Examination of Witnesses (Questions 80
- 99)
TUESDAY 7 OCTOBER 2008
COUNCILLOR DAVID
SPARKS, COUNCILLOR
STEPHEN CASTLE
AND MR
SEAN MCGRATH
Q80 Chairman: You have said the same
often yourself.
Councillor Castle: That is the
basis on which our democratic system works. I am comfortable with
the idea of it being a strategic body—whatever structure
that looks like. It may well be that it needs to be what you might
describe as more variable geometry. There are times when, across
a context of some areas of work, we might want to work with Kent,
for instance, on the Thames Gateway; there are other times where
we might want to work with Hertfordshire and Suffolk, as our closest
East Anglia neighbours and, frankly, more importantly, we might
want to work with London. The artificial divide we have, at the
moment, between the three RDAs in the South East is quite ludicrous
in terms of the areas we operate. So I would accept the need for
some degree of strategic work in a strategic body, but that needs
to be shaped by the local environment, and that will be different
in different parts of the country. There has to be a strong level
of democratic accountability to that.
Q81 Mr Hoyle: Do you believe that
more scrutiny should come from regional ministers? Also, do you
believe, because I do, that we should have regional select committees
to actually dig in and make everybody accountable, not just the
RDAs?
Councillor Castle: If we have
a regional minister for Essex, yes.
Councillor Sparks: We have a specific
view on this. The Local Government Association have already given
evidence to the Select Committee on Modernisation that it is our
view that there should be select committees but the select committees
should involve leaders of councils as well as MPs because that
would be the most cost-effective way of dealing with it. In terms
of your question before about RDAs, what should happen with RDAs
is, number one, there should be a review of what RDAs actually
do, in light of the history of RDAs where they have accumulated
functions without necessarily asking for them, and do they integrate.
Secondly, there needs to be a recognition that the main focus
of economic activity is at the sub-regional level. Thirdly, there
needs also to be a recognition, for example, in relation to the
point about Bromsgrove Railway Station, that there are other strategic
changes afoot on transport and the RDA needs to relate to other
regional bodies that may be set up.
Mr Hoyle: So, overall, it is a plus we
can take from today from the three of you, can we?
Q82 Chairman: I think we need to
hold that question. There was an acceptance of a need for something
between central and local level, not necessarily (in Essex's case)
of the current structure of RDAs.
Councillor Castle: The other challenge
is that local government is not one size.
Q83 Chairman: How big is Essex's
population?
Councillor Castle: It is 1.2 million
for the county council areas, and about 1.5/1.6 if you add in
the two unitaries. That is an interesting issue there—the
relationship between small unitary, top-tier authorities and a
large county, and the role you may or may not need in terms of
co-ordinating that. We work very closely together, particularly
in the Thames Gateway structure, which covers about a quarter
of the Essex County Council area and the two unitaries, but when
you look at smaller counties, for instance, or other unitary structures,
then it is possible to see a greater importance for that more
strategic working and bringing together those groups.
Q84 Mr Hoyle: I think you have made
that relevant point about size does matter. I am in one of the
biggest of the North West, with 7.5 million—bigger than
Scotland, bigger than Wales—and yet we do not have the representation
that we maybe ought to have. If I just get the point from you
(I am not trying to put words in your mouth, Stephen), what we
said is we ought to reduce some of the smaller agencies.
Councillor Castle: Firstly, I
would argue, basically, that trying to model it on a government
office for regional structure that dates back from civil defence
after the Second World War is ludicrous, because it has no sense
or context in the part of the country that I come from. Then there
is the challenge about how you fund that activity and what scale
it is at, and how it relates to different sizes and capabilities
of local government. This one-size-fits-all structure, without
a one-size-fits-all per capita funding, with a one-size-fits-all
assessment process, is not going to give you a sense of what is
really happening.
Q85 Mr Hoyle: I think the danger
is they will say: "Essex man says size matters".
Councillor Castle: That has never
been an issue.
Q86 Chairman: This issue of boundaries
of structures does matter quite a lot. For example, I have a sense
that Advantage West Midlands has never played quite the role it
might—and I am sorry to be specific but it is a helpful
illustration—on the Cotswold Line, which is crucial to the
economic development of South Worcestershire in the West Midlands,
because within 30 miles that line goes through three regions:
the West Midlands, and my constituency, the South-West and the
constituency of Geoffrey Clifton-Brown in the Cotswolds, and the
South East and the constituency of David Cameron. So it is these
structural issues where you have these major bodies taking strategic
transport structure decisions which can get in the way of effective
decision-making.
Councillor Sparks: We have done
work on this. We have quoted in our evidence the Prosperous
Communities II, where we commissioned research to analyse
different markets—labour markets, housing markets and retail
markets—that clearly showed, (a), as I have already said,
that sub-regions are where the main economic activity is that
hangs together, but, (b), that if you were looking from the point
of view of sub-regions, or you are looking from the point of view
of economic activity, you would not get, as Stephen has already
said, the government administrative regions that we currently
are working to. Quite clearly, this is a question of a band which
goes from Tewkesbury to Banbury, for which what you have said,
Chairman, is equally appropriate.
Q87 Chairman: I do not want to go
on about Bromsgrove Station, and Julie Kirkbride may pursue it
a bit longer, but also there is an issue about what the broader
principle illustrates. In the past, if you needed a station lengthened
you would deal with the county council and the Department for
Transport, effectively. Now you have the Department for Transport
and the county council, and you have Network Rail and you have
Advantage West Midlands—there are four bodies taking a decision
where it used to be two. That does leave a question mark about
the role and effectiveness and the need for RDAs in that context.
You have doubled the bureaucracy in the decision-taking process.
Councillor Sparks: Yes, but the
Local Transport Bill will give the opportunity for local authorities,
such as yours and Bromsgrove, to co-ordinate with other local
authorities to set up new integrated transport authorities, and
one would hope that if the new integrated transport authorities
were given the powers that we want you would then have a regional
decision in terms of the allocation of stations that would be
streamlined and would actually make sense, rather than the current
complicated and complex problematic arrangement that you have
got with transport at the moment
Q88 Chairman: The problem you have—and,
again, it is this broader issue—is that I have three integrated
transport authorities, if not four. I want one to integrate Birmingham
and the communities there; I want one to integrate with Oxfordshire
to go to London; and I want one to go south to Cheltenham, Bristol
and the South West. The one ITA does not solve my problem.
Councillor Sparks: One of the
lessons to be learned from the experience, so far, of Regional
Development Agencies, with the exception of the northern RDAs,
is that the other RDAs need to link far more together to sort
out cross-boundary problems.
Q89 Mr Binley: Can I pursue this,
because I want to pick up on what Stephen Castle said and ask
him some advice, really. I represent Northamptonshire; Northamptonshire
sits right at the bottom of the East Midlands and we have, in
many respects, more affinity with the eastern counties than we
do with Derby, Leicester and Nottinghamshire. There is another
difference too, because we are a sustainable communities county,
and the others are not. You are talking about Thames Gateway:
we have our part of looking at the south-east Midlands bit, and
I wonder how we create more flexibility in those terms. That seems
to be the point you are making. However, I have not quite heard
how we do that and retain cohesion as well.
Councillor Castle: It is a challenge,
and government struggles with this. It is this border issue. If
we went back to you asking me: "Where has EEDA been successful?",
I think EEDA, when it was initially set up, was very successful
on the innovation agenda based around Cambridge and pulling together
that sort of area of government intervention. Where it has struggled
has been in border areas, and Thames Gateway is the one I know
well, but you are absolutely right in terms of the M11 corridor
up to Milton Keynes. It is a challenge. That is where, frankly,
devolving activity to local government can act in a granular way
cross-border, and that is how we have made Thames Gateway successful
(operating between North Kent, South Essex and East London) and
it is only recently, frankly, the RDAs have come together on a
tripartite basis to actually add capacity into the Gateway. It
is a journey. The other thing you have to remember, as Julie pointed
out earlier, is that RDAs have only been around for nine years;
they have been massively loaded up in terms of extra responsibilities
by government and trying to deal with this cross-border stuff
is tough. I have been doing it for eight years in local government;
my key area of work is getting local authorities to work together
who, frankly, have been at war for a long time. You cannot expect
this to be easy. What I would say (certainly from my perspective
of the three South East RDAs) is that they are now working together
better, but it is challenging. I think the construction of cross-border
partnerships—again, coming back to the original points of
discussion around economic development activities, it is particularly
crucial that that takes account of functional economic areas which
are pretty much always cross-border if you are anywhere near the
edge of an RDA area—with local government, with the RDA
and with business is critical. That is starting to happen, I think.
Q90 Chairman: This leads me on to
the questions I want to ask about planning and the new spatial
planning role that is being given to RDAs in the legislation we
expect later this year. Of course, cross-border issues are very
important in this respect, but let us look at the skills and resources
the RDAs have to do this new planning role. Do you believe they
have them, and (if they do, that is great), if they do not, can
they get them in time to fulfil the very real challenges of the
Regional Spatial Strategy processes and so on that we are going
through at present?
Mr McGrath: Planning colleagues
of mine, certainly within the county, have a degree of concern
about understanding of the full procedures they need to go through
in terms of developing a spatial plan, in terms of the procedures
that need to be followed. We need to be clear that the RDA actually
have those skills and capacity or are preparing to actually build
up to that. There has been some work around transference of people
from our ex-regional assembly to the RDA—the assembly obviously
looked after the RSS originally—but we are quite worried
about the whole process and particularly that some of those planning
aspects could be overridden totally by the economic drivers. We
appreciate the economy is a key issue, and we agree with that,
but it needs to be a balance between what the drivers are but,
also, the ability to deliver the planning structure, and we have
a number of reservations about it.
Councillor Castle: I would not
disagree with that. Clearly, I come from a philosophical position
that says that planning should be returned to county councils
and top-tier local authorities, so I am not going to argue that
it is the right decision. I have sat through a rather bizarre
experience where I have listened to Conservative Council colleagues
bemoaning the removal of the regional assemblies, because at least
there was democratic oversight of the planning process. The reality
is that capacity is not there at the moment. I think there is
a major concern, and has been, in the East of England, around
planning capacity being lost at a regional level—the regional
assembly—and I think that is going to be a challenge, to
be honest. I absolutely pick up the point that Sean made: it is
trying to make that translation from being focused around development
of a regional economic strategy (which I think the RDAs did pretty
well and there is some expertise in that now) to actually trying
to deal with the compromises and complexities of spatial planning
around communities and the way communities develop—because
it is about people; it is much more about people than it is about
just the economy.
Q91 Chairman: Privately, there is
a significant number of RDA chief executives who have said to
me they do not want these planning powers. They are not prepared
to say so in public because the Government is telling them they
have got to have them. One RDA chief executive said to me recently:
"I want to come into a business-focused organisation running
economic services and business related services, not to be a planner.
If I had wanted to be a planner I would have become a planner".
So do you understand that concern? What is your view of what your
colleagues have said?
Councillor Sparks: First of all,
in relation to the point that you have just made, this is entirely
consistent with what I said earlier in relation to the inheritance
of other functions that they have not asked for, so it is not
surprising that they do not necessarily want this because they
are not staffed up to do it. I do not think that this is a major
problem because it is equally the case that there are people who
exist at the moment because, by definition, they are doing it;
it is just a question of those being transferred over or seconded
to RDAs in order to carry on the function. By far the more difficult
fundamental and problematic, in relation to the planning function,
is the question of the democratic deficit.
Q92 Chairman: We will turn to that
a little later. In other words, we are saying, technically you
think they can cope with it—whether they want it or not
(and my private conversation is they do not)—but the political
question and the democratic issue are the real ones. We will come
to those.
Councillor Castle: The only point
I would add to that is I think there has been this issue around
uncertainty for planning experts at a regional level and the concern
about losing that capacity out of the region.
Q93 Mr Binley: Can I ask a very straightforward
and simple question and ask you if you think local authorities
wish to see the proposed economic assessment duty set out by government?
In what way do they wish to see it? How would they develop it?
How are they developing it?
Councillor Sparks: The situation
as far as this is concerned is that it is now very mixed, because
what has happened with local government as a result of expenditure
constraints (my own local authority is a classic case on this)
is that where there was economic expertise in our local authority
it was largely lost as a result of a budget cutback many years
ago. Local authorities throughout the country have lost a lot
of capacity in relation to economic expertise. The pattern frequently
now is that they would buy that in from consultants. I have concern,
as the regeneration chair of the LGA, that local authorities across
the board do not have the capacity at the moment. Some local authorities
do, others do not. Again, it is not an insurmountable problem;
we have performed this function before and we can do it again.
Councillor Castle: I would agree.
It is a mixed picture. Certainly from an Essex point of view,
we have invested substantially over the last two or three years
in economic development capacity; we are quite comfortable with
that. I think the economic assessment duty, whilst I may argue
that I do not want additional duties passed down from government
on local government, if it is light touch and we are able to shape
that at a local level then I think that it will encourage and
focus local authorities across the country to engage in this agenda.
Taking David's point, in some they have retrenched back from that;
from an Essex point of view we have engaged because we believe
it is something that is incredibly important. I think it is a
mixed picture.
Mr McGrath: From our position
we still have some capacity to do it, and I think we would quite
welcome the duty. From our perspective, we see it as a key way
of engaging with the development of the regional integrated strategy
to make sure that sub-regional and local issues are actually built
into that process right at the beginning. One of the issues we
have in the North West is that there is a process beginning at
the moment through the RDA to look at how they might develop that
strategy, but as yet we do not know what the deeds of the local
assessment duty are going to be or when we will need to do it
and we want to make sure the timings are right so we have the
opportunity to feed that information in.
Q94 Mr Binley: Let me ask whether
Government should do more to help local authorities prepare themselves
to undertake what is a new responsibility. Are you getting enough
support and guidance in those respects? You say it is patchy.
From my experience at the local government level, "patchy"
is a bit of an understatement, quite frankly. I wonder whether
Government should do more to make it more cohesive and bring it
all together.
Mr McGrath: From our position,
there is some work that is beginning that government are involved
in through our regional improvement Efficiency Partnership, where
we are looking at developing capacity across the region but, also,
in the sub-region (particularly within the 15 local authorities)
on particular issues, and economic capacity is one of them. So.
We need some of that, what you might call, pump-priming money
to look at how we can work together and see what capacity exists,
so when we do actually undertake the duty we can bring other partners
together rather than trying to do it separately between ourselves
and the two unitaries.
Q95 Mr Binley: Can I just add to
the question before the other two answer it? Is it that the bigger
authorities who have slightly more money sloshing around are able
to deal with this better than the smaller authorities who have
been relatively starved of money?
Councillor Castle: My response
to that would be that the reality is that if you have got an authority
which has had significant budget issues, if Government is saying
to it: "Actually, frankly, economic development is now dealt
with by RDAs", clearly they are going to focus on the areas
which they feel, in terms of their community—and, in fact,
government is insisting through the inspection process—that
they should be engaged upon. You are absolutely right; the advantage
of a large authority is that within the context of a very large
budget (Essex is above £2 billion) we can allocate funds
within that to deliver the priorities that we believe are important
for us. Just going back to your original question about is it
for Government to do that, I think it is for Government to say
to the RDAs: "You must devolve that activity", and it
is then for local government to pick up that opportunity and pick
up that challenge—not for the Government to say so.
Councillor Sparks: I think this
is a very interesting point. Overwhelmingly, large, strategic
local authorities are better able to perform this function or
they are better able to sustain cuts, but the reality is—
Q96 Chairman: What do you mean by
"large", by the way? What is the population size?
Councillor Sparks: I would say
met district, shire counties, big, unitary authorities.
Q97 Chairman: Shire counties are
very different; mine is 500,000.
Councillor Sparks: But the reality
and the history is that district councils, shire districts, in
particular, like Chorley, have a long history of economic intervention,
and many of them at the sharp end have performed a really good
function in terms of regeneration of their communities. So you
also need to take that into account as well.
Mr McGrath: We proposed, as part
of our response to the SNR, that we should develop a local assessment
duty in conjunction with our districts but, also, the two unitaries.
So we take a sub-regional approach to it.
Councillor Castle: The other thing
to remember is that from an SME point of view, again, small district
authorities, it is a level that you can actually grasp. It is
a struggle even for a unitary or county.
Q98 Mr Binley: Is this a point we
need to concentrate on a little in our report—this disparity,
and creating a disparity of performance?
Councillor Castle: What is important
is ensuring that there is the devolution, from a RDA perspective,
and an expectation that local authorities are going to pick up
this agenda. There is going to be a responsibility that needs
to be on different tiers of local government to work together
and, in particular, where you have got a functional economic area,
different parts of local government, in terms of unitaries and
counties. Certainly I see that happening—not everywhere—but
partially that is about, I think, the degree to which an RDA is
prepared to devolve that level of activity and the degree to which,
bluntly, local government may have been weaned off that level
of activity and not have the appetite to take a leadership role.
Councillor Sparks: The other point
that needs to be made, though, is that the parallel needs to be
drawn in terms of what has already been recognised about development
control and the planning function where many local authorities
cannot get enough development control people to perform the function,
and as such there is a real problem. The alternative, if you are
given the duty, is that people, quite naturally, if they have
the skills, can go to private sector consultancies and earn a
fortune, then ultimately the council taxpayer will pay the bill
Mr Binley: Can I come to the last question?
I do not want to ask you to answer it publicly because I tried
that the last time and it did no good at all. I wonder if you
would write to us and give us good examples of where this whole
thing of assessment is working well and where it is not. LGA ought,
particularly, to be well placed to do that. I think that would
help us give us some understanding of the problem.
Chairman: This is on local economic development?
Q99 Mr Binley: Yes, that is right.
I do not want you to go public now because I see the results from
the business organisations, but if you could write to us, could
you take that on board?
Mr McGrath: I think I could just
say that you could look at the Lancashire website, where we have
a whole section of pages set up around the economy and economic
data that we would tend to use as part of economic assessment
duties. You can actually see some of the capacity that we do share.
Chairman: I think Mr Binley was also
asking a slightly bigger question about the good practice by local
authorities in terms of economic development regeneration.
Mr Binley: Could you come to us privately?
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