Examination of Witnesses (Questions 120
- 133)
WEDNESDAY 12 JULY 2000
MR CHRIS
BROWN, MR
BILL STEVENSON,
MR PETER
DEELEY AND
MR JOHN
HOLMES
120. Was the clawback scheme devised to counteract
the subsidy that developers were seen to be taking?
(Mr Brown) My understanding is it was devised as good
public procurement, if you like, good value for money for the
public sector, to ensure that where these windfall profits did
arise, which is not very frequent, they were captured by the public
sector.
121. Have you come to a view on how a competitive
tendering process, subject to public procurement rules, might
work?
(Mr Brown) I have. I suspect this is an area that
the Commission would quite like us to go back with a creative
proposal on, as indeed may well be happening. I can see the potential
for the public sector in partnership with the private sector identifying
projects, assembling land and, because the European public procurement
rules are about to change, being able then to have an open negotiation
with the private sector. That will never replace PIP because the
public sector will never be able to assemble the volume of sites
that the private sector was able to in the past.
122. Could there be potentially advantages to
direct development or public procurement schemes from the point
of view that they might be quicker to process and therefore less
bureaucratic?
(Mr Brown) I do not think they will be either of those
two things, but they might get the sort of development in the
short term which you would not otherwise have.
(Mr Stevenson) The big risk is they prove to be competitors
to our industry, not partners.
123. Who?
(Mr Stevenson) The public sector compete for the raw
material that we require—i.e., brown field land.
Mrs Ellman
124. What about the impact of the removal of
PIP on house building, looking particularly at building on brown
field sites?
(Mr Stevenson) We have been achieving, most of us,
in excess of 60 per cent, so we have been achieving government
targets, but as you can imagine a lot of the brown field we have
been dealing with is quite good brown field in the better locations
with better revenues and so on. We have been consuming that fairly
rapidly. It therefore follows that a great deal of the brown field
left is in the more marginal areas and quite a lot of it is in
the negative scenario, so I am afraid the absence of PIP is going
to reduce hugely our ability to deal with brown field in the coming
years. As I said earlier, it will not impact immediately because
we have a lot of schemes currently rolling through but you will
see the effects probably in a few years' time when the lack of
the programme makes itself felt.
125. If there was direct development by RDAs
and you were involved as the developer of housing on such sites,
would that not be a way forward?
(Mr Stevenson) No. The scale would be far too small.
The kind of output we require is huge and they could not come
anywhere near matching the kind of resource we need.
126. Would that not depend on the resources
available to you?
(Mr Stevenson) You could not come up with the kind
of resources needed.
127. Why?
(Mr Stevenson) The scale of the industry is very large
indeed. You would have to replicate a large part of the industry's
skill and activity and finance in order to do that. I think it
is highly improbably that it will ever be done.
(Mr Brown) The education process the Commission has
been through over the last six months or so suggests to me that,
in relation to housing, they probably could get themselves to
the view that developers were not being subsidised; there was
no state aid to developers, but clearly with housing the subsidy
to the occupier is not the state aid issue. I can see the potential
for them getting comfortable with a scheme which allowed that
GAP funding for housing and indeed probably for some other uses,
leisure and things like that, where there is not a cross-border
trade. The people who are worried are car manufacturers and people
like that.
Mr Olner
128. Car manufacturers do not sit very well
on 115 acres or three or four acres, do they? All of the witnesses
who have given evidence to this Committee on this subject have
damned the fact that the Commission has stopped GAP funding. What
do we do? What do we say to government to bring back a measure
that will counteract the fact that we have lost GAP funding, because
the old urban renewal was horrendous. What do we do?
(Mr Brown) Can I come back with two? One is an urgent
need for the RDAs to have extra resources very quickly, not April
next year, but now. The second-and I find it very frustrating-is
I think the Department has to work with the Commission to put
in place a replacement programme. We cannot go aggressively fighting
them. We have to put pressure on them but we have to work with
them to get a conclusion.
(Mr Stevenson) We have to find some mechanism to bring
back something very similar to that programme. If we as an industry
were confident that that was being done, we would get on with
bringing forward these projects. What is most disturbing is we
are not doing that now. The gap is already in place. If we had
some assurance of people working hard at bringing back a programme,
we would be back there preparing schemes ready to receive it when
it arrived.
Chairman
129. What sort of deadline are we looking at?
I found this morning fairly depressing because everyone is identifying
the problem and we are not really getting much nearer to the solution.
What are the crucial dates? At the moment, you are in limbo as
far as new developments are concerned. How soon do you need decisions?
(Mr Stevenson) We would have liked them in December
last year. It is already overdue.
(Mr Holmes) From our point of view, in terms of a
small developer, we need it yesterday because we are stopped.
For the bigger companies who have rolling programmes and large
schemes which are rolling through, fine; they have some stock
in hand. As far as we are concerned on our site, we are now stopped.
We are putting in the infrastructure and what will be galling
is that public sector money has gone into the infrastructure and
the bare sites sit there unable to be developed. In terms of the
new scheme going on, what I would like to try and get the government
to convince the Commission on is to look at two things. Firstly,
that there should be some sort of threshold where smaller schemes
can go through without too much bureaucracy either at central
government or at European Commission.
130. Can you give us any suggestion of the sort
of level in size or cost of the threshold?
(Mr Holmes) Somewhere between three to five million.
That is depending on the size of the scheme. We are looking at
an exercise where we would need 200,000. That is the level we
are working at. The other area is that, if we are having this
artificial restriction on assisted areas, there ought to be exceptions
to that where there are specifically contaminated sites outside
of assisted areas.
Chairman: I have considerable concern about
assisted sites because in my constituency we have two wards which
qualify because of levels of unemployment but there are not any
sites within those two wards that can be built on. In the two
wards next door there are sites but their unemployment figures
were not quite sufficient to qualify.
Mr Benn
131. To pick up Mr Stevenson's comment about
the speed with which this is being addressed, do I take it that
your view is that the Commission is simply not moving fast enough?
(Mr Stevenson) Yes.
Chairman
132. It is the Commission, not the United Kingdom
government?
(Mr Stevenson) Yes.
Mr Olner
133. Or both?
(Mr Brown) Can I disagree slightly with Bill because
I think it is the system. I do not blame any of the individuals
but we have heard about the mechanisms they have to work through
and you cannot expect any system like that to work quickly. Can
I just cheer you up with one thought, Chairman? I think the Commission
are very sympathetic to your point about assisted areas. They
recognise that the assisted areas map is not drawn for regeneration
and therefore they are sympathetic to regeneration that is happening
outside that map.
Chairman: On that note, can I thank you all
very much for your evidence?
| 
