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 expenditurebecause obviously some things
are harder to identify than others, on services by region per
headwhich 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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