Examination of Witnesses (Questions 860
- 881)
WEDNESDAY 19 APRIL 2000
THE RT
HON JOHN
PRESCOTT, THE
RT HON
HILARY ARMSTRONG
AND MRS
MAVIS MCDONALD,
CB
860. The Secretary of State will be aware that
I recorded my opposition to the park and ride scheme being built
on a green belt site and there was a lot of support for my opposition.
Can I turn now to local transport plans which the government seems
to be putting great emphasis on? Does the Secretary of State share
the concern which has been expressed by witnesses that highway
engineers will simply identify their own pet projects? All of
us around this table could identify our own bypasses we would
want to see built in constituencies. Do you share that concern
expressed by witnesses? Also, can the Secretary of State advise?
If local transport plans are going to be produced by every tier
of local authority, at the end of the day, which one in the event
of conflict is going to overrule the other?
(Mr Prescott) On the first point, we have actually
done what you suggest. That is to have a strategic framework towards
roads. Any bid for any road programme, whether regional or national,
has to fit into that. The White Paper we produced on roads made
it clear we were changing the criteria as well, in the sense of
emphasising more money to go into maintenance rather than the
road programme. We set our road programmes. We ended the wish
list and we said it had to fit the economic prosperity, environmental
considerations and I think there were three or four other ones
that we set as the criteria. Roads have to be judged against that.
The government laid out what its priorities were in those 37 projects.
We are bringing some forward now to add to those. Many of them
are bypasses. Every Member of this Committee has their own bypass!
I think a different approach. It is not left to the highway engineers
to pick their projects. That is what used to be called "predict
and build". We have now changed it to a much more intelligent
approach. The second one on local transport is that, yes, the
demand is greater than the resources. It is laid down to the local
authorities what we think is important in that process. They have
to put the bids to us and we have to make a decision about those
priorities. Some will want very expensive light railway systems;
some will want more buses. We have to make a balanced judgment
but we also say to them there is a possibility of using congesting
charging parking and that has to be hypothecated in a way that
it has to be used for the public transport system. That is a radical
change. It is new resources for them and it means that they can
build a transport system to meet the sustainability of the communities
that we seek in the White Paper.
Mr Benn
861. I cannot resist saying we are looking forward
to the opportunity of some light rail systems in Leeds in view
of the comment you have just made. Having got that plug in, thinking
about the problems of neighbourhoods in decline, there are two
phrases that really stick in my mind. One from the SEU report
was that it has been no one's job to do anything about it. The
second is a comment I hear frequently from constituents who come
with problems. They refer to it and then they say, "Nothing
has been done about it." Whose job do you think it is, in
relation to those neighbourhoods, to do something and how are
you going to ensure that they have the means to turn them round?
(Hilary Armstrong) As you know, we did publish our
draft strategy last week, the national strategy on neighbourhood
renewal. One of the problems is that it is not just one person's
job to do something about it. What we have sought to do in the
strategy is give a framework where it will be absolutely clear
that responsibility is being taken, maybe at local level, by a
neighbourhood manager. At local authority level, there would be
a local strategic partnership which would bring in all of the
key players to look at regeneration needs across the area of the
authority and to identify priorities and to make sure that they
were then encouraging neighbourhood organisations to come together.
We are also saying we want to pilot the idea of a neighbourhood
manager who would both have the confidence of the local community
but also enough clout if you like, to use a northern expression,
to pull together the organisations that do have a responsibility
to act effectively in the area. I think it is important that local
people can identify who it is that they can turn to, but I also
think that we cannot be in a position where any of the organisations
at local authority level, at regional level or at national level,
are able to say, "It is not my job. It is their job."
That is what we were trying to get through, to actually pull together
the responsibilities of each tier of government across government,
but also public organisations like the Health Service that are
not within local government, to actually do something and find
that there is a coordinating mechanism, in a sense, a framework,
that coordinates that activity and makes sure at local level they
know who they can go to.
Mrs Dunwoody
862. Would this person have statutory powers
to order these various associations, groups and government departments
to work to them?
(Hilary Armstrong) No, because we do not think that
that would work.
863. Would they have resources on that basis
to call them all together?
(Hilary Armstrong) What we have put out is a consultation
document. It is out there for three months and we do want ideas.
We are really saying, "Have we got this right? If we have
not, what ideas have people to make sure that it is right?"
My experience of working at that level is that, if people go around
ordering people, then they do not get the actual cooperation to
make sure that things really change. One of the things that people
are concerned about is that they get active cooperation rather
than statutory responsibility that people agree to but then do
not deliver much through that.
Mr Donohoe
864. What role do you see for councillors in
this? I thought that was their role?
(Hilary Armstrong) I think councillors have a very,
very important role. It is councillors' job to both represent
their public to the institutions and to make sure that the institutions
work on their behalf. I think it is one of the tragedies that
we are in at the moment that, for example, when I launched the
east Manchester urban regeneration company, there were two local
residents who had been elected by the population with a higher
turn out than for the local elections because the local community
did not see their councillors as being the people to represent
them. I think that is a real tragedy and that is one of the reasons
why we have our local government reforms, to try and turn that
round. Nonetheless, within what we were suggesting in the national
strategy, the role of local councils is very important and very
central. They will play a very important part in the local strategic
partnership. Yesterday, I was speaking at the east Lancashire
partnership launch where they were launching their strategy and
that has come out of a new commitment for regeneration. They would
see themselves as being the core of a new local strategic partnership,
to identify what the needs of the area are in terms of regeneration,
to identify the resources to tackle that and to then work with
the local area in how they actually deliver that. Councillors
are playing a very important role in that east Lancashire partnership.
(Mr Prescott) There will be no neighbourhood tsar.
Mr Benn
865. On the question of resources, clearly that
is essential to clout. The great benefit of SRB has been the flexibility.
In the area I represent, money has been spent to employ four additional
police officers, really practical stuff, but do you accept that
one of the cries we are hearing from people is, "Thanks for
all the money and thanks for all the progress", which is
great, but if people on the ground think that they can apply that
money in a slightly different way, outside the way that it is
being structured at the moment, do you accept that they need the
flexibility to do that in the interests of the areas you are trying
to turn round?
(Hilary Armstrong) We are trying very hard to make
sure that that is possible and available. In the New Deal for
communities, which I know you are very interested in in Leeds,
that is a specific part of that programme. It is, in many senses,
a pilot exercise where we are encouraging neighbourhood partnerships
in their programme to put forward ideas which would mean changing
the way the rules currently apply. Some are putting forward ideas,
for example, around private landlords, who again we are working
with. Some are putting forward ideas about benefit into work,
but again we are seeing if we can pilot and change. They have
been given total freedom in working out how they would spend the
money if they were given it. What they have to do is convince
us that spending the money in the way they want to will make a
difference.
866. We have had conflicting evidence about
what we should do about large, single tenure housing estates in
areas of low demand; whether they, on the one hand, can be turned
around by putting in investment and, on the other, people say,
"No. Actually, in some cases, you need to in effect knock
them down and start again". Do you have a view on this?
(Hilary Armstrong) I think it very much depends where
it is and what the local economy is. That is why it was important
that you took evidence on competitiveness too, because it is my
belief that, if there is sufficient demand, you can turn any area
round. What we need to be doing is increasing demand in our regions
so that we are well able to do that, but when you have in the
north, as we do at the moment in the three northern regions, an
average of between 22 and 25 per cent of public housing, social
housing, that is either empty or difficult to let, you are talking
about very, very serious problems of low demand as well as people
simply not liking the properties. If it is that the properties
are letting people down and that there has not been sufficient
investment in that, then you can work with them on what you do
with the properties, on how you arrange the properties and so
on, in order to make sure that they are places people want to
live in. If there are serious problems of demand because there
is simply not the population to support all of the properties
that are available, if you take the public and the private sector
together, then you are into different problems. The policy action
teams have produced a report for the neighbourhood renewal strategy
which was on low demand and Mavis chaired that task force.
(Mr Prescott) Before Mavis says something, last week
I was talking to one of the neighbourhood renewals representatives
in my constituency area. In Hull, we have quite a lot of empty
houses for the population that has left Hull. It has had its effect
on the public housing estates and empty houses. The proposal being
put to that area was that they would have to reduce so many. The
people on the estate, the tenants in the neighbourhood, were saying,
"Do not knock those down now because when we develop the
way we are doing the demand will increase". I think what
Hilary says is quite right and is reflected there, in changing
a policy taken by the council to deal with empty housing is not
to assume that an area that has not got a demand at the moment
might not want to have an extra demand if you improve it. That
is an important point that we have to consider in the policies
regarding empty houses or changes we make in these areas.
(Mrs McDonald) One thing that the policy action team
concluded was that you could only take a decision locally and
that in some places, if demand was low for particular types of
property, you had to think about knocking some of that property
down within a broader framework for the area. The other thing
that we have quite a lot of evidence on, which has been supported
by other authorities since, is that some of the demand has arisen
because in some of these areas there has been a preponderance
of social housing and very little housing that people could buy;
and that bringing back properties into the area that people can
afford to buy is quite a successful way of creating demand. Some
of the regeneration that has been done in the centre of Manchester,
for example on the Hulme Estate, showed that that was very successful
because the social housing has been replaced by mixed and both
sets of property are very popular.
Christine Butler
867. Would not one of the ways of tackling this
so-called lack of demand be to address issues other than urban
fabric such as schools, hospitals, densities of housing and maybe
mixed tenure? I cannot see that one could come before the other.
I wondered what proposals you might have to create a more vibrant
community where you have mixed tenure and you get middle income
groups into these areas. Do you have any definite proposals there?
(Hilary Armstrong) Yes. The Housing Green Paper spelt
this out. We do want to see that happening. With many of the new
developments that are happening, that is precisely what we are
encouraging. That has also been other advice to local government
when they are thinking about their housing proposals. The local
authority has a responsibility to be the strategic housing authority,
not just the landlord. It is in their role as the strategic housing
authority that they need to be working out how they can get mixed
development. We want mixed development that brings in mixed tenure,
but we also want mixed development that means it is easy for people
to get to and from work. Work very often these days is not smoke
stack industries any more; it can be located within what were
previously seen as residential areas. We have that view of mixed
development. Our specific way of demonstrating the value of this
has been through the millennium village concept at Greenwich but
also the work that we have been encouraging and supporting at
Hulme and similar things in other parts of the country which demonstrate
that this is a very vibrant way of ensuring sustainable communities.
We are also—and this is very much part of the way we are
working in the spending review—working with other departments
across government. The way we are approaching the White Paper
is not for us just to talk about our department policies but to
actually bring them in, because it is mainstream services that
really make a difference in deprived areas. What the report that
came out last week said was that we have to improve the basic
quality of public services going into deprived areas and that
is seen as one of the main things that has not been done successfully
in the past and must be done successfully in the future.
Mr Cummings
868. What can and should be done by government
to address the huge problems of the growing disparity between
the south-east and London economy and the rest of the country?
How would you plan to get more jobs into the cities?
(Mr Prescott) The first thing to recognise is that
the disparity is simply just not a north/south issue, though it
is there and has been for some while. Our development of the Regional
Development Agencies has been an important step. They have only
been in operation about 12 months but they have developed a strategic
and regional plan; they have looked at how we might develop the
regions; they have already created jobs and guaranteed some. In
that sense, that is a positive movement which we feel has been
correct in implementing and is having its effect. It does cause
us equal concern though about the movements and deprivation within
the areas themselves. The areas the Honourable Member represents
himself after the pit closure would show that the levels of unemployment
and deprivation, even in the north-east, vary considerably from
those of other parts of the north-east. We have tried to target
more of those resources and plans to meet those needs. In our
index of deprivation which we have been developing and looking
in parts of the United Kingdom, it is what influenced us in our
approach to some of the assisted areas, is that if you look at
the levels of the most deprived areas indicated by jobs, poverty
and unemployment, you find that a considerable amount are based
in London. That is what has moved our neighbourhood policy, to
try and direct ourselves to that. Our general economic policy
is important for jobs north and south and that is having its effect.
800,000 more jobs is a step in the right direction and we have
been getting a share of those in both the north and south. I have
to recognise a great deal of the new information technology industry
still tends to be concentrated where they think to be effective,
certainly as we have seen down in the south-east. I do not think
it is very easy to say to them, "You shall move from this
area and go to the north-east". Let me give you one very
good example. Vodafone came to me for a planning application-I
have to make a decision about it. Newbury was where their place
was. They are in 50 offices and they are saying they want to be
concentrated in one. Can we do that? We cannot do it in Newbury
but we can do it on a greenfield site. If I had said to them,
"Sorry, I would like you to move now up to the north-east
and develop there", quite apart from what it would have done
for Newbury, I am not sure that they would have taken my direction
and moved up and gone to the north-east. I have to find a balance.
The balance that we are doing in the north-east over the years
and even under the previous administration has been getting some
of that new investment, but it is no guarantee the jobs stay there.
It is a changing global economy, as the north-east has found out.
We do our best both nationally and regionally and with our public
expenditure programmes to direct ourselves at deprivation, whether
it is in north, east, south or west.
Mrs Ellman
869. Do you have any plans to repeal the Conservative
legislation restricting local authorities' ability to be involved
in companies? I think this is important because of Lord Rogers's
recommendation that local authorities should be the lead in regeneration.
(Mr Prescott) I think it was a bit of ideological
nonsense that I disagreed with at the time. We chaired a similar
committee where we thought this was being just how people felt
about it in that government or the local authorities. What we
have done is change some of the rules. Some are legislation; some
are Treasury rules which were equally difficult for local authorities.
I announced in the Housing Paper on transfer of housing stock
why could not local authorities borrow against their own revenue
stream? Why was this only given to registered social landlords
or private companies? I think we have made some of those changes.
As to the definition, it was always what is a public sector company
but an authority to be involved in? It used to be less than 50
per cent or more than 50 per cent. Now it has got to 20 per cent.
I think, in a way, that inhibits us and that is why in the local
government legislation, which my colleague has been dealing with,
we have given them greater power of wellbeing. We are looking
at how that will work but I do want to make one particular point
of qualification. If we look at Hull Telephones in my own constituency,
if I simply left that to the basis of Treasury rules, we were
constantly trying to get the capital to develop it. I was an advocate
of turning it into a public/private partnership. They did that
free of the Treasury controls. It was useful for them to get the
capital but I think it is the potential that it got itself into
a new organisation where the local authority owns less than 50
per cent but what was the value of the company ten months ago?
£400 million. It is now two and a half billion, even with
the 480 stock exchange figures. I think we have to get a balance
of what is a proper operation for the local authority and what
structures they should operate in.
870. Do you plan to repeal the legislation that
stops local authorities having more than 19.9 per cent of a company
without severe impositions on them?
(Hilary Armstrong) In the Local Government Bill last
year, we introduced proposals in section 16, through the Best
Value legislation, which are intended to make it much more clear
as to what local authorities can do. We will be consulting on
how we take forward section 16 of the 1999 Act in the next few
weeks. We are also, at the same time, reviewing the capital finance
regime of local government to move towards a regime based on prudential
indicators, thereby shifting more responsibility on to local government
themselves—the amount of money they can raise and the way
in which they raise that, and then the way in which they repay
that. There will still need to be regulation. As John has said,
he has already moved the rules significantly in what he was able
to do for local authority companies in regard to airports, and
what we are proposing to do in regard to housing. The proposals
that were in the Housing Green Paper demonstrate that we are prepared
to move on local authority companies, but we, nonetheless, will
have to remain within the rules of what is public and what is
private. Local authorities will have to take the decision which
will leave them either in the public or the private sector company,
but we have encouraged joint venture companies and local authorities
being involved in them. As I say, we have already changed the
rules—
Chairman: I am keen to try and get two more
questions in quickly.
Mr Brake
871. Is the new commitment to regeneration the
right way to go about regeneration? How will this interface with
the National Strategy for Neighbourhood Renewal?
(Hilary Armstrong) The new commitment is a proposal
that local government themselves have developed. There are 22
pilot schemes. Again, they are being evaluated. I think that that
has been a very positive model. The Government always wants to
work in ways where we build on good practice. We do not think
that we necessarily have got all the bright ideas; there are very
strong ideas that we want to build on that are coming from local
authorities. I think that the way the new commitment is working
already is very encouraging and we want to work with that. The
National Strategy builds on new commitment and takes it
to a new step and brings further central government commitment
into the whole thing. I think that, therefore, new commitment
is a very good vehicle which is already beginning to prove itself.
We have to learn from the pilots what is working well and what
can be improved on. I think the National Strategy takes
us into the next stage of that, we have been working closely with
local government in developing that, and we will be continuing
to discuss with them the lessons, as I say, from the new commitment,
the ideas in the National Strategy and how we take the
whole thing forward.
Mr Gray
872. Two quick questions before we let you off
the hook. First of all, when is the Urban White Paper going to
be published?
(Mr Prescott) When it is ready.
873. In your written evidence to the Committee
you say, very specifically, that the paper will be published in
summer 2000. Are you changing that now?
(Mr Prescott) When it is ready.
874. So you would like to withdraw what you
said in your written evidence?
(Mr Prescott) It may be ready in the summer. It may
well be.
875. We note the difference between what you
say and what you write. Lots of witnesses have agreed with the
PIU that what we have is a plethora of strategies, task forces,
consultations, partnerships, committees, blah-blah—
(Mr Prescott) Better than it was before.
876. This is not Prime Minister's question time,
although we could have some fun if it was. We are trying to get
at a serious point here. The PIU, which is a government organisation,
says that there are far too many of these things and that what
we need is co-ordination. Would you agree with that view?
(Mr Prescott) Yes.
877. Is that why the Cabinet Office has set
up the so-called Regional Co-ordination Unit? Is that its job?
(Mr Prescott) Yes.
(Hilary Armstrong) They have not. We have.
(Mr Prescott) The paper produced by the Cabinet Office
was on public information about co-ordinating departments. It
is a very serious point. It is how you get government offices
to deliver, and the questions before were about how do you deliver.
The mechanism is very, very important. The reality has been—for
those of us who believed in regional de-centralisation and regional
government concepts (if I may mention that). I have always said
that government offices have not properly represented all the
departments, not all the departments have been represented there,
and the first thing to do is to make sure they are. Therefore,
the one recommendation we have is that all these departments should
be represented at that government office. That is only the first
step. The second point is that we have reports that clearly show—and
the development agencies complained also—that whilst departments
were delivering their own particular programmes they were not
co-ordinating it in any way. If you look at the Neighbourhood
Renewal, many of them are confused about having to go to ten
different departments to find out about one decision, and it is
exhausting trying to find an answer to something that you could
actually conclude if somebody could bring them together. Lord
Falconer has been before you saying that what we have now agreed
is that, under my department, the departments will be co-ordinated,
their offices in the regions are central now and co-ordinate to
a government policy. So if you have got an education programme
or a jobs programme, or housing programme, that will be reviewed
to make sure that those expenditures fit in to what is required
in that region and delivered in a much more co-ordinated way.
To make sure that happens—because departments are quite
strong, as you know, and I have outlined my disputes and I have
had discussions with various departments on these matters—it
has the authority now that they will have an overriding government
policy in these matters to co-ordinate. Lord Falconer's job is
to make sure that those departments do that, and under the direction
of the committee that I have in control we will make sure it is
delivered.
878. If you have regional government, which
you mentioned, in place, which presumably you are still committed
to, then surely it will drive further regeneration, and it will
not be the RCU at all.
(Mr Prescott) It may well be, but we have not got
that at the moment.
879. You are backing off regional government?
(Mr Prescott) I have always been a believer of regional
government. I have made it clear on the floor and I will make
it clear again for you, because it is an interesting point, I
have always believed in de-centralisation. That is not the issue
we have at the moment.
880. The RCU are centralising—
(Mr Prescott) How would we deliver the programme?
I do believe you need to make sure that departments deliver in
a way, because all those regional departments may be regional
in name but they take their directions from down at the centre.
That is not a surprise. What I want to make sure—and you
know as an adviser to government when you worked in the Department
of the Environment—is that co-ordination is equally important
in delivering that policy. We are making sure that happens.
881. So if there were regional government driving
urban regeneration, then the RCU would be disbanded because it
would no longer be needed. Is that what you are saying?
(Mr Prescott) That is an entirely different set of
questions if you get to de-centralisation in that form. We have
committed, as a party, to be looking at that, we have started
the process of de-centralisation, that is a discussion that will
take place and, no doubt, you will want to address it yourself
at another time. What we are doing at the moment is dealing with
government as it is, making sure it delivers its policy in a much
more effective way, and that is what that unit is going to be
doing.
Chairman: Fine. On that note can I thank you
very much for your evidence.
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