Examination of Witnesses (Questions 100
- 119)
TUESDAY 7 OCTOBER 2008
COUNCILLOR DAVID
SPARKS, COUNCILLOR
STEPHEN CASTLE
AND MR
SEAN MCGRATH
Q100 Mr Hoyle: Just touching on economic
development, I welcome what you said about Chorley as I was the
Chair of the Economic Development and I thought we were brilliant.
They have lost the way since because it is not been a priority,
and I am pleased that it is going to be back as a priority for
local authorities. What I would say, listening to Lancashire County
Council, who also have a very good reputation, is I think you
have got to re-engage with the new chief executive, and it has
got to be one of the priorities for counties. Is there a danger
that we have a beauty competition between RDAs, saying: "Come
to us; look how good we are; look what we can do" and we
are now going to extend that beauty competition between districts
and mets within one RDA area? Is there a danger that we will be
wasting money, or do we believe we can go back to the old method
of delivering good images and a very prosperous economic development
through the local authorities in the way that we used to? I am
just bothered that we are in danger of having another beauty competition
at a lower level and retaining the one at the higher level.
Councillor Sparks: I think the
pertinent point to make on this one—and I will quote a practical
example, which is known to Adrian—is the situation in relation
to the Black Country, where you have Wolverhampton, Walsall, Sandwell
and Dudley, where there is now, in essence, one plan for that
area. They have, together, been able to sort out tricky political
problems such as the Merry Hill Shopping Centre, for example,
practically in my own ward, and it would be stupid for us to think
that it should go back to, say, Dudley having a large economic
development unit, or Sandwell having a large one and others not
having it. Clearly, it has moved on and therefore those four local
authorities would be better advised to work out what works for
them collectively, and that might be a model that might be applied
elsewhere.
Mr McGrath: On the same basis,
there could be a danger but that is about maturity of partnerships
between local authorities. I would quote another group of local
authorities I used to work for in terms of Greater Manchester,
whose people would come across as being very coherent but would,
like anybody else will, argue in private. Certainly, if local
authorities come together on the basis they need to work on their
common issues are in terms of discussing the RDAs, you can overcome
that beauty contest approach, but you need a degree of maturity
in terms of partnership working.
Councillor Castle: I would agree
with both David and Sean. We have all got examples, and we have
in Thames Gateway over the Lakeside basin development and the
commitment of all of the local authorities there that were competing
town centres to actually back an expansion of Lakeside, because
that is politically in a regional context. I think that is perhaps
where things have changed since pre-RDA, and that is due, I think,
to the maturity of local government and its ability to work together
in partnership, compared to, perhaps, where we were 10 years ago
Mr Hoyle: My final question is: do you
think Lancashire County Council still needs a fully-staffed office
in Brussels, or should it now be a shared office?
Q101 Chairman: Can you remember that
question? There might be a final question from Lindsay and I at
the end in which we explore that at greater length. Just remember
that. Hold that thought and Mr Hoyle can ask that question again
at the end. I do not want to throw that issue away. Hold that
thought, Lindsay; I will let you ask that one again at the end.
Treasure that one. Before I bring in Adrian Bailey, can I just
say we have talked a lot about the variability of performance
of RDAs, but if we are honest local authorities vary in their
performance a great deal too: the quality of councillors varies
wildly around the country; the quality of leadership of those
councils varies wildly; the quality of officers varies wildly
as well, and the ability of local authorities to work together
varies wildly. I was told recently in the North West (whether
or not it is true) that Greater Manchester is great—local
authorities work together and are very co-operative, but in Greater
Liverpool that is not the case at all; the districts fight each
other. We have still got the variability of performance of RDAs;
so is there not also a need for quite a strong thumping between
Government and local authorities to make sure that variability
of performance of your members is also dealt with?
Councillor Sparks: I think it
is important that in local government we do recognise that we
continually need to improve; that it is the case that local authorities
vary by definition, and there will be good and bad practice. My
own view in relation to the economic role of local authorities,
by definition, is that those local authorities who do not get
their act together, either individually or collectively, will
not best serve their communities and their communities will not
regenerate to the extent that they should do. Ultimately, if they
fail they should be punished in the ballot box.
Councillor Castle: I think David
is obviously right in terms of the ultimate sanction in terms
of the electorate, but certainly in the period that I have been
involved in local government this time, and the time when I was
a district councillor, I think there has been a very significant
improvement in the overall quality of local government: in councillors,
in officers and in the way in which they engage with their communities.
Whilst I am sure we have all got to be on the comprehensive performance
assessment process and the degree to which local government is
audited and inspected, one outcome of that has definitely been
a substantial improvement in the quality of the way in which local
government operates and, I would argue, to a much greater extent
than other areas of government, possibly even RDAs. So in terms
of the CPA process, you can learn from the journey that local
government has been on. I think the challenge is around economic
development because there has been this sense that that duty has
gone somewhere else and, therefore, it is no longer a priority
for local government, but actually the quality particularly around
that area is an issue.
Q102 Chairman: And the local authorities'
stock of retired business people whose views of business are probably
out of date, typically—typically—may not be the best
people to drive that process forward. Not always—there are
very honourable exceptions.
Councillor Castle: In fact, I
was doing my books at 11 o'clock last night—but I am not
retired.
Q103 Mr Bailey: I think you probably
would have heard the comments made by the business representatives
on the local authority board. Could I ask you what your position
is on this? What are your feelings about it?
Councillor Sparks: As I say, we
have already given evidence that we think that the leaders' forum
in itself is insufficient and that, from our point of view, the
best way for local authorities to be involved in the accountability
of Regional Development Agencies is for us to do it in conjunction
with Members of Parliament. Following on from that, it is equally
the case that you cannot expect, for example, in a particular
region, 30-odd leaders to effectively monitor an organisation;
those 30-odd leaders will need to come up with some arrangements
that will reduce the numbers to more manageable proportions, will
need to take into account proportionality so that there is inclusivity,
and will need to reflect the actual region, if it is going to
result in something that is an improvement on what we have already
got. The other point that is particularly crucial to us, based
on our experience now, is that if leaders are there to be part
of (for want of a better expression) the executive role of RDAs—i.e.
helping to produce a single strategy—then they should not
equally be expected to scrutinise the efficiency and effectiveness
of that process.
Councillor Castle: The critical
issue for me is that we are talking about leaders. Probably the
biggest failure that I have seen in terms of regional assemblies,
and I certainly would criticise the way in which scrutiny has
been exercised by the regional assembly of RDAs (certainly in
my experience), is that it has often not engaged the people who
are actually the leading local authorities, and I think the construction
of a leaders' forum—I take David's point it is going to
be one that actually is small enough, and we have looked at different
models in the East of England and we have an executive group,
where there are going to be issues about balancing the size of
authority, and I take his point on proportionality, but I still
think, in terms of engagement, there is more opportunity there
that would bring us significant improvement in that. I would also
go back to the first point that I made: there is this issue about
is it the right size region, is it the right size structure that
we are trying to engage with, but if you accept that is there
and it is a given then I think we would certainly support the
leaders' forum with a model that is distinct in each region. Again,
I think somebody made a point which picked up how would you deal
with a group representing the CBI, and a lack of agreement within
that forum? I think you have to allow each region to decide how
they are going to deal with that. It cannot be imposed necessarily
from the outside, but I think local government is now mature enough
to have that discussion and that debate. You will avoid a lot
of those conflicts if you get the regional structure right, and
therefore it feels functionally correct, and you do not have wildly
competing priorities from regions that are so disparate that they
do not function.
Q104 Mr Bailey: How do you feel about
the point that David made—I think I have it right—that
there is a potential conflict of interest with the body being
led by local authority leaders who may have had a say in the formulation
of the policy anyway?
Councillor Castle: You can put
together structures that would enable people who are, perhaps,
outside of that immediate executive relationship—it might
be the broader leaders group, if you like—because there
is a challenge about going from 30 down to 10 that David was talking
about. I think the critical issue for me, to be honest, is not
just about the scrutiny process. With respect, I accept you may
not agree with that, in terms of your current role, but for me
it is about how do you bolt the leadership together, democratically
accountable leadership, that is scrutinised ultimately by the
electorate with the formulisation, with the business community.
That, for me, is the most important thing. In this sense I think
it actually does a better job. What the regional assemblies, frankly,
were not doing (you can argue whether they were providing effective
scrutiny) is they were not connecting the leadership, ultimately—democratically
accountable representatives, the leaders of those local authorities—with
the RDAs.
Q105 Mr Bailey: I was on a regional
assembly for a very short period of time so my experience would
not matter, but I accept it was when they were in their infancy.
Councillor Castle: So was I.
Councillor Sparks: Some of them
did not grow up.
Q106 Mr Bailey: Sean, do you wish
to add to that?
Mr McGrath: The point I would
make, just referring to the comments made by the private sector
in terms of perceived difficulties or perceived interests stopping
things happening, in terms of the North West there is actually
a track record of taking some hard decisions by leaders coming
together and taking a broad position around issues. In terms of
the scrutiny side of it, I think the county's position is really
that it is difficult for those leaders to scrutinise another organisation
like that, and what we would like to see is more sub-regional
engagement in terms of scrutiny of RDAs in terms of what they
are doing at different levels, and actually bringing in some of
the experience of local authorities. We would not say that every
local authority would need to do it but certainly we could actually
take different models; you could bring in different leaders in
different levels, which I think would bring some more experience
to the role.
Q107 Mr Bailey: If I have interpreted
your answer correctly, what you are saying is that local authorities
could set up their own individual authority monitoring mechanisms
which could then feed in to the local authority leaders' forum.
Mr McGrath: I think you ought
to see partnerships of local authorities, but you could look at
that kind of model in terms either of a sub-regional footprint
or a functional economic area footprint.
Q108 Mr Bailey: Could I just put
it to you: you are all involved in local government in one way
or another and I have heard three rather different models of accountability
put forward, all of which may have merits. Is there any sort of
common theme, if you like, amongst your comments that you could
agree on?
Mr McGrath: That there is accountability
for the area that the RDA is operating in. It is not one-size-fits-all;
people need to make their own decisions that are appropriate to
their area, and that work, I think, is the key issue for me.
Councillor Sparks: I would agree
with that but make the further point: what has not happened so
far—and it is not just in relation to RDAs—is that
when you get these regional or regional-type mechanisms they do
not necessarily plug into the real political world—the real
key decision-makers—and that it does not make any difference,
for example, in the West Midlands how many people scrutinise the
Advantage West Midlands from the Dudley point of view; what matters
in Dudley is that the West Midlands joint district, which represents
them, has an effective link into that scrutiny process because
that is, as you know, how we work.
Q109 Mr Bailey: I would agree with
that, personally. Do you think that, given the current proposals,
there is a genuine problem that the strategic integrated regional
strategy could be delayed in some areas rather more than others
because of the complexities of the local authority structure and
accountability?
Councillor Castle: Yes, I would
not disagree with that. The fact that we have only just about
got our Regional Spatial Strategy through, and there is a legal
challenge against it, demonstrates that clearly. It, bluntly,
comes back to the first point I made, which is that whatever the
regional structure is and whatever the strategic coming together
of people, it needs to make sense for the elements within that.
Otherwise you are always going to struggle to get agreement.
Councillor Sparks: I totally agree
with Stephen, but I think you need to ask the question, where
it is not working: "Is this a fundamental problem or a superficial
problem?" I think you might find in some cases it is a fundamental
problem going back to boundaries, and so on and so forth.
Mr Bailey: Could I just conclude on this
one: you will have heard some of the comments or, maybe, read
some of the comments about the business community's opinions of
this forum. Are you concerned, from a local authority perspective,
that it is a genuine issue and that vital decisions could be either
delayed or not made because of, basically, petty, parochial local
politics?
Q110 Chairman: Or "democracy",
as I prefer to call it.
Councillor Sparks: Looking at
the evidence before you today and listening to the previous session,
the fundamental point here is that the private sector are missing
the point in relation to the single strategy. The single strategy
is not purely an economic strategy; it involves planning. In particular,
it is at the centre of planning that starts the ripple that ends
up in terms of a wave that hits us, as local councillors and Members
of Parliament, on individual planning decisions. We feel very
strongly that there has to be a democratic input into that process.
Councillor Castle: The reality
is that if we are talking about the current structure, in terms
of its relationship, or proposed structure, you have the RDA,
as the business-led organisation, which is engaging. To be honest,
I also do not see this artificial divide between so-called local
government and so-called private sector. I have already made the
point that I run a business. Frankly, a third of our current cabinet
in Essex are actively running businesses; at least two-thirds
come from a very significant business background. So, bluntly,
I do not see that divide. I think sometimes we can play into that.
I understand the role of the representative organisations and
what they are trying to articulate; I would question, frankly,
whether any of the organisations there were representing me as
a business, or indeed the majority of businesses in Essex. Frankly,
as an elected politician, I would suggest I probably represent
more of them than they do.
Mr McGrath: I would agree with
both the statements; the only example I give is in terms of the
North West leaders' forum (or a version of) that will be representing
the private sector for the East Lancashire Chamber of Commerce
sitting on that group. They have actually accepted that they can
engage in that way and see a role for it now. Again, I think it
goes back to the point made earlier: it depends upon the forum
and how it is set up for each area and how appropriate it is.
That is the key issue.
Mr Bailey: Can I just say thank you,
and I am sure you will share with me delight at the Chairman's
forthright support for local democracy.
Chairman: And rejoice in the fact that
the Black Country has now recognised the Ordnance Survey maps
for the first time too. Let's rejoice.
Q111 Mr Wright: In terms of the proposals
to devolve the funding for economic development to local authorities,
there has been concern expressed from some of the written submissions
we have had that the RDAs will probably try not to use the powers
to delegate funding to local authorities. Indeed, in Lancashire's
submission as regards the North West Development Agency, they
say the agency appears to be reluctant to devolve funding to the
extent required by the sub-national review.
Mr McGrath: In terms of our experience,
we are getting a number of mixed messages in terms of how the
RDA are intending to address the sub-national review. In some
places it is: "Well, if you develop the capacity we will
devolve funding, but the onus is on us to judge you, in terms
of whether you have the capacity or not". We would argue
that in terms of the various assessments that local authorities
go through, at a number of different levels, we jump through those
hoops on a regular basis, to a certain extent, and certainly from
a county perspective we can show that we are an Excellent authority
certainly in managing resources. On the other hand, you read a
copy of the RDA's corporate plan here, and it refers to delegating,
as opposed to devolving. I think there is an issue around language
there. What we want to see is not just: "These are the outputs
to be achieved, here's the money to go away"; what we want
to see is: "Here's the broad outcome, go away and work out
what is the best way of delivering it", depending on what
the footprint is. So I think we do have a number of concerns,
in terms of the way things are moving, in terms of the strategy;
we are not necessarily seeing changes in the organisation at the
current time, but they may come at a later stage.
Councillor Castle: I would argue
that there should be an assumption that local authorities are
competent unless there is proof otherwise. I think there is a
danger that it is the other way round. I would also argue, from
an RDA's point of view—and I can understand the reticence
in terms of devolving this activity—for some RDAs that is
quite a big leap in confidence, and whether they have got the
capacity themselves to really understand whether local authorities
are competent, you know, is a challenge. With 50 local authorities
in the East of England it is a big ask of EEDA to turn round and
say: "Yes, I am absolutely comfortable this small district
over here, or this county and unitary here, is competent".
There is a challenge around that and how we have bounced into
the process is challenging, but from a local government perspective
I would argue there should be an assumption, unless there is proof
otherwise. It is absolutely Sean's point, in terms of the way
in which we are measured and tested, that evidence should be there.
Councillor Sparks: In view of
the time, I have nothing to add.
Q112 Mr Wright: In part of the other
submission that you made from Lancashire, you did mention that
it is possible that RDAs will require additional incentives or
motivations in order to follow through the promise of the SNR.
What incentives do you think they should need? Surely, if it becomes
a given that that should happen, they should not need an incentive
to do that.
Mr McGrath: It goes back to this
point that the assumption should be that, unless there is a good
reason otherwise, something is devolved. That needs to be built
into it. At the moment it is about if the capacity exists, in
terms of the local authorities coming back. Who makes that judgment
on the capacity? What we would like to see is that the assumption
is there, first of all, and then it would be up to the RDA to
actually then say what the problems might be rather than making
a judgment around: "We just do not think you have the capacity".
Q113 Mr Wright: You mentioned the
question about competency. How would an RDA actually measure the
competency of each of the local authorities?
Councillor Castle: You should
be able to judge that through a comprehensive performance assessment
process. That is there, it is visible, so in that sense it is
capable. I think the challenge then is to what extent that is
focused through to the two-tier system—the upper-tier authority
and then going through into the districts. There is a challenge,
particularly for a small RDA, in suddenly being asked to be able
to account, in terms of their accountability status, for the fact
that these local authorities are able. I do not know whether that
is about government providing more financial assistance for RDAs
to go through that process, but otherwise there will be a natural
internal pressure to say: "We can't absolutely guarantee
that those local authorities are capable, so therefore we're going
to at best delegate and perhaps not go through the process".
So I think we need to understand it is quite a challenging role
for RDAs to adopt, although, as I said, I would go back to the
position that the information is there and the assumption should
be that local authorities are competent. I do not think it is
an easy process, much as I might wish it is, certainly from an
Essex perspective.
Councillor Sparks: RDAs have existed
long enough. The pertinent question is: where RDAs have a problem
with a particular local authority, what have they done to sort
it out and why have they not sorted it out?
Q114 Mr Oaten: In view of the time,
perhaps just for shortness (I think you mentioned this was an
area you were involved in), I put to the business groups about
the ability of the RDAs to manage the European Regional Development
Funds, and they did not seem to be aware of this process. Have
you, in your experience, got concerns about how the RDAs will
manage what is a significant pot of money?
Mr McGrath: In terms of the process,
it has happened so far. I think the starting point has been that
under the previous European programme, certainly in the North
West, we built up quite a robust relationship with Government
Office, who were managing the funds, and over a period of years
probably came to a position where we felt we were doing things
in the right way and delivering. I think the trick has been missed
with the RDAs in terms of they are starting from scratch, and
my personal opinion is I think they have underestimated the scale
of the issue. Certainly, the principle to give the money to the
RDA to be able to provide matched European funding straightaway
is good, and is one of the key issues for the funding officer,
but trying to put European funding on to an existing process without
adapting it too much has caused quite significant problems, in
terms of the process. I also feel this may just be a North West
issue because we have had a number of action plans which I know
in some areas, or even nationally, were not always looked upon
terribly well. We feel they have over-centralised, and have lost
a lot of the local expertise that exists in very good projects
across the region and tried to take it all in-house. I think that
has been a major issue in terms of expertise but also capacity.
So things are improving but things are slow, and the unfortunate
thing is we are actually in the same position we were in the old
programme, whereby we had not spent any money for a significant
period of time, and we thought we had learned those lessons last
time, but I do not think we have.
Councillor Sparks: Could I quickly
comment, because I represented local authorities in the negotiation
on European funding for about 20 years in the government and European
government community. There are two points that need to be made
on this, and it is also pertinent to you trying to identify what
are good performing RDAs, and how you get an answer. The first
point is that it does vary, and there is best practice. In the
West Midlands it will not make any difference because there has
always been a partnership between Government Office and the Regional
Development Agency and local authorities and Uncle Tom Cobley
and all, so it does not really make much difference. The pertinent
question is: if you cannot get people to give you negative comment,
if you have got a best practice example and you can carry this
right across the board, you identify a best practice example and
then compare what other RDAs are doing or other local authorities
are doing, and then draw your own conclusions.
Q115 Mr Clapham: Finally, on the
accountability issue of the sub-national region, we have heard
a lot about accountability, and I am just interested in what you
have to say, Stephen, about the way in which the West Midlands
has worked, and there has always been that engagement right through
from business to local authorities etc. The one thing that the
SNR does is actually take some of the powers away from local authorities,
and I know that in terms of accountability your submissions have
suggested there should be seven major points that should be used
in terms of the way in which we actually scrutinise the RDAs.
So, are you satisfied that the measures, for example, of scrutinising
the transfer of the powers under the SNR are sufficient? Do you
feel that they are appropriate? Do you feel that there is more
that needs to be done? If you do feel there is more that needs
to be done, are you making government aware of that?
Councillor Sparks: There needs
to be more flexibility at government level at this particular
moment, and this is why your report is so important. We just need
a little bit more flexibility on the scrutiny point. There is
a whole case study now of scrutiny of bodies outside of Parliament,
and the Parliamentary model does not always translate exactly
if you want effective scrutiny. Our point is really strongly made
that every local authority in the country has to perform a scrutiny
function, and every local authority in performing that scrutiny
function has to separate the executive from the scrutiny function
for it to be effective. This needs to be the case here.
Q116 Mr Clapham: These points, presumably,
have been made? Has there been a response? Has Government responded?
Councillor Sparks: We are still
awaiting a response on this—a positive response.
Q117 Mr Clapham: There is another
area, and Lindsay touched on it, which is important in terms of
accountability, and that is as we move to an integrated sort of
single strategy, we have got, at the same time, the RDAs competing
abroad to bring business in to certain areas, and that is something
that is going to be problematic for accountability. Do you feel
that there is a need to look at how we might adjust our system
of accountability to ensure that RDAs that are working abroad
in order to attract business in are doing it in a way which is
going to be—shall we say—a more cohesive and open
approach across the piece, rather than just sort of focused on
those RDAs that are perhaps better equipped than others in order
to attract business? Just to give you an example, we were in Washington
earlier this year, and whilst we were in Washington there were
people there from Yorkshire Forward, and doing a good job. It
seems to me that there is an issue here in terms of the way in
which we look at that sort of integrated regional strategy; that
there may be some areas that benefit much more than other areas
because they have got a better machine that is able to actually
attract the business in. Are there measures sufficient to allow
us to ensure accountability of the RDAs in the way in which they
do work internationally?
Councillor Sparks: I think this
is a really, really important point because one of the things
that has not been examined sufficiently is the degree to which
RDAs do in fact need to collaborate with each other. There are
examples. The East and West Midlands, for example, collaborate
on inward investment. Again, we have found with local authorities
the best way to make progress is by emphasising best practice.
You have only got a small number of RDAs, after all, so it is
not going to take Einstein to sort it out.
Councillor Castle: Can I add on
that? I think it is a really significant issue and it comes back,
again, to my original point around budgets and the capacity of
RDAs. I have been, putting my Olympic hat on, in Beijing with
Yorkshire Forward, with a massive stand, advertising Yorkshire
as somewhere to come to for pre-Games training camps and, indeed,
large events. I have sat there with three other regions on a stand
half the size, purely because those regions do not have the budget
to compete against something like Yorkshire Forward. There is
a challenge around that in terms of disparity, and particularly
when it comes to that more discretionary spend around attracting
international opportunities, whether it is sports, Olympics, or
business opportunities. Some regions have a very significantly
greater capacity than others, and I think there is a real challenge
around that. To an extent, large local government can offset that,
but that might be something you want to look at.
Chairman: That is very interesting. We
do just have a couple of minutes, and there is this one "hold
that thought" moment from Lindsay Hoyle, which builds on
what you have just said.
Q118 Mr Hoyle: Obviously, the emphasis
is on the counties but you have still got the ivory tower in Brussels.
Do you still think there is a need for that and do you think it
should be shared with the rest of the North West?
Mr McGrath: If I go back to your
original question, first of all, you asked us about why we have
our office, and should we have a shared office. We do have a shared
office, to begin with; we have the University of Lancaster and
the University of Central Lancaster as our partners, and Preston
City Council are about to sign an agreement with us, so we have
three partners so far and we are looking for more in terms of
the office. In terms of why we have an office, we have particular
issues that the county has identified which do not relate to other
parts of the North West, and actually they do not show up in terms
of the framework that the RDA and 4 North West have set for their
Brussels office. Our focus is mainly turning to renewable energy,
green issues and transport. You might talk to other places and
there might be different issues; certainly, Greater Manchester
will focus on transport and Liverpool will focus more on ports.
In terms of the offices that do exist, there are five in the same
building. I do not think I could describe it as an ivory tower—I
do not know if you have actually been to the office or not.
Q119 Mr Hoyle: It is still worth
millions.
Mr McGrath: In terms of where
it is—we can disagree about that—but it is an older
type of office block in Brussels rather than the new, shiny ones
you see in pictures, I have to say, but we see a benefit for it
in terms of influencing European Commission around things like
the Soils Directive. looking at transport issues; we have a project
called Civitas operating in Preston, South Ribble and, hopefully,
parts of Chorley as well. That comes out of membership of the
policy network and that is built upon the work of our Brussels
office. Our view would be we would be happy to contribute, as
we do now, to a broader, North West operating framework, which
we do, with different people taking on different responsibilities,
but what we do not see at the moment is a mechanism whereby those
particular issues for Lancashire, as a large, local authority,
can be actually addressed in Brussels.
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