Examination of Witnesses (Questions 300-307)|
TUESDAY 5 MARCH 2002
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,
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.
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
(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
Chairman: On that note, can I thank you very
much for your time.