This bit made me laugh.
I read the original book when it came out and it was funny and - in some ways - true. I was born and bought up in the town ranked #4 in the original list (Hythe), but when I read it I was living in Hackney (#10 on the list). So I could shove the book in the faces of my friends and colleagues and say: look at me! I've moved up in the world!
The reason I laughed is because around the time of publication (2003?) I was working in the Government's Social Exclusion Unit. Prior to that I had spent time in the Neighbourhood Renewal Unit; later on I'd go on to work for the Lyons Inquiry. Part of my work included meeting people, and one thing I took away from those meetings would be how incredibly proud people could be about their neighbourhoods and towns: however deeply sunk into poverty the area was, they still cherished the place. The other thing I learned was, more often than not, those people often had good ideas about how to fix some of the issues - local solutions for local problems. All they needed was a little help and support from authorities to get those solutions off the ground.
So when the author claims that "governments" didn't read the book - some of us did. We enjoyed it, and we tried to do things to help people make their towns just a little bit less crap. Sadly it wasn't enough, but if people don't try then nothing will ever get fixed.