Debate 24 - Notes

Introduction - Robin Nicholson

1960s - great deal of public investment in development, but results not seen as successful - dubious legacy. Today belief in government that can stimulate private investment by making public investment. That’s the theory, can we prove it? Are these investments having a lasting impact on the economy - does it work like that and how can you measure it. Today’s event is to examine the belief that the concept of physical capital can help us to a better understanding.

Speaker 1 - Geoff Mulgan

I had an early involvement in getting govt to accept the potential of building as a way to improve the economy. I was influenced by the book Rubbish Theory - and a key example is to consider how differently Islington terraced houses have been valued in the past. Value is socially constructed not given.

There are many misplaced claims about the potential of development. Someone involved in Thames Gateway said to me ‘lets not have another period of building-led development that leaves everything as it was before’.

The notion of ‘capital’ is as yet largely rhetorical rather than useful in any practical sense.

Cabinet Office paper on ’social capital’ covered a lot of ideas, but still difficult to evaluate the costs and benefits.

Problem when you try to define e.g. public value because it is so broad and covers some combination of 1) outcomes, 2) service, as well as 3) intangibles such as ‘trust’.

The evidence base of impact of built environment on outcomes is weak.

All the values are shared between residents, visitors, etc, The difficulty is in aggregating different kinds of value - private, public, etc. Cost-benefit, social return on investment. It’s very hard to aggregate these into a single measure - in doing so you lose more than you gain. Instead, I argue that what we need is a value map, mapping the likely structure of value need. We need to be explicit about those values that can be captured, but also capture other types - such as environment and crime. And about the degree of certainty. This would give a tool for public dialogue about the impact of changes to the built environment, and also help public agencies to decide where and how much to invest.

Looking to CABE to study this - maybe through its enabling role in the context of neighbourhoods. Thames Gateway is crying out for a method to give all the different players opportunities to contribute.

Speaker 2 - Adam Poole

I’m interestned in masterplanning vs laisser faire. Risk with master-planning is that you get it wrong. UK has world’s 4th largest economy - but where will we be in 10 years time? Richard Florida’s book on the rise of the creative class: S-curve thinking - things don’t always continue on the up, but reach a point where re-invigoration is s needed. To develop the creative economy we need particular sorts of places. Which comes first - the places or the people?

Speaker 3 - Chris Murray

Francois paper gives poetic treatment of the subject. He talks a lot about measurement - but the paper ducks the question really. If to have meaning, needs measurement. We should separate out the measurement and indicator work from other questions. ‘Physical capital’ may not be useful concept - legacy from land ownership - but we need new term. Francois says ‘Value is always about perception’ - but it is also about usability. We need a metric with functionality and perception on the two axes.

We can’t step outside our own system of values - we can’t preduct future values in creating future environments for future generations. Anyway, who knows best? It’s definitely worth while trying to improve things. High rise is an easy one to pick on.

Debate

Ian Cooper - is there no such thing as intrinsic value, what about the biosphere which supports life and is probably unique in the universe?

Mulgan - So much talk on value is very weak - govts and public agencies are driven by metrics. The conundrum of democracy is that many things are not valued by the public, e.g. the environment. In the case of the natural environment - most of the valuing of this is based on classical economics - that is what value the public puts on it. Not treated as inherently valuable.

The quality of place can perhaps be summarised by a trio comprising: outcomes, experiences and social trust. Perhaps we can define a basket of these values. There should also be the opportunity for paternalism or leadership - consider the ‘angel of the north’ where hostility has turned into support. Some things where public agency can lead and challenge the market - remembering that if you get it wrong you get kicked out of office.

Mike Murray - values change over time, need to build adaptable buildings that are open to new uses and interpretations.

Matt Bell - is there a conjunction or disjunction between supply and demand for housing. Recent study for JRF showed that when people faced with new development, they are more happy with the new proposals if they are likely to get new facilities or infrastructure.

Richard Saxon – in USA people go to where the action is, not where there are physical amenities. We may be measuring the wrong things.

Measurements and regeneration - it is very multi-layered.

Creative cities. Strong determinant of house prices is school reports. Manchester vs Leipzig study by Peter Hall - what cities do in attracting and keeping families is key - all those who are planning to move out may be retained by provision of good suburban environments including open space. Perhaps families (not necessarily 2 adults and 2 children) are the core members of the creative class. The link between family and economic growth is key.

Whose decisions should we be trying to affect by using the concept of physical capital and its application? Is it a government macro concept for government to measure macro outcomes, or a micro-level tool or for influencing a LA whether to demolish or refurbish 6,000 sub-standard houses.

Mulgan - I see it as a tool for LA’s to use to discuss options with local businesses etc. Those decisions need legitimating through some metric - could be this (micro level application).

Paul Hildreth? ODPM – government is struggling with regional regeneration. We’ve taken quality of place rather than public realm. Co-ordination failure is a problem – e.g. may have all this regeneration activity going on in city centre, but no attention being given to schools.

Paul Hildreth? ODPM - Urban task force is believed to have been a success in encouraging regeneration, but there has been a lack of systematic evaluation using economic principles. Also we have never checked the impact regionally, for example Tate at St Ives has led to benefits to St Ives but what has been the effect on Truro. Not studied.

Mike Murray - you always need leadership.

ODPM - that was what I meant about lack of coordination.

Frank Duffy – places are more successful than buildings, because they are more negotiated among wider circle of stakeholders. Therefore more successful.

Chris Murray – Egan and National Centre for Sustainable Communities identifies the need for working with and engaging communities, but lack of skills in how to do it.

Adam Poole - Dyson took lot of criticism for moving production abroad, but now employs more people despite having done so.

Need to engage EPSRC, ESRC and AHRB to support work of this kind, also to have longitudinal studies.