Private sector involvement through partnership, PFI or other mechanisms is a critical component of the urban regeneration process.Todate therehasbeenlittle researchintotheperceptionsoftheprivate sector,reasonsforinvolvementin urbanregeneration andrelationshipsbetween private and public sector actors.Thispaperis basedonfocus group discussionswith actorsinvolvedin the regeneration process.Interpretation, which isfroma qualitative perspective, investigatesfourmain themes namely the rationale for private sector investment in urban regeneration; policy mechanisms to lever private sector investment; the "nancing of urban regeneration; and the alleviation of risk.
An integral part of the urban regeneration process is the role performed by the private sector in terms of stimulating property development and investment. The use of capital within regeneration raises the question of access to and availability of "nance, indeed the more extensive the scale of the development, the greater the dependence on private investment. However, from the private sector perspective there is a perception that urban regeneration projects are risky with a lack of information about the value of assets which, given the need for "nancial prudence, can lead to the by-passing of potential opportunities.
The refocusing of urban policy in the 1990s is associatedwiththeshiftinemphasisfromproperty-ledregeneration towards a broader-based partnership agenda with a focus upon community interest as exempli"ed by City Challenge and the Single Regeneration Budget (SRB) programmes. While both of these initiatives are based on the concept of bidding, a central theme of the former was the need for the local authority to forge e!ective partnerships with the private sector, voluntary organisations and community groups * a philosophy reinforced by the latter's emphasis upon the role of local communities (Adair et al., 1999). This approach was underpinned by the Way Forward (DETR, 1997a)1 suggesting a stronger focus on social aspects of urban renewal. The comprehensive holistic approach is reemphasised in the Urban Task Force report (1999a) which advocates successful urban regeneration founded upon strong democratic local leadership, public participation and the use of public "nance to attract increased private investment. In this context the continuing role of private "nance in funding existing programmes together with the new Regional Development Agencies (RDAs) is seen as a central element in realising e!ective urban regeneration. The attraction of signi"cant private sector "nancing for urban regeneration is a major challenge for government given the barriers perceived by institutional and other non-investors in urban regeneration (Adair et al., 1998).
The need for e!ective urban regeneration re#ects the critical economic role played by cities in England today. In 1991 urban areas were the home of 90% of the total population providing for 91% of the total economic output and 89% of all the jobs. The maintenance and improvement of the economic strength of towns and cities is therefore critical to the competitive performance of the country as a whole. The physical, economic and social decline of inner city areas over the past three decades coupled with the increasing growth of the suburbs has resulted in growing pressure for more e!ective urban regeneration as well as renewed interest in urban management as a critical component in the re-creation of economically competitive environments (Urban Task Force, 1999a). It is recognised that if these objectives are to be achieved, there is a need for increased partnership between public and private interests. However, in spite of the wealth of literature on urban regeneration, relatively little knowledge is available on the nature of private sector investment, the actors in the process and the conditions under which investment will or will not take place.
This paper draws upon research undertaken by the authors and funded by the Joseph Rowntree Foundation. The study involved a comprehensive analysis of both investors and non-investors in urban regeneration across a number of major cities in Great Britain. The current paper examines some of the qualitative "ndings stemming from the research and in particular draws upon evidence debated at a series of focus groups held in Manchester, Newcastle-Upon-Tyne and London (Lee Valley) to examine the perceptions of participants regarding the e!ectiveness of private sector "nance in urban regeneration. While focus groups have become an accepted technique in a wide array of environments including research (Stewart and Shamdasani, 1990), their application to date within planning has rested more with social policy matters rather than with development/investment-related issues. In this respect this research provides an important insight into the behavioural aspects of those involved in urban regeneration.
In accordance with theoretical considerations regarding the conduct of focus groups (Kitzinger and Barbour, 1999)the research involved a series ofsuch meetings, nine in total. The strategy adopted for each location included a public sector group comprising representatives from central and local government, urban development corporations and other agencies. The private sector grouping consisted of developers, investors, "nanciers, agents and occupiers. A third mixed group of representatives from both the public and private sectors was undertaken to explore cross linkages of opinions and issues concerning the "nancing of urban regeneration.
The paper draws together the main themes of the focus group discussions examining principal issues such as private sector investment, policy mechanisms, "nancing urban regeneration and risk. Conclusions are drawn regarding the most e!ective mechanisms for attracting private sector "nance into urban regeneration in particular the conditions conducive to private sector investment and the mechanisms for the alleviation of risk.
Attracting property investment into urban regeneration locations
In fragile property markets, of which urban regeneration is an example, the private sector is cautious about investing particularly where the levels of income and capital growth are perceived to be limited (Amin and Thrift, 1995). Whilst the planning process has often been used to prevent or curtail peripheral urban expansion, more positive policies are required if the risk factors of developing in urban regeneration locations are to be overcome. Traditionally such areas have been considered by the private sector as zones of risk and uncertainty. Urban regeneration needs to demonstrate a positive return on private sector investment and through the use of public resources pump-prime much larger sums of investment.
The need for some form of public sector intervention, the way in which this is channelled and the respective roles of the private and public sectors have been the subject of debate for well over the past 20 yr. Indeed the precursor of a series of radical regeneration measures aimed at addressing these issues can be traced back to the 1977 White Paper on Policy for the Inner Cities (DOE, 1977). In the 1980s, Urban Development Corporations (UDCs) were hailed as the #agships epitomising property-led urban regeneration (Healey et al., 1992; Imrie, 1992; Turok, 1992; Imrie and Thomas, 1993; Robson et al., 1994). However, by the early 1990s a refocusing of urban policy sought to address a broader-based agenda exempli"ed by City Challenge, SRB and English Partnerships. These programmes are recognised as having made a signi"cant contribution to urban policy through fostering e!ective partnerships across a wide range of bodies; integrating departments and funding strategies; advocating a regional approach; inter-relating economic, social and environmental aspects of urban decline; and emphasising the importance of monitoring and assessment of expenditures (Parkinson, 1997). These themes continue to underpin government policy as outlined in the discussion paper, The Way Forward for Regeneration (DETR, 1997a), which focuses on the need for a strategic approach; e!ective partnerships and co-ordination; better targeting and concentration of resources; competition and results; ensuring value for money and more imaginative use of "nancial and non-"nancial mechanisms.