNR) - a programme to enhance economic performance of all localities. "Prosperous Places: Taking forward the Review of Sub National Economic Development and Regeneration", was published on 31 March 2008. The Government set out its focus on unlocking talent, creativity and energy to enable people to make a greater individual contribution to national prosperity which is seen as essential in an increasingly competitive global economy. It was an inclusive agenda that focused on improving opportunities for everyone and increasing prosperity in deprived areas as well as in those areas that were already more affluent. One element of this was around matching skills to employment opportunities - in order both to provide relevant skills to support businesses and to ensure individuals have relevant skills and qualifications to perform well in a role.