Examination of Witnesses (Questions 70
- 79)
TUESDAY 7 OCTOBER 2008
COUNCILLOR DAVID
SPARKS, COUNCILLOR
STEPHEN CASTLE
AND MR
SEAN MCGRATH
Q70 Chairman: Gentlemen, thank you
very much indeed for coming today. Thank you for the evidence
you have provided this Committee with in writing from all of your
organisations—we greatly appreciate it. We know who you
are from the name-plates, but perhaps you could begin by describing
yourselves and your role for the record and for the Committee.
Councillor Sparks: I am David
Sparks and I Chair the Regeneration and Transport Board at the
LGA, and I am more than willing to answer questions about Bromsgrove
Railway Station. I am a former board member of AWM, the West Midlands
RDA, and a current member of the Regional Assembly, and I am more
than willing to deal with the issues to do with the transformation
of the West Midlands RDA because it is pertinent to the performance
of individual RDAs—what makes a good RDA and a bad RDA.
Q71 Chairman: For the record, you
are a councillor as well?
Councillor Sparks: In Dudley.
Councillor Castle: Stephen Castle.
I am a Cabinet Member for Economic Development and Regeneration,
the 2012 Games on Essex County Council. I am also a Deputy Chairman
of Thames Gateway in south Essex, and I am just about to end a
six-year period as the Conservative local government representative
on the leader board.
Mr McGrath: Sean McGrath, Head
of External Relations, Lancashire County Council. My remit covers
economic policy, sub-regional and regional governance and European
funding policy as well.
Chairman: Do not let the politicians
intimidate you, please, Mr McGrath, as we go through this session.
It is one against all of us and those two, so please do not let
that be a problem. Particularly, do not be intimidated by Mr Hoyle,
whom I am sure you know very well. Mr Hoyle has the first question.
Q72 Mr Hoyle: That is the good news.
It can only get better. You all know the RDAs well; you have obviously
got more experience than most people between you. What are the
strengths and weaknesses of the RDAs to date?
Councillor Sparks: The strength
of the RDAs is that they do bring "added value" insofar
as they can provide co-ordination that would not otherwise exist—or
would not have existed in the past. A classic case is in the West
Midlands which involves the Rover Group when, quite clearly, with
all due respect to Bromsgrove and Birmingham, Bromsgrove and Birmingham
would not have come together as fast as they did without the RDA.
My own local authority in Dudley would not have been involved
and Sandwell would not have been involved to the same extent;
it was only through the Regional Development Agency that the co-ordination
was put in and that the economic intelligence was got out so that
we could do something about it effectively. In terms of weaknesses,
the weaknesses, I think, are intrinsic in the fact that when they
were established they inherited staff from government offices
with a civil service mentality and they have inherited, or been
dumped on by government, a wide variety of different functions
that they did not ask for.
Councillor Castle: From my perspective,
the strength is often where an RDA can operate in a strategic
sense in an innovative leadership capacity. So, for instance,
in the East of England (obviously, my particular perspective is
from an East of England point of view), the work which has been
done around the economic impact of the London 2012 Games would
have been difficult to commission at a sub-regional level. So,
on that basis, for instance, the Transport Economic Impact Study,
again, which has been delivered at a regional level, where it
is a strategic view of economic impact, I think, is effective.
The challenge, frankly, for the East of England, is that, bluntly,
we have the wrong boundary. We have the smallest RDA with one
of the largest populations that it serves, and therefore its ability
to actually act at a sub-regional level is hampered by the fact
that for large chunks of East of England they would look to a
much greater relationship with London and parts of the South East
than they would do with the rest of the East of England. Whilst
I am sure you are not here to have a conversation about regional
boundaries, the effectiveness of any RDA is clearly dependent
on its ability to service a functional economic area, which we
can argue is either at county level or, indeed, sub-county level.
What I think is the strength of an RDA is the fact that you bring
together a business group—you talked earlier about the sort
of wider stakeholder engagement—and I would argue that the
RDA brings that stakeholder engagement, particularly with business-led
RDAs, and its ability then to interact at a strategic level sitting
above top-tier local government. However, a critical issue—and
the weakness—under the current structure, is that that often
does not reflect the functional economic area. So it is difficult
to intervene and deliver.
Q73 Mr Hoyle: So size does matter.
Councillor Castle: I think size
matters, and actually size and relation to functional economic
areas. So, for instance, the North East you could argue is a functional
economic area. I am hard-pushed to find a functional economic
area bigger than half-a-million people in the East of England,
and, frankly, that probably is Thames Gateway.
Mr McGrath: In terms of the strength,
certainly the ability to develop a regional position. In terms
of the North West, as certainly you will be aware (and there was
a question earlier about identity), it is quite a disparate place,
to a certain extent, but being a Londoner one of the things I
have noticed about the North West is that there is a very clear
position that it is north of London and it is north-west of London
and people do treat it as a unit on that basis. In terms of whether
it has been able to bring different groups together, or bring
businesses together, on a regional basis, particularly in our
last regional funding advice round on transport issues, we certainly
worked quite closely on that and came up with a very good position.
Weaknesses, certainly from a county and sub-regional perspective,
are: its approval processes of projects tend to be quite slow,
we find, and reading some of the documentation around how RDAs
might support capacity in local authorities, well, I think we
might argue that with some of our systems we could help them improve
some of their work. There is, and has been, a tendency to drift
into areas that may be the work of others, in terms of the work
on climate change. Very clearly, local authorities have a clear
lead on that issue. Another one of the key issues, certainly for
the county, has been representation. RDA boards are not meant
to be representative of areas—we understand that—but
we have always had a feeling (and certainly the leader of the
county council has said this) that Lancashire has never been properly
represented in any kind of way, whether it be on the board or
any other position.
Q74 Mr Hoyle: So, overall, do you
think the North West Development Agency is good or bad? I think
it is good. What is your view?
Mr McGrath: I think it is mixed
because I do not have another one to compare it with in my working
career, I suppose. I think there are certainly areas where it
could develop. Certainly in terms of if there are not changes
in line with the SNR, if delivery is devolved and funding decisions
are devolved, I think the position will move more to bad than
good. But, at the moment, I would say mixed.
Q75 Mr Hoyle: There is a danger in
sitting on the fence: you get splinters. How effective do you
think the RDAs are? What is the true effectiveness of them? I
know you have given us a little taster, but is there anything
else you would like to add on that?
Councillor Castle: I think they
are effective in parts. The point I make—
Q76 Mr Hoyle: And how should it be
measured?
Councillor Castle: I think that
is also a challenge, because the reality is that different RDAs
are delivering on a different scale, and therefore it is about
economic interventions. If it is about simply measuring the number
of businesses that are touched, then an RDA with a certain size
budget, relative to the size of the economy, is clearly going
to be able to achieve a different level of intervention. I think
that is the challenge for an RDA like EEDA; that it is being tasked
with a similar set of responsibilities as an RDA in the North
East or North West, which has a higher degree of funding per head
of population—per capita. So there is a real challenge.
With local government you can say: "Your role is to increase
participation in physical activity, if you are involved in sport,
and you can be measured on that and your funding". While
some might argue that, frankly, in the South East our funding
is not, perhaps, the way I would like to see it balanced with
other parties, it is certainly closer, I think, to per head of
population than it is within an RDA. Therefore, it is a challenge
to actually determine whether an RDA is being effective. You talked
earlier about trying to probe businesses as to whether or not
they think RDAs are effective. One of the other roles that I play
is that I run a business that employs 27 people. With respect,
the CBI are not going to give you any opinion as to whether or
not I think the RDAs are effective because it is difficult to
measure that. There is a measurement issue. Critically, as we
move towards comprehensive area assessment in local government
terms, ensuring that the RDAs are a critical part of that process
is important, and that hopefully should be the gauge of performance,
but it is really about what is the broad range of stakeholders.
In that, that is business, it is local government, it is the skills
of industry—how do they sense their RDA in terms of the
role that they want it to play? Trying to have a single vision
of what an RDA should be doing and, therefore measuring and benchmarking
that on a national basis, is ludicrous with the current system
of funding and the current structures. It goes back to what was
said before: if you were measuring these bodies in terms of their
effectiveness in a functional economic area, if you had a consistent
level of funding across the country, then I think you can make
a much better judgment. Frankly, at the moment, I think it is
fairly meaningless.
Q77 Mr Hoyle: Can I take it from
the three of you, overall, you want to see the RDAs remain? Is
there anything—in your own little empires—you would
like to strip away, or add to your empire?
Mr McGrath: In terms of our position,
going back to the point about how they are measured, firstly,
particularly using GVA( Gross Value Added) as a measurement of
their success—it is one measure and recent documents have
highlighted that it is not enough to reflect the economy in any
area..In terms of RDAs I think we would probably reinvent them
and reinvent them differently, in that we welcome the strategic
role but we do not necessarily welcome the delivery role, in that
they try and do everything. They should be working more closely
with partners or devolving to partners or partnerships to deliver
some of the functions. So although there is a strategic side to
it, they should actually look at organisations that are delivering
things already to do some of that work rather than trying to take
it all on themselves
Q78 Mr Hoyle: So you want them to
have the strategic role but you take the money off them? I think
that was the coded message you tried to give us.
Councillor Castle: I think there
is an argument for some degree of strategic engagement. I use
two examples where a strategic body (albeit I would absolutely
argue it is on the wrong boundary) can add value, but I think
we need to be really clear about the relationship between whatever
that body is—who it involves, the ability to interact with
business (I think, actually having a business-led organisation
makes sense)—but the degree of accountability to democratically
elected individuals. You would not accept, frankly, the business
community sitting next to you in the House and making decisions.
Q79 Mr Hoyle: Brian is here.
Councillor Castle: You are democratically
elected and accountable.
Mr Binley: Can I strike that from the
minutes, Mr Chairman?
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