Examination of Witnesses (Questions 40
- 59)
TUESDAY 7 OCTOBER 2008
MR CHRIS
HANNANT, MR
STEVE RADLEY
AND MS
KAREN DEE
Q40 Mr Binley: I think that would
be helpful. Can I go to the CBI again?
Ms Dee: I will have to answer
in the same manner, which is I believe that there are a lot of
good examples for local authorities across the country but I have
not got a list in front of me but I am more than happy to write
to you with those examples.
Q41 Mr Binley: Do you want to add
anything, Steve?
Mr Radley: I could do the same.
Mr Binley: You knew the sort of questions
that we were going to ask. I am quite surprised that you are less
well-prepared than I would hope you were, representing business
as you do.
Q42 Chairman: I have to say that
one of the themes that comes through from your evidence and the
local authorities' evidence is that you do not like local authority
much and they think they have a big role. That seems to be the
mood that underlines your evidence and that slightly concerns
me.
Mr Radley: I think it is more
an issue of balance here. We are not down on local authorities.
I think what we are trying to say is that RDAs need to be allowed
to play a strategic role and we are concerned that some of the
details and mechanisms being put forward will prevent them from
doing that.
Chairman: Adrian will now pursue the
local authority question.
Q43 Mr Bailey: Just on a general
approach, obviously we have got the flavour of at least the CBI
opinion of the local authorities' forum. Do you think that the
existing proposals give local authorities too much power in the
process, and perhaps the other panellists might like to come in.
Mr Hannant: We do not see it as
a practical way of going about it. Our understanding is that the
local authorities would all have to agree it. You have got differing
numbers of local authorities in any given region. It strikes me
as a recipe for paralysis of the process. We are already seeing
that it takes a long time for these economic plans to reach fruition
and then come back out of government, by which time they are often
completely out-of-date. We think that the process of setting the
strategy would be more effective if it could be done more expeditiously.
We do see a clear role for local authorities, but we think that
the current model is maybe slightly too impractical and cumbersome.
An idea around a majority of local authorities or two-thirds of
local authorities signing up, something around that, so they would
have their say and they would have influence, but not quite the
thing that is being proposed by government.
Q44 Mr Bailey: Sorry if I am paraphrasing
what you are saying, you are saying effectively that as long as
there is no mechanism via which a minority could determine, if
you like, the pace at which these processes are concluded?
Mr Hannant: Yes, I think there
has got to be a balance between getting the thing done and allowing
everyone to have their say, and I think the balance is not quite
right at the moment.
Q45 Mr Bailey: Just following through,
and this is really Karen's area, the Chairman, quite rightly,
pointed out that your evidence seemed to be dismissive of the
role of local authorities. What he did not say is that you have
actually proposed an alternative, the establishment of "a
board of stakeholders including business, unions, local government,
utilities and environment agencies". Perhaps Karen would
just like to outline her thinking on that.
Ms Dee: I should first say that
we were not intending to be dismissive of local authorities in
our evidence. What we were intending to suggest is that the process
of the leaders' forum signing off a single strategy caused us
considerable concern because we felt that, at least in the way
that the Government had outlined those proposals, it seemed to
be that that would be a veto, and that if you could not
get all of those local authorities to agree unanimously to the
strategy, then it would just not go forward. We had concerns that
that would lead to not necessarily the best and most strategic
policies being followed and that was principally our area of concern.
Q46 Mr Bailey: Just before you move
on to the other point, do you not think that would be covered
by the point that Chris made that if there was some mechanism
within the local authorities' forum to prevent a small minority
from, in effect, ruling the roost on this, then that would actually
overcome that particular criticism?
Ms Dee: I think that would certainly
help. I think that places quite a burden on those local authorities
for ensuring that they can reach agreement on what, after all,
might be some quite politically difficult decisions that have
to be made. From a business perspective there are some decisions
that have to be made, and I think our concern is about the process
and making sure that we do not end up with a system which simply
allows decisions not to be made because, frankly, nobody is making
them. That was the nature of our concern rather than saying local
authorities should not have a role. In terms of that we had then
thought what is it that ought to be another option? The stakeholder
board is one potential option. It is not something that all businesses
have said yes, that is the precise answer, but I think what we
are trying to suggest there is that there may be other models
other than the leaders' forum that might provide a better focus
or mechanism through which all of the necessary stakeholders can
be involved and give the RDA the decision and support they need
to get the decisions taken and to get the strategy and the economic
development pressing ahead.
Q47 Mr Bailey: Do you not think that
this effectively could be a mini regional assembly?
Ms Dee: You are not the first
to suggest that that is what it is. Frankly, some have suggested
that is what it means. Our view is that there are a number of
stakeholders all of whom have a valuable view on this issue and
we need a process or a mechanism that allows all of those people
to be involved to buy into the strategy, and even if they do not
agree with all the precise details feel they have been involved,
and that is it, the strategy is there, and it can then be delivered.
That is only one mechanism.
Q48 Mr Bailey: Do you not think that
that is the role of the RDA and effectively the leaders' forum
or local authorities' forum is, if you like, to address the accountability
and that to a certain extent what you are suggesting undermines
it?
Ms Dee: I do not think that the
RDA could necessarily say that it could replace that board and
that it has the views of all the stakeholders. I think stakeholders
would say that the RDA has a role to lead and to push the strategic
direction, but naturally the local authorities need to be involved,
businesses want to be involved a, whole range of people want to
be involved and need to have a say in order to get that strategy
to be meaningful and to be something that can be delivered.
Q49 Mr Bailey: Could I just ask Steve
and Chris if they have got any views on this?
Mr Radley: One of the proposals
we put forward was to give a greater role for regional ministers
to sign off the strategies put forward by the RDAs when they were
doing that, as well as assessing whether they had developed a
credible plan and whether they had the capability to deliver it.
One thing regional ministers would need to look at very closely
was the level of consultation that the RDAs had engaged in with
local authorities, local people and local businesses as well.
They would need to establish that they had done that to satisfy
the regional minister.
Q50 Mr Bailey: Chris, have you any
views?
Mr Hannant: Not particularly.
I am slightly in the camp that what the CBI suggested does sound
like a regional assembly writ small, so I think for us it is the
practicality of it rather than theologising. People have to have
their say and a mechanism needs to be found to make sure that
that process does not become too lengthy or subject to being held
up by just a small minority of special interests. The majority
of authorities being comfortable with it, or something like that,
we would be happy with, or a role for regional ministers.
Q51 Chairman: I know Mark Oaten has
a supplementary but before I bring him in, can I explore briefly
this regional minister question. I was lucky in the West Midlands
that until recently at least we had a very, very good regional
minister, Liam Byrne, one of the cleverest men in the Government
who now has been promoted, and rightly so. There is no criticism
of him as a person but he was an impossibly busy minister. He
was a Home Office Minister with an immigration brief, he was a
Treasury Minister doing broader issues. He is a constituency MP
as well fighting an election coming up and on top of that he was
a regional minister. He is accountable to nobody. There is no
question time in the House of Commons. We might need to discuss
as a Committee at a later date the regional select committee system
which is proposed by the Government to address this lack of accountability.
I have doubts about this system but that is another matter. Regional
ministers are very, very busy people and even the most able of
them, like Liam Byrne, really have not got the time to be accountable
to us. I do not even know who you write to to write to the regional
minister. You have not got an address as a regional minister.
You write to the Government Office of the West Midlands, I believe.
I do not think regional ministers are the answer, with respect.
Mr Hannant: As I said, we are
not strongly wedded to any particular view. I think if you were
to give a regional minister more responsibility, et cetera,
then you would not want regional ministers to have two hats.
Q52 Chairman: So you want a massive
expansion of the machinery of government and a whole new department
to be created with nine new regional ministers as separate jobs?
Mr Hannant: Not necessarily. Some
of the feedback I have had about the regional ministers who have
been more engaged—Nick Brown in the North East—
Chairman: Liam Byrne has been engaged
in the West Midlands, he has gone around quite a bit, but I cannot
get meetings with him to discuss really important immigration
policy issues because his diary secretary says he is too busy.
That is the answer I get from him. That is the price you pay.
They cannot do both jobs; being a minister is a very demanding
job. It is a point I make and I will leave it there. Mark, I must
not steal your thunder so go on to your question please.
Q53 Mr Oaten: You have asked that
one but I am happy to move on. The RDAs have now got, as you know,
this new power to manage some of the European funds coming through
and I just wondered if you have got any observations—and
I know it is early stages yet—as to how that process is
working and how aware you all are of the potential there is for
a large amount of money to come through and how businesses feel
they can engage in that process to get their hands on the money?
Are any of you aware of this change?
Ms Dee: It is not something that
our members raise. I am only partially aware of it.
Q54 Mr Oaten: This is £2 billion
worth of money from the European Regional Development Fund, it
is a massive amount of potential that businesses and projects
in the regions can get their hands on, and the gatekeepers for
it are the RDAs, and I am interested to know whether or not the
Government has made the right choice in allowing them to be ones
that administer this?
Ms Dee: Certainly it is not something
that any of our members have commented on in terms of effectiveness
at the moment. I will go back and check.
Q55 Mr Oaten: It is interesting that
there may be a lack of awareness even that it is around.
Mr Hannant: I must admit that
I am not aware of the detail but quite a lot of European funding
tends to be on a regional level, so to me if the funds are attached
to that sort of greater than local authority level but sub-national
level, it would make sense to find a vehicle at that level. I
have no strong view on whether the RDA is best to do it or whether
the Government Office is best to do it, but I would suggest that
that is the right level to be pitching it at.
Q56 Mr Oaten: Steve, any awareness
of this?
Mr Radley: I have not got anything
more. Again a similar answer to Karen, it is not something that
has come up from businesses in talking to them.
Mr Oaten: I am happy to let it rest there
but note that it is fascinating that there is a lack of awareness
about how such a massive amount of money is being managed, which
either suggests that business does not know about it or perhaps
the RDAs have not been that effective in signalling that they
have this amount of money to hand out.
Q57 Mr Wright: Just taking a step
back really in terms of the proposal to devolve some of the economic
development funding to local authorities, obviously there has
been some concern within many of the business sectors, but also
local authorities are biting at the bit to try to get this funding
into their economic development units, and I am sure that some
would use that to good effect and some again may well find it
extremely difficult to come up with the necessary skills and expertise
to handle that element of funding. What do you consider would
be the impact on business of the local authorities having that
devolved economic funding?
Ms Dee: I think in principle it
is a good idea that the RDAs should not have to be the people
that are delivering everything. They should be in a sense commissioners
so if there are projects that they see need to be delivered at
the local authority level then it is right that local authorities
are the people that deliver that. As you say, there are some that
are good and some that are bad and clearly there should be some
sort of mechanism for ensuring that the RDAs, or whoever is providing
that funding, can account to make sure that they are getting best
value for money from the people who are going to deliver it.
Q58 Mr Wright: Overall do you consider
that the impact would be a positive one for that to be devolved
down?
Ms Dee: I think potentially yes.
It makes no sense for the RDA to have to be the person that delivers
all of those things. They have quite enough to do and they need
to take a strategic view. Delivery should take place by whoever
is the best placed person to do that and if it is a local level
project then why should that not be the local authority.
Q59 Mr Wright: Do you consider that
the business community should also have an input into this?
Ms Dee: I think the business community
will want to have an input and the local authorities and the business
will probably also quite often be people who will be involved
in that delivery. This should be about making sure that there
is a proper partnership approach to ensure that things are delivered
in a sensible way.
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