Back for good

It's "quicker by quango", the manager of Washington new town once said, extolling the undemocratic nature of its development corporation. Only an appointed body, backed by central government and armed with powers to face down local opposition, could have levelled the spoil heaps and pit workings of County Durham and created a liveable environment.

Borrowing from the Treasury to buy land and paying back from the proceeds of development, corporations have also created Crawley, Cumbernauld, Corby and Cwmbran. They did not all turn out to be successful, but both left and right agreed that the administrative model worked.

During the 1980s, Michael Heseltine favoured urban corporations when, as environment secretary in Margaret Thatcher's first government, he demanded action in the cities. Labour councils opposed to the unelected and dynamic corporations stood in the way of regeneration in east London and Liverpool, as he saw it. In fact, Heseltine drew heavily on conventional wisdom. Malcolm Wicks, then a social researcher and now a Labour minister, said: "In the urban development corporations [UDCs], central government's disillusionment with its experience [with local authorities] took tangible form."

And now the quangos are back. John Prescott's Office of the Deputy Prime Minister (ODPM) has just placed advertisements for two new UDCs, one covering the existing south Essex borough of Thurrock, the other tracts of the London boroughs of Newham, Hackney, Greenwich, Bexley, Havering and Barking and Dagenham. For two days a week, the chairs will receive £44,528, deputies £33,450 and, for three days a month, board members £11,259. Members must "unlock the regeneration and growth potential" of their areas, and fast. A parliamentary order for the Thurrock UDC will be debated in September to begin in October. Thames Gateway UDC will open for business next spring.

But this time, things are supposed to be different. If in the past councillors were allowed on corporation boards on sufferance, now they will be there as of right. In Thurrock, the council will have four seats out of a dozen. Thurrock will select eight nominees and Prescott will pick from them. The arithmetic of the Thames Gateway board will be complicated by the fact that several local authorities are involved.

On the UDCs' relationship with councils, the word in ODPM circles is "benign". No collaboration: no UDC. Conservative-controlled Ashford, another of the expansion areas identified in Prescott's plan, has said no. "We don't want one, we are a democratically elected body and do as well as any quango," says a spokesman. No it is then, says the government. UDCs are not a prospect either for other expansion areas along the Thames estuary, Cambridge and the Milton Keynes-Northamptonshire belt.

But will the goodwill last for the areas that have agreed? Tony Rich, programme manager for economic regeneration at the Local Government Association, remembers what happened initially with the London Docklands Development Corporation (LDDC). UDCs will have to make sure they avoid giving the impression of a stitch-up with the private sector to the exclusion of local people.

Goodwill needs financial lubrication too. Jeremy Grint, head of regeneration in Barking and Dagenham says the transport and social infrastructure required must be committed at an early stage in the development process. "There also needs to be a clear understanding of what planning powers would be held by a UDC and what is retained by the London boroughs."

And that is not the only "clear understanding" that is needed. English Partnerships, another quango, was created to mop up after the old UDCs. Although answerable to the ODPM, it could refuse to give up its landholdings in the Thames area. Criticised for its lack of capacity, it may still get in the way of the UDCs. Then there is the London Development Agency to contend with; it is part of mayor Ken Livingstone's empire and is also interested in any developments.

Structures matter, but money will be critical. The new towns were ultimately self-financing. The commission for the new towns, which wound them up, reckoned that over four decades the Treasury broke even: the new towns bought land at agricultural use values and over time captured the proceeds from building homes and factories. Heseltine's UDCs were given tightly controlled specific grants; at times they were generous, allowing the LDDC to pay for the Limehouse Link, one of the most expensive stretches of urban highway.

For the latest UDCs, Whitehall is undecided. Ed Balls, the chancellor's chief economic adviser, wants public authorities to capture some of the value they create, but there is a lot of in-fighting still to be done.

In Thurrock, the Thamesside part of the borough is a study in dereliction, from the redundant docks at Tilbury to the Shell Haven oil depot. And after land is reclaimed, there are Prescott's houses to be built - 17,000 is Thurrock's target, pushing the population from 135,000 to 200,000 within a decade. Spur roads off the M25 and A13 are urgently needed, at least one new river crossing and an improved railway. The plan says 25,000 new jobs in the UDC area; the reality is a lot of people travelling to work in London.

Thurrock borough's Labour leader, Andy Smith, wants a better mix of housing, more homes that are affordable and more up-market dwellings attracting white collar workers - or meeting the aspirations of local people who he hopes will be acquiring new skills. "The UDC is the opportunity Thurrock has been waiting for," says Smith. He acknowledges, though, that his window of opportunity is going to be short. "At a time when we have the government's full attention and are receiving unprecedented funding through Thames Gateway, the UDC will make sure that all these resources are directed to and by the people who need them."

But there's the rub. The UDCs have a good track record in filling in docks and getting property values up, but much less good in "building communities". In the words of the ODPM's own consultants, the UDCs' "focus on physical and economic regeneration may well have contributed to their success: on the other hand, the same narrow focus contributed to their relative failure to improve social conditions in the communities within which they were located."

The Thurrock picture is complicated as 60% of the UDC area is classified as metropolitan green belt and there will be strong lobbies to oppose the construction the Prescott plan implies.

Facing down such lobbies is precisely the reason why UDCs are thought to be more successful regenerators than elected councillors. Can the Thurrock and Thames Gateway UDCs be cuddly and community-centred and succeed in mobilising public and private money along the muddy banks of the river? David Lock, chairman of the Town and Country Planning Association, says the people appointed as chairs, and the brief they receive from the ODPM, will be critical. "Development corporations need to be strong and pull their partners along."

UDCs at a glance

· Similar to the development corporations that built Stevenage, Peterlee, East Kilbride and other new towns from the 1950s to the 1980s - as agents of central government with planning powers designed to cut through local opposition. They borrowed from the Treasury and paid back from proceeds of development.

· Reinvented by Michael Heseltine, Tory environment secretary. Promoted in the aftermath of riots in Brixton and Liverpool in 1981 after local councils were deemed part of the problem. Private sector friendly, they had planning and land reclamation powers. Grant funded.

· Used in London Docklands, Merseyside, Bristol, Birmingham and the Black Country and Leeds to build roads, railways and promote growth, with mixed results. All were wound up by the late 1990s.

· Now being set up in Thurrock and east London as part of John Prescott's communities' plan. There are arguments about the funding stream. The rest of the Thames Gateway and the other three growth areas in the plan: Cambridge-Lea Valley, Ashford, and Milton Keynes-south Midlands will not get UDCs.