FINANCING GREEN INFRASTRUCTURE IN TIMES OF AUSTERITY

...THE CASE OF LIVERPOOL, UK

by Dr Ian C. Mell, Department of Geography & Planning, University of Liverpool

 

Abstract

The UK government austerity measures have placed extensive pressures on Local Planning Authorities (LPAs) to find budgetary savings whilst still meeting key service delivery targets. As a discretionary service the provision of green and open space has seen its funding cut significantly. Liverpool in north-west England has been one of the cities most affected by the austerity measures losing approximately 58% of its budget. As a consequence Liverpool City Council (LCC) are making difficult financial decisions regarding which services to support. One option being pursued is a review of the city’s green and open space resources to reflect upon how, where and what services are “required”, and where alternative sources of funding can be located. This process includes a Green & Open Space Review commissioned by the Mayor’s office, which is currently consulting and reporting on how LCC can maintain its green and open spaces through a suite of different funding mechanisms. The following paper reports on the progress of this ongoing process and the options currently under review by LCC.  

 

1- Introduction

Since the election of a Conservative-Liberal Democrat government in 2010/11 the city government of Liverpool, UK (Liverpool City Council, hereafter LCC) has witnessed an approximate 58% cut to its budget. Such drastic cuts have forced LCC to make difficult decisions regarding which services to fund, and which to make savings from. This is further complicated by the need to deliver minimum service levels for statutory programmes leading to additional funding restrictions being placed on discretionary services of which Green Infrastructure or green and open space is one.
In light of the changes to Local Planning Authority (LPA) funding LCC and the people of Liverpool have become increasingly engaged in discussion reviewing how the city can (a) finance services, (b) protect Liverpool’s green and open spaces from development, and (c) where necessary identify alternative mechanisms to fund Green Infrastructure in perpetuity. Whilst this ongoing debate is a welcome forum for information sharing it has also led to confrontations, as members of the public appear unwilling to trust the judgement of LCC regarding the long-term protection of the city’s landscape.
The following paper outlines the background to these arguments and offers an examination of a number of the public, private and community-led funding options currently being explored by LCC to meet the financial challenges of landscape management. Using the ongoing Liverpool Green & Open Space Review (LG&OSR) as a sounding board the paper argues that the set of complimentary options drawn from public funding sources, i.e. developer contributions, private investment from sponsorship or philanthropic gifts, and community-led asset transfers could provide a more flexible and sustainable mechanism to fund Green Infrastructure management in Liverpool.

 

2- Green Infrastructure in Liverpool

Liverpool is a city in the north-west of England with a population of approximately 400,000. At its height in the early twentieth century the city was home to over 800,000 people who were employed in the city’s various technical industries (Sykes et al., 2013). The city is framed geographically by the River Mersey to the west separating Liverpool from the Wirral Peninsula and by the Merseyside greenbelt to the east and south. Liverpool also has a history of investment in green and open spaces. Throughout the 1800-1900s wealthy philanthropists funded the development of a number of Liverpool’s most successful and popular parks, including Sefton Park. As a result the spatial layout of Liverpool’s green and open space could be considered as a ring of parks around the city centre. Whilst some have argued that the development of these sites was to promote well-being in the city, it could be also be suggested that their purpose was to ensure a healthy workforce (Sykes et al., 2013). The location and context of these green spaces within the wider Liverpool green network is though unquestioned, as they offer a series of spaces, i.e. a stepping stone landscape of hubs, that link different communities with the city’s landscape (Jongman & Pungetti, 2004; Liverpool City Council, 2015). Within the city Liverpool has approximately 200 sites which LCC classifies as green and open space of which 109 are considered as parks (Liverpool City Council, 2015).
Furthermore, although Liverpool is reported to have approximately 62% green and open space (The Mersey Forest, 2010), which includes land owned/managed by LCC and areas in private ownership, it is not all of high quality or well maintained. Moreover, the costs of some sites, for example crematoria, cemeteries or Liverpool’s two Green Flag status parks (Stanley Park and Sefton Park), are significantly more than the management regimes for pocket parks and incidental spaces. The spatial distribution of the city’s green and open spaces are therefore considered by some in Liverpool to be inequitable, with a greater propensity for higher quality and greater quantity of sites being located in the more affluent south of the city. This view, however, is only partially correct, as the costs of maintaining the city’s parks, gardens and open spaces are approximately the same in north and south Liverpool (Liverpool City Council, 2015).
Each of the issues described above has had an influence on how LCC and local communities value and interact with the Liverpool’s green and open space. The view that LCC is managing the city’s landscape ineffectively has developed in parallel to the perception that the city has negotiated land sales for development on a small number of green spaces. As a result Liverpool has witnessed a groundswell of opposition to development which manifests itself in local campaign groups. In part the negative publicity being received by LCC regarding the sale of green spaces led directly to the establishment of the G&OSR and the city-wide review of how fund landscape management in the long-term (Liverpool Echo, 2015b, 2015c, 2015a). 

Fig. 1. Local environmental campaigning in Liverpool

 

3- The development context of Liverpool

Urban development in Liverpool has a long history of both positive and negative investment. As the city expanded in the 1800’s home, amenities and infrastructure were developed to service the city’s commercial and industrial activities, which saw an expansion of the city’s housing, road and rail, and green infrastructure resource base. However, as the city’s industrial offer declined Liverpool saw the beginning of stagnation in some communities and the partial breakdown of community bonds. These issues could be considered to hold a spatial dimension with communities in north Liverpool feeling the most significant impacts of unemployment, poor health and well-being, and the effects of a weakening housing stock and public realm (Parkinson, 1988; Couch & Karecha, 2006). One of the consequences of such change was the identification of areas of north Liverpool, for example Anfield, Everton, Kensington and Kirkdale, who were eligible to receive central government funding from the Housing Market Renewal and Pathfinder schemes (Sykes et al., 2013). Although significant efforts have been made in Liverpool to regenerate these areas there has been a mixed reaction to their successes. Some would argue that new housing and community amenities have been delivered, whilst other would point to the wholesale removal of housing and streets as a major reason why the social bonds of the areas have worsened. Moreover, because of the alternative viewpoints associated with these programmes there is a mistrust of LCC and their development agendas in many communities in Liverpool (Nevin, 2010). Some communities therefore feel that the city has let them down in terms of delivering on promised investment and as a result view development, especially on amenity spaces such as a parks, as negative. A further consequence of this social and political mistrust has been LCCs attempts to regenerate areas in north Liverpool which lacks commitment from developers to invest in the area. This is partially a reflection on the perceived animosity between communities and the city council but also illustrates the lack of economic viability associated with development in these locations (Hatherley, 2013).
In contrast to the lack of trust of LCC witnessed in north Liverpool there is an alternative mistrust of the council in south Liverpool communities. South Liverpool is characterised by more affluent communities who appear more engaged with planning and development issues which affect their areas of the city. This has been witnessed in the growing voice of local environmental campaign groups who have vociferously called for no development to occur on green or open spaces. The dilemma in south Liverpool differs from the north of the city as developers want to build in the south, as they see it as a being economically viable. Unfortunately, the locations they have identified as potential investment sites have included parklands, incidental green spaces or amenity areas used by local communities. Therefore, although several such sites are not classified as parks and/or gardens they do hold values for local populations. The campaigns to save Sefton Park Meadows/Park Avenue incidental green space, St Julie Wood, the Festival Gardens site and parts of Calderstones Park are all framed as campaigns to save functional and locally valued green spaces from development. The difficulty for LCC is that the costs of maintenance and the location of some spaces make them suitable for development. Moreover, some sites have been identified as providing opportune locations for high value housing which would, potentially, increase the revenue the city receives from local taxes. 

 

4- Liverpool Green & Open Space Review

To assess the current feeling within the city about the development landscape the Mayor of Liverpool established the Green & Open Space Review (LG&OSR) in 2014/15. The review is chaired by a local environmental activist who presides over of a Board of ten people drawn from LPA officers/Heads of Service and from local academic institutions1, businesses and the third-sector2. The Board was charged with investigating alternative options for the long-term management of the city’s green and open space. Initially the review undertook a desk-based review of the financial and management arrangement currently in place in Liverpool to manage the city’s landscape. This was supported by a series of public consultation events were held across Liverpool to gather data about the quality and quantity of the city’s green and open spaces, barriers to use, where improvements could be made, and what possible funding options were available to LCC to reduce the financial commitments on the city to fund/manage its green spaces. The Board’s Chairman also undertook an extensive tour of Liverpool and visited each of the green and open spaces managed by LCC3. At each site a rapid on-site appraisal was conducted to review a number of principles, i.e. access, visible maintenance issues, on-site amenities and public use. The outcomes of this tour were used to contextualise the on-going discussions of value, use and function of different green and open spaces across the city. In addition to the consultation events three further thematic workshops were held exploring alternative approaches to funding. These events including presentations from organisations who were perceived to have worked innovatively in financing green and open space management outside of direct LPA funding. This first round of activities was used to populate the Liverpool Green & Open Space Interim Report (Liverpool City Council, 2015), and was followed by a further round of consultation events in January 2016. It is envisaged that in late spring 2016 that the final report will be released. LCC have also proposed that the findings of the report will be used shape the Draft Local Plan, with specific relevance to the creation of a connected green network for the city based on landscape ecology principles (Farina, 2006), and to provide a baseline set of options for the future funding of green and open space in Liverpool1. 

 

Fig. 2. Liverpool Green & Open Space Review Board Interim Report

The following sections present a discussion of how these issues could be addressed using a range of public, private and community-led funding mechanisms. What they aim to show is that green space planning and management does not need to rely solely on existing LPA or central government financing. Alternatively, it suggests that LPAs can draw from a wider set of options which offer short, medium and long-term solutions to the Green Infrastructure management. Each sets of options will be supported by a discussion of examples currently being debated in Liverpool to illustrate how each could be engaged to establish a more sustainable form of funding for Liverpool’s landscape. 

 

5- Alternative funding options: Public

The public funding models available to LPAs are relatively well established in the UK. Developer contributions in the form of Section 106 (S106) agreements, commuted sums, and more recently Community Infrastructure Levy (CIL) payments have all been discussed providing avenues for LPAs to generate capital and revenue funding for Green Infrastructure (Roe & Mell, 2013). S106 payments are potentially the most frequently used form of financing, as well as, being the most well-known (Cullingworth et al., 2015). These payments are negotiated between LPAs and developers to fund investment in the additional infrastructure needed to service added housing, commercial or transport infrastructure. Funding is normally allocated to specific capital projects but can also be assigned to revenue spending for maintenance. The main drawback of this process is that it can be difficult for LPA officers to negotiate significant sums, as developers often claim that if higher payments are required to gain consent then the development may become economically unviable (Wilson, 2013). The focus of negotiations is therefore central to the success of attracting funding, as LPAs need to show the essential nature of infrastructure investment in order to ensure financing conditions are placed on development (Rydin, 2013). The proposed developments in Anfield and on Everton Park in north Liverpool and Calderstones Park and the Festival Gardens site in the south of the city could potentially be used generate S106 funding (Liverpool City Council, 2012).

One recent mechanism that has been proposed to meet this need is the use of CIL, which has been reported as a way of ensuring that new development contributes to the delivery of strategic investment (Lord, 2009). CIL schedules are generated by LPAs to establish what investment is considered essential to a specific area. They can include new community assets, for instance schools or hospitals, or strategic transport infrastructure. In practice all development over a certain size (m2) would contribute to the delivery of CIL projects. This does though limit the nuanced approach of S106 agreements by removing the ability of LPAs to allocate funding to smaller or community-scale Green Infrastructure projects (Mell, 2012). In Liverpool the developments of new infrastructure associated with the Liverpool Waters, the University of Liverpool, and Liverpool John Moores University developments could be thought of as projects that could attract CIL payments (cf. Atlantic Gateway, 2015), unfortunately Liverpool does not currently have an adopted CIL investment programme.  
A third approach open to LCC is the development of endowment funds that could be used to meet the long-term maintenance costs of funding. Based on the retention of land sale receipts as an endowment which uses the interest paid on the fund to meet maintenance costs, such a process may lower the financial responsibilities placed upon LCC (Hale & Sadler, 2012; Kear, 2007). Furthermore, if a city-wide endowment process is established then we may see a greater equity of funding, as although land sales may occur in specific locations the funds could be used to meet the needs of the entire city. LCC is currently exploring the possibility of using endowment funds to in Everton Park where the sale of a section of the park is being sold for housing with the development contribution being used to form an endowment fund manged by the Land Trust. However, although endowments provide funding they also require the sale of land. Local communities are often reluctant to accept such sales even where the profits are used to meet funding needs, as they often lose important community resources, such as green spaces, in the process. Managing the development of endowments is thus a complex process. However, some locations including Milton Keynes have been successful in managing endowments over a prolonged period highlighting the possibilities they provide (Lane Fox, 2014).
Finally, changes to local council (a tax on residents to fund local services) or businesses taxes could be used to raise funds for Green Infrastructure. Policy Exchange, a UK-based think-tank, proposed that by charging a specific proportion of local taxes to fund green space could be one mechanism to ensure that finances are available for LPAs to meet needs (Dryson, 2014). Moreover, through the identifications of a specific contribution that would be allocated to green space management LCC would be able to inform residents that their taxes are being directly used to fund green space, as is the case with local emergency service contributions. Such a programme of taxation could include a proximity caveat whereby those residents/businesses located nearest to green spaces would pay more because they benefits most significantly from these resources (Geoghegan, 2002; Willis & Whitby, 1985). In Liverpool such a premium is noted with house prices located next to the city’s high quality green spaces, Stanley Park, Sefton Park and Woolton Woods, being higher than in other areas of the city.

 

6- Alternative funding options: Private

Although there is a less well defined literature on how private financing can be used to meet local development needs compared to LPA-led options they do offer alternatives which are more adaptive to the focus and scale of investment needed (Wilson & Hughes, 2011). Several approaches can proposed to fund Green Infrastructure including sponsorship of green spaces across a city, buying sites and managing them for the city or providing larger development contributions to obtain planning consent. All of which lower, to an extent, the responsibility placed on LPAs to deliver capital investment and revenue spending. In Liverpool each of these options could be used to meet local needs, however, there is a lack of detail as to whether each has been investigated.

For example Liverpool has two top-flight soccer teams who could be approached to provide endowments to fund the management of the city’s soccer fields over a given period. This would potentially decrease the costs to LCC of managing these cites, would provide a much-valued resource for local teams/communities, and would provide positive public relations for both clubs. Whilst both teams engage in community outreach and philanthropic activities, the sponsorship of the city’s sports pitches could of great value to the city. Similarly, the city also has national-scale developers and land owners who could sponsor specific sites or purchase Green Infrastructure resources and manage them for the city of Liverpool. The developments of Liverpool Waters, as well as, the wider Atlantic Gateway project could use the Liverpool Green Infrastructure Strategy as a strategic base for investment in a city-wider green network (Green Infrastructure North West, 2010; Mersey Forest, 2013). It may also provide them with additional esteem within the local development content allowing them to negotiate investment objectives from a position of strength. 

 

Fig. 3. High-end Green Infrastructure investment, Liverpool City Centre

The sale of land and endowment models to developers and/or businesses could provide further opportunities for LPAs to work with investors to negotiate mutually beneficial development. However, the management of such a process would need to be carefully monitored to ensure that the management needs of the LPAs, the access rights of the public and the functionality of a Green Infrastructure was not compromised by a change of ownership (Webster, 2007).
Finally, we could argue that developers should simply contribute more to the development and managed of the landscape. Developers, however, argue that S106, CIL and/or commuted sums make investment unviable, which could alternatively be seen as a fall in profit margins. Moreover, many developers consider themselves to already fund Green Infrastructure within developments and argue against need to allocate additional funds. It could be argued though that the creation of a liveable and attractive investment environment requires a high quality landscape. Therefore investing in Green Infrastructure may offer a ‘win-win’ solution for developers and LPAs to improve an area, as investors will be attracted and people will want to live there. Thus returns from local taxes could increase, house prices (and associated sales) could improve and the local economy could be boosted (Andersson et al., 2014; Geoghegan, 2002; Caspersen et al., 2006; Mell et al., 2013). The sale of land and endowment models to developers and/or businesses could provide further opportunities for LPAs to work with investors to negotiate mutually beneficial development. However, the management of such a process would need to be carefully monitored to ensure that the management needs of the LPAs, the access rights of the public and the functionality of a Green Infrastructure was not compromised by a change of ownership (Webster, 2007).

Finally, we could argue that developers should simply contribute more to the development and managed of the landscape. Developers, however, argue that S106, CIL and/or commuted sums make investment unviable, which could alternatively be seen as a fall in profit margins. Moreover, many developers consider themselves to already fund Green Infrastructure within developments and argue against need to allocate additional funds. It could be argued though that the creation of a liveable and attractive investment environment requires a high quality landscape. Therefore investing in Green Infrastructure may offer a ‘win-win’ solution for developers and LPAs to improve an area, as investors will be attracted and people will want to live there. Thus returns from local taxes could increase, house prices (and associated sales) could improve and the local economy could be boosted (Andersson et al., 2014; Geoghegan, 2002; Caspersen et al., 2006; Mell et al., 2013). 

 

7- Alternative funding options: Community-led

The third alternative funding stream is drawn from community-led initiatives. Although such approaches are harder to define due to the changing nature of community groups and the funding which supports them, they do offer a wealth of valuable knowledge about the value of local green spaces. Community groups and local campaigns are also supported by enthusiasm, and in many cases knowledge of the projects and/or sites they are addressing. As a result community groups could be viewed as holding strong social bonds with the local environment, which can be used to promote a longevity of engagement with green space planning and management (Head, 2007; Fraser et al., 2006).
Community-asset transfer is one such approach which is being promoted to allow local communities to take legal responsibility for the management of local green and open spaces. These transfers are developed by LPAs with local groups/communities who take on the funding, management and liabilities of ownership of local green spaces (CABE Space & Asset Transfer Unit, 2010). These can vary in size from small neighbourhood or pocket parks to larger sites. Transfers do though require local communities to illustrate their capacity to undertake ownership in terms of time commitments and technical expertise. Herein lies one of the main operational issues: some communities have the aspiration to manage local green spaces but do not have the knowledge of management regimes, funding generation or the legal ramifications of ownership (Thorlby, 2011). LPAs and landowners must therefore be thorough in what transfers they approve and which community groups are eligible to apply for such transfers. In Liverpool sites around Menlove Gardens and areas of Speke have both been identified by local campaign groups (including Friends of groups) as locations that could benefit from transfers and are being explored by the city and local communities.
Although asset transfers may be difficult to action due to the lack of experience and/or knowledge of some communities they can help generate funding through local-scale funding/crowdsourcing. Whilst such activities can be difficult, there is a wealth of experience within the third-sector and local community groups regarding which funds are accessible for green space management. For example the Heritage Lottery Fund/Big Lottery Fund, Landfill Tax Credits/Biffa Awards or tree planting grants from the Forestry Commission, England’s Community Forests or the Woodland Trust all have grants which local communities are eligible to apply for (Department of Communties and Local Government, 2012). The success rate for applications is though relatively low and groups must have the capacity in term of time and expertise to frame their proposals to the funder’s calls. Where funding is allocated, as in the Merseyside, then environmental organisations such as The Mersey Forest have been a useful agency in identifying key issues and deliverables, as well as, providing more technical assistance (Mersey Forest, 2013).  
A further option available for communities is to take informal ownership of a space or informally manage it to maintain the socio-ecological value of a space to local people. Projects as Incredible Edible in Todmorden and other guerrilla gardening projects across the UK have been successful in turning incidental or underused spaces into local resources (Thompson, 2012). Although the success of such projects varies depending on the drive and commitment of the project groups such activities do provide a sense of empowerment for local people who wish to ‘do something’ (Measham & Barnett, 2008). Moreover, although ‘Friends of’ groups do not fulfil the same role they do offer a community of people who are prepared to volunteer to undertake green space management (Firth et al., 2011). In Liverpool the Friends of Walton Hall Park are one such group who have a semi-formal role in managing the park. Likewise in Menlove Gardens and Score Lane Gardens the local communities organise plantings, litter picks and funding events. Therefore although local groups may not have the legal responsibility to manage a green space they do provide informal assistance and maintenance.  There are, however, legal implications of such uses which need to be considered. 

 

8- Future funding opportunities for Liverpool’s Green Infrastructure

Each of the approaches noted above illustrate that funding can be sought from a range of public, private and community-led sources. They also highlight that complex and sometimes difficult conversations are needed between stakeholders to identify what finance is (a) available and (b) appropriate to any specific green space. In Liverpool these issues are all being investigated through the G&OSR as LCC attempts to limit the negative impacts of the UK government’s austerity measures on its service delivery. However, although LCC is engaged in a review which aims to facilitate a more sustainable approach to funding for green space, the immediate discussion of these options is not straight forward. Partially this reflects the difficulties LPAs have historically had when dealing with developers but also recognising the engaged nature of parts of the city’s population, which reflects the politicised nature of local government in Liverpool (Sykes et al., 2013). What this means is that all decisions regarding green and open funding, management and/or redevelopment are publically visible and are often played out in the local media. LCC and the Green & Open Space Review are thus attempting to add transparency and evidence to this process to present stakeholders with a suite of funding options that are suitable for Liverpool. This is an ongoing and long-term process.
The funding of Liverpool’s green and open space is currently subject to a sets of constraints which are impacting on its delivery of discretionary services similar to those seen across the UK. Following the release of the UK government’s austerity measures, city councils and elected Mayors have had to make difficult, and often complex, choices, regarding how they manage the delivery of both statutory and discretionary services. Due to the visibility of landscape issues in Liverpool following the controversial development proposals for Sefton Park Meadows/Park Avenue incidental space, the city’s leaders have taken the more proactive step by reviewing the structure and focus of its funding and management of Liverpool’s green and open spaces. By attempting to identify alternative funding sources to meet the long-term management needs of the city’s landscape LCC have taken an important first step in acknowledging that the funding streams supporting LPAs may no longer be viable. As a consequence other cities in the UK are looking to Liverpool for guidance as to how they can limit the negative impacts of central government cuts to LPA services.
Whilst the review being undertaken in Liverpool cannot, and will not, offer ‘the solution’ to funding cuts, it is envisaged that it will establish a baseline of options that can be used to meet local/city needs. By approaching funding as a suite of complimentary public-private-community led sources LCC is attempting to limit the impacts of decreased funding from the public sector. Moreover, there remain questions as to whether developer contributions will continue to provide a significant proportion of capital and revenue funds for Green Infrastructure, LCC are thus looking at private and community funding options to meet this deficit. Developers should though still be liable to fund infrastructure projects through S106 agreements, commuted sums and CIL, however, it is becoming clearer that the sums received may be lower (Payne & Barker, 2016). Therefore, we can argue that by identifying alternative funding sources from the private sector or based on community-led initiatives that the pressures placed on LPAs to fund Green Infrastructure could be lowered. 

 

9- Conclusions

Despite the rhetoric of disapproval by some community and campaign groups Liverpool’s ongoing review of how to fund its green and open spaces is a positive step in addressing funding constraints. Due to the 58% cuts in their budget LCC have been required to rethink how they fund discretionary services in the city (Liverpool City Council, 2015). The Liverpool G&OSR should be considered as a forward thinking approach to this process, and may be one that is replicated in other cities in the UK. LCCs approach to the promotion of an integrated public-private-community form of funding provides options for the city to work with central government financing mechanisms and developers, but also provides scope to engage businesses to sponsor, buy or endow funds for long-term management, and for local communities to take a legal stake in how the city’s landscapes are managed. Holding such debates in a public forum, as the G&OSR has done, helps to raise the visibility of the problems with financing and provides a platform whereby solutions can also be offered. Liverpool has therefore further steps to take to ensure that the findings of the G&OSR are enacted upon, however, the nature of the ongoing discussions and the positive response from public and private stakeholders suggests that a more sustainable approach to long-term financing of Green Infrastructure can be developed. 

 

Footnotes:

1) For clarity author is a member of the Green & Open Space Review Board

2) See http://liverpool.gov.uk/mayor/mayoral-commissions/strategic-green-and-open-spaces-review-board/ for further details.

3) The list of sites was derived from the current management plan of the city’s landscape contractors and from the LCC Strategic Housing Land Availability Assessment (SHLAA) released in 2013

4) Details obtained during personal communications with the Head of Planning at Liverpool City Council and within the LG&OSR Board meetings. 

 

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