Examination of Witnesses (Questions 80-92)|
BENDER, KCB AND
24 OCTOBER 2006
Q80 Mr Weir: How long do you feel
the RDAs have to prove that they are effective in the changed
Mr Darling: I am not setting an
arbitrary timetable but as a matter of fact one of the things
we have to decide as part of the Comprehensive Spending Review
process is how much we are proposing to spend, not just on programmes
but also on administration. Of necessity in the next few months
we will look at what we need to do here. In parallel to that,
the government is looking at organisations asking how they relate
to local authorities. I mentioned the city regions, the Passenger
Transport Authorities and so on. These are all things that we
need to take into account. Of course you learn through experience.
Generally speaking, RDAs have been good. There are variations
inevitably. A lot depends on the people you have in them. You
should not be surprised at that. Whilst it will be changed from
time to time, the principle behind an RDA is a good one because
it is important that we do not become too London-centric. We have
to make sure that the different regions also can attract their
investment, drive their own businesses and so on.
Q81 Rob Marris: You were talking
about variations. I preface this comment and question by paying
tribute to successive Secretaries of State for Scotland because
I note from your departmental annual report that after devolution
in 2000-01 comparing spending per capita by RDAs, the West Midlands,
my region, with Scotland, Scotland was getting per capita 61%
more in 2000-01. The estimated outturn for this year, that difference,
has gone up from 61% to 155%. Their plans for next year are that
that differential will rise to 158%. Given that GDP per capita
is lower in the West Midlands than in Scotland and they are similar
populations, can you account for the huge difference?
Mr Darling: I probably can but
I cannot offhand. I am six months rusty on this. Expenditure per
head does vary. It depends of course what you attribute to it
but it might be better for me to write to the Committee and set
out what the differences are.
Q82 Rob Marris: The figures are set
out at page 178.
Mr Darling: I know where they
are set out but the explanation is what you want.
Q83 Chairman: There are a number
of West Midlands Members of Parliament on the Committee who are
very interested in the answer to that question.
Mr Darling: There will no doubt
be an interesting discussion around this table.
Q84 Mr Binley: I am particularly
interested in your comment about attracting inward investment
and its relationship to job creation, especially in those areas
that are asked to create massive housing growth in relation to
sustainable communities projects. I wondered how your department
has fitted into that particular project and what hope I might
give people in Northamptonshire that there will be jobs available
for the 350,000 or so additional people who will be coming into
the county as a result of the project.
Mr Darling: The department is
engaged principally with other departments rather than on its
own as a department. The basic problem we have is that we know
there is a housing shortage in many parts of the country. Understandably,
people are concerned about where these houses are going to go,
what is the impact and so on. What we need to focus our minds
on is that we want to do everything we can to grow more jobs in
this country, to attract people to come and do business here,
but one of the things they will consider is can they get people
to come and work for them; are there houses available? That is
leaving aside that in this country the number of people living
on their own is increasing so the demand is going up and so on.
We have to strike a reasonable balance. In areas like Northamptonshire
and large parts of the south east, we know that we need more housing.
There are very few parts of the country now where that is not
the case, even in areas that historically have not had this problem.
We are very closely involved. Of course, the primary responsibility
is with the Department of Communities and Local Government, but
the Treasury is involved, we are involved and just about every
other government department is involved as well.
Q85 Mr Wright: You mentioned the
transfer of responsibility to RDAs. One of those was Business
Link. That was the responsibility of the Small Business Service
so the SBS has lost one of its main roles. What is it expected
to achieve in the future?
Mr Darling: I refer you to the
Parliamentary statement I gave at the time we did this, just after
we came back in October. We want it more to concentrate on those
areas of policy that affect small business. That is what its core
responsibilities are. I think the RDAs are far better placed to
provide frontline services. The Small Business Service is much
better at looking at those areas of policy that we need to concentrate
on and there will be specific projects, I dare say, from time
to time that we will need to look at. I took the view not just
that we need to simplify the number of things that we offer people;
I would also like to reduce the number of places that you to get
them because one of the things that people complain about is not
just the sheer number; they also say, "Is it the RDA? Was
it the Small Business Service? Is it the local authority?"
The more we can simplify that the better. The RDA is quite a good
place to start with.
Q86 Mr Wright: Do you see a time
when perhaps the Small Business Service will itself be encompassed
within the RDAs?
Mr Darling: No. It is going to
lose its status as an agency because it is frankly too small.
It will become part of the DTI within the next few months.
Sir Brian Bender: Essentially,
it was set up some years ago as a delivery body of 500 people.
The Secretary of State's decision now turns it fully into a policy
and analysis unit about small business enterprise policy located
in the DTI, working across government, about 50 strong, plus the
task and finish group that I mentioned earlier. It is and will
be part of the DTI and no longer an agency, getting other people
to do the delivery, RDAs, Business Link and so on.
Q87 Chairman: And finally, the big
one. What are you for? Apart from being a home to 92 non-executive
Departmental Public Bodies and executive agencies, tucked away
on page 161, paragraph 6.5 under "Setting and Delivering
Priorities", "Performance in 2005-06", you say
that you have initiated the DTI 2020 project which aims to identify
how the department may look in 2020, including its future role,
policies and spending priorities. Give us a hint.
Mr Darling: Every Secretary of
State for Trade and Industry gets asked this question. I was looking
back at what the DTI had done over the last 30 years and it is
remarkable how much has changed. With practically every reshuffle,
something comes in or goes out. The longest single period of stability
happened between 1621 and 1970 when it was called the Board of
Trade. Since then it has changed. It has been the Department of
Energy, the Department of Industry; Trade has been and gone; Employment
has been and gone. It was called the Department of Prices and
Consumer Protection, or at least some part of it was, in the second
Wilson Government, I think. The DTI is unusual in that it covers
a very large number of sometimes unrelated subject matters. That
is one of the good things about it. It is a very interesting place
to work. You mentioned energy which is of crucial importance,
whereas a few years ago it was not. It will be probably one of
the biggest things the government is going to have to deal with
in years to come. We have not mentioned today the whole question
of nuclear. That is the second biggest item that the DTI spends
its money on through the NDA and so on. We have mentioned science
and technology which is by far the biggest area. As you say, there
are a very large number of arms' length bodies which over the
years have been brigaded under the DTI. Who is to say whether
every one of them should be there? There are always going to be
arguments. At the end of the day, it is for the Prime Minister
to decide what shape the government is to take and not for any
individual Secretary of State. There are functions within the
department that are going to have to be carried out in one place
or another. My guess is that over the years what is important
and what is less important will change according to circumstances.
What I am very clear about is that the DTI has, like many other
government departments, some very good people in it who we want
to keep. It is very important, if we are going to maintain the
efficiency of the British Civil Service, that we make sure that
we can retain these people to serve successive administrations.
Rather than looking at what is the DTIbecause the answer
is it will probably change and has changed in the pastand
incidentally I discovered I was still president of the Board of
Trade, despite the fact that if there is a board I have not seen
it. A lot of the stuff that happens here is going to continue
for many years.
Q88 Chairman: That is not a strong,
strategic case for the department. You have offered a pretty strong
case for the Department of Energy but do you think there is a
need for a business-facing department within the machinery of
Mr Darling: Firstly, yes, there
is a case for energy. Yes, for science and technology. Yes, for
company law and employment relations. All these things need to
be done by the government. The shape of priority and so on will
vary from time to time. In relation to government, as I have been
suggesting throughout this examination, there are things that
government needs to do. Some of them will be done within the DTI.
Some of them might be done in the Treasury or Transport or Defra
or wherever. What I am very clear about is we should not be duplicating
them. We should ask ourselves which areas of work are not being
done by anybody else that we do need. For example, maintenance
and an understanding of relations like aerospace, pharmaceuticals
and so on. If they can be done better elsewhere, that is what
we should do. If they need to be done better in the DTI, we should
do them there. The better question to ask is: what are the functions
that the government needs to discharge? What does the government
need to know? Then you deploy your resources accordingly. The
name on the silver plate on the front door is of secondary importance
to what needs to be done within the department.
Q89 Chairman: You indicated earlier
that you would be entirely supportive of next year's departmental
report. There are people I hear speculating that you may have
a different job in a year's time as Chancellor of the Exchequer,
some say. There is historic tension between the Treasury and the
DTI. I am sure we would love to know what view you would take
as Chancellor of the need for a business-facing department.
Mr Darling: It is a nice try.
There is no tension between my department and the Treasury.
Q90 Chairman: That is a first. They
are still in mourning for the loss of the Financial Services Regulation.
Mr Darling: I cannot remember
whether that came over just before the general election 1997 or
just after, but it rather makes my point about how Whitehall is
organised, which is ultimately for the Prime Minister.
Q91 Chairman: The important thing
from what you have said is that all the major parties have toyed
with the abolition of the DTI in the sense of some huge, low hanging
fruit to gain public expenditure and regulation back. Most of
those functions have to be done somewhere.
Mr Darling: You make a very good
point. I do not know if you pointed that out at last year's general
Q92 Chairman: I thought it.
Mr Darling: I cannot conceive
that any government would say, "We have no responsibility
for science and innovation." Science and innovation have
been moved around Whitehall several times, certainly within my
recent memory. How you organise Whitehall or government, whatever
you doI remember the debate about work and pensions, for
example, when it was set upwhat do you split? Should employment
law be part of work and so on? These are arguments that state
a case for just about every single proposition.
Chairman: I think you have told us what
DTI 2020 will conclude. We are very grateful to you. Thank you
very much indeed for your time. We look forward to getting the
very important information relating to the financial aspects of
the department. Thank you very much.