Warning over regeneration project

The Department of Communities and Local Government (DCLG) is intended to provide work and homes for hundreds of thousands of people over the coming decade.

But the chairman of the House of Commons Public Accounts Committee (PAC) said the project had the potential to become a "public spending calamity" if the Department does not "vastly" improve its management.

The Government wants to see 160,000 homes built and 180,000 jobs created in the Thames Gateway region east of London by 2016, bringing in 350,000 new residents and swelling the area's population by 22%. But the PAC has warned that, despite spending some £673 million on the programme since 2003, the DCLG has failed to put in place many of the basic management mechanisms needed for such a vast project - including a budget.

In a new report, the PAC said that, if successfully completed, regeneration of the 100,000-hectare Thames Gateway region of east London, south Essex and north Kent could make a "significant contribution" to easing housing pressures in the South East and add as much as £12 billion a year to the UK's economy.

Denouncing the department's handling of the programme as "weak", the report said the DCLG had put processes in place for just 14 out of 48 key management tasks identified by the National Audit Office.

Work on major sites was being held up because agreement on the necessary transport links was not yet in place, and the target of 160,000 new homes by 2016 will be missed by 65,000 unless current building rates are accelerated, warned the report.

Committee chairman Edward Leigh said: "The Department for Communities and Local Government is at present manifestly not up to the job of managing the enormously ambitious enterprise of regenerating the Thames Gateway region. Action must be taken now to prevent the enterprise ending in another public spending calamity.

"It still amounts to little more than a group of disjointed projects which do not add up to a programme which is purposeful and moving forward. The department has been incapable of taking the present rather insubstantial vision and galvanising the multitude of central, regional and local partners in the scheme to work together to turn it into reality.

"The department has not yet established the basic arrangements for controlling the programme including - incredibly - a budget. It has failed so far to set clear and co-ordinated objectives and measures of progress. Crucial to the success of the enterprise will be a full and co-ordinated contribution by Whitehall departments but, like a small child clamouring for the attention of its bigger classmates, the department does not have the influence to make this happen."