Examination of Witnesses (Questions 360-379)
MS JANE
HENDERSON, MR
ALAN CLARKE,
MS PAM
ALEXANDER, MR
DAVID CRAGG
AND MR
DAVID HUGHES
15 MAY 2006
Q360 Chair: As previously, can I encourage
you to work co-operatively within your organisations so that we
do not get multiple presentations from the same organisation.
Mr Cragg: I am David Cragg, Regional
Director of the Learning and Skills Council in the West Midlands.
Mr Hughes: David Hughes, Regional
Director, LSC London.
Mr Clarke: Alan Clarke, Chief
Executive of One North East.
Ms Alexander: Pam Alexander, Chief
Executive of SEEDA, the South East England Development Agency,
and currently the Chair of Chief Executives for six months.
Ms Henderson: I am Jane Henderson,
the very new Chief Executive of the South West Regional Development
Agency.
Q361 Chair: Can I start off by asking
you what role of your particular organisation is in delivering
PSA2, a regional economic performance PSA, and how you fit in
to the regional government's structures.
Mr Cragg: Clearly, we have a PSA
regime which transcends the specific economic development focus,
but we would clearly believe that the focus on apprenticeship
particularly and adult level 2 and basic skills are the core elements,
which are hugely relevant to the broader economic context in which
we operate, working not least with our partners in the RDAs through
the newly-formed regional skills partnerships. Actually now we
are in the third year of regional skills partnerships—so
I hope well-established regional skills partnerships!
Ms Alexander: As you know, we
are regional bodies directly accountable through the Secretary
of State for Trade and Industry to Parliament, and also accountable
through our individual RDA boards, which are business-led, with
representatives across a range of organisations, including local
government, the voluntary sector and the private sector. We are
scrutinised by the regional assemblies. The Regional Economic
Strategy, which is the overarching framework of our work, is agreed
with partners across the regions, and focuses on both aspects
of the PSA2, investing in success for the economic growth of "UK
plc" and reducing the gaps between regions by lifting under-performance.
We do this through a range of different ways set out in the agreements
with our partners across the region, and fundamentally supported
by the Regional Economic Strategy, including support for business
growth, skills and new enterprise, and physical regeneration and
leverage of funding into development of brown-field land and support
for physical and community development.
Mr Clarke: There are three Government
departments that signed up to that particular agreement, Treasury,
DTI and now the Department of Communities and Local Government—each
RDA has lead role responsibilities with respect to a different
part of government; so One NorthEast has a lead role with respect
to Communities and Local Government; the South East, together
with East Midlands, with DTI; and Yorkshire, who are not here
today, with Treasury—so that is another way that we interface
with the three parts of Government that are signed up to this
particular PSA target.
Q362 Martin Horwood: First, I would
like to say "welcome" to Jane Henderson, because you
are Chief Executive of my RDA, so I am interested to hear your
views, not least because I suppose you still count as a bit of
an outsider at the moment!
Ms Henderson: I have been made
very welcome indeed.
Ms Alexander: We are trying to
learn from her new approaches.
Q363 Martin Horwood: The RDA Act
1998, states: "RDAs must have regard to the Assembly's views
when preparing its economic strategy and must account to the Assembly
for the exercise of its functions." How do you think that
works in practice?
Ms Henderson: It is important
to realise the RDAs have two kinds of relationships with regional
assemblies: one is the scrutiny relationship which you have described
under the Act, but also as a strategic partner, taking into account
the fact that the regional assemblies are the regional planning
bodies that produce the regional spatial strategy, the regional
transport strategy and so on. From the point of view of the scrutiny
role, the intention of the Act was that regional assemblies were
in a position to ensure that RDAs' activities and strategies linked
up properly with other things going on in the region and locally.
That was the thought behind it, and I am sure it is done slightly
differently in every region. As you probably already know, in
the South West the Assembly has adopted a scrutiny panel process
that involves two public scrutinies every year on strategic issues,
which are preceded by an evidence-gathering process with partners.
If you ask me to describe how that felt, I am told that it is
constructive but not too cosy—which is probably about right.
The aim is to keep the RDA on its toes, but also at the same time
to contribute to regional knowledge and strategy by increase of
knowledge from the process.
Q364 Martin Horwood: One of the issues
that has been raised in evidence to us already is exactly who
the relationship is between, and in particular whether you have
a relationship that might tend towards the cosy with for instance
the officers of the Assembly as opposed to the quasi-elected members.
Do you think that is true?
Ms Henderson: I have only been
in post two weeks, but in week minus one I went along to a meeting
of the regional political leaders of the Regional Assembly with
my chairman, and the dialogue there was very directly with the
politicians rather than with the officers. I would say that at
least annually, I think twice a year, there is a new arrangement,
whereby the Executive of the Regional Assembly will jointly meet
with our board. We have one such meeting coming up in June. So
I would not say the relationship was entirely with the officers.
In addition, of course, the Chief Executive appears in front of
the Assembly full plenary four times a year and gives a formal
presentation on the agency's work at two of those occasions.
Q365 Alison Seabeck: The South West
are clearly endeavouring to improve the scrutiny process, and
that is a fairly recent development. This is not necessarily directed
at you, Jane, but is this a practice that is followed in other
RDAs—and perhaps Pam could answer this—or is it horses
for courses and do different RDAs have different scrutiny mechanisms
in terms of their working with the assemblies?
Ms Alexander: There are fundamentals
that we all share, so we all work closely at officer level to
support the strategies that we are working together on, be it
on the regional housing board or the regional transport board.
We all have a responsibility to account to the plenary of the
regional assembly through our chairs, as Jane has suggested. In
between those two things, I, for example, always go to the executive
committee meeting and report on the activity of the region, and
we table the activity report that my board takes at each of its
meetings. We have set up a liaison committee with a group of the
regional assembly members, and officer support, to talk about
key areas and to plan future scrutinies in the scrutiny programme
that they run through the year.
Q366 Alison Seabeck: As a matter
of course, would the RDA respond to a scrutiny paper delivered
to them from the Assembly?
Ms Alexander: Yes, absolutely,
and we would be scrutinised on our response as well, in a sense,
and it would be expected to be followed through. I could give
examples of cases where the scrutinies have produced real improvements
in how we have done our business.
Q367 Chair: It would be quite helpful
if you would drop us a note.
Ms Alexander: Certainly, we would
be happy to do that.
Q368 Chair: Positive examples.
Ms Alexander: Certainly.
Mr Clarke: From the North East,
we did have a referendum as well, so therefore the relationships
with the Assembly varied at different stages. It would be true
to say that in the first year or two of the RDA it was very adversarial,
very much carried out by the political members. It was in the
press, and quite hostile, is the truth of the matter. How constructive
that was in the end, other people will decide. Then we were all
preparing for a referendum in the North East, and we had to prepare
for either a "yes" vote or a "no" vote; so
quite rightly we worked very closely with the Assembly and Government
Office to make plans for plan A or plan B. We have now moved into
a different phase of scrutiny which does exactly what you say.
It looked back at the last two or three areas that have been scrutinised;
consultants have been engaged by the assembly to check on whether
we have followed up and pursued all of those recommendations,
and we have been held to account literally on this report, with
20 recommendations, and how many we have followed through and
which ones have still to be dealt with; how circumstances have
moved on. It is also true to say that we have a relationship around
the regional spatial strategy, housing and transport, where we
are looking to align what we are doing. In an area like the North
East, where we have such an uplift in economic performance to
make, there has to be a balance between people, organisations,
politicians, to an extent scrutinising each other—which
is obviously healthy—and working together for the benefit
of the regional economy. The balance is quite important.
Q369 Martin Horwood: This is a linked
point. When the scrutiny goes as far as making a formal recommendation,
it is unclear to us from the national perspective whether this
is consistently applied—whether it is consistently possible
for regional assemblies to make formal recommendations to the
RDAs and the extent to which those have to be followed. What is
your view on that? Have you had formal recommendations from an
assembly, and have those been acted on?
Ms Alexander: As Alan has just
said, all scrutinies, in my experience, would end with recommendations.
All of them would be considered by us and be reported back to
the Assembly on our response. We would not necessarily always
follow the recommendations if we felt we had good reasons for
not doing so, but I would be very happy to give examples of the
many occasions when they have been very helpful indeed.
Q370 Martin Horwood: Perhaps you
could give examples of both the ones you have followed and the
ones you have not followed.
Ms Alexander: Certainly.
Q371 Martin Horwood: That would be
an interesting comparison.
Ms Alexander: There is quite a
large library so far, so we could pick some interesting ones across
the country for you, which might be helpful.
Ms Henderson: Technically or formally
the RDAs are only required to "take account" of the
Assembly's comments, but obviously we take them very seriously
indeed. I will make a slight confession on behalf of my RDA: I
understand that the Assembly picked us up on the fact that we
did not formally take some of the recommendations through the
board on separate papers, rather than through the Chief Executive's
report, and that is being corrected. In fact, we have a scrutiny
protocol with the Assembly, which is being reviewed externally;
and there is to be a discussion about that as part of our joint
meeting with the Assembly Executive in June.
Q372 Martin Horwood: If these formal
mechanisms for scrutiny and accountability vary across the country—which
is an odd idea anyway because I can see there is an argument for
some things to be regionally variable, but accountability seems
to me to be a universal concept—does that mean that some
RDAs are less accountable to the public than others?
Ms Alexander: I do not think on
this issue it varies in principle at all. I think we are all scrutinised
with a programme that is agreed ahead, which is taken through
our boards, and where the response is given back and followed
through. We may have slightly different board procedures, but
I do not think it goes beyond that.
Q373 Martin Horwood: So you are confident
we could not find a regional development agency that—
Ms Alexander: I am pretty confident
you would not find one that had not got scrutiny processes and
took formal responses to the reports; I would be surprised to
find that was the case.
Ms Henderson: I suppose it is
fair to say the regional assemblies all have different approaches
as well, so there is going to be some diversion on how that particular
objective is secured.
Ms Alexander: I would be very
happy to look for you and let you know.
Mr Clarke: It also varies significantly
depending on which subject you are looking at. When the Assembly
looked at science and innovation, part of that was an educational
process, because I, as the Chief Executive, struggled to keep
up with some of the details around nanotechnology and renewable
energy and so on; so if you are spending money on investment in
science that is a different scrutiny process to looking at what
we are doing in relation to tourism or support for small businesses.
There is an element of an understanding of what regional development
agencies are doing in certain key technical areas, as well as
the areas that would be more easily understood by us as well,
to be frank, on occasions.
Q374 John Pugh: I want to ask you
questions with regard to your mission. Business often complains—the
British Chambers of Commerce have told us that you cannot perform
effectively as strategic bodies because you are too involved in
delivering services like Business Link and so on; and West Midlands
complained that there was not sufficient consultation over the
formulation of a strategy for the automotive manufacturing industry.
Is not part of the problem that the mission of the RDAs is not
always as clear as it might be?
Mr Clarke: First of all, the extra
responsibilities that the regional development agencies have been
given by government have been on the basis of earned autonomy.
They were not there in the beginning, in 1999; they have been
added since then, on the basis that there is a view in those key
areas that were core business to start with, a reasonable job
has been done, and some extra responsibilities can be added. It
is important to separate having strategic responsibility for something
and actually delivering it; and this is where the chambers of
commerce are mixing two things, because in relation to reviews
of business support and business links, in most cases the regional
development agencies are procuring a contract for a region and
the delivery of a service by others, and on occasions it may well
be that the chamber of commerce wishes to bid for such contracts,
and the RDAs are holding a strategic role to make sure that the
quality of that business service is better than it was in the
past and delivers more businesses than had been created previously,
particularly in regions where the business start-up rate is very
low. Others areas like tourism, like rural, have all been added
as extra responsibilities, and the principle of that is to avoid
fragmentation and to give, at a strategic level, greater leverage
over the key areas where productivity can be increased; but it
does not mean, and nor could it, that the agency can provide and
deliver all of those services. I accept the point that because
we are involved in a wide range of activities, there is always
this balance between focus and prioritisation, and having a balanced
approach across a range of areas in order to move an economy forward
in quite complicated regions.
Q375 John Pugh: On the issue of focus
and prioritisation, you can either prioritise doing something
about the most deprived areas, or, as business possibly would
better support—you could do something about rewarding obvious
winners and encouraging them to grow more. How do you deal with
a dilemma like that?
Mr Clarke: First of all, it is
a dilemma, and it is not easy. I would be ducking the issue if
I said otherwise. It probably depends which region you are talking
about because some regions are obviously far more economically—
Q376 John Pugh: Some regions are
winners already.
Mr Clarke: That is an issue. If
I can speak from a north-eastern point of view in relation to
this question, we need to do something different over the next
10 or 15 years than what we have done over the last twenty or
thirty, because despite all of the efforts that have been made
by all of the key agencies and the private sector, the gap has
increased rather than reduced.
Q377 John Pugh: The gap between as
well as within the regions.
Mr Clarke: In terms of economic
performance. Therefore, the emphasis will be slightly more in
terms of building on opportunity where investment will lead to
greater private sector investment and economic uplift in performance,
while not forgetting areas that have needs as well, and trying
to link those areas into new areas of growth where jobs are being
created and so on, and that is about transport, skills and people
on occasions having to travel a bit further to jobs, if that is
what is required.
Q378 Martin Horwood: Do you not think
there might be a fundamental problem with the whole concept of
regional development agencies in one sense? The Government has
been pouring money into your RDA in order to catch up with Pam's
and Jane's, but they have simultaneously been pouring money into
Pam's and Jane's in order to maintain the gap!
Ms Alexander: I do not think we
feel as though we are having money poured into us, but I take
the point. I think that is an issue that we will obviously individually
address as well. I think the point that I would say has developed
very strongly over the last six years is the focus that John Pugh
asked about because the regional economic strategies that are
developing now—and most of us are involved in reviewing
them at the moment—have a much clearer perspective on that,
possibly because we do have a more comprehensive toolbox at our
disposal. We have developed partnerships across our region which
are about investing in opportunity but also about recognising
which aspects of those opportunities are going to deliver the
most. In the South East we have expressed our view that the South
East is the engine of the UK economy and needs supporting too.
There are undoubtedly challenges there and the balance between
investing in success and investing in areas that are under-performing
in the South East, in many cases under-performing the national
average as well as the South East average, is part of the focus
of our regional economic strategy.
Q379 Martin Horwood: But only part
of it! RDAs have taken over responsibility for things like tourism,
which is the whole region; so would you not regard it as a bit
of a failure if the North East caught up with you?
Ms Alexander: No, not at all because
I have always taken the view that you grow the cake and then everyone
can have larger slices of it. That is, to me, what this is about;
it is about investing in growing the whole UK economy and making
sure that the connections between bits of it, as Alan said, are
improved so that where you are creating a good return on investment
because in a sense it is part of a low-hanging fruit, that is
connected into the areas of deprivation in ways that make links.
For example, we won the Diamond Synchrotron for the Harwell Science
and Innovation Campus, and we are keen to turn that into a really
exciting new science campus, but also to link it back with Daresbury,
the competitor in the North West, so that we are creating synergies
across the two regions and all of the supply chains that will
link to the businesses involved. I do not think it has to be either/or
and I do not think it will be successful if it is either/or.
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