Examination of Witnesses (Questions 240-259)
MICHAEL CARR,
DIANA GILHESPY,
GLENN HARRIS,
JEFF MOORE
AND ANTHONY
PAYNE
7 JULY 2009
Q240 Sir Peter Soulsby: Okay.
In your earlier evidence, we talked about what happens when you
are expected to make reductions in spending within the year. Could
you just remind us of the difficulties that that leads to? As
I recall, you told us that a significant portion of your revenue
spend was committed up front, and that if you have to make reductions,
it can be quite catastrophic. Can you just remind us of that?
Glenn Harris: The revenue budget
is mainly paying for people on the ground delivering front-line
services. Business support would be a good example. You tend to
spend fairly evenly across the year, and at the beginning of the
year you pretty much know exactly what you are going to spend
and where you are going to spend it. If you then suffer a reduction
in year, you very quickly have to work out where you can adjust
and make savings. We very quickly have to have dialogue with all
our projects, programmes and partners to see where we can pull
back some expenditure, slow some things down, perhaps defer things
to a later year, if possible. We take a judgment on where we can
make reductions and have the least impact on the services that
we provide. You have to do that across a range of projects. It
is seldom just one that you can have a dialogue with.
Jeff Moore: You get difficulty
with reductions in budgets, as you will know only too well from
your own experience, as it were. A particular difficulty is that
most of our capital projects, which take up easily 50% of our
resources, are major, complex projects. Building the first new
veterinary school for decades is a big project involving a number
of partners. There is also the avenue coking works that we have
talked about, working with Laing O'Rourke to clean up the former
Steetley colliery across two district council boundaries and two
county boundaries, and providing, first, a concrete manufacturing
plant and then a skills academy. Those are complex, long-term
projects involving issues with state aid, partner funding contributions
and all sorts of planning issues as well. Most of our projects
are of that order and are long-term projects. You can be so far
down the line with lots of expectation from partners, and lots
of moral obligations, and then you lose money and have to cut
schemes. It has a political, economic and moral impact. It is
huge, and it can have serious reputational consequences for someone
who has worked in excess of a year on a major project.
Q241 Sir Peter Soulsby: Finally
on budgets, much has been made recently about the potential savings
from cutting out regional bodies, including, of course, emda.
Can you just remind us of the proportion of your spend that is
on administrative costs, and the extent to which you have reduced
that in recent years?
Glenn Harris: If you look at 2008-09,
you will see that our percentage expenditure on pay costs was
just under 7% of the total—6.82%—which was one of
the lowest of comparable RDAs. In terms of efficiency savings,
since 2005, we have saved over £2 million like-for-like on
administration, using that year as the baseline. We have exceeded
our administration efficiency targets that we have had set each
and every year. In the current three-year cycle, like all the
RDAs, we had a ceiling imposed on our administration costs and
we need to generate efficiencies each year to stay within it.
We have managed to do that. Just to confirm, our salary costs
were £11.9 million for the last year and we had a total programme
expenditure of £175 million.
Chairman: Okay. We are moving on to corporate
planning and the current economic situation.
Q242 Judy Mallaber: You rely heavily
on a range of partners to deliver your corporate planning objectives,
as part of your whole way of working. What effect is the credit
crunch having on your partners, and what impact has that had on
you and your ability to deliver your objectives?
Jeff Moore: By far the biggest,
obvious area where the credit crunch is impacting on us is the
amount of private sector resource there is to fund regeneration
schemes. As I was talking in response to Peter's comments about
the impact of budget reductions, the impact of the credit crunch
is on those who provide partner funding. We will not be the sole
funder for lots of our schemes. There will be a cocktail of funds
from elsewhere in the public sector and specifically from the
private sector, particularly on the major property regeneration
schemes in our urban areas. There is little direct private sector
finance available in the current circumstances for regeneration
work—I am talking about those who are working on our schemes.
The RES and the corporate plan are about other activity in the
region to deliver regeneration, to deliver renewal. As the private
sector cash dries up, you see lots of schemes stopping or not
being taken forward. That is certainly the biggest impact that
we have. We then have to look at how we can maintain activity
that we feel is absolutely crucial as much as possible, and work
with other partners, particularly the Homes and Communities Agency,
to see how we can develop projects together.
Diana Gilhespy: Most of the RDPE
money is disbursed through private sector projects. We are allowed
to fund up to 50% of those projects. A lot of them are around
renewable energy and minimising waste. Obviously, one of our concerns
is that we are getting less projects coming through to do that
very important type of work in terms of making companies more
efficient, simply because they haven't got the match funding.
Our response to that is to increase the number of people who are
going out and talking to companies. We have had the Survive and
Thrive Events in terms of helping Business Link to help people
to negotiate loans from banks. There are a number of ways in which
we are trying to support our rural-based businesses, so that they
are able to access those grants and make themselves more competitive.
Jeff Moore: Clearly, the biggest
impact in terms of what you would read and hear in the media all
the time is about businesses being able to access credit from
their banks. Obviously, we have worked extremely closely with
the banks to understand their issues, and then make sure they
understand the various responses that have happened at a national
level. Most of the responses are national-level responses: the
enterprise finance guarantee scheme, the working capital guarantee
scheme. There are a host of initiatives that have been done nationally.
There is an export credit guarantee extension and the trade credit
insurance loosening that has been happening. So businesses tell
us that they are finding trade credit difficult—or bank
lending. We have done a number of things. We have made the banks
aware of all the products available nationally and regionally:
our own regional transition loan fund has £6 million in it.
We have done that by communicating with the banks. We have a regional
risk finance forum where we tell all the leading banks of the
issues available. But we have also been asked, and have done,
so far, to brief well over 100 business relationship managers
from RBOS[1]—each
one that sits in a branch in the East Midlands—about those
products that are available and about the services delivered by
Business Link. I can't go into the full depth of everything that
we told them, because time would not allow. We have done a similar
thing with Lloyds, and we are available to work with all banks
to do that. That's about a sharing of information. It's about
a gathering of intelligence and influencing Government in what
they need to do to respond to the credit crunch. That is a major
part of our work, which is that strategic research-type work,
as well as delivering.
Q243 Judy Mallaber: Can you clarify
that for me a bit more, on individual businesses? The companies
that I have been dealing with still haven't known what is or isn't
available. We have had several where the banks have pulled the
plug for rather dubious or incomprehensible reasons. I have dealt
with that via a person who works through the Derby and Derbyshire
Economic Partnership, rather than directly through Business Link,
but I believe there's going to be yet further changes in the structure.
So when you say "we" are doing this, how does that work?
Who is in charge of dealing with that kind of business support,
particularly in relation to picking up the schemes that are available
and the difficulties, which are the ones that come forward most
to me, of dealing with the banks?
Michael Carr: Absolutely. First
and foremost, the person in DDEP who you've been dealing with
is, I think, a guy called Geoff Stone. Geoff is actually part
of the emda investment and development team. We fund his
position. We placed him in the sub-regional partner, because we
felt he was appropriate to work alongside the local authorities
in terms of the work that we were doing there at sub-regional
level. Geoff's role is actually increasingly being aligned with
Business Link. His role is to look after the foreign-owned and
large company interests for the agency. Actually, with the changing
sub-regional structure, we have just placed the contract to manage
people like Geoff with East Midlands Business, who just happen
to run the Business Link service, so there is a joining-up of
that service to ensure that there's no discontinuity. In many
cases, they are now becoming an extension of the Business Link
service, but covering foreign-owned and large companies only.
Jeff Moore: Information as to
people having difficulty with their banks or their lending will
come to us from a variety of sources, Judy. We will effectively
appoint an account manager to deal with each one of those. We
won't give them that title. That account manager may be the person
on the ground in the sub-regional partnership—DDEP. It may
be a specific financial adviser from Business Link. There are
two key specific financial advisers in EMB: Barry Egan is one
of them who has visited lots of individual companies on this issue.
It may even be an issue where I or the chairman are raising these
matters with the Secretary of State, even, for them to be raised
with senior executives in the bank. It's about matching horses
for courses, really.
Q244 Judy Mallaber: So do all
these agencies and ways of doing things come under emda's
umbrella, one way or the other?
Jeff Moore: One way or another,
we tend to get most of the intelligence that comes forward, but
there may be an example: within Amber Valley, let's say, a particular
small business is having particular trouble with its bank, and
it's perhaps the same bank as the local authority has. They may
go direct to the local authority, and the local authority has
some influence on the bank. It's down to the individual business
where it portrays its problem, but they are effectively harvested
by emda, its sub-regional partnerships and its Business
Link advisers.
Q245 Judy Mallaber: That also
raises a question within the current economic situation about
what are the mechanisms and how close are they for yourselves,
the Government Office and the Regional Minister to work together?
As you've said in some of the examples that you have seen at closest
quarters, we start off going right to the top of BIS, as it was
then, so your relationships have to be close with Departments,
because they often have the people who can put the screws on the
banks. How do those links work between yourselves, the Government
Office, the Department and the Regional Minister?
Jeff Moore: They work in a formal
sense through the regional economic cabinet. The problems of an
individual business are not often discussed in the regional economic
cabinet, but at the margins of that meeting, you might get people
who raise the concern of a particular business. At the margins
of many meetings, the concerns of particular businesses will be
raised. We will talk about it principally to the Regional Minister
and people within BIS if we feel that we need access to national-level
banking executives. If we feel that we can deal with it at regional
or local level, we will speak to whoever is appropriate at that
level. We work closely with the Government Office on this, but
we will not tell them about every case that we are working on.
It is not necessary.
Q246 Judy Mallaber: And was it
yourselves who took the lead in trying to inform businesses about
what is available?
Jeff Moore: Absolutely. We took
the lead. The banks are part of what we have had since 1999—a
regional risk finance forum. That first manifested itself under
our lead in order to bring about the regional venture capital
fund. In the times of plenty, we had representatives of the major
banks, representatives of venture capital and representatives
of local authorities who were invited as well. As the recession
has bitten and the credit crunch has taken hold, that same group
has been responsible for informing us as intermediaries about
the position of the banks and telling us about the position of
businesses, so that we can feed intelligence into the Government.
Through that route, we have proposed that perhaps we should have
seminars and information exchanges about what products are available
and what the Government's response is. That has helped us immensely
on the ground. We have led that throughout.
Michael Carr: May I just add a
little bit to that? The part of BIS responsible for things like
Business Link and the access to finance products is called the
enterprise directorate. As RDAs, we have formal quarterly meetings
with the enterprise directorate. We had one last week, and on
a day-to-day basis, we can deal with the senior reporting officer
for that Department, passing information to and fro. For instance,
the triage system that was set up by BIS to allow MPs to put into
place constituent business queries, was designed in conjunction
with the RDA. It used to allow those things to be passed out for
the RDAs to pick up and disseminate out to their individual partners,
if they were not already aware of them. Work alongside the development,
within the freeing up of credit guarantee that came out within
the budget, for instance, would have been jointly designed with
ourselves. All the national products—the Enterprise Finance
Guarantee Scheme, for instance—were designed so that they
would be delivered through the Business Link. There would be people
trained and ready to support those products when they were offered
through the banks. We work extremely closely with national Government
in the design and delivery of those programmes and on the ground,
linking up, as Jeff said, with the partners that are required
to deliver them.
Q247 Judy Mallaber: Within that,
you do not mention the Regional Minister. How has the existence
of a Regional Minister helped the region in relation to what is
happening with the economy at the moment? It seems to have got
slightly left out of the people who you say you have linked into.
Jeff Moore: There are a number
of formal routes through which the Regional Minister will deal
with us and then deal upwards to Government. The Regional Minister
chairs the regional economic cabinet, which garners intelligence
on what is happening within the region and calls to account those
agencies that are there to respond—Jobcentre Plus, the Learning
and Skills Council, ourselves and the Government Office are all
party to that. It is similarly joined by the TUC, East Midlands
Business Forum, the CBI, the Institute of Directors and so on.
The Regional Minister chairs that and plays an active part in
gathering intelligence and corralling that group into responses
that are necessary at our regional level, or those responses that
he needs to push national Government for. He is extremely active
in that respect. The Regional Minister sits on the regional economic
council, which is jointly chaired by the Chancellor and the Secretary
of State for BIS. That contains representatives from all regions
and is also about influencing Government policy and responses
to the recession, so he plays a very active role in that. He is
also an extremely excellent advocate for the East Midlands—very
involved and concerned about what is happening with the East Midlands
economy—so we have a regular dialogue with him, both formal
and informal, and we can pick up a phone to Phil at anytime and
he will help us with either Government or individual businesses.
Similarly, he picks up the phone to us about individual businesses
as well, so I think that he is pretty responsive in that respect.
Q248 Judy Mallaber: What has been
achieved that couldn't have happened without a regional Minister?
Or what things would not have happened or would have gone awry
without the Minister to ease the route as you've described?
Jeff Moore: The biggest advance,
from my perspective, would be the advocacy for the East Midlands
within Whitehall and the Government. There will be specific examples
of where Phil has been part of a concert party of people involved;
there is a recent soon-to-be-announced major investment in the
region— Northamptonshire—that Phil will have played
a part in, but I feel that by far the biggest impact is that the
East Midlands now definitely has a strong voice within Whitehall
and will not be seen as a Cinderella region. Similarly, the regional
Minister does call us to account for delivering on what we are
doing for him.
Q249 Chairman: Okay. The RES highlights
the importance of higher education. It is a big player in the
East Midlands; something close to 2.2% of GDP. Can you quickly
run through how you support higher education in the region and,
particularly in the current economic climate, are you keeping
a real focus on the importance of higher level skills? I assume
you are, but can you just run through what you are specifically
doing with your team, Jeff?
Jeff Moore: We stay very close
to our universities. Higher level skills are what UK plc needs
more of to deliver on the economic challenges of the 21st century.
The East Midlands, as we characterised it in our earlier evidence
to you, is generally regarded as a low skills, low pay, low unemployment
economy. If we're to compete successfully in the 21st century
we need to address that, and further and higher education are
major players in assisting us in that direction. Since our inception
we have been in the fortunate position of being a net importer
of undergraduates but an exporter of graduates as a region to
elsewhere in the country. We work on a number of levels to both
retain those graduates in the region and make sure that we work
with our universities and further education colleges to deliver
the skills that are needed for the future. The innovation agenda
is a major one where we deal with universities, which Mike will
touch on. Diana will touch on how we are working with universities
on the general skills agenda as well. Perhaps you would like to
start, Diana, with how we interface with higher education in that
respect?
Diana Gilhespy: Indeed. I think
that in the regional evidence we talked about the ESP partnership—the
employment, skills and productivity partnership. That is one of
the ways, and there are other ways in which we engage with universities,
in which we involve universities on skills in particular. With
our further education colleges and local authorities we are very
concerned about the issue around progression and, as Jeff has
said, the retention of graduates within the East Midlands. Progression
is one of the issues that we are working on with them. I think
that the other issue is around specifically what sort of skills
and higher level skills we need within the East Midlands. Here
I point to the work that we are doing on science, technology,
engineering and mathematics to work with schools and businesses
to encourage young people to think about and progress in those
subjects to universities. We are engaging with universities to
help young people to see the advantages of studying science, technology,
engineering and mathematics. That particular programme is £9
million. The thing that we do not have is funding to fund higher
level skills themselves. We are genuinely acting as a catalyst,
which is a part of our strap line, in order to ensure that, when
working with businesses, they are aware of opportunities for their
own staff to upskill, and with schools and young people in terms
of the opportunities that are available to them if they do upskill,
particularly within those areas that we are most reliant on in
the East Midlands, which are the science and mathematics disciplines.
Q250 Chairman: You referred to
funding. We had evidence about some of the difficulties that have
been experienced in getting funding for the region compared with
other regions. ERDF, for example, is an area that has been raised
with us. Why is this? Why is that sector having problems with
ERDF, if I take that as an example, compared with other regions,
other RDAs?
Diana Gilhespy: Sorry, which sector?
Chairman: We were told that they were
having difficulty in obtaining funding in the region, and they
used as an example the ERDF, and made the point that other universities
in other regions were not experiencing some of the difficulties.
Jeff Moore: I don't think that's
the case, Bob. The evidence that I have seen and read is that
we apply the rules too stringently. I think in the current climate
I would treat that as a compliment rather than as a criticism.
Adhering to the rules under which our funding has been given is
quite crucial as far as I am concerned, and I think we have made
multi-million pound investments in our universities. There is
a lot of rhetoric about: "You can get £100 million into
x university." I would say we have made approaching £30
million-worth[2]
of investments in our universities and we think that compares
very favourably with our proportion of the overall RDA pot. So
we are not aware of it.
Q251 Chairman: Can I quote? "The
implementation of the ERDF competitiveness programme by emda
in this region is bureaucratic and difficult". Unlike their
experiences, they believe it for other regions but they just experienced
difficulties in applying for match funding—for recession-related
initiatives.
Jeff Moore: We'd need to understand
that a bit more, but I think it is a fact. ERDF funding is bureaucratic.
Q252 Chairman: I know that. They
were just making the point that they felt it was perhaps over-bureaucratic
in the East Midlands compared with other regions. Just a comment.
Whether it's fair comment or not, I am sure you will want to take
it away and look into it.
Jeff Moore: We will look into
it. We are aware that under the previous programme, the 2001 to
2006 programme, there are a number of concerns about the delivery
of the programme—none of them in the East Midlands. We believe
that is because we have had the right processes in place that
have stopped any difficulty with the European Commission and potential
clawback and penalties, so I would want to see where the example
is, that it is less bureaucratic. I would want to check that that
will not lead me into a problem further down the line at the end
of the 2007 to 2013 programme when money is actually being clawed
back, because that is a problem in three of the nine English regions
at the moment.
Q253Chairman: Okay. What about Learning
and Skills Councils in the region? Will you elaborate on what
your relationship is like with them?
Jeff Moore: Yes, the Learning
and Skills Council, the chief executive of which is Tom Crompton,
is part of the employment skills and productivity partnership.
It is a major funder. Its budget is probably four to five times
the level of our budget, so it has a major influence on the delivery
of skills in the region. As Diana mentioned, it is a major partner
in terms of how we get progression from what it does to what higher
education does, and of how we ensure that we get the degree of
synergy so that we deliver the skills that businesses need in
the 21st century. Relationships with Tom and with his predecessors
are excellent. They work very closely with us. There are lots
of projects that they work directly on that Mike and Diana could
tell you about. Our relationships with them are excellent.
Q254 Chairman: I am sure that
you agree with Lord Mandelson's comments about the need for industrial
activism, but what do they mean to you, and what are you doing
to put them into action?
Jeff Moore: This could take a
long time.
Chairman: Hopefully not.
Jeff Moore: So we will paraphrase
and shorten. We believe, and have always believed, that what we
have done from the start is industrial activism. I gave you the
example of BioCity, which is about regenerating a derelict building,
providing access to funding and venture capital, providing business
support services to grow the bio-pharma businesses that are a
key sector in the East Midlands and world economy for the 21st
century. That is industrial activism in action. We are working
with the Department to draw up a framework that gets greater collaboration
across the country, that delivers a framework for what industrial
activism needs. It is a major issue that we are dealing with all
the time, and it involves that balance of need and opportunity
when you need to turn communities around and provide industrial
opportunities for them, working on those growing sectors, particularly
in the East Midlands, aerospace and bio-pharma. How do we make
them grow and flourish in the 21st century? It will be about skills,
working on innovation, having the right sites and the right clustering
policy—to use an old term. It is about being the catalyst
to make those areas thrive and survive. Mike is a key part of
the national network, putting that all together.
Michael Carr: To be fair, Bob,
things are still emerging on this front. A huge amount of work
is going on to draw together the framework, which will underpin
the changes in the way the Government and ourselves, as an agency
for Government, invest in the future. Jeff has already pointed
out that in many cases, we have been very good at joining up quite
disparate strands of policy and making them work on the ground.
The big win around the "New Industry, New Jobs" White
Paper is to start seeing some of that joining up happening at
a national level. To some extent, that is outside our control.
Obviously, the changes in the new Government structure, bringing
together business support and innovation skills, provide a bigger
opportunity to do that. Interestingly, if you look at our range
of business support, innovation and skills, they come under our
productivity theme, so you might argue that we are a couple of
years ahead of the game in terms of that one. From our side, it
will involve some degree of national prioritisation and direction
from central Government that we have perhaps not seen before.
It will have some impact on the RDA family, which will be looking
to join together in some of their thinking. They will be looking
beyond their regional boundaries at how they can join with other
regions and come together to form a delivery platform to support
national Government. There will be some changes in the way in
which some regions will have to start addressing some of the national
challenges, but some of that is still in the melting pot as we
see how Government develop with us the actual national framework
that we described earlier.
Jeff Moore: Specific examples
would be our development with our colleagues in Advantage West
Midlands and in the manufacturing technology centre along with
three universities and the Welding Institute, which would be about
state of the art works on joining techniques for the aerospace
industry. That is what industrial activism is about. It is high-level
research and innovation that is then applied to employment opportunities
in those industries. Similarly, before industrial activism came
about, we worked with the university of Nottingham on the development
of the first new veterinary school in the UK for a number of decades.
We worked with Nottingham Trent university on animal and veterinary
nursing, because animal health is a growing, developing sector
for the world economy, and we have specialisms in that area. What
niche we will have in that marketplace going forward is what industrial
activism is about, first at UK plc level and then at East Midlands
level. As you will know only too well, we have a heritage of coal,
coal power and mines. What opportunity does that provide us in
industrial activism for clean coal and carbon capture and storage,
as we address the challenge of the low-carbon economy of the 21st
century? What research do we need to do? What programmes do we
need to put in place? That is industrial activism on the ground.
Chairman: Good stuff. Thanks.
Q255 Sir Peter Soulsby: Briefly,
I would like to return to the criticisms of emda that we
heard from the university of Nottingham. I shall pick out three
things that they said. First, they criticised project appraisal,
which they described as inefficient "by design". I think
they implied that it was over-complex and unnecessarily bureaucratic,
which was a point made earlier. They also criticised the apparent
unwillingness of emda to give a clear no at an early stage
when a project is not suitable. It said that it prefers to give
conditional yeses. [Interruption.] Perhaps you can't win
on this. None the less, the criticism was made. It might be that
those two points are not entirely incompatible. The third criticism
was that perhaps emda has paid inadequate attention to
long-term results, and that after a couple of years of a project,
having gotten it under your belt, emda loses interest.
Do you think that there is any fairness in any of those criticisms?
Jeff Moore: Glenn will deal with
the appraisal one, and I shall deal with the other two.
Glenn Harris: In terms of project
appraisal, which we touched on before, we apply the rules that
we need to apply. That is the issue of the Treasury Green Book.
So we cannot apologise for that, and we want to get that right.
I would say, though, that last year we appraised 500 projects.
By that I mean getting an application in a fit form that we can
look at and appraise. The average time taken to appraise was 15
days. Some 90% of those were done inside 15 days. The longest
appraisal in terms of having an application completed—when
we have a full application—was 27 days. That was the longest
we had last year. Now, I think quite often people give criticism
because they have an idea, and they will come and talk to us very
early on—and it is an idea. Then there is a long developmental
stage involving many people and many different components. But
that is a long way before getting to the appraisal stage. That
gestation period can take some time, and we work with them and
show them what they need to do. We talk around state aid and the
kind of things that we are looking for to align the RES and the
outputs. But in terms of the actual appraisal itself, we can demonstrate
that in the way we process-manage it. We use effectively a form
of the total production system to manage our appraisal process
from front to back. It is up on the screen in the office and you
can see, at any one stage, where a project is. Like I said, the
average is 15 days. We think that compares pretty well with anyone
doing a similar process.
Jeff Moore: It isn't about appraisal.
The criticism is addressed as one of appraisal, but it is about
projects being worked up that are often hugely complex. What you
will find is that in most projects, the original idea becomes
something completely different by the time it gets to the appraisal
level, and then that goes through in 15 days. But it is working
up major projects. We do not think it is a criticism that is legitimate,
Peter, in that respect. Refusal to say no—that is fascinating
because since Bryan and I took over in 2005, we have always been
accused of being starkly clear in saying no too quickly. I believe
that we should say no as soon as it is a no and not lead people
up the garden path unnecessarily. Certainly in Nottingham university's
case, we have said no to a number of things that they have come
forward for. The first one was that they wanted £5 million
towards the veterinary school and we said no on the first day.
It is a criticism that I am not aware of. As you say, Peter, perhaps
we can't win in that respect, but we will try to get the balance
right. Inadequate attention to results, etc. I find that fascinating
and quite disturbing, and I see the Vice-Chancellor of Nottingham
University quite frequently. As we reported to you last time,
we were the first RDA in the country to commission a full impact
evaluation of everything that we do. We have been very diligent
in working out the impact on the East Midlands economy of our
activity. That is the £9 to £15 that I referred you
to last time. We have analysed right across our project portfolio,
so I think that is not a fair criticism either.
Q256 Sir Peter Soulsby: To be
fair to the university of Nottingham, they were talking about
RDAs more generally than about emda. They said that, "the
operating and reporting conditions placed on RDAs often led to
a focus on the short-term `outputs' at the expense of long-term
benefits. Typically an RDA's interests in a project cease after
2-3 years." I suppose the question is, does your interest
cease after two to three years?
Jeff Moore: No, it does not cease
after two to three years. We could keep you here until 4 o'clock
with a list of projects that are 10 to 15-year projects. Avenue
Coking Works is an example and there are various others with universities.
I would say that one of the things we are about is doing beacon,
pilot, innovative projects and demonstrating that they work. We
then tell the rest of the public sector and other sectors to mainstream
that example. We definitely do proof-of-concept work for two to
three years to prove that things work and that they have an economic
impact, but then we say, "Our investment will stop. You will
take it on because it is good for your business, your sector and
your local authority." It is not inadequate attention to
results. We are very performance managed, results focused and
customer orientated.
Chairman: The single regional strategy.
Judy.
Q257 Judy Mallaber: We talked
earlier about you having been given more responsibilities over
the years and what that has done to whether you can maintain your
emphasis on core strategy and strategic involvement. You are now
going to become responsible for a huge amount more after the Sub-National
Review, what with transport planning and housing matters. The
same question: how are you going to make sure you still have your
emphasis on economic development and how such things work so that
you do not just get so caught up with all the different responsibilities
that you lose focus on everything?
Jeff Moore: Anthony is going to
focus on that.
Anthony Payne: You are absolutely
right: the single regional strategy will be a more all-encompassing
document, which brings with it both advantages and maybe some
disadvantages around complexity. We firmly believe that having
the opportunity to better align the economic strategy with the
spatial strategy, which is in essence what a single strategy will
eventually come to, is a positive. Having said that, within our
region, the alignment is already good between the existing regional
economic strategy and the regional spatial strategy. We will work
closely though to ensure that going forward we make that alignment
even better and that we end up with a co-ordinated and well thought
through regional strategy. How are we going to do that? We have
the change management plan in place, which was submitted from
GOEM to central Government, which basically outlines the way we
are going to take the work forward. As a region, we are working
very closely with our regional partners, in particular the local
authority leaders' board, which is in shadow form at the moment
and will come into existence next year. We have a clear work programme
through that change management plan to prepare for 2010 and onwards.
We are also working closely with GOEM, the assembly and stakeholders
to ensure that we can put that in place. I just want to make one
last point to bring you up to speed. Last week, we had our first
event with stakeholders, to work with them on stakeholder engagement,
to ensure that the single regional strategy process is as robust
as it can be and to ensure that we will work with stakeholders
to make it a good process. That is the technical and procedural
side. Then, in terms of dealing with it from a strategic basis
and a content basis, there will undoubtedly be challenges to ensure
that we can cover all the agendas within it. There is a risk that
you have such a wide strategy that it says all things to all people
and not a lot to others. The challenge for us going forward is
working with partners to identify what the absolute priorities
are for that regional strategy. I am confident that the joint
working arrangements we have with the emda strategy team
and the East Midlands Regional Assembly team, which currently
works on regional spatial strategy, will ensure that we work as
a virtual team to come up with as good a strategy as we can, building
on all our experience to date.
Q258 Judy Mallaber: What have
you identified as the areas that will be particularly difficult—that
you will need to watch out for? Have you identified areas where
you think that you might fall down if you don't get it right?
Anthony Payne: I don't think I
can answer that as yet. I don't think that we have got to that
level of detail in our workings. What I can say, though, is that
if you look at the RES as it currently is and you look at the
regional spatial strategy as it currently is, there is a high
degree of alignment already between those two strategies. When
they, in effect, become co-joined from April 2010, we are jointly
of the view that they are not contradictory in their nature. It
will then be the responsibility of the two teams to make sure
we take forward a very comprehensive process to develop that strategy
in as co-ordinated a way as possible. The key challenge is the
complexity of it and the vastness of the potential agenda that
will need to be reflected, but we will need to work through that
and it is too early at this stage to say what issues may come
out as real big challenges.
Jeff Moore: A public challenge,
Judy, will definitely be a misinterpretation of what the Act may
say and what our powers may be. People are concerned that we will
become responsible for giving planning permission for extensions.
We will not become responsible for giving planning permission
for extensions, but as you know from your own experience as MPs
that is a high-profile issue with constituents and it is something
that is exercising the people of the East Midlands at the moment.
Will this economic development organisation be deciding planning
permissions? Clearly we won't, but I think that education and
information process will be one of our key challenges should the
Act go through and should the guidance give us the responsibilities
that we anticipate it will.
Q259 Judy Mallaber: You have obviously
started talking about how you relate to partners within this process
and you said you had initial meetings with stakeholders. Who were
the stakeholders and what arrangements have you made for their
future involvement, because there isn't any formal mechanism for
involving people?
Jeff Moore: Anthony will come
on to the detail, but one of the things that we have been very
keen to do is to make sure all stakeholders are represented, heard,
listened to, consulted and part of that process, in an appropriate
way, and we have been conscious of the evidence that the Committee
has been given during part of that. What we are also very aware
of is that a number of existing individual stakeholders have raised
concerns about wanting to refresh stakeholder representation.
A number of what you would call major stakeholders have said we
need different stakeholder arrangements, so we have been very
keen to go back to square one and say, "What does the stakeholder
community want?" That is what happened on 2 July, but Anthony
can tell you who was there.
Anthony Payne: The event was well
attended. There were nearly 80 stakeholders there from a range
of organisations across the East Midlands, from the economic sector,
the environmental sector and the social sector. There were organisations
such as Social Enterprise East Midlands and EMEL, the environmental
organisation, through to business organisations, like the IOD
and the CBI. A whole range of organisations were there. I think
we threw the invite open wide through all the networks that we
traditionally engage with and through which the EMRA traditionally
engages with. The event itself will result in a short report towards
the end of this month. We are then going to have processes and
some other engagement with a variety of the partners who attended
last week's event, and the intention is to go back to them with
scenarios for discussion at an October event, with a conclusion
and finalisation of stakeholder arrangements by the end of this
calendar year, at the very latest. That will be in place in advance
of April 2010, when the new arrangements need to be in place.
Jeff Moore: The FSB was there.
1 Correction by witness: I meant to say 40 not
100. Back
2
Correction by witness: I meant to say £50 million-worth. Back
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