centres inside former industrial areas has the effects to build new centralities and increase the ...... improving and joining up local services, and making them more responsive to local needs. ...... annemiekeminderhoud.wordpress.com.
Corso di Laurea magistrale in Metodologia, Organizzazione e Valutazione dei Servizi Sociali
The power of communities. The case study of Hackney Co-operative Developments
Relatore: Prof. Carlo Borzaga
Studente: Michele Bianchi
Anno Accademico 2014/2015
Acknowledgement To the staff members of Hackney Co-operative Developments and to my cousin, Doctor Graziano di Gregorio, for the wonderful help and support.
TABLE OF CONTENTS 1. The regeneration of the city. 1.1 The evolution of the city. 1.2 The European context. 1.2.1 The origins of the industrial city. 1.2.2 The decline of the industrial city. 1.2.3 Nowadays 1.3 The need of regeneration. 1.3.1 Brief story of urban transformation. 1.3.2 The definition of urban regeneration. 1.4 The current situation of urban regeneration in Europe. 1.4.1 The models of urban regeneration. 1.4.2 The evaluation of urban regeneration models. 1.5 The gentrification process. 1.5.1 The beginning gentrification process. 1.5.2 The reasons of gentrification. 1.5.3 Is gentrification a problem?
2. The change of public policies in the last decades. 2.1 The evolution of public policies. 2.1.1 The Golden age. 2.1.2 The crisis. 2.1.3 The 1980s and the neoliberal reform. 2.1.4 The partnership between public and private. 2.2 The evolution of public urban policies. 2.3 The evolution of public urban policies in the UK.
3. The communities’ empowerment. 3.1 The deep roots of the alternative development. 3.2 The acknowledgement of communities. 3.2.1 The community empowerment. 3.2.2 Domains of social practice. 3.2.3 The policies of empowerment. 3.3 The community-led enterprise. 3.3.1 Definition. 3.3.2 The local focus. 3.3.3 The political message. 3.4 The limits.
4. The case study: the Hackney Cooperative Development. 4.1 History of HCD. 4.2 Current structure. 4.2.1 Staff. 4.2.2 2014 Annual report.
4.2.3 Financial situation. 4.3 The project on the Borough of Hackney. 4.3.1 Gillet square. 4.3.2 Pionnering Social Enterprise in Hackney. 4.4 Working methods. 5. Conclusion.
CHAPTER 1: THE REGENERATION OF THE CITY.
1.1 THE EVOLUTION OF THE CITY. Cities undergo constant change. They are never static, never finished, always adjusting to new circumstances. They respond to the needs of people and they have changed their own face to be more attractive. Over the last 30 years, many European cities have experienced a pace of change far more rapid than at any other time in their recent history. The causes of such rapid evolution in the nature and functioning of cities lie in two main factors. The first is the radical restructuring of the economic base of cities that has occurred as they have ceased to be centres of manufacturing production and have become instead the locus for services and centres of consumption. The second is the process of decentralisation, or suburbanisation, that has pulled many structures out from central and inner-city areas towards the periphery of conurbations. Both trends have resulted in large-scale abandonment and dereliction of land and buildings, degraded environment, unemployed labour, and acute social deprivation. The response of public policy to these problems, in partnership with the private sector, is known as urban regeneration: that is to say, policies that attempt to return derelict and vacant land and buildings to beneficial use, create new forms of employment, improve the urban environment, and tackle an array of urban social problems. In biology, regeneration means the regrowth of lost or injured tissue, or the restoration of a system to its initial state. Regeneration concerns the regrowth of economic activity where it has been lost, the restoration of social function where there has been dysfunction, or social
inclusion where there has been exclusion, and the restoration of environmental quality or ecological balance where it has got lost. (Couch C., Frases C., 2003)
We have to consider that urban areas are complex and dynamic systems, they reflect the many processes that lead to physical, social, environmental and economic transitions and they themselves are the prime generator of many similar changes. Urban regeneration is an outcome of different sources of influence, both internal and external, and, more importantly, it is a response to the opportunities and challenges which are presented by urban degeneration in a particular place at a specific moment. By saying this, we are not suggesting that all urban problems are unique to a particular town or city, but each urban challenge is likely to require the construction and implementation of a specific response. The urban regeneration is a long-term process that involves both the public and the private sector. Each generation faces a wide range of problems, therefore it is always important to learn from the previous experiences.
1.2 THE EUROPEAN CONTEXT. After the initial post-war rebuilding, the countries of Western Europe experienced a long period of economic growth that brought ever-great wealth. Individuals were able to afford more and better housing, and the consumption of consumer goods increased. Public services and welfare benefits were also improved by tax-rich governments. Countries urbanised apace as workers left the increasingly mechanised agricultural sector to take better-paid jobs in manufacturing and expanding industries. However, this era of continuous growth was interrupted by the Arab-Israeli war of 1973 and by the oil price crisis that followed. In that historic moment, governments had to face economic crisis and high level of unemployment. Declining profits and rising social costs put
ever-greater fiscal strains on national and local governments, leading to cutbacks in public expenditure and services. The growing urban deprivation, the fracturing of traditional communities, and the beginnings of migration of millions of people from southern nations, caused new social problems to arise: alienation, racial tension, crime, marital breakdown and mental illness. At the same time the physical infrastructure of many cities, particularly those that had expanded rapidly in the late eighteenth and nineteenth centuries, was becoming obsolete and in need of replacement. The Western European democracies had to consider the problems of cities under a new light. The new consciousness of social problems, reinforced by the growing popular movements, brought states to see the problems of cities not only as infrastructural but as a structural social, economic and urban system. To fully understand what is happening to Europe’s major centres today, one has to analyse why and how they were created, and have later declined. The management and redirection of the process of the city creation is itself a complex exercise, and we have to begin by knowing what factors need to be managed. 1.2.1 The origins of the industrial city. This historic analysis inevitably starts from the United Kingdom. In the midseventeenth century, a happy coincidence of events happed in this part of Europe. Throughout the United Kingdom, except the southern rural parts of Ireland, a class of capitalist landowners emerged, with ambition to encourage the empowerment of their property. To this was added the availability of capital for investment through a banking system and an emerging labour force of rural migrants. All of it was set in the context of a society that had achieved internal security and stability. By the time that James Watt had uncovered the way to harness the power of the steam engine in 1776, economic
scene had radically changed. In Britain both old and new cities emerged or expanded to prosper in this new economy: Glasgow, Birmingham, Sheffield, Manchester, Leeds, and the Western Riding towns, and besides them new ports such as Liverpool, Hull and Dundee, which imported raw materials like cotton and exported local products (Couch C., Frases C., 2003). The large tracks of what is now termed “the inner city” were created by the strong economic and social forces of the industrial revolution, where factories were built and the workforce lived in densely packed housing (Colquhoun I., 1995). On the continent of Europe, there was a different situation. There were cities with a rich history of trade and banking such as Antwerp and Amsterdam, whereas much of the land was still held in feudal tenure, making its commercial exploitation difficult. Equally, much of the labour force was still rural and held in feudal bondage. It was not really until the French revolution that the spread of new structure struck this medieval legacy. It was through the revolutionary armies of France, and later Napoleon, that these barriers were swept away and the condition for economic innovation appeared. The first example of this was the case of Walloon region, nowadays a part of Belgium. Here technology was already available and a market of industrial products did exist. There was a plentiful supply of investment capital from the rich ports and textile areas of Flanders, Ghent and Brussels. Many parts of Europe offered wide resources such as coal and labour supply. These areas were however still trapped in age-old feudal system, which were liberated only by the incorporation of the region into the new French Republic. A similar process was triggered in the Netherlands and Germany (Couch C., Frases C., 2003). 1.2.2 The decline of the industrial city. Thus by the middle of the nineteenth century an entire new urban society had emerged throughout much of Western Europe. The internal stability in each nation and systems
of urban governance enabled it to flourish. However, much of the growth and success of each national grouping of industries and towns was at the expense of others, and the competition for resources and growth led to conflicts. In this context, the crash was inevitable; during the first part of the last century the European empires fought two “world wars” that changed the society radically. The structural changes of Europe had a destabilising effect on what was apparently a permanent and unchangeable society. The continent, after the second conflict, had to face new challenges. The technological basis of society had shift from coal to oil and electricity energy. Chemical industries had replaced older processes, and the products of the industry had evolved and multiplied, dramatically altering the location criteria for new industries. The raw materials were being exhausted, or abandoned in favour of cheaper sources in colonial countries. The labour market was changed by the cross-border migration, such as the movement of Italians to France, Germany and Belgium, Poles to the French coalfields and Irish to Britain. However, there was a general reaction to the economic problems in the whole Western Europe. In essence, the local political and governance systems that existed at that time derived their legitimacy from the dominant urban pattern of industries, towns and cities. Moved by the need of rebuilding after the destruction of the Second World War and driven by the aim of a better condition of cities, they planned the rebuilding of industrial and economic dominance. Liverpool, Rotterdam, Lille, Charleroi, Essen and many other cities would be reconstructed, provided they would remain the powerhouse of Western European economy and would still manage national labour, capital and political structures. The 1960s and 1970s deeply changed the situation. As explained above, the industrial and commercial base, upon which the Western society had originally been founded,
almost ceased to exist. The heavy industries in the Far East and developing countries left vast areas of urban dereliction, vacant buildings, unemployment and poverty. From the end of 1970s on, the inner cities have recorded a decrease in population and a fast and progressive decline. The “urban empty space”, industrial areas abandoned for the de-industrialization process, became immediately visible. In these zones the effects of unemployment were evident and the changes of public spending merged with the increasing processes of exclusion from the job market, social isolation and ethnical discrimination of new immigrants (Vicari Haddock S., Moulaert F., 2009). Another important element of this period is the suburbanisation process, when many middle and working- class white people left the city centres for a better accommodation in suburban. This displacement was caused by the fear of bad social conditions in the inner cities (Loretta L., Slater T., Wyly E., 2008). 1.2.3 Nowadays. The situation explained above led the governments and planners to think about new solutions and views for the urban policies. During the 1980s, a new economic and political idea of governance was developed: the neoliberalism. During those years, this word was widespread all over the world. Academics and policy analysts used it as a descriptive shorthand to summarize the prevailing trends towards deregulations, commercialization, privatization, labour-market flexibility, public-private partnership, and the downsizing of those parts of government that help the poor, racial or ethnic minorities, and other groups marginalized by market process (Loretta L., Slater T., Wyly E., 2008). This new policy had important consequences also in the field of urban requalification. One of the most important changes in the evolution of urban policies was the new idea of relationship between the different levels of public government and the third sector. It would become the core of the new concept of urban governance, and was a radical mutation of local governments. The public sector started to adopt an
entrepreneurialist behaviour and to look for a collaboration with the stakeholders of the third sector. The “new urban policy” (Swyngedouw, Moulaert, Rodriguez, 2002) aims to increase the economic growth predisposing spaces where it is possible to locate new drive forces for the growth of urban economy, and gives the cities the adequate infrastructures. In this context, also the planning was modified, passing from the allencompassing idea of urbanism to a new view of intervention based on specific projects for a particular area. From the concept of urban expansion to the concept of renewal of space inside the city (Vicari Haddock S., Moulaert F., 2009). Nevertheless, these changes were enough because the world deeply changed during the last twenty years. Professor Ian Colquhoun analyses the 1990s situation of Western cities in this way: “The pace of change is now so dramatic that, without intervention, the model of the city with which people have been familiar since the nineteenth century could rapidly become obsolete. Cities could ultimately revert back to their one-time role as centre of government, learning and culture, and sustain only the population size and physical extent necessary for those functions. Production would be almost exclusively based on non-material goods, information technology, advanced service sectors, etc., where the most common words will be new, light and flexible.” (Colquhoun I., 1995, p.12) During the last decades the world has changed and the Western society too. Nowadays cities are connected and the globalization process has touched everyone. This mobilization of power at different geographical scales involves long-range strategic planning as well as short-run tactical sophistication (Loretta L., Slater T., Wyly E., 2008). Europe has to tackle the cultural integration of thousands of people and the development of a new economy based on the third sector, information and communication technologies. “A new generation of cities is emerging (in Europe) competitive and confident.” (Roger R., Fischer M., 1992, p.37). The governments and local policies makers have to allocate
public funding to stimulate the refurbishment of the existing built environment and the provision of new infrastructure (Colquhoun I., 1995). The inner cities issues continue to be a problem to tackle in different ways as social, economic and physical.
1.3 THE NEED OF REGENERATION. As explained in the previous paragraphs, the cities and their neighbourhoods are always changing. This is originated by the dynamic systems that composed the urban areas. The urban planners have the assignment to lead and organize these changes with a specific idea of the new city. In this analysis it is basic understand and delineate the meaning and development of what is a process of urban regeneration. 1.3.1 Brief history of urban transformation. The physical setting, the social structure, the environment, the economic context and the political idea of governance; all these elements must be taken into consideration when we talk about urban regeneration. Each one of these is necessary to build a project to rejuvenate a building, area o borough. During the decades, the experts of architecture and urban requalification have studied and debated upon how the city has to be changed. Urban areas have always performed a wide range of functions, as explained above. The relative importance of each of these functions has changed over time. Cities are open system and they are influenced by different factors. As Mumford pointed out: “In the city, remote forces and influences intermingle with the local: their conflicts are no less significant than their harmonies.”(Mumford, 1940, p.4) Harmony is the aim of urban planning and social politics. The utopia city, where every person lives in peace and happiness is an idea that crosses the centuries. Previous eras of urban policy have witnessed the introduction of many novel and well-intentioned
schemes aimed both at the resolution of particular problems within existing urban areas and at the establishment of new settlements within, adjacent to or remote from existing towns and cities (Robert P. & Sykes H., 2000). The availability of large spaces led to the expansion of the boundaries of urban areas during the centuries of industrialisation. The increase in the diversity of land uses within pre-existing built-up areas has been the typical and dominant response to the need to provide additional space for houses, factories, offices and shops. A clear example of this process is the case of English cities during the Victorian age. The result of this was the creation of large urban slums named “cities of dreadful night”. It happened because the society had not paid attention to the living condition of the majority of urban residents (Roberts P. & Sykes H., 2000). The belated recognition of the consequence of unregulated urban growth during the last decades of the nineteenth century reflects one of the messages that has been carried forward up to the present-day practice of urban regeneration: this is the relationship between urban physical condition and social response (Roberts P. & Sykes H., 2000). To understand this relation it is necessary to understand that nowadays the urban changes are determined by global forces. An urban event, such as the closure of a factory, may simply be a decision taken in a boardroom thousands of miles away. This tendency to dislocate decisions for a local area from their consequences has been exacerbated in recent years through the internationalisation of production (Roberts P. & Sykes H., 2000). Nowadays cities suffer a strong pressure, not only for the increase of global processes but also for three strong dynamics that must be taken into consideration to understand the current changes of urban contexts:
The transformation of the job market: as said above, the era of industrialization has ended and nowadays the third sector is the core of the economy. This is based on the job flexibility that does not allow to have a certain employment contract. This vulnerability of the workers’ conditions have brought to high risks of social marginalization.
The social structure has changed: on one hand the richest groups have more resources but on the other poverty is quickly rising.
Immigration: the arrival of thousands of people from all over the world has changed the composition of the European society as much as the Schengen treatment inside the EU zone. (Vicari Haddock S., Moulaert F., 2009, p.8).
If people are to be induced to invest their lives and hopes in the cities, it is necessary to determine ways to make these places as a whole satisfy present day needs and aspirations; where this cannot be achieved, equally attractive opportunities must be developed (Colquhoun I., 1995). 1.3.2 The definition of urban regeneration. Urban regeneration is an outcome of the interplay between these many sources of influences and, more importantly it is a response to the opportunities and challenges, which are presented by urban degeneration in a particular place at a specific moment in time. (Roberts P. & Sykes H. 2000, p.10). Roberts P. and Sykes H. base their concept of urban regeneration on the mix of different issues correlated with this process: The relation between the physical conditions evident in urban areas and the nature of social and political response; The need to attend to matters of housing and health in urban areas; The desirability of linking social improvement with economic progress;
The containment of urban growth; The changing role and nature of urban policy; The dominant policy issue. These six elements provide the basis for an initial definition of urban regeneration: “Comprehensive and integrated vision and action which leads to the resolution of urban problems and which seeks to bring about a lasting improvement in the economic, physical, social and environmental condition of an area that has been subject to change.” (Roberts P. & Sykes H., 2000, p.17). The author has elaborated this from a wide academic background. This definition encompasses the essential features of urban regeneration that have been identified by Lichfield, where she points to the need for a “better understanding of the process of decline” and an “agreement on what one is trying to achieve and how” (Lichfield, 1992, p. 19). by Hausner, who emphasises the inherent weakness of approaches to regeneration that are “short-term, fragmented, ad hoc and project-based without an over strategy framework for city-wide development” (Hausner, 1993, p.526). By Donnison in his call for “new ways of tackling our problems which focus in a co-ordinated way on problems and on the areas where those problems are concentrated” (Donnison, 1993, p.18). Ian Colquhoun underlines there are some other elements that must be taken into consideration when the idea of urban regeneration is analysed: 1. There must be a catalyst, someone to trigger off the urban regeneration initiative. 2. Someone has to have vision to know where the regeneration effort is going. 3. There has to be a strategy but with no more than two or three main planks. The important of the strategy is that the direction needs to be clearly pointed. The initiative has to capture the vision referred to above, holding on to the flagship project and ideas. It should not attempt to cope with everything.
4. There has to be a proper legal and financial framework which ensures that there are formal links to the city, the developers and the planning authorities. All parties must be allowed to play their own particular role in the process. This may mean accepting that the private developer is the best able to perceive market trends. To avoid conflict between this and community requirements, everyone involved should set out their objective for the project right from the beginning. This enables all of the costs to be accommodated at the feasibility stage and, if necessary, written into the legal and financial framework. Thereafter, change of mind should be avoid. 5. Sensitivity of approach which requires time and effort. This calls for an understanding of the wider issues in the area and the hopes and aspirations of the people on the ground. Also, the political framework, both nationally and locally, needs to be fully understood. 6. It is most important to involve the community the policy should be to enhance the status of the inner city area, recognizing its local values and giving the who live, work and invest there a greater commitment to its future. The aim should to raise the people’s living standards, widen their choice, improve environmental, housing and economic conditions. (Colquhoun I., 1995, p.26). Obviously, this definition is a general meaning of urban regeneration. The interpretation of this process has had different versions during the years. It is also important to consider that the way in which the urban regeneration is applied depends on a wide range of factors, as described above. The complexity of the context and the correlation with different parts of society as economy, public security and social policies, have determined the creation of various points of view on the renewal of cities. Most of the urban regeneration processes are chosen from the governance, therefore the planning of renewal is a political decision and it is structured to respond to a specific idea of city and life together. There are a number of different approaches to the organisation of urban regeneration which relate to the political outlook. Professor Ray Pahl has suggested seven as follows: 1. That which perceive the problem in terms of the efficiency of the service delivery by government agencies and free enterprise. Solution are seen to depend on
increasing the efficiency of bureaucracy and free enterprise by the use of managerial expertise. 2. That of the self-help anarchist who is also concerned with services, but argues that they should be locally rather than centrally administered. The quality of the service in terms of the recipients is seen as more important than the actual goods delivered. It is also argued by some that centralized system are in any case incapable of delivering services to a diversified market. The solution is to encourage small-scale self-build project. 3. The Marxist approach which insist that there can be no solution until government gaings control over the free flows of capital in the private sector. Solutions depend on the political mobilization of the working classes. 4. The approach of the pragmatists and realists who consider that a timid piecemeal solution is inevitable, and who are primarily concerned to work out precisely what is and what is not feasible within the existing political framework. Some people in this camp even insist that the problem is not political at all. 5. The view put forward mainly by people working on the ground that the solution lies in encouraging local grass-roots activity, because existing central and local government are incapable of , and/or uninterested in, coping with the needs of the poor and the deprived. The most important thing is the desire of local people to control their own lives and work, and the need for them to discover their own humanity. Policies should aim to achieve people’s aspirations rather than the other wat around. 6. The view of those who reject the bureaucratic encumbrances of government controls, and believe in the encouragement of small scale free enterprise activities, both community and capitalist inspired. 7. The view of the “one-off fixers” who want to put in consultants, decide on priorities, timing and budget, and then send a task force in to do the job. (Colquhoun I., 1995, pp.25-26). Up to this point, the urban regeneration has been considered in a theoretical way. The next paragraph will analyse the current situation of this process into the European context. The aim of the next section is to understand if the politics adopted by the
national and local governments have achieved the goals of a renewal of cities and improvement of citizens’ conditions.
1.4 THE CURRENT SITUATION OF URBAN REGENERATION IN EUROPE. This paragraph is based on the work of an inter-disciplinary academic group led by Frank Moulaert and Serena Vicari Haddock. The collaboration of this group started in 2001 as a European research project named Social Innovation, Governance and Community Building (SINGOCOM) financed by the European Union. The research work was followed by a second part named Katarsis: Growing Inequality and Social Innovation. The aim of this six-year project was to investigate the practices of urban regeneration in Europe and the construction of social relationships against social exclusion. The starting point is dual: on one hand, there is the dissatisfaction for the politics that the European cities have done to tackle the problems of poverty and social exclusion. On the other, there are certainties that some projects and initiatives that carry out social innovation do exist, and they can create new models for a better urban regeneration. 1.4.1 The models of urban regeneration. At this point, I have provided a theoretical context of urban regeneration in Europe. The research carried out by the Moulaert and Vicari Haddock’s work group gives a clear image of the evolution of renewal practices throughout the last 20 years. As previously said, the process of urban regeneration can be inscribed into the field of public politics. The collaboration with the private sector has become more and more vital for planning, nevertheless the urban regeneration remains a decision with strong political implications. From the 1980s the framework of urban politics has been oriented towards the liberal conservatism. The mainstays of this are the centrality of market, the decrease
of public spending, taxation and deregulation. The range of approaches inside this concept is very wide. Nevertheless, the work group has reduced all the experiences to 4 models capable of representing the whole panorama: Physical regeneration: The base of this model is the alliance between local governments and entrepreneurs that allows to attract extra-local resources, in order to transform vast urban or sub-urban areas. The aim of this model is the urban economic relaunch. The cases are different: the need of re-building an abandoned industrial area, the renewal of public housing neighbourhoods or the marginal sub-urban areas. In addition, the international events represent an occasion for requalification e.g. the Olympics or Expos. Headquarters, exposition areas, cultural centres or sport facilities are the core of this model.
Economic regeneration: The aim of this model is the promotion of new economic activities based on ICT and advanced services for enterprises. Generally, this model is inserted in a wider strategic program for the development of cities. The urban government has to provide the city with the conditions to compete in a global context. This means investing on strategic infrastructures such as railways, motorways or airports, and also promoting research centres for the technological innovation and advanced services for enterprises. The city becomes the product that must be sold. In order to achieve this, a marketing strategy is fundamental. The consequence is the construction of place-identity or place-branding marketing strategies.
Cultural regeneration: In this model, the culture is the core of the renewal process. Different reasons give importance to the culture as key element of regeneration: first of all, in the last decades culture has become a large and important economic sector and it has been developed particularly in the cities. The second reason is linked with the consumption of art and culture. The cities
are the main places of request of this sector; the expansion of the high-educated middle class and the major attention of the media to cultural events have led to the growth of the cultural field. The role of culture must also be taken into consideration for the construction of the international profile of cities. These infrastructures work as àncore of urban regeneration, as they contribute to the elevation of specific areas of cities. The collocation of new museums or cultural centres inside former industrial areas has the effects to build new centralities and increase the attention and investments in that area. Finally yet importantly, culture has the power of communication and it allows to create processes of social integration and of expression of different local groups. Integrated regeneration: different projects go under this name, but all with the same characteristics. This model is a set of politics that coordinate and integrate different fields and levels of governance. The aim of this model is the involvement of beneficiaries of local social politics in order to achieve the empowerment of people and communities. This approach was launched by the European Union in the mid-80s to tackle the poverty and social exclusion through the creation of projects and politics based on the integration of local governments, social private sector and local stakeholders. The tools for the development of integrated politics pay particular attention to the need of building a permanent alliance and partnership between policy and civil society, in order to create a common base of knowledge and comprehension for social exclusion dynamics. The partnership has been assumed as the best practice for social innovation. The results of this collaboration are projects that unite physical regeneration and promotion of social initiatives, training opportunities, and developments of new fair businesses that aim to give possibilities to the weakest social classes.
1.4.2 The evaluation of urban regeneration models. The group of researchers has also carried out an evaluation of these models and the correlated politics. The main aims of urban politics are the creation of new job positions and the attraction of new investments. First of all, it is important to underline that this analysis is limited because the increase of job positions and investments are determined not only by local politics, but mostly by national politics and global implications. Nevertheless, the results are under the expectations. The researchers have underlined the partial participation of private investments in the cases analysed in the European context. That is to say that most of the resources invested into urban requalification projects are public, which is in contrast with the neoliberalist idea of public participation decrease. The employment is also an issue that needs particular attention. The increase of the construction industry is inevitable but temporary. The employment generated by the regeneration proposed during the last years is dual: on one hand highqualified jobs have been created in the field of services and support for businesses. On the other hand, a lot of non-qualified jobs have been created in traditional fields as restorations, security and cleaning services. This solution cannot satisfy the needs of many neighbourhood where the levels of educations are low. The result of these models is the creation of new areas where it is possible to view a renewal of the houses and spaces, but which are not accessible to the former inhabitants. The regeneration shown above has led to the re-building of entire areas as new zones for new people. A clear example are the cultural-centres projects, around which the former abandoned areas have become fashionable and elegant neighbourhoods where the costs of new houses are higher than before the requalification. On one hand, it means that it is a success for the planner and local governments, as a lot of inner-cities are now wonderful places characterized by new houses, services and businesses. On the other hand, the privatisation processes have brought to the displacement of low-income
people from their areas due to the increase of the living cost and the house prices. These models have highlighted a particular direction followed by the urban policies, that goes under the name of gentrification.
1.5 THE GENTRIFICATION PROCESS. As explained above, the urban regeneration is a complex process and the implications and results are multiple. This paragraph aims to analyse a particular direction of the urban development. This is an important step within the general idea of this thesis, since the understanding of this particular process of urban regeneration allows to comprehend that these urban policies are not a clear single line of action but need a specific political address. In the paragraph 1.4, it was explained that different models of regeneration have developed throughout the last years in Europe. The results of these models of intervention are different and gentrification is the most visible of these. First of all, a definition of “what is gentrification” can help to start the analysis of this process. The explanation provided by Loretta L., Slater T. and Wyly E. in their handbook “Gentrification” it is a good start point: “Gentrification is the transformation of a working class or vacant area of the central city into middle class residential and/or commercial use” (Loretta L., Slater T., Wyly E. 2008, p. xv) Obviously this short explanation is not enough. We need to comprise the gentrification in order to describe possible alternatives to the urban regeneration. This phenomenon had attracted the attention of media, national and local governments, urban planners, architects, city boosters and political activists for 60 years. Why gentrification has attracted such widespread interest? Chris Hamnett (1991) outlines five reasons:
Gentrification has provided a novel and interesting urban phenomenon for geographers and sociologists to investigate. Gentrification poses a major challenge to the traditional theories of residential location and social structures. Gentrification is a political and policy-relevant issue as it is concerned with regeneration at the cost of displacement. Gentrification has been seen as constituting a major “leading edge” of contemporary metropolitan restructuring. Gentrification represent one of the key theoretical and ideological battlegrounds in urban geography. After a decade of Hamnett’s pronunciation, the authors of the handbook “Gentrification” have added other points to the list: Gentrification is the leading edge of neoliberal urbanism. Gentrification has gone global and is intertwined with processes of globalization. Gentrification is no longer confined to the inner city or to First World metropolises.
1.5.1 The beginning of gentrification process. The British sociologist Ruth Glass first coined the term “gentrification” in 1964, she was one of the first urban sociologist in Europe. A refugee from Nazism for her Marxists studies, she used the term “gentrification” to describe some new and distinct processes of urban change that were beginning to affect inner London: “One by one, many of the working class quarters of London have been invaded by the middle classes-upper and lower. Shabby, modest mews and cottages – two rooms up and two down – have been taken over, when their leases have expired, and have become elegant, expensive residences. […] Nowadays, many of these houses are being
subdivided into costly flats or “houselets”. The current status and value of such dwelling are frequently in inverse relation to their status, and in any case enormously inflated by comparison with previous levels in their neighbourhood. Once this process of “gentrification” starts in a district it goes on rapidly until or most of the original working class occupiers are displaced and the social character of the district is changed. (Glass 1964) Gentrification,
however,
began
before
the
term
itself
was
coined.
The
“Haussmannization” of Paris is a clear example of an early process of gentrification in history. Baron Haussmann, a member of Napoleon III’s court, demolished the residential areas in the centre of Paris in which poor people lived, displacing them to make room for the city’s now famous tree-lined boulevards. Gale (1984) argues that by the late 1930s parts of New York, New Orleans and Charleston, as well as the Georgetown of Washington DC were well experiencing gentrification. Instead, as Loretta L., Slater T., Wyly E. (2008, p.5) argue, the emergence of gentrification properly began in post war advanced capitalist cities. Its earliest systematic occurrences were in the 1950s in large metropolitan cities like Boston, Washington, London and New York. In both The USA and Britain, post war urban renewal meant the bulldozing of old neighbourhoods to be replaced by modern housing and highway. The evolution of this way of urban renewal saw a new definition of what gentrification is by Neil Smith (1982, p.139): “By gentrification I mean the process by which working class residential neighbourhoods are rehabilitated by middle-class homebuyers, landlords and professional developers. I make the theoretical distinction between gentrification and redevelopment. Redevelopment involves not rehabilitation of old structures but the construction of new buildings on previously development land.” Loretta L., Slater T., Wyly E. (2008) underline that the residential rehabilitation that Ruth Glass had described was only one face of the gentrification process. The cities has tried to re-imagine themselves under new light and, started to amplify the idea of
renewal to other elements of urban contexts as waterfronts and industrial areas also with the redevelopment of restaurants, businesses and the construction of hotels, convention complex and cultural districts. 1.5.2 The reasons of gentrification. It is possible find the beginnings of gentrification process from the urban policies of renewal of 1950s. After twenty years, production explanations emerged in response to widespread popular fascination with an urban “renaissance”. On the other hand, during 1960s, the cities registered an acceleration of suburbanization, when many middle-class and working class whites fled from inner cities, but a small signs of reversal appeared . An explanation of this movement from the old cities centres to the suburbs was built in the late 1950s and early 1960s. The dominant perspective or urban studies were a blend of social and spatial theories of the Chicago School of Sociology and neoclassical economics. The idea of this framework is the assumption that urban environment tends to find an equilibrium between cooperation and conflict. These models explained suburbanization in terms of an overriding consumer preference for space, combined with differences in the ability of high and low income households to engage in locational trade-off between access to centralized employment and the cheaper land prices available on the lower-density urban fringe. The form and function of the city can be understood as the result of choices made by innumerable individual decision makers (Loretta L., Slater T., Wyly E. 2008). This analysis highlights what the neoclassical models has named “The paradox of the US cities”: middle-class and wealthy households living on cheaper suburban lands and poor and working-class households forced to crowd into dense apartments located in inner cities. The reports of gentrification phenomenon during the 1960s directly contradicted this narrative. The appearance of substantial pockets of gentrification in dozens of cities rendered consumers sovereignty explanation deeply problematic. In some places, urban
renewal government programs had created new offices, malls and residential developments for middle-class, mostly white households. It seemed to be a “spontaneous” movement back to the city but during the following years some socioeconomics factors determinate this return of white, young and well-educated people into inner cities. The gasoline crisis of 1973 was the turning point commuting costs spiralled for suburbanites even as the combined effects of increase of costs for transportation, recession, inflation and high interest rates played havoc with housing market activities. It brought many people to take in consideration the more convenient prices of inner cities (Loretta L., Slater T., Wyly E. 2008, p.44). In 1977, Everett Ortner, the managing editor of Popular Science Monthly, claimed that “back to the city is an important movement that is going on in every city of the USA” (quoted in Beauregard 2003). In addition, Neil Smith has expressed his idea about the “back-to-the-city” movement: “The logic behind the uneven development is that the development of one area creates barriers to further development, thus leading to underdevelopment, and that the underdevelopment of that area creates opportunities for a new phase of development. Geographically this leads to the possibility of what we might call “locational seesaw”: the successive development, underdevelopment, and redevelopment of given areas as capital jumps from one place to another, then back again, both creating and destroying its own opportunities for development.” (N. Smith, 1982, p.52) The “seesaw” dynamic is a result of complex economic situations inside the urban context. When an investment takes place, capital cannot be quickly shifted from there to a more profitable opportunity elsewhere. Moreover, capital investments operate inside a geographical tension between the need to equalize conditions and seek out new markets in new places versus the need for differentiation and division of labour that is matched to various places’ comparative advantage. Neil Smith was the first to connect these fundamental dynamics of capitalist development to the fine-grained circumstances of individual land parcels in the inner cities (Loretta L., Slater T., Wyly E. 2008).
In a competitive market economy, the aim of different actors is the maximization of profit. Everyone is incentivised to use a particular land parcel for the most profitable function possible. The value of urban land is primarily a collective social creation determined by the concepts of centrality and accessibility evaluated by both the society and the collective social investment (Loretta L., Slater T., Wyly E. 2008, p. 51). The economic analysis of Neil Smith
can
explain
how
gentrification has become a key element of urban renewal. The private right allows landlords to capture investments
most in
of the
social form
of
ground rent, which is the charge to use their land. The ground Image 1. The rent gap.
rent, therefore, is capitalized
through a combination of tenants payment, entrepreneurial activity, and asset appreciation captured at resale. The new development of a land parcel involves all actors to maximize the profits as much as possible up to the full potential. However, the capital invested to develop a place is now anchored there, and thus it is vulnerable to anything that alters the urban-economic circumstances of that place. In addition, the depreciation is unavoidable: aged buildings require ongoing labour and capitals. As years go by, the divergence between “capitalized ground rent” and “potential ground rent” (the maximum that could be appropriated based on the highest and best use) will enlarge. The result is the depreciation and disinvestment caused by the higher costs of requalification and the economic possibilities of property owners in the inner cities neighbourhoods. It causes the decline of the areas, which results in middle-class and
businesses moving away. This explains the apparent paradox of poor people who live on valuable land in the heart of large and vibrant cities. This divergence between capitalized and potential ground rent is “the rent gap” and it is fundamental for the production of gentrification (Loretta L., Slater T., Wyly E. 2008). As Smith puts it: “Only when this gap emerges can gentrification be expected since if the present use succeeded in capitalizing all or most of the ground rent, little economic benefit could be derived from redevelopment. […] Gentrification occurs when the gap is wide enough that developers can purchase shells cheaply, can pay the builders’ costs and profit for rehabilitation, can pay interest on mortgage and loans, and then can sell the end product for a sale price that leaves a satisfactory return to the developer.” (Neil Smith, 1979, p.545). During the following years the Smith’s thesis was attacked by different studies, in particular about the difficult to determinate a measure of capitalized and potential rent. In addition, another critique is how to measure the variation of capitalized and potential rent due to significant fraction of housing market activity that involves buyers and sellers working across international boundaries. Hammel (1999) has noted in the Smith’s formulation that the capitalized rent is analysed only at the level of individual land parcel and the potential ground rent at the metropolitan scale. But capitalized ground rent can also be influenced by conditions in the surrounding neighbourhood. Also, it is not immediately that gentrification operates in the poorest areas of the cities. In different cases it operates with different paths, it often begins in a relatively depressed, devalorized, working-class part of the city but not the absolute epicentre of worst poverty (Loretta L., Slater T., Wyly E. 2008). In the following years other theories have emerged to explain the reasons of gentrification and some of them have a more cultural and sociological, rather than economic view. In 1973 Canadian geographer Daniel Bell elaborated the Post-industrial
thesis, that tried to explain gentrification as a result of the post-industrial society. This is composed by four key elements: -
A shift from a manufacturing to a service-based economy.
-
The centrality of a new science-based industry, with specialized knowledge as a key resource, where universities replace factories as dominant institutions.
-
The rapid rise of managerial, professional, and technical occupations.
-
Artistic avant-gardes leading consumer culture, rather than media, corporations or government. (Loretta L., Slater T., Wyly E. 2008, p.91).
In the 1990s another geographer, Chris Hamnett, highlight the connection between gentrification and the deep changings of society from industrial to professional: “There is evidence that a process of professionalization is concentrated in a number of large cities with strong financial/producer service base […] London experienced an increase in the proportion of professional and managerial workers in 1961-1981, while the numbers and the shares of all other groups declined. There is no evidence for absolute social polarisation in London in the 1960s and 1970s and the 1991 census is most unlikely to reveal a sudden reversal of fortune.” (Hamnett, 1994, p.407). In addition, researches about the political profile of gentrifiers were carried out. In 1994, Ley has conducted a study in different Canadian cities and found that the most gentrificated neighbourhood of Toronto, Montréal and Vancouver contained an electorate, which predominantly sided, with more left-liberal reform politics. There is evidence from other cities that left-liberal politics characterize the new middle-class professionals. In 1997 Tim Butler demonstrated a Gurdian-reading, labour-voting, leftist ideological orientation of the Borough of Hackney. These accounts challenge popular assumptions of gentrifiers as “yuppie space invader”. In 2003, Richard Florida elaborated a theory about the middle-class that local policy makers (the creative class) must take into consideration. Florida’s idea is that the new economy of cities must be based on this new class of gays, youth, bohemians, professors, scientists, artists and entrepreneurs.
“The creative class manages to combine a bourgeois work ethic with bohemian culture. The creative class desire tolerance, diversity, bike paths, hiking trails, historic architecture and so on” (Loretta L., Slater T., Wyly E., 2008, p. xx) At this point, we have a clear explanation of what is gentrification. The next paragraph is going to analyse the criticalities of this phenomenon. 1.5.3 Is gentrification a problem? Gentrification is a phenomenon viewable in different cities and neighbourhoods. It is possible to find different aspects of the characteristics of this particular approach to urban requalification. Moulaert and Haddock’s formulation of regeneration models can be a useful tool to read the gentrification phenomenon. The researchers have analysed and structured different models of urban requalification, as I have explained in paragraph 1.4.1. The physical, economic and cultural renewal of urban areas have brought to new contexts that must be assessed for their capabilities to respond to local needs. One of the most important aims of urban regeneration are the creation of new employment and the attraction of investments. Moulaert and Haddock’s work group has recorded a major participation of public investment on urban renewal projects. In addition, the perspective on the job market in the new areas has been demonstrated to be a failure. The analysis shows that the costs to create a new job position through the urban projects is 20 times higher than to create new employment through programs for benefits to industry. Furthermore, the employment that was created concerned only two types of work: on one hand, job positions for high specialized professions in the fields of business and advanced services. On the other hand, non-qualified jobs in the fields of restoration, security and cleaning services. These results are not efficient, especially if considered in relation to the problems of lower working class. The non-qualified work occupations are characterized by low-income and job-insecurity. The consequence is
evident in new requalified boroughs. The potential dwellers are the first kind of workers, which means that the former habitants have to displace (Vicari Haddock S., Moulaert F., 2009). Their research continues analysing the impact of cultural projects of regeneration. The work group has underlined a problem linked with the culture-led projects, which are programs of regeneration led by the creation of high profile cultural institutions. Clear examples are the New Tate Gallery of London, The Baltic/Sage Museum of New Castle, The Opera House of Sidney and the Guggenheim Museum of Bilbao. The core of this intervention is the idea that the culture is the regeneration element of a place. The criticism in these cases is the development of new dwelling areas around the new cultural centres that have accelerated the process of social fragmentation. In addition, only the low-income occupations have registered an increase resulting from these projects. Furthermore, Moulaert and Haddock underline that many experiences do not take in consideration the local communities and their cultural practises. In addition, other researchers have expressed their critiques against the gentrification processes: “I
consider
gentrification
as
a
class
based process
of
neighbourhood
transformation and as a key regeneration strategy. Contemporary definitions fail to adequately theorise how and why contemporary processes of gentrification are used as part of regeneration strategies and the implications this has for working-class communities. Gentrification is both an economic and cultural process which has been effectively harnessed by the state to manage deindustrialisation for material and socially productive ends. Gentrification has evolved from a means of urban renewal to a strategy for regulating working-class behaviours and practices. Thus, I put forward a new theoretical understanding of gentrification. It is a part of a hegemonic project which supports neoliberal and flexible forms of accumulation. It does so by seeking to create the more affluent citizen, in a moral and material sense.” (Kirsteen, 2014, p. 14)
Peter Birke, Florian Hohenstatt and Moritz Rinn reports another case of gentrification, a group of researchers who have followed the protest against the requalification of Hamburg-Wilhelmsburg a district inhabit by poor and working-class people. This zone has been target by local politics for a revitalization during the 2000s. Vehicle of this renewal were two big exhibitions: the International Building Exhibition and the International Gardening Exhibition. The researchers point out the total exclusion of local population in the decision about the renewal of the area and the fast increase of the rents and land costs due to the requalification. The revitalization project of the waterfront of Wilhemsburg was assigned to the HafenCity society. The researchers describe the project with these words: “HafenCity is illustrative of the post-industrial discovery of new uses to which waterfronts can be put, a trend also evident in other metropolis, from Toronto to Lisbon. A mixed-use housing settlement consisting almost entirely of upscale residential construction, equally expensive office spaces.” (Birke P. Hohenstatt F. Rinn M., 2015, p. 201) It is obvious that the positive or negative effects of gentrification are a result of different points of view. For the local governments and planners, the achievement of a renewal with new businesses and/or cultural centres is a success. In addition, the renewal of urban areas and the introduction of new middle-class people lead to the decrease of social problems in those zones. Furthermore, the result is only a displacement of lowincome people and their segregation. As Mark Davidson has explained regarding the requalification of Docklands area in London: “There is not the social-mix preventive by the program of renewal of Thames. There was no transference of social capital from high to low income groups, or any of the other desired outcomes from the introduction of a middle-class population into these central-city riverside locations. In part this is due to the transitory nature of the newbuild residents, and in part it was due to the spatially segregated nature of the newbuild developments with respect to the adjacent low-income communities. The new
build developments did allow to the Thames for the adjacent low-income communities, but those communities rarely went there because the imposing nature of the new builds and their security put them off” (Loretta L., Slater T., Wyly E., 2008, p.202). Thus the problems related to this kind of requalification are well-explained by the examples provided. Moulaert and Viccari Haddock highlight the same elements in their assessment of the urban requalification projects. The failure of these projects of requalification is the inability to tackle the social problems of local communities that live in the areas where the renewal is operated. The reasons are various but, as the cases report, similar. First of all, the physical, economical and cultural requalification through a gentrification process does not consider the possibility to create job opportunities for local people that suffer low levels of qualification. Secondly, gentrification tends to displace the low-income people and privatise the local public spaces, introducing new businesses that have a high-income target of customers. Consequently, these projects lead to the maximization of social polarization. The policy makers tend to prefer urban policies that renew the areas and do not tackle social exclusion. Meanwhile the welfare state in Europe is deeply changing and this context is creating huge problems of governance and capability of problem solving, as next chapter will analyse. In addition, projects of regeneration through culture do not involve local communities. Finally, one of the most important problems is the inability of local governments to engage communities. “For the weaker social groups, the exclusion from the democratic processes add another dimension of marginalization. It feeds the progressive weakening of social relationships and the sense of community” (Vicari Haddock S., Moulaert F., 2009, p.41.Own translation). The failure of many projects of urban requalification can be attributed to problems of local engagement and to a missing focus on the issues and needs of the neighbourhoods.
As I will argue in the following chapter, a better way to renew the cities is the empowerment of local communities.
CHAPTER 2 THE CHANGE OF PUBLIC POLICIES IN THE LAST DECADES.
At this point, it is necessary to introduce another element for the analysis: the role of public policies. In the previous chapter, I have analysed the development of urban regeneration policies under different aspects. As explained, the role of public policies makers is basic. All the urban interventions are determined by political choices as the Abercrombie’s Plan for London (1944) for the re-development of the capital of the UK after the war, or the National Agenda for Eighties (1979) elaborated by President Carter’s Commission about the development of cities during the following decade. Another example is the report Towards urban renaissance (1999) created by the Urban task force of the New Labour government in the UK. This is about the British vision of cities renewal that is the base for the urban plan Our town and cities – the future: delivering an urban renaissance (2000). The European Union has also paid attention to the urban policies through the European program Urban (1996) and the current online platform Joint Programming Initiatives Urban Europe. Local and national governments are key stakeholders in the process of development and renewal of cities and towns. They determine the political vision of interventions and, as explained in the first chapter, these political patterns are different. This chapter aims to explain the role of public urban policies in Europe from the end of Second World War to the present. In the last seventy years, the continent has changed under different aspects. The presence of socialist systems and their failure has deeply influenced the political choices of the nations and the creation of the European Union. The economic system is mutated from Fordism to the pre-eminence of the service sector. Alongside, the state has changed its
role in the creation of public policies as the welfare state or the management of urban policies. 2.1 The evolution of public policies. The role of the state is always changing. The reason why I have decided to analyse it from the middle of last century to nowadays is that the last seventy years can explain clearly the evolution from a strong state presence to its current form of main actor, that works in partnership with other parts of the society. The role of the state is defined by the economic theory on the base of three elements: 1. The functioning of the economic system considering its capability of selfregulation, that means a dual consequence: the full utilization of the resources and the promotion of development. 2. The assessment of the effects of market on the distribution of wealth, thus the correlated social cohesion and policies of redistribution. 3. The suitability of the decision-making processes to support the economic development. (Artoni R., Casarico A., 2009, own translation) The economic definition of the role of state could be narrow, but it can give a useful tool to understand the contribution of states in the development of nations from different points of view. In particular, it is possible to see how the economic evolution is a key element that is taken into consideration in many evaluations of social and urban programs. 2.1.1 The Golden age. Before the Second World War, the evolution of the state had achieved a situation where this was the predominant actor. It was determined by the presence of dictatorships in Europe and the Keynesian theory in the USA. The state had a strong role in the determination of job market and economy. Huge interventions, such as the creation
and/or acquisition of strategic economic fields i.e. the iron industries or strong investments in infrastructures, were carried out. In the same period the states started to consider the creation of insurance and health national systems to care for the conditions of the population (Ferrara M., 2012, p.25). Between the end of the Second World War and the 1970s, many countries lived the Golden age of welfare state and public dominance in the economic sector. The disaster of war led the nations to structure plans for the re-building of societies and economies. The intervention into different sectors of economy was a key element of the public policies of 1930s and 1940s, but during the 1950s it was a strategic choice to ensure the economic recovery after the destruction. The state took the right to intervene directly in the production of goods and services in order to support the rebirth after the war. The main tool to achieve this goal was the creation of strategic institutions owned by states that aimed to control key sectors of economy (Panozzo F., 2005). The predominance of the state was also in the expansion of welfare coverage. The Anglo-Scandinavian countries decided for a universal coverage of all the risks and citizens, based on the Beverage Report (1942). In the continental area a model based on the insurance of breadwinner workers was developed. During the Golden age the investments for social policies increased the public spending but the parallel economic growth of manufacturing industries guaranteed the financial support for these interventions (Ferrara M., 2012). The development of the welfare state during this period is wellexplained by Esping-Andersen: “The advanced welfare state, which became one of the hallmarks of the “Golden Age” of post-war prosperity, implied more than a mere upgrading of existing social policies in the developed industrial world. In the broadest of terms, it represented an effort to bring about economic, moral and politicalal reconstruction. Economically, it departed from the orthodoxies of the pure market nexus and required the extension of income and employment security as a right of citizenship. Morally, it sought to defend the ideas of
social justice, solidarity and universalism. Politicalally, the welfare state formed part of a project of nation building, affirming liberal democracy against the twin perils of fascism and bolshevism. Many countries became self-proclaimed welfare states, not so much to give a label to their social policies as to foster national social integration.” (Esping-Andersen G., 1994, pag.1) The analysis of the Golden age underlines the main characteristics of the Western society of that period. The drama of war led to the development of a new system where the ideals of equality and social justice had to be assured. In addition, it must be kept in consideration that the creation of these public policies was correlated with the social structure of 1950s and 1960s, when the breadwinners were the keystone of the social system: they provided monthly salaries, the base of protection for families. In addition, in that period, families were still structured in the traditional way of unit group (Migliavacca M., 2011, pp. 55-56). The governments had the possibilities to support the public policies thanks to the high level of economic growth. This situation persisted until the crisis of 1970s. 2.1.2 The crisis. The 1973 oil crisis began in October when the members of the Organization of Arab Petroleum Exporting Countries (OAPEC), consisting of the Arab members of the OPEC plus Egypt and Syria, proclaimed an oil embargo. The embargo was a response to American involvement in the 1973 Yom Kippur War. By the end of the embargo in March 1974, the price of oil had risen from $3 per barrel to nearly $12. The oil crisis caused many short-term and long-term effects on global political and global economy. It was later called the "first oil shock", followed by the 1979 oil crisis, termed the "second oil shock." The embargo had a negative influence on the US economy by causing immediate demands to address the threats to U.S. energy security. On an international level, the price increases changed competitive positions in many industries, such as
automobiles. Macroeconomic problems consisted of both inflationary and deflationary impacts. (Wikipedia, 2015) The “oil shock” can well-represent the start point of the crisis of 1970s of all the Western societies. The increase in the price of oil determined a spiral of inflation in the Western nations that determined a wide range of consequences. First, the governments had planned their economic and social policies on the base of continue economic growth. After the embargo, the situation deeply changed and the level of growth constantly decreased. In addition, the working social structure were deeply changing during the 1970s. The typical model of Fordism, based on massive production and consumption, enormous assembly line and prevalence of male workers, was at the end. The 1970s were the transition point from this situation to the post-industrial society bases on services and new ways of production: new demands of consumptions, flexibility of production and decentralisation of industries (Ferrara M., 2012, p.27). The consequence of this situation was the emergence of a huge crisis of the public system under different aspects. The welfare state of Western countries started to be insufficient to respond to the social problems. The reasons are various, as explained above the economic crisis of 1970s had decreased the resources to support the public spending for the welfare. In addition, the emergence of new demands had put under pressure the social assistance services. The social structures of Western societies deeply changed due to the modification of family groups and the aging of population. The males were no longer the only workers in the family, determining the need to implement education services in order to give women more time to work. The divorce also determined the end of the traditional family system. The decrease of fertility and the implementation of the health care system brought to life lengthening, determining the aging of population. The consequence was the rise of new social needs, such as the child and elderly care (Ferrara M., 2012, p.28).
Another element that must be taken into consideration is the mutation of the political context in the Western countries. During the crisis of 1970s, the centrality of the state was put into doubt. Its capability to determine the policies of nations started to decrease due to the emergence of strong global influences that a single government could not face. From the middle of the 1970s, the combination of rising unemployment and inflation brought to the consideration that the Keynesian interventions and policies were becoming obsolete. The end of the West-East easing of tension and the conservative electoral victories in Great Britain and U.S.A. indicate the end of the compromise between capital and labour. This compromise was set up during the Golden age by the social-democratic parties and was the base of that period. The main enemy of the conservative revolution was the welfare itself. The first effect of this change was the reduction of public investments in the coverage of risks and the state-subsidiarity (Joppke C., 1987). The crisis of the 1970s and the advance of conservative parties in the Western countries led to a new phase of public government concept. 2.1.3 The 1980s and the neoliberal reform. Neoliberalism is a term whose usage and definition have changed over time. Since the 1980s, scholars and critics have used the term in a variety of social sciences. Primarily in reference to the resurgence of 19th century, ideas associated with laissez-faire economic liberalism. Beginning in the 1970s and 1980s, its advocates supported extensive economic liberalization policies such as privatization, fiscal austerity, deregulation, free trade, and reductions in government spending in order to enhance the role of the private sector in the economy. Neoliberalism is famously associated with the economic policies introduced by Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States (Wikipedia, 2015). The UK and USA were not the only two countries governed by neoliberal principles during the 1980s, also Sweden, after six decades of social-democratic hegemony, Germany, the Netherland and Denmark elected
governments that pushed for a retrenchment and deregulation (Kitshelt H., Lange P., Marks G., Stephen J., 1999). “New right neoliberalism is best understood as the result of an alliance or natural affinity between the functional requirements and organisation of Anglo-American market economies and the political goals of right-of-centre parties in power. Neoliberalism lies at the interaction of an economic policy to promote the cost competitiveness of domestic firms and a political-strategic framework to undermine the demographic and institutional bases of electoral opponents’ work.” (Kitshelt H., Lange P., Marks G., Stephen J., 1999, p. 17). One of the effects of this new politic were upon the public welfare systems. The immediately reduction of the state role in the support of them was the consequence of the neoliberal reform. The spending review of state led to the reduction of public economic support to the retirement and national health system. On the other hand, this change in the public policy makers led to the consideration that the private sector could was a partner in the development of new policies. 2.1.4 The partnership between public and private. The result of the neoliberal reform of 1980s is the construction of a new kind of relationship between the state and the citizens. The neoliberal theories aimed for a development of society through the enlargement of its boundaries. The main element of this political evolution is the realization of partnerships between states and different parts of societies. The idea of public policies has changed during the years from a concept of government, which considers the traditional role of state as main and unique actor of public life, to the governance idea, which considers policies as a result of the interface between different public or private actors (Cottino P., Zandonai F., 2012, p.4).
2.2 THE EVOLUTION OF PUBLIC URBAN POLICIES. As previously shown, the state intervention was the key element of public policies from the end of the Second War World to 1970s. The national governments were the key actors of the reconstruction. The public intervention aimed to invest huge resources in the acquisition of lands and building of infrastructures. Another important sector was the public housing. This kind of policy aimed to respond to the huge need for accommodation. In the Netherlands, for example, over 75% of social houses were built during the 1950s. Also Austria, Sweden and France achieved high volumes of new buildings in this period (Balchin P., 2006). During the 1950s and 1960s, the urban growth achieved high levels and the enlargement of cities caused the emergence of problems inside the urban context (Robert P., Sykes H., 2000, p.15). The evolution of public urban policies has followed the same path of the public polices delineated above. The neoliberal reform is also viewable in the urban regeneration context. From the 1980s on, the idea of trade deregulation, freedom of movement for economic resources, and work flexibility have determined the urban policies in the Western countries (Vicari Haddock S., Moulaert F., 2009, pp.26-27). The way to re-start economies after the crisis of 1970s was to ensure a freedom in the economic context and a growing collaboration between the public and private sector. The economic upturn is the key-point of the neoliberal reform, and the governments have entrusted it with the new development of nations and cities. These reasons explain the implementation of gentrification in these years, and the growth of attention on the opportunities in the cities is linked to this new economic approach. “During the 1980s there was a move away from the idea that the central state should or could provide all of the resources required in order to support policy interventions. This new policy stance was matched by a greater emphasis on the role of partnership.” (Robert P., Sykes H., 2000, p. 16).
This tendency to partnership is also viewable in the urban regeneration context. There is an emerging consensus in Europe that, in order to address the interconnected problems related with many urban areas, there is a need to develop strategic framework of partnership based on strategic design, local focus, multisector approach and multiagency partnership. “Most organisations involved in urban regeneration recognise that the issue they face have multiple causes and therefore need a multi-agency approach to devising and implement solutions.” (Robert P., Sykes H., 2000, p. 37). From the 1980s to nowadays the elements around the public policies and the urban regeneration have begun very similarly. In both cases, it is possible to see the emergence of issues that concern the need for a strategic view about the development, the collaboration between local governments and private sector and the need of new strategies to solve social issues. “The need for a strategic approach to urban regeneration arises from the concerns regarding property-led urban regeneration and inner city policies in general have been described as being modest in scale, geographically dispersed, marginal and ad hoc in character, and lacking any relationship to structural urban economic trends.” (Robert P., Sykes H., 2000, p. 38). Urban policies approaches through transformation projects in isolation were no longer possible. The emphasis should be the promotion of conditions for economic, social and environmental regeneration. In this way, it is possible to present the case of a particular form of organisation in the UK named Community enterprises. They can explain well the evolution of the role of state, the promotion of social innovation and the partnership between both sides in the urban regeneration.
2.3 THE EVOLUTION OF PUBLIC URBAN POLICIES IN THE UK. The urban policies of the United Kingdom during the last seventy years reflect the general evolution that I have delineated previously. The urban policies of 1950s were characterized by the re-building of cities after the tragedy of Second World War. The task of new housing became urgent for the Labour government, which had to respond to the needs of families. The national and local governments were the key actor in the reconstruction, with the minor intervention of the private sector. Driven by the welfare state ideology, the urban polices were deeply based on the public control of assets and provision of services in order to direct the processes of urban regeneration. During the 1960s the housing and population pressure continued to be a problem. The growth continued in the suburban and peripheral areas, while the inner-cities decline began to be a problem. “The inability of state policies and action to alleviate unemployment and deal with race riots and failing local economies, fostered the belief that the state planning system was incapable and considerably inefficient.” (Tsenkova S., 2002, p. 9). Home Office established the Urban Programme (1968) in order to tackle these problems. The central government spent huge resources to support social and urban projects that aimed to diminish the social exclusion in inner cities. The central government covered 75% of costs and the local authorities the remainder, but the British welfare system and urban post-war reconstruction began to be a failure (Tsenkova S., 2002). The urban policies of 1970s aimed to address four major problems: Rising urban poverty, housing needs, low-income earnings and unemployment. The long-term male unemployment and the increasing job-loss in the inner city areas. The concentration of ethnic minorities in urban centres.
The causes as opposed to the symptom of decline. The adoption of the 1977 White Paper about the urban problems led to initiation of the Partnership Programme as a strategy to regenerate the inner cities. The main goal of the partnership was to direct investments from different sectors to the development of inner cities (Tsenkova S., 2002). The 1980s were the turning point in the evolution of public policies in general and urban policies in particular. The Thatcher’s governments claimed that the underlying reason of the deterioration of inner cities was the economic decline. Rich Heap, Community Editor at UBM's Future Cities, explains well the strategy of neo-liberal policies: “In 1977, the Labour government published a white paper "Policy for the Inner Cities" that claimed Britain's inner cities had deteriorated due to high unemployment, poor amenities, and economic decline. When Thatcher came to power in 1979, she set about trying to address this. She believed the property sector should play a key role in urban regeneration, in contrast to state-led policies of the 1970s. Her main policies were Urban Development Corporations (UDCs) and Enterprise Zones. UDCs were established following the Local Government Planning and Land Act 1980. These were appointed boards, mostly from the private sector, that aimed to entice private investors to invest in rundown areas. The hope was that this would bring buildings and land into use; develop trade and industry; and create homes and other facilities. Enterprise Zones were also established following the same 1980 legislation. These were defined geographical areas where private investment could be encouraged by policies, including 100 percent tax allowances for spending on commercial buildings; a faster planning system; and cutting other red tape.” (Heap R., 2013) At the same time, the neoliberal reform put the base for the reduction of the intervention of state. One of the main results was the decrease of spending for public structures as libraries, fire brigades stations or institutional buildings in general. From the 1980s, the reform of public governance considered the engagement of local communities in the creation and management of social and local services. The idea was to involve the citizens in the production of services based on the local needs. The main actors for the
development of this new policy were the Trusts. These are asset funds created by one or more persons in order to collect resources that will designate to specific aims or beneficiaries. The main issue of the development of community organisations was the “asset acquiring,” which means the collection of assets in order to provide goods and services to local communities. The most important choice operated in the UK is the transfer of public assets from the state to the community organisations. The result is the renewal of local public asset under the management of organisations set up by communities (Tricarico L., Le Xuan S., 2013) This aim of requalification through the involvement of local communities has continued under the governments of the New labour. In particular, the most important programme developed by Tony Blair’s governments was the New Deal for Communities (NDC) programme, an ambitious area-based initiative that aims, over 10 years, to transform 39 deprived neighbourhoods in relation to six outcomes: Transform these areas by achieving holistic change in relation to three placerelated outcomes: crime, community, and housing and the physical environment (HPE), and three people-related outcomes: education, health, and worklessness. ‘Close the gaps’ between these 39 areas and the rest of the country. Achieve a value for money transformation of these neighbourhoods. Secure improvements by working with other delivery agencies such as the police, Primary Care Trusts (PCTs), schools, Jobcentre Plus (JCP), and their parent local authority: the Programme is fundamentally rooted in partnership working. Place the community ‘at the heart of’ the initiative. Sustain a local impact after NDC Programme funding ceased. (Final report – New Deal for Communities Experience, 2010)
“Between 1999-2000 and 2007-08, the 39 NDC partnerships spent a total of £1.71bn on some 6,900 projects or interventions. A further £730m was levered in from other public, private and voluntary sector sources. They have developed, with partner agencies, a range of interventions, designed to support locally-developed strategies that encompass the three place-related outcomes of crime and community safety, community and housing and the physical environment, and the three people-related outcome areas of health, education and worklessness. Between 2002 and 2008 NDC areas saw an improvement in 32 of 36 core indicators spanning crime, education, health, worklessness, community and housing and the physical environment; for 26 out of the 27 indicators where significance testing is possible, this change was statistically significant. The biggest improvements were for indicators of people’s feelings about their neighbourhoods: NDC residents recognise change brought about by the NDC Programme and are more satisfied with their neighbourhoods as places to live.” (Final report – New Deal for Communities Experience, 2010, pp. 5-6)
During the same years, Blair’s governments promoted another important national program to develop new skills and resources in the disadvantaged zones the Neighbourhood Management Pathfinders. This program aimed to improve public services through the building of partnerships between local communities and local services providers at a neighbourhood level, to tackle local problems and improve local services. It funded the development of 35 Pathfinder partnerships to develop and test neighbourhood management as proposed by the Social Exclusion Unit. Partnerships have been funded in deprived urban and rural areas across every region of England. The aim of the Programme is: “To enable deprived communities and local services to improve local outcomes, by improving and joining up local services, and making them more responsive to local needs. The Pathfinders have all operated the same model and approach, with a small professional team lead by a Neighbourhood Manager and supported by an Accountable Body. The teams are accountable to a multi-sector partnership including local residents and have sought to bring residents and service providers together to influence mainstream services and improve local outcomes. The majority of Pathfinders are
located in the 20% most deprived areas in England” (Neighbourhood Management Pathfinders: Final Evaluation Report, 2008, p. 4)
In this context, the idea of a more specific legal form to encourage the initiatives of communities grew up. The idea of social enterprise has been well known and accepted in the UK context for many years and it was one of the main focuses during the entire New labour government period (Nicolini E., 2012, p.24). In 2001, the Social Enterprise Unit (SEUn) was set up to develop the analysis about the topic of social cohesion and “social inclusive wealth creation”1. The idea of creating a new legal form was delineated in the Cabinet Office Strategy Unit report “Private Action, Public Benefit” published in September 2002. From 2002, the British government started a public consultation about the need of recognition of the community projects. The Companies Act of 2004, part 2, established the Community Interest Company (CIC) as a new legal form incorporation. The parliament passed legislation in July 2005 with the Community Interest Company Regulations. The CICs can have different forms as limited liability Company, limited by guarantee, limited by shares. The main characteristics are: “CICs are limited companies which operate to provide a benefit to the community they serve. They are not strictly 'not for profit', and CICs can, and do, deliver returns to investors. However, the purpose of CIC is primarily one of community benefit rather than private profit. Whilst returns to investors are permitted, these must be balanced and reasonable, to encourage investment in the social enterprise sector whilst ensuring true community benefit is always at the heart of any CIC. For some CICs this is delivered through the provision of a service to a specific community, for example a welfare service to vulnerable people, in others it will be an activity that generates profits which are used to support a specific purpose such as a running a cafe where all profits generated are used to benefit the community. Each CIC is required to submit on a yearly report detailing the activities undertaken and how these have benefitted the community. This is an important document as it sets out publicly exactly how the CIC
has met its obligations to deliver community benefits.” (Office of regulator of CIC, 2015, p. 3)
As explained by the Office of regulator of CIC, the essential feature of a CIC is that its activities are carried on for the benefit of the community. A community for CIC purposes can embrace either the population as a whole or a definable sector or group of people. “The CIC legislation states that any group of individuals may constitute a community if they share a common characteristic which distinguishes them from other members of the community and a reasonable person might consider that they constitute a section of the community.” (Office of regulator of CIC, 2012, p. 6).
The community interest has to be proved by the CIC with the Community Interest test. The regulator assesses the capability of a company to satisfy the interests of community considering: the purposes for which it is set up; the range of activities in which it will engage; who will be seen as benefiting from its activities.
This brief explanation of the evolution of the partnership between the state and the society in the UK can explain well the context that a government has to create if it wants to develop a new relationship with the citizens. The CICs, last point of this explanation, are the tool that the state provides the society with in order to ensure the self-organisation of new services and the goods production, which both aim to solve the local social problems. The structure of CICs allows the communities to take in their hands the management of local assets and renew them. All these elements together compose the framework for the theoretical explanation of an alternative urban
regeneration based on the empowerment of communities, which I am going to show in the next chapter.
CHAPTER 3. THE COMMUNITIES’ EMPOWERMENT.
The last chapters have delineated the current European context of urban regeneration, public governance and elements of criticism of the urban development. These are the key points analysed: In the last decades, the European cities have altered their functions and structures and new problems and demands have arisen. In the last years, in particular, the evolution of global processes has become faster but also the idea of local development has been acknowledged more. The national and local governments suffer a continue decrease of role and budget, the total de-regularization of the private sector has not been an adequate response for many urban issues and the civil society requires a major involvement in the management of public assets and decision-making processes. The urban regeneration is now at a turning point where the partnership between public governance, private sector and civil society is necessary in order to tackle the new urban problems. The emergence of new solutions for the governance of urban areas is now the hotspot for the new development of cities. The aim of this chapter is to present an alternative view concerning the development of new solutions for the urban contexts. This thesis is based on the idea that every single response to a specific problem is unique and it is difficult to generalize the problemsolving process for situations in different contexts. This dissertation starts from a theoretical framework for an alternative development different from the ones presented previously. It takes into consideration the civil society, which refers to the organised
expression of citizens, as the main actor for new forms of urban and social innovation. The aim is to show that it is possible to set up solutions for many of the issues exposed in the previous chapters with a new approach. The previous explanation has exposed the critiques to past models of development. Firstly the state and then the market, have been delegated to achieve this goal without the engagement of civil society. The first step is the recognition of the organised citizens, inside communities, as key stakeholders and actors. The second is the creation of specific policies that aim to empower the civil society. The main conclusion will be the idea that communities and self-organised citizens can be the key actors of the urban regeneration processes through the construction of new businesses that allow to self-empower communities: the community-led enterprises.
3.1 THE DEEP ROOTS OF THE ALTERNATIVE DEVELOPMENT. The economic crisis of the last years has led the world to meditate on neoliberal models of development. The idea of an alternative development has got deep roots. During the 1970s, an “invisible college” (Friedmann J., 1992, p. VII) of specialists in economy emerged with a disaffection for the mainstreaming theories that emphasised the rapid cumulative growth, its urban bias and the single-minded pursuit of industrialization. The environmental problems became also an issues correlated with the attention about what kind of development the world wanted to follow. The alternative development movement was also influenced by the theories and practices of Gandhi in India and Latin American social movements. The success of neoliberal parties during the 1980s led to the consequences on economy and public governance that I have analysed in the previous chapters. The invisible college hoped for an improvement in the condition of poor people and the development of an economy able to be eco-friendly. The
movement, limited mostly to scholars and development professionals, invented its idea of new economy through many international meetings as the Stockholm Conference on the Human Environment (1972), the seminar on “Pattern of Resource Use, Environment and Development Strategies” (1974) in Cocoyn (Mexico) and the creation in 1976 of the International Foundation for Development Alternative (IFDA). The main purpose of IFDA is the launch of the Third System (Friedmann J., 1992, pp.2-3): “The state and the market are the two main power exercised over the people. But people have an autonomous power, legitimately theirs. The “third system” is that part of the people which is reaching a critical consciousness of their role. It is not a party or an organisation, it constitutes a movement of those free associations, citizens and militants, who perceive that the essence of history is the endless struggle by which people try to master their own destiny. […] This movement tries to assert itself in all spaces of decision making by putting pressure on the state and economic power and by organizing to expand the autonomous power of people.” (IFDA, 1980, pp 69-70) On the political side, the rapid change of panorama during the falling of Soviet Union and dictatorships in Latin America must be taken into consideration. Also, the legacy of social movements from the 1970s in the Western countries have had an important influence. These events raised the international profile of civil society. Grassroots participation has become celebrated as a major source of social and political change and a valuable instrument able to smooth democratisation processes (Minderhoud A., 2009). The consequence of this emerging global movement has been the increased number of non-governmental organisations (NGOs) in different fields of public life. This term refers to
“non-state, non-profit orientated groups who pursue purposes of public
interest”, excluding the private sector (Fischer M., 2011, p.288). In addition, many practices of democratic participation of civil society are hailing from the development of alternative engagement of people in Latin America. In particular, the participate budget born in 1989 in Porto Alegre. This practice has influenced many experiences in South America, as well as in Europe, about the involvement of citizens in the public
decision-making process. In addition, the International Co-operative Alliance recognised the importance of a local focus during the 1990s. In particular, the seventh principle of the Statement on the Co-operative Identity, elaborated
during the
Conference of Manchester (1995), enunciates: “Co-operatives work for the sustainable development of their communities through policies approved by their members.” The parallel growth of both the Third system idea and civil society is not accidental. The scholars of this theory have recognised the different scale at which the alternative development can occur: local, national and global. The local space is indicated as the place where “people’s creative unfolding”: “Development is lived by people where they are, where they live, learn, work, love, play and die. The primary community, whether geographical or organizational, is the immediate space open to most people. It is in the village, the neighbourhood, the town, the factory, the office, the school, the union’s local, the party’s branch, the parish, the sport club, the association – whatever its purpose – that personal and societal development first and best interact.” (IFDA, 1980, p.12). During the last decades the Alternative Development doctrine has grown wiser, thus it is possible to delineate many of its key beliefs: The state is part of the problem and the alternative development must, as much as possible, proceed outside and perhaps even against it. The people and local communities are the main target. They can inherently be communitarian. Community actions are sufficient for the practice of an alternative development, and those political actions are to be avoided. (Friedmann J., 1992, p.6). Obviously, the doctrine of Alternative Development is not a monolith. Its framework encompasses different points of view, from the Kropotkin’s anarchist idea that the state
is the enemy to the Friedmann’s considerations that the local scale must be the level of action but communities’ projects need a strong support from the public governance.
3.2 THE ACKNOWLEDGEMENT OF COMMUNITIES. In 1992, John Friedmann, Honorary Professor in the School of Community and Regional Planning at the University of British Columbia in Vancouver, Canada, and Professor Emeritus in the School of Public Policy and Social Research at UCLA, published the book “Empowerment. The politics of Alternative Development”. The aim of his studies is to develop a thesis about the alternative development of local communities. Professor Friedmann has analysed the evolution and articulation of the international alternative development movement and underlined that the communities are the key elements of alternative development theories. Alongside, another important approach has been conceptualized, the Community Development. This states the idea based on “A set of values and practices which plays a special role in overcoming poverty and disadvantage, knitting society together at the grass roots and deepening democracy […] Community development is a way of working with communities. Its key purpose is to build communities based on justice, equality and mutual respect.” (Community Development Foundation, 2009). International organisations as United Nations, UNICEF and OXFAM, agree with this approach that demonstrates the recognition of the community during the last decades. In addition, the UK governments have been considering the importance of local communities from the 1980s on, as explained in the previous chapter. The acknowledgement of communities is the first step; the following is the development of new solutions for the achievement of important goals in the tackling of social issues at local level.
3.2.1 The community empowerment. The empowerment is define as “An approach which is fundamental to an alternative development, places the emphasis on autonomy in the decision-making of territorially organized communities, local selfreliance (but not autarchy), direct participatory democracy, and experiential social learning. Its starting point is the locality, because civil society is most readily mobilized around local issues. […] An alternative development is essentially a dialectical ideology and practice. It is what it is because mainstream doctrine exists, just as state exists. Its aim is to replace neither the one nor the other but to transform them both dramatically to make it possible for disempowered sectors to be included in political and economic processes and have their rights as citizens and human beings acknowledged.” (Friedmann J., 1992, p. viii). The theoretical base of empowerment is the consideration that the economy must focus on people and their needs, not on the profit maximization. The first grade of justification of this idea is the Universal Declaration of Human Rights, adopted by the General Assembly of United Nations in 1948. It highlights the importance of adequate standards of life: “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.” (The Universal Declaration of Human Rights, Article 25, 1948) Secondly, Friedmann argues that the base for the empowerment is the recognition of citizen rights. A democratic state is the holder of authority, but it must be accountable to the people organised as a political community and, in recent years, as civil society. The third grade indicated by Friedmann is the “human flourishing” that is the right of social conditions for the self-realization of every-one.
Professor Friedmann provides many examples of cooperative informal economy aimed to give support to people in critical situations. These cases can show well the idea of an economy based on the recognition of needs and the values of cooperation for common goals. The Chilean ollas communes are public kitchens where women can prepare meals together with food bought collectively. These experiences solve not only the problem of malnutrition, but also teach people the values of cooperation, joint decision-making and leadership. Another example are the talleres, workshops managed with cooperative principles. In these places, periodical meetings are organised in order to discuss common problems. “In the case of popular organisations with their base in local communities, resistance is far less confrontational than with informal work. Rather, it lies the discovery by participants of the powers of mutual aid and cooperation on the fringes of the market economy. Popular economic organisations may bring only a small amount of income, or they may simply succeed in lowering living expenses. Their major contribution is that they bring hope, teach skills, and, by turning individual problems into collective ones, offer new possibilities for solution. They are also essential vehicles for selfempowerment.” (Friedmann J., 1992, pp 23-24). From these experiences, it is possible to find many elements that can be applied to the European context. A clear example of a politic for the empowerment of communities in the EU is the Involving Communities in Urban and Regeneration (1997) promoted by the Department of the Environment, Transport and the Regions (DETR) in the UK. The document defines policies for the activation of local potential. “When community organisations gain access to the policy process through partnership or other means, they need to develop their capacities to engage in local economic development and social initiatives. The DETR recognises the role of communities in helping with the strategic direction and management of programmes and consequent need for communities to develop the capacity to achieve this.” (Roberts P., Sykes H., 2000, p.118).
For the DETR capacity-building is about: Skills: project planning, budgeting and fund-raising, management, organisation, development, brokerage and networking. Knowledge: of the programmes and institutions of regeneration, their systems, priorities, key personnel. Resources: essential if local organisations are to be able to get things done. Power and influence: the ability to exert influence over the plans, priorities and actions of key local (and national) agencies. Capacity-building is a process that enhances: The empowerment for communities because people increasingly do things for themselves. The ability to create structures and networks to assist this process. Skills to enable local people to take charge of their futures. (DETR, 1997) After the delineation of the theoretical framework of the community empowerment, it is necessary delineates the context and the key actors that are involve in the society around this topic. 3.2.2 Domains of social practice. Friedmann has elaborated a conceptual map of the different “popular-struggle terrains”. Each domain has an autonomous core of institutions that governs its respective sphere. The core of the state are the executive and judicial institutions. For Friedmann, the core of civil society is the household, but in this analysis I prefer to consider the organised forms of citizens characterised by grassroots elements and the social movements. The core of the economy is the corporation and the core of the political community are independent political organisations, such as parties. For each of these it is possible to identify a distinctive power: state, economic or political power.
Image 2. The social domains by Friedmann.
As Friedmann (1992) says, the social power, which is the power of civil society, is composed of eight different bases: Life space is where the communities live and where the people have relations with each other. Surplus time is the time available outside the job.
Knowledge and skills this refer both the educational levels and the mastery of specific skills.
Appropriate information concerned the public and social life as infant care, standard
health
opportunities.
practices,
changing
political
configurations
and
job
Social organisations either formal or informal as churches, mother’s clubs, sports clubs, neighbourhood improvement associations, credit circles, discussion groups, tenant associations, peasant syndicates, ecc. Social network these are essential for self-reliant actions based on reciprocity. Instruments of work and livelihood these represent the physical conditions for work as the health and the access to good house conditions. Financial resources monetary income and formal or informal credit arrangements. The relative access is a measure, which indicate the grade of capability of a person or family to achieve these bases. This measure allows to determine different levels of livelihood and the absolute poverty. Below this “line”, people may be unable to move out of poverty by their own. The empowerment is achievable when people begin to selforganise their actions within the communities in order to improve one or more of the bases listed above. Likewise, Roberts P. and Sykes H. support the thesis of Geddes (1995) about the community needs and urban regeneration. For communities, the challenge is to improve their access to social resources, extend social and economic opportunities and develop local services to become more effective in meeting local needs. “Empowerment requires policies that enable citizens to gain greater access to services and to have more say on the use of community resources such as housing.” (Roberts P., Sykes H., 2000, p.115). Each domain exists at a different level of territorial organisation: city, region, nation, global. The four domains are inscribed within a bounded territory of life space. The four terrains have traditional relationships with each other and they are normally in conflict with each other. Friedmann points out that during the last 200 years, in the Western society, the power has been accumulating along the vertical axis a-a’, linking
the state with corporations at the expense of power along the horizontal axis b-b’, with connects civil society with political community. The concept of disempowerment elaborated by Friedmann is explainable here, as exclusion of citizens from the economic and political power. In extreme cases, the disempowerment takes the form of dictatorship backed by military power that shuts down the political community. “This drama take place at all territorial scales. Of particular interest to an alternative development, however at least initially, is the local scale, which is the privileged terrain of the disempowerment sectors. Here the struggle involves a redefinition of roles between state and civil society, and civil society and corporate economy, with special attention given to new form of political participation in planning, communal action, economic organisation, and gender relations in both the household and political community. Most important, an alternative development involves a process of social and political empowerment whose long-term objective is to re-balance the structure of power in society by making state action more accountable, strengthening the powers of civil society in the management of its affairs, and making corporate business more socially responsible.” (Friedmann J., 1992, p.31) 3.2.3 The policies of empowerment. In the last decades, the structure of society, delineated by Friedmann’s conceptual map, has seen the reduction of the state sphere, the change of economy and the enlargement of civil society. The issue underlined by the professor is the need of new forms of participation of citizens and the empowerment of poor classes. A policy for the empowerment of people must cover one or more of the eight points of social power. As Friedmann points out in his analysis, the empowerment requires a strong state that supports the policies of development in this direction (Friedmann J., 1992, p.35). The need of new policies that puts the communities first was also indicated by the community development approach. This, as explained above, promotes nowadays a set of practices, in particular for social workers, that promote the self-reliance of communities (Hope, A.; Timmel, S.; Hodzi, C., 1995).
On the same note, Professor Moulaert underlines the need of new approaches by institutions. In particular, he agrees with the “bottom-linked” vision that recognises the centrality of initiatives inside the communities promoted by those immediately concerned but stresses “the necessity of institutions that would enable, gear or sustain such initiatives through sound, regulated and lasting practises and clearer citizen rights guaranteed by democratic state-functioning.” (Moulaert F., Martinelli F., Swyngedouw E., Gonzalez S., 2010, p.9). The community empowerment is mainly a political approach that must be promoted by the local or national government. The aspect concerning this analysis is particularly the management of urban spaces, private or public, and the policies for a community empowerment. In his studies Moulaert has pointed out the rising of a tendency that “Reduces the governance of public space to the management of the exchange and control of properties rights. […] This means that great parts of public space have not only been privatised but depoliticised too.” (Moulaert F., Martinelli F., Swyngedouw E., Gonzalez S., 2010, p.6). The enlargement of the private market and the reduction of the state presence have not solved the social problems of cities. On the contrary, they have accentuated the social fragmentation and the disempowerment of local communities through the privatisation of spaces and the delegation of the development to the private sector (Moulaert F., Vicari Haddock S., 2009). Both Moulaert & Vicari Haddock and Roberts & Sykes take into consideration Friedmann’s studies about the empowerment, but the approach proposed by these authors is that the empowerment is chiefly a state-promoted policy. The main conclusion that it is possible to deduce from the current situation is the need for a new model that surpasses the dualism between state and private market. The civil society has achieved an important role and the state has recognized its importance, as explained in the second chapter about partnership. The traditional economy cannot
respond to social problems because is not its nature. The welfare state has changed dramatically since the 1950s and 1960s, and the social problems are different too. The spending review of public governance has led to the abandonment of huge parts of cities and assets. Thus, the new form of civil society participation into the governance of public assets must have specific characteristics: Economic autonomy. Empowerment for disadvantaged people, which means the improvement of one or more of the social bases listed above. Local focus. This is the reason why, is my opinion, the community-led enterprises can be the answer to these problems and the new form of self-organisation of local communities.
3.3 THE COMMUNITY-LED ENTERPRISE. The community-led enterprises are a model of business that centralizes local people and needs in its mission. They operate within the systems of protection producing goods and services for the increase of social cohesion. They are set up to be inclusive of local communities and governed by democratic rules. The open-structure and the clear social aims give them the capabilities to understand the evolution and mutation of local needs (Demozzi M., Zandonai F., 2008). 3.3.1 Definition. What characterizes the community-led enterprises as tools for the urban regeneration is: The renewal and management of local and/or public assets. A business plan. The engagement of community and the focus of the mission on this.
This type of business is a helpful instrument that can achieve many goals, such as the self-organisation of communities and the renewal of parts of cities. This idea of the community-led enterprise as actor of urban regeneration can be supported even by the International Research Network EMES. This has elaborated a definition of communityled enterprise developed on a dual dimension. The first aspect requires four characteristics: 1. The production of goods and services in a continuous way. 2. An elevate grade of autonomy. 3. A significant level of economic risk. 4. The presence of paid-workers and not only volunteers. The second aspect is the social dimension: 1. The community must be the first beneficiary of the production of goods and services. 2. The enterprise must be a collective initiative, which involves being promoted by a group of citizens. 3. The enterprise must have a government not based on the property of capital. 4. The enterprise must guarantee the participation of citizens and stakeholders into the decision-making process of the enterprise. 5. The enterprise must establish a limited distribution of profits. (Demozzi M., Zandonai F., 2008, p.11, own translation).
These businesses are totally different from the traditional private organisations. Their core are the social aims, not the profits. The key characteristic of the community-led enterprise is the capability to improve the eight points that form the social power. The base for these projects are the strong intentions of local groups of the civil society. The foundations of a project for the creation of a community-focused business are the resources brought into the company by citizens and the capability to set up a business plan coherent with the local needs. The informal relationships between the new organisation and the context around it are the key resources for the new business. On
the other side, the future organisation has to be able to build new formal relationships with the stakeholders engaged into the project. This mix promoted by the new organisation is the tool to understand the context and the base for the elaboration of new answers to security needs, cohesion and social protection. This is a continuous process of connection between the social context, the stakeholders and the business that brings to the calibration of the goods and services on the specific needs of the local community. (Demozzi M., Zandonai F., 2008, pp.16-17). Community-led enterprises are a mechanism for empowerment because they employ local and/or disadvantaged people who can gain their participation in the economy and develop skills for the future (Roberts P., Sykes H., 2000). In addition, they set up instruments for the capacitybuilding of local people. These aim to improve parts of the social power such as working skills, knowledge, level of instruction, social networks and livelihood of places.
Community as factor of legitimation
Community as stakeholder into the governance of community-led enterprise
Community as aim of business and beneficiary of it
Community as well of resources
Image 3. The link between community and enteprise
At the beginnings of their activities, these businesses require a huge legitimation and support from the local community. On the other side, they work to improve and
revitalise the old relationships inside the local life space. The scheme above explains well the relation between the enterprise and the community: These organisations recognise the community as main stakeholder because it is the first beneficiary of their activities. The communities are defined on the base of territorial boundaries. Capability to develop formal and informal relations with other stakeholders and representatives of local territory. An open system of governance. The community-led enterprises are not defined by their goods or services (as factories or service companies), but it is the centrality of communities that identifies an organisation of this type. These are the reasons why this type of business can be considered a good solution for many social problems within the disadvantaged context. These enterprises activate the resources of local community and work to tackle the social issues after analysing them in detail in partnership with the key local stakeholders. The urban requalification has also an important social value inside the context of disadvantaged neighbourhoods. In 1982, James Q. Wilson and George Kelling elaborated an innovative social theory about criminality, the “broken window theory”. This sustains that the prevalence of disorder and abandon parts of cities create fear in the mind of citizens. “This withdrawal from the community weakens social controls that previously kept criminals in check. Once this process begins, it feeds itself. Disorder causes crime, and crime causes further disorder and crime.” (Encyclopædia Britannica, 2016). The role played by the community-led enterprises in the requalification of cities have different outputs from a social impact on the community to the physical renewal of abandoned buildings and the generation of new economical possibilities.
3.3.2 The local focus. At this point, it is important to analyse the reason why the project of community empowerment and urban regeneration through the community-led enterprises needs a local focus. It could probably appear obvious, but I prefer to highlight the reasons why social innovation starts from the lowest level: the neighbourhoods. Professor Friedmann has compared small-scale alternative development projects versus the typical large-scale mainstream development projects. The first kind of projects are considered by the mainstream economic doctrine as little contributions to the economic growth and capital accumulation. But if we analyse these projects under the point of view of empowerment they show an approach that could be winning: 1. The impact of small alternative projects are primally local. This is important because social problems assume specific aspects inside specific contexts and the solutions must conform to the situations. 2. Transaction costs of many small projects are generally higher than for one big project. For this reason both international banks and national Ministries prefer few and large over small and many. 3. Alternative development projects are inherently difficult to coordinate. This is true in particular when they are promoted by different actors. On the other hand, when they are promulgated by Minitries and obligated to be coordinated they may lose their innovative character. (Friedmann J., 1992, pp.140-141) People active in neighbourhoods consider the communities as the enablers of citizenship rights in social life. Communities are considered as the concrete life-experience setting where citizenship rights are fought for, where mobilitations against social exclusion are initiated and staged, and where new political rights are defined. (Moulaert F., Martinelli F., Swyngedouw E., Gonzalez S., 2010, p.6)
3.3.3 The political message. The urban regeneration through the community-led enterprises is an argument that involves economy, social politics, urban planning and also politics. The original meaning of politics is the old greek word πολιτικός that means “what concerns with the public life of a city” (Treccani, 2015, own translation). Thus, every discussion about “what kind of life we want together” is a political debate. Also this thesis and topic have a particular political aspect. First of all, most of the cases that have originated the current examples of communityled organisations were political initiatives. Moulaert and Vicari Haddock have analysed the origins of many European cases and have determined a political background for most of them. The influence of many theories of the 1970s, such as the alternative development, is clear. But during the 1990s a new cycle of mobilitation started. The fragmentation and heterogenity of social movements have led to different forms of mobilitation with a wide range of goals. The reduction of action scale and the focus on issues at micro-level are the main characteristics of the new urban initiatives. Mayer (2007) has delineated three spheres of the current mobilitation within the urban context: The conflic between the neoliberal projects, in particular the gentrification, already explained in Chapter 1, and the network of local citizens organised as civil society. It is important to underline that the associations or informal groups have lost the typical political character of the 1970s. On the other hand, they have re-actived the ideas of cooperation and mutual-aid. The second sphere is connected with the deregulation of the state and the reduction of the public governance influence. These processes have opened up new spaces for the growth of the civil society, and initiated the partnership
between this and public governance for the management and production of new goods and services. The new models of employment, like the temporary contracts, have led to the fragmentation and
insecurity of work. Many initiatives and projects are
promoted for the re-inclusion of weak social groups inside the job market (Moulaert F., Vicari Haddock S., 2009). This last point in particular underlines how these initiatives are set up to empower local people. Most of the actual cases of urban regeneration through the community-led enterprises are generated from a situation of conflic that has been managed by the local government and transformed into a constructive situation, as the second point. The involvement of local people working with the public and private sector improve the quality of policy decisions and ensure the more effective implementation of local programmes. If the governance is more open, a wider awareness of how local problems can be resolved will be achieved (Roberts P., Sykes H., 2000, pp.54-55-56). Professor Friedmann has also explained his point of view on the political nature of the empowerment “If an alternative development is to advocate the social empowerment of the poor, it must also advocate their political empowerment […] An alternative development involves a process of social and political empowerment whose long-term objectives is to rebalance the structure of power in society making the state action more accountable” (Friedmann J., 1992, p.31). Also Professors Moulaert and Vicari Haddock highlight the political nature of urban regeneration, in particular in the defect of democratic processes. It is their opinion that many blind urban projects are the consequence of a political exclusion of many parts of society from the public governance. A major involvement into the public sphere and a more open governance could be a solution. The aim of the empowerment is not being assisted by the state, but the achievement of a grade of consciousness that can bring to
the self-organisation of communities. As Professors Friedmann, Moulaert and Vicari Haddock assume, these initiatives can be born from a protest for disadvantage situations, but they must continue their evolution with an idea of collaboration with the public governance. On the other side, the national and local governments must promote new forms of engagement for civil society in the management of public assets and issues. “It is possible to empower communities through the widest and most effective representation of local interest. The composition of boards, the election or selection of representatives and agreement on appropriate structures present hard choices. Representativeness and community access to local authorities and partnership can be difficult to achieve if a limited number of groups predominate over others […] Representativeness in community initiatives should therefore establish the ownership of initiatives by the community so that there can be as broad as possible acceptance of goals pursued.” (Roberts P., Sykes H., , 2000, pp.114-115).
3.4 THE LIMITS. Every proposal presents important aspects that demonstrate its attitude to be a good solution for particular problems. It is also important to present the limits of a particular idea in order to be complete. The first element to keep into consideration is the long-term realization of a communityled enterprise. Compared with a traditional business, this organisation needs more work, in particular in the field of public relation between this and the nearby stakeholders. This is a basic passage that requires much time and work. This means that a problem which needs an immediate solution could not be resolved by an enterprise. In addition, community-led enterprises require the approval of the elected board for the main decision, resulting in a probable lengthening of time for the realization of projects. The open governance of a community-led enterprise could be a fascinating aspect on one
side, but could be also a criticism on the other. The capability to engage the local community could be an obstacle to the ordinary governance of the enterprise. The composition of a board with different points of view and interests could create conflicts, or previous discords could be brough to the board by many parts. In addition, the participation can ensure the engagement of the community, but only if the members of the board are able to be the voice of the community, not the exponent of their particular positions. As shown previously, the emergence of this new type of business is the result of the reduction of the state’s intervention into social problems. Nevertheless, many social issues continue to be a specific competence of social workers because they require particular interventions. It is the case of extreme poverty, mental health or violence in household contexts. The relationship with the local governance could also be a criticism because these projects need the support and approval of public actors. The contribution of public stakeholders is the availability of resources, particularly the possibility to use the public assets. The public governance must recognise the indipendence of community-led projects and leave the sufficent autonomy to citizens to manage the assets and the new enterprises. On the other hand, its opposition could be a serious obstacle.
CHAPTER 4 - THE HACKNEY CO-OPERATIVE DEVELOPMENT
4.1 The Context: The London Borough of Hackney. Hackney is a north-east borough of London and part of Inner London, the internal zone of Greater London. Hackney is officially a part of “East London”. It is bounded by Islington to the west, Haringey to the north, Waltham Forest to the north-east, Newham to the east, Tower Hamlets to the south-east and the City of London to the south-west. The Borough is divided into 14 postal districts. Form north to south: Stamford Hill, Upper Clapton, Stoke Newington, Lower Clapton, Hackney Marshes, Dalston, Hackney Central, Homerton, Hackney Wick, De Beauvoir, South Hackney, Haggerston, Hoxton and Shoreditch. The Borough
Image 4. Map of the London Borough of Hackney
covers an area of 19.06 square kilometres, and it is crossed by the artificial canal Lea River (Wikipedia 2015). 4.1.1 History. From the end of 18th century, the borough knew an important development as an industrial zone. The presence of the Lea River allowed the availability of water for the industries and navigation. During the second half of the 19th century, Hackney's population grew rapidly and estates and farmlands were built on it. The rapid changes, which occurred during the Victorian era, were due to the development of factories and the building of new houses for the working class. They created most of the urban
landscape viewable today (Hackney Council, 2014). The installation of the railway was, in addition, an element of development for this borough. Hackney's first station was the Bishopsgate terminus (partially in Shoreditch) which opened in 1840. The North London Railway opened in 1850, the City link to Broad Street in 1865 and the GER line to Liverpool Street in 1872. Trams operated in the borough from 1871 onwards and were just as important as railways in assisting development (Hackney Council, 2014). From the 1930s, the London Country Council started different projects of requalification for the disadvantage situation of the slums in Hackney caused by the fast urbanisation around industries. The industry began relocating from Hackney and Shoreditch directly after the Second World War. When the wholesale restructuring of the London economy occurred in the 1970s and 1980s, it wiped out most of the remaining larger firms (Hackney Council, 2014). Nowadays, the borough is living a renaissance thanks to the requalification of many abandoned warehouses and industries as work places for young entrepreneurs. 4.1.2 Demography. “Hackney is a relatively young borough with a quarter of its population under 20. The proportion of residents between 20-29 years has grown in the last ten years and now stands at 21%. People aged over 55 make up only 18% of the population.” (Hackney Council, 2016, p.3). The historical analysis of the population of this borough is interesting. From the beginnings of the 19th century, the industrialization operated an enlargement of the area. From 1801 to 1901, the rate of growth is 2460%. This increase was constant until the 1920s. From 1921 to 1981, the last year with a negative growth rate, the population decreased by 51%. Probably this was due to the war destruction, the closure of industries and the economic crisis of the 1970s and the 1980s. From 1991 to nowadays, the population of Hackney has started a re-growth and the rate has increased by 37%.
Hackney’s current population is estimated at 257,379 people and it is the third most populated borough in London (Hackney Council, 2016). Table 1. Historical development of the population of Hackney. Year
Pop.
±%
Year
Pop.
±%
1801
14,609
—
1921
368,469
−2.8%
1811
19,523
+33.6%
1931
358,117
−2.8%
1821
25,342
+29.8%
1941
305,501
−14.7%
1831
35,482
+40.0%
1951
260,626
−14.7%
1841
68,246
+92.3%
1961
240,521
−7.7%
1851
94,961
+39.1%
1971
221,975
−7.7%
1861
172,385
+81.5%
1981
179,536
−19.1%
1871
249,81
+44.9%
1991
187,792
+4.6%
1881
327,234
+31.0%
2001
202,819
+8.0%
1891
369,209
+12.8%
2010
213,573
+5.3%
1901
374,132
+1.3%
2015
257,379
+20%
1911
379,12
+1.3%
Source: Wikipedia, Hackney, 2015. A deeper level of analysis is the ethnical composition of the borough. This shows how Hackney is a melting pot of different ethnicities. Hackney is the sixth most diverse borough in London. “The single largest ethnic group in Hackney is White British which accounts for 36.2% of the population. This marks a significant reduction in the proportion of White British residents from 44.1% in 2001 […] It is reflective of Hackney’s increasing diversity, which currently marks it out as the sixth most ethnically diverse borough in London. Hackney is a truly global and diverse borough. […] Historically Hackney has been a
borough that welcomes people from around the world and inward migration dates back to the 18th and 19th centuries. In the 1950’s and 1960’s, labour shortages in the reviving post-war economy drew in migrants from the Caribbean, Cyprus, Turkey and South Asia. In the last 10 years they have been joined by migrants from Western European countries like Spain and France, Eastern European countries like Poland, which have joined the European Union in the past decade, people from North, and South America, Australasia and African countries like Nigeria and Somalia.” (Hackney Council, 2016 pp. 6-7) Table 2. Ethnic Groups of Hackney. HACKNEY
LONDON
ENGLAND
White: English/Welsh/Scottish/Northern Irish/British
36,20%
44,90%
79,80%
White: Irish
2,10%
2,20%
1,00%
White: Gypsy or Irish Traveller
0,2
0,10%
0,10%
White: Other White
16,20%
12,60%
4,60%
TOTAL
54,50%
59,80%
85,50%
1,50%
0,80%
Mixed/multiple
ethnic
group:
White
and
Black 2,00%
Caribbean Mixed/multiple ethnic group: White and Black African
1,20%
0,80%
0,30%
Mixed/multiple ethnic group: White and Asian
1,20%
1,25%
0,60%
Mixed/multiple ethnic group: Other Mixed
2,00%
1,50%
0,50%
TOTAL
6,40%
5,05%
2,20%
Asian/Asian British: Indian
3,10%
6,60%
2,60%
Asian/Asian British: Pakistani
0,80%
2,70%
2,10%
Asian/Asian British: Bangladeshi
2,50%
2,70%
0,80%
Asian/Asian British: Chinese
1,40%
1,50%
0,70%
Asian/Asian British: Other Asian
2,70%
4,90%
1,50%
TOTAL
10,50%
18,40%
7,70%
Black/African/Caribbean/Black British: African
11,40%
7,00%
1,80%
Black/African/Caribbean/Black British: Caribbean
7,80%
4,20%
1,10%
Black/African/Caribbean/Black British: Other Black
3,90%
2,10%
0,50%
TOTAL.
23,10%
13,30%
3,40%
Other ethnic group: Arab
0.7%
1.3%
0.4%
Other ethnic group: Any other ethnic group
4.6%
2.1%
0.6%
Source: Nomis January 2015. An important aspect is the religious composition of the borough. Only one third of the population is Christian, and there is a high rate of Jewish and Muslim people. It is important to underline the presence of the Harendi Jewish community in the postal district of Stamford Hill. In this zone, 30.000 people declare themselves as “Harendi Jewish”. It is the largest community in Europe of this Ashkenazi ultra-Orthodox group. The huge differences inside the borough are not an issue for the citizens. “Nearly nine out of ten Hackney residents say that Hackney is a place where people from different backgrounds get on well together. Hackney’s diversity and multiculturalism are the main factors contributing to residents feeling proud of the borough.” (Hackney Council, 2016, p. 14). 4.1.3 Health, education and housing. Others factors that is important to consider are Health and Education. In the last census of 2011, 14.5% of the citizens of Hackney said they were disabled or had a long-term limiting illness. Life expectancy is 78.5 years for men and 83.3 years for women. Life expectancy in Hackney is below the London average, especially for men.
Table 3. The historical evolution of house prices in Hackney
Hackney
Inner London
London
2004
213.000
240.000
220.000
2005
220.000
250.000
230.000
2006
247.500
275.000
245.000
2007
265.000
312.500
265.000
2008
265.000
314.000
260.000
2009
275.000
323.226
250.000
2010
292.500
350.000
288.000
2011
310.000
360.000
292.000
2012
325.000
369.950
300.000
2013
375.000
403.195
322.000
2014
430.000
461.000
364.000
Source: Nomis 2015. 58.8% of pupils obtained five or more GCSE’s grade A*-C including English and Maths in 2015, up from 43% in 2008. This is close to the London average, 61.5 % and well above the England average of 53.4% (Hackney Council, 2016). The proportion of households who rent from a private landlord has more than doubled in the past 10 years. Nearly a third of all households are now private renters. Nearly 45% of all households in Hackney rent from a social landlord. They tend to have higher unemployment rates and lower average incomes than people living in other tenures. It is important to underline the elevate cost of houses and lands that has increased in the last 10 years. I have carried out a research, which shows the fast growth of prices. From
2004 to 2014 the average price of houses in Hackney has grown by 102% against the 92% of Inner London and a 65% of Greater London. This is an important social element because it is a sign of the gentrification process. 4.1.4 Economy. This paragraph shows the key statistics of the economy of Hackney during the last years. The following tables are the result of my research from the data of the Office for National Statistics. Table 4 illustrates the evolution of the local economy during the last four years. These figures represent the private sector, which includes companies, sole properties, partnerships and not-profit bodies. Table 4. Businesses in Hackney.
Hackney 2010 2011 2012 2013 2014 Growth 2010-2014 % per size (2014)
Total 9.330 9.635 10.685 11.355 12.790 37,08%
Micro (0 to 9) 8.460 8.765 9.665 10.185 11.560 37% 90,38%
Small (10 to 49) 715 710 865 995 1.045 46% 8,17%
Medium-sized (50 to 249) 130 130 130 145 155 19% 1,21%
Source: Nomis, 2015. It is evident that there is a strong increase in the column of the micro and small business, opposed to the stationary situation in the last column, corresponding to the large businesses. This implies a huge increase in the sector of services and retail, which means a particular evolution of the economy. During the 19th and the 20th century the economic growth was led by medium and large sized industries. The recent rebirth of the borough is linked to the commerce and services. In particular, as explained above,
Large (250+) 25 25 25 25 25 0% 0,20%
Hackney is nowadays a fashion borough where young entrepreneurs decide to move to and rent workspaces for their businesses, in particular in the fields of arts and new technologies. “The makeup of Hackney’s economy has changed significantly since 2000. Between 1994 -2004, Hackney saw a 27% drop in VAT registered businesses in manufacturing. Factory and warehouse space decreased by nearly 18% between 2000 and 2003, this was the 3rd biggest loss of factory space in a borough, in London. Over the past decade, Hackney’s old factories have become workspaces for a new boom in technology, media, and telecommunications, or more broadly, knowledge based industries. Hackney is home to the centre of one of the largest clusters of knowledge industries in Europe. The cluster is London wide, but it began in Shoreditch where arts and entertainment, professional, scientific, technical, finance, business services, and information and communication firms have grown by 191% since 2003” (Hackney Council, 2015, p.3). Table 5 shows the evolution of wages during the period between 2004 and 2014. The figures expose the particular situation in which the hours worked per week remain stable, while the wages register an increase of 26% for males and 36% for females. This is probably due to the elevation of the minimum wage by the UK governments. In 2005 the minimum was 5.05£ now is 6.70£2. Another important element in this table is the evident gap between male and female wages, which must be kept into consideration especially in the following paragraphs. In addition, the gap appears also in the hours worked.
2
www.gov.uk/national-minimum-wage-rates
Table 5. Weekly pay and Hours worked. Gender comparison.
Date 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Male
Weekly pay - basic Median Female 403,5 434,4 414,0 439,9 470,0 501,5 507,9 544,8 499,1 520,2 511,0
Hours worked - basic Median Male Female 361,0 373,7 384,5 418,4 452,6 479,3 450,1 457,1 476,4 482,3 491,8
36,5 36,0 36,6 36,8 36,6 37,0 37,0 36,0 36,0 36,1 37,4
Source: Nomis, 2015. Table 6 shows the current situation (June 2015) of the employment in Hackney. Even though the numbers of businesses and average earnings have reached a significant level in recent years, the rate of employment continues to be lower than London’s and Great Britain’s. This means that people who are not citizens of Hackney, probably set up the new businesses without employing local workers. Table 6. Employment situation of Hackney.
Economically Active† In Employment† Employees† Self Employed† Unemployed Source: Nomis, 2015.
Hackney Hackney (Numbers) (%) 142,5 74.4 132,3 69.0 105 54.8 26,9 14.0 10,4 7.3
London (%) 77.4 72.2 59.3 12.5 6.6
Great Britain (%) 77.5 73.1 62.5 10.1 5.7
35,0 35,0 35,0 35,0 35,0 35,0 35,0 35,0 35,0 35,0 35,0
4.1.5 Deprivation. For this part of analysis, it is important to introduce two tools. In 2004, the Office for National Statistics of the UK (ONS) elaborated a new system of recognition, which has divided the UK into Super Output Areas (SOAs). This system was created to maximize the information of small areas. The OAs can be Lower Layer Super Output Area (from 1000 to 3000 people) and Middle Layer Super Output Area (from 3000 to 5000 people). These are a good tool for the statistical analysis of different areas. The second tool is the Index of Multiple deprivation that ranks each local authority area, ward and lower super output area in terms of seven domains: health, education, income, employment, housing and access to services, living environment and crime, in order of deprivation. The domains are brought together in an overall Index of Multiple Deprivation (IMD). “Hackney was the eleventh most deprived local authority overall in England in the 2015 Index of Multiple Deprivation, in 2010 it was ranked second. In 2015, 17% of its Lower Super Output Areas were in the top ten percent most deprived, compared with 42% in 2010. This indicates that Hackney is becoming less deprived relative to other local authority areas in England.” (Hackney Council, 2016, p.17). There are also specific indexes of deprivation for elder people and children poverty. The index of Deprivation Affecting Older People (IDAOPI) had a value of 42 in 2015, which means that 42% of people aged 60 and above are either receiving Pension Credit, out of work benefits, or their income is less than 60% of the national median excluding housing benefits. In 2015, Hackney ranked second for all local authorities in England for this indicator. The Her Majesty’s Revenue and Customs (HMRC) measures the index of children poverty “as the percentage of children living in families in receipt of out of work benefits or tax credits where reported incomes are below 60% of the national median income before housing costs are deducted.” (Hackney council, 2015, p.18).
The council has registered a 28% in 2013 that indicates the fourth highest position in London. Another element must be added to this analysis. If data are cross-checked, the result is that in the poorest lower output areas of Hackney the level of ethnic diversity is higher. Table 8 shows a comparison between the percentages of ethnic groups in the Borough of Hackney and the areas in the 3, 5 and 10 percentile of the highest deprived areas. This means the presence of a link between the most difficult situations in the borough and the ethnic minorities. An important element is the historic mutation of the status of Hackney. During the last 30 years, after the closure of industries, this borough has been an abandoned place. In the past, many families were attracted by work availability and lower rents, but more recently the lack of employment has led to this situation. Table 8. Ethnical composition of Poorest LSOAs in Hackney. Hackney (London Borough)
3%
5%
10%
White
Count
45587
3.711
9.521
33.673
White
%
54,7
43,7
43,2
47,9
Mixed/Multiple Ethnic Groups
Count
12.849
639
1.536
4.765
Mixed/Multiple Ethnic Groups
%
6,4
7,7
6,9
6,8
Asian/Asian British
Count
19.687
1.028
2.654
7.706
Asian/Asian British
%
10,5
12,2
12,1
11,0
Black/African/Caribbean/Black British
Count
56.858
2.464
7.184
19.871
Black/African/Caribbean/Black British
%
23,1
29,4
32,3
28,8
Other Ethnic Group
Count
13.059
523
5.006
3.820
Other Ethnic Group
%
5,3
6,0
5,4
5,6
4.1.6 The current situation. This brief description of Hackney has delineated important information and elements. This borough has gone through deep changes during the last two centuries, from a strong industrialization to its renewal as a chic place for artists and entrepreneurs. What is important for this analysis are the social issues underlined in the last paragraphs. The current situation of Hackney is a modification of its status from an old and abandoned borough to a gentrified zone of London. The first signs of the gentrification process appeared in Hoxton and Shoreditch. The two areas, now very famous parts of the glamour east-London, were for decades working-class zones. In the early 1990s, they began to attract artists due to the lower prices of warehouses, in particular around the zone of Hoxton square. The commercial art gallery The White cube was opened in 1999 inside a former factory. The high concentration of artists and young people drew new businesses as cafés and pubs, turning the area into a nightlife district. The proximity with the City and the increasing charm of these two zones led to the growth of real estate values (Porter L., Shaw K., 2009). The new dwellers of these areas, named by previous residents the “Shoreditch Twan” are
“new media, fashion students,
photographer-type person a privileged digital or old school arts background.” (Urban Dictionary, 2005). The success of Hackney is due to the Olympic games of 2012 in the nearby new part of East-London. The opening of the East London Underground in 2012 has led the gentrification process close to the Dalston and Bethnal Green areas (Porter L., Shaw K., 2009). The increasing prices showed above also confirm the changing of the Borough of Hackney in this direction. New businesses are not a sufficient solution for the decrease of the disadvantage situations, because they employ few people and most of them are high-qualified. “The price paid by local communities as a result of the rapid change in the neighbourhood is high. Most locals do not benefit from new jobs being created or are
confined to low-paid bar or security work. Children find difficult to stay in the area when they move out from their parents’ home […] there have been clear conflicts over the use of green, cultural, social and retail spaces and a wide spread feeling of alienation among “old” residents.” (Porter L., Shaw K., 2009) Many reasons why Hackney has become gentrified are explained by The Economist in the article “Chasing cool” (2014). First, the position close to the City of London is strategical. Secondly, the trend that makes the city centre more pleasant is due to the idea of building reduction in the Green Belt outside Inner London. In particular, the lower costs of houses in the 1990s was the key element of the gentrification in Hackney (The Economist, 2014). As many other parts of London, such as the Docklands or Camden Town, Hackney is now living a new life. It is a positive thing if we consider the increase of businesses and the renewal of old buildings, but the current situation has led to the displacement of many old dwellers. The working class is leaving this borough and the new families are regenerating most parts of the resident areas, just like young entrepreneurs are doing with the old warehouses and shops. What is important to consider about this gentrification is the attention paid to the old residents. The “gentrification wave” conveys charm but also higher costs of living. Can the working class families sustain these costs? This is the reason why communities are becoming important again in today’s life. The fast changes inside this borough can destroy old traditions and memories. In addition, the previous status of industrial borough has left a heritage of old buildings. In this context, it is possible to introduce one of the most valuable cases of community-led enterprise for the regeneration and management of urban assets: the Hackney Co-operative Developments (HCD).
4.2 The Hackney Co-operative Developments. This paragraph is the result of my internship period at Hackney Co-operative Developments from April 2015 to July 2015. During these months, I interviewed many current and former members of HCD and I can now delineate the case study about this organisation and its services and projects. The Hackney Co-operative Development is a Community Interest Company specialised in business support, customised training, affordable workspace provision and creation of suitable environments for small businesses, community groups and voluntary organisations in Hackney. 4.2.1 Mission. The mission of HCD is the social and economic development of Hackney through the values of cooperation, self-help, self-responsibility, democracy, equity and solidarity3. In particular, the company indicates as key objectives of its business: (1) To foster and develop common ownership resources for local regeneration and community economic development. (2) To work to bring together economic with social and community development. (3) To promote wealth generation together with the equable sharing of its benefits, in line with the co-operative movement's social ideal of the Commonwealth. (4) To foster the extension of local democracy in the peaceful development and management of local affairs. (5) To foster the formation of co-operative businesses and organizations to achieve sustainable democratic control and ownership by people at work of the enterprises in which they work.
3
www.hced.co.uk
(6) To foster and support at all levels the principles and concepts of cooperation and common ownership, sustainable development, fair trade, ethical and ecological business practices. To support the growth of these principles and practices in its own affairs and in industry and commerce generally. (7) To promote communication and fair-trade, locally, nationally and internationally. (8) To promote co-operation between such co-operative and common ownership enterprises, small businesses and voluntary organizations. (9) To foster and support small businesses, social enterprises, not-forprivate-
profit
organizations
and
voluntary
organizations
benefiting the local economy in accordance with the above objectives. (HCD’s aims & objectives doc., 1985). 4.2.2 The origins. Established in 1982, the HCD has deep roots in the cooperative movement of London. The Hackney House Cooperative set up this organisation as Adam Hart, former CEO of HCD from 1996 to 2006, explains: “In the 1970s, there were a lot of squatters in London and they occupied many dwellings. In the 1980s, also, the housing cooperation increased with political support; there were lots of cooperative houses. Here there was the Hackney House Cooperative. This was a group that supported people who wanted to live in a cooperative house. Based on this experience, they thought that it would also be possible to develop business in a cooperative way. They asked local authority for a place to start businesses and received Bradbury Street, with the agreement to raise the funds to renew the entire building. The regeneration was funded with the Government money invested to increase the economic and social situation of suburban areas. This money was pushed into community organisations in order to stop conflicts.” (Appendix 1) The basic idea of HCD is that the support to a community through the development of new cooperative and social companies can improve the conditions of local people. Business can bring wealth if it is set up with social and mutual values. The focus are the
disadvantaged people of Hackney who cannot be helped only with the traditional support provided by the state. Ethnic minorities and women are the main target of the services; as explained in previous paragraphs they are the most deprived groups. The building of relationships with the surrounding context is, from the origins, a essential tool for this organisation. “There is a high level of sustainable black, ethnic minority and female entrepreneurs and community groups. Many of these were assisted through start-up grants, advice from HCD and other agencies on how to move to market sustainability, specialist services, low-cost loans and the availability of affordable workspace.” (Hart A., 2003, p.238) The business support and the possibility to rent workspaces for affordable prices are the main services of HCD; these are tools for the economic growth. Alongside, extremely important is the agreement between the local authority and HCD for Bradbury Street and Gillet Square. The management and renewal of these spaces is the keystone of this experience, because it demonstrates that a community-led enterprise is set up with social and cooperative values, and that the focus on local people can regenerate parts of cities without the economic exclusion of gentrification processes. 4.2.3 The structure of HCD and the community engagement. This company was set up to provide business support and affordable workspaces for those people of Hackney who desire to build new social enterprises. It is important to analyse how, after 20 years, the company is structured, keeping into consideration that it is a Community Interest Company and must therefore respect specific elements, as the satisfaction of local interest and the democratic governance. The HCD is a company limited by guarantees, it does not have a share capital, and from 2005 it is a Community Interest Company. Members of HCD can be people, other organisations and public authorities that support the aims of HCD (The company acts of 1985 and 1989).
All employees are admitted to the membership. All members compose the General Meeting, which is a periodical reunion. Nowadays the HCD has 300 members.
Employees
Staff Members
Chief of Executive Office
General Council
Elect
Directs
Members of HCD
Work for
Communities of Hackney
Image 5. The structure of HCD
This assembly has the task to elect the General Council every year. The General Council is the main tool of governance of HCD. The General Meeting can also decide on issues that are assessed as strategic by the General Council or the CEO. The General Council shall have no more than thirty members, it must represent the social composition of Hackney and this is the reason why Interest Groups shall be represented as followed: (a) Six seats shall be reserved for elected representatives nominated for election by local worker co-operatives, common ownership enterprises and small businesses; (b) Two seats shall be reserved for elected representatives nominated for election by trade union organisations; (c) Five seats shall be reserved for elected representatives nominated for election by community and voluntary organisations;
(d) Two seats shall be reserved for elected representatives nominated for election by employees of the Company; (e) Two seats shall be reserved for elected representatives nominated for election by organisations in category (d) of article 6 above. (The company acts of 1985 and 1989). Dominic Ellison, the CEO of HCD, explains the importance of General Meeting and General Council: “Our members run organisations in Hackney and they have connections with the neighbourhood. The General Meeting of our members elects the board and decides the strategy for HCD. […] We have a strong relationship with other community organisations. We also aim to help single people and work in partnership with the council as a voice of Hackney’s people. Another way [to relate to Hackney] is that all the members of board are representative of the community in different ways. For example me: I work also with the Hackney voluntary sector. The majority of our board members are part of Hackney community groups and businesses.” (Appendix 2) The General Council has the power to manage the Company, as express by Article 32 of The Company Acts: “The business of the Company shall be managed by the General Council who may pay all expenses of the formation of the Company as they think fit and may exercise all such powers of the company and do all such acts on behalf of the Company as may be exercised and done by the Company and as are not by statute or by these Articles required to be exercised or done by the Company in General Meeting.” The General Council elects a Chairman who is the person in charge to preside over the meetings and speak in behalf of the Council. Actually, tenants, representatives of the Co-operative movement and party and HCD staff members, all compose the Council. The composition of the Council reflects the multi-stakeholder aspect of HCD, able to be more inclusive of different points of view. The General Council, in order to manage the
business of HCD, has the task to search and employ staff members, in particular the Chief Executive Office. Nowadays the staff members of HCD are: Dominc Ellison: Chief Executive Office. Anthonia Onigbode: Financial Director. Bekele Teklu: Business Development Manager. Brian Millington: Social Enterprise Development Manager. Leah Keene: Property Manager. Rob Devoy: Tenant Support Officer. Claudette Spencer: Administrator/Accounts Assistant. Clarissa Clayton: Creative Producer. Anja Beinroth: Community Organiser. HCD also hosts two volunteers and various interns. The structure shows how HCD operates in different fields and offers many services. 4.2.4 The services. During the years, the services provided by HCD have been influenced by the strong relationship with the social aspects of Hackney. The peculiarity of this organisation is the focus on the issues of the local communities and the research of new solutions to tackle the social and economic problems of disadvantaged groups. Paragraph 4.1 explains the current situation of the Borough of Hackney and its critical aspects. “There is a high level of sustainable black, ethnic minority and female entrepreneurs and community groups. Many of these were assisted through start-up grants, advice from HCD and other agencies on how to move to market sustainability, specialist services, low-cost loans and the availability of affordable workspace.” (Hart A., 2003, p. 238).
HCD works within this community since 1982, and its services are in line with its mission: Affordable business premises: HCD is the owner of 73 spaces in Hackney ranging from 100-1550 sq. ft. These include small offices, medium-sized workspaces, retail outlets and night time economy venues. These properties are in part ownership of Hackney Council, such as the Bradbury Street and Beechwood Road buildings. HCD has an agreement for the free usage of these spaces because it renewed them. Other properties were bought during the years. The choice of affordable prices for the new businesses is a key element of this analysis. The support for the economic growth of Hackney starts from the availability of workspaces for people who cannot pay the market price. In addition, HCD draws particular attention to the tenants. “We enjoy good relations with our tenants who benefit from the ethos engrained in our social and economic values and who often benefit from opportunities to collaborate with HCD and other tenants. When selecting new tenants, we prioritise co-operatives, social enterprises, businesses looking to enhance Dalston’s cultural offer and local residents keen to start up in business and particularly welcome applications that demonstrate how organisations will work co-operatively with other tenants.”4 HCD premises currently accommodate over 70 locally owned small businesses, charities and social enterprises. Businesses incubated by HCD have higher survival rates than London’s in the first three years. 34% are businesses of services such as solicitors, trainers or architects, 19% of the clients are in the media and tech business, 23% in the culture industry and the remaining are shops, restaurants, workshops and charities. Pioneering Social Enterprise in Hackney: this programme, developed by Mr. Millington, has the aim to support new co-operative and social enterprises in 4
www.hced.co.uk/premises
Hackney. HCD does not limit its work to the provision of workspaces, but also helps people develop their ideas of business. This is the second main service that HCD provides Hackney with, in order to achieve its mission. As they explain “We believe passionately that social enterprise in its many forms offers individuals the opportunity to come together to create businesses that are better for them and society.”5 This service provides support in business planning, market analysis, design of products and services, change of management structure, conversion into a new legal structure as CIC or co-operatives, strategy for rapid economic growth, preparation for trading in the first year. It is not a coincidence that HCD supports the formation of new social enterprises and cooperatives. It is a clear part of its mission and, in addition, “Statistically, Social Enterprises recruit far more employees from the local area. In the most deprived communities, they are more likely to focus on addressing social and financial exclusion. 52% of Social Enterprises also actively employ people who are disadvantaged in the labour market.” (HCD, 2015) Social Enterprises are more likely than conventional businesses to employ people from ethnic communities and at competitive wages. (Sam Obeng-Dokyi, Mapping London’s Ethnic Minority Social Enterprises, 2007). Social enterprises in the most deprived communities are more likely than social enterprises in the least deprived to focus on creating employment opportunities (32% vs 17%), addressing social exclusion (20% vs 12%) and addressing financial exclusion (15% vs 6%)(The People’s Business, Social Enterprise UK, 2014) English my way and Learn my way: these two programmes are set up to help people acquire basic skills for their social integration. The aim of these is to enforce the knowledge of English for foreign people and the use of the internet
5
www.hced.co.uk/pioneering-Social-Enterprise-in-Hackney
and computer. These courses are clear examples of empowerment for disadvantaged people. Training courses, events and workshops: HCD, together with partners as Cooperative London and Principle Six, organises events and workshops to improve the network of cooperatives and social enterprises in Hackney. Gillet Square cultural events: every year HCD organises events for Hackney people and rents out the square to whomever wants to run new events. HCD provides all the equipment necessary to arrange events such as concerts, art exhibition or events for kids. 4.2.5 Gillet Square. In the heart of Dalston there is a place that represents the main project of HCD, Gillet Square. Surrounded by Bradbury Street and Kingsland Road, this is not just a place, it is the reason why this company can be considered a good example of urban regeneration through community-led enterprises. The history of this place is 25 years old. As Adam Hart explains, Hackney and particularly Dalston were totally different many years ago. “In the 1980s, there were some riots due to the ethnic tensions and social exclusion. During the early 1980s, the manufacturing industries collapsed, and a lot of warehouses closed. There was a 26% of unemployment. The consequence was the emergence of a huge squatter population in the old factories.”(Appendix 1) The area of Gillet Square had previously been a car park for years, and the nearby warehouses were abandoned during the 1980s. The place quickly became a source of disadvantage. “At that time it was a disused car park surrounded by derelict buildings, inhabited by drinkers and drug dealers, and avoided by the local community.” These are the words of the architects of Hawkins/Brown studio, which worked to the renewal of this place with HCD. Adam Hart also confirms the description of this place:
“Before the renewal, the square was a terrible place always attended by people with drug and alcohol problems and by homeless. It was not a safe place, it was where the problems were hidden.” (Appendix 1) As explained above, the building between the car park and Bradbury Street was assigned to HCD from the Council as place for its business. A new space for the community began to be a key goal for the staff members of the company. “This project was the result of three development projects: in 1996, we operated the redevelopment of Bradbury Street, in 1999 we renewed the market trading units and in 2004/5 we built the Dalston culture house.” (Appendix 1). In 2006 Gillet Square took the current aspect and the HCD could give this place back to the local community. The key characteristic of this project is the engagement of different stakeholders in the regeneration process: the public local government, the private sector as technic developer of the project and HCD as expression of the local community organised in a business structure. HCD had the idea to design the new public space with the contribution of the community. “We organised some open days and asked feedback from local community. There were several communities in Dalston and we tried to involve all of them. We had to structure meetings with all the different parts of the neighbourhood.” (Appendix 2). It is clear from the first steps that this project needed to achieve the endorsement of different parts of the local communities, such as the businesses and the ethnic minorities. Gillet Square is: “The culmination of many years’ exploratory work, in consultation with the local community and with the assistance of a high-quality design team (architects Hawkins/Brown, Stock Woolstencroft, Turkington Whitelaw and others). Through this process a coherent and uplifting vision for the area has emerged. […]This perception is conditioned by an appreciation of Jane Jacob’s famous four conditions for successful city neighbourhoods:
Mixed use (housing, retail, office, workshops etc) Small blocks (intricate layouts, many corners, avoidance of long stretches) Aged buildings (for aesthetic and economic reasons, allowing significant elements of low rental) Density (achieving critical mass, community safety).” (Hart A., 2003, p.239).
Nowadays Gillet Square gives place to shops, offices, workspaces and an international jazz club as “The Vortex”. Its name is renowned in London and the cultural programme offers events for every age and kind of people. The creation of a renewed space where businesses and local people can co-live is the goal achieved by HCD, but the management of this place is also an important element that must be taken into consideration. From many years, HCD has employed a Creative Producer who has the task to organise events in the context of Gillet Square. The current producer is Clarissa Clayton, who illustrates her job in this way: ”My work is more than just managing events. I can use a number of resources, we have a lot of equipment to run events as gazeboes, chairs, tables, instrumentation for live music. HCD also has a permanent events licence for activities in the square, which makes it a lot easier for us to run events in the square. With this, we can respond to proposes quicker. These resources help me run events, but the real challenge is that I do not have a budget, so for every event we need to raise money and other resources as volunteers.” (Appendix 3). The community engagement continues to be an important element of Gillet Square. As Mr. Ellison explains, the relationship between HCD and the community of Dalston is in permanent evolution: “To understand what people want in Gillet Square we do surveys during the events. Some years ago, an anthropologist and an artist studied what people think and want from Gillet square. They carried out a work for a whole year, interviewing people in the square about Hackney, their life and what they thought about the new space. Last July
we had a special event in Gillet square: an open discussion about the public space. We invited many different stakeholders, from the council, community organisations and local businesses, to share their idea of the space and its mission.” (Appendix 2). Also Mrs. Clayton describes how her work is a continued comparison with the people around the square: ”We support local groups that want to organise activities in the square. For every event, we think about how we can involve locals, and we engage other community organisations. We also ask local people to help us as volunteers. We also have set up a group call “Gillet square action group”, which is open to everyone who wants to attend the activities going on in the square. The group talks about how to involve people and create new kinds of events. Every event is free-access. Most of the activities are thought in order to get people involved not only “coming and watching”. We also think of activities for different kinds of people from the younger to the older.” (Appendix 3). In 2012, Gillet Square was rewarded by the Academy of Urbanism with the “Great Place Award”. This recognition is the confirmation of a long and well-done work with local communities for their interests. As the Academy argues: “What is most remarkable in all this, is the commitment of the local community shown by their ‘joining in’ and sharing of a long term vision that has resulted in the square and its constituent parts making a very significant, vibrant and inclusive contribution to the community, becoming a physical testament to what can be done if the special ingredients are found and the right formula applied.” (Lumb D., 2011.) 4.2.6 Budget. It is strictly important to analyse the economic aspects of HCD in order to determine if this company is able to be autonomous as a community-led enterprise. The article 56 of the Company Acts identifies the aims for the profits of the company: “to generate reserve for the continuation and development of the company and to sustain social and charitable objectives of this”. This is a typical characteristic of social enterprises in general. The main difference from traditional businesses is the re-investment of profits
inside the company for its improvement. As table 9 shows, HCD has achieved a reserve of capitals in fixed assets of more than 5 million £. This is an important element of stability because allows HCD to tackle moments of crisis. Another important issue is HCD’s capability to create income to support its services. As described by table 10, the rents of properties are the main incomes for this company. For the 2015-2016 Budget the rental incomes are estimated at 443.813£ and the Service Charge for the use of the different spaces amounts to 92.000£. It is important underline that the higher rent is from Bradbury Street the first building owned by HCD. The reason is the presence of many office, shops and workspaces inside this. These figures shows the capability of HCD to use its first asset. These resources are not enough to support the various services of HCD, hence each manager has to look for additional funds for its project. For example, 12.750£ have been found for Gillet Square this year and the UBS bank supports the Pioneering Social Enterprise in Hackney programme with a grant of 36.500£. The other revenues amount to 27.500£ and are reserved to other services. Under the voice “Other Incomes” there are “Hiring of rooms”, “Insurance Reimburse”, “ Bank Interest”, ecc… These have an amount of 41.483£. The total expected income is621.464,25 £. The expenditure is divided into different item costs, such as Service Charge Expenditures, Property Expenditures and Salaries. This last voice in particular is the highest. HCD has spent 288,465.52£ that is the 47% of the total outcome. The other costs are linked with the management of properties. The company sustains these expenditures in order to decrease the rent for the tenants. The total amount of the outcomes is 612.416£. This means a surplus for the trading year 2015-2016 of 9.047£. This expected surplus for 2016 is less than the result of the last two years. In 2014 HCD registered 13.446£ and in 2015 29.370£. This is due to the renewal of the property in Downahm Road and the consequent lack of rents.
Table 9. Balance Sheet at 31st of March 2015.
2015
2014
5,057,936
5,058,083
86,949
75,902
29,689
45,103
Total Current assets
116,638
121,005
Creditors: amounts falling due within one year
-302,38
-298,52
Net Current liabilities
-185,74
-177,51
Total assets less current liabilities
4,872,194
4,880,571
Creditors: amounts falling due after more than one year
-541,77
-579,52
4,330,422
4,301,052
3,431,184
3,431,184
977,713
977,713
-78,475
-107,85
4,330,422
4,301,052
Fixed assets Current assets Debtors Cash at bank and in hand
TOTAL Funds and reserves Revaluation reserve Capital funds General reserve Members Fund
Table 10. Budget 2015-2016 of HCD. Rental Income: Excl. VAT Bradbury Street Rent Receivable
178.281,63
Cooperative Workspace Rent Receivable
79.042,12
Downham Road Rent Receivable (See void)
32.340,00
Gillett Street Rent Receivable
32.062,42
Kingsland High Street Rent Receivable
55.073,89
Dalston Culture House
67.013,42 443.813,48
Service Charge: Excl. VAT Bradbury Street Service Charge Receivable
42.645,95
Cooperative Workspace Service Charge Receivable
20.380,88
Downham Road Service Charge Receivable
0,00
Gillett Street Rent Service Charge Receivable
3.562,49
Kingsland High Street Service Charge Receivable
10.746,44
Dalston Culture House
14.671,14 92.006,90
Voids - Downham Road
32.340,00
Bad Debts 1.5% (Gross Rent & Service Charges Rec)
0,00 32.340,00
Total
503.480,37
Revenue Projects: LCD Coop/Business Support
8.750,00
Online Basis
500,00
Tinder Foundation
5.000,00
One Hackney Pilot
13.000,00
UBS
36.500,00
Gillett Squre Project
12.750,00
Total
76.500,00
Other Income: Excl. VAT
Hiring of Rooms/Desk Space
14.500,00
Insurance Reimburse
2.378,88
Deposits/Refund on Lease
6.405,00
Loan Repayment by Tenant
6.000,00
Legal Fees Received to Process Leases
2.100,00
Bank Interest Receivable
0,00
Other Premises/Use of Other Facilities Income
10.100,00
Total
41.483,88
Total Expected Income
621.464,25
EXPENDITURE: Service Charge Expenditure: Excl. VAT Services Administer by Premises Manager: Cleaning & Materials + Sanitation
29.400,00
Refuse Collection
4.800,00
Additional Cleaning/Gardening/Window Cleaning
3.000,00
Decoration include external Cladding and Painting
15.000,00
Flooring
3.000,00
Drainage & Plumbing
2.500,00
Heating/Electrical
6.000,00
Keys
500,00
Joinery
1.300,00
Maintenance
1.500,00
Roofing
1.500,00
Security
2.500,00
Signage
2.000,00
Statutory Obligations
5.000,00
Structural (External/Internal)
5.000,00
Window & Glazing
2.500,00
Contingency
1.000,00
Total
86.500,00
Other Property Expenditure: Excl.VAT Advertising /Publicity
0,00
Rates Liability 2015/2016 (Empty & HCD Use)
1.464,00
Combined Insurance + Lift Cover
18.882,47
Cabin/Office
5.000,00
Utilities: Heat & Light / Water
36.500,00
Utilities Debt
15.600,00
Legal/Technical Fees
2.980,00
Loan Repayment/Overdraft
41.775,00
Head Rent (CWS)
26.000,00
Total
148.201,47
Establishment Overheads: Excl. VAT Advertising/Publicity/Annual Reports
3.400,00
Photocopier Usage/Cards Purchase
1.320,00
Photocopier Rental (2)
3.600,00
Telephone & Internet Broadband
6.950,00
Web Management
350,00
IT SLA
3.250,00
Postage / Franking Machine Rental
600,00
Stationary & Consumables
3.500,00
Office Sundries
750,00
Audit
8.000,00
Legal/Technical Fees (General Issues)
0,00
Content Insurance
1.533,46
Office Equipments/Equipment Repairs
3750,00
Management Meetings/Entertainement /AGM/Misc
2.000,00
Library/Subscriptions
1.950,00
Conference & Seminars
1.750,00
Bank Charges
1.500,00
VAT Disallowed (PE) (Not Reclaimable)
0,00
Total
44.203,46
Direct Revenue Project Expenses: Gillett Square Direct Expenses
12.750,00
One Hackney Pilot
7.150,00
Total
19.900,00
Grand Total Before Staff Costs
298.804,93
Salaries+ Employers NIC @ 13.8%
Premises & Maintenance Manager (35 Hrs)
36.278,99
Deputy Director (32 Hrs)
51.194,91
Tenant Support Worker Wkr (35 Hrs)
35.354,93
Director (35 Hrs)
58.002,27
Administrator (35 Hrs)
25.108,38
Business Support & Skills Manager (35 Hrs)
43.225,34
SE Enterprise Dev Manager (35 Hrs)
36.244,85
Stakeholder Employer Contribution 3%
3.055,86 288.465,52
Other Staff Costs: Staff Travel/Expenses
1.500,00
Personal Accident & Sickness Cover & Prof. Idemnity
1.516,05
Vortex & GSquare Site Management
19.680,00
Staff Training/Temporary/Volunteers
2.450,00
Total
25.146,05
Total Expected Expenditure
612.416,50
Surplus/(Deficit) for the year
9.047,75
APPENDIX 1 Adam Hart. Former CEO of HCD How did you finance the project of Gillet square? The council did not spend a lot of money. Most of them came from the national government about 700.000, 5/600.000 from the city hall, 200.000 from the TFL and other from social banks. The initial cost prevented was 1.2 mln. The final cost was 1.6 mln. We promoted Gillet square again the idea of gentrification. Dalston square is another place in hackney that is the symbol of gentrification. The developer destroyed an old theatre. Dalston square was built with the commercial funds. Gillet square was a very problematic place. We won the 100 place for London by the mayor so the architecture and urbanism office adopted the project and they send the application to the central government. There was also the coincidence of the opening of the railway. Make Dalston a new place for London were a strategic choice because it was a problematic place. The Ground Work, a collective of architectures, had 500 000 by the city hall to spend in environmental projects and we established a partnership. Gillet square is a particular project, an innovative project, because were involved public, voluntary and private sector in a unique project, it was the magic. After 6 years of planning, the square was completed. The design has to create a theatre. Before the renewal the square was a terrible place always habituated by people with drug and alcohol problems and homeless. It was not a safety place, it was where the problems were hidden. The great success of Gillet square is that we fail the gentrification. How does HCD creates the community engagement? This project was the result of three development projects: in 1996, we operated the redevelopment of Bradbury Street, in 1999 we renewed the market trading units and in 2004/5 we built the Dalston culture house. We organised some open days and we asked feedback from local community. There is not one community in Dalston and we tried to involve all of these. We had to structure meeting with all the different parts of the neighbourhood. HCD holds the license for all the public events in the square. It manages the cultural events. This is not only a local square it is an international square. How long are you here? In 1991, I was a staff members and from the 1996 to 2006 the chief. I have lived in Dalston since 1982. Do you remember Hackney in 1980s? It was a very different place in many ways. In 1980s, there were some riots, during the early 1980s the manufacturing industries collapsed, and a lot of warehouse closed. There was 26% unemployment. The consequence was the emergence of a huge squatter population in the old factories. From the beginnings of 1990s, many artists became in Hackney for the cheap rents. It was always a place of high diversity. If you were a voluntary group, the council helped you to develop abandoned building. By the middle
of 1990 things begun to change and the house market started to grow. In 1980s, you could rent a commercial place for nothing now there are very expensive prices and a lot of developers covert warehouses in houses. HCD is very lucky because we negotiated an agreement long term for Bradbury Street and Beechwood Street. How did HCD born? In the 1970s, there were a lot of squatters in London and they occupied many dwellings. In the 1980s, also, the housing cooperation increased with political support; there were lots of cooperative houses. Here there was the Hackney House Cooperative. This was a group that supported people who wanted to live in a cooperative house. Based on this experience, they thought that it would also be possible to develop business in a cooperative way. They asked local authority for a place to start businesses and received Bradbury Street, with the agreement to raise the funds to renew the entire building. The regeneration was funded with the Government money invested to increase the economic and social situation of suburban areas. This money was pushed into community organisations in order to stop conflicts. The cooperative form was the structure more used by HCD to support the community and businesses. In particular, the targets are women, ethnical minorities, and marginal groups in general. All these sections of community are included in the HCD’s constitution. How does HCD involve community? If you are a resident, if you have interest in Hackney, if you are a part of the groups listed above you can be a part of HCD. Work with community means many things. The base is strong connections with other community organisations. The picture is more complex than it seems. It is always difficult involve all community in all the decisions.
APPENDIX 2 Dominic Ellison HCD Chief executive. How does HCD engage Hackney community? In a number of ways: our members run organisations in Hackney and they have connection with neighbourhood. General meeting of our members elects the board and it decides the strategy for HCD. Secondly, we are responsive to the community. An example is the Gillet square project designed with public consultation. The events are organized with the support of community. Thirdly, we have a strong relationship with other community organisations. We also aim to help single people and work in partnership with the council as a voice of Hackney’s people. Another way [to relate to Hackney] is that all the members of board are representative of the community in different ways. For example me: I work also with the Hackney voluntary sector. The majority of our board members are part of Hackney community groups and businesses. How does HCD understand Hackney’s problems and interests? The structure described above is the answer. We also do many surveys for example: To understand what people want in Gillet Square we do surveys during the events. Some years ago, an anthropologist and an artist studied what people think and want from Gillet square. They carried out a work for a whole year, interviewing people in the square about Hackney, their life and what they thought about the new space. Last July we had a special event in Gillet square: an open discussion about the public space. We invited many different stakeholders, from the council, community organisations and local businesses, to share their idea of the space and its mission. Which were the conclusions? We received a lot of good feedbacks on the previous work. We also realized that we need to improve information about our work because only few people knew that HCD manages Gillett Square. For the future people auspicated more inclusion in the events of square. The most important result was the creation of “The Gillet square action group” which is run by different local stakeholders. How does HCD involve members? I think this is an area we have to improve. I have some doubts about the benefits derivate from our membership. Currently if you are a HCD member you can only vote at our general annul meeting and participate at discussions. We work actively with any members of Hackney so I do not know which could be the difference between being or not being a member. I know that is a benefit have a large member group for us. It helps us to run in a more closely way. Can you delineate the decision making process of HCD? We do not have a very clear line of action. Generally, if there is a large issue we discussion with staff members. I will take suggestions and opinions from them and I will take a final decision with them. If the issue has a large impact on HCD we can consult board for a decision. That could be on the scale of issue. We present the
problem to the board members, we give them all the information we have and sometimes some solution and we ask them to decide. How does HCD provide information to its members? We provide record report of board meeting, we report finance performance and all the project we run. The annual report is the most important document to provide information about what we do. We plan to create a monthly newsletter for all the members. What do you want to change in the future? For me the wider engagement of community is good, we need to improve the membership offer.
APPENDIX 3 Clarisse Carlyon. Creative manager of Gillett Square. How long are you in HCD? 5 years. Can you describe your work? My work is more than just managing events. I can use a number of resources, we have a lot of equipment to run events as gazeboes, chairs, tables, instrumentation for live music. HCD also has a permanent events licence for activities in the square, which makes it a lot easier for us to run events in the square. With this, we can respond to proposes quicker. These resources help me run events, but the real challenge is that I do not have a budget, so for every event we need to raise money and other resources as volunteers.” Another important task of my job is work in partnership with different members of community to organise events and help them to empower their activities. I am also developing a long-term strategic business plan for Gillet square to achieve more capitals. How was born the idea of Gillett square? Before, Gillett was used to be a car park. HCD started to manage the building around and the car park space. HCD involved the council, other organisations and a collective of architects to re-planning the area. The project was funding by the Major of London. How do you involve community in the activities of Gillett square? In a number of ways. First, we support local groups that want to organise activities in the square. For every event, we think about how we can involve locals, and we engage other community organisations. We also ask local people to help us as volunteers. We also have set up a group call “Gillet square action group”, which is open to everyone who wants to attend the activities going on in the square. The group talks about how to involve people and create new kinds of events. Every event is free-access. Most of the activities are thought in order to get people involved not only “coming and watching”. We also think of activities for different kinds of people from the younger to the older.” Can you describe the financial management of Gillet square? We run different size of events so in some cases we have to raise money to do them. We often organise events in partnership with other organisations. For example, we had a big music festival in partnership with Barbican Centre and they raise money for it. I work for HCD so it pays my wage and the events directly organise by it. We are also taking in consideration commercial events to promote brands and in these cases ask a higher pay for rent the square, in order to create a budget to organise 3/4 other community events.
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