The current tide of economic woes is placing greater pressure on England's cities to radically alter how regeneration projects are managed. The arm's-length urban regeneration company (URC) model spawned by Lord Rogers' Urban Task Force report in 1999 is facing increasing uncertainty, not least because regeneration quango the Homes & Communities Agency (HCA) has admitted it will have to reduce the number of vehicles that it funds.

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Opinion: Three experts on the regeneration challengers facing Yorkshire and Humber

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In January, a study by De Montfort University for the Northern Way economic development coalition called for councils to simplify the "complex maze" of local delivery bodies.

In Yorkshire and the Humber, different paths have been taken to replacing the URC model for city-based regeneration. The region originally had three URCs. Sheffield's and Hull's have now been converted into economic development companies (EDCs). Then, last month, Bradford's URC, Bradford Centre Regeneration, officially transferred its responsibilities to the council. So why have these cities chosen different routes for urban regeneration in a post-URC world?

Sheffield was the first city in the region to set up an EDC. One of Creative Sheffield's aims was to promote the city to global firms and attract inward investment. Creative Sheffield regeneration director Andy Topley says there was a realisation that, to make the city's economy really successful, its regeneration vehicle should cover more than the physical regeneration with which the URC dealt. "We recognised the success of the partnership model in physical development and applied it on a wider scale," he says. This involved pulling the work and resources of different bodies under one banner to simplify the regeneration process, he says.

Topley cites Sheffield's Digital Campus scheme as an example of how the EDC model enables broader support to be provided. "We have experts in sectors such as employment, new media and manufacturing. With Digital Campus, we can build the space, but what's equally crucial is that we have teams to help nurture and advise the firms (in it)."

Hull Forward's launch in April 2008 was also intended to allow the city to coordinate physical and economic development more effectively. The EDC identified healthcare and renewable energy technologies as potential growth sectors for investment. Hull Forward chief executive John Holmes says: "The private sector felt that the city was not being marketed as well as it might. We now focus on engaging with businesses and getting them to help sell the city. We provide links between partners and make smarter connections with universities and the education sector."

Bradford's URC was tasked with developing a city masterplan and initiating various projects. "The URC has done that job," says Bradford City Council strategic director of regeneration Barra Mac Ruairi. "The council's regeneration team now has strong leadership with the capability to carry on that work." All the URC's staff, except for now-retired chief executive Maud Marshall, have moved into the council's building to form a city centre delivery unit in its regeneration department.

Mac Ruairi says that bringing the team into the council has made communication easier. He dismisses fears that the in-house model will prove introspective and says that the council is setting up a cross-sector board to ensure that outside expertise is pulled in. Mac Ruairi says that six core areas of activity have been identified, including the creation of City Park - a landscaped public space in central Bradford with facilities for concerts, markets and sporting events - and a new hotel and office complex. "We realised that the URC needed more focus," he says.

Lord Rogers' report argued that delivering regeneration using dedicated arm's-length bodies encouraged trust from private partners. But Jon Sawyer, managing director of consultancy Eye, says it now makes sense for cities to pursue their over-arching regeneration strategies through in-house teams, while reserving the option of forming partnerships with the private sector to tackle particular jobs. "Any new model (of local regeneration) is likely to be more council-focused, -staffed and -driven at the administrative level, and the optimum place for private sector expertise and any special purpose vehicle is at the project level," he says. But he warns that councils will have to employ people with specific skills and do more external recruitment if the in-house model is to succeed.

Atam Verdi, director of Leeds-based consultancy Aspinall Verdi and regional representative for Yorkshire and the Humber at design watchdog the Commission for Architecture and the Built Environment, questions whether an in-house operation can maintain the same focus on urban renewal as an external body: "Will an in-house team work on a few key projects or will support be spread too thinly across projects and priorities?"

He believes a city will choose a particular model depending not only on its financial resources - the move from URC to EDC involves a certain amount of streamlining to concentrate on core areas - but also on the rapport between a council and an arm's-length body: a delivery vehicle is more likely to be effective in areas where both bodies work well together, such as Hull and Sheffield, than in places where there are tensions between the local authority and the vehicle.

Jan Anderson, executive director of environment at regional development agency Yorkshire Forward, is less concerned about differences in approach. "One arrangement is no better or worse than any other," she insists. "An arm's-length body might be more expensive to set up and run, but it might repay those costs through greater private investor confidence and faster progress. An in-house arrangement might be more effective at dealing with issues such as planning and local authority processes; that could have an equivalent value to arm's-length benefits."

Anderson says that, whatever path is chosen, it must be constantly reviewed to ensure that it is still appropriate. She adds that cities must devise a strategy that all partners fully back. "This will help put those towns and cities at the front of the queue when the economy starts to pick up," she says.