Select Committee on Communities and Local Government Committee Minutes of Evidence


Examination of Witnesses (Quesitons 629-639)

YVETTE COOPER MP, MR PHIL WOOLAS MP AND RT HON MARGARET HODGE MBE

16 OCTOBER 2006

  Q629 Chair: Can I welcome you all to this session on regional government. Can I start by asking a question about PSA2, which commits three departments to make sustainable improvements in the economic performance of all the English regions and over the long term reduce the persistent gap in growth rates between the regions? Which do you think is the most important: to improve the economic performance of every region or to close the gap between the most dynamic and the least dynamic?

  Yvette Cooper: The reason that the PSA target was set up like that was exactly in order to prevent taking the easy way out of trying to do one rather than the other of the two aspects of the target, so in order to be clear that we do want to narrow the gap between the economic growth rates of the regions but not simply by slowing down growth of high-performing regions. Equally, we want all the regions to grow, but it is not enough to simply have economic growth in every region; we actually want to narrow the gap as well. It was deliberately done to put the two elements of the target in. If we had thought one was more important than the other, we could have just picked one of those two elements as the PSA target, and frankly, from the point of view of any government department, the simpler a PSA target, the better.

  Margaret Hodge: I think the two are very interlinked but if all the areas where GVA is less than the national average, if they all improved to the national average, we would find average GVA would be £1,000 more right across the country. In getting economic growth and in closing the disparity between the regions, you enormously benefit the whole of the nation.

  Q630  Chair: I am grappling with that mathematical problem. If you increase everybody to the average, you cannot possibly make the average better.

  Yvette Cooper: The average itself would then go up. It was the mean, but if you take the current average ...

  Q631  Chair: We will worry about that one later. Can I ask you this, Yvette: the London super-region clearly does have an emerging growth strategy, part of it linked, for example, to the 2012 Olympics, but there does not seem to be a similar strategy for key provincial city-regions. Would you like to comment on or justify that?

  Yvette Cooper: The most immediate response is, of course, that we have the Northern Way, which is very clearly an economic strategy for the three Northern regions. Every area will have a slightly different approach and the geography will vary. As you know, there is clearly a specific strategy being developed for the Thames Gateway, which cuts across three regions but has a particular identity and faces particular issues of its own. Equally, each region has its own regional economic strategy, and the three Northern regions have come together to draw up the Northern Way, which I think is particularly important when it comes to the PSA target that you referred to earlier. It is inevitable, particularly around the 2012 Olympics, that the area round London should seek to make the most of that and to make sure that we can get as much economic benefit spreading much more widely than simply the immediate Olympic area as we possibly can, but I think it would be wrong to say that that means there are not strategies for other regions or other cross-regional partnerships as well, because the Northern Way is the best example, but other regions are developing their own approach. The Midlands have talked about a Midlands Way approach, looking at the East and West Midlands together as well.

  Q632  Chair: Can I just return to the issue about the gap between regions. What evidence is there that the policy is reducing that gap?

  Yvette Cooper: The growth figures are interesting. The most recent figures are 2003-04, which show that for the North Midlands and West regions, compared to the greater South East regions, the growth rate for the North Midlands and West is higher than the growth rate for the greater South East. Clearly, there are cyclical factors involved, so it would be wrong to base an assessment on any one individual year. What is also the case is that there is a slightly more complex position for London, which shows greater cyclical variations than other regions. Nevertheless, from my reading of the chart, which we can certainly make sure the Committee has a copy of, if you look at the three Northern regions compared to, say, the South East region, then actually for each of the last four years the growth rate in the Northern regions as a whole has been higher than in the South East region. I think that does show something quite interesting if you compare it to 100 years of a widening north-south economic divide linked to the industrial history and so on, and we saw that gap widen particularly every time there was a recession. So every time we had a national recession what it did was widen the gap between the regions. The fact of having the economic stability over the last ten years has obviously helped in that but these latest growth figures do seem to suggest also that we are having an impact in terms of the gap between the regions as well. The other factor that I think is significant that suggests that it is more than simply a cyclical issue is the fact that the skills gap is narrowing. If you look at the number of people with Level 2 skills, there is a significant narrowing of the gap over the last few years in terms of those with Level 2 skills. It has not seen the same impact yet in terms of some of the higher level of skills. Nevertheless, it is important, I think, that the skills gap is narrowing.

  Q633  Chair: Can you compare the resources that are currently going into the Northern Way and the resources going into London and the London Olympics?

  Yvette Cooper: I cannot give you immediate, specific figures for the Northern Way compared to things like the Thames Gateway. It is about £100 million for the Northern Way. What we do have is figures for the overall spending on services per region, which we can send to you, which show the total identifiable expenditure—because obviously some things are harder to identify than others, on services by region per head—which shows higher figures for the North East, North West and Yorkshire and Humberside compared to the southern regions other than London, which, of course, because of additional pay factors for London and additional cost factors alongside the deprivation, makes it obviously a more distinctive case. But we can give you those figures which show expenditure overall per region.

  Q634  Alison Seabeck: The Government Office for the South West told us when they came before us that they are currently implementing 46 public service agreements. That is obviously quite a wide range of formal tasks they are being asked to undertake. Given the complexity of that, and given the need for PSA2 to be met and so on, who in central government actually pulls all this together and ensures that central government's messages get out to the regions, particularly given that obviously, departmental expectations of Government Offices vary, and there is clear evidence that they vary?

  Yvette Cooper: The Government Offices' role has changed and expanded as we have devolved more out to the regions. Initially, when they were first set up, they were probably only dealing with a couple of departmental programmes of work. Now they deal with a whole range of departmental programmes of work and so the scope of work has changed exactly as we have tried to pass more out to the regions. That therefore means that the regional directors have a critical responsibility in terms of co-ordinating the work across the different departments. If lying behind your question is whether we should do more in terms of looking at the regions as a whole, then I think there is probably quite a strong case for that. Individual departments obviously have to take account of their own priorities in different ways.

  Q635  Alison Seabeck: Is there not a risk that certain departments will be able to pull strings more effectively with the Government Offices than others and therefore risk priorities being slightly skewed? It is all about leadership within the departments.

  Yvette Cooper: If that is a criticism of individual departments for not sufficiently engaging with their regional offices, perhaps that means there is more that individual government departments should do. Certainly, because we obviously do quite a lot of work with the regional offices, I have regular meetings with regional directors, for example, to talk about a whole range of different issues, including planning and so on. I think that is probably quite an important thing for Ministers to do but that will vary from department to department.

  Q636  Alison Seabeck: It is quite an interesting role for Government Offices in a sense, because they are stuck in the middle really. You have a real question about who pulls their strings. Is it government-down trying to implement government policies or should they be listening to what is happening on the ground in the region and making sure that that view is fed upwards to central government and therefore policies adapted accordingly? It does seem to vary from region to region, exactly that dynamic. It does not seem to be consistent across the country. You must have an oversight of this and experience of all regions. What is your feeling? Is the balance right? Are Government Offices willing to be slightly independent of government or are they simply extended arms of government?

  Yvette Cooper: My experience of dealing with regional directors is that they will do both; they will look at implementation and monitoring and progress with particular things that need to be done in different areas, but they will also feed back problems, difficulties, and I have certainly found them extremely helpful in terms of identifying problems and difficulties in particular areas, maybe around housing and so on, and being very good feedback mechanisms. What I think we should not do, however, is expect the Government Offices to do everything. They are linked through the Government; they are part of government. We made a decision for example, on housing to transfer the regional housing board from what was usually committees chaired by the Government Office to the regional assemblies. It was partly a Kate Barker recommendation that we needed to link housing and planning but it was also, I think, a sense that actually, those sorts of housing priorities, the recommendations on what the housing priorities were within the region, should better come from regional assemblies, who are a more responsive way of feeding back the real views within the region than the Government Offices.

  Q637  Alison Seabeck: So we should not expect the Government Offices effectively to stand up to central government; it should be the regional assemblies being in turn fed by what is going on in the region and the regional development agencies and what they are picking up. Is that what you are saying?

  Yvette Cooper: The Government Offices do provide important feedback mechanisms but we should not expect them to do something, to be something that they are not. The regional assemblies and the RDAs on economic matters play particularly important functions. We should not expect Government Offices to play those functions.

  Q638  Anne Main: If I can take you back a step, you said that there may be a problem of communication between government and the regional offices. Have you done any assessment to see how good the communication is, so that we have a picture of how well visions or strategies are being communicated? There does seem to be a bit of a grey area as to who is responsible. Is it coming from down or up? Are you sure that the communication is good? You have accepted that there may be a criticism.

  Yvette Cooper: No, it was an open question: if you want to put criticism to us that you have picked up, then obviously we will look at it.

  Q639  Anne Main: I just wondered if you had any information.

  Yvette Cooper: We are not aware of Government Offices raising systematic concerns about a particular department or a particular issue where they feel that the communication is not working effectively at all, and what I can say from my policy area is that, certainly around housing and planning, I have quite a lot of contact with Government Offices, and I find that that arrangement works extremely well, that they are very good at both being able to not simply look at what the policy execution is in particular areas but also to come back and say they have got problems with this or problems with that or we are going to have to change policy in a particular way to address particular things in particular areas. What I cannot do is speak for every government department, because clearly issues and policies will work in a different way.


 
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