Agenda

The economic realities of Thames Gateway are beginning to bite. Europe’s largest regeneration project is too big, too complex, too ambitious to be realisable and the money must be on the government now preparing a quiet, gradual retreat from its commitment.

Not a full-scale retreat, mind, more a retrenchment to advanced positions already well dug in. Ministers will be keener to talk up the potential of the western end of the Thames Gateway, the bits that London mayor Ken Livingstone is driving, and consigning the more fanciful projects in Barking and Dagenham and further east and south to another day.

While the next few months are bound to be dominated by the city regions agenda of David Miliband, minister for local government and communities, there will be much talk about institutions and processes getting in the way of a coherent Gateway strategy.

Unquestionably, would-be developers are suitably unimpressed by the myriad public bodies with varying degrees of control and influence over the Gateway. Nor are they much taken with time-consuming planning regulations and demands from government for sustainable, mixed communities.

And they certainly don’t buy into the Prescottian notion of developer altruism, the deputy prime minister’s unspoken requirement that the private sector recognise the moral imperative for it to contribute via lower profits to a programme of sustained housing growth in London and the South-east.

But most of all, developers and the housebuilding industry don’t see sufficient evidence of the government keeping to its side of the bargain. There is little prospect of the government delivering the infrastructure required for the Gateway programme, which the private sector argued was a sine qua non from the very outset of the sustainable communities agenda two and a half years ago.

The signal of the retreat has already been sounded. Opening a Labour Conference fringe event in Brighton last month, housing minister Yvette Cooper described the Gateway as “a huge opportunity”, particularly for the London economy. By the end of it, she was reminding her audience that she was a Yorkshire MP, that the government was facing transport investment pressures from other parts of the country and that those who wanted more transport resources in the Gateway “have got to make a good case”.

So after two and a half years of John Prescott banging the drum about the national importance of the Thames Gateway, a minister in his department now wants to hear the case for public investment.

There is little point in drawing up blueprints for regeneration unless public bodies engage and involve the private sector from the outset

Expect to hear ministers invoking the Olympics as one reason why the Gateway has to be rethought. You might have thought the staging of the Games in the Lower Lea Valley might act as a catalyst for further regeneration of the Gateway. Wrong. It now appears the hard deadline of the 2012 Games will get in the way of faster redevelopment beyond the Games’ venues.

The economic window for making possible the Gateway development as originally conceived by Prescott has probably been and gone. As the economic outlook begins to darken, Gordon Brown is starting to mothball some of the big-ticket items awaiting his approval. Top of that list is Crossrail, which many Gateway advocates believe will generate huge development opportunities but which now appears to be once again stymied by Treasury intransigence.

There are several lessons from all this. First, the pace of global change, in this context the steep growth in the London and the South-east populations and the speed with which household profiles change, is too fast for our slow-changing planning system.

Second, the mindsets of the public and of the business community remain wedded to the belief that the provision of infrastructure, especially transport, is the responsibility of the state.

Third, there is little point in drawing up blueprints for regeneration, especially ones as large as this, unless public bodies engage and involve the private sector from the outset.

Fourth, Thames Gateway and the other South-east growth areas have to be considered not as separate entities but in relation to each other, to surrounding areas and to the rest of the country. The emergence of the Northern Way strategy as an afterthought is testament to the piecemeal nature of this plank of policy.

Finally, the government can guide great regeneration projects of this kind but it cannot direct them. Ultimately, the housing market remains exactly that – a market. The government can prod and push developers and housebuilders as much as it likes, but there is only one dictum that they will follow and that is the need for a return on investment.