Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 300-307)



  300. One thing which has been put to us is that where there are obligations because of Listed Building constraints which add to the cost of the development, then that ought to be quite possible to get through the State Aid rules because other states can fund costs where they have imposed an obligation on a private company or whatever to do something.
  (Mr West) That is exactly ... one of the many bases on which we have argued that our principal grant scheme ought to be approved by Brussels.


  301. Mr West, you came, I think, last week, so you heard the evidence then and you heard things about Manningham Mills and the canal-side development at Stoke.
  (Mr West) Yes.

  302. Is there any good news for those sort of schemes if you get approval for yours or are they still in difficulties?
  (Mr West) I think they are still in difficulties for the reason that I explained. We have not yet been asked for a grant for the canal-side development in Stoke, although I know that they are planning to ask us for one. The building concerned is Grade II*, so it would, in principle, be eligible, but the gap that needs to be funded to make that scheme economically viable is far larger than we could fill by ourselves and, therefore, it is very important that, as it were, the rest of the funding is not caught by the State Aid rules. Similarly, Manningham Mills, again—

  303. Manningham Mills is pretty significant, is it not?
  (Mr West) It is pretty significant and for all the reasons that your earlier witness explained. We are very concerned about that and the precedent that it is setting.

Chris Grayling

  304. Given all the issues that we have in this country, how is it working elsewhere in Europe?
  (Mr West) Mainly by direct development. We do not have any detailed information, I have to say, but what we understand is the case is that in heritage field, as more generally, more is done in Europe through direct action by the state: for example, running schemes where the state acquires an historic building in an historic area, and repairs the structure and the façade and then sells the building on to the private sector to be fitted out and put back into use. That is not a practice that has ever been done much in this country. We have done about, I think, two or three such schemes ourselves, but they are very much the exception rather than the rule.

  305. Given the fact that the current system is constraining some of the things that you would like to do, are there alternatives that you can take from elsewhere in Europe which clearly would not have the same Commission-related problems?
  (Ms Souter) I think there is a huge resource issue if we get involved in that. It is much easier for us to provide partnership and sequel funding as part of the group exercise to take something forward than to provide the entire funding to acquire, then put back into good order and then move on. I do not think the funding structures that we have in place at the moment would enable us to do that in any significant way.
  (Mr Shelton) Could I just very briefly add to that, Chairman. At the time that the European Commission was challenging, we were very concerned that we were not able really to get across the seriousness of the situation to the officials of the Commission. We were talking a different language to them and we did quite a lot of work looking at the different dynamics between the UK and the European property markets and the issues which came across were similar. Public sector intervention tended to be by way of Direct Development. The issue about recycling land was less pressing on the mainland Europe simply because population densities were lower than they are in the UK and there was not, generally speaking, the same legacy of industrial decline. Finally, property markets operated in a very different manner in that a lot of development on mainland Europe was for owner-occupied uses rather than it being funded by investment institutions or third parties as is the case in the UK Where you have got third parties involved, market value is the really key issue in a way that it is not when you have an owner-occupied development.

  306. Can I just ask English Partnerships what is your vision of what a European Regeneration Framework should look like?
  (Mr Shelton) We thought long and hard about this and in our negotiations with the Commission, DGIV, we made a number of suggestions to them about how to address their concerns. We ultimately came to the view that what genuinely is needed is for the European Commission to accept that the gap funding approach is not a State Aid. I do agree with what Alison said earlier about PIP; it did tend to encourage pepper-potting, but in some instances pepper-potting can be a good thing if you in an attractive market town one particular site which is a blot on the landscape, then a pepper-pot of that scheme might well be a wonderful thing for the town. If, on the other hand, you are dealing with a situation like Tom Russell was describing in East Manchester where you have got one small scheme surrounded by a sea of dereliction, then doing that scheme in isolation is not a good thing.


  307. So what you are really telling us is that if we went back to what we had before the Commission stopped PIP funding, then we would be doing very well?

  (Mr Shelton) That is essentially what is required, Chairman, if the ... renaissance agenda is to be successful

  Chairman: On that note, can I thank you very much for your time.

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