News Analysis: Beyond the Dome, there is little left of an eastern promise

As the Government prepares to give away its biggest millennium project, questions remain over renewal it should have triggered

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Public to pay for £3m upkeep of Dome after sale

The Millennium Dome, squatting at the tip of the Greenwich Peninsula, has been a nightmare, an incubus, for the Blair government. This week will come the announcement that it is to be handed over, free, gratis and for nothing, to an American leisure firm. That company plans to turn it into "an entertainment venue", which it certainly wasn't before.

It was always supposed to be more than the venue for a millennial knees-up. Tony Blair saw it as a good first paragraph for his 2001 election manifesto. No dice there, then. But it was also meant to be a key to unlock the further regeneration of east London wasteland, following on from the achievements of the 1981-98 London Docklands Development Corporation. What now is the balance sheet of this attempt to reverse London's historic westward dynamism?

The poisoned land of the Greenwich Peninsula wasn't included within LDDC territory because Michael Heseltine, the Secretary of the Environment at the time who was the only begetter of these east London regeneration schemes, felt the line had to be drawn somewhere. But he saw the Dome as a landmark, a beacon, promising more wonders, further downstream.

New Labour took on his Greenwich scheme. After all, west of the Dome, in the LDDC lands, lay an amazing new world. As Sir Peter Hall, professor of planning at University College London, has said: "If you woke up and found yourself in Canary Wharf, you would think you were in Hong Kong."

There were, also, less visibly, thousands of new homes: precisely 24,046, the LDDC's final report shows.

Most of all, perhaps, there was the psychological bludgeoning of the London boroughs, whose stubbornness and stupidity had long prevented fresh thinking on what to do after the docks closed.

Without this mental transformation, for example, the borough of Southwark would not have avidly embraced the idea of Tate Modern as the regeneration of a derelict Thames-side power station.

This was the council that had to be taken to court because it refused Sam Wanamaker permission to build his own vision, the Shakespeare's Globe theatre, on Bankside. The council claimed this site was the only place to house the municipal dustcarts.

And then east from the Dome lay Lord Heseltine's other new vision, the so-called Thames Gateway (previously known by the less PR-friendly name of "east Thames corridor") unveiled in 1994.

In size, this far overshadowed the LDDC's eight and a half square miles. North of the river, it stretched all the way from Greenwich to Tilbury; and south, right down into the depths of north Kent. Most of Kent might deserve its traditional name of "the garden of England", but much of north Kent is a warren of abandoned cement works and other dead or dying industries.

The LDDC – Lord Heseltine's greatest achievement as a minister – was like "an occupying power", Tony Travers, specialist in urban government at the London School of Economics, says. It was a local dictator. In terms of planning, it could do more or less anything it wanted.

But its crucial characteristic, in a state so centralised as Britain, Mr Travers argues, "is that it gave central government the confidence to spend money". The LDDC "persuaded the Thatcher government to spend billions of pounds on urban regeneration". To her credit, and that of Lord Heseltine, Docklands never became a disaster zone like New York's burnt-out South Bronx, which it could easily have done. "Canary Wharf became everything the British don't usually seem to want," Travers says, ironically. "It's clean, prosperous and it works."

Signing off in 1998, the LDDC stated that 85,000 people were now in jobs within its territory. How to assess the nature of those jobs is more difficult. "A lot of them were re-locations, no doubt about that," Eric Sorensen, chief executive of the LDDC from 1991, says.

"Did employment grow more successfully in the new location? No one knows. How can you tell what would have happened if the jobs hadn't moved? You're trying to measure a hypothesis. We do know that it's a long-run game, and that around Canary Wharf a critical mass has developed, which is complementary to the City of London."

Thames Gateway has a much tougher task, especially now that the failure on the Greenwich Peninsula is certain to have dented government confidence in east-side regeneration. There are many fine words.

But this is a "partnership" scheme, a question of trying to bang local councils' heads together, not a dictatorship. More exactly, it is now two partnership schemes: Thames Gateway London (within the terrain of the Mayor, Ken Livingstone) and Thames Gateway North Kent (outside it).

Since the creation of the Greater London Authority, there is also the London Development Agency, reporting to the Mayor, and run by one of Mr Livingstone's old allies from GLC days, Michael Ward.

The development agency has a £300m budget. Its "four guiding principles" are given as: economic growth; knowledge and learning; diversity, inclusion and renewal; and sustainable development. All deeply well-meaning. But neither the agency nor the Thames partnerships appear, so far, to have the carnivorous vigour of the LDDC. Nor do they have the focus of the Prime Minister's attention.

On the Greenwich Peninsula, his brief to his good friend, Lord Falconer of Thoroton, seems to have been: get rid of it, at any price. Or even at no price. He's unlikely to want to throw good money after bad.

Tim Williams, the chief executive of Thames Gateway London, says optimistically: "We're working to build a new city in east London, both sides of the river: 200,000 new homes and 200,000 new jobs.

"In terms of population a city the size of Cardiff is coming. We want to raise the agenda, and make people think differently about east London. We don't want to bring a lot of white, middle-class people in. We want to do better than that." But he doesn't have the brute leverage of power the LDDC had.

At present there are two great new landmarks within Thames Gateway. The vast Bluewater shopping centre, near Dartford, is a great success for its developers, but it has sucked in retail trade from many miles around.

Then there is the Channel Tunnel high-speed rail-link, nudging its way from Ashford, Kent, through Stratford in east London, to (one of these days) St Pancras. The gilt has rubbed off this gingerbread.

Cross-Channel freight is stymied by the refugee crisis. Passenger numbers are falling. But great hopes are placed on Stratford as a new regeneration zone, provided the trains regularly stop there which, of course, will slow their progress to and from the tunnel. Catch-22.

As the Dome saga shows, switching London's westward dynamic to the east is harder than many thought. This harsh fact of life is underlined by the Government's backing for a new terminal, and probably soon another runway, at Heathrow. London's prime economic engine was once the docks. Now it is Heathrow.

The LDDC had a unique opportunity, and unique powers, but it created no comparable economic engine. Without one, the jury is still out on east London's long-term future.

Paul Barker is senior research fellow, Institute of Community Studies, Bethnal Green, east London