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12 Feb 2002 : Column 60WH

Regional Development Agencies

1.30 pm

Mr. Ian Liddell-Grainger (Bridgwater): I am grateful for securing the debate to allow me to talk about regional development agencies, and especially the South West of England development agency.

There is no doubt that regional development agencies have burst on the scene. However, I want to know why they are here and what they hope to achieve. If I were asked what the South West RDA stood for, I would say a "really dreadful agency that removes democracy absolutely", which is "RDA" twice.

Why must we have a regional development agency in the south-west of that size? It includes Gloucester, Wiltshire, Somerset, Dorset, Devon and Cornwall. If one turned the RDA on its head from Gloucester and stuck it upwards, it would stretch to the Scottish borders, which gives some idea of the amount of land that is covered.

The RDA's brief is to help with economic development, efficiencies, employment, development and sustained development. It has not hit any of those criteria since its inception. It is meant to work for the benefit of people in the south-west, not for the benefit of a few.

Why do we have a quango that has been formed to be subservient to an un-elected regional assembly? I do not understand why the assembly has the say over the RDA. During a similar debate on 12 December, my hon. Friend the Member for East Devon (Mr. Swire) asked about the Government's plans for the regional assemblies, what they would be used for and when they would be made legitimate. Our problem is that the RDA goes to the regional assembly every time that a decision must be made and the assembly okays it. What legitimacy does that have in the south-west? Absolutely none.

Let us examine the figures that show the growth of the RDA. In 1999, its budget was £44 million, in 2000, it was £63 million and, in 2001, £84 million. Up to 20 per cent. of its assets can be transferred to any one project and I shall return to that subject because of last year's foot and mouth crisis.

I am intrigued by the RDA's annual accounts. It spent nearly £10 million on administration out of a budget of £84 million. The accounts show that it spent £41 million safeguarding 602 jobs and creating a further 1,000. That money has been spent badly on behalf of the people in the south-west to create a sustained infrastructure.

Let us consider examples of where the money goes. The constituency of my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) contains the Morlands site in Glastonbury, which the RDA has bought. What is the RDA doing about that? It has not approached my right hon. Friend to tell him what it will do to the site. Why will the RDA not say what will happen to it?

In my constituency, a bypass is not being built for Ashcott and Walton because of Somerset county council's inability to get it together. The RDA did nothing to help. Nobody disputes that the bypass is a

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necessity. If the RDA exists to help and to create sustained development, why was it silent even after my colleagues and I made repeated pleas?

I discovered that the RDA spent £123,000 on advertising last year. When I asked why, I received no answer. Perhaps I can help to answer that question. The latest advertisement in stations in the south-west is a nice picture of the Clifton suspension bridge with giraffes on it. We do not have many giraffes in Somerset—or anywhere else in England that I am aware. Why spend money on promoting south-west tourism with a photograph of the Clifton suspension bridge in Bristol featuring giraffes? The serious side is that the advertisement is promoting the zoo in Bristol, but it does not look good for the south-west. Why can we not have an integrated policy, rather than a fragmented idea of unitary authorities? I suspect that the RDAs were originally designed to look after the unitary authorities.

Moving down the M5, our arterial motorway, it is evident that the RDA's main development, as it itself admits, is in Bristol, Exeter, Plymouth, and, because of objective 1 funding, Cornwall. Most revealingly, the areas in between have been forgotten. The coastal and market town initiative would put money into such places—Minehead, in my constituency, is an example—although they do not know what they are supposed to do with it. I asked whether we might have some for Watchet, which features in the deprivation index and needs the money, as it has high unemployment, but we were told that that was not possible. I have tried twice to set up a meeting with an RDA representative, but I have been let down both times.

Mr. Hugo Swire (East Devon): Given that welcome initiative, would my hon. Friend say, on reflection, that the RDA could have been more proactive in coming to terms with some of the severe deprivation caused as a result of foot and mouth, or does he consider that it has done everything possible?

Mr. Liddell-Grainger : My hon. Friend and I both represent rural constituencies, in his case East Devon, where foot and mouth has been devastating, and I agree. The RDA put aside £14 million to deal with the foot and mouth crisis. The crisis has cost the country more than £10 billion, but our RDA has provided only £14 million to help us.

My constituency covers part of Exmoor. The other part is covered by my hon. Friend the Member for Taunton (Mr. Flook). If people want to find out what it is like to feel the cold chill of foot and mouth, they should go to see the businesses on Exmoor. My hon. Friend the Member for East Devon is absolutely right—the package was too little, too late and, unfortunately, put together in a difficult way.

Let us consider the company itself. I believe that changes have been made and I am sure that the Minister will bring me up to date. Why does the board contain only three business people, one of whom—the managing director of Clarks shoes—has just resigned? The rest are all from county councils or they are union representatives. There is nothing wrong with them, but what experience have they of business? Surely the RDA is a business-orientated organisation designed to introduce infrastructure and business. If we do not have that, we do not have a viable organisation.

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The most damning aspect is the role of Sir Michael Lickiss, chairman of the RDA. He is an accountant. What experience has he of business? The buck stops there and nothing has given me any comfort that the RDA is working. I call on the Minister to make Sir Michael resign and have a business man take over. As long as Sir Michael is there, no real progress will be made. It is not that he has done a bad job; he has done the job that, as an accountant, he was trained to do. Why can we not have the head of Clarks, or the head of Cellophane from my constituency, for instance? Why must we have an accountant? Sir Michael should realise the limitations he faces, say, "I've done my bit, thank you very much", and ride off into the sunset. The longer he is there, the less that will happen. We are now witnessing the proof of the pudding.

The Government should examine RDAs carefully. If they want credibility for a structure that I believe to be entirely wrong, because of its size and because they broke something that was working perfectly well, and if they want legitimacy for the RDAs, they will have to convince a sceptical south-west—a huge area—to accept that the RDA works. On the evidence of the report and the board and all the other information that I have given, I do not see how the organisation can be sustained. The longer it goes on as it is, the more it will damage the south-west. Give us the chance to show that the south-west does not need the RDA. It needs the proper funding that councils and other organisations had before.

Mr. Swire rose—

Mr. John Cummings (in the Chair): Order. I have not been given notice, but if the Minister does not mind—

The Minister for Employment and the Regions (Alan Johnson) indicated assent.

1.40 pm

Mr. Hugo Swire (East Devon): Thank you, Mr. Cummings. I am sorry if I was a little quick off the mark.

I agree with much of what my hon. Friend the Member for Bridgwater (Mr. Liddell-Grainger) said. I fear that his comments about RDAs are historical, as I believe that they are shortly to be replaced; they certainly would be if the Conservatives were back in power. RDAs do not represent a homogenous geographical area, particularly not in the south-west, as my hon. Friend said.

The costs worry me. They have been increasing dramatically, while our councils have been starved of central Government funding. The results are all too clear, particularly in Devon. Interestingly enough, when I put a written question to the Minister for Employment and the Regions a few months ago as to how many people in my part of the world had asked or made written inquiries about wanting to have a regional assembly, the answer was none. I suggest that that is probably the answer that most of my hon. Friends would get if they asked the same question.

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RDAs duplicate a lot of work that is already done by the Government office for the south west and the county council. They are shortly to be replaced, not by reinvigorating the existing tiers of local government, as we would do and as my hon. Friend has suggested, but by another body of unelected officials at the regional assemblies. I fear that the structure of regional government will be altered beyond recognition, as that is the last project that the Deputy Prime Minister wishes to see through. I understand that he has already been forced to redraft the White Paper that is due on regional government to make it clear that a tier of regional government will have to go to make way for the regional assemblies. We all know that that will be at shire county or county council level.

I was at a meeting of the Confederation of British Industry in Plymouth the other day and the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Exeter (Mr. Bradshaw), made his feelings about county councils clear. He said that they wasted money and were an unnecessary level of local government. We disagree fundamentally; we think that they are a good level of local government and they should be beefed up. We do not believe that the RDA should accrue power, or that the son of RDA, the regional assembly, should come in its wake.

There is confusion and it would be helpful if the Minister would clarify the position as the White Paper has not come out yet. The other day, when I was investigating improvements to the roads in my constituency, I was told that the south-west area's multi-modal report was coming out and was going first to the regional assembly. Why is it going to the regional assembly? Does the assembly have the authority to investigate such a report? We need clarification.

I hope that the Government are not moving too quickly to replace RDAs with regional assemblies. I hope that the replacement is nothing to do with the fact that the Tories won 17 counties while Labour emerged with only seven at the last county council elections. We in the south-west believe that we have particular needs, and I am sure that other areas could argue that equally well. In the light of foot and mouth disease, we need clear help and we want money to go to the end user. We do not want it diverted to quasi-autonomous national government organisations. Will the Minister clarify his plans?

1.44 pm

The Minister for Employment and the Regions (Alan Johnson) : I am grateful to the hon. Member for Bridgwater (Mr. Liddell-Grainger) for the opportunity to talk about regional development agencies. They are a key element of our economic strategy and, when single-pot funding arrangements are introduced in April, they will increasingly have the flexibility to decide on their own priorities. With regard to that, they will be guided by the regional economic strategies that they are developing, and by a close understanding of the needs of stakeholders in their regions. They will work best where stakeholders engage fully with them and ensure that their views and perspectives are clearly expressed. I also thank the hon. Gentleman for his courtesy in letting my office have notice of some of the contents of his speech.

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There is a genuine difference of opinion between the Government and the official Opposition on RDAs. The comments of the hon. Members for Bridgwater and for East Devon (Mr. Swire) have made that clear. The Conservative party is opposed to the RDAs. It was opposed to them in 1997, when they were part of our general election manifesto, and it was opposed to them in 2001, when we said that we would build on the foundation that the RDAs have provided by continuing to decentralise.

Conservative Members continually get confused about the difference between devolution and decentralisation. The hon. Member for East Devon asked me to clarify what will happen when the RDAs are replaced. The RDAs are not going to be replaced. A White Paper will be published shortly that will describe detailed proposals for English regional devolution, but it will not suggest that the RDAs should be replaced. However, I will not refer to its contents at length, because they do not address the issue under discussion.

The Conservative party does not have much experience of Scotland and Wales. In 1997 it truly became a one-nation party: none of its Members of Parliament represented Scottish or Welsh constituencies; they represented constituencies in only one nation—England.

Mr. Liddell-Grainger : We have one Member of Parliament who represents a Scottish constituency.

Alan Johnson : I was referring to the 1997 election. The 2001 election resulted in a 100 per cent. increase in the number of Conservative Members of Parliament from Scotland; there is now one, instead of none.

The decentralisation programme is founded upon an analysis of what happened in Scotland and Wales. Scottish Enterprise and the Welsh Development Agency have been around for a long while, and they still play an integral part in promoting economic development in those countries, despite devolution and the establishment of the Scottish Parliament and the Welsh Assembly. The principle of one nation and one Principality has been upheld in those countries, and that will also be the case in England. None of the White Paper's proposals will involve the replacement of the RDAs. We are talking about regional assemblies—or the subject of democratic accountability, which featured in the contribution of the hon. Member for Bridgwater.

It is worth reflecting on why we established the RDAs. In 1996, Bruce Millan, the former European Commissioner, examined the successes and failures of regional policy. He found a piecemeal and fragmented picture. There was much useful activity in all the regions, including the south-west, but different elements were unconnected to each other, and individual regions lacked ownership of their various activities. Disparities between regions had widened, and no region's performance was as good as it could have been.

A White Paper entitled "Building Partnerships for Prosperity" was published in December 1997. It built on the Millan report by clarifying the roles and

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functions of the RDAs. It also separated out the RDA for London—which would form part of the structure beneath the newly elected Mayor and Assembly—from the RDAs in the eight remaining English regions. The RDAs outside London were given legal status by the Regional Development Agencies Act 1998, and became fully operational in April 1999. In the ensuing period, the RDAs have, by necessity, merely been the channel through which funding streams that were previously set in place have been distributed. Over 90 per cent. of their funding comes from land and properties and the single regeneration budget. Therefore, in those early years, the RDAs' roles were to establish their economic strategy and to work with the stakeholders, and, as the CBI report before Christmas recognised, when we move to the single pot in April, the RDAs will have the flexibility that they need.

We have followed a consistent policy in relation to the RDAs. They are intended to be powerful bodies, which understand and have real roots in their regions. With regional partners, they have drawn up regional economic strategies which will guide their activities. Their close engagement with local partners means that they are able to direct resources to the real priorities in their regions. If hon. Members believe that an RDA has not identified those needs correctly—which was the gist of much of what Opposition Members said—they need to engage with them closely as they revise and refine their strategies.

Irrespective of the position of the Conservative party, which may or may not change, it is important that all MPs engage fully with the RDAs. They have an important role to play. It is worth reflecting for a moment on the impressive successes that the South West RDA has already achieved. Regeneration plans that the RDA is supporting will protect over 400 jobs at the Lister Petter site in Dursley and enable that long-established company to continue operating. Investment of £15 million in the Eden project, which funded much of the infrastructural work to kick the project off, is already seeing excellent returns. Recent research shows that Eden generated £111 million extra spending in the south-west in its first eight months of operation. The RDA has also invested £1.5 million in the combined universities in Cornwall project, and has committed a further £10.5 million. That crucial project for Cornwall will owe much to the RDA's support.

I was interested to hear the concerns of the hon. Member for Bridgwater that RDAs concentrate excessively on urban areas at the expense of the countryside. I have heard that criticism in reverse: that urban areas get a raw deal. I assure both tendencies that we expect RDAs to address difficulties in both town and country. We have set them urban targets to reduce social exclusion in the most deprived wards in towns and cities, and rural targets to regenerate market towns, and come up with their own targets for action in identified rural priority areas in the light of last year's rural White Paper. We have asked them to address both aspects in their corporate plans.

The hon. Gentleman expressed the view that the South West RDA should have done more in response to the foot and mouth crisis. I know how difficult

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conditions have been in the south-west. However, the South West RDA has done a great deal to help firms suffering as a result of foot and mouth. The RDA was instrumental in setting up the regional taskforce formed after the crisis broke. Through the business recovery fund, the RDA has committed £14 million to assist business recovery in the region. Phase 1 of the fund involved the allocation of business support of up to £15,000 for affected businesses. In all, 1,200 businesses in the south-west region received grant support totalling more than £8.5 million, of which more than £5.5 million has been claimed already.

We made further business recovery funds available in November and a further £3 million was allocated to the south-west. Following discussions involving partners in the region, it was decided that the funds should support the regional priority sectors most affected by the outbreak, and most closely associated with rural areas. On 28 January, the RDA announced that more than £2.3 million of funding would be earmarked to support sub-regional and regional initiatives in the food and drink, and leisure and tourism priority sectors. Initiatives that are being supported include an extension of the successful tourism promotion run by the RDA and South West Trains last summer to run until late spring, and the setting up of a dedicated south-west food and drink promotional organisation.

One would always want to do more in such circumstances. I hope that the real achievements will satisfy the hon. Gentleman that the South West RDA is taking the need to support the rural economy seriously and is acting effectively to do so. In that context, I think that the hon. Gentleman's call for Sir Michael Lickiss to resign is unfair and unwarranted. Accountancy is a noble profession, and I would not condemn someone because he happens to be an accountant.

Without having the statistics, I believe that RDAs are business led and, as far as I know, the hon. Gentleman is right to say that there is no more than one trade unionist on every RDA board. The latest refreshment of those boards has emphasised and underlined the need for them to be business led, which means that a majority of people on the RDA boards should be business men or business women, but it is obviously important for other stakeholders also to be represented. I agree with him that in the main business people should sit on RDA boards. Sir Michael Lickiss has done an excellent job with his board and staff in launching the RDAs and establishing their priorities, and a call for his resignation is unwarranted.

I understand that the South West RDA has actively supported economic development projects in the hon. Gentleman's constituency. It has contributed £2 million towards the £5 million cost of the Watchet marina development to which he referred. Minehead is part of the coastal and market towns initiative, and the RDA is working up plans with the local community to assist in regeneration. In Bridgwater town, the RDA contributed £3.4 million to a successful multi-stranded single regeneration budget project at Sydenham, and will be supporting another project in Hamp ward. It is also involved in discussions regarding the possible relocation

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of the cattle market in Taunton to a motorway junction location, which would benefit the town and the farming community. The RDA has also given outline agreement to help fund the Foyer project aimed at homeless young people. Significant funding has been provided to Bridgwater college for its heavy goods vehicle school.

The hon. Gentleman also mentioned the Moorlands site in Glastonbury, and he asked what the RDA is doing. The RDA purchased the site in March last year, health and safety work has been carried out to make it safe and secure and a steering group has been formed with 14 interested organisations to monitor and advise the consultants who have been engaged. I am advised that a public consultation on the use of the site will be undertaken shortly.

Those are all examples of valuable activities carried out by the RDA, and they are the kind of activities that RDAs throughout England are carrying out for the benefit of the communities that they serve. The hon. Gentleman was concerned that the regional assembly has too much influence over the South West RDA. There will be a legitimate argument about that when the White Paper is published, because the question of democratic accountability is fundamental to that debate. We have strongly encouraged assemblies to take a leading role in scrutinising RDA activities, and I congratulate the South West regional assembly on its initiative in setting up "select committees" to inquire into the RDA's corporate plan. Assemblies can play a key role in scrutinising the plans and work of the RDA in their region. Although they are not directly elected,

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they contain a significant majority of local authority members, who are, of course, elected, with the rest of the membership made up from social and economic partners in the region.

The fundamental aim of the RDAs is socially inclusive sustainable wealth creation. That is the role with which nothing should interfere. We set their targets centrally because they are using taxpayers' money, and it is clear that even under the single-pot regime central Government should set output targets and ensure that taxpayers' money is well spent. It is, however, a matter for the RDAs in each region to work with their strategic partners to develop their own strategies.

RDAs are increasingly effective, and are supported by the Confederation of British Industry, the Trades Union Congress and most people who are interested in balanced and effective regional development in England. Their role is increasingly well understood by regional stakeholders who have inputted effectively in the regional economic strategies that guide their activities.

I would be the last person to say that there are no problems. RDAs are less than three years old and, as I explained, they have been working in difficult circumstances in this early period. Abolishing them would mean that the work that they have done, which has led to an impressive strategic focus, would be lost. I hope that even Opposition Members who are sceptical about the matter will come to appreciate the benefits of regional decentralisation as we move into the brave new world of the single-pot regime later this year.

Question put and agreed to.

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