East Midlands Development Agency and the Regional Economic Strategy - East Midlands Regional Committee Contents

Examination of Witnesses (Questions 54-59)


22 MAY 2009

  Q54 Chairman: Welcome, David. Thanks for hosting our meeting today. The Select Committee has been keen to get out and about in the region. We have been in Nottingham, we are here in Leicestershire today, and we are going to Tupton fairly soon. We all know each other, but it would be helpful for the record it you would introduce yourselves. The way to do that, I have been reminded, is to push the buttons when you speak. Shall we start with you, Martin?

  Martin Traynor: Yes, I am Martin Traynor. I am an ESEP member of the Regional Assembly and I chair the Regional Scrutiny Board.

  David Parsons: I am David Parsons. I am Chairman of the East Midlands Regional Assembly and I am also Leader of the County Council in Leicestershire.

  Martin Hill: I am Martin Hill. I am Chairman of the Regional Improvement and Efficiency Partnership and also the Chairman of Local Government East Midlands. When I am not doing that, I am Leader of Lincolnshire County Council.

  Q55 Chairman: We will try to finish at 12.30. There is a lot to cover, so we need to be fairly quick. Let me cut straight to the chase. How do you think emda is doing?

  David Parsons: If you want me to start, I will. In our submission to you, Paddy, we have tried to be fair. We think that there are pluses and minuses. There are positives where emda has achieved, certainly in its help for business organisations. It is good on that. It can point to coalfields renovation. Everyone has probably been to The Avenue coking sites. It has personally helped me an awful lot on the East Midlands China Business Bureau. We have long-standing links with west China here in Leicestershire. Because we did not want to just visit on a civic basis, we decided to try to develop trade links and business links. emda took that over. It also ran with the India desk, and has developed the links well. I am happy with that. I have also been involved in European funding. It has been incredibly competent on that. On the negative side, an update of the regional economic strategy at a time when the economy has changed significantly is something that emda really ought to have been on earlier. I don't want to be unfair to emda, but there is a job of work to be done there, particularly as it serves on the Regional Economic Council with me, as it happens, and others to try to help in the current economic downturn. We need a coherent strategy on attracting and retaining foreign direct investment. We need to do something about tourism here, which it needs to grasp with both hands and develop. But I wouldn't say it's a mixed picture—by and large, it is certainly one of the better development agencies. It has been very helpful. We have tried to help it as well, but there are areas that it could and should develop.

  Q56 Chairman: Do you think that the organisation is well known in the region? Has it permeated down? Let me test you a bit. For example, there has always been a view that emda may not focus enough on Lincolnshire.

  Martin Hill: Yes. I was going to mention that there has always been fear about the famous golden triangle and that, if you aren't within that area, you will lose out. I think that things have improved. I have certainly challenged people in emda that there are other areas. Again, as David has said, there were certain issues years ago when emda was first created when there was very much a focus on the Nottingham, Leicester and Derby triangle. Efforts have been made and, although I am not totally reassured, I am reassured that it is scrupulously fair with how the money is allocated while at the same time making sure that it is not just giving money away for the sake of it. Tourism is one area that it has improved. Relations are better. It is an area where there is a view, certainly in Lincolnshire, that possibly tourism does not receive the importance that it should have within the region. On whether emda is well known, it is well known obviously by those who need to know it, but whether the general public know of emda, I very much doubt. We have had SSP issues. Frankly, it was overcomplicated to have all the different SSPs, which overlapped into different county boundaries. There was an issue there. Those who need to know, know who they are, but I don't think that anybody else does, particularly. The issue with development agencies is that they are allocating Government money, so the question that you could ask is, "Could anybody else do it, or could it be done differently?", because the money is coming anyway. We're not sure how much money will come in future, but they are doing that. The key question I would ask is whether it could be done a different way.

  Q57 Chairman: Can we pursue that? How far do you think that emda is a voice for the region, and that in a sense you own it and you are part of it, and how far is it, as you put it, the agent for the Government?

  Martin Hill: Eight of us—sorry, Martin, seven of us—are elected, so you have that focus. It is difficult to say that you are the voice of the region when, frankly, you are all appointed, although there are obviously people on the emda board who are also elected. I think that it is more difficult to claim that you are the voice of the region when you haven't got that democratic accountability. We know that democracy is having a bit of a rough ride at the moment, but there is that legitimacy where people can go forward. If someone has gone out on an electoral mandate and the people have supported that mandate, it gives you that powerful voice to say, "This is what we think because we have tested it with the public." That is one of the issues where you need that democratic element. There have been issues under the new structures. There is a bit of culture clash, because obviously emda has a more focused, narrower, "We'll get the job done, let's just get on with it" approach, whereas as we all know as people who have been elected it is much more clumsy and long-winded—but at least people hopefully feel that everybody has had a say about how it should happen.

  Chairman: We will get on to that governance issue towards the end. David, do you want to say something?

  David Parsons: I think that emda is a voice for the region. That is not to criticise emda; the way in which it has been set up is that it is not the voice for the region. There are several voices: the leadership group which is being set up is clearly one, which will liaise with emda. The regional assembly has been one, and it has been effective in a number of areas. It has been incredibly effective in getting regional funding allocation for local roads, for instance—roads into Nottingham, and roads between Widmerpool and Newark and so on. That is clearly a voice of the region as well. You could say it is not the voice for the region because it lacks a sort of democratic element which should be there if it was to be the voice for the region, so you would want a structural change, but in being a voice for the region I don't think that it has done too bad a job in the fields that it has got involved in.

  Chairman: Bob, you wanted to ask about responsibilities?

  Q58 Mr Laxton: Local authorities and local government have always been absolutely, directly engaged with emda and well represented on the board. Do you perhaps sometimes think that it is maybe a little bit too business orientated? Also, do you think that because of the chunks of additional powers—in grant-giving and various other areas—that have been handed over to emda over the past 10 years, in part it has sort of diverted them and they have lost some sort of focus?

  David Parsons: A couple of comments on that—first, on it being too business oriented. I am not sure that they are and I think that they ought to look at the structure of their board. One of the criticisms that I have seen is that they say that they are business oriented but, actually, the people on their board—I have to be very careful with what I say here—

  Mr Laxton: I understand the sensitivity.

  David Parsons: They could be even more representative of local business than they are now. Obviously, as a democratic politician acting regionally, I am going to say that I think that their proceedings would be improved enormously if they took a huge account of what people like me and Martin said. I think that that would give them more legitimacy. Actually, on the current board, getting that message across—this is a criticism of emda, I think—has not always been easy.

  Q59 Mr Laxton: How do you feel about that, Martin? I'm not wanting to drive wedges in, but from a business perspective?

  Martin Traynor: I think there is a difference between people representing business and people with a business background. Quite clearly, people are selected for the emda board on their business experience. That does not necessarily mean that they represent the wider business community. There is a distinct difference there. I would not contradict anything that David said. The bit about democratic accountability is an important one. Certainly going forward, as SNR flushes out, that needs to be looked at. Your points about when the RDAs were set up and the growth over the past 10 years—

  Mr Laxton: Changed quite dramatically.

  Martin Traynor: It has. As Peter will recall, when we were looking at housing the RDA—probably in about '99—

  Sir Peter Soulsby: We remember it well.

  Chairman: We do.

  Martin Traynor: We all have the scars from those days. We were looking at a team of about 40 people, but if you look at emda now it is well in excess of 200, but that is because over a period of time Government have given them additional responsibilities. When the RDAs were first set up, it was very much about an economic development organisation or agency that would be fleet of foot and able to make the right sort of interventions far more quickly than local authorities at the time. The argument was that local authorities were tied down with standing orders, etc. The difficulty that we have found over the years—something that must go back to BERR, or the DTI as it was in its former life—is the interpretation of things like state aid rules. The processes that emda has to undertake to make sure that it is compliant with state aid rules are making the whole process laborious. That then dispels the argument about being fleet of foot. This is not a criticism of emda, it is the way the system has worked. You have a situation now in which the SSPs have an application form of something in the region of 65 pages—whether for £500 or £5 million, which is of course ridiculous. The other difficulty that emda has is getting its projects through. You are looking at a minimum of 20 weeks from an expression of interest to the potential first payment. That is far too long. That is not of its making, that is the interpretation that BERR has put on it through state aid rules.

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