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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1054-i House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE BUSINESS AND
the role of regional development agencies
MR CHRIS HANNANT, MR STEVE RADLEY and MS KAREN DEE COUNCILLOR DAVID SPARKS, COUNCILLOR STEPHEN CASTLE and MS DEBORAH HAYDOCK Evidence heard in Public Questions 1 - 121
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Business and on Members present Peter Luff, in the Chair Mr Adrian Bailey Mr Brian Binley Mr Michael Clapham Mr Lindsay Hoyle Miss Julie Kirkbride Mr Mark Oaten Mr Anthony Wright ________________ Memoranda submitted by British Chambers of Commerce, EEF and the CBI
Examination of Witnesses Witnesses: Mr Chris Hannant, Head of
Policy, British Chambers of Commerce; Mr Steve Radley, Chief Economist,
EEF; and Ms Karen Dee, Head of Infrastructure, Q1 Chairman: Lady and gentlemen, thank you very much for coming in today in this opening session in the Committee's inquiry into the role and effectiveness of regional development agencies. It may interest you to know that as far as we can recall this is the biggest inquiry we have ever launched in terms of volume of evidence received. We thought we had been flooded during our energy price inquiry but we have now received almost exactly twice the number of submissions to this inquiry than we received for that one, 113 pieces of evidence and growing daily, which I think shows the interest of the issue to those involved, and we are very grateful. Having the British Chambers of Commerce in particular before us today, it would be strange not to invite you to comment on the survey that you published this morning. I understand that the Engineering Employers' Federation might also have some comments to make but Karen Dee from the CBI this is not really your area of responsibility so we will come to you on the RDAs. Not that the CBI does not have a lot to say on the situation but not this particular branch of the CBI. I introduced you implicitly by that but can I do what I always do and ask you to begin by introducing yourselves for the record, perhaps starting with Karen, then Steve, and then Chris and as you introduce yourselves make a comment on what you have been saying this morning. Ms Dee: Good morning. I am Karen Dee and I am Head of Infrastructure at the CBI. Mr Radley: Good morning. I am Steven Radley, Chief Economist at the EEF. Mr Hannant: Chris Hannant, Head of Policy at the British Chambers of Commerce. This morning we published our Quarterly Economic Survey. As the name suggests, we survey our members four times a year. We think it is the biggest survey of business across the country. We get over 5,000 respondents and the picture looks pretty grim out there in the real economy. I think it is worth making a distinction between the real economy and the world of finance. When I say things look grim, we have got some of the worst indicators in terms of confidence, cash flow, order books, et cetera, since we started it nearly 17 years ago. Things are tough but they are not disastrous. We are at a relatively good place to start in terms of unemployment, inflation, interest rates, et cetera, so although it looks a bit grim it is not disastrous. However, there is this looming crisis in the finance world which is concerning. You look away for a couple of hours and there are new developments. We are very concerned about the potential impact and the consequences that the seizing up of the money markets and the lack of liquidity for the banks may have for businesses in terms of availability of credit, overdrafts, loans, et cetera. Working capital is the life blood of every business and we are concerned that the financial crisis could turn what is a downturn and a tough economic situation into something that is much, much more serious. In that respect we have been calling for prompt action from the Bank of England for a half point cut in interest rates on Thursday and also for the Government to cut business taxes, but I think more generally the thing that is sorely missing at the moment is any confidence in the financial system, and that has to be restored some way, and I think it is not the sort of thing that one specific action can deliver. It is not just the UK Government but governments around the world which need to be seen to be on top of the crisis so that people who are lending in the money markets can start to have a bit more confidence and start to lend that money and then the credit will flow again. Q2 Chairman: I know two of my colleagues want to explore that issue of credit availability in a little more detail briefly, but, Steve, could I ask you to comment on EEF's position. EEF has been quite optimistic about manufacturing (although there are concerns about raw material prices and so on) but what do you make of what the BCC have said today? Mr Radley: In terms of the overall picture I agree completely with what Chris
is saying. From a manufacturing
perspective, what we have been saying for the past nine to 12 months is that
for a lot of companies they felt a disconnect between what is happening in the
financial markets and their own situation, for a lot of them continued to be
fairly strong. I think more recently we
have seen it starting to impact on manufacturers because it has squeezed
consumer spending and we have seen the hit on motor vehicle producers and
export markets, particularly in the European Union (which have kept things
going for manufacturers for some time) are now starting to look a lot weaker. I would add though that there is still a mood
of resilience out there and I think a lot of companies have diversified, they
are selling into the Chairman: I think that leads nicely to what Brian wanted to ask you. Mr Binley: Having
met with about 24 small businesses over the last week, nine of them in the
Chamber of Commerce office in Q3 Chairman: A policy prescription expressed articulately by Brian Binley! Mr Hannant: I would agree with what you have heard, although we are talking constantly to our members to try and find out what the picture is. It is mixed and it depends with whom they are currently banking. There is certainly pressure coming down through the banks to reduce credit because the banks do not have any money themselves, and that is the problem, and it will be essential that measures are taken to ensure that the cash flows and that there is money available to businesses to enable them to carry on because if the system seizes up then we are all in trouble. Mr Binley: Yes. Chairman: Thank you very much for that. Lindsay? And then, Steve, do you want to comment at all? Q4 Mr Hoyle: Just following up from Brian, it is interesting because what we are asking for - and you seem to be agreeing - is intervention by the Government and if we are putting the money in, why are we not getting something back in return to help protect business, and it is nice to see the Chambers of Commerce going along with that. Hopefully everybody is of the same opinion. So what can we do, why are we not naming the bad boys in the banking game because I think the problem is, as you said, it is not everybody, it is certain banks, so let us name and shame and we will know, effectively, who we have to take on. My concern is, and what small and medium-sized businesses are saying to me is that their biggest problem is paying their new energy bills. Not only have we seen oil go down but the fact is gas is going up by 30%, oil has dropped by 30 so gas has dropped by 30, and the projection is a 30% increase on top of what they are already paying, so we have got a 60% differential in the price and they cannot pay their energy bills. What do you think we should do and what are you doing to try and get those bills down? Mr Hannant: I agree that there is a problem with the energy markets for small businesses. Q5 Mr Hoyle: Medium sized as well. Mr Hannant: Small and medium-sized businesses. What we hear a lot about is that they find themselves on complex contracts, it is difficult to ascertain what the true price of what they are paying is, sometimes they find themselves flipped over on to a new contract because they have not picked up on the small print and the problem is that they do not have the same rights that you and I have as retail customers. We have been asking the Department - I still want to call it the DTI - to look at potentially extending those rights to small and medium-sized businesses. Certainly we have been talking to Ofgem about looking at the practices of the energy companies in regard to small businesses. They have a current investigation into it. Q6 Chairman: Their provisional results yesterday are really quite encouraging in this respect. They seem to have taken a lot of our concerns as a Committee and Mr Hoyle's concerns in what they have said, and it is something to which we are planning return to as well, so there is some sign of hope there. They have expressed exactly what you have just said in your report yesterday. Mr Radley: On the energy issue I think the only thing I would add is the issue for a lot of manufacturers is their inability to get gas on the same contractual terms as their competitors in Continental Europe. This seems to be an issue that Ofgem has actually taken up and I think it is probably something that needs to be taken up by the European Commission. On the issue of banks, measures to help SMEs will be extremely helpful but it is no substitute for an overall strategy that is actually going to shore up confidence in the financial system and that is probably something again that we are going to need to do at a co-ordinated level across European. At the moment what is extremely unhelpful is that the key European economies do not seem to be working as closely together as they should do. Mr Hannant: I do not think it is just a question about naming and shaming. Banks are in the business of lending and if they do not lend there is no point to them, and the problem where they are cutting back on lending is because they have not got anything that they can lend, so I would agree with Steve that we need to get the whole market moving, the money markets and all the rest of it, so they are in a position to shift the money around. Q7 Mr Clapham: Steve, can I just ask in relation to what you were saying about manufacturing whereby you said that because manufacturing had previously not had the kind of relationship with the banks that others might have, they had found their own route through, but nevertheless there were implications for the future. Is it a matter that if we see the Government intervening immediately then we might well avoid tipping manufacturing into a worse position than it already is? Mr Radley: I think what we need to do is we need to move fairly quickly here to intervene to shore up confidence in the banking system. That is going to have implications not just for manufacturers but business across the economy. What we do not need to do is rush into something that does not work. We need to come up with a plan fairly quickly that is going to be credible and actually underpin the banking system, and I think that is the key issue for manufacturing. If you get that right, manufacturers have been through a lot of tough times over the last couple of decades, and they are extremely resilient now and they have got stresses in place to actually move forward, but what we need to do is get the financial system fixed for them to be able to do that. Chairman: We must move on to the main subject of the inquiry but it may interest you, and indeed other people, to know that we do hope to have the new Secretary of State in relatively soon to explore these issues in rather greater depth than we have been able to do in this brief ten or 15 minute beginning. Thank you very much for that. It does set in context the issues about RDAs to which we must now turn and I look to Lindsay Hoyle. Q8 Mr Hoyle: Karen, can we start off, if we look at the RDAs, what do you think are their strengths and also what are their weaknesses? Ms Dee: I will not take that as a leading question! Basically, as we have outlined in our submission to the Committee, the CBI right from the start of the set-up of the RDAs were supportive of the RDAs. We thought that it was a good idea to have a regional tier or body to focus on economic development. I think that some are better than others, performance is mixed, but we continue to see that as an important role. I think there are some key policy areas for us where it is clear that that regional level is important, things like planning for infrastructure and some transport issues which are not unique to local authority-type boundaries and getting that co-ordination and having a body to be able to do that is something that we see as particularly valuable. In terms of weaknesses, it is not easy to say that they are all the same because there are regional differences. Some of the key concerns that our members would express are things like making sure that they focus on what they were intended to deliver, so the focus on economic development should be what they spend their time doing, not trying to do too much and spreading themselves too thinly. I guess there is patchy business engagement and some are very good and others are less good. Those are some of the headline things from us. Q9 Mr Hoyle: How do you think the RDAs' effectiveness should be measured? You have said that you have seen the strengths and weaknesses, some are good, some are bad, so how do you think we should measure them? Ms Dee: I think that is quite a tricky question. From a business perspective what we are really interested in is the outcomes. You can measure outputs, you can measure inputs, but it is sometimes very difficult to assess even if you have outputs what that actually means, does it mean that those businesses in their areas were successful? It is getting a real feel for how they have delivered real, genuine effectiveness based on outcomes not just outputs, and I am not sure we have a fixed idea about exactly how that should be done. Q10 Mr Hoyle: I want to test you a little bit more on that because what is interesting is if you know that some are good and some are bad then obviously you are measuring the effectiveness. Ms Dee: What we do not do currently is gather empirical evidence. Q11 Mr Hoyle: Right, so it is a gut feeling you are giving your evidence on. Ms Dee: It is not a gut feeling; it is the feeling we get from our members. When we have asked them (which is what we have done as part of this) some say, "Yes, we are really pleased because they are effective and they engage with us well and they are doing a good job, we feel," and others will say, "We are not so sure." Q12 Mr Hoyle: So who is a shining example? Ms Dee: I am not in a position to say --- Q13 Mr Hoyle: But it will help us with our evidence, to be honest. What I will not do is ask you who is the poorest but it might be good to say who you believe is top of the tree. Or one of the best if that is easier. Ms Dee: One of the things that members have commented is in the North East they are particularly strong at business engagement. Businesses that commented to us said, "We are particularly pleased with the way that the North East Development Agency engages with us," so that was one particular area. Q14 Mr Hoyle: My final question on that
because I think that is absolutely key, is do you think that is down to size
because it is a smaller agency? If we
take one of the biggest compared to the North East, which is the Ms Dee: I am not sure if it is size as much as whether or not there is a distinct regional identity. In the North East there is that and I think in part that helps. Mr Hoyle: Thank you, Chairman. Q15 Chairman: Before I bring in the next questioner, and I will call Mark Oaten in on a supplementary, can I ask you an overarching question, and you might want to respond to some of Lindsay Hoyle's points as well. I am struck by how few of the pieces of evidence we have received for this inquiry actually come from the business sector. They have come from central government agencies, the local authorities, the RDAs themselves, academia, various lobby groups and professional bodies, and the voluntary sector, but only about 20 of the 113 or so submissions received actually come from business. What I see here, if I am very frank with you, is a reluctance to bite the hand that feeds. Many trade associations have spoken to me privately about their views about RDAs and have encouraged me to undertake this inquiry because they are critical, but they have not submitted evidence to this inquiry because they are reluctant to be seen to be criticising their pay masters. Do you think that criticism is fair? Chris? Mr Hannant: I think there is an element of that. I endorse most of what Karen says. There is definitely patchy performance and I would also say that even where an RDA is perceived as doing well they may have variable delivery across what they do. There is also a desire to be supportive because when the original proposal came out it said look at economic development at a sub-national level, and people thought, "Yes, that is a good idea, we endorse that, we support that," and I think one of our concerns is that what we have got now is quite far from the original model. They have acquired a whole range of what you might call non-economic responsibilities to deliver government policy because they happen to be something that can deliver a policy objective below national level and that is the tool the government alights on. That has been one of their problems because it has diluted their focus away from economic issues. I would also like to just develop one of the themes that Karen picked up. Where they are failing from our perspective or the performance is below what is ideal, there is no real mechanism to pull them up by their boot straps. Q16 Chairman: We will come to accountability questions later. I do not want to cut you off because other colleagues will come to those questions later. Steve, do you want to comment? Mr Radley: Just to add a couple of points. I think measurement of effectiveness is an extremely difficult thing to do. You probably need a range of tools there. I think in terms of looking at outcomes we are very attracted by the original recommendations of the sub-national review where you look to gross value added per head and measured productivity and you supported it by a number of indicators that were not perfect (such as enterprise, skills, research and development spending) but were probably the best available. I think you have to supplement that by looking at the effectiveness of individual programmes and also the level of engagement with business. You have to look at a range of things, but I think Karen is absolutely right, the focus needs to be on output. On the issue of commenting on the performance of individual RDAs, I do not think I would want to be drawn to say one is better than the other, but I think you can identify some areas of very good practice. I think for example the northern RDAs have done extremely well in working with other partners in terms of regenerating some of the cities that were going into decline. Q17 Chairman: But you are going back on the good stuff again. What I am asking you is whether there are failings. I think your submission pulls its punches a bit. Let us take the issue of boundaries of RDAs, the CBI evidence and the EEF evidence both tuck away inside their evidence is a criticism that the boundaries are unhelpful. That is one of the major criticisms I get from industry. A national industry like aerospace or automotive - to just choose two at random - operate nationally and when it comes to innovation which the CBI evidence refers to, or general competitiveness questions, as yours does, you say the boundaries of RDAs are irrelevant for day-to-day operations. Mr Hannant: I would add that one of the key things that helps an RDA be successful is where their administrative boundary coincides with the real economic area. Q18 Chairman: Like the North East? Mr Hannant: Yes and, to be honest, it works less well across the South
East. The economic area really is Q19 Mr Oaten: For a Select Committee to do its job properly we need to know who are good performing and who are bad performing RDAs. That seems to me completely simple. The only question is that you either will not tell us or you do not know. I do not accept that you do not know because I know you all know who is good and who is bad and I know you know because you have done surveys and the British Chamber of Commerce has done its survey last August and on all of those five questions about a third of businesses said that their RDAs were doing badly. You must therefore know who submitted that from which regions and you must have a regional breakdown of where those figures came from. Why are you not prepared to give the Select Committee that information? We do not necessarily want to name and shame but for us to do our job it would be very helpful to know who is good and bad. I do believe you know the answer to that question because you must have it from the data from your survey. Mr Hannant: We do. One thing I would just say though is that some of those people saying they are good and bad will be talking of the same RDA. Q20 Mr Oaten: Let us worry about the analysis of it. If you have got the facts, just give them to us. Mr Hannant: We are getting a mixed picture in the assessing of all RDAs and also a mixed picture depending on what they do and what you are asking about. I do not think it is as simple as just saying RDA A good, RDA B bad. Q21 Mr Oaten: Chris, do you accept in the untangling of that that it might be extremely helpful to understand why one does something well and another does something badly? But you are not prepared to share that with us? Mr Hannant: That survey was done before my time at the BCC but I am quite happy to go back, look at it, and see whether we do have the data that specifically relates to --- Mr Hoyle: Somebody has got the data. Chairman: Can we bank that pledge. My RDA was one of the worst RDAs in the history of mankind when it was set up, it was just appallingly awful. It has improved significantly. Although I have issues with it, it is significantly better than it was so we all have subjective feelings but getting an objective measure of the change would be really helpful I think. We will bank that pledge, thank you very much. Tony Wright? Mr Wright: Just on the same issue, it is not so much that you have a good RDA and a bad RDA, quite clearly the figures here show a mixed bag of those that are good and those that are bad, and I think the whole process has also got to be about where an RDA is performing very badly in one particular area of their responsibilities they may well be able to learn from another RDA that performs particularly well. That to me is the most important thing - that we need to look at the weaknesses as much as those strengths. We are not saying which is the worst performing RDA in the country. There are issues that they may well be addressing. I have concerns in my particular area and I am aware of where some of the weaknesses are there, but they are quite well performing RDAs as well. You have got the percentages there and I am sure that you would be able to break those figures down to say RDA B performs well in communication with business and also effectiveness in terms of the resources but they may well perform very badly in other areas. That is the information that we need. We are not after a witch hunt to say that one is a very bad one so we need to change it, because we believe that there are good things in many of the RDAs, but there are things that need to be improved on and where they can learn from other RDAs. Chairman: Can I suggest that we do not get too bogged down. I agree strongly with what Tony Wright has just said. Perhaps all three of you could go away and think about this question and what they are prepared to share with us in more detail. You have made a pledge on your survey. It is important because it is very difficult to do our job. Also Mark's point about driving up performance by bench-marking - which is a common feature of industry for heaven's sake - is a really important one, so can I invite you to think about that and we will return to you after this meeting to discuss the issue. Julie Kirkbride has a point. Q22 Miss Kirkbride: RDAs have existed for around ten years and things were done differently before. As Steve said, in those ten years they have morphed into mini empires and the direction of travel is to become bigger and more powerful, I am sure, so if you could decide would you keep the RDA structure or would you abolish it and deliver a lot of what it does locally? Mr Radley: If you look at this you could argue that you could do things at a local level, county level, regional level or something in between, and divide regions into subregions. For us we feel that this is probably the best available strategy because it is closer to the customer than national delivery but it has got the critical mass that you will not get if you just operate it at, say, the local authority level. What you need to do - and the RDAs are starting to edge towards this - is actually make sure that you collaborate between the RDAs so you have initiatives going across the boundaries, which is a point we made in our submission. In some cases you probably need to look at operating below the regional level as well as at the sub-regional level and focusing on specific issues. Mr Hannant: I would say for me it is the functions of the RDA that are more important. They do deliver some important economic functions. They also do some stuff that we think should not be done by them. I would strip it down to the fact that if they did not exist we would still want those core business support functions being delivered. Q23 Miss Kirkbride: But they could be done by somebody else? Mr Hannant: They could be but where you have got an RDA that is functioning and delivering effectively on those I would say leave it in place. What we have also said is that there should be mechanisms for where it is not working, for ministering and consultation with local business and local authorities to come together with a different means of delivering those core functions. Q24 Chairman: Before you answer Julie's question, can I just remind you of what you said in your evidence: "Businesses do not recognise regional boundaries when innovating and so need RDAs to present a consistent and coherent approach across the UK" - which we have already agreed they are not doing - "and RDAs often have market awareness, but sometimes lack full appreciation of the needs of business", which is a very elegant way of saying something really rather critical. Ms Dee: Using that and drawing on it, if the RDAs were not there we would see a need for some sort of sub-national body to take through and tackle some of those issues which do not easily fit at local authority level. In our view there is a need for some sort of regional body to drive economic performance. It is also true that if you are a business - and this partly comes back to your previous point, Chairman - often companies are big and they see themselves as national and they do not see themselves necessarily as regional and the boundaries therefore are always going to be slightly arbitrary. That does not necessarily mean that you should not have a regional body but it does mean that they need to work together closely and they need to understand that businesses will not always sit within one region, so we do see a need for a continuing regional function in terms of promoting economic development. I suppose that there is considerable scope for streamlining and tightening up on the focus of what they deliver, and it is important that they collaborate with those other partners who may be in the lead in delivering some of those issues. I think what I am saying is that they cannot do it all by themselves, but it is a useful cascade down from national policy in between to local authorities. Mr Radley: A good example of where we are moving in the right direction is the decision to align some of their budgets with the Technology Strategy Board to support innovation, so some of the criticisms that we made are now starting to be addressed. Chairman: Very good team work there! Q25 Miss Kirkbride: It strikes me therefore that there might be a role for stripping them down considerably, but in actual fact the direction is to augment them with this business of the strategic integrated regional strategy and the fact that they are going to be now responsible for economic and spatial planning. For a start I would like your observations on that. It seems to be fundamentally anti-democratic to start with, but you are the panel so let us start with ladies first. Ms Dee: The position that we have taken generally is that we support the concept of bringing the regional strategies into a single regional strategy. It makes no sense in our view to have them as separate documents administered and delivered by separate organisations, so as a principle we are supportive of a single regional strategy. And given our views on the need for the RDA to be there driving economic development, we think that it is a reasonable proposition for that body, or a single body at least and therefore the RDA, to be able to take that on. That is not without its challenges and I think we believe that there are going to be some significant issues for the RDAs in assuming these roles - skills, resources and making sure that they get the right focus - so we support the principle, but in practice I think it is going to be a very difficult challenge for the RDAs to take on. Mr Radley: Just to add to that a little, I think the key thing is that RDAs play a very strategic influencing role and are a strong voice of business in terms of getting things done that really matter to businesses locally such as transport, planning, those sorts of issues. At the same time as they are taking on a more strategic approach they should look to devolve delivery for a lot of the economic development programmes and have more of a commissioning strategic role. If they get that and if they develop the skills in terms of what they need to do on planning infrastructure and transport, then I think they have got a good chance of being very successful. Mr Hannant: I endorse most of what my colleagues have said. For me the RDA role on planning is about leadership. It does not necessarily have to be undemocratic. I think there is a role for the local authorities and there should be a role of accountability at a ministerial level for sign-off, but I think that if you have an effective economic strategy you do need a clear lead, you need some individual organisation in the lead pulling it together with a clear remit that they are charged with economic development, otherwise you have got a recipe for too many cooks. They do have a leadership role but that is not to say that the local authorities and indeed ministers should not have their say, so I do not think it is undemocratic. Miss Kirkbride: Two quick examples then from my own constituency as to why it is
deeply undemocratic. For one thing on
housing targets, they want to give lots of houses to Redditch which will
therefore have to built on the greenbelt border of Bromsgrove because there is
not enough space in Chairman: On the problems with the Bromsgrove railway
station extension I am with you all the way
because it is crucial for getting commuters into Miss Kirkbride: I knew he would let me say that. Mr Binley: Can we all have special deals, Chairman! Q26 Miss Kirkbride: I have just given you two very good examples of how deeply undemocratic it is. Mr Hannant: It is very important for your RDA to be in consultation and dialogue with local authorities and local people in the developing strategy and I would hope that they would come out with an answer that is both good for the economic development of the area and for local people. I do see that there is an important leadership role and you can only have one leader in an area, I would say. Q27 Miss Kirkbride: The skills issue was
raised as one of the reasons why it might be tricky to implement this new idea
of a strategic integrated regional strategy, or whatever it is called. Is that the principal problem that you have
with it, otherwise let us go and "Balkanise" Ms Dee: Our response to the Government proposals was that we are supportive of the principle. We have considerable issue with some of the structures underneath and quite how you make them work together, so I am not sure that we are yet in the situation where we say yes, it is all sorted and let us just go ahead. There is quite a lot of work still to do to refine the proposals to make sure that they are workable and that the RDAs are going to deliver something that is better than the current system that we have. Otherwise, what is the point? This is essentially a re-organising of regional structures and if that is to be meaningful to business then it has to deliver something that is better. We are not yet convinced that the detail behind that proposal has been worked out sufficiently to give us the confidence to say we are there. Q28 Miss Kirkbride: The Government have taken powers to push through planning projects of national importance - building nuclear power stations or whatever it might be - and I think that is right because there are some things that we have to do fast and more streamlined and that is a national power. What is it at the moment that is lacking across the country that the new RDA structure is going to address if that problem has been decided by a piece of new government legislation? What is going wrong at the moment that is going to be addressed by these super-bureaucracies across the country? Mr Hannant: Currently we have got at a regional level two competing strategies, we have got the spatial and the economic, and it seems to make sense to us to look at that collectively. Also the general view of the membership is that regional assemblies have not been effective and have not delivered in their role, and it seems to make sense at a sub-national view that you are looking at these things together and that there should be an organisation that is charged with leading on this stuff. As I said, I would endorse what Karen said as well, we do not think the Government in its current proposals has got the structures right, but we do think there is an important role for all local players - business, local authorities - to engage in this process, but it has to be led by an individual organisation and co-ordinated. Q29 Chairman: Can I help Julie with this point about democracy. I wrote last night flicking through the evidence "democracy" in very large letters against one of your comments. "The proposal to grant a wide range of powers to the leaders' forum for drawing up and "signing off" the single strategy; scrutinising/holding to account the RDA; and delivering elements of the strategy would be a significant transfer of power/influence away from the business community (and therefore the focus on economic development) towards local authorities", as if this is something awful and dreadful. There is this messy business of democracy and there is nothing more controversial than where housing land should be, where new roads and railways are built where employment land is established. This is a fundamental building block of the democracy of this country and you seem to be arguing for a corporate estate in which local authorities are cut out. Ms Dee: No, not at all. If I can come in on that point, our concern was about the way that the forum in the Government's current proposals might seek to work. Q30 Chairman: We will deal with that in more detail a little later on. So you value democracy and Julie is wrong to say that you are anti-democratic and you want to squeeze out local authorities? Ms Dee: No, the local authorities should not be squeezed out, that is not the point at all, but there is a role for the RDA to take that strategic view which I think local authorities are not in a position to be able to do themselves. Mr Radley: Our concern has been that the local authority leadership forum looks as though it would be a very cumbersome approach that would tie RDAs --- Chairman: Adrian Bailey will ask you about that in more detail later so we will bank that and wait for him to come back to that. Mr Hoyle: Now we know about Bromsgrove railway station we are all right! Miss Kirkbride: I want it on the record as they might be listening, yes, quite. Mr Binley: Thank you very much. I will probe this whole business of the involvement of local authorities to really understand what you meant by the remark that the Chairman quoted. I want to ask whether you think that the local authorities do have the skills and expertise to undertake the duties designated to them? I want to know if business really welcomes this because the feeling I am getting is that it does not. I am a businessman primarily, that is my proudest boast and you are representing me and I wonder where you are coming from. Chairman: Can I just help to form Brian's question and point out that many of the submissions from the local authorities we have received have expressed concern about the wording of the SIR in relation to the economic assessment that underpins the SIR so the economic assessment itself is also a matter of considerable concern to those local authorities. Q31 Mr Hoyle: Including Mr Radley: I think the concern of business is that they want RDAs to play this leadership role. They cannot just plough ahead and not talk to people. They need to consult local businesses, local people and talk to the local authorities and engage with them. What business is looking for is one organisation to take leadership, to actually take decisions at a strategic level. If you devolve this to the local authorities it is very difficult to get a strategic decision across a regional area and you end up politicising a lot of these decisions. Mr Binley: I am just concerned that you do not have the skills and expertise needed to represent business, quite frankly Chairman: Do you mean the RDAs? Q32 Mr Binley: No, I am talking about these people. I am just making a point and I am concerned about that as a businessman myself. It seems to me that scrutiny has to be applied. It seems to me that scrutiny can best be applied by the people on the receiving end of this who are best represented in many respects by business and local government. I just want to repeat: do you believe that local authorities have the skills and expertise to undertake that scrutiny? If you do not, what should we do to ensure that we do have that because it is a vital part of the process? Mr Hannant: We have concerns that they do not at present. We also have concerns that the economic assessment would become a bit of a tick box exercise where they call in some consultants, chuck some money at them and they will provide the assessment and it will go onto a shelf. I think for us the economic duty should be applied to their responsibilities across the board so that they are considering the impact on the economy when they are considering all their other tasks. I think that there is also a role for the RDAs and the economic service here in central government to support the development of capacity and an understanding of the local economy and how to measure impact, et cetera, within the local authorities, but, to be fair to them, they have not had this responsibility before so it is not surprising that they do not necessarily have the capacity to respond to it, but they will need support in developing that capability. Q33 Mr Binley: Bearing in mind the way that the Revenue Support Grant has been going over the past three years, do you think they have the money to develop the skills to do this job properly or do they need more money? Mr Hannant: It is certainly the case that public finances are tight and we are seeing that feed through to local authorities. I am not sure they will have the money, although we are concerned more generally about the position of local taxation on business. Q34 Mr Binley: I did not go there and I want you to stick with the question. Mr Hannant: I would not want an issue about local authorities being short of money to deliver to translate into "let us introduce workplace parking levies" or some other tax on business to pay for it. Q35 Mr Binley: Agreed. Let us get it out of the way, so do you think that the Government itself ought to re-look at Revenue Support Grant with this in mind and specify that there is a need to improve skills in this area? Mr Hannant: It may be necessary to look at that.
I think it is certainly the case that there is capacity and resource
within the RDAs to help support local authorities to develop this sort of thing
and there is also a high degree of expertise within Q36 Mr Binley: But your general conclusion is that there is some work to do in that respect? Mr Hannant: There is some work to do. Q37 Mr Binley: Can I ask the CBI? Ms Dee: As far as I know, we have not taken a view on the Revenue Support Grant issue. On the local economic assessment duty, again it was one of those issues where we felt it sounded like a good thing that local authorities should have some sort of duty to think about the economics of their area and how they can improve that. Whether or not you impose it as a duty and quite how they would measure it, like my colleague said, we do not want it to become a burdensome process of reporting. Similarly, we question whether or not they would be able to do it, but in principle it is something that we think might be a useful trigger for getting local authorities to think about and value economic development within their areas. Q38 Mr Binley: Do any of you want to become politicians because you do sound like them? Let me move on to an area where I have some compliments to pay to the work of local authorities. I speak particularly from experience in Northamptonshire where I believe that work undertaken in economic development and regeneration has been very good indeed. Are there examples of good practice that can be shared with the Committee in that respect? Do you agree and will you be up-front with me and tell me; am I right about Northamptonshire, for instance? Mr Hannant: I cannot off the top of my head give you any examples of local authorities, but we do recognise that they have a positive role to play at the British Chamber of Commerce and we are currently doing some work with the LGA about what we can do working together at a local level to support local economies. Q39 Mr Binley: Hang on, I am getting more and more the impression that you do not really want to answer our questions. You take surveys of 5,000 companies every three months. You have got more information in this respect than almost anybody else in the country. Level with us, give us some information that we can put into good use to ensure that the situation works better. I ask again: give me examples of good practice in order to allow us to do that. Tell me where good practice exists and what that good practice is? Mr Hannant: Our survey of our members is more about the state of their business. I would be more than happy to write to you in follow-up. I just could not tell you off the top of my head now where we have had some examples. Q40 Mr Binley: I think that would be helpful. Can I go to the CBI again? Ms Dee: I will have to answer in the same manner, which is I believe that there are a lot of good examples for local authorities across the country but I have not got a list in front of me but I am more than happy to write to you with those examples. Q41 Mr Binley: Do you want to add anything, Steve? Mr Radley: I could do the same. Mr Binley: You knew the sort of questions that we were going to ask. I am quite surprised that you are less well-prepared than I would hope you were, representing business as you do. Q42 Chairman: I have to say that one of the themes that comes through from your evidence and the local authorities' evidence is that you do not like local authority much and they think they have a big role. That seems to be the mood that underlines your evidence and that slightly concerns me. Mr Radley: I think it is more an issue of balance here. We are not down on local authorities. I think what we are trying to say is that RDAs need to be allowed to play a strategic role and we are concerned that some of the details and mechanisms being put forward will prevent them from doing that. Chairman: Q43 Mr Bailey: Just on a general approach, obviously we have got the flavour of at least the CBI opinion of the local authorities' forum. Do you think that the existing proposals give local authorities too much power in the process, and perhaps the other panellists might like to come in. Mr Hannant: We do not see it as a practical way of going about it. Our understanding is that the local authorities would all have to agree it. You have got differing numbers of local authorities in any given region. It strikes me as a recipe for paralysis of the process. We are already seeing that it takes a long time for these economic plans to reach fruition and then come back out of government, by which time they are often completely out-of-date. We think that the process of setting the strategy would be more effective if it could be done more expeditiously. We do see a clear role for local authorities, but we think that the current model is maybe slightly too impractical and cumbersome. An idea around a majority of local authorities or two-thirds of local authorities signing up, something around that, so they would have their say and they would have influence, but not quite the thing that is being proposed by government. Q44 Mr Bailey: Sorry if I am paraphrasing what you are saying, you are saying effectively that as long as there is no mechanism via which a minority could determine, if you like, the pace at which these processes are concluded? Mr Hannant: Yes, I think there has got to be a balance between getting the thing done and allowing everyone to have their say, and I think the balance is not quite right at the moment. Q45 Mr Bailey: Just following through, and this is really Karen's area, the Chairman, quite rightly, pointed out that your evidence seemed to be dismissive of the role of local authorities. What he did not say is that you have actually proposed an alternative, the establishment of "a board of stakeholders including business, unions, local government, utilities and environment agencies." Perhaps Karen would just like to outline her thinking on that. Ms Dee: I should first say that we were not intending to be dismissive of local authorities in our evidence. What we were intending to suggest is that the process of the leaders' forum signing off a single strategy caused us considerable concern because we felt that, at least in the way that the Government had outlined those proposals, it seemed to be that that would be a veto, and that if you could not get all of those local authorities to agree unanimously to the strategy, then it would just not go forward. We had concerns that that would lead to not necessarily the best and most strategic policies being followed and that was principally our area of concern. Q46 Mr Bailey: Just before you move on to the other point, do you not think that would be covered by the point that Chris made that if there was some mechanism within the local authorities' forum to prevent a small minority from, in effect, ruling the roost on this, then that would actually overcome that particular criticism? Ms Dee: I think that would certainly help. I think that places quite a burden on those local authorities for ensuring that they can reach agreement on what, after all, might be some quite politically difficult decisions that have to be made. From a business perspective there are some decisions that have to be made, and I think our concern is about the process and making sure that we do not end up with a system which simply allows decisions not to be made because, frankly, nobody is making them. That was the nature of our concern rather than saying local authorities should not have a role. In terms of that we had then thought what is it that ought to be another option? The stakeholder board is one potential option. It is not something that all businesses have said yes, that is the precise answer, but I think what we are trying to suggest there is that there may be other models other than the leaders' forum that might provide a better focus or mechanism through which all of the necessary stakeholders can be involved and give the RDA the decision and support they need to get the decisions taken and to get the strategy and the economic development pressing ahead. Q47 Mr Bailey: Do you not think that this effectively could be a mini regional assembly? Ms Dee: You are not the first to suggest that that is what it is. Frankly, some have suggested that is what it means. Our view is that there are a number of stakeholders all of whom have a valuable view on this issue and we need a process or a mechanism that allows all of those people to be involved to buy into the strategy, and even if they do not agree with all the precise details feel they have been involved, and that is it, the strategy is there, and it can then be delivered. That is only one mechanism. Q48 Mr Bailey: Do you not think that that is the role of the RDA and effectively the leaders' forum or local authorities' forum is, if you like, to address the accountability and that to a certain extent what you are suggesting undermines it? Ms Dee: I do not think that the RDA could necessarily say that it could replace that board and that it has the views of all the stakeholders. I think stakeholders would say that the RDA has a role to lead and to push the strategic direction, but naturally the local authorities need to be involved, businesses want to be involved a, whole range of people want to be involved and need to have a say in order to get that strategy to be meaningful and to be something that can be delivered. Q49 Mr Bailey: Could I just ask Steve and Chris if they have got any views on this? Mr Radley: One of the proposals we put forward was to give a greater role for regional ministers to sign off the strategies put forward by the RDAs when they were doing that, as well as assessing whether they had developed a credible plan and whether they had the capability to deliver it. One thing regional ministers would need to look at very closely was the level of consultation that the RDAs had engaged in with local authorities, local people and local businesses as well. They would need to establish that they had done that to satisfy the regional minister. Q50 Mr Bailey: Chris, have you any views? Mr Hannant: Not particularly. I am slightly in the camp that what the CBI suggested does sound like a regional assembly writ small, so I think for us it is the practicality of it rather than theologising. People have to have their say and a mechanism needs to be found to make sure that that process does not become too lengthy or subject to being held up by just a small minority of special interests. The majority of authorities being comfortable with it, or something like that, we would be happy with, or a role for regional ministers. Q51 Chairman: I know Mark Oaten has a
supplementary but before I bring him in, can I explore briefly this regional
minister question. I was lucky in the
West Midlands that until recently at least we had a very, very good regional
minister, Liam Byrne, one of the cleverest men in the Government who now has
been promoted, and rightly so. There is
no criticism of him as a person but he was an impossibly busy minister. He was a Home Office Minister with an
immigration brief, he was a Treasury Minister doing broader issues. He is a constituency MP as well fighting an
election coming up and on top of that he was a regional minister. He is accountable to nobody. There is no question time in the House of
Commons. We might need to discuss as a
Committee at a later date the regional select committee system which is
proposed by the Government to address this lack of accountability. I have doubts about this system but that is
another matter. Regional ministers are
very, very busy people and even the most able of them, like Liam Byrne, really
have not got the time to be accountable to us.
I do not even know who you write to to write to the regional
minister. You have not got an address as
a regional minister. You write to the
Government Office of the Mr Hannant: As I said, we are not strongly wedded to any particular view. I think if you were to give a regional minister more responsibility, et cetera, then you would not want regional ministers to have two hats. Q52 Chairman: So you want a massive expansion of the machinery of government and a whole new department to be created with nine new regional ministers as separate jobs? Mr Hannant: Not necessarily. Some of the feedback I have had about the regional ministers who have been more engaged - Nick Brown in the North East --- Chairman: Liam
Byrne has been engaged in the Q53 Mr Oaten: You have asked that one but I am happy to move on. The RDAs have now got, as you know, this new power to manage some of the European funds coming through and I just wondered if you have got any observations - and I know it is early stages yet - as to how that process is working and how aware you all are of the potential there is for a large amount of money to come through and how businesses feel they can engage in that process to get their hands on the money? Are any of you aware of this change? Ms Dee: It is not something that our members raise. I am only partially aware of it. Q54 Mr Oaten: This is £2 billion worth of money from the European Regional Development Fund, it is a massive amount of potential that businesses and projects in the regions can get their hands on, and the gatekeepers for it are the RDAs, and I am interested to know whether or not the Government has made the right choice in allowing them to be ones that administer this? Ms Dee: Certainly it is not something that any of our members have commented on in terms of effectiveness at the moment. I will go back and check. Q55 Mr Oaten: It is interesting that there may be a lack of awareness even that it is around. Mr Hannant: I must admit that I am not aware of the detail but quite a lot of European funding tends to be on a regional level, so to me if the funds are attached to that sort of greater than local authority level but sub-national level, it would make sense to find a vehicle at that level. I have no strong view on whether the RDA is best to do it or whether the Government Office is best to do it, but I would suggest that that is the right level to be pitching it at. Q56 Mr Oaten: Steve, any awareness of this? Mr Radley: I have not got anything more. Again a similar answer to Karen, it is not something that has come up from businesses in talking to them. Mr Oaten: I am happy to let it rest there but note that it is fascinating that there is a lack of awareness about how such a massive amount of money is being managed, which either suggests that business does not know about it or perhaps the RDAs have not been that effective in signalling that they have this amount of money to hand out. Q57 Mr Wright: Just taking a step back really in terms of the proposal to devolve some of the economic development funding to local authorities, obviously there has been some concern within many of the business sectors, but also local authorities are biting at the bit to try to get this funding into their economic development units, and I am sure that some would use that to good effect and some again may well find it extremely difficult to come up with the necessary skills and expertise to handle that element of funding. What do you consider would be the impact on business of the local authorities having that devolved economic funding? Ms Dee: I think in principle it is a good idea that the RDAs should not have to be the people that are delivering everything. They should be in a sense commissioners so if there are projects that they see need to be delivered at the local authority level then it is right that local authorities are the people that deliver that. As you say, there are some that are good and some that are bad and clearly there should be some sort of mechanism for ensuring that the RDAs, or whoever is providing that funding, can account to make sure that they are getting best value for money from the people who are going to deliver it. Q58 Mr Wright: Overall do you consider that the impact would be a positive one for that to be devolved down? Ms Dee: I think potentially yes. It makes no sense for the RDA to have to be the person that delivers all of those things. They have quite enough to do and they need to take a strategic view. Delivery should take place by whoever is the best placed person to do that and if it is a local level project then why should that not be the local authority. Q59 Mr Wright: Do you consider that the business community should also have an input into this? Ms Dee: I think the business community will want to have an input and the local authorities and the business will probably also quite often be people who will be involved in that delivery. This should be about making sure that there is a proper partnership approach to ensure that things are delivered in a sensible way. Q60 Mr Wright: Is there not a consideration that because of the relationship with the RDAs and the local authorities through the proposed forum that is put forward that there would be a conflict of interest there? Ms Dee: There is a concern, in theory anyway, if it happened that way, that local authorities would be involved in setting the priorities and then actually delivering some of them if the funding is devolved and then holding the RDAs to account. They seem to have quite a lot of responsibility and whether there would be a real onus on making sure that there were mechanisms in place to ensure that there was no malpractice. I am not suggesting there would be malpractice but it seems that setting the strategy, delivering it and then holding the other people to account is quite a big function for a local authority to have. Mr Binley: Just
a quick one on that particular point that RDAs should not do everything. I met with my own RDA, the East Midlands
Development Agency on that very point, and specifically they said that, in
short, business support in the Chairman: I think that is a comment to build on the earlier answer you gave. Mick Clapham will now draw to a conclusion the threads of some of the underlying themes of this session - and I hope we have not stolen some of his thunder. Q61 Mr Clapham: I do not think you have and I think we can certainly do some probing anyway. It seems to me listening as we have gone through this session that what you are really saying is that the effective RDAs are those that engage with business on the one hand and local authorities on the other. Of course we know that the sub-national review is talking in terms of transfer of powers, et cetera, and that should bring greater focus of that approach, so when, for example, Karen says that we cannot pick out those RDAs that are good against those RDAs that are bad, it seems to me that what you are saying is that the good RDAs are the ones that engage in the way that I have just suggested and the poor ones are the ones that do not. Would that be correct? Mr Hannant: It is not always so black and white. Just to give you an example, picking up from what we have just been talking about, our members do see that the RDAs should not be delivering unless there is absolutely no-one to do it and they are seeing some RDAs competing with private companies delivering services. One of those that has been cited to us as doing this is the North East. On virtually every other measure the North East is cited as an excellent RDA. It has excellent engagement with business and local authorities and it is doing a good job, but it is not always just everything that any given RDA does is good and top of the class. It is a slightly blurred picture. Q62 Mr Clapham: I think all three of you are in agreement that the RDAs, or a structure like the RDAs, is necessary. Before we look at the sub-national review and the transfer of powers and what you think about that, coming back to that first aspect of the question, would you agree that the RDAs are necessary in order to be able to ensure that we get that unified strategy and that the integrated strategy is likely to bring a greater focus on actually doing that? Mr Hannant: Yes, broadly. I think that there is a need for something at the sub-national level that co-ordinates and leads on a regional bases, so yes. Q63 Mr Clapham: Coming to the sub-national review then, in terms of accountability do you agree with the measures that are set out in the review and, if not, why not and what do you think might be added to make the accountability better? Ms Dee: You mean in terms of the leaders' forum? Q64 Mr Clapham: Yes. Ms Dee: We have partly touched on that but the CBI does have significant concerns about the leaders' forum. As I indicated previously, we feel that there are difficult decisions to be made. If it was intended, and it is not clear actually from the proposals, that the group of local authorities would have a veto, and if they could not reach agreement the strategy could not proceed, that would be very damaging indeed. Our view was that it would be quite tricky to get all those local authorities to agree. Quite what the basis for that sort of vote, it did not talk in any detail in the proposals about how that would work, so we have considerable concerns about that. We also felt that might lead simply to a solution where the RDAs were tempted then to follow the path of least political resistance, and you may end up with sub-optimal decision-making or the wrong types of projects pursued, and we could see a problem with that. Q65 Mr Clapham: Would you all agree with that approach? Mr Hannant: Broadly, yes. One of our concerns is it could lead to a sort of barrel (?) approach. Q66 Mr Clapham: So, really, are we saying the priority is to find the balance between accountability at the regional level and accountability at the national level? By the way, there has been a change in the way in which the regional ministers have been appointed because we have now got regional ministers appointed that do not have another sort of remit; they are going to focus primarily on the regions. Presumably that change the Government is looking at, in terms of regional ministers, would be helpful in bringing about the priorities that you want to see in the balance of powers. Mr Radley: We feel that regional ministers could be well placed to do this, particularly if they are allowed to have the time to do it well. At the same time, you clearly want to have good quality people. In danger of turning into the Liam Byrne fan club, we have actually found from talking to local businesses, EEF and other local organisations, he has been extremely effective in engaging with local businesses. So I think you can do these things, and obviously you end up being incredibly busy. We would just propose the regional ministers as one way forward, and some of the other ideas that are on the table, such as majority voting, certainly deserve a lot of scrutiny as well, and they could offer a sensible way forward. What we are concerned about is that if the convoy is moving at the pace of the slowest ship you will end up with paralysis or fudge, or a combination of the two. Chairman: I wish we could go on a lot longer, frankly, because there is a lot more we could have explored on some of these issues. I would like to have taken them in more detail. The idea that the mechanism is set up to achieve nothing, of course, summarises the American Constitution, and the checks and balances that are there to make sure that no decision is ever taken has served that country quite well. There we are! Thank you very much for your time and trouble. There is one more thing, which is the breakdown of the research that the Chambers of Commerce did, and your own views on the effectiveness of different RDAs. Q67 Mr Hoyle: Just on that point, because it was interesting actually that you knew the scores for the North East, where they were excellent all the way through except for one, so obviously you must have the information. Or do you just happen to know the North East and nobody else? Mr Hannant: With all our surveys we do not always collect information on ---- Q68 Mr Hoyle: I thought you would fudge the question! Mr Hannant: We will have a look at what we collected at the time. Chairman: We are grateful to you for your time and trouble. Thank you very much indeed. Memoranda submitted by Local Government Association, Essex County Council and Lancashire County Council
Examination of Witnesses Witnesses: Councillor David Sparks, Chair, Transport and Regeneration Board, Local Government Association; Councillor Stephen Castle, Cabinet Member for Economic Development, Regeneration and London 2012, Essex Council, and Mr Sean McGrath, Head of External Relations, Lancashire County Council gave evidence. Q69 Chairman: Gentlemen, thank you very much indeed for coming today. Thank you for the evidence you have provided this Committee with in writing from all of your organisations - we greatly appreciate it. We know who you are from the name-plates, but perhaps you could begin by describing yourselves and your role for the record and for the Committee. Councillor Sparks: I am David Sparks and I Chair the Regeneration and Transport Board at the LGA, and I am more than willing to answer questions about Bromsgrove Railway Station. I am a former board member of AWN, the West Midlands RDA, and a current member of the Regional Assembly, and I am more than willing to deal with the issues to do with the transformation of the West Midlands RDA because it is pertinent to the performance of individual RDAs - what makes a good RDA and a bad RDA. Q70 Chairman: For the record, you are a councillor as well? Councillor Sparks: In Mr McGrath: Sean McGrath, Head of
External Relations, Chairman: Do not let the politicians intimidate you, please, Mr McGrath, as we go through this session! It is one against all of us and those two, so please do not let that be a problem. Particularly, do not be intimidated by Mr Hoyle, whom I am sure you know very well. Mr Hoyle has the first question. Q71 Mr Hoyle: That is the good news! It can only get better. You all know the RDAs well; you have obviously got more experience than most people between you. What are the strengths and weaknesses of the RDAs to date? Councillor Sparks: The strength of the RDAs is that they do bring "added value"
insofar as they can provide co-ordination that would not otherwise exist - or
would not have existed in the past. A
classic case is in the Q72 Mr Hoyle: So size does matter. Mr McGrath: In terms of the strength,
certainly the ability to develop a regional position. In terms of the North West, as certainly you
will be aware (and there was a question earlier about identity), it is quite a
disparate place, to a certain extent, but being a Londoner one of the things I
have noticed about the North West is that there is a very clear position that
it is north of London and it is north-west of London and people do treat it as
a unit around that. In terms of whether
it has been able to bring different groups together, or bring businesses
together, on a regional basis, particularly in our last regional funding advice
round on transport issues, we certainly worked quite closely on that and came
up with a very good position.
Weaknesses, certainly from a county and sub-regional perspective, are:
its approval processes of projects tend to be quite slow, we find, and reading
some of the documentation around how RDAs might support capacity in local
authorities, well, I think we might argue that with some of our systems we
could help them improve some of their work around that. There is, and has been, a tendency to drift into
areas that may be the work of others, in terms of the work on climate
change. There is a role and, very
clearly, local authorities have a clear lead on those issues, and one of the
key issues, certainly for the county, has been representation. RDA boards are not meant to be representative
of areas - we understand that - but we have always had a feeling (and certainly
the leader of the county council has said this) that Q73 Mr Hoyle: So, overall, do you think the North West Development Agency is good or bad? I think it is good. What is your view? Mr McGrath: I think it is mixed because I do not have another one to compare it with in my working career, I suppose. I think there are certainly areas where it could develop. Certainly in terms of if there are not changes in line with the SNR, if delivery is devolved and funding decisions are devolved, I think the position will move more to bad than good. But, at the moment, I would say mixed. Q74 Mr Hoyle: There is a danger in sitting on the fence: you get splinters! How effective do you think the RDAs are? What is the true effectiveness of them? I know you have given us a little taster, but is there anything else you would like to add on that? Q75 Mr Hoyle: And how should it be measured? Q76 Mr Hoyle: Can I take it from the three of you, overall, you want to see the RDAs remain? Is there anything - in your own little empires - you would like to strip away, or add to your empire? Mr McGrath: In terms of our position, going back to the point about how they are measured, firstly, particularly using GVA (?) saving as a measurement - it is one measure and recent documents have highlighted that - in terms of RDAs I think we would probably reinvent them and reinvent them differently, in that we welcome the strategic role but we do not necessarily welcome the delivery role, in that they try and do everything. They should be working more closely with partners or devolving to partners or partnerships to deliver some of the functions. So although there is a strategic side to it, they should actually look at organisations that are delivering things already to do some of that work rather than trying to take it all on themselves Q77 Mr Hoyle: So you want them to have the strategic role but you take the money off them? I think that was the coded message you tried to give us. Q78 Mr Hoyle: Brian is here! Mr Binley: Can I strike that from the minutes, Mr Chairman? Q79 Chairman: You have said the same often yourself! Q80 Mr Hoyle: Do you believe that more scrutiny should come from regional ministers? Also, do you believe, because I do, that we should have regional select committees to actually dig in and make everybody accountable, not just the RDAs? Councillor Sparks: We have a specific view on this. The Local Government Association have already given evidence to the Select Committee on Modernisation that it is our view that there should be select committees but the select committees should involve leaders of councils as well as MPs because that would be the most cost-effective way of dealing with it. In terms of your question before about RDAs, what should happen with RDAs is, number one, there should be a review of what RDAs actually do, in light of the history of RDAs where they have accumulated functions without necessarily asking for them, and do they integrate. Secondly, there needs to be a recognition that the main focus of economic activity is at the sub-regional level. Thirdly, there needs also to be a recognition, for example, in relation to the point about Bromsgrove Railway Station, that there are other strategic changes afoot on transport and the RDA needs to relate to other regional bodies that may be set up. Mr Hoyle: So, overall, it is a plus we can take from today from the three of you, can we? Q81 Chairman:
I
think we need to hold that question.
There was an acceptance of a need for something between central and
local level, not necessarily (in Q82 Chairman:
How
big is Q83 Mr
Hoyle: I think you have made that relevant point
about size does matter. I am in one of
the biggest of the Q84 Mr
Hoyle: I think the danger is they will say: " Q85 Chairman: This issue of boundaries of structures does matter quite a lot. For example, I have a sense that Advantage West Midlands has never played quite the role it might - and I am sorry to be specific but it is a helpful illustration - on the Cotswold Line, which is crucial to the economic development of South Worcestershire in the West Midlands, because within 30 miles that line goes through three regions: the West Midlands, and my constituency, the South-West and the constituency of Geoffrey Clifton-Brown in the Cotswolds, and the South East and the constituency of David Cameron. So it is these structural issues where you have these major bodies taking strategic transport structure decisions which can get in the way of effective decision-making. Councillor Sparks: We have done work on this.
We have quoted in our evidence the Prosperous
Communities II, where we commissioned research to analyse different markets
- labour markets, housing markets and retail markets - that clearly showed,
(a), as I have already said, that sub-regions are where the main economic
activity is that hangs together, but, (b), that if you were looking from the
point of view of sub-regions, or you are looking from the point of view of
economic activity, you would not get, as Stephen has already said, the
government administrative regions that we currently are working to. Quite clearly, this is a question of a band
which goes from Q86 Chairman: I do not want to go on about Bromsgrove Station, and Julie Kirkbride may pursue it a bit longer, but also there is an issue about what the broader principle illustrates. In the past, if you needed a station lengthened you would deal with the county council and the Department for Transport, effectively. Now you have the Department for Transport and the county council, and you have Network Rail and you have Advantage West Midlands - there are four bodies taking a decision where it used to be two. That does leave a question mark about the role and effectiveness and the need for RDAs in that context. You have doubled the bureaucracy in the decision-taking process. Councillor Sparks: Yes, but the Local Transport Bill will give the opportunity for local authorities, such as yours and Bromsgrove, to co-ordinate with other local authorities to set up new integrated transport authorities, and one would hope that if the new integrated transport authorities were given the powers that we want you would then have a regional decision in terms of the allocation of stations that would be streamlined and would actually make sense, rather than the current complicated and complex problematic arrangement that you have got with transport at the moment Q87 Chairman:
The
problem you have - and, again, it is this broader issue - is that I have three
integrated transport authorities, if not four.
I want one to integrate Councillor Sparks: One of the lessons to be learned from the experience, so far, of Regional Development Agencies, with the exception of the northern RDAs, is that the other RDAs need to link far more together to sort out cross-boundary problems. Q88 Mr
Binley: Can I pursue this, because I want to pick up
on what Stephen Castle said and ask him some advice, really. I represent Northamptonshire;
Northamptonshire sits right at the bottom of the Q89 Chairman: This leads me on to the questions I want to ask about planning and the new spatial planning role that is being given to RDAs in the legislation we expect later this year. Of course, cross-border issues are very important in this respect, but let us look at the skills and resources the RDAs have to do this new planning role. Do you believe they have them, and (if they do, that is great), if they do not, can they get them in time to fulfil the very real challenges of the Regional Spatial Strategy processes and so on that we are going through at present? Mr McGrath: Planning colleagues of mine, certainly within the county, have a degree of concern about understanding of the full procedures they need to go through in terms of developing a spatial plan, in terms of the procedures that need to be followed around that. We are clear that the RDA actually have those skills and capacity or are preparing to actually build up to that. There has been some work around transference of people from our ex-regional assemblies to the RDA - the assembly obviously looked after the RSS originally - but we are quite worried about the whole process and particularly that some of those planning aspects could be overridden totally by the economic drivers. We appreciate the economy is a key issue, and we agree with that, but it needs to be a balance between what the drivers are but, also, the ability to deliver for the planning structure, and we have a number of reservations about it. Q90 Chairman: Privately, there is a significant number of RDA chief executives who have said to me they do not want these planning powers. They are not prepared to say so in public because the Government is telling them they have got to have them. One RDA chief executive said to me recently: "I want to come into a business-focused organisation running economic services and business related services, not to be a planner. If I had wanted to be a planner I would have become a planner." So do you understand that concern? What is your view of what your colleagues have said? Councillor Sparks: First of all, in relation to the point that you have just made, this is entirely consistent with what I said earlier in relation to the inheritance of other functions that they have not asked for, so it is not surprising that they do not necessarily want this because they are not staffed up to do it. I do not think that this is a major problem because it is equally the case that there are people who exist at the moment because, by definition, they are doing it; it is just a question of those being transferred over or seconded to RDAs in order to carry on the function. By far the more difficult fundamental and problematic, in relation to the planning function, is the question of the democratic deficit. Q91 Chairman: We will turn to that a little later. In other words, we are saying, technically you think they can cope with it - whether they want it or not (and my private conversation is they do not) - but the political question and the democratic issue are the real ones. We will come to those. Q92 Mr Binley: Can I ask a very straightforward and simple question and ask you if you think local authorities wish to see the proposed economic assessment duty set out by government? In what way do they wish to see it? How would they develop it? How are they developing it? Councillor Sparks: The situation as far as this is concerned is that it is now very mixed, because what has happened with local government as a result of expenditure constraints (my own local authority is a classic case on this) is that where there was economic expertise in our local authority it was largely lost as a result of a budget cutback many years ago. Local authorities throughout the country have lost a lot of capacity in relation to economic expertise. The pattern frequently now is that they would buy that in from consultants. I have concern, as the regeneration chair of the LGA, that local authorities across the board do not have the capacity at the moment. Some local authorities do, others do not. Again, it is not an insurmountable problem; we have performed this function before and we can do it again. Mr McGrath: From our position we still have some capacity to do it, and I think we would quite welcome the duty. From our perspective, we see it as a key way of engaging with the development of the regional integrated strategy to make sure that sub-regional and local issues are actually built into that process right at the beginning. One of the issues we have in the North West is that there is a process beginning at the moment through the RDA to look at how they might develop that strategy, but as yet we do not know what the deeds of the local assessment duty are going to be or when we will need to do it and we want to make sure the timings are right so we have the opportunity to feed that information in. Q93 Mr Binley: Let me ask whether Government should do more to help local authorities prepare themselves to undertake what is a new responsibility. Are you getting enough support and guidance in those respects? You say it is patchy. From my experience at the local government level, "patchy" is a bit of an understatement, quite frankly. I wonder whether Government should do more to make it more cohesive and bring it all together. Mr McGrath: From our position, there is some work that is beginning that government are involved in through our regional improvement efficiency partnership, where we are looking at developing capacity across the region but, also, in the sub-region (particularly within the 15 local authorities) on particular issues, and economic capacity is one of them. So whether you would say that needs government in a way of actually helping to look at them, but those priorities are set by ourselves, and we have said that economic issues are a fairly key one for us. We need some of that, what you might call, pump-priming money to look at how we can work together and see what capacity exists, so when we do actually undertake the duty we can bring other partners together rather than trying to do it separately between ourselves and the two unitaries. Q94 Mr Binley: Can I just add to the question before the other two answer it? Is it that the bigger authorities who have slightly more money sloshing around are able to deal with this better than the smaller authorities who have been relatively starved of money? Councillor Castle: My response to that would be
that the reality is that if you have got an authority which has had significant
budget issues, if Government is saying to it: "Actually, frankly, economic
development is now dealt with by RDAs", clearly they are going to focus on the
areas which they feel, in terms of their community - and, in fact, government
is insisting through the inspection process - that they should be engaged upon. You are absolutely right; the advantage of a
large authority is that within the context of a very large budget ( Councillor Sparks: I think this is a very interesting point. Overwhelmingly, large, strategic local authorities are better able to perform this function or they are better able to sustain cuts, but the reality is ---- Q95 Chairman: What do you mean by "large", by the way? What is the population size? Councillor Sparks: I would say met district, shire counties, big, unitary authorities. Q96 Chairman: Shire counties are very different; mine is 500,000. Councillor Sparks: But the reality and the history is that district councils, shire districts, in particular, like Chorley, have a long history of economic intervention, and many of them at the sharp end have performed a really good function in terms of regeneration of their communities. So you also need to take that into account as well. Mr McGrath: We proposed, as part of our response to the SNR, that we have got to develop a local assessment duty in conjunction with our districts but, also, the two unitaries. So we take a sub-regional approach to it. Q97 Mr Binley: Is this a point we need to concentrate on a little in our report - this disparity, and creating a disparity of performance? Councillor Sparks: The other point that needs to be made, though, is that the parallel needs to be drawn in terms of what has already been recognised about development control and the planning function where many local authorities cannot get enough development control people to perform the function, and as such there is a real problem. The alternative, if you are given the duty, is that people, quite naturally, if they have the skills, can go to private sector consultancies and earn a fortune, then ultimately the council taxpayer will pay the bill Mr Binley: Can I come to the last question? I do not want to ask you to answer it publicly because I tried that the last time and it did no good at all. I wonder if you would write to us and give us good examples of where this whole thing of assessment is working well and where it is not. LGA ought, particularly, to be well placed to do that. I think that would help us give us some understanding of the problem. Chairman: This is on local economic development? Q98 Mr Binley: Yes, that is right. I do not want you to go public now because I see the results from the business organisations, but if you could write to us, could you take that on board? Mr McGrath: I think I could just say that
you could look at the Chairman: I think Mr Binley was also asking a slightly bigger question about the good practice by local authorities in terms of economic development regeneration. Mr Binley: Could you come to us privately? Q99 Mr
Hoyle: Just touching on economic development, I
welcome what you said about Councillor Sparks: I think the pertinent point to make on this one - and I will quote a practical example, which is known to Adrian - is the situation in relation to the Black Country, where you have Wolverhampton, Walsall, Sandwell and Dudley, where there is now, in essence, one plan for that area. They have, together, been able to sort out tricky political problems such as the Merry Hill Shopping Centre, for example, practically in my own ward, and it would be stupid for us to think that it should go back to, say, Dudley having a large economic development unit, or Sandwell having a large one and others not having it. Clearly, it has moved on and therefore those four local authorities would be better advised to work out what works for them collectively, and that might be a model that might be applied elsewhere. Mr McGrath: On the same basis, there could be a danger but that is about maturity of partnerships between local authorities. I would quote another group of local authorities I used to work for in terms of Greater Manchester, whose people would come across as being very coherent but would also be aware that they, like anybody else, will argue in private. Certainly, if local authorities come together on the basis they need to work on what the common issues are in terms of discussing the RDAs, you can overcome that beauty contest approach, but you need a degree of maturity in terms of partnership working. Mr Hoyle: My final question is: do you
think Lancashire County Council still needs a fully-staffed office in Q100 Chairman: Can you remember that question? There might be a final question from Lindsay and I at the end in which we explore that at greater length. Just remember that. Hold that thought and Mr Hoyle can ask that question again at the end. I do not want to throw that issue away. Hold that thought, Lindsay; I will let you ask that one again at the end. Treasure that one. Before I bring in Adrian Bailey, can I just say we have talked a lot about the variability of performance of RDAs, but if we are honest local authorities vary in their performance a great deal too: the quality of councillors varies wildly around the country; the quality of leadership of those councils varies wildly; the quality of officers varies wildly as well, and the ability of local authorities to work together varies wildly. I was told recently in the North West (whether or not it is true) that Greater Manchester is great - local authorities work together and are very co-operative, but in Greater Liverpool that is not the case at all; the districts fight each other. We have still got the variability of performance of RDAs; so is there not also a need for quite a strong thumping (?) between Government and local authorities to make sure that variability of performance of your members is also dealt with? Councillor Sparks: I think it is important that in local government we do recognise that we continually need to improve; that it is the case that local authorities vary by definition, and there will be good and bad practice. My own view in relation to the economic role of local authorities, by definition, is that those local authorities who do not get their act together, either individually or collectively, will not best serve their communities and their communities will not regenerate to the extent that they should do. Ultimately, if they fail they should be punished in the ballot box. Councillor Castle: I think David is obviously right in terms of the ultimate sanction in terms of the electorate, but certainly in the period that I have been involved in local government this time, and the time when I was a district councillor, I think there has been a very significant improvement in the overall quality of local government: in councillors, in officers and in the way in which they engage with their communities. Whilst I am sure we have all got to be on the CPO process and the degree to which local government is audited and inspected, one outcome of that has definitely been a substantial improvement in the quality of the way in which local government operates and, I would argue, to a much greater extent than other areas of government, possibly even RDAs. So in terms of the IPA process, you can learn from the journey that local government has been on. I think the challenge is around economic development because there has been this sense that that duty has gone somewhere else and, therefore, it is no longer a priority for local government, but actually the quality particularly around that area is an issue. Q101 Chairman: And the local authorities' stock of retired business people whose views of business are probably out of date, typically - typically - may not be the best people to drive that process forward. Not always - there are very honourable exceptions. Q102 Mr Bailey: I think you probably would have heard the comments made by the business representatives on the local authority board. Could I ask you what your position is on this? What are your feelings about it? Councillor Sparks: As I say, we have already given evidence that we think that the leaders' forum in itself is insufficient and that, from our point of view, the best way for local authorities to be involved in the accountability of Regional Development Agencies is for us to do it in conjunction with Members of Parliament. Following on from that, it is equally the case that you cannot expect, for example, in a particular region, 30-odd leaders to effectively monitor an organisation; those 30-odd leaders will need to come up with some arrangements that (a) will reduce the numbers to more manageable proportions, will need to take into account proportionality so that there is inclusivity, and will need to reflect the actual region, if it is going to result in something that is an improvement on what we have already got. The other point that is particularly crucial to us, based on our experience now, is that if leaders are there to be part of (for want of a better expression) the executive role of RDAs - i.e. helping to produce a single strategy - then they should not equally be expected to scrutinise the efficiency and effectiveness of that process. Q103 Mr Bailey: How do you feel about the point that David made - I think I have it right - that there is a potential conflict of interest with the body being led by local authority leaders who may have had a say in the formulation of the policy anyway? Councillor Castle: You can put together structures that would enable people who are, perhaps, outside of that immediate executive relationship - it might be the broader leaders group, if you like - because there is a challenge about going from 30 down to 10 that David was talking about. I think the critical issue for me, to be honest, is not just about the scrutiny process. With respect, I accept you may not agree with that, in terms of your current role, but for me it is about how do you bolt the leadership together, democratically accountable leadership, that is scrutinised ultimately by the electorate with the formulisation, with the business community. That, for me, is the most important thing. In this sense I think it actually does a better job. What the regional assemblies, frankly, were not doing (you can argue whether they were providing effective scrutiny) is they were not connecting the leadership, ultimately - democratically accountable representatives, the leaders of those local authorities - with the RDAs. Q104 Mr Bailey: I was on a regional assembly for a very short period of time so my experience would not matter, but I accept it was when they were in their infancy. Councillor Sparks: Some of them did not grow up. Q105 Mr Bailey: Sean, do you wish to add to that? Mr McGrath: The point I would make, just
referring to the comments made by the private sector in terms of perceived
difficulties or perceived interests stopping things happening, in terms of the Q106 Mr Bailey: If I have interpreted your answer correctly, what you are saying is that local authorities could set up their own individual authority monitoring mechanisms which could then feed in to the local authority leaders' forum. Mr McGrath: I think you ought to see partnerships of local authorities, but you could look at that kind of model in terms either of a sub-regional footprint or a functional economic area footprint. Q107 Mr Bailey: Could I just put it to you: you are all involved in local government in one way or another and I have heard three rather different models of accountability put forward, all of which may have merits. Is there any sort of common theme, if you like, amongst your comments that you could agree on? Mr McGrath: That there is accountability for the area that the RDA is operating in. It is not one-size-fits-all; people need to make their own decisions that are appropriate to their area, and that work, I think, is the key issue for me. Councillor Sparks: I would agree with that but make the further point: what has not happened so far - and it is not just in relation to RDAs - is that when you get these regional or regional-type mechanisms they do not necessarily plug into the real political world - the real key decision-makers - and that it does not make any difference, for example, in the West Midlands how many people scrutinise the Advantage West Midlands from the Dudley point of view; what matters in Dudley is that the West Midlands joint district, which represents them, has an effective link into that scrutiny process because that is, as you know, how we work. Q108 Mr Bailey: I would agree with that, personally. Do you think that, given the current proposals, there is a genuine problem that the strategic integration regional strategy could be delayed in some areas rather more than others because of the complexities of the local authority structure and accountability? Councillor Sparks: I totally agree with Stephen, but I think you need to ask the question, where it is not working: "Is this a fundamental problem or a superficial problem?" I think you might find in some cases it is a fundamental problem going back to boundaries, and so on and so forth. Mr Bailey: Could I just conclude on this one: you will have heard some of the comments or, maybe, read some of the comments about the business community's opinions of this forum. Are you concerned, from a local authority perspective, that it is a genuine issue and that vital decisions could be either delayed or not made because of, basically, petty, parochial local politics? Q109 Chairman: Or "democracy", as I prefer to call it! Councillor Sparks: Looking at the evidence before you today and listening to the previous session, the fundamental point here is that the private sector are missing the point in relation to the single strategy. The single strategy is not purely an economic strategy; it involves planning. In particular, it is at the centre of planning that starts the ripple that ends up in terms of a wave that hits us, as local councillors and Members of Parliament, on individual planning decisions. We feel very strongly that there has to be a democratic input into that process. Mr McGrath: I would agree with both the statements; the only example I give is in terms of the North West leaders' forum (or a version of) that will be representing the private sector for the East Lancashire Chamber of Commerce sitting on that group. They have actually accepted that they can engage in that way and see a role for it now. Again, I think it goes back to the point made earlier: it depends upon the forum and how it is set up for each area and how appropriate it is. That is the key issue. Mr Bailey: Can I just say thank you, and I am sure you will share with me delight at the Chairman's forthright support for local democracy! Chairman: And rejoice in the fact that
the Q110 Mr
Wright: In terms of the proposals to devolve the
funding for economic development to local authorities, there has been concern
expressed from some of the written submissions we have had that the RDAs will
probably try not to use the powers to delegate funding to local authorities. Indeed, in Mr McGrath: In terms of our experience, we are getting a number of mixed messages in terms of how the RDA are intending to address the sub-national review. In some places it is: "Well, if you develop the capacity we will devolve funding, but the onus is on us to judge you, in terms of whether you have the capacity or not." We would argue that in terms of the various assessments that local authorities go through, at a number of different levels, we jump through those hoops with ease, to a certain extent, and certainly from a county perspective we can show that we are an excellent authority around that - certainly in managing the resources. On the other hand, you read a copy of the RDA's corporate plan here, and it refers to delegating, as opposed to devolving. I think there is an issue around language there. What we want to see is not just: "These are the outputs to be achieved, here's the money to go away"; what we want to see is: "Here's the broad outcome, go away and work out what is the best way of delivering it", depending on what the footprint is. So I think we do have a number of concerns, in terms of the way things are moving, in terms of the strategy; we are not necessarily seeing the same changes in the organisation at the same time, but they may come at a later stage. Councillor Sparks: In view of the time, I have nothing to add. Q111 Mr
Wright: In part of the other submission that you made
from Mr McGrath: It goes back to this point that the assumption should be that, unless there is a good reason otherwise, something is devolved. That needs to be built into it. At the moment it is about if the capacity exists, in terms of the local authorities coming back. Who makes that judgment on the capacity? What we would like to see is that the assumption is there, first of all, and then it would be up to the RDA to actually then say what the problems might be rather than making a judgment around: "We just do not think you have the capacity". Q112 Mr Wright: You mentioned the question about competency. How would an RDA actually measure the competency of each of the local authorities? Councillor Sparks: RDAs have existed long enough. The pertinent question is: where RDAs have a problem with a particular local authority, what have they done to sort it out and why have they not sorted it out? Q113 Mr Oaten: In view of the time, perhaps just for shortness (I think you mentioned this was an area you were involved in), I put to the business groups about the ability of the RDAs to manage the European Regional Development Funds, and they did not seem to be aware of this process. Have you, in your experience, got concerns about how the RDAs will manage what is a significant pot of money? Mr McGrath: In terms of the process, it
has happened so far. I think the
starting point has been that under the previous European programme, certainly
in the Councillor Sparks: Could I quickly comment,
because I represented local authorities in the negotiation on European funding
for about 20 years in the government and European government community. There are two points that need to be made on
this, and it is also pertinent to you trying to identify what are good
performing RDAs, and how you get an answer.
The first point is that it does vary, and there is best practice. In the Q114 Mr Clapham: Finally, on the accountability issue of the sub-national region, we have heard a lot about accountability, and I am just interested in what you have to say, Stephen, about the way in which the West Midlands has worked, and there has always been that engagement right through from business to local authorities etc. The one thing that the SNR does is actually take some of the powers away from local authorities, and I know that in terms of accountability your submissions have suggested there should be seven major points that should be used in terms of the way in which we actually scrutinise the RDAs. So, are you satisfied that the measures, for example, of scrutinising the transfer of the powers under the SNR are sufficient? Do you feel that they are appropriate? Do you feel that there is more that needs to be done? If you do feel there is more that needs to be done, are you making government aware of that? Councillor Sparks: There needs to be more flexibility at government level at this particular moment, and this is why your report is so important. We just need a little bit more flexibility on the scrutiny point. There is a whole case study now of scrutiny of bodies outside of Parliament, and the Parliamentary model does not always translate exactly if you want effective scrutiny. Our point is really strongly made that every local authority in the country has to perform a scrutiny function, and every local authority in performing that scrutiny function has to separate the executive from the scrutiny function for it to be effective. This needs to be the case here. Q115 Mr Clapham: These points, presumably, have been made? Has there been a response? Has Government responded? Councillor Sparks: We are still awaiting a response on this - a positive response. Q116 Mr
Clapham: There is another area, and Lindsay touched on
it, which is important in terms of accountability, and that is as we move to an
integrated sort of single strategy, we have got, at the same time, the RDAs
competing abroad to bring business in to certain areas, and that is something
that is going to be problematic for accountability. Do you feel that there is a need to look at
how we might adjust our system of accountability to ensure that RDAs that are
working abroad in order to attract business in are doing it in a way which is
going to be - shall we say - a more cohesive and open approach across the
piece, rather than just sort of focused on those RDAs that are perhaps better
equipped than others in order to attract business? Just to give you an example, we were in Councillor Sparks: I think this is a really,
really important point because one of the things that has not been examined
sufficiently is the degree to which RDAs do in fact need to collaborate with
each other. There are examples. The East and Chairman: That is very interesting. We do just have a couple of minutes, and there is this one "hold that thought" moment from Lindsay Hoyle, which builds on what you have just said. Q117 Mr
Hoyle: Obviously, the emphasis is on the counties but
you have still got the ivory tower in Mr McGrath: If I go back to your original
question, first of all, you asked us about why we have our office, and should
we have a shared office. We do have a
shared office, to begin with; we have the University of Lancaster and the
University of Central Lancaster as our partners, and Preston City Council are
about to sign an agreement with us, so we have three partners so far and we are
looking for more in terms of the office.
In terms of why we have an office, we have particular issues that the
county has identified which do not relate to other parts of the Q118 Mr Hoyle: It is still worth millions. Mr McGrath: In terms of where it is - we
can disagree about that - but it is an older type of office block in Brussels
rather than the new, shiny ones you see in pictures, I have to say, but we see
a benefit for it in terms of influencing European Commission around things like
the Sole Directive (?). We have got a
massive contract we are about to sign, looking at transport issues; we have a
project called Civitas operating in Q119 Mr
Hoyle: Final question: why do you disadvantage the
other districts - other than Mr McGrath: Preston asked, first of all, and through the Lancashire European network that we facilitate, which includes all districts, both chambers of commerce, the Lancashire European Partnership and various educational institutions, etc, we are going to be rolling out that model to everybody else, using it as a pilot. Q120 Chairman:
I
think it is a question, on reflection, we should have allowed more time for,
because I can get very facetious now - I cannot resist the temptation - but I
think there is a huge question about the way UK plc represents itself overseas. We are a very small country, actually, in the
great scheme of things now - whether we like it or not - with a tiny population
compared with Q121 Chairman:
I do
not know whether you agree with the summation of your evidence - particularly
yours, Chairman: We have overrun our time and you have given very short and coherent answers, all three of you, so that is a comment on the fascination of the subject. Can I say what I should have said to the last witnesses: if, on reflection, you feel there is something you have not had a chance to say or that has not been reflected, or something you would like to expand on, we are always open to getting supplementary memoranda after this. We have found this session extremely helpful, and we are very grateful to all three of you. Thank you very much indeed. |