With banks still not lending and public spending cuts closing grant routes, what are the remaining avenues developers and regeneration organisations can go down?
European Regional Development Fund, the support fund for EU member states is worth £520m over six years from 2007 to 2013 to the North West, however ERDF has to be used as match funding, covering a maximum of 50% of the cost and cannot fund whole projects. NWDA grants previously filled this gap but now applicants have no clear source of match funding.
North West Urban Investment Fund, an initial £100m from ERDF and NWDA is secured and underwritten by the European Investment Bank. Sixty per cent of this must be spent in Merseyside. This is not gap funding as such, schemes must be viable or very nearly so, this is development finance and the fund has strict criteria; office schemes in town and city centres at environmentally sound sites next to public transport interchanges.
Regional Growth Fund, a £1bn pot for the next two years decided on a case-by-case basis, designed to help public sector-dependent areas first, with a panel headed by Lord Heseltine, former Minister for Merseyside in the 1980s and regeneration advocate whose Haymarket business publishes Regeneration & Renewal magazine, making recommendations to ministers. The Government said of its new fund "Local enterprise partnerships will play an important role in bringing together bids for the Regional Growth Fund, working with key partners such as universities. Private sector companies and other public-private partnerships will also be invited to bid independently for the fund."
Homes & Communities Agency, non-commercial obviously, oversubscribed and facing cuts of its own, but there is still funding available in the region for projects that maximise the provision of affordable housing and can demonstrate best value for money.
Bank debt, despite what they might say, banks are still not lending on new developments, only the most prime of prime schemes pre-let to the strongest covenants such as a big supermarkets or local authorities stand a chance of favourable terms
Iain Jenkinson, director of planning, development and regeneration at GVA Grimley in Manchester, has advised the NWDA on development programmes. He said: "Yesterday's news from the NWDA was simply devastating for all involved in the community of regeneration and economic development, public and private sectors alike. Really important schemes based around what makes the North West economy 'tick' have been pulled with very little by way of a 'plan B' in evidence. It is highly unlikely that the majority of these schemes and programmes will re-emerge in any form in the short to medium term, which will leave the region a much poorer place."
In terms of ongoing revenue funding, partner organisations such as urban regeneration companies in Salford, Liverpool and East Manchester as well as inward investment agencies Midas and The Mersey Partnership face the prospect of turning to cash-strapped local authorities for money to keep running after March 2011. Alternatively, they could ask private companies for contributions in terms of membership subscriptions. The likely outcome for many is job cuts and reduced activity or closure altogether.
Andrew Thomas, chief executive of the Centre for Construction Innovation North West, said: "The effect of austerity cuts is manifesting itself in the loss of some fantastic partner organisations from April 2011 that have done brilliant work in the NW region.
"How demoralising it must be for the good people in the NWDA and partner organisations to see their work cut short through no fault of their own, thanks to greedy city bankers, lunatic mortgage lenders and the fiscal crisis.
"The short term loss of some of these projects should not be allowed to tarnish the brilliance of the great work and substantial legacy that is left from the work of the NWDA over the past years.
"CCI is still here however to help the construction sector in the NW and is grateful for our other business streams and partnerships."
CCI has contracted support from the NWDA, as well as European funding, for a resource efficiency programme aimed at small and medium sized enterprises in the built environment sector, with specific targets of carbon and waste reduction – the programme is known as the NW Construction Knowledge Hub and includes partners; the University of Liverpool, University of Central Lancashire, BRE and Urban Vision.
Thomas added: "The CCI is working with the NWDA to realise efficiency gains and savings through the life of the project up to April 2012. The NWDA funding represents a quarter of the overall funding of the NWCKH, but only a modest proportion of CCI's overall income. CCI look forward to continuing to work with our other customers and partners to improve the Built Environment sector in the North West through these challenging times and into the future."