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Skills developer
Regeneration & Renewal – 18 January 2010

Mark Smulian interviews building firm Mace's UK regeneration head John Boulby

The head of regeneration in the UK for an international construction firm says that expertise in social exclusion and economic competitiveness is now essential for developers.

In the decade before the credit crunch, public spending on regeneration was high enough to attract many developers and construction firms to the sector. But now, with large spending cuts on the way and a general lack of private finance, the sector must seem a lot less enticing. John Boulby, UK regions operations director for international construction and project management company Mace, however, says he thinks his firm can still make money from regeneration projects despite the looming cash shortages.

Mace turned over 608 million in the year to December 2008 and saw profits rise from 10.8 million to 14.9 million despite the start of the credit crunch. The company is privately owned and does not publish detailed financial information, but says it expects the UK public sector, including regeneration, to end up contributing about 26 million to its 2009 turnover.

Regeneration perhaps looks a vulnerable part of the business, but Boulby, who heads its regeneration work outside London, says Mace still sees opportunities. "I don't think Mace would pull out of regeneration because it is a key area of business in the regions, where we have long-term relationships with clients and win work by our network and knowledge rather than by bidding for it," he says. "Regeneration is one area where people come to us. The public sector squeeze will not drive us out of regeneration."

Nor does Boulby think it likely that the decline in the land value of sites in deprived areas will push Mace into pure development projects rather than those that can also support regeneration. "Everyone is aware that lower site values may become an issue, but it is not yet challenging our work," he says. "Opportunities are still there because we often work in areas where sites are difficult to move even when the market is good, so, because values there are generally lower anyway, any drop in the market is far less marked. That means [regeneration] projects can still stack up [financially]."

Public spending cuts are another looming threat as the Government has pulled spending on regeneration and housing forward into the current financial year from the next. This has cushioned some regeneration projects, but at the expense of future investment. "Everyone is aware that this is likely to have an impact, but it hasn't yet arrived," says Boulby. "We support clients by helping them to look at alternative funding mechanisms."

Boulby says that alongside its construction and project management base, Mace has had to gain expertise in seeking out finance, understanding public funding mechanisms and working with stakeholders. "Ten years ago, we were just delivering physical projects," he says. "But now clients are more focused on economic competitiveness and social exclusion in a lot of areas where we work. Those cities that are being successful are the ones that are dealing with economic competitiveness and social exclusion."

Part of this response has, he says, been a change in the regeneration skill set from one based on planning and development to one that includes people with the "soft skills needed to deal with partners and communities, and who can knit together sometimes conflicting opinions to get progress and sell an idea to a range of people". Boulby says regeneration needs people from a range of backgrounds so that "we are not simply providing clients with the next manager off the shelf, but can match people to projects."

This breadth makes him wary of any suggestion that regeneration training should be rigidly formal. "There are a number of valuable university regeneration courses, but people pick (regeneration skills) up from other professions, which is what I did as a planner, and I think that's good as it gives a broader understanding," he says. "We have staff from law, economics and surveying backgrounds, among others, and they come at [projects] in many different ways, which is healthy as it brings new ideas."

Boulby is enthusiastic about the possibilities opened up for regeneration by the creation of the two statutory city-region pilots in Greater Leeds and Greater Manchester, under which the councils in each area will collaborate on economic development. "City-regions are a welcome step, partly because they will be easier to deal with than multiple bodies, but also because they create a new opportunity to drive local economies," he says. "I hope the creation of city-regions is the beginning of decentralisation towards major cities and travel-to-work areas. Britain has less decentralisation than other European countries, but city-regions can manage their own affairs and know their areas."

Longer term, Boulby can see national regeneration quango the Homes & Communities Agency's Single Conversation mechanism - under which it talks to councils or groups of councils about local housing and regeneration funding needs - being used with an growing number of city-regions, allowing regeneration and its financing to be planned on a more joined-up, conurbation-wide scale. All three political parties are making noises about localism and more devolution to major cities. But, historically, oppositions of all kinds offer devolution and then, as governments, fail to deliver much of it. This time round, Boulby can only hope the parties mean what they say.