Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Minutes of Evidence


Examination of Witnesses (Questions 80 - 99)

WEDNESDAY 8 SEPTEMBER 2004

MR NICHOLAS BOLES, MR JOHN ADAMS, MR DAN CORRY, MR WARREN HATTER AND DR PETER KENWAY

  Q80  Sir Paul Beresford: But the economic development argument, which everybody would agree with the crux of what you were saying, this Assembly can talk about it, it can get a strategy, but it cannot do anything; all it can do is talk to other people, all it can do is consult or react to consulting.

  Mr Adams: I do not think that is true. The Regional Development Agency does exist.

  Q81  Sir Paul Beresford: It can build thousands of houses in areas where the local people will not necessarily want them but they will not have any say in it because it is no longer local.

  Mr Adams: But there are very important regional decisions when you come to regional planning. There are extremely hard decisions to make about regional planning and whether local authorities can just carry on building the houses wherever they want, or whether you have to take some hard decisions across the region to have some more tempered increase in the supply of housing, and those are very difficult decisions which have not been made and which have very important knock-on consequences for people who have to live in areas of low abandonment and also possibly for economic growth.

  Mr Boles: I think you are shifting the goalposts there because you were suggesting that economic development was the key and now you are moving to their planning role. The planning role is, I agree with you, a real power and an utterly inappropriate one for a body this distant from the people and this distant from the communities affected by planning decisions to exercise. So that is the one real power that they have and they should not have it. The economic development point, fortunately the British people understood quite a long time ago the one thing that guarantees full employment, which is fortunately what we almost have in this country, is not what RDAs or Regional Assemblies or anybody else does; it is the fact that we have low inflation, a good monetary policy and, though I am not a total supporter of his, a Chancellor who is manning a very tight budget. That is what creates the circumstances of economic development. The RDAs have a role and it is a role that is best run by local businesses who understand what are the real constraints on their development, not by a bunch of rather distant, full-time politicians.

  Q82  Mr Betts: In terms of winning public support for the concept—and we have talked about the referendum test as being something that we have to get to, and in some ways I am rather glad I am not trying to persuade people to vote for this in its present form—is it not true that we are going to have to have two or three things which the public easily understand are the functions of a body which, in exercising them, is going to make a difference to their lives? We can see in London that the transport was not really connected to any part of the democratic process and the changes with the Mayor and the GLA brought it back into the democratic process. If the regional bodies in England were to have some power to bring back regulation of bus services, which is a complete shambles at present in places like Sheffield, then people might begin to understand that there is something for them to do which will actually affect them.

  Mr Corry: You are underestimating what is already in the Bill. If you can say this Regional Assembly is all about trying to deliver economic prosperity in the north-east—and at some time Nick needs to look at the inequalities across the regions in these things, he is living in a strange world—this is quite something. But, I absolutely agree, transport is the big missing thing in the Bill. The White Papers on transport that came out at the time of the Spending Review started to move to a more regional approach, particularly with the PTEs and so on. I think that is the one thing that we would like to see quite a lot more of.

  Q83  Chairman: Can I take you on to the question of scrutiny in the Bill? Does it do it well?

  Mr Corry: I think as Tony said earlier, there is a difference from London—and we have done work on how scrutiny works in London—and there is a big issue there because the Mayor has separate legitimacy through the way he is elected. In the Regional Assemblies it will be different. We have proportional representation, so it may well be in a lot of Assemblies we will have almost "coalition governments"—it may not be true in the first one, but it may be. So that is going to make things different. I think the design of the Review and Monitoring Committee and its sub-committees and area committees is quite interesting. I heard what people said earlier about a change from the way things are done elsewhere on the proportions of party representatives. The powers look pretty strong—to call people, and so on. So I think everything is in place. I think all places where scrutiny has been brought in recently, in London, in local government, the scrutiny people have found it difficult to find out exactly what their role is. In London scrutiny has done some very good reports raising issues to political attention, reports on the health of the London economy and that sort of thing. What they have been much less good at is scrutinising the decisions the Executive makes, and the same thing has happened in local government, and I doubt we have found the answer in this Bill. But I do not know what the answer is, to be honest; it is tricky stuff and we are all learning.

  Q84  Chairman: Should the bill then prescribe or should it be left to the Assemblies to make up their own mind how they would do it?

  Mr Corry: I think maybe there could be a bit more discretion in here, but I think the way the government seems to see scrutiny working is to try and make it not just a political bun fight, and there is a danger that if you left it entirely to an Assembly to decide, the dominant party would seek to shape scrutiny so that it would not cause it any trouble, and that could not be right.

  Q85  Christine Russell: A number of you have already pointed out and identified the fact that the draft Bill sets out this very wide general purpose but, in reality, gives the proposed Elected Regional Assemblies very little spending money. You, Mr Boles, have mentioned perhaps transferring some NHS funding to the regional bodies. Is that a serious proposition? What other additional areas of funding do you think could be realistically transferred to the proposed bodies?

  Mr Boles: I think that is perhaps putting the cart before the horse in the sense that what I am suggesting is that if you are going to have Regional Assemblies at all there is only a point in doing it if you are transferring a very large chunk of something that central government currently does to Regional Assembly management, and one example could be to regionalise the NHS which is, let us face it, the most centralised organisation in the western world. That would be real, beefy at that stage for a Regional Assembly and it would be real devolution—it would be power going away from the centre rather than being sucked from below. I think that taking a bit of NHS funding and ladling it to them without having a real role is not really the point. I would agree with Tony Travers' comment earlier, which is that if you are going to create these bodies—and I sincerely hope that all of the referendum will turn them down—then at least give them independent funding power because we see with local government that local government is really no longer local government, it is local agency. If you want to make it local government or regional government it has to be independent and autonomous in its funding as with everything else.

  Q86  Christine Russell: So what about the other three groups of you?

  Dr Kenway: I think there is a general point that the things that seem to us to be most appropriate at a regional level are things that you could in some sense call "infrastructure". That obviously includes transport. There are some issues—and again we are looking here at the London level—the question of some aspects of school, not the performance or what schools do inside them, but where schools are; an admissions policy. There is a move at the moment to have some attempt to provide across London a uniform admissions policy. You have accused me already of trying to move the goal posts; I think the next suggestion is more a Clive Woodward, of trying to change the game. But one area of infrastructure that in some parts of the country, certainly the southwest of England, people would, I suspect, be very keen to have some democratic control over is water. That is even further away, given that it is now privatised and regulated, although not in any sense competitive. I think one has to think in quite an ambitious way along those sorts of lines, but certainly transport is the biggest single thing, and the evidence from Europe, when you look and see what have these regions done, one finds it is things to do with transport which are their big successes.

  Q87  Christine Russell: Do your two organisations also agree about transport?

  Mr Corry: I mentioned about transport earlier. I think in the long run you can see the regions playing a very different role from that envisaged in the Bill. We have published a report suggesting that the regional allocation for local authorities should be given to an Elected Regional Assembly to then allocate down to local authorities, much as happens in most European countries. But that is in the long run. I think it would be wrong to jump in this Bill to that sort of system. There are serious question marks, which there already are in London, about what on earth the Government Office is doing and whether it should be so big, and whether there are a lot of things it does that should go. If we do have an Elected Regional Assembly I think that will be a question that will come up very quickly. Learning and Skills is the other area worth highlighting there. If Regional Assemblies happen and are successful what we would expect to see them leading successful regional economic policies. It is a big part of the agenda, and obviously there are issues with the relationships between different government departments and where these funding streams come from. Clearly there is no way that, by the time we get the first ERAs, Learning and Skills Council funding is going to be directly under ERA control, but I would suggest that that is the way to move.

  Q88  Christine Russell: Can we talk now about running costs? Five pence a week on the rates and £25 million a year; is that realistic?

  Mr Corry: It is hard to know. You will have to ask the officials how they calculate the numbers. What should be happening is that this should not be additional, most of this money should be stuff that was being spent by Whitehall, from Whitehall civil servants, or whatever, coming down, and we must make sure that is what happens. Similarly, some of it should be coming out of the Government Office work as the work is taken over by the Regional Assemblies.

  Mr Adams: Can I come back to the comment about funding? Obviously funding must follow the powers and I agree with other colleagues on the table that transport is the great big hole in the government's devolution plans. I think the area of Learning and Skills is more controversial. I am not an expert on Learning and Skills by any means, but my colleagues at IPPR, who do a lot more work in this area, are more sceptical about the regionalisation of the Learning and Skills agenda because fundamentally what they would like to see is the empowerment of the individual to choose his or her own training skills, rather than the ability of officials within the new regional Learning and Skills, or whatever would replace it, trying to plan the skill needs for individuals. So fundamentally the people who argue for regionalisation are pretty much arguing for that because they think they can do a better job of working out what the local economy needs. I am not an expert but that is the argument put forward by my colleagues within IPPR. If you look back 10 years a lot of people were very dismissive about individuals who took media courses—they called them "Mickey Mouse" media courses—but of course the evidence now shows that the individuals who took those courses do better than the average. So for that individual, the 18-year who made that choice, it was a very intelligent choice to make, but some of the people who know best would not have gone down that route. I sit on the fence somewhat because it is not particularly my area, but there is not the consensus which there is in transport, I believe.

  Mr Boles: I just want to register an emphatic nod to everything my colleague just said.

  Mr Adams: Colleague?

  Mr Boles: Okay, opponent, if you prefer!

  Q89  Christine Russell: Can I ask you about targets because in your submission you referred to this idea of setting targets for the Regional Assemblies and then linking additional funding? Do you have any further comments to add on that?

  Mr Corry: There are two bits. We were thinking about the way local public service agreements (LPSAs) work and whether the regional assembly should play some role in either negotiating them, rather than the government office as they do now, or at least being involved so that LPSAs are consistent with regional strategies. This is all about making everything consistent. There is also an issue about whether we should have regional public service agreements. Is that the way to do these things? A bit like local government, regional assemblies ultimately are going to end up doing some things where they have complete freedom to do what they want and there are going to be other things where the Government is going to ask them to be a delivery agency or at least a monitoring agency. The Treasury sometimes refers to these bodies as "intermediate" bodies in its Devolving Public Services paper. Some of these ideas are interesting. We are very interested in multi-tier governance, which is what we are getting and the key thing is how do these different levels join up. There are a lot of mechanisms and some of them will be around these kinds of ideas.

  Q90  Chairman: One of the key things is going to be the amount of money that the government has to pass down to these bodies. When I used to dish out pocket money to my kids it was relatively easy to give them money for things that I approved of them spending it on but when I definitely did not approve it was quite difficult. Do you really see the mechanism in here to ensure that the English regional assemblies are going to be able to get money from central government to do things that central government might not approve of?

  Mr Corry: Central government has real problems doing that with local government. The thing that I am united with Nick on is that they should do a lot more to devolve. You have got to take the ring-fencing off and all the rest of that sort of thing. With regional government it is the same thing, the more it comes out of a single pot and you leave it to the assembly to decide how to spend it better. The crunch—we all know that—will happen when we have a government of one colour in Westminster and of another in the region, the same thing we are waiting for to happen, if it ever does, in Wales and Scotland. There will be different tensions. Multi-level governance does have tensions and does have conflicts but ultimately you have to decide whether it is the right direction to go in or not.

  Q91  Chairman: In quite a lot of European countries there is almost a constitutional settlement which not only sets out the powers but sets out separate funding. Would that not make a big difference to this?

  Mr Corry: It would. I think we are a long way from leaping to that though.

  Chairman: Adrian Sanders?

  Q92  Mr Sanders: How would you characterise relationships between current regional organisations (RDAs, government offices, regional chambers) and what changes are likely if an elected regional assembly is introduced in place of regional chambers?

  Mr Hatter: I think the first part of the answer is that it differs in different regions. Let's bear in mind that that question really also includes the English regions that are not up for a referendum, be they delayed or not. There is certainly some evidence from our research, but anecdotally as well, that in regions where an ERA is just not on the agenda, let's say the South East for example where there really are not very many people who would argue for it, that means that there are not the tensions there that are associated with support or opposition for an ERA which means that there is no barrier to the three main regional bodies working effectively and to local agencies and others working with them. But, I do not think it is as simple as saying that in regions like the South East things work more effectively. What seems to be the case is that relationships work best where there are people with real credibility who are trying to make progress on agendas where it is clear that there is a need for a stronger regional dimension than there is now. I think another thing to bear in mind starting to come through from some of our research is of course in reality a lot of the individuals who will be involved if we do get ERAs will be the same people and that will facilitate relationships working fairly well. I think that reflects on what Tony Travers said in response to one of your questions earlier on.

  Mr Adams: I think it is also fair to say that of the three regional institutions the regional chambers and regional assemblies are very much the junior partner. It is almost like politics where Labour and Conservative are the two big parties and the Liberals are possibly half another one. The capacity of regional assemblies is simply not as big as the RDAs or government offices. They do not have the staff or the capacity and they are also disadvantaged by their governance structures where they report to local authorities, which of course is a collection of representatives, a sample of local authorities across the region, so that mitigates against, for example, taking harder decisions in regional spatial strategies because you cannot expect the individual from Durham not to argue for Durham and you cannot expect the individual from Newcastle not to argue for Newcastle. So taking region wide hard decisions is very difficult with that sort of structure.

  Q93  Mr Sanders: How would that change if they were elected? Surely it would be even worse if they were elected and the person elected for Newcastle would be arguing for Newcastle within the regional assembly? How does it differ?

  Mr Adams: I see what you are saying but I think you underestimate the parochial nature of the current regional assemblies and also when you have an elected assembly you will have to be an executive representing the political parties and talking for the whole of the region. So I think it will be much harder to hide behind different geographical interests when you have the executive headlining supposedly leading for the region in a much more high profile manner.

  Q94  Chairman: Can I take you on to this question. We are basically going to end up with a hotchpotch of devolution, starting in Scotland, coming down through Wales, with some of the English regions possibly with elected bodies and some of them without. Does that matter?

  Dr Kenway: Not at all. It seems to me to be in a way a rather strange question. Yes, it is going to pose challenges for ODPM and central government but that is what they are there for. It is the model in other countries. You have different regional settlements. If you look at somewhere like Spain—

  Q95  Chairman:—That causes a certain amount of tension in Spain, does it not, with some of those who do not have quite as much autonomy wanting more autonomy? I think the same is true in Italy, is it not, that there are some fairly substantial autonomous regions and other regions are pressing to have equality with them?

  Dr Kenway: That is true so those tensions between almost competitive regions seem to me to be in many ways constructive and positive. People are going to be arguing for more powers because they see others having them and presumably using them to good effect. In a way that seems to me to be a rather British approach to the thing, that rather than trying to design a perfect blueprint and imposing it from the top, you allow a system rather messily to emerge through experience. In substance what this Bill in our view needs to do is to allow that to happen. We should see that as a strength not a weakness. Really that would be a central planner's perspective and not one I would have thought was—

  Q96  Chairman: Is it logical to start with regions or might it be more logical, at least for some parts, to look like city states or enlarged city regions, particularly the issue of the South East?

  Dr Kenway: I would certainly agree that one should not in any sense restrict this thing to the boundaries of the government office regions. It seems to me to be inconceivable as it is to everyone else, that anything in the South East could possibly exist. One ought to allow potentially other regions or subregions to emerge if there is a desire for it and a need for it with those things being ultimately decided in the referendum.

  Q97  Chairman: The Government obviously resisted that pressure because it just thought it would be very, very difficult to get agreement on alternative regions or subregions. Do you think there is any evidence that you can produce a pattern for some of the places that you have just referred to which will work logically?

  Dr Kenway: I do not know is the straight answer. Do I have evidence? No. I think to go down a route that involves drawing lines on maps you have already lost it. I think one wants a process that in some sense says if subregions, which could be groups of counties for example, want to come forward that seems to me to be the only way to do it but no, no evidence that it would work.

  Q98  Chairman: You could split the South East into three, could you not, and still have three subregions that were larger than the North East?

  Dr Kenway: I think that is probably right.

  Q99  Mr Betts: Could I follow that through. Initially the problem with the current model is that we are dealing with historic lines on maps. Just to go back to my own situation in Sheffield, which is a fairly significant subregional economy, the regional boundaries actually cut through the travel-to-work area and about a third of Sheffield's travel-to-work area is in a different region. If regional economic planning is the main purpose of these bodies it seems rather odd that we end up with that sort of situation.

  Mr Bowles: I completely agree with Nick but just want to suggest a practical way that one could go forward. You could just say that if a sufficient number of people had got together, signed a petition, or whatever it is, saying that they want to have a referendum on a particular region they could get funding from the Electoral Commission for a campaign, and you would have a campaign. That organising group would have had to have got to a minimum target level of support and they would define what was the region they were trying to create. The question would be put to the people in that space and it would be decided and then central government would have a duty to pass to that regional construction. You would probably have some minima in terms of size of population but that would be proper, grassroots, organic devolution taking place rather than this top-down construction.


 
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