Examination of Witnesses (Questions 20
- 39)
TUESDAY 7 OCTOBER 2008
MR CHRIS
HANNANT, MR
STEVE RADLEY
AND MS
KAREN DEE
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 a well performing RDA 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 10 years and things were done differently before. As
Steve said, in those 10 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 sub-regions. 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 ministers in 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 be built on the greenbelt
border of Bromsgrove because there is not enough space in Redditch.
That does not seem to me very democratic. We are very happy to
take houses but we have to take them where this unelected body
says we have got to take them. Secondly, we want a new railway
station and because they have shed loads of money the only place
you can get any money is from the RDA but the RDA want to build
roads, they do not want to build railways or new stations. If
we could go straight to the Department for Transport and just
put a rational case together we could do that, or to the planning
department, but we cannot; we have to go to these unelected people
who decide without any say so from anybody who elects them what
their priorities are and they get shed loads of money from the
Government to do as they choose. How can that be democratic?
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 Birmingham from my constituency
too, so I declare an interest.
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" Britain
with all these RDAs creating more super-structures?
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 Barnsley.
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 economists here
in central government to support the development of capacity,
the understanding of the local economy and how to measure impact,
et cetera, within the local authorities. 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 Whitehall and the economic service within
BERR and the like that could help transfer their knowledge and
expertise via RDAs to local authorities.
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.
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