Examination of Witnesses (Questions 219-239)
MICHAEL CARR,
DIANA GILHESPY,
GLENN HARRIS,
JEFF MOORE
AND ANTHONY
PAYNE
7 JULY 2009
Q219 Chairman: Good morning, one
and all. Thanks for coming in to see us again. Sorry about the
few moments' delay, but that's all sorted now. It has been a while
since we last took evidence from you, in Notts County Council's
chamber. Since then we have had a bit of a leg around in taking
evidence from other organisations. We have done a bit in North
Derbyshire, where I got myself surprisingly, irretrievably lost,
but I got there eventually. That's fine. Thank you for coming
in to give evidence again. We really want to pick up some of the
issues that have arisen as a result of the other evidence that
we took and of some of the comments—good, bad, etc.—that
we have received about the role of emda. I shall kick off
straight away. Some witnesses have commented that your role as
emda is not sufficiently understood in the region, particularly
among small and medium enterprises. Because of that, we would
like to know whether you perceive it as an issue and also what
you are doing to try to improve your profile across the East Midlands.
Jeff Moore: You can always do
more, Bob. There is no doubt about that, so we are not complacent
about our profile, but in terms of small and medium-sized enterprises,
which I think was the thrust of the question, we engage with all
their business representative organisations: the FSB, the IOD,
the Engineering Employers Federation, the CBI and, in particular,
the East Midlands Business Forum, which is the representative
body for all business groups in the East Midlands. But more pertinently
than that, we deal with tens of thousands of businesses each and
every year. We deliver services direct to those businesses through
Business Link, directly ourselves or through other partners. Of
the 67,000 businesses that Business Link dealt with last year,
well over 70%—something in the order of 50,000 businesses—were
SMEs. Mike might want to expand on the detail, but we feel we
engage with them a great deal. Obviously, you can always do more
if you have limitless resource to do more. We think we are doing
as much as we possibly can within the constraints that we have
in how we spend our budget. I do not know whether Mike wants to
add to that.
Michael Carr: Just a few things.
Clearly, one of the things that we have been doing over the last
three to four years is simplify the offer to businesses, and therefore
I would suggest that most businesses now have a good understanding
of where to go to get business support and the nature of the support
that is available to them. There is no doubt about it: Business
Link is the heart of that network. As Jeff said, 80,000 individuals
and businesses made contact with Business Link this year. That
is a significant increase on the previous year, when it was only
60,000. It reflects the amount of effort that we have put into
streamlining the service, making it simple and easy to access,
and providing more advisers on the ground and more support in
the form of grants and loans. Businesses are taking it up in ever
increasing numbers.
Q220 Chairman: The larger businesses
and organisations are well engaged. There is no doubt about that.
I think the comment came generally from the Federation of Small
Businesses; very small micro-businesses were saying that there
was a mixed view as to how well organisations knew emda
and what your role was. I think it was primarily from that sector
that we ended up with that—not heavy criticism, but just
an observational comment.
Jeff Moore: There are two points
there, Bob. We were aware of that evidence from the FSB and are
quite surprised and frustrated by it, because it has never mentioned
that to us direct at all. In all our dealings with the FSB, we
have dealt extensively with Cath Lee, who is the former regional
policy manager of the FSB. Mike met her on a quarterly basis—that
issue has not been raised at all. In terms of engagement, that
issue has not been raised with us before at all, so we are quite
disappointed that it emerged out of the blue, as far as we are
concerned. That is quite frustrating to us. I was addressing in
my answer more the issue of whether every single business in the
East Midlands, whether it be large or small, knows exactly the
role of emda. That was the point about my comment, "You
can always do more," but if it is about engagement with the
FSB and SMEs, I think we have done as much as we possibly can
within the resource constraints that we have. There is clearly
a whole array of stakeholders within an economy as diverse and
complex as the East Midlands that want, effectively, 100% of our
attention. That is quite reasonable if you are a single-issue
organisation that impacts on emda. You may want 100% of
our focus. We make no apology for the fact that we have to make
difficult decisions against a disparate background of stakeholders,
so we have to balance priorities. We cannot be everything to everyone,
nor have we always set out to do that, but we do feel we have
engaged significantly with the FSB. You may want to talk about
our role with it nationally, Mike.
Michael Carr: There are just a
couple of things to add on that. First and foremost, as Jeff has
said, we do meet with the FSB regularly, and we also share with
it, through the regional economic cabinet, the day-to-day intelligence
that we collect through Business Link. We have 184 front-facing
individuals under the Business Link brand. They are touching with
businesses all the time, and therefore the intelligence that we
are gathering, particularly during the recession, is particularly
effective in steering the programmes that we drive. One of the
roles I play on behalf of all the RDAs is interesting. I sit on
the Business Link strategy group, which includes all the seniors
of the national representative bodies. Stephen Alambritis sits
on that. He is the senior co-ordinator on that group, and his
view is that Business Link is, for the first time, targeted at
and serving small and micro-businesses. It is interesting that
there is a contrasting view between what we are getting regionally
and what we are seeing nationally in that situation.
Jeff Moore: Stephen is the national
FSB representative.
Q221 Chairman: Okay. On engagement
with emda, again, I think that there was a view, which
came over very clearly to us, that with larger companies and organisations
across the region your engagement was excellent. But we picked
up comments in a couple of areas. One was the engineering and
manufacturing trade unions specifically, which felt that they
were perhaps frozen out of things a little in terms of their engagement
with emda. Also, we picked up comments from the environment
agencies, when we took evidence from them. They certainly felt
that, unlike with other the RDAs, there was not a representative
on the board representing the environment sector. I know that
there is, of course, a representative from the TUC on the board,
but certainly the unions in the manufacturing sector within the
East Midlands still felt that they were a little bit out of the
loop, if you like.
Jeff Moore: Turning to the union
point first, from 2002 Nev Jackson, the TUC regional chairman,
was on our board. Neville was replaced at the end of his six-year
term by Elizabeth Donnelly, who I believe is on the national executive
of Unite. As union representatives, they have been given a full
hearing and play a full part on our board, as much as any other
board member does. They come as representatives for the region,
but they clearly also represent their constituency very effectively.
Unite has not raised those concerns with us, but I believe that
it is Unite that has raised them. I think that through Neville
the TUC has had a great deal of input into our board and the things
that we do, and Elizabeth Donnelly has certainly been on our board
for some time now and has had an effective input. We believe that
we do engage with the unions in that respect. Similarly, the TUC
is part of the regional economic cabinet and receives all the
intelligence that we give to the cabinet on the recession, which
is when it has been particularly in focus, but also the long-term
stuff that we put to the cabinet about new industry and new jobs.
So, in terms of the unions, we have dealt with them directly through
our board and have engaged with them. We have been in conversation
with them for some considerable time about various projects that
they want to bring forward, but which have not yet been turned
into formal applications for funds.
Q222 Judy Mallaber: On that specific
point, the strongest argument made—this may be something
you will want to talk through with them—was that, while
you will obviously have a lot of links with a lot of different
businesses around the region, and you may have those links from
having a trade unionist on the board, very often the first intelligence
that you will get, and that we as MPs will get, of a problem in
a company or a workplace comes from a local union link. I think
there was a feeling that the links with the unions did not spread
wide enough into the region, and that they were formalistic with
one person on a board. Have you looked at, considered or discussed
with them how you can bring that broader intelligence in from
what is a useful network as far as you are identifying what is
happening in the region?
Jeff Moore: I understand the point
and it is something that we will take away and consider. Clearly,
through our engagement with businesses, local authorities, the
Government office and the third sector, particularly when businesses
are having difficulties, we can glean that intelligence from a
whole host of sources. Union reps will write to us direct and
say, "Company X is having difficulty because of the recession.
What are emda and the other partners going to do about
it?" We have a multitude of examples of that. We do not say,
"Okay, we can't deal with that; it has to come through our
union board member." We will engage with whoever gives us
the intelligence about where we need to intervene. We will look
at how we can do that better.
One of our concerns, as I have said, relates
to the FSB and to Natural England's concerns. Those concerns were
not raised with us direct, so they have come out of the blue to
us. We think that one major concern going forward is, as you know,
the changing nature of what we are going to do going from an economic
strategy to an integrated regional strategy, and the greater engagement
that we will have in terms of spatial issues. We feel that there
is a degree of concern about how stakeholders will be engaged
going forward, and that is manifesting itself in a bit of the
evidence that you are getting. We have positive proposals for
that, which we may come to later, but I know that Diana wants
to comment on the union point.
Diana Gilhespy: It was actually
on the Environment Agency point really. I would say that there
are three regions of the Environment Agency that cover the East
Midlands, as it were, so it is very difficult to get a single
point of contact. But we have contact with each of those three
regions, particularly in relation to the remediation of the Avenue
coking works, where we have been able to combine our investment
with their investment to have a plan for reducing the flood risk
going through Chesterfield. That is a long-term piece of work
that we have been involved in. There is very good co-operation
and they understand the issues around the potential contamination
of the River Rother. We jointly work together to sort out the
flood risk issues in Chesterfield. The other area where we are
doing a lot of work with them is around the whole issue of coastal
flooding in Lincolnshire. That combines a huge number of issues
and problems to do with climate change and the flood risk to very
vulnerable coastal communities. If we do not plan properly, we
could have sea water coming across some of England's most valuable
agricultural land, so we are working with them, the Government
Office, Natural England and EMRA—the East Midlands regional
assembly. I am going to miss somebody out—when you do a
list, you always miss somebody out—but we also work with
the local authorities. Although you are saying that we do not
have a specific person on the emda board, we engage very
much with the Environment Agency over issues that jointly affect
us and the economy of the East Midlands.
Michael Carr: Can I just say something
on the union side? I do not want you to go away thinking that
we do not have good working relationships with the unions, because
we do. You will be aware, particularly in the recent economic
climate, that there has been a large number of potential job losses,
particularly in large employers. There is a very strong network
within the East Midlands where people such as the Learning and
Skills Council, Jobcentre Plus and ourselves form, in effect,
what you would call a hotspots group to address things. Unions
very much play a role in that and have been working closely alongside
us in dealing with some of the issues—particularly the redeployment
of skilled people into similar industries, so that we maintain
those skills. I did not want you to feel that, despite maybe not
having the structure that you have suggested, there were not good
relationships, because on the ground I believe that they are linked
into the network that I have just described.
Jeff Moore: Clearly we have dealt
in many ways with the TUC as the co-ordinator of unions in that
respect. I know that these have been long answers, Bob, but if
I can just touch briefly on the engagement with, let us call it,
the environmental sector, in terms of the RES evidence base. We
think that we have addressed that point in our subsequent written
evidence to you. As an example, in developing the RES evidence
base we dealt with a number of regional stakeholder organisations—the
British Geographical Survey, the Environment Agency, English Nature,
English Heritage and the Countryside Agency—who were all
engaged in assisting with the development of the environmental
chapter of the RES evidence base. They were formally part of that
process. We find it frustrating that we are alleged not to have
engaged with them. Similarly, we have worked with environmental
partners such as the East Midlands Environment Link and the Campaign
to Protection of Rural England, and with the statutory consultees,
such as English Heritage, English Nature and the Environment Agency
through a task-and-finish group to do the strategic environmental
assessment of the RES itself, which is a statutory requirement.
We had a task-and-finish group of those partners; we do not do
it all ourselves. We have addressed that in more detail in our
subsequent written evidence, but we will look to learn what we
can from the new conversations that we have had as a result of
this scrutiny process to make what we already think is working
well better for the future.
Chairman: Thanks, Jeff. Can we move on
to evidence base?
Q223 Sir Peter Soulsby: Since
evidence was mentioned, can I take this opportunity to put on
the record again that I am a member of Unite? That really ought
to be pre-recorded. On the evidence base, we had some criticism,
particular from the Federation of Small Businesses. They suggested
to us that emda's research duplicated information that
was already available out there and as a result it was perhaps
a wasteful effort and not as timely as it might have been. How
do you respond to that?
Jeff Moore: Anthony will respond
to the specific point about our research capability and where
we get our research from because we get it from a variety of sources.
Mike will deal with any specific points that we need to talk about
on the FSB's research.
Anthony Payne: The key point to
make here is that we look at information that comes from the likes
of the FSB, but within the round. We get information coming through
to our research team from a variety of sources. Business networks
are one of those, through East Midlands Business Forum and its
constituent bodies. Information also comes directly from businesses
themselves, through our work with Business Links and the systems
that we have set up with those—Mike might want to pick up
on those—and through direct working with key partners like
Jobcentre Plus. The key point, Peter, is that we maximise information
from a variety of sources rather than relying on just one. Certainly,
in terms of working with the FSB through the East Midlands Business
Forum, we take on board the information that it provides. But
it is only one part of a gamut of information that we then utilise
for our benefit and assess and analyse to help shape our work,
whether it be strategic or in terms of delivery.
Jeff Moore: So we will also use
our connections with the Bank of England. The regional agent for
the Bank of England is very close to us, so we will use the connections
with him in terms of banking. We use our business contacts directly
with the businesses that we deal with, both large and small—by
far, most of our contacts are with small ones. We will also deal
with TUC reps that are on the regional economic cabinet. Roger
McKenzie, TUC Midlands Regional Secretary was on there, but he
has now been replaced as he has moved on. They feed intelligence
in about business dynamics. We take all of that—it is not
about having one source—and we then have our own, very strong
internal research team. We do not rely on consultants to produce
the final outcomes for us. Mike, is there anything else that you
want to say about FSB research?
Michael Carr: We touched on a
couple of bits earlier, Peter, in the sense that over the past
six to nine months we have been using our adviser teams, who are
meeting many hundreds and thousands of businesses a week, to give
us direct feedback. So in terms of the appropriateness and, dare
I say it, the ability to bring information out that is current,
I think we are as best placed as we have ever been. We feed that
in, as I say, to many bodies, including the regional economic
cabinet. I think the interesting thing for me is the working that
we do with the employer or business representative bodies, because
not only do we have our formal quarterly meeting with East Midlands
Business Forum, I also hold a quarterly bilateral meeting. This
is known as the "no surprises" meeting. It is the one
where we actually have a chat about what is happening nationally
in each of our agencies and how that reflects regionally. The
FSB is part of that. That is part of the mechanism where the contact
has been so strong in past times and we will work alongside the
intelligence that, from time to time, is driven by member surveys
and things like that by these organisations. We had one just last
week in terms of a publication from the EEF around its positioning
on manufacturing, and we put a supportive positioning piece alongside
that.
Q224 Sir Peter Soulsby: Can I
just interrupt for a moment? The evidence from the FSB was actually
pretty scathing about your research. You have described yourselves
as working very closely with them. If you work as closely as that,
how come the FSB don't appreciate the value of what you are doing?
Jeff Moore: We could not understand
the position, because we previously worked with the previous regional
policy manager of the FSB, Cath Lee, who never raised these concerns
with us. Now, there is a new co-ordinator of the FSB who had not
been there long, who gave the evidence to you. We do not understand
that. We believe our research is extensive and does have the breadth
that it needs to have and the depth that it needs to have. We
do not disrespect the FSB's research. We use it where we feel
it is appropriate to use.
Michael Carr: And will continue,
Peter, to work closely with it. Interestingly, they didn't attend
the last bilateral meeting a couple of weeks ago.
Q225 Sir Peter Soulsby: Can I
just take you to another theme that we have pursued in evidence?
This is one that we raised, actually, with the Minister and with
the head of GOEM, the Government Office, and it was really to
do with your relationship with GOEM and the extent to which they
try to influence the policies of emda and the nature of
the relationship you have with them. How would you characterise
that relationship?
Jeff Moore: It is a very important
partner and on occasion, when it needs to be, it would be a critical
friend. We account in a whole host of directions. We account directly
to BIS, and through the Minister and the Secretary of State to
Parliament, but we also report on a host of stuff to GOEM and
it is responsible for, I suppose, overseeing the fact that we
are delivering on the economic part of the Government's agenda.
It does not instruct us how to do that, but it is entitled to
attend our board—the regional director attends our board.
We work closely with the regional leadership team at the Government
Office on a host of issues, including all those that you have
addressed. When businesses are in trouble, we work together on
how we can deal with what may be large-scale redundancies. When
there are opportunities for inward investment to come in and there
are planning issues, we deal with the Government Office planning
people. I therefore think that GOEM is a very valuable partner.
It has some formal, specific roles in terms of the reporting of
my objectives, as it were, and recommendations on my pay levels—not
the rest of my executive team—and clearly it works with
the chairman on his objectives and reporting on the performance
of his objectives to the Secretary of State.
Q226 Sir Peter Soulsby: That brings
us to an issue that we pursued last time with you, and also with
other witnesses, about the perceived tension between emda's
role as an agent of Government, managing Government funds, or
public funds, and its role promoting the region's economic interest.
Which of those two roles, in the end, takes priority?
Jeff Moore: They both take priority,
Peter. You wouldn't expect me to answer in—
Q227 Sir Peter Soulsby: I didn't.
What I want to know is how you manage that tension.
Jeff Moore: Creatively. We manage
it through a board of 15 non-execs who come with the advice and
knowledge from their experience in business, in higher education,
the trade unions and across a whole panoply of areas. That is
where the non-exec directors help greatly. We do it through a
mix of skills at the executive team level and right across the
agency. We are very conscious—more so now than ever but
I don't think we needed reminding of it—of the need to make
the most of each taxpayer's pound we get. The taxpayer does not
make a choice to give us that cash, as they do when they buy a
product. It is given to us on their behalf to use wisely. We see
the sensible use of taxpayers' money as a key pillar of what we
do, alongside that key pillar of being an advocate for the economic
interests of the East Midlands, and the East Midlands effectively
within UK plc, and UK plc within Europe and so on. We see both
as equally important. Through our appraisal processes, which you
may want to look at in detail with Glenn, we manage what you call
tension—I think it is just the twin priorities—of
looking after the economic interests of the East Midlands against
the resource constraints that we have, and making the most of
each taxpayer's pound that we get.
Q228 Sir Peter Soulsby: Is it
not true that it is possible to see emda, and indeed other
regional development agencies, as having such a wide range of
different responsibilities and so many different levels of accountability
that there is a danger of a lack of focus and a lack of any real
accountability to anybody?
Jeff Moore: I will address the
accountability question separately, because I do not think that
is the case. I listened to issues about accountability yesterday.
I have worked in the public sector all my life and I have never
been more accountable than I am now. In terms of the breadth of
the agenda, as you will recall, we had a BERR Select Committee
inquiry, as it was then, into RDAs last year, for which I and
Bryan Jackson—our chairman—and the chairman of the
West Midlands gave evidence in chief back in October. The question
of the breadth of our agenda was put to us and I will answer as
I did then. Our agenda has got extremely broad and some see that
as a potential weakness. It has become so broad, I believe, because
we have been successful. We have been seen since 1999 as successful
deliverers on the Government's agenda. We believe that, as the
Government have had specific problems—foot and mouth, the
floods in 2007, 9/11 and the impact that had on the aerospace
industry, particularly in Derby and the East Midlands—Government
have looked to us for solutions, as they have done with issues
with the Rural Payments Agency, RDPE and ERDF. We have been successful
in providing efficient, effective delivery of those services for
Government, and that has continued to broaden our remit. It is
a very legitimate comment that our agenda has got extremely broad
and could therefore challenge the focus we have. That is an issue
for us to address but I think it has happened simply because we
have been seen as successful deliverers. In terms of accountability,
as I said earlier, I am—we are—directly accountable
to our sponsor Department for Business, Innovation and Skills,
through Pat McFadden in the House of Commons and through the Secretary
of State, Lord Mandelson, to the Cabinet and the House of Lords.
We are accountable in that way. We are similarly publicly accountable,
in that our accounts and annual report are laid before Parliament—that
is about to happen for this year. We hold an annual public meeting
which 400 to 500 people attend, where we account for our performance
and take a very strong question-and-answer session from the public.
There are similar routes of accountability through Select Committees.
We have spoken at the House Modernisation Committee, we are faced
with a PAC inquiry into RDAs, we have done the BIS Select Committee,
so we are directly accountable to Parliament in a host of ways.
Within the region, we are accountable to the Regional Assembly
through its regional scrutiny function which has worked well in
the East Midlands. We work closely with the Regional Assembly
on that. We have a concern at the moment about the possibility
of duplicating scrutiny, which we talked about at our last evidence
session. As I said, my own performance and that of the chair are
accountable to the Government Office. To be frank, we have filled
the pages of the local press with our accountability for the businesses
services we are delivering. We are very openly accountable. There
are a lot of accountabilities, Peter, but we are definitely accountable
rather than unaccountable. We are waiting to find out whether
we also are having, as we anticipate, a Grand Committee for the
East Midlands, but it is yet to agree its date. There are Grand
Committees for every other region, but we have been unable to
get a date for the East Midlands one. With the multiple accountabilities,
as I said before, I feel more accountable than I ever have in
my working life. That includes 20-odd years in public finance
dealing with issues such as the community charge, council tax
and the rates before that.
Michael Carr: May I just add one
point? This breadth issue is quite important because, while it
was portrayed as a challenging thing, one thing that we are able
to do with that breadth is join things up. That means that we
can gain economies of scale and multi-influencing on particular
areas. Where we see things not work so well, it is often when
they are run in national silos, as I would describe them. At regional
level, we have seen a lot of evidence of the business support
agenda linking into things like the rural agenda. You start to
join things together, such as regeneration being linked with innovation.
They come together to form some very successful projects, but
that is because we have that breadth and the ability to bring
things together into a single focus.
Q229 Judy Mallaber: I will specifically
follow that up. We have mostly dealt with it, but are you saying
that the breadth that you have does not in any way diminish your
ability to carry out your core functions? That is one of the items
that is put to us. Also, are you more of a delivery agent now,
rather than a strategic body? Would you like to comment on that?
Jeff Moore: Two things: it is
a thing on which we have to have constant vigilance, so that it
does not take us away from our core role. We do not believe that
we have fallen into that trap yet. We believe that we would have
heard from a whole ream of people if we had taken away from our
core service. We have definitely grown our delivery function since
1999. The increase in our staffing complement, which has probably
doubled in our case since 1999—it has grown much more elsewhere—has
been because of the delivery functions that we take on, such as
delivery of the ERDF programme and the RDPE. We became a statutory
consultee on planning matters in the mid-2000s, which also required
a delivery role. We have definitely increased our delivery functions,
so that is a change. We have not lost that overriding strategic
role, which is to develop the RES, to get partners behind it and
all push the economic development wheel for the East Midlands
in the same direction, but we have had more delivery functions.
To return to the accountability point, they are all audited in
spades by the National Audit Office, so we are accountable through
formal audit channels as well.
Q230 Judy Mallaber: You might
not be able to do this, but can you give us any idea of a division
of the time of the RDA between strategy and delivery, and of the
proportion of your time that is spent on the accountability function
that you speak of? It may be hard to break it down.
Chairman: Probably too much, by the sounds
of it.
Jeff Moore: It is quite difficult
to do. We have grown in resource to deliver the delivery function,
so we have always retained a strategy, research and intelligence
directorate that has continued at about the same numbers as we
have continued to deliver that development of strategy, research
and the technical base, as it were. We have grown quite significantly
on the delivery side. This will be a guess—and I would not
want to be held to it—but I would say that we are probably
40:60 strategy to delivery. It might now be more like 30:70 than
previously. There is a mix across the piece because in order to
deliver, we need high-quality research and strategy. What is happening—I
have made this point before—is that we are spending far
more time answering scrutiny now than we ever did before, and
Freedom of Information Act inquiries. Whereas previously it was
something that we would have done as part of our daily routine,
we are now using two to three people to deal with just that microscopic
scrutiny through the press and FOI. They are working full-time
on that. Preparing for this Committee, the Select Committee on
Business, Innovation and Skills and the Public Accounts Committee
that is going to happen in December is taking far more time than
it did in our early years. That is not to complain—it is
just to say that it is having an impact on us.
Michael Carr: On strategy, I do
not think that you can do delivery without strategy in our role.
I shall pull down one area that you might think is primarily delivery,
which is business support. Linking out of the RES, we do have
a regional business support strategy. It was first published in
2005 and refreshed in 2008 through to 2011; integrated within
that were the simplification principles linking up to what the
Government were asking us to do. More importantly, it was not
emda's business support strategy, it was the region's,
because there are significant other partners that want to play
in the business support work, most notably the local authorities.
Just last week, we had a whole day put aside to talk about how,
under the new sub-regional arrangements, the local authorities
were going to engage with emda in putting a joined-up,
simplified platform of business support together. That is pure
strategy work. That is painting a picture, then talking to partners
on how we deliver it. It was a particularly successful day.
Q231 Judy Mallaber: Moving on
to the questions that have been raised with us and that we have
discussed with you as well I think, about the make-up of the board
members and the question of them being chosen for their individual
skills rather for a representative function, do you think that
that is something that there should be concern about?
Jeff Moore: It is not really for
me to comment. The process of appointing the board is dealt with
by the Department. The Department seeks to get the right mix of
skills. We feel that it is important that we get the right mix
of skills. If at any time I as chief executive feel that the board
is weak in a particular area, I will make a comment to the regional
director of the Government Office and to the chairman: "When
you are recruiting to the board, I think that, possibly, all other
things being equal, we should have this set of skills." So,
at times for instance, we have had considerable property skills
on the board, with people from the property sector. At times we
have not had those skills. If I feel that that is detrimental
to us, I shall make a comment, but then it is down to the recruitment
process and the appointment process by the Minister to make sure
that that is balanced.
Q232 Judy Mallaber: But would
you find it helpful to have, specifically, representatives of
different interests? You clearly do with, say, the TUC rep, because
it will choose who comes on, but that is not true of the other
sectors.
Jeff Moore: One of the first things
that we say to all our board members, when they come for their
induction and they come with the chairman, is that they come as
representatives of the East Midlands. I think that the key test
is whether they are able to bring the three strands of activity
that they need to bring to the board. First is the corporate governance
accountability check, because obviously we are accountable to
them as non-execs. Are they able to fulfil a corporate governance
role? Many of them are, from their experience. Are they able to
be ambassadors for the agency and, principally, for the region
and the economy of the region? Thirdly, do they have specific
experience from their previous employment history, or previous
life as it were, that can add value to what we do across the broad
range of things that we do? I think that we are fairly good at
picking up people who can act across that range of areas.
Q233 Judy Mallaber: The specific
area, although you spoke about how you bring in and feel that
you have worked with environmental organisations, in which there
has been comment has been on whether there should be a specific
requirement to have environmental expertise on the board. When
you started off as emda, you had that, but by accident—with
Martin Doughty being on the board. That seems to have probably
influenced the emphasis placed on that within the board's work.
Is it right that that expertise should be there for rather more
of a reason than by accident, a result of someone getting on through
another channel, rather than having environmental expertise there
as something that should be looked for in its own right?
Jeff Moore: I was on the board
with Martin and I have been on the board since 1999—not
on the board but an executive director for the board. I don't
think there has been any change whatsoever in our attention to
the environmental agenda. Martin was a key advocate for that,
as he was for Derbyshire, but he was also a key advocate for the
East Midlands and the East Midlands agenda and the East Midlands
economy. In the first iteration of the board under the previous
chairman, Derek Mapp, and particularly in the first round of handing
out portfolios, he gave all of the board members portfolios that
were not of their past. I cannot remember what Martin's was, but
it would not have been environment because he gave Graham Chapman,
the leader of Nottingham City Council, the rural portfolio. Pat
Morgan Webb, who was the head of a further education college,
was not given the skills portfolio. That was given to Len Jackson
from Northern Foods. Martin was not given that particular role.
I think we have had as much emphasis on that sector as we ever
had. If the environmental sector, to call it that, believes it
should have a formal representative on the board, that is an issue
for Ministers, my chairman and the Government Office to resolve.
I do not think we have lost out because of it but if it is something
that is replicated across the country as a vulnerability then
maybe it is something that needs to be addressed, but everybody
is always trying to address these issues within a maximum of 15
board members, so the breadth, depth and diversity of our geography,
our various communities, and our various sectors are quite hard
to replicate across a 15-person board. Originally it was a 13-person
board.
Chairman: Okay, budgets.
Q234 Sir Peter Soulsby: Before that,
can I put a question about appointments to the board? I know it
is obviously not down to you, but your remit now goes far beyond
that of BIS. The appointments to the board, as I understand it,
are still done by BIS Ministers. Don't you think that is a bit
of an anomaly now?
Jeff Moore: I think it is a matter
for Ministers to decide when they are appointing who they discuss
the appointments with. What I do know is that they are provided
with choice by the interview panel, so options are put to Ministers.
Q235Sir Peter Soulsby: But it is BIS
Ministers who do it.
Jeff Moore: It is Pat McFadden.
Q236 Sir Peter Soulsby: We now have
what we are told are very important roles in Regional Ministers.
Don't you think it is something of an anomaly that a Regional
Minister does not have a lead role in making the appointment?
Jeff Moore: The Regional Minister
now does have a significant role as far as I am aware. I believe
that the Regional Minister does get consulted by Pat McFadden
on that particular aspect.
Sir Peter Soulsby: I asked him this question
and I wanted to make sure that I had understood it correctly because
it is an issue that the Government may need to address.
Chairman: Budgets.
Q237 Sir Peter Soulsby: I shall come
on, as you suggest Chairman, to budget issues. In your first evidence
session you talked to us about the withdrawal of end-year flexibility.
That is the ability to carry spend over from one year to the next.
It is something that we raised with the Minister and the Government
Office in their evidence session. Could you illustrate to us the
sort of problems that that raises and why it is something that
we may wish to address when we come to report?
Glenn Harris: The problem arises
if you have a large capital scheme that will probably spend several
million pounds perhaps every two or three years. Quite often those
are the schemes that are subject to delay or slippage. We can
have in any one year an amount of money—let us say £5
million—set aside, committed against that scheme. If the
scheme is then delayed, we can't spend the money on it in the
following year. If we could have end-year flexibility, we could
simply roll the money that was due for the scheme this year into
next year and spend it. Without end-year flexibility, the problem
is twofold: first, you need to use the funds that cannot be spent
on that project in the year, so you have to have additional projects
that can come forward to spend the money in the right way; secondly,
because the project has slipped but is still contracted and something
you would like to do, you then have to find money out of the following
year's programme, which itself already has commitments from previous
years. You effectively have two problems: one, how you use the
funds this year; and, secondly, finding the money again for the
scheme next year. That is the main issue.
Q238 Sir Peter Soulsby: I am sure
that that is something that you avoid, but is it not the case
that that inflexibility at the end of the year is something that
has at least the potential to distort priorities?
Glenn Harris: It potentially could.
We think we have managed to avoid that.
Jeff Moore: We have a mantra in
respect of that, Peter, that, despite that pressure, our top priority
is not to waste a penny of taxpayers' cash on doing a less than
optimal scheme because of the push to that. That is easy to say
but difficult to do, but it is something that we do.
Q239 Sir Peter Soulsby: Can you
just remind us about the flexibility that you have within the
year from the so-called single programme, and to what extent you
are able to use that creatively?
Glenn Harris: The single programme,
which is our prime source but not our only source of income, is
split into two sorts—capital and revenue—and we have
reasonable flexibility to allocate funds to whatever the strategic
priority in programmes is beneath that. Some of them are somewhat
nationally prescribed. For instance, we are required to provide
a Business Link service. How that is contracted and delivered
is up to the region, but we certainly have some flexibility about
how we use the funds in the year.
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