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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1054-ii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE BUSINESS AND
THE ROLE OF REGIONAL DEVELOPMENT AGENCIES
MR NICK PAUL, DR BRYAN JACKSON and MR JEFF MOORE Evidence heard in Public Questions 122 - 253
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Business and on Members present Peter Luff, in the Chair Mr Michael Clapham Miss Julie Kirkbride Anne Moffat Mr Mark Oaten Mr Mike Weir Mr Anthony Wright ________________ Memoranda submitted by Advantage and East Midlands Development Agency
Examination of Witnesses Witnesses:
Mr Nick Paul, Chair,
Advantage West Midlands, Dr Bryan
Jackson, Chair and Q122 Chairman: Gentlemen, welcome to this second evidence session of this committee's inquiry into the role and effectiveness of RDAs. Some people may think we have had rather a middle and centric set of witnesses today, but I understand you have been nominated by the Chair of the Committee of Chairs to represent the whole RDA movement, if that is the right phrase, with the exception of London, which enjoys a slightly special status within the RDA sector and has submitted separate evidence to us, but sometimes there are eight and sometimes there are nine for these purposes because of different government models. I think that is the correct situation. So, having probed the fact you are all Midlanders and, in fact, although I know all of you personally, perhaps you would like to introduce yourselves for the record. Mr Paul: My name is Nick Paul and I am Chairman of Advantage West-Midlands. Dr Jackson: I am Bryan Jackson; I am Chairman of East Midlands Development Agency and also Chair of Chairs. Mr Moore: I am Jeff Moore; I am Chief Executive of the East Midlands Development Agency. Q123 Chairman: So, Bryan, you nominated yourself to come here today? Dr Jackson: I did, yes. Q124 Chairman: Quite right too. What are Chairmen for if they cannot nominate themselves! Can I ask you a more general question before we begin the specific longer-term stuff on RDAs themselves? We are in exceptionally difficult economic times, posing huge challenges for the real economy. Everyone thinks the country is moving into recession over the next two or three quarters. That will make life very difficult for the business sectors that you represent in the various parts of England. What are you doing as RDAs to address these fresh and emerging difficulties? Dr Jackson: The first thing we did was, obviously, talk to business. We launched with the Treasury, in each region, a document of what exactly was going to happen and how we could help in the immediate situation. We also opened up some of the grant and funding rules. The biggest thing we have done, though, is to activate our business links to be able to respond and to advise and guide business. What we find in talking to business is that generally they do not know they are in trouble until it is too late, and so we refocused all the business advisers in Business Links to make sure that they got to business and explained about money control, cash flow control, debtor control, so that they knew how to handle the crisis that was coming. It is an iterative process. We are constantly reviewing. Every four weeks we send a report into government on what is happening amongst the businesses, but also we must not lose sight of the fact that our economic strategy is a 15-20 year horizon. So we are not moving away from that, either because we have to establish that for the future, but we recognise the urgency and the demand currently and we are responding to it. Q125 Chairman: But all the evidence from the RDAs, rightly in my view, reflects your role in crisis times. Mr Paul, your evidence from AWM talks, for example, about the work at Longbridge which Jeff and Bryan are very familiar with. This is a national crisis. It seems to me intriguing that what you are saying is the RDAs are responding identically across the country so there is no regional differentiation in response. Dr Jackson: It is like all things. In a crisis as big as this and as global as this the answers tend to be the same. Mr Moore: There are some differences. Clearly, as Q126 Chairman: What is the RSA. Mr Moore: Yes. There are
set limits on that for SMEs; there are also geographic limits on that. Some regions have increased the geographic
spread of those; they have also increased the ceiling on the limit from 100,000
to, say, 140,000. Others have responded
specifically by creating particular venture funds at the moment or increasing
the amount that they have got in venture capital funds. One thing we are definitely noticing in the
current climate is that, as it is getting more difficult for businesses to get
debt, more of them are turning to equity venture capital, particularly at the
lower end. So if individual RDAs see a
particular for that, then they are increasing the amount of venture capital
funds there are in their region.
Obviously each RDA is responsible for managing Business Link. It will have given an emphasis to cash flow
management, as Q127 Chairman: Let me put it to you that the Government values you so highly at a time of major national economic crisis, it has devoted £300 million away from you to a completely different scheme, the Home Buy Direct Scheme announced by the Prime Minister in September. So actually at a time when you really need every penny you can get, you are having your wallets raided. Dr Jackson: Obviously that is not going to take effect until, in the main, 2010/2011. Our biggest input currently is the influence, the guidance--- Q128 Chairman: I am sorry, you say it is not going to take effect. It is a mortgage rescue plan. It is not taking financial impact until 2010? Dr Jackson: There is a financial impact currently, but that is a small amount of money. The big amount of money comes in 2010/2011. Mr Moore: Our 300 million is taken away in 2010/2011, not in 2008/2009, and it is capital money as opposed to current money, and nearly all of our Business Link contracts are funded out of current resources, so Business Link advisers are paid out of our revenue resources. We have approximately a 50:50 split capital currently. Q129 Chairman: It is not really a question for you, but that intrigues me because of it's position as a mortgage rescue crisis with the current problems in the mortgage market and the housing sector but it is not being spent for two years, so that seems just a little bit puzzling to me. That is probably not a matter for this inquiry though and is something we can investigate separately. Thank you for that. Let us go on to the more general questions. I know that my colleague Anne Moffat wants to come in on this as well. What are you for fundamentally? Let us put it another way. What gets done because you are there that would not get done if you were not there? Dr Jackson: Why we are there is to sustainably grow the economy of our region. We do that through an economic strategy. We are able to consult across all stakeholders. We develop the evidential base so that we actually develop a strategy based on what is necessary from fact and evidence and the analysis of that evidence. What would not get done if we did not exist? I would like to think we are a very much business-led organisation. We are primarily there to ensure that businesses grow, develop and create wealth that can then be distributed in other ways. What would not get done is you would not have the business-led organisation, pulling everything together and making things happen. Q130 Chairman: You say "making things happen", but the criticism of you all here in the area, the one thing you are very good at is coordinating other people. You say "consulting across all stakeholders". The consultation business, the coordination business, has grown like topsy in the last few years as more and more organisations want more issues. The skills agenda, for example, I often hear it said that all you do is complicate matters because you put another body into play which everyone else has to consult with and spend more time - expensive civil servant's time - consulting with each other. Mr Paul: I think that you have to look at the evidence of the
transformation that is going on region by region. If you look at the examples, we have a
development site at Ansty, just north of Q131 Chairman: Regional development centre? Mr Paul: R&D. Excuse me. Thank you for correcting me. You can see that we have got the national manufacturing centre being built there. That has taken years of putting together, and if you look at the submission from Ericsson, you will see that they say, "Thank you for being the one-stop shop, thank you for making certain that, with all of the various partners that we have to coordinate the effective delivery of that, you are there to be able to take us through all that." So you have to look at examples after examples of where we have worked with partners - New Street Station as another example - where you have to bring together a whole raft of people, and without our involvement these particular projects do not get delivered, and we can see evidence right across our regions. We could take you and show you the evidence. Q132 Anne Moffat: Really. I would love to be taken and shown the evidence. You are speaking about manufacturing, serious manufacturing. That is exactly what we need to be doing in this country. That is a great example of where you could excel, if you like, but I am not seeing any evidence of it. Mr Paul: Can I take you through to the example where we worked
with Jaguar Land Rover. Innovation is a
big issue for the Q133 Anne Moffat: Why can that not be done through central government? Mr Paul: I think the evidence is that when we come to coordinate the activities of the various central government departments, it is on the ground that we do it. It is really quite difficult for government here in Whitehall to understand what is required, what is needed, in any particular part of the regions, and we, through our business contacts, through discussions, through our regional economic strategy that Bryan has talked about, do understand our regions very well and, therefore, we can come together with partners and make things happen. Mr Moore: I think the point is that regions are the size of many
European countries - Dr Jackson: Can I say, I was managing director of the biggest ever single inward investment into this country, and the reason I think regional bodies are pretty critical is we did not have an RDA but the group responsible created what was almost like a forerunner for an RDA, so we had a one-stop shop. Otherwise it would have been extremely difficult to invest just under a billion pounds in this country. Q134 Mr Oaten: What was that? Dr Jackson: Q135 Anne Moffat: Can I ask you what evidence there is for that? Dr Jackson: Evidence for what? Q136 Anne Moffat: For the trust element. Dr Jackson: The fact that people like Rolls Royce, Bombardier come to us well in advance of any issues to discuss with us privately the challenges and what potentially are their crisis points is the evidence. We do not publicise that, for obvious reasons, but we have worked very, very closely. There is a great example currently with a company who had a huge problem: a full order book, a gap for three years, a full order book. Working with us privately we were able to overcome that issue. They were able to announce extra jobs on Friday. It is these sorts of things that we do. Q137 Anne Moffat: What do you do for the wee people? Dr Jackson: For the wee people, as you call them, I am very concerned
that the person in Anne Moffat: I like that answer. Q138 Chairman: I like the answer but I still think we must challenge you. As a matter of fact, you know the answer to this question - we talked to Essex County Council last week - the boundaries of RDAs are everything to civil defence planning requirements at the time of the Second World War and nothing to economic reality. Have you heard? Is that the origin of the boundaries of the regions, do you know? The point is: how is it that you make sure that what you are doing does not turn in on the region and become obsessed with a region's need and ignore the wider national need? Let me give you two examples of that. Essex was very concerned about the Thames Gateway project, which involves the East of England Development Agency, the South East Development Agency and the London Development Agency; that Thames Gateway project spans three regional boundaries. I wrote against your evidence, the joint evidence (RDA24 done by EMDA on behalf of the whole group), a big "No" against the South West, because you both know what the South West has done for the aerospace sector. The aerospace sector is a national industry. It does not belong to a region; it belongs to the South East, the North West; it belongs to the East Midlands as well. How can you stop RDAs, these boundaries drawn on maps, becoming real obstacles to genuine but economic issues? They need to be addressed. Dr Jackson: We did not actually draw the boundaries, so we are
charged with delivering within the boundaries as defined, but, of course, when
I fly over the Mr Paul: That said, I think that in a number of our regions,
and particularly, I would say, the Q139 Chairman: I think there are more issues around the fringes. The Thames Gateway issue is a very powerful example. One of the most important projects this country has ever known, spans three RDAs, so it more than a fringe issue. Mr Paul: No, I was trying to explain, Chairman, in the context
of the Mr Moore: And clearly the great South East comes together as
three RDAs, London, the South East and the East of England, to address the
problems of the Thames Gateway, and they are trying to drive that quicker. In terms of some of your comments about
business, though, Chairman, as Chairman: We were reminded by Essex County Council last week that their county is bigger than many European countries, so those sub-regional structures are often also very important. By the way, it is important to say that there is a consensus in all the evidence received, even from the Federation of Small Business, that there is a need for something between central government and local government, and I do not think we have received any evidence contradicting that view. The question is what that something should be and what it should do, and that is really, I think, what we are looking at in this committee. Q140 Mr Wright: On the boundary issues, is not the fact that there is a lot of competition out there between the areas that each of the individual areas are fighting for the same business? I will cite one which happened two or three years ago that I am aware of in the renewables sector. There were emissions going from one of the Midlands agencies to try to attract one of the wind turbine manufacturers to come to the Midlands. The same would have been said for the East of England Development Agency. They would be chasing the same business. Would it not be far better for the UK economy for the regions, perhaps, on some of these major initiatives to get together? We talk about the Thames Gateway, for instance, where there are three development agencies trying to put their two-penneth in for the same business. Would it not be better, before that happens, before it takes the resource away from each of those areas, for those areas to get together in the national interest and say, "Let us look at this as an industry for UK Plc rather than for the West Midlands, rather than for the East of England, rather than for the North West, fighting for the same business, and the one that is obviously the greatest attraction for the inward investment, they are the ones that are--- Q141 Chairman: We are going to go into overseas representation in more detail in a subsequent question. If you can answer that in principle, it would be very helpful. Dr Jackson: In principle we have many cases where we have done
exactly that. If I can give one example,
the Manufacturing Technical Centre is a case in question, where we had Mr Moore: Actually we discussed that with national RDA
colleagues, so we know where we feel we have strengths as economies and where
we have weaknesses, and we will agree with the Mr Paul: The key thing is that businesses make decisions based
on facts, based on evidence, and businesses will decide where they want to
locate based on the strengths of the sub-region or the region. For example, just going back to wind power,
GEC in Rugby is a centre which naturally felt they had the expertise and the
skills to build on that, so we have helped them to support that very important
part of the economy. We have gone on to
say, "They will need skills", and therefore we have worked with Q142 Mr Wright: Very briefly, Chairman, my bone of contention is the fact that, whilst we look for inward investment from other areas, in terms of renewables what manufacturing base have we got here for a turbine in the UK? We seem to be chasing foreign-produced companies to actually invest in. What work have you done to try to say, "Let us start a British turbine"? Has there been any work done there? That to me is the initiative we need. Mr Paul: Yes, and we have helped GEC in this context to secure a significant chunk of business for turbine work, and we can see a bright future for them. Mr Moore: That is why the East Midlands was given the Energy
Technology Institute as part of the national initiative, because we have lots
of small manufacturers, researchers into renewable technologies in the Q143 Chairman: Mr Paul, you are able to look me in the eye and say, for example, that the Quantum Technology Partnership at KinetiQ, to which I attach such importance - and for which, AWM, I should say thank you for the visit we had earlier this year which you organised and accompanied us on around the West Midlands, it was a very useful two days. We went to KinetiQ - a hugely important project. Your colleagues at the other RDAs are not snapping at your heels for that project; you have ownership of that Quantum Technology Partnership and it is going to come to Worcestershire. Is that right? Mr Paul: We are working very hard to succeed in that direction, and I think, again, that demonstrates the fact that our decision-making is evidence-based and will be based on the facts, and the facts of that matter will be, we believe, that KinetiQ is the best home for that development because they have the skills and the expertise and, working with them, we will endeavour to secure it. It is a great opportunity, you are absolutely right. Q144 Chairman: You do not feel threatened by your colleagues elsewhere in the RDA movement who want a share of this very exciting modern technology for themselves? Mr Paul: No, in this case we are working with the South East
because Q145 Miss Kirkbride: I take the points that you have been making on the panel where there is public sector involvement in projects, and very necessary public sector involvement, to improve R&D. Therefore I take on board what you say when you come to stitching up the other universities and how that always works. But we talk to some business which are global and, as Mr Paul has just said, these are global businesses which have competitors across the world. The UK, however big we might be as one county, is still a little tiny island in the middle of the Atlantic and, therefore, for most Indians the UK is the UK and it is not made up of Worcestershire and Derbyshire and Nottingham or Scotland, for that matter. They would say to us that there is a bit of tension actually when it comes to the role of the RDAs, because they are a global business with various skills and where, perhaps, the West Midlands might feel that it is particularly strong in one sector, there are still companies in Scotland or Yorkshire or Cornwall, or wherever it might be, but because it is not a priority for those other areas of their business, then they find rather frustrating that some of the stuff that they have to do goes through the RDA. Therefore, there is tension where there is a global business that is not relying on public sector support but which still finds the RDAs interfering in what they do when they see themselves as a global business, and yet they are forced to look regionally to the things that they want doing. Do you not accept that there is some tension in some global businesses over the structure of RDAs? Dr Jackson: I do not know which global companies you are talking
about. Can I talk about mine? I have personally never had that
situation. We are based in the Q146 Chairman: Can I put it to you: your company, Toyota, came to the UK before there were RDAs. All the big internationally mobile automotive sector investment came to the UK before there were RDAs, and the system worked perfectly well. Dr Jackson: No. Peter, I did say right at the start that the system did not work. Let me paint a picture for you. Q147 Chairman: There is Nissan, there is Honda. It is all pre RDA. Dr Jackson: Yes. I cannot talk about Honda or Nissan, but I can talk about mine. We had a situation where the city council was Tory, the county council was Labour--- Q148 Chairman: But a particular company was---. Mr Bookbinder, as far as I remember. Dr Jackson: David did a really great job. ---and we had a
planning authority that was Labour. We
had the forerunner of what is East Midlands Development Agency. Where I give credit to David---. What Bookbinder did was build upon all-party
politics: "We will create one body and we will deal with you, Q149 Chairman: Toyota does make very good cars. Dr Jackson: Thank you very much. Miss Kirkbride: It would not have happened without the RDA? You would not have doubled your investment without the RDA. Chairman: It all happened without the RDA. That is the point Q150 Miss Kirkbride: No, you have doubled your investment as a result of the RDAs. That is what you seem to be saying. Dr Jackson: No, what I am saying, very clearly, is that we were able to convince our shareholder to invest more money in this region because of a growing economy, because of employment, because of the skills of the people. All the things that RDAs are charged with doing. Mr Moore: Q151 Chairman: My point is that someone would have done that work anyhow. This is the crucial test. By the way, I was at the DTI as a special adviser at the time. The department had quite a big role to play in the Toyota investment too. Mr Moore: Absolutely. Q152 Chairman: It was a very good example of partnership working between central government and local authorities across the political boundaries, but someone would have done it. Let us move on from that, because I understand your point. At an early interview for a job I was asked one opening question, and I want to ask it to you now. Your written evidence talks, inevitably and compellingly, about your strengths as organisations, and you have been talking about that compellingly for the last half an hour. Tell me what you think your weaknesses are? Dr Jackson: I have not been interviewed for a job for nearly 40 years, so I need notice of the question! Mr Moore: I have. Dr Jackson: He has. You go and then I will try to think of a meaningful--- Q153 Chairman: Your answer is exactly the same as mine all those years ago. I could not think of any. Mr Moore: I was interviewed for a job much more recently. Q154 Chairman: I spent the rest of the interview remembering them; so we will see how it goes today. Mr Moore: I think the answer that I would use, Peter, as in a classic interview, is to turn your weaknesses into strengths. One of the problems that we have had is we have shown ourselves to be successful deliverers for government since 1999, one of the most successful delivery arms for government since that time, and, as a result, we have been given more and more powers beyond our original powers. The ERDF is something that we have been given this year, the Rural Development Programme is something that we have been given, we were given responsibility for managing the Business Link, we have been given responsibility for managing the Manufacturing Advisory Service. Q155 Anne Moffat: You are not telling us your weaknesses. Mr Moore: I think the weakness that we are attacked for is that we have too broad an agenda, and I think it is because of all the various roles we have been given over the intervening ten years. I think if business pointed to a weakness, as it does in its evidence, it is that we have now too broad an agenda. I would say that has arisen out of the fact that we delivered well on our earlier activities. Dr Jackson: I have identified a different weakness, now I have had
a chance to think about it. I would say
that one of the weaknesses we generally have is, as you just said, if I said Chairman: You did all start very badly,
particularly in the Q156 Mr Clapham: Before I go into that question, Chairman, what I want to say, having heard what Bryan said, is that if you look at the situation, as it were, a decade ago, we just had the two RDAs, one in Wales, one in Scotland, and it was because of that experience that we called on the RDAs to become part of the English market as well. I think that when you look at the evidence, and there is evidence available to show that RDAs actually attract foreign investment, and the study that was done by the department showed that quite clearly, I think that that coordinating work that RDAs do at local level, bringing it that knowledge and then the connectivity to the national effort is, indeed, very important. But coming to the question that the Chairman referred to, one of the criticisms in some of the submissions that we have received expresses the view that RDAs do not have sufficient business experience to really lead and to fulfil the task. What are your observations with regard to that the statement? Mr Paul: Can I take that one?
If you look at our Board it is business dominated. We have more business folk on the Board than
we have any other grouping. We in the Dr Jackson: Also - we anticipated you might ask this because we are always going on about business and business and business - 43% of the people employed by the RDAs come from a business background. Q157 Mr Clapham: 43%? Dr Jackson: Yes. Mr Moore: We appoint people from specific backgrounds. Our Director of Business Services ran his own medical supplies company. So we make sure we are across a nature of backgrounds, but there is no denying that we need public sector expertise as well. These are public sector jobs as well. There is a huge amount of dealing with national government, local government, so you need a balance. You could not have 100% private sector skills, nor could you have 100% public sector skills, and we believe we have got the balance right and keep that under review all the time. Q158 Chairman: That 43% figure is a national figure cross all RDAs. Mr Moore: It is. Q159 Anne Moffat: So we will see jobs for the boys? Dr Jackson: Hardly, they are properly appointed and they go through the normal constraints, and in terms of the Board, the Chair, as you know, that is through OCPA, so it is hardly jobs for the boys. In fact, I did not appreciate how difficult it is to get the job as Chairman. Mr Paul: Nor me. Q160 Mr Clapham: So what we have is the engagement with business at the local level. Mr Paul: Yes. Q161 Mr Clapham: We are engaged with local authorities at the same time, and you feel that the balance is about right between private business and the public input? Mr Moore: It is and, as Nick has used the example in the West Midlands,
our business support services in the East Midlands, our whole strategy, is
designed by consultation with business and then is delivered by a business
contractor, called East Midlands Business Ltd, that is a shareholding of the
Chambers of Commerce, three or four of the Chambers of Commerce in the East
Midlands. So we have business support
designed by business and delivered by business and, as we say, in order to
commission that work, as it were, we have approximately 43% across the nation
of business skills directly within the RDAs.
It is about 35% or 36% cent within the Q162 Mr Clapham: Can I just turn to the overseas activities. As I said earlier, there is a study that shows quite clearly that RDAs have been successful in bringing foreign investment into the UK, but there is a view that perhaps RDAs create a situation where work is duplicated in some circumstances, that they may at the same time cause disparity. Because of the competition between RDAs to bring in foreign investment, it does not work in a way, or so is the view, that is more coordinated. It is merely the RDAs that are better equipped to bring in the foreign investment that do better. What are your observations on that? Dr Jackson: The first point I make is RDAs are very, very
successful in attracting inward investment.
If you just take pure involvement of RDAS, 50% of the jobs last year
were RDA driven. If you take RDA
assisting UKTI in their endeavours, 83% of the jobs that came into the Q163 Anne Moffat: How is that calculated? Dr Jackson: The number of jobs that we created divided by the
amount of money that we spent on our overseas offices; as simple as that. So we do not spend a huge amount of
money. Also, the independent report done
by Arthur D Little showed that anecdotally we were being told there is great
confusion, there is duplication and independent studies show no duplication and
also no misunderstanding amongst our customer base. In fact, quite the opposite, very supportive. We have some 14 countries that we are
involved in as a group, 36 locations within them, and we are not competing with
the Q164 Chairman: You were successful before you existed as well. You have not improved the success rate. Dr Jackson: No. You say we were successful, but we have grown and we have had more success year on year. Every year we are more successful, for the last ten years, at attracting inward investment. Those are the facts. Mr Moore: And the world is much more competitive than it was ten
years ago, Peter, and the rest of the world is out there trying to take those
businesses and we think it is a significant risk. It would be a significant risk to the Dr Jackson: One thing I forgot to say is that UKTI are on record as saying they would not be able to do it without the RDAs. Q165 Mr Clapham: Really we can sum up the work that the RDAs do overseas by saying that it is coordinated with the national effort? Mr Paul: Yes. Dr Jackson: One of the things that Arthur D Little showed us was
that there is an opportunity to firm up and become a bit more focused on things
like marketing. We agree with that. We are trying it in - I will get the
countries wrong - I think it is Q166 Mr Clapham: You said one of the weaknesses is that you do not really get this information over to the public. Do you feel that there is a real need to get over to the public the work that you do in actually attracting inward investment? Dr Jackson: Funnily enough, it is not so much the public. Last Friday we had nearly 500 people for an annual public meeting where me and Jeff spent an hour and a half answering questions from the public. It is not getting the message across to the public, it is getting the message across to government, to the opposition, to some stakeholders and to business, particularly SMEs. So we are working very, very hard. It is a balance, is it not? How much money do you spend on marketing to get the message across to SMEs versus how much money you spend helping SMEs grow and develop. Have we got that right? Probably not, but we are working on it. We are trying to improve that, but there is room for improvement. Q167 Mr Clapham: Are you working on a better relationship with government in the sense of making government aware of the job that you do? Dr Jackson: Absolutely, and through our sponsor department, BERR,
we work very closely, Chair of Chairs has a duty and a responsibility to make
sure that information gets through. We
have got 160,000 businesses in the Mr Moore: Having regional ministers has been really positive for
the regions as well. Working very
closely with the regional ministers, you can get your message and the evidence
about the work we do back into Whitehall and back into Westminster, and we can
do even more to carry our message within our own regions and, through the
regional ministers coming together, as they will do, in the Regional Economic
Council, you can get a much bigger impact as well. As Mr Paul: Can I also add to this point? In terms of brand management, if you will, we have got Business Link and the Manufacturing Advisory Service, two very successful organisations which are under the auspices of the RDAs, and most people will not realise that is the case. So you have got a brand out there which is Business Link. It does not say "powered by AWM" or "EMDA" or anything else, it sits there as Business Link. It is national with regional--- Chairman: We had a very good Business
Link in Q168 Miss Kirkbride: My question was only what the Chairman has just asked. Because you now exist and because there have been some successes in the British economy in the last ten years that you have been there, we are obliged to believe that that was your success. Where is your proof? For example, on inward investment, which is always easier to quantify, can you provide the committee with figures showing that since your existence the level of inward investment to the UK has gone up as a proportion? The relatives are there, but what was happening before has had a quantum leap since you arrived and there is more of it. Can you demonstrate that to us to show that it is not just a progression: you are doing what someone else did before and still doing it competently? Dr Jackson: Whether it was done before or not is not really the question, is it? The question is: is this being done more effectively and cost-effectively, and that is part of the argument. Q169 Miss Kirkbride: You are cheaper at doing it, not better at doing it? Dr Jackson: I hate using the word "cheap" with my background. We are much more attuned to the quality of deliverance using taxpayers' money effectively. Q170 Miss Kirkbride: I am not sure that the number of civil servants has gone down in the last decade. Dr Jackson: I have never been charged with reducing the number of civil servants. Maybe that is a job to come; I do not know. Q171 Miss Kirkbride: So you do not think you can supply the committee with figures showing--- Dr Jackson: Of course we can supply the figures. Q172 Miss Kirkbride: ---that inward investment has gone up? Dr Jackson: Of course we can. Q173 Miss Kirkbride: We would be very interested in that figure to show some evidence of what you are saying. Mr Moore: To answer that point you would need to know what happened in the rest of the world as well. Q174 Miss Kirkbride: The world has always been a competitive place. It is not uniquely competitive in the last few years; it has always been a competitive place. You cannot just say, "Times are different and therefore we have to be judged against..." The UK has had a massive credit boom over the last ten years, as we now know to our cost. That might have helped some of the employment figures that you have given in the records to the committee. If you had not been doing well over the last ten years, then God help you, because you are going to have a tougher time of it now. Mr Paul: In the Q175 Miss Kirkbride: We like you, but we want to know the whole of the RDAs. We cannot make an exception just for you, Nick. Mr Paul: Although we try to do our best to represent the whole of the RDAs, inevitably our examples tend to fall back. Q176 Miss Kirkbride: We want the whole picture. Mr Paul: We then have to go back to the submission. Dr Jackson: He has grown three years running, we have grown five years running. You have asked for the figures. The figures are not an issue. Mr Paul: I wanted to go back to the point the Chairman made
about Q177 Mr Oaten: I have no doubt on the figures in terms of inward investment, but I think we do as a committee need to probe more on this issue of the overseas activity and how that works, because I do not think we have done that enough. If you are in India, for example - just talk me through how this works - are SEEDA and AWM in India at the same time and what happens in terms of the meetings that you are having there over trying to persuade companies to come in? Are they trying to persuade companies to come into the West Midlands or into the South? Is there a danger in that live situation that there is duplication and that possible investors are confused because there are too many RDAs bidding? How do you overcome that down on the ground in reality? Dr Jackson: As I said, we have 14 countries and there are 36
vocations within those 14 countries. So,
yes, the answer to your question is in certain countries like Q178 Mr Oaten: But how many of the countries are in a situation where we have more than one RDA represented? Dr Jackson: The Q179 Mr Oaten: A note on that would be quite useful. Dr Jackson: We can do that, yes, but bear in mind, if you take Q180 Mr Oaten: It is a big country? Dr Jackson: ---it is a big country.
We have had a relationship over 30 years with a particular region. We have Q181 Chairman: We have been there. It is very good. Dr Jackson: It is excellent, is it not? So we have that relationship. Somebody else will have a relationship in Mr Moore: Can we just return to the wider Business Link point that you made, Chairman, just for a second. For example, in the East Midlands, as a result of going from five separately provided Business Links to one, we have reduced the overhead costs from 32% to 23%, and we have increased the number of customers by 29% and kept customer satisfaction levels at the same level, and put something like 35% more advisers directly out on the frontline. There are definite economies of scale and those can be replicated by my colleagues throughout the country. Q182 Chairman: We are going to move on to some more detailed questions because we have been ranging generally about the overall effectiveness of RDAs. Can I put to you one concern I have, which is very often companies, trade associations, here and abroad, have been critical to me in private of RDAs. They are critical about the lack of co-ordination in India, for example, about the inward investment operation. They will never say that in public because they are worried about biting the hand that feeds. I worry that this inquiry is actually not getting the hard-edged evidence we need because they are reluctant to criticise their paymasters. You are in a very strong position, are you not? How do you make sure you are hearing not just what you want to hear from these people? How do you make sure you are hearing the real truth? Dr Jackson: That assumes we only give money to people who like us and say nice things about us. Any grant or any support that we give to such organisations goes through a really thorough evaluation process and has to go in front of the board and the board makes business decisions on it, so it is not a question of giving it to our friends. If people do not want to criticise us perhaps it is because the criticism is not that large, I do not know. You really have to ask them. Anne Moffat: You wish! Q183 Chairman: I hear vitriolic complaints in private about the quality of your staff. No specific agency but generally, that they just do not understand business, they are second rate, they are failures, they do not know what they are doing, but they will not say it in public. They will not criticise the quality of the staff in public, but in private they will happily say it, because they are worried about upsetting people they have relationships with, that is the trouble. Mr Moore: I find that fascinating,
Chairman, because I watched last week's session where you talked at some length
to the business community about measurement of effectiveness. There are a whole
host of measures. We have a set of
targets on jobs that business has created and brownfield land regenerated, and
we have regenerated collectively an area the size of Q184 Chairman: That was your origin and with English Partnerships you were very strong on it. Mr Moore: Particularly on the effectiveness, in 2006 we all had an independent performance assessment carried out by the National Audit Office. That was entirely independent carried out in the same way as those performance assessments were carried out of local authorities. Entirely on an unattributable basis, businesses were part of that consultation process: "How do you find your RDA? Is your RDA good at ambition? Has it got capacity? Is it good at partnership? Is it good at performance management?" The fifth category was, "And how is it doing on achievement?" Every RDA came out of that process with anonymous business responsiveness to that run by the NAO as performing well or strongly in the top two categories. Q185 Mr Oaten: But, Jeff, that was not the finding of the British Chamber of Commerce survey which they presented to us last week where on six critical questions about the RDA the performances were actually coming in at around a third negative comments on six of the questions. We had a bit of a battle with the British Chamber of Commerce to try and come back and say, "Look, tell us which RDAs are not performing so well in which areas" and, again, it was quite difficult to get the information coming through. There is some evidence that businesses privately, when they fill those forms in, are not entirely satisfied. Mr Moore: Like you asked last week, we have asked for that evidence. The independent process showed that was not the case. We would like to see that evidence so we can address it. You have had responses from a whole set of chambers, the North East Regional Chamber, very supportive of RDAs, the Nottinghamshire Derbyshire Chamber, supportive, and the West Midlands Chamber is very supportive. The evidence that we get, whether it be anonymous or public, is supportive. There will be weaknesses, we will not be complacent about those, but we need to know what that is. Q186 Chairman: The survey you are referring to, it is in the public domain obviously. Mr Moore: It is. Q187 Chairman: I am just making sure we have had it. We can get that. Mr Moore: It is in the public domain and the next thing that is going to be in the public domain --- Q188 Chairman: PricewaterhouseCoopers. Mr Moore: To answer more precisely your
more detailed question about impact evaluation, last week you said targets are
one thing and independent assessment of your performance as an organisation is
another, but something we have been particularly keen on, and the CBI comment
on it in their written submission, is impact evaluation. It is work that we have led in the Q189 Chairman: One last question on this effectiveness question. Do you think that you should be measured differently? Are the measures that are being used appropriate? Do you expect PwC to recommend new measures to measure your effectiveness? Dr Jackson: There are two things I would like to say, Chairman. First of all, I do not want to give the impression that we are not welcoming criticism. Constructive criticism makes you better, so we are happy to take any of that and review it. We are not precious that we know all the answers; we do not. Secondly, in terms of how we evaluate it, the Government set the output targets, that is what we are charged to do. As Jeff referred to, when I became Chair I wanted to know what is the impact, what are we doing, very much in the way you are asking your questions, what difference are we making, so we have been doing this evaluation. That led into BERR commissioning a national one. Whether they will come out with new measures, maybe they will. Also, they have changed the measure now so we have a regional growth PSA-type target. I think evaluation and effectiveness will become measures in the future because they generally show what the impact is of what you are doing. Not only do we want to know we have done that and that is the impact, I am trying to find will that provide a guide so that when we get a request for an investment in something we can say, "That sort of investment for a pound gives you three and this sort of investment gives you nine, and with a limited resource we should be going for the £9 return". We are hoping that sort of thing will come out of this evaluation study as well. Chairman: Thank you. We will move on to spatial strategy matters. Q190 Miss Kirkbride: You are going to be given strategic integrated regional strategy powers. Do you want them? Dr Jackson: I think I will ask Jeff to answer this actually. Q191 Anne Moffat: He talks too much! Dr Jackson: Shall I answer it then? Mr Paul: Why do we not just say yes, we want a single integrated strategy because we have got to bring together the economic strategy and the regional spatial policy strategy. Mr Moore: That is the point that we want. Mr Paul: That is what we want. Mr Moore: It is them aligning. We have not said that we need to be the body that actually brings that together, government has said that. One of the key weaknesses is that spatial strategy is not aligned with economic strategy, they operate to different timescales and are done by different bodies. Our key point is can we have those aligned such that we can, for the first time perhaps, plan for growth at the same time as planning for environmental change, climate change. It is the alignment that we want. Mr Paul: Absolutely. Q192 Miss Kirkbride: Do you agree, Dr Jackson? Your body language does not suggest that you are entirely with them on that. Dr Jackson: We said right at the start what we wanted was a bringing together of the spatial strategy and the economic strategy because it made no sense to be doing them at different times, quite honestly, because there is confusion, there is duplication and there is opportunity to get it wrong. In all honesty, as a Chair of an RDA, how government mechanisms are determined to present and develop that, that is up to government. What I am more concerned about at the moment is do not lose the big picture, which is the bringing together, but we are getting on with the day job. That is how I see it. Miss Kirkbride: If you do end up getting these things, which one presumes at the moment you will, how are you going to have the resource and the staff to make a good fist of it? Chairman: It is just worth mentioning that there are rumours going round at present that the government is changing its mind on this. We are hearing a lot of rumours to that effect, but they are only rumours. Mr Weir: You started these rumours, Chairman! Q193 Chairman: I rather wish I had actually! Dr Jackson: Having failed to answer the question I think I am in danger of being accused of starting the rumour! How we would do it, clearly if we get any responsibilities, as I understand it, we will inherit some of the people who were doing it for regional assemblies who have the skills and the natural attributes. We do not have that as a background, we would have to get it, the same as any other business. If we took on new business we would have to buy the resource. Q194 Miss Kirkbride: So you are going to inherit the planners and the whole --- Dr Jackson: Not the planners. Anne Moffat: Do you think they should be elected? Q195 Chairman: One at a time. Do not get too enthusiastic! We will come to those questions, Anne. Dr Jackson: I never said that I want to be a planning officer. I would like to think that as a regional development agency for the new combined strategy we will be talking at the strategic level, so it is those many jobs, that sort of housing built with this sustainability. The planning of it and where the houses go, there is a system already in existence and I am quite happy to leave that system operating. What I am saying is strategically we should bring them together and make sure that we are pushing forward the economy. Q196 Miss Kirkbride: Bearing in mind that this is a massive diminution of democratic control over something about which the people that we represent feel very, very, very strongly, before we get on to that democratic deficit can you give me a really good example of what is wrong at the moment and why we should allow this massive transfer of democratic control to come over to you when this has gone so badly wrong, for example? Dr Jackson: I am not sure this is a good
example but we have a case in our own area, if I may use that. We have the Q197 Miss Kirkbride: Any example in the West Midlands of putting these things together? Any example as to why we should allow this to happen? Mr Paul: Yes. In the Q198 Miss Kirkbride: Do you think, therefore, those override what is going to be, as I say, a big transfer of democratic control? In the end what legitimacy do you have to decide, to be personal again, that we should have all these houses in Bromsgrove in places we do not want them when actually my council should be deciding that? That is going to be one of the impacts, Redditch is going to grow and the bits that do not get into Redditch are going to go into Bromsgrove on the green belt as opposed to in Bromsgrove where we want them. Why on earth should your body be deciding that when it used to be Worcestershire County Council and Bromsgrove District Council? Dr Jackson: Again, with respect, we are not asking for this, we are being given this. There must be a mechanism that retains some control over that process and that is for government to decide. Q199 Mr Oaten: Is not the real answer that they will never take the brave decisions because they are going to have to stand for election? It is much better to have an organisation like you taking them which does not have to do that, that is the real answer, is it not? Dr Jackson: I suppose there is an element of that. We do take managed risks. You are right, I do not have to stand next May to be re-elected as a local authority so I can take hard decisions. I would argue that I am more accountable in many ways by what I decide because it is immediate and, it is like business, if I make big mistakes my shareholders say, "goodbye". It is the same principle, I think. Q200 Miss Kirkbride: Is there not some halfway house in all of this whereby where there are important decisions for the region, whether it is on transport or housing or jobs, you can have an influence but, nevertheless, the things that upset people where there should be some democratic control can still be left with people who can be removed, which you cannot? Dr Jackson: Again, my understanding is you have a leaders' forum of elected people who will sign off the joint strategy. Also, we do not sit in a darkened room doing this, there is a huge consultation process, a huge inquiry in public, so everybody has the opportunity to say, "No, it shouldn't be in bloody Bromsgrove, don't put it in the strategy". It is not as if we go into a little corner somewhere and say, "I've got a good idea, let's put them in Bromsgrove because that will upset people and it doesn't matter because we don't have to worry about the people there". This is a hugely open process. Anne Moffat: But it is not, is it, because there is not genuine consultation? Q201 Chairman: Let us not debate the merits of the regional spatial strategy. I have very strong views on that subject, particularly in the West Midlands, but we will not go there today. I think what Julie is saying is that it is possible to achieve what you desire, the full integration of the economic strategy into the planning strategy, without having one body doing it, which many of us have severe reservations about on democratic accountability. It could be two separate processes closely aligned. Dr Jackson: Of course, providing that we do not lose sight of why we were developing it, which was for sustainable economic growth. Q202 Chairman: To be honest, strategies are not just about economic growth. Dr Jackson: But they are an integral part of it: transport, housing. You cannot have economic growth without paying close attention. One of the biggest criticisms of business is that RDAs do not have control of transport because one of the biggest hindrances for growing business is the infrastructure. Why does government not give RDAs transport? On every platform I am asked, "Why aren't you in charge of transport?" Anne Moffat: Did you not just say that? Chairman: Let Julie finish off, then Mike, then Anne. Q203 Miss Kirkbride: Perhaps one of the answers to that is the motorways in our country go through the West Midlands and come into the East Midlands, up to Yorkshire, Lancashire and down to Cornwall, and there are not the natural boundaries. Therefore, why should you necessarily be in charge of transport because --- Dr Jackson: Why should a regional assembly be in charge? Q204 Miss Kirkbride: I would not want them either, but you are the --- Dr Jackson: Why should a local authority be then? Who is going to be responsible? Q205 Miss Kirkbride: Because the local authority works with the DfT directly, do they not? Dr Jackson: Why do we not work with the DfT directly? Whoever gets it, it is just a mechanism of government. If we are asked to do it we will do it to the best of our ability and we will make sure we have got the right skills in place. If they ask somebody else to do it, so be it. We are saying do not lose the big picture, that is all. Q206 Chairman: Are you making a bid to replace the Highways Agency? I am not being facetious. Dr Jackson: No, not all. We are talking about the strategic implications. Q207 Chairman: I just wanted to make sure I understood that. Mr Paul: Can I give two practical
examples, if I may. Recently, two or
three weeks ago, we formally opened what is known locally as the Rotherwas link
road in Herefordshire. There is an
industrial estate in Dr Jackson: Also, we have got an example under the RFA regional funding we did last year where we did work together, all local authorities, and prioritised transport and we had people saying, "Yes, I'll give up my road". We did that on the evidence that we had gathered to show the economic impact of why it had to be that road and not that road. I agree there are many ways. Chairman: It is working quite well at present. Miss Kirkbride: If you talk about trains rather than roads then, of course, you like to build roads because you can get some benefit. You can say, "Look, I made this wonderful road and, therefore, I have been very good at improving economic activity in this area", but because you do not get the full credit for trains because that is a Network Rail responsibility, yet you have a budget for trains, we are in discussions about the Bromsgrove Railway Station and we expect you to take trains as seriously as you take roads. Chairman: It matters to the Chairman too, so she is allowed to make the point. Anne Moffat: I wondered why she had such licence, Chairman! Q208 Miss Kirkbride: I finish there, I got it on the record. Mr Paul: Can I respond by saying the single largest investment that AWM has made is £100 million that is going into the regeneration of New Street Station, so we are involved with trains. Miss Kirkbride: That is a regional capital though. Chairman: Mike, and Anne has considerable licence too when her turn comes. Q209 Mr Weir: I wanted to ask an entirely practical question. I am sitting here looking at a wonderful flow chart, "New integrated streamlined process" which says, "RDA and local authorities leaders' forum with stakeholders scope the issues" and it takes a year, "RDA drafts strategy and agrees with local authority leaders' forum (3 months)". What happens if they do not agree? Surely the same problems will occur here as they do in the present system? Dr Jackson: Answer yes, they will. Q210 Mr Weir: Who is the lead authority? Does the RDA say to the local authority forum leaders, "I am sorry, we are going ahead with that", or do you get stalemate? Dr Jackson: At the moment we do not know and that is one of the things that CLG are looking at. Q211 Chairman: We are waiting for the SNR. Dr Jackson: We are waiting for it, yes. Mr Moore: That is business's concern that they have expressed in their submission to you. Q212 Anne Moffat: Where would you bank your money? Dr Jackson: Well, that assumes I have got any. Where would I bank my money? I have to be careful here because I think I know what is behind the question. Chairman: I do not think you are licensed to give independent financial advice. Dr Jackson: I was going to say I am unqualified. Where would I bank my money? In British banks. Mr Wright: Hear, hear! Q213 Chairman: That is a good answer. That has completely thrown me, I was not expecting her to ask that. Dr Jackson: If it is any consolation, neither was I! Anne Moffat: I am fed up now, I have got the evidence! Q214 Chairman: Can I put it to you, and a short answer will do, at a time of major economic crisis, which we face, and an economic downturn, which we face, and at a time when you are taking credit, probably rightly so, for having improved the business focus of your organisations, and you have said businesses are concerned sometimes about the spreading of your responsibilities removing your focus from the core activities, that it would be very strange indeed to give you a huge additional responsibility relatively unrelated to your historic experience as organisations. That is spatial strategy planning. Dr Jackson: That is a loaded question. Q215 Chairman: Yes. Dr Jackson: Let me answer it this way. If you are thinking logically you would say let us concentrate on what we are really good at and let us make the difference now. Our economic strategy looks at a 20 year horizon, so we cannot just say that we have got to handle this now and forget about everything else, we have to take the big picture into account as well. Q216 Chairman: But to divert you now --- Dr Jackson: That is what I am saying. If you ask me as a businessman, no, I would not do it now, but that does not mean to say I would not do it. That is an honest answer. That is a Bryan Jackson answer and not necessarily an EMDA answer. Q217 Chairman: Thank you very much indeed for that. Just very quickly from me before I pass on to Tony. I missed him out last week so I have got to make sure I keep him in this week. Local authorities and the economic assessment duty. I do not want to spend much time on this, but do you think that local authorities have the skills to do this duty? If you do that is fine, if you do not are you helping them develop that ability? Dr Jackson: There is a lot of comment, and I am afraid some of it is anecdotal so I am not sure I should really pay credence to it. If you listen to a lot of businesses, businesses have said it publicly and privately, they do not believe the local authorities have it. Equally, you could say that about RDAs not having planning. It is fair to say, I assume over the last ten years, economic development departments have been lowered because they did not have to do it because you had RDAs, but that does not mean to say they should not have an economic duty. I think it is quite important that local authorities do have it as long as it is evidentially based and feeds into an economic strategy for the region. Q218 Chairman: I think I summarise the evidence of my own District Council, Wychavon, where they say they feel the assistance they have received from AWM, particularly in the Evesham area, has played a part in helping them drive up their economic regeneration and they have become more focused on these issues and are grateful for the mutual support they have had. Mr Moore: There are examples,
Chairman. For our region we have done
the impact of congestion charging. It is
one of the added-value things you get from an RDA. We have done impact research on what is the
cost of congestion to the Q219 Chairman: The local authorities are concerned about the integration of these assessments into the process, the SIR is not clear enough, is not strong enough, is not robust enough. How do you expect the assessments to input into the single integrated regional strategy process? Dr Jackson: Again, very much through the process that we currently adopt for consultation on the economic strategy, so very important stakeholders. All we would ask is that it is district as well as top tier authorities that are involved in it and they would input just the same as any other stakeholder into the consultation process. Mr Wright: Before I go on to my line of questioning, just a comment. In the last hour and a quarter I have come to the conclusion that two RDAs very close together may well give a completely different overview of RDAs if we had the South-West RDA and North-East RDA together. I think that is something we should probably look at. Obviously two RDAs very close together can rub off on each other and what benefits one area is certainly going to have a knock-on effect for the other, whereas if you have two disparate areas then quite clearly it may well be different. I am not saying overall that should be done, but that is something that should be thought about. Chairman: I went to a meeting of the Chair of Chairs and I have to say I was quite impressed when they all sang from the same hymn sheet. Q220 Mr Wright: That might be something we have to look at in terms of getting two significantly different RDAs together. Mr Moore: We have more RDAs on our
board than any other RDA. We have five
that we board with: Q221 Mr Wright: I just ask as somebody coming from the eastern region. Talking about the sub-national review and what they are looking at is reviewing and reforming the management of the RDA funding, you will be expected to delegate that funding to the local authorities who will manage it. Do you think that the local authorities have the necessary skills to manage that funding and, if not, what are you going to put in place to help with the skills shortage? Mr Moore: We do think they have the
skills to deliver on the overall objectives of the economic strategy. In the Dr Jackson: What we say to the local authorities, we call them sub-regional partnerships which are business-led, is if this comes about we must have business involvement. Business creates wealth, therefore they should have a say in how it is done. We do not want to go from having everybody involved to just the local authority. Q222 Mr Wright: Would it be the same for your RDA? Mr Paul: Yes, absolutely. I would also point out that there are any
number of what I would describe as regional projects, regional initiatives,
where quite clearly you work with a group of local authorities or a group of
other partners. When we talk about major
inward investment, when we talk about Q223 Mr Wright: So how do you plug that skills gap? Mr Paul: We work very closely with
them, in essence. Some of our staff
spend a lot of time in certain parts of the Q224 Mr Wright: Would you say it is a generalisation that what happens in the East and West Midlands would be across the piece in terms of the other RDAs, that already there is this delegated funding? Mr Paul: Yes. Dr Jackson: Yes, there is. Q225 Mr Wright: When you get together it is one of the areas that you would discuss and look at the weaknesses as well? Mr Paul: Yes. Dr Jackson: Correct. Q226 Mr Wright: In terms of delegating that funding, and there may well be opportunities to delegate even more funding, how would you measure whether or not an authority has got the skills? For instance, you, Nick, mentioned the fact that there are one or two local authorities that do not have the necessary skills. Would that come through the National Audit Office or would it be something that you do yourself? Mr Paul: It is a combination of
feedback. Often you find that people are
prepared to put their hands up and say, "We need help". Mention has been made already going back to
rural parts of the Dr Jackson: We do have our own internal auditors, so if we are going to work with a body like a local authority, a sub-regional partnership, we do a due diligence and then we have an understanding and agreement, a round of understanding, heads of agreement, whatever, that they will deliver X, Y and Z. We follow it up very closely, we monitor it and they have to give monthly reports. Every six months I meet with the chair and chief executive of every sub-regional partnership to assess where we are and what we are doing. Q227 Mr Wright: The leaders' forum has been discussed already. Do you think that might well flag up a conflict of interest between the RDAs and the local authorities? Mr Moore: I think it can flag up a conflict of interest as it stands between the leaders' forum at the moment that is also charged with the scrutiny role under the SNR, so that needs reconciling. In terms of the leaders' forum itself, it is a case of can it come together to make those strategic decisions that are for the good of the region. Q228 Mr Wright: Do you think it can? Mr Moore: Clearly there will be differences in different regions. In our own region it has taken a considerable amount of time to get a leaders' forum together; it is happening much quicker in other parts of the region. It goes across the political divide, the size and tier of authority, and it goes within the same political representation at times. It is not easy but it can be done. Q229 Mr Wright: Overall you think it is a good idea? Mr Moore: It is something that needs to be worked through to ensure that it delivers this alignment of the strategy for the good of the region. I think it can be done. Q230 Mr Wright: A politician's answer! Dr Jackson: That means no by the way. Q231 Mr Wright: Obviously a bit of conflict there, it does not sit comfortably with the RDAs. Would that be the RDAs' view across the board? Dr Jackson: No, it does vary across the RDAs, and that is understandable. Mr Paul: It does, yes. I sit as part of the strategy group that is
working with the leaders' forum and it will be made to work in the Mr Wright: Right. Thank you, Chairman. Chairman: We are now going to come to questions of accountability, which is quite a thorny issue. Q232 Mr Weir: We have touched on this to a certain extent already, but how do you see the balance between accountability at local, regional and national levels? You quoted the example of Lincolnshire where there can be different outcomes sought by national government, regional government and, indeed, local government. How do you see that balance being found? Mr Paul: As a businessman who has come
into this job, a bit like Q233 Mr Weir: I understand that, but under the sub-national review you are going to be given these huge new powers and apparently you are going to have at least three masters from national government, local government to regional level as RDAs. There are conflicts, and the classic example perhaps is the third runway at Heathrow where it may be seen by national government as a strategic national objective, local government may be dead against it for entirely local reasons, and business may have a different view because of the business implications of it. How are you going to bring all these together? Where do you see your principal accountability being under the new structure? This takes me back to the question of what happens in this wonderful flow chart when there is a dispute between the various levels. I think the answer before was you do not know because nobody has ever said it. There has to be a mechanism for getting through these disputes surely. Mr Paul: We envisage that the regional select committee will have a big impact on this. We are talking, are we not, about maybe a grand committee. Q234 Chairman: The Government is calling for regional select committees. I say "the Government", the Modernisation Committee put it as a partisan issue and the opposition parties opposed the Government's proposals. Mr Paul: We recognise that there will be more work to be done. The other point I would make is that we are scrutinised by the public, by our partners, they sign off our corporate development plans, they sign off the regional economic strategies. We feel we are under a lot of scrutiny. That is not to say we do not want it. Frankly, the more that we can be encouraged to improve, the better. It is a continuous improvement programme and I see the regional select committees adding to that and also regional ministers adding to that. Q235 Mr Weir: It sounds like a recipe for gridlock to me with all of these different organisations. Dr Jackson: It is a point that has been made by business in some of their submissions and when we talk to business. What they do not want is the RDA to lose its fleet of foot, manage risk, quick response thought through, evidence-based. If you get a conflict situation like that, I think it is the role of the RDA to gather the evidence, to examine and study that evidence and present the economic case. Ultimately it is a democratic process, national government will make that decision. This is probably why we have still not seen anything issued about what the structures will be. In many ways it is working at the moment, maybe not as efficiently and effectively as it can be, but there is a sort of understanding and a sharing and working together. I hope that whatever comes out does not destroy that. Q236 Mr Weir: The flow chart for a streamlined process seems somewhat optimistic! Obviously the forum for local authority leaders will give some local authority accountability, but are there other stakeholders to whom the RDA should be accountable, and who would they be? Mr Paul: I think you have got to back to business, to the third sector and voluntary groups, and go back through to many, many of the partners that we have. They have got to be intimately involved, as they are now, in creating the regional economic strategy and as they are now in determining the corporate plans for the regional development agencies. Q237 Mr Weir: How are they going to fit into this proposed new structure? Mr Paul: At the moment, I would suggest that we are going to continue as is. I do not know what the new structure is. I am very much taken with the fact, as I said earlier about Team West Midlands, that we have good partnership working. We have good partnership working with all of our key partners and I do not want to jeopardise that, I want to make certain that is built on for the benefit of the region. Q238 Mr Weir: Do you see the RDA continuing to talk to these groups and representing them, in effect, in negotiations with local authorities through their leaders' forum, or do you think the forum should include representations from these groups? Dr Jackson: There is an argument that
says that the leaders' forum should have representations from other
stakeholders, but I think the danger there is that you are reinventing regional
assemblies. I do not underestimate the
difficulty of what they are trying to do.
Please remember that on RDA boards are the local authorities, so they
are involved and engaged and are an integral part of the development of the
strategy already. In terms of the actual
process, I really struggle to see how you are going to do it other than by
encouraging co-operation. Personally, I
do not see the need for primary legislation to make this happen, I think that
would be a disaster and would logjam everything. I hope, as Nick says, that we can retain
--- We do not operate in a separate
room. The leaders of Q239 Mr Weir: Do you think, for example, the forum should be able to veto the single integrated regional strategy? Dr Jackson: Personally, no, I do not. The purpose behind bringing the single integrated regional strategy was to grow sustainable economies. If we have consulted and involved every stakeholder, if everybody has had their say and we create a strategy, why would you want to veto it? It is not something I have just written on the back of a fag packet and said, "This is a good idea because I've thought of it". We have to make sure that the process is thorough, covering everybody we currently cover. We had the biggest exercise of this kind when we developed our RES and I think we had 28,000 hits on our website with 43,000 submissions. We can get out there. It is not done secretively. I would hope that working as we do now in partnership, irrespective of what our roles demand, we can get what is best for a region in terms of sustainable economic development. That is the real thing, is it not, not, "Let's play with structures and let's have a game by drawing charts and flow charts". What are you doing and what is the benefit of what you are doing is of more interest to business-led boards, I would suggest. Q240 Mr Weir: Inevitably, in some of these discussions on structures there is going to be an area of conflict between various interests. Dr Jackson: Sure. Q241 Mr Weir: There is going to have to be some mechanism for dealing with that where inevitably a lot of issues will be dealt with by discussion. Dr Jackson: Ultimately it would be the Secretary of State who would have to make the decision if there was no agreement. That would be my proposal. Mr Paul: Also, I should point out that to my understanding I do not think there has been any region that has not had its regional economic strategy signed off by its partners. Mr Moore: There was one. Mr Paul: Okay, I am just being
corrected, there was one. Bear in mind
that we create a regional economic strategy every three years, and there are
nine RDAs doing it. In essence, we do
seem to be able to work with partners.
It is down to creating the evidence base to try and understand. In order to do that we have all had to create
what we have called an observatory in the Mr Moore: Clearly the regional ministers, as currently proposed, will have a role in that decision-making process up to the Secretary of State as well. Chairman: We have got one last area of
questioning before we conclude, which Mark will do, but let us just look at
this regional minister question again briefly.
Last week you said that the regional ministers would not have other
jobs, but in fact they do. The Department
for Work and Pensions has three regional ministers and they are all very busy
people. There are many things that it
would be good to do in the ideal world and the idea of regional ministers makes
a lot of sense, but they have got to compete with their jobs as other
departmental jobs, their jobs as constituency MPs. Liam Byrne did a fantastic job in the Q242 Anne Moffat: Perhaps he was sitting down and having a cup of tea! Dr Jackson: He is recovering! Chairman: We are now talking about deputy regional ministers who are not actually ministers. Mr Clapham: That was the point I was making, Chairman, that the deputy regional ministers, of course, will have more time to work with the region and particularly the RDAs. Q243 Chairman: You are talking about the deputies. This is a new idea which I was not aware of. There are real issues for Parliament here in holding these people to account. The regional select committee model is one that I have profound reservations about simply on logistical grounds. We are all so busy I do not think you will find people to staff these committees, never mind rooms for them to meet in. There are big questions on the regional ministers. What would you have us do about regional ministers if you value them so highly? Dr Jackson: We did a study about three years ago on potential governance structures and we were very supportive in that report of the establishment of a true regional minister. We have it somewhat diluted now because our regional minister is a health minister and they are busy, there is no question about that. It is the old adage, is it not, if you want a job done give it to somebody who is busy. What I would say and what I understand from the other chairs is that it is better to have the regional minister, even if it is only 20% of their time, because it is another access into government, of feedback, and an opportunity to influence. For me, I would have a regional minister. I would prefer a full-time regional minister but I am quite happy with where we are at the moment. Chairman: Okay. We could debate this at some length. We must not get into what the Modernisation Committee has decreed. Q244 Mr Oaten: This should not take long. I am interested to know how the new powers of handing out the European Regional Development Fund money is going. I was a little bit alarmed last week when we had the evidence session from the Chamber of Commerce and local authorities. None of them seemed to be aware that this pot of money was there, that you guys had it, and they did not seem to understand how the process worked. How is that going? Dr Jackson: I will make a general comment and then I will ask Jeff to give you some information on it. I was quite surprised to watch that. I was very surprised that they did not understand that. There has been a consultation process that we have all had to go through involving all businesses, all stakeholders, including EEF, CBI, IoD and everybody else and their uncle were involved in this in the determination of how you would split and spend and prioritise this money. For three people to then say they did not know about this I found quite amazing. I just thought I would make that point. Q245 Mr Oaten: Is that their fault or yours? Dr Jackson: It is nobody's fault because the situation is we took responsibility this year and we have only just come to the point where we are going out for the first tranche. So it is very, very early days. However, we are oversubscribed, as I would suggest every area is - I look to my experts - yes. So there are a hell of a lot of people out there who do not know about it. Q246 Mr Oaten: The deadline for submissions has passed in some areas, so it is not early stages. Mr Moore: I found the evidence on this quite surprising last week as well, but we launched this in terms of our own programme in March this year, at which there were something like 400-500 people. The programme monitoring committee, which is one of the governance structures that is created, creates the Chair of the East Midlands Business Forum; the East Midlands Business Forum is the Chambers, the FSB, the IoD and the CBI, and so we find it strange. We are over-subscribed, as we have said, with applications for the first two tranches, many of which are businesses which will benefit through intermediaries. So we find it quite surprising, but we have publicised this far and wide - as have all of the stakeholders. Q247 Mr Oaten: If you are over-subscribed that is good news and would suggest the word has got out, or what it suggests is that it is the same old folk who would have been trying to get money from you anyway, and is there just the slight danger that you are using this money to repeat some of the projects you might have been funding anyway? Dr Jackson: No, because under the new rules we have changed where we are spending the money. We have had to explain that to people. As Jeff said, we had 500 people in a rather large conference hall; we had members of the EU there as well, we had our Regional Minister and we explained it in great detail. We did press interviews, it was covered by the television - so there is a huge amount of effort that has gone into it. I would advocate that people are applying because they know about it. Q248 Mr Oaten: Finally, on that, the people applying are coming from different areas to those you normally deal with? You are getting into new areas? Dr Jackson: Yes. Mr Oaten: That is helpful. Q249 Chairman: I am going to ask one or two last questions. Do any other colleagues want to ask anything else first? Anne Moffat is silent - briefly. Excellent. Can I just bring this to a conclusion? (Excellent you are happy.) It seems to me that one of the explanations for the increasing mood music from business that you are more welcome than once you were - the Federation of Small Business, for example, says that they want an organisation like yours to exist - could be because you have become a much more effective voice for business. Indeed, your lead submission says you are the voice of business as part of public decision-making (?) and you are proud of your business-led approach, which does suggest that taking into account spatial strategy matters is very dangerous, because that involves many more things other than business and the economy. That is one conclusion I take from this: you have become more effective; you are co-ordinating work more effectively between yourselves; you are the voice of business. Why should we risk breaking that model that seems to be working rather better than it used to? Dr Jackson: Is that a rhetorical question? Q250 Chairman: It is rhetorical. Mr Paul: I think we have got to co-ordinate the infrastructure, the housing and the jobs. It has got to be brought together. Q251 Chairman: Co-ordinated, but not necessarily done by the same body. Mr Moore: I think the key point we would want to make from today about the juxtaposition of the spatial and economic strategy is that they are aligned and you do not have that degree of conflict, and then they go through all the appropriate approval processes with the relevant, democratically elected bodies. That is the key point we would wish to make Q252 Chairman: Do you think your boundaries are magic; that they are, by definition, the ideal and perfect boundaries? Mr Moore: Of course not. Mr Paul: Having said that, I think
there is evidence for, I would suspect, the Q253 Chairman: When we look at Tony here, the East of England Development Agency is a strange animal; the South East of England Development Agency is a strange animal. Where I live - in my constituency - South of Worcestershire, I look to Gloucestershire more than I do to Birmingham for my economic interest, as you know very well. So are those boundaries written in tablets of stone? Mr Moore: The point we would make, Chairman, is that they have become more written in tablets of stone because increasing government regional policy has created more delivery mechanisms on those same regional boundaries, which were the regional boundaries of the government offices. So Health-bound and all sorts of other organisations - the Learning & Skills Council boundaries have recently been regionalised, and others - means there is a greater consistency across the country now than there ever was before RDAs were created. The key point we would make is you have to show ability to work across boundaries, but efficiently and effectively for the businesses that you deal with. So we work across four boundaries for Rolls Royce, but one RDA delivers the contract for them on behalf of the rest. So there are lots of examples of cross-boundary working. There is always a boundary and someone is always on the periphery of that boundary - whether it be a council, whether it be a parish, whether it be a region or whether it be a country. Chairman: On that note, we conclude our
session. Thank you very much indeed,
gentlemen; we are grateful for your evidence, both written and oral, and we
will see where we go from here. We do
not know at what stage we will continue this inquiry; it rather depends,
slightly, on the publication of the |