Examination of Witnesses (Questions 260-279)
RT HON
KEITH HILL
MP, RT HON
NICK RAYNSFORD
MP, MR JOE
MONTGOMERY AND
MR ANDREW
WELLS
19 OCTOBER 2004
Q260 Mr Betts: We were talking about
a time period for developments in the South East. Have you got
a time period when we might actually see some more concrete proposals
to bring about this regeneration, including commitments from other
departments?
Mr Wells: I do not think we have
that timetable yet, but we have not yet responded to the Northern
Way. The Deputy Prime Minister has taken delivery of it and we
are preparing our response to it, which may give you more of that.
Q261 Chairman: When do you expect to
respond?
Mr Wells: I am sorry, I cannot
say. I cannot remember when the Deputy Prime Minister has said
he will respond.
Q262 Chairman: Could you let us have
a note with the date?
Mr Wells: Yes. He has announced
that we are doing a strategic plan and I think he will make the
essence of his response in that strategic plan, which he is producing
before the end of the year, either next month or December.
Q263 Mr Clelland: Are you saying that
because of the introduction of the Northern Way departmental programmes
such as the Department for Transport's 10-year programme are up
for amendment now?
Mr Wells: I think we need to negotiate
what can be done to put the Northern Way in place. I think it
is fair to say that the beginning of the Northern Way, and it
comes out of quite a lot of academic work, was to say there are
very large transport infrastructure existing investments in the
North, particularly the M62 corridor, and can those be used as
the glue, if you like, to tie together a better economic offer
from the North. That was partly the concept behind it and I think
that needs to be explored, as well as the question of whether
more investment is required. As you mentioned, the West Coast
Main Line, the East Coast Main Line, also provides very fast travel
between cities like York, Newcastle and London and other parts
of the North, so there is a lot of transport investment there.
In many ways, it provides freer access in those parts of the country,
in my experience, than in the South East, where there is a lot
more congestion.
Q264 Mr Clelland: There are within the
regions, and certainly within my region, different priorities
for transport infrastructure and transport improvements than
appear in the 10-year programme. Are we saying that because of
the Northern Way there is a possibility to revisit these issues?
Mr Wells: I think there is always
the possibility to revisit them. I think, in fact, the 10-year
programme is being revisited. Also there are other developments
which were announced in the Spending Review to look at regional
spending and to see whether you could provide more guidance regionally
about the amount of money which might be available to allow people
to form their priorities in different regions better. That is
being worked up as well, which will put the regions more in the
driving-seat in terms of transport expenditure among other pots
of expenditure.
Mr Raynsford: Can I just add to
that and I have to be rather careful about what I say here because
we are in a purdah period. The current referendum taking place
in the North East is about whether or not people want a new framework
which would allow greater regional ownership of planning for transportation
and other infrastructure needs that underpin economic improvement.
This is very much an issue which is current and where there could
well be change.
Q265 Mr Betts: You could go on to say
that the draft Regional Assemblies Bill does not actually give
any powers to the regional assemblies to make decisions on transport
matters, does it, in terms of spending?
Mr Raynsford: It does. It specifically
enables them to develop a regional transport strategy. That is
exactly the point David Clelland was highlighting, the importance
of each region being able to define its priorities and to have
a more effective base for presenting those.
Q266 Mr Betts: Unlike housing, which
is an ODPM responsibility, where the assemblies would have responsibility
for allocating funding, that does not happen on transport under
the Bill, does it?
Mr Raynsford: The precise powers
are as I have described but, as you well know, this is a subject
where there has been considerable discussion and there is continuing
discussion about how we ensure an effective regional input into
the definition of transport priorities.
Q267 Mr Betts: Can I just follow on then
on this issue of co-operation with other departments into the
Pathfinder areas and some of the other ways of regenerating and
rejuvenating areas in the North. Again, it has my full support,
I think it is an excellent concept. I was having a briefing yesterday
from the Chief Executive of the local Pathfinder in South Yorkshire
and I am impressed by what they are trying to do. If you start
talking to them about "How are we going to deal with towns
in the Dearne Valley?", which probably are not going to have
their own sustainable employment initiatives, they are going to
have to rely on getting jobs in the bigger conurbations, in Leeds
and Sheffield and elsewhere, yet again there is no evidence of
any extra transport money coming in to provide those particular
links and the Department for Transport working in with ODPM's
excellent initiative?
Mr Wells: We run the Pathfinder
programme and I am grateful for your support for it. The aim of
that is to tie in all the players locally, so we have insisted
that people form cross-boundary partnerships to look at housing
markets as a whole and form partnerships with the other players
there. I think we have seen it more as a question of how you can
build successful economies for those areas for the future, so
more how you can tie in the Regional Development Agencies, the
Learning and Skills Councils to ensure that you rebuild employment
opportunities in there. The areas do vary. Some of them are very
close to very hot economic spots in their regions. If you take,
say, Manchester-Salford or Birmingham-Sandwell, and you think,
well, surely it is possible there to rebuild the offer, it is
a question of getting the housing stock modernised, getting it
and making an attractive offer. That may involve some replacement,
it may involve some complete renovation, but you can do it. In
other areas it may be just that those conurbations, and this is
accepted by some Pathfinders, no longer have a living at the size
they are and maybe they do need to shrink. I am sure transport
is also an issue. I must say, when I go round the country it is
not one that people have put to me as a very major issue, but
certainly it is one where we would seek to tie in the Department
for Transport if it emerges as a key issue in the strategies people
develop.
Q268 Mr Clelland: Coming on to the delivery
of sustainable communities and the skills and training necessary
to achieve that, could you give us perhaps a brief synopsis of
how the Department is taking forward Sir John Egan's recommendations?
Mr Hill: We now have a group of
officials working specifically on developing the National College
for Sustainability Skills. We are in discussions with the Local
Government Association about possible synergies with their own
work on local government leadership and we expect to be making
announcements at the Sustainable Communities Summit in Manchester
at the end of January.
Q269 Chairman: Can I just go through
the low-demand areas. Are there any plans to designate any other
places as low-demand other than the Pathfinders which have been
announced?
Mr Hill: Obviously, in the very
generous settlement that we had from the Chancellor on low-demand
areas, a trebling of funding to deliver the existing Pathfinders,
we anticipate that there will be a certain amount of investment
available to tackle low demand in others.
Q270 Chairman: If we go through. The
Manchester and Salford one, they have got a plan which is up and
running. How much money have they got?
Mr Wells: We allocated them £125
million over the present three-year period. We need now to go
back to them and agree how much they get for the next two-year
period.
Q271 Chairman: You are expecting them
to get significantly more money?
Mr Wells: In the next two years,
but they were one of the first and that is why they got such a
large allocation in the first year. I hope you will not press
me on the budgets for all the rest because I cannot remember.
Q272 Chairman: I was thinking of pressing
you on all the rest but I will accept a note on that. Let us take
the Manchester one. The whole of the area of East Manchester has
two metro tramlines going through it. A whole series of people
were prepared to make investment decisions in those areas on the
basis that those two tramlines were going to be built. The Department
for Transport has now put the veto on those tramlines. What discussions
are you having with the Department to point out that things like
the Manchester business parks' whole viability depends on people
from these low-demand areas being able to get to and from work?
Mr Wells: As you might expect,
there have been discussions between Ministers on these decisions.
The Department for Transport took that decision because of very
large cost overruns on that project, like some other light rail
projects elsewhere in the country, and it is understandable that
they cannot write a blank cheque for projects which show hundreds
of millions of pounds' increase in the cost as they go forward,
even after quite serious efforts to look at them again and restrain
those costs. I think we have to work from where we are, but I
know discussions are going on, not least between the partners
in Manchester and the Department for Transport, and I think we
will have to wait to see what the outcome is of those discussions.
Q273 Chairman: The Hull and East Riding
one, that is the last of the Pathfinders which have been announced,
is it not? When do you expect to receive their strategic plan?
Mr Wells: We expect to receive
it very soon, either this month or very early next. We are now
confident that one will come forward and we hope to be able to
sign it off by the end of the financial year so that it can start
spending in the next financial year.
Q274 Mr Betts: Do you rule out absolutely
and totally the fourth way for decent homes?
Mr Hill: Back to the battle of
the ALMO. There is no fourth option.
Q275 Mr Betts: Even though local authorities
borrow with prudential guidelines against the future rental stream,
this has no more effect on the public accounts and public borrowing
than the question of (- inaudible -) ?
Mr Hill: Mr Betts, we recognise
obviously that the new prudential borrowing regime does offer
some scope for local authorities to borrow for the purposes of
social housing investment and we are looking constantly at the
ways in which financial arrangements relating to local authorities
can assist them in their social housing programmes. One of the
ways in which local authorities have been assisted has been by
increases in the maintenance and management grants, which you
know were increased significantly this year, and it is our hope
that we can deliver another satisfactory settlement in the next
year, which we believe may assist certain authorities in these
areas. I think the truth is that we do not anticipate that there
will be major changes in the financial regimes of local authorities
to assist them in delivering on the Decent Homes programmes simply
out of those changes.
Q276 Mr Betts: So tenants decide that
they do not want an ALMO, they do not want a PFI, they do not
want a stock transfer; does that mean, Minister, you are content
simply to say you will not reach the Decent Homes standards in
those local authorities?
Mr Hill: No. I think what we would
want to do is what occurred, as you know very well, in Sheffield,
what I believe is occurring in Stockport and what is occurring
in Birmingham and what we expect to occur in Camden, and also
Stroud, which is that local authorities re-engage with tenants
to find a way forward in a renewed options appraisal process.
Q277 Chairman: If people vote the wrong
way you keep going on at them until they vote the right way?
Mr Hill: We have to respect people's
decisions, but, like tenants, we are anxious to deliver on Decent
Homes and the evidence is that ways forward can be found which
are very satisfactory. It is not for me to presume on the sentiments
of Mr Betts about the Sheffield experience, but I think, on the
whole, the feeling is that return to a somewhat reformulated structure,
I believe it was initially a wholesale stock transfer and now
it takes the shape primarily of a series of ALMOs, 10 ALMOs, I
think, which obviously are responding to tenants' needs, seems
to be working really rather satisfactorily. I think we take encouragement
out of the experience of local authorities who have failed in
these ballots in going back and working with tenants to find a
way forward.
Q278 Mr Betts: On a different issue,
when we had the balance of funding review, we talked about education
funding and it was a general view from the Minister and people
on the Committee that education would not be separated from local
government funding. Then very shortly afterwards we had an announcement
from the Secretary of State for Education which meant effectively
that education funding goes from the Department for Education
to schools with a guarantee of three years and almost bypasses
local authorities, except that they pass it on. Is not that a
pretty fundamental change and how much discussion was there with
the Minister at the ODPM before that was announced?
Mr Raynsford: I can say that there
was very considerable discussion.
Q279 Mr Betts: And agreement?
Mr Raynsford: I think you must
put this in the proper context. Throughout the lifetime of this
Government there has been a presumption that all additional finance
which has been raised by Government to encourage performance in
schools should be passported through local authorities to schools.
That presumption has been there. As I have said on many other
occasions, it is not a very large move in real-world terms from
a passporting regime as rigorous as the one that has been operated
to one where there is a total ring-fence. In real-world terms,
the effect is not going to be that different for local authorities.
I accept that there are, should we say, theological issues which
those who are great aficionados of the niceties of local government
finance will go on arguing about, but I want simply to emphasise
the fact that in real-world terms there is not that much difference
between a ring-fence and a presumption of 100% passporting.
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