Examination of Witnesses (Questions 80-93)
SOUTH EAST
CHAMBER OF
COMMERCE
29 JUNE 2009
Q80 CHAIRMAN:
We no longer have a Regional Assembly. We have a Leaders' Board
overseeing the role of SEEDA. Is that an improvement or not?
ROSS
MCNALLY:
The jury is out on whether it will be an improvement. We as stakeholders
had quite an influential voice in the Regional Assembly. We were
not over-happy with the Regional Assembly, but that is probably
because culturally we were not entirely used to working within
those kinds of political environments. We would try to act not
politically but pragmatically, and other bodies in the same forum
were obviously, by their very nature and by necessity, political
organisations, so there is a cultural issue between the two, but
I think that we did a pretty good job in the circumstances. We
welcome the sub-national review. It has certain impacts as a consequence,
so you cannot have both arguments. We recognise that sub-regionality
in the region is very significant and important, so we are happy
that the changes are taking place, but we just want to feel that
there is greater representation of the business voice. How one
achieves that is a matter for debate, because I do not think that
having some regional arc that is going to make any real difference
is the answer. The answer is a protocol for real business engagement
at every level, so that the voice of business is heard in the
same context as the voice of the voting public.
Q81 CHAIRMAN:
When we had the Assembly, there was a protocol for stakeholder
consultation and a method by which business, the trade unions
and the third sector were involved in discussions. It was put
to us at the time of the sub-national review that that protocol
and those forums had disappeared. Since the leaders' group has
come into effect, has that protocol been reconstituted? Is there
now a mechanism through which business is consulted?
ROSS
MCNALLY:
The only mechanism that I am aware of is a couple of seats on
the main strategy board. That is in the EEF report. I do not think
that they are even voting seats, so the opportunity to directly
influence and have a vote at the table has gone. We will live
with that, but what we would like is a protocol, a template if
you like, agreed and formulated at regional level, whereby local
authorities, county councils and the region somehow engage the
voice of business, and other stakeholders as well, in that protocol.
We would like a template that everybody could sign up to and say,
"Yup, we know what it's doing, and we know why it's there".
Q82 CHAIRMAN:
Since the Leaders' Board has come into existence, has anybody
contacted you to discuss setting that up?
ROSS
MCNALLY:
The only place where that was discussed was in our South East
Business Forum. It was discussed with representatives from both
SEEDA and the Leaders' Board. It therefore could be a work in
progress, but I do not know.
Q83 CHAIRMAN:
So the situation now is that previously there was a formal mechanism
for consulting business, the trade unions and the third sector
but there is no longer a mechanism in place, and, as far as you
are aware, there is no completed piece of work to put the mechanism
in place.
ROSS
MCNALLY:
Yes, not as far as I am aware, but that may be ignorance.
CHAIRMAN: If
you are not aware, how could there be a mechanism?
ROSS
MCNALLY:
Exactly. Perception is all.
Q84 CHAIRMAN:
So what needs to be done in practice to put that in place?
ROSS
MCNALLY:
The great joy of having all the local authorities meeting in this
representative grouping is that there is suddenly the ability
to say, "Let's have some consistency right across the region,
and in exchange, here is a greater accountability and responsibility
for economic development. We will give you a business engagement
on the other side of that table." We need to agree a template,
and for it to be agreed that it will be implemented at local level.
I am not going to determine what that looks like, as that has
to be negotiated from both sides of the table. Bodies like the
chambers of commerce and the Federation of Small Businesses, and
all our other regional business bodies, would be very happy to
get engaged with such a shape and structure.
Q85 CHAIRMAN:
But prior to the sub-national review, the chamber, the trade union
movement and the third sector actually worked quite hard to make
it clear that you needed the mechanisms by which you were being
consulted to be replicated under the new arrangements. From what
you are telling me, although there was something in the sub-national
review saying that there should be a mechanism for consulting,
actually there was no replication of that. That mechanism has
just disappeared.
ROSS
MCNALLY:
Yes, that would be my interpretation. Who is accountable for that?
There is a political reason why that may have happened, but perhaps
the RDAs should have been more interested in ensuring that that
engagement continued because it had real economic development
value.
CHAIRMAN: But
equally, the Leaders' Board ought to have insisted on that.
ROSS
MCNALLY:
Of course.
Q86 DAVID LEPPER:
Are you aware from colleagues in other parts of the country and
other regions about whether the kind of structure that we have
just been talking about has actually been put in place in other
regions following the setting up of Leaders' Boards and so on?
ROSS
MCNALLY:
The only thing I know—I have not analysed and studied this,
so I cannot say that it is absolute knowledge—but anecdotally,
I know from other chambers of commerce that at the time the changes
were made, the local authorities started to engage businesses,
particularly chambers of commerce, very strongly in creating bodies
that were genuinely engaging the business opinion. I know that
because contracts started to be put in place. Literally, funding
was put in place to engage the business voice so that it could
start to inform decision making. That was a bit of an urban response,
which makes sense.
Q87 CHAIRMAN:
We have received submissions saying that the RDAs should be more
strategic rather than delivery bodies. Is that your view?
ROSS
MCNALLY:
Yes. I think it is. Again, we could debate what we mean by that,
but I would say that strategy is really what it is about, provided
that they recognise that they are not just sitting there with
a nice piece of paper describing some strategy, but they can then
go out and work. We have new skill sets to leverage the relationship
and make that strategy have meaning on the ground. That is where
the principal change needs to take place.
Q88 CHAIRMAN:
Can you give me any examples of where that strategic role is working
well or badly?
ROSS
MCNALLY:
It works best where regeneration takes place. There are examples
where regeneration areas naturally look for a strategic direction
from the RDA, a partnership engagement with the local authority,
and an engagement with the local community because there is a
recognised need. Therefore, if large sums of inward investment
from the RDAs come into those communities, it is quite important
that they are engaging. So you would see a bit of best practice
around the regeneration areas. I would just say that a lot more
of that kind of approach should actually be taking place elsewhere,
but not entirely, because there is perhaps a little bit too much
of: "We've come into the regeneration area and we know best,
because it was failing as an economy before we got here."
That kind of attitude is a problem, but that's something that
you accept if you're going to get the benefit of the inward investment.
Q89 CHAIRMAN:
In my own area in east Kent there has been recognition of the
need to regenerate that area. In my own constituency, two—one
in the centre of my constituency and one on the outside—very
good serviced business parks have been created by SEEDA. Both
of them are completely empty.
ROSS
MCNALLY:
Is this the Betteshanger?
Q90 CHAIRMAN:
Betteshanger is one of them and the other one is the so-called
EuroKent Business Park, which are fabulous. Hopefully, one day
they will be teeming centres of industry, but at the moment they
are growing potatoes, by and large.
ROSS
MCNALLY:
I did ask, because I was interested in the regeneration areas.
I happen to live and work from Hastings old town, so I have some
sense of this, but I'm not working in those areas. I got an e-mail
from Peter Hobbs, the Chief Executive of the Channel Chamber of
Commerce, and he commented entirely on the two parks that you've
mentioned. He said that they look great but there are no businesses
in them, which is a bit disturbing. His conclusion was that it
was a tragic waste of money—SEEDA had not sought support
from the Chamber or any other support organisations to resolve
these problems. That's what he said, which tends to lead you to
the view that if you start to engage the business engagers, our
view is that you might start to get greater success. Rather than
doing things in parallel, they have to be threaded through.
Q91 CHAIRMAN:
Just looking at that as an example, how could it have been done
differently? My guess is that in both places the local chamber
would say that they knew these business parks were being built
and they never stood up and said, "Stop. This is a waste
of money." They perceived them to be a good thing. To be
fair, 10 years from now, looking back, they might turn out to
revolutionise the business landscape in those areas. We are looking
forward and perhaps being a little over-critical, but how would
engagement with the chambers and the big business sectors have
changed the outcome?
ROSS
MCNALLY:
First, I don't think they would have stood up and said, "Don't
do this," because that's not necessarily something that the
business community would have wanted to have heard, or in the
long run would have been the wise thing to do. Inherently, if
you're going to do anything from an RDA, there is risk, and we
welcome that risk. The more you try to avoid the risk, the less
you're going to do and then you're no longer an RDA. You have
to accept that some things are going to work and some are not.
Like any business development that any business would do, the
RDA should to an extent be taking those risks. What we are saying,
however, is that long before problems were identified, businesses
would have been engaged around those. Maybe more businesses would
have been persuaded that this was a business opportunity for them
to grow and to be placed there. Maybe the kinds of units that
were put on there would have been different. Maybe the streaming
of when they came on might have been slightly different. There
would have been the subtle distinctions as to how it rolled out
and how it worked, and maybe where there's an interest in inward
investment, the parks would have been fit for purpose for some
inward investment opportunities. It's all about joining everything
up, and the RDA joins its bits up, but is it joining up the real
economy out there? It's very difficult to do, especially on what
is literally a tiny budget for a massive economy, but you should
therefore get in there, share agendas and be talking round the
table. I have experienced this for many years, where something
is said by somebody in the context of a meeting that actually
transfers a problem into an opportunity and suddenly it becomes
a success. We all know that happens in life but you have to get
yourself out there, in the real economy, to make that happen.
CHAIRMAN: In
this particular case, on one of those business parks, or adjacent
to it, they have created an innovation centre for small businesses—in
an incubator. That is full. That is great.
ROSS
MCNALLY:
Are they moving out and growing?
Q92 CHAIRMAN:
Exactly. The business parks then need to be filled by going out
to places such as India and China—the wider world—and
attracting inward investors to build their factories. What is
it that SEEDA needs to be doing?
ROSS
MCNALLY:
SEEDA's strategic position would be to create a world-class SME
community for a world-class region. Inward investment wants to
come in to a community that has fantastic supply chains—the
skills are all in the area, rather than just being brought in
by the inward investment itself—so how we engage businesses
is vital. We need to engage them to make them more enterprising
and more willing to reinvent themselves at different stages of
their life cycle. We look at businesses and see entrepreneurs
who, after years 7 and 8, have to reinvent their entrepreneurial
spirit from within. That kind of engagement is absolutely necessary,
and no one solution will make it happen. It is about having as
many activities and engagements as we can, and things happen out
of that.
Q93 CHAIRMAN:
Which brings me to my final question. You say there is a danger
of SEEDA becoming "SEEDA-lite". Exactly what do you
mean by that, and is it a good thing or a bad thing?
ROSS
MCNALLY:
It is a bad thing. It would take the existing framework and structures
and—in response to Government saying that funding is tightening—it
would shrink them down, maybe taking out one or two key areas,
rather than completely reinventing the way it thinks. It should
consider, if it had been given a proportionately smaller budget
10 or 15 years ago when it was first mooted, what it would have
looked like. Again, that is difficult to do. Businesses are being
asked to do it—that is the reinvention of a business for
the new economic conditions. SEEDA must also reinvent its business
model for new economic conditions. If your role is economic development
and you have less money, the best thing to do is to utilise that
money to leverage all the other activities that are happening
out there to get more bangs from those bucks. It is more of a
wholesale model than a direct retail model. It is about utilising
the others to achieve the economic development.
CHAIRMAN: Thank
you very much for your evidence.
MR SMITH:
My apologies for missing the bulk of your evidence, and for arriving
late, Chairman.
CHAIRMAN: We
will have a five-minute adjournment before we take evidence from
Hastings.
| 
