UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 406-v

HOUSE OF COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE THE

EAST MIDLANDS REGIONAL COMMITTEE

 

EAST MIDLANDS DEVELOPMENT AGENCY AND THE REGIONAL ECONOMIC STRATEGY

TUESDAY 7 JULY 2009

(WESTMINSTER)

 

MICHAEL CARR, DIANA GILHESPY, GLENN HARRIS, JEFF MOORE and ANTHONY PAYNE

 

Evidence heard in Public

Questions 219 - 274

 

USE OF THE TRANSCRIPT

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Oral Evidence

Taken before the East Midlands Regional Committee

on Tuesday 7 July 2009

Members present:

Mr. Bob Laxton (in the Chair)

Judy Mallaber

Sir Peter Soulsby

 

Examination of Witnesses

Witnesses: Michael Carr, Executive Director of Business Services, Diana Gilhespy, Executive Director of Regeneration, Glenn Harris, Executive Director of Corporate Services, Jeff Moore, Chief Executive, and Anthony Payne, Executive Director of Strategy and Communications, EMDA, gave evidence.

 

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. 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 director or regional 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 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 Council for the 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 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 director 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 Brian-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-I am trying to think of his second name-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.

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 new 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 Project 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-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 it 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 bit 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 councillor 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 investment 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 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 point 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 Brian 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 is being 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 Emerald, the environmental organisation, through to business organisations, like the IOD and the CBI. A whole range of organisations was 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.

 

Q260 Judy Mallaber: Obviously, a number of those bodies might be region-wide, but in that event and in others do you find that some parts-some counties-are very much under-represented and there's an over-emphasis from other areas?

Jeff Moore: We try to encourage representation from all geographic areas, which was why the board, years ago, went from 13 to 15-because of under-representation on the board from Northamptonshire and Lincolnshire. When we hold events, we try to take them round the region and we try to encourage as many people to attend as possible. We use electronic methods to overcome travel difficulties, if they are there. We will try and overcome any of those difficulties, Judy, and if we feel that we've had low attendance from, let's say, stakeholders in Northamptonshire or Lincolnshire, we will then take special measures to ensure that they have been included and their views have been addressed.

Anthony talked about 80 stakeholders there. As far as I see it, I have 4.3 million stakeholders-each and every single person who lives in the East Midlands. We have 350,000 business stakeholders; we have 40-plus local authority stakeholders; we have an enormous amount of social enterprises-all sorts of stakeholders. It is a massive number and a massive task. Balancing their disparate views is difficult, but it is what we try to do within our resource capability, and we have started it off for the integrated regional strategy. There is no template. It is not predetermined.

 

Q261 Judy Mallaber: Moving on slightly, the original recommendations in the Sub-National Review proposed that you delegate an increasing amount of your funding to partners, including local authorities. I know you've emphasised to us very explicitly that you don't seek to spread your funding equally across all points of the region, but in terms of delegating an increasing amount of function, will you try and make sure that's shared around? Will you just prioritise, and it will all go to certain areas? What criteria will you use to deal with competing claims for funding?

Jeff Moore: We feel we're leaders in the devolution of funding to our sub-regions. We created our seven sub-regional partnerships, and we've given over a third of our money consistently-some £200 million has been delegated to the sub-regions for them to decide what to spend and where. We will continue to have a policy of devolution of funds to sub-regions. It's now going through the principal upper-tier authorities-the counties and the unitaries-to reflect the mood music of SNR. We're doing it directly through those local authorities. That money will still go.

Clearly, we face significant decline in our own resources over 2010-11. It is not possible for me to say at this stage that there will be an increasing rate of devolution of those resources to the sub-regions.

 

Q262 Judy Mallaber: How do you decide which sub-regions get what, because you said before you don't divide things up equally, or presumably according to population?

Jeff Moore: We're talking at two levels. First, we take the overall pot, which is about £150 million to £170 million and that has been divided roughly into two thirds regional funding and one third sub-regional funding. Lots of the two thirds regional funding is also delivered sub-regionally, because Business Link, which runs to many millions, and business support are delivered on streets to businesses in localities. Some is then used for what we would call regionally important schemes: BioCity would have been a regionally important scheme.

In terms of where we spend all our regional money, we will work out what is required from new industry, new jobs and the regeneration framework, which is effectively decided by Government policy. In terms of giving to the sub-regions and how that money is shared between them, it is decided by a mini-formula of the formula that the Department uses to allocate our funds. We have a complex formula that shares the £2 billion pot around the RDA group. That has complex elements, some based on need and some on opportunity, including employment, innovation, skills, business base, population, core costs, deprivation and so on. We apply that at sub-regional level to take the third that we give to our sub-regions between them.

Lincolnshire gets its formula-based element, and Derbyshire gets its formula-based element, and they then deliver those in the localities that they feel are appropriate and on the schemes that they feel are appropriate within the overall parameters of what the regional economic strategy says. That is the key contractual requirement that we have on those unitary and upper-tier authorities.

I think we have covered how we allocate our regional funds in our previous stuff, but we can go over that again. Diana, do you want to touch on any of that?

Diana Gilhespy: No.

 

Q263 Chairman: Jeff, you were talking a moment ago about your relationship with your stakeholders. We are perhaps back to accountability, and you are almost over-accountable in some respects. East Midlands Regional Assembly made the comment that they felt that there was "potential for East Midlands Councils...to play a leading role in" regional scrutiny. How would that work? I am conscious that you are probably over-scrutinised as a body.

Jeff Moore: At the moment, I feel scrutinised into the ground-we do an immense amount of reporting accountability. Until now, we have worked with the regional scrutiny committee of the regional assembly. We would make a plea that whatever new scrutiny arrangements come forward, can they not be duplicated and can they be efficient and effective, so that we can concentrate on getting on with the day job rather than spending a disproportionate amount of time accounting for what we are doing at a variety of levels? We do not deny the need to be accountable. We welcome that, and we welcome scrutiny, but we want to avoid duplicate scrutiny. Whatever proposal comes forward, we want it to be lean and fit for purpose. You may not need anything other than the scrutiny that you currently have and that the Grand Committee and Parliament will have.

Another specific plea is that whatever scrutiny is developed and embodied at regional level, we want it to have very strict conflict-of-interest protocols. That is absolutely necessary, because in the past we have been looked at by those who have a number of hats, and we want conflict-of-interest rules to be clear.

 

Q264 Chairman: If EMDA, the local authority leader's board, cannot agree, for example, on a single integrated strategy, how confident would you be that Ministers could resolve the matter, if they were given the task of holding the ring?

Jeff Moore: I do not want to comment on the political environment, but we are fairly confident that we have worked well with the local authority leader's board. A major success is the move to three and three on the local authority leader's board-three RDA reps and three local authority leaders. That has been a major achievement, and it could have been quite difficult.

The new leadership board is being formed because of the change in the county elections, so there is a bit of a movable feast going on there. It is about to meet fairly soon, and we will have the nominees on to that joint board. We are confident that we could resolve such matters at regional level and not need to go to the regional Minister for the solution. That has been our past history and our past experience.

We have worked extremely well with the assembly. David Parsons is a big supporter of the RDA. He clearly leads the local authority leaders. I feel that we can reach agreement. It is a much more complex and difficult task, given the spatial elements added to the economic elements and the point that the planning dynamic is a vibrant focus of public interest, but we believe that we can get there. Anthony's work with Stuart Young and others at the assembly has been exemplary so far. We imagine that we will get to agreement.

Chairman: Thank you, Jeff. We have already covered quite a good chunk of sustainable development in the comments that we have picked up about what was perceived to be an element of lack of director representation.

 

Q265 Sir Peter Soulsby: What I have to say is something that we have explored a little with others. We have heard from a number of sources, particularly the Environment Agency. I note the point about there being two or three different elements to the Environment Agency with responsibility for the East Midlands, but there is lack of a champion body for sustainability in the region similar to Sustainability North East and Sustainability West Midlands. It is something that has come back on a number of occasions as a theme. Is it not the case that there is a lack of leadership in the region? Whether it falls to EMDA or elsewhere, that leadership ought to be provided from somewhere.

Jeff Moore: Anthony will pick this one up.

Anthony Payne: Sustainable development champion bodies came out of DEFRA in about 2006, as you know. At that time, we had a sustainable development promotion and sustainability group within the region co-ordinated through the East Midlands regional assembly. With SNR, we took the view with our regional partners, the Government Office for the East Midlands, EMRA and that body that we would do a review to look at what we thought was best for the region. Following that review, which we completed just over a year ago, all regional partners that had been interviewed concluded that we needed to embed sustainable development within Sub-National Review frameworks going forward and strategies rather than a specific SD body. That was the conclusion that came out of an independent piece of research.

I was looking at that bit of research yesterday, because I thought that the matter might be raised today. I found that 72 of the key protagonists around the sustainability agenda were interviewed. It was a very extensive piece of research and the whole conclusion that came out of it was the need to embed rather than to have a separate body.

Jeff Moore: Specifically we are saying that the sustainable development organisations within the region have actively said that they do not want one body putting forward as the sustainable development champion, and we respect that consultation.

Chairman: Okay.

 

Q266 Sir Peter Soulsby: I once put to the Minister that embedding it, mainstreaming it or integrating it can actually just mean ignoring it. Is that not a danger?

Anthony Payne: There is a risk of that, but I think that the history within our region and the history of the regional economic strategy and the regional spatial strategy is that we have not ignored it. It is embedded throughout the RES. There are key elements of sustainability sprinkled throughout, and key to the strategic priorities within the RES. The same is true of the regional spatial strategy. I actually think that the converse is true. If we have a specific body that almost sits in its corner saying that SD is really important, it could actually become even more marginalised. So the risk is that it becomes just a talking shop for a particular group.

 

Q267 Sir Peter Soulsby: Which leads on to the question whether it is better to look at an index of sustainable economic welfare as a way in which to measure what is being delivered in the region as against GVA or GDP. I think that you have particular views on that.

Jeff Moore: We do. We have an index of sustainable economic well-being, and we were the leaders in developing that as a measure of progress for the region. As we have said, we had GVA and GDP measures before, but it was little consolation to the East Midlands if the economy was growing massively. People were getting better off, but they did not feel better off because they were frightened about crime and their environment was polluted or whatever. We were leaders with the New Economics Foundation and Surrey university in developing the index of sustainable economic well-being. That is an index about which we have put evidence in, and we are leading on. It is key.

Another point on sustainability-I know you want to come back, Peter-is you raise questions such as, "Are we bureaucratic on ERDF and does it take a long time to do appraisals?" One of the key elements of our appraisal process is a sustainability check. That all adds to what we are doing in order to make sure that we have addressed the issues. As we do an appraisal, it is also an appraisal on a sustainability basis.

 

Q268 Sir Peter Soulsby: I am sure I know the answer to this from the evidence you have already given, but can I just check? You talked about the sustainable index of the sustainable economic welfare. You would, I think, welcome its adoption across regions, rather than just the East Midlands.

Jeff Moore: It is not for me to tell other regions what they wish to do, but that work was indeed ground-breaking and it has been taken on by a number of politicians as a key element of how to develop. Other regions have started to address it, look at it and show an interest in it. Even though it is a year or so old, it is relatively new and is the developing measurement index, because you learn more about how you can develop the measurements of crime, the impact of crime, the benefits of volunteering, the impact of accidents and things like that. It can be a very big measure, and we are very positive about it. Making sure that we can measure it and that it has got all the right elements to it is a key challenge going forward.

Chairman: Judy, you covered some of the semi-rural stuff.

 

Q269 Judy Mallaber: There is another issue before that on sustainability. We have a statutory duty to promote equality, and we will have to monitor equalities and diversity impacts, but I have not really seen that addressed in the evidence or by our witnesses. Can you tell us something about that and whether you have any formal structures in place to ensure that you deal with issues around equality and impacts on people?

Anthony Payne: Two points on that. First, as Jeff has just alluded to, in terms of the sustainability appraisal, all projects also go through an equalities impact assessment. Secondly, we are going out to consultation over the summer-we will be taking that through to our board-for our integrated equalities scheme by the end of September to early October. That will be going out to consultation following our July board.

 

Q270 Judy Mallaber: When you go out to consultation, how does that get out to people and who does it get to? Part of the whole point of this is that there will be many places that your consultation does not reach, which might be precisely the places that are affected by what you do or don't do.

Anthony Payne: We try to reach all the parts that all consultations try to reach. We will work with all our stakeholders in organisations such as EMRA, GOEM and so on, as well as the other stakeholders who came to the recent stakeholder event, those who are on our database and so on. We will try to make it go as wide and far as possible.

Jeff Moore: Including the local representative of the commission for human rights.

Anthony Payne: The new EHCR, as it is now known. We will make sure that the consultation is as wide and as appropriate as it possibly can be. We will then rely on other partners to send it further on, so that it has a cascade effect. We are sure that it will reach all the parts it needs to reach.

Jeff Moore: This is an example of some of the projects. Anthony has talked about the statutory requirements and how we do an equalities impact assessment of projects. A number of our projects are specifically targeted at areas where we think that advantage exists. In some of our communities, it is quite difficult to access finance from the traditional financial sector, so we have a product called East Midlands enterprise loans that is specifically targeted at disadvantaged groups.

Michael Carr: One thing to add to that, Judy: on every business support product that we have, we require the partner to monitor the customer base that they are dealing with from a diversity point of view where we can get it-not everybody chooses to share those details. We have a comprehensive review of our diversity of outreach in terms of our business support programmes. That has been a major step forward that we have taken under the guidance of the agency's broader diversity policy that allows us to monitor exactly where our business support products are hitting.

 

Q271 Judy Mallaber: How does your analysis of economic impact and possible programmes take account of gender issues, as well as different communities-racial diversity and so on?

Michael Carr: There will be a requirement within every contract that we place to monitor the diversity of impact. Based on the performance, we will ask for changes, if necessary, to ensure that further work is done on that. But actually what we have seen is a growing trend in terms of penetration into areas like black and ethnic minority businesses and gender-based businesses, in terms of women's businesses. So we are actually already seeing a quite significant swing in the impact of our programmes in these areas.

 

Q272 Judy Mallaber: Going on to the issue that Bob was trying to get me on to about rural and semi-rural areas, very often people talk rural or the urban divide and leave out semi-rural. What measures do you take to make sure the appropriate support is provided to areas that are semi-rural, because very often the divide is just, "It's a village," or "It's a city," and there is nothing in between?

Diana Gilhespy: If I can just pick up on the business support side of things, we now have over 40 offices, which are staffed by business advisers. So there is a sort of physical presence. That has been also assisted by our investment programmes through to our regional partners and regional innovation centres, particularly across the coalfields, but there is now a programme across Lincolnshire, whereby we have a hub in Lincoln but then outreach centres across the region.

Obviously, as well, we have specially trained advisers in land-based businesses, but also all business advisers have some awareness of the difficulties and the issues faced by rurally located businesses. We have also, largely through our sub-regional partners, a very active engagement with market towns, enabling them to refresh their offer to businesses, retailers and tourist visitors. So we have that physical development, but also support for other development such as business improvement districts within our smaller market towns. So there is a cocktail of ways in which we can support rural areas.

 

Q273 Judy Mallaber: Many market towns are declining in using shops. They get sucked out by Tescos, I should imagine, and other supermarkets. Does EMDA have any strategy for dealing with that, or ability to counter that development?

Jeff Moore: That will be part of our ordinary recession response strategy, in a way. What we specifically had with market towns, right at the very beginning of the agency, was a sort of analysis of what keeps a market town sustainable. What size of market town needs a cinema, bank, library and so on? So we did an analysis of that, and then our projects and programmes were about delivering those as far as we possibly could into market towns that were deficient in them, or getting partners to do that. Similarly, the issue you're raising, though, really Judy, is about the fact that you've got recession and you're having shop closures urban, suburban, rural, hamlet-wide.

Judy Mallaber: It is not just recession; it is also longer-term development of big supermarkets.

Jeff Moore: It is. We have other programmes and projects. First, I would say that the business support and business support advice available throughout the region is available to anyone and everyone. Secondly, there are schemes like the Pub is the Hub, which is very heavily sponsored by His Royal Highness Prince Charles. We have done more than any other region in respect of declining villages, losing shops, losing various other aspects-not necessarily to out of town retail, but maybe out of town retail 10 miles down the road to a Tesco. There are lots of pubs throughout Lincolnshire, Derbyshire and Northamptonshire. The pub is struggling, but it can be turned into the post office, shop, or advice or maybe crèche mechanism, working with the Princes' Trust charities. That is the sort of programme that we intervene in.

Michael Carr: Last year, we supported over 20,000 businesses and individuals in rural areas through the Business Link service. So it is a substantial amount of the work that they do.

 

Q274 Judy Mallaber: The other specific issue that has been commented on is how one of the biggest challenges facing businesses in rural areas is about access to broadband. What is your involvement in that? Have you helped to meet that challenge?

Michael Carr: Clearly, one of the issues that we were first faced with 10 years ago was that there was a very patchy internet access. A number of projects, including some sub-regional work that we did in places like Lincolnshire, significantly increased the opportunities for people to have access to broadband. Actually, a relatively small proportion of people now do not have access to broadband. Some would say that it's not quick enough, but they do have access to it.

Our policy has changed more now to e-adoption and e-development-basically trying to get people to use those facilities more. A remarkable number of businesses still don't use computers, IT infrastructure or the web. Particularly, those that do are often very basic users, and I am sure you are aware, Judy, that there's a lot more you can now do through the web. We have moved from infrastructural support, which was in the first part of what we did, often through sub-regional partners. Now, we are much more into e-adoption and e-development work.

Jeff Moore: That's where we would work with things like the Regional Minister-that's that strategic/delivery divide. The strategic bit is: have we got the right level of broadband infrastructure and coverage? Strategically, if we haven't, we will lobby Government, work with BT and other providers, and get Phil Hope to work on our behalf to make sure the East Midlands is wired up. We will not pay or deliver in that wiring up. But when it is wired up, we will deliver e-adoption policies and products, because you can take the horse to water, but you've got to find a way of making it drink to make our businesses competitive with broadband.

Chairman: Thanks indeed, Jeff and your team. It's been a long session, but we have picked up, as you'll all have gathered, a lot of queries, comments and praise. Don't think of us too harshly, if you think that we have just plucked out the areas of criticism. We wanted to drill down to some of those and get your responses. That has been immensely useful. We have pretty well concluded our programme of evidence taking so far as EMDA is concerned. We've got some work to do now to produce the report. We will get the report out before the parliamentary recess. I think it will require a lot of work and activity to do that, but bravo. We are going to work fairly hard at that.

Thank you very much for the time that you have given us. You've had two long sessions-one at Notts County Council and one here today, and that's been immensely useful. We are very appreciative of your time and imposing on you yet another layer of scrutiny, but that's the way of the world. Thank you.