Examination of Witnesses (Questions 139-159)
GOVERNMENT OFFICE
FOR THE
SOUTH EAST
AND SEEDA
6 JULY 2009
Q139 Chairman: Welcome everyone.
Would you like to start off by introducing yourselves for the
record?
Jonathan Shaw:
Jonathan Shaw, Regional Minister.
Pam Alexander: Pam Alexander,
Chief Executive of SEEDA.
Colin Byrne: Colin Byrne, Regional
Director of the Government Office for the South East.
Q140 Chairman: It is good to see
you here. Do you want to start off by making a statement, or just
answering questions?
Jonathan Shaw: I am happy to make
an opening statement, Chairman. I am responsible for a two-way
flow of information providing a clear sense of strategic direction
for the South East and giving the region as a whole a voice in
central Government. Collectively, Regional Ministers ensure that
Government policy takes account of the differing needs of the
nine English regions. To do this, I need a clear understanding
of the South East and what it means for the Government, and I
pick this up primarily from people in the South East with whom
I have had the privilege of working as Regional Minister for the
past two years. Our region is a great region. It is a locomotive
of the national economy; it has high-calibre manufacturing, and
an excellent service sector. Quality of life is high for many,
and people want to live here. Businesses want to come here, and
employment rates remain high, despite the recession, at 82.3%
for men and 73.3% for women. Of course, as colleagues are only
too well aware, there are many challenges for our region, with
pockets of severe deprivation and high unemployment, as Committee
members know from their own constituencies. There are skills shortages,
high costs, particularly in terms of housing, pressures on infrastructure
and new pressures arising from demographic change and climate
change—those are the sorts of messages that I have been
trying to get across. It is important that we ensure that the
flow of information gets to every part of our economy and to every
community. We do not want to see any business fall over where
that could have been prevented with the range of different Government
schemes that there are to help, and, indeed, we do not want to
see any family lose their home, again, if the schemes that we
have put in place could have helped them. Skills and employment
have been my priorities over the last two years. What was illuminating
was a visit to Slough, where only a fraction of the local community
is working in the large companies located there, because they
do not have the skills that are needed. The location and the infrastructure
are first class, as are the businesses, but as I say there is
a disparity. Skills are an essential part of my job. We have implemented
the sub-national review, which I know you have spoken about, I
have established the South East Economic Delivery Council, bringing
together all partners, and I have worked in partnership with the
South East England Development Agency and colleagues in the Government
office. There is more that I could say, but I will use that in
my answers to you.
Q141 Chairman: The terms of reference
for this inquiry are SEEDA, the regional economic strategy and
issues to do with business and employment in the region. I think
it would be helpful if you could each encapsulate in a sentence
or two the different roles that you play in the region, because
there is some confusion as to where SEEDA and the Government Office
for the South East (GOSE) sit, and how the Regional Minister sits
between the two.
Jonathan Shaw: Well I do, and
I am. GOSE is the Government in our region, working to ensure
that Government policies are delivered on the ground. An example
of that might be the local area agreement. GOSE will sit down
and negotiate with local authorities—there are 19 such agreements
across the region—to determine their priorities in relation
to what the Government priorities are. Sometimes, there will be
a gap—housing is often one, where the authority is less
enthusiastic about the number of houses that it needs to see provided
for the local community, despite, perhaps, high housing waiting
lists—and GOSE will help to reach an accommodation of that.
In addition, working on the crime and disorder agenda, as well,
it will ensure that various initiatives that come out of the Home
Office are brought in at the community level. I guess with SEEDA,
it is agreeing the overarching RES, which I know you are aware
of, and ensuring it is implemented on the ground—also focusing
on the priorities for that organisation. My sitting in between
those bodies is to bring them together with political interface,
because most organisations, be they private, voluntary or public,
will organise themselves now around the regional areas. We can
have discussions about whether parts of it should be in the South
West or Eastern regions, but I do not think anyone is seriously
discussing that. People want a political interface; as well as
meeting the business community, they want to talk to a politician
rather than to Government offices.
Q142 Chairman: So, GOSE is the
Government in the region, but SEEDA is responsible for business
policy in the region. Presumably, that is, to some extent, the
Government's business policy, so where does precedence sit and
who resolves an argument?
Jonathan Shaw: SEEDA has quite
a lot of autonomy, particularly with its single pot. Pamela will
say that it has got smaller, which it has, but it still has quite
a lot of autonomy up to £10 million. Pamela, do you want
to say something?
Pam Alexander: Yes, thank you.
SEEDA is an organisation which is driven by funding from Government
to achieve the Government's objectives, which are twofold: to
increase the growth of every region and to reduce the disparities
in growth between the regions. As the fastest-growing region,
clearly, we focus on the former, but because we have, as the Minister
has already said, substantial disparities within the South East,
we are also engaged in looking at how we can help those parts
of the South East that are not growing as fast as others. We have
a business-led board, the majority being business people and the
chair being a business person, so there is a real looking of both
ways, if I can put it like that, to be business driven as well
as delivering Government policy, because our role is to make those
interventions which the public sector can best make to support
the market and enable it to work better. I would suggest there
are probably three ways in which we do that—we work to intervene
directly with businesses, either to support individual businesses
or to support sectors, and we work directly with place, so whether
it is the coalfields regeneration programme or working with our
Diamonds for Investment and Growth, we work with the local authorities
and all the other local partners to make the most of the opportunities
they have in that place and to identify the gaps that the market
is not best able to bridge. Our relationship has strengthened
hugely with the role of Regional Minister, which Jonathan has
filled with great energy, because it enables us to have a representation
in the region at political level which we cannot do for ourselves.
We are not a democratically elected body—we are absolutely
an appointed body—and whilst we are funded by Government,
there is a distinction to be drawn there. We also have a very
close link with the Government office, which is not only our voice
in Whitehall in relation to the region itself and what it is looking
to achieve, but is also a very important conduit for us for some
of the discussions we need to have about specific policies.
Q143 Chairman: So, you answer
to your board. If your board forms a view as to a policy it wants
you to follow which is at odds with the Government's view, how
does that get resolved?
Pam Alexander: My board is appointed
by the Government and my Chair is appointed by the Prime Minister;
therefore, fundamentally, we are there to respond to the Government's
desire to have a regional development agency. The Government have
been very clear, since we were created, that they want that regional
development agency to respond to the needs of businesses and communities
in the region, so it is our job to ensure that the Government
are aware if the policies are not those which our businesses or
local communities seem to be seeking, and to make sure that we
represent the voice of the South East as strongly as we can in
Whitehall. For example, we contribute the most to the national
Exchequer, and we create a voice for trying to ensure that some
of that comes back to the key infrastructure needs of the region.
Our job is to resolve those tensions, if there are tensions, between
the needs of the region and what Whitehall sees as the needs of
the region.
Q144 Chairman: So, all three of
you feel that the relationship is working?
Jonathan Shaw: These two have
been at this for longer than I have—
Chairman: They were at it before you
were there.
Jonathan Shaw: Exactly. I feel
that it does, because there is a great deal of consensus across
the South East, working with the range of different partners,
be they in local government or in the voluntary or private sectors,
about the priorities of the South East—Pamela spelt those
out. If you create the right forums in which that discussion can
take place, from those forums people see cause and effect. An
example would be credit insurance. Certainly, in the meetings
that I chaired with the South East Economic Delivery Council,
which has all the business community on it, that came up time
and again, and we were able to feed that in—me as the Regional
Minister to the Council of Regional Ministers and then up to the
National Economic Council—so there is a direct link. They
can see cause and effect, and I think, as a consequence, they
can have some confidence that we have got the right infrastructure
in place. The business community is pretty pragmatic, and it seems
to operate with the view, "Let's get involved and have that
dialogue; let's put our case forward and engage." Since the
new infrastructure—and my ability to have that interface
as a politician—has been formulated, it has proved very
worthwhile. For the business community, there have been some dividends.
Q145 Chairman: Let me put two
alternative views to you, one at a time. First, the Engineering
Employers Federation said to us that the regional development
agency had the advantage of being able to represent regional interests
better than if that were left to national Government. I am assuming
that you would agree with that as a justification for having an
RDA, otherwise the Government would not have them—do you
want to expand on that?
Jonathan Shaw: The EEF is an organisation
that I know well, and its chief executive sits on our delivery
council. It does not organise itself by administrative boundaries;
it organises itself by sub-regions or travel-to-work time. If
there were a reduction of the size within which we operate at
a regional level, or if we just operated at a sub-regional level,
I think that the EEF would find that far too demanding of its
time and bureaucratic. It can only put up so many people for so
many meetings, and one has to get the economies of scale right.
Very often, that will be at a very local level, but you need to
operate at all the levels and determine what is most economic.
As I say, generally these days, national organisations will have
some form of regional structure, and they see—I am sure
most people would agree—that it is better that we all have
the same parts of England, rather than lots of different parts,
because that lends itself to forging better partnerships and understanding
priorities.
Q146 Chairman: Okay. An alternative
view was put to us by local authorities that said, "This
is all a waste of time; get rid of the regional development agency
and leave it to us."
Jonathan Shaw: What I would say
is that from where, perhaps, some of those people were, to where
they are today, demonstrates a success for the RDAs, because once
upon a time they would very much work within their silos at a
district level, let alone at a county level. You are seeing the
emergence of cross-border working because of the RDAs and some
of the local government reforms that we have brought in. There
is a far broader understanding that people need to work collectively
to get the right economies of scale. We can have a debate about
where the region begins and ends, but the fundamental principle—that
you need to get a sizeable chunk in the South East co-operating
and working together for the benefit of community and business—is
evident from some of those local authority behaviours. Also, a
number of them would point to the success of the RDA in its leverage
and what it has been able to do to put people on the same page.
You were taking evidence from colleagues from Hastings, for example;
I read the transcript, and it was very positive about the impact
of Sea Space, the body that SEEDA set up, and what it has been
able to lever in. I have been to Hastings on a number of occasions
and seen that for myself. Without the RDA and without that broader
thinking, I do not believe that Hastings would have made the advancements
that it has to date—if we'd had a system that we inherited
in 1997.
Q147 Chairman: Just to finish
off this section of questioning, I think those same local authorities
would suggest that they know their areas better than SEEDA does.
Where cross-border working needs to be negotiated, GOSE could
provide a brokerage service to do that. Do you feel that is a
realistic way forward, Mr Byrne?
Colin Byrne: It is an interesting
debate that the region is having itself. A number of the leading
players in the region—I think that Councillor Carter, the
chair of the Strategic Board, is one of them—have increasingly
started to recognise the important role that SEEDA and GOSE play
in the region. That is a different role. Among my colleagues,
I play the role of being central Government's clear representative
in the region. Sometimes I have to give very harsh messages to
local authorities and sometimes I act as a policeman with them,
particularly over issues such as child safety. In other areas,
I play a partnership role. If we look at the example of the Partnership
for Urban South Hampshire, we see that until PUSH came along local
authorities traditionally did not work as co-operatively as they
might have done. It was SEEDA's involvement and, indeed, our own
that helped them come to a point where they recognised the economic
advantages of working together. Indeed, SEEDA has put in money
to facilitate some of that down there. Without that almost external
perspective, local authorities sometimes find it difficult to
work out where the advantages of working together are. Both SEEDA
and ourselves do provide that external perspective to very great
benefit in places like urban south Hampshire.
Jonathan Shaw: One of the best
examples of local authorities working together is in relation
to the decision by a previous incarnation—the regional assembly—to
identify through the local development funding that Hindhead tunnel
was a key piece of infrastructure for the South East. I think
that that involves £350 million. Who would have thought a
few years ago that that would have been a united response from
every single authority—83, or is it 84[1],
authorities across the South East? They said, "This part
of Surrey will be the recipient of all of this investment because
we can see it is not just of regional importance; it also has
an impact on our national economy." That is a good example,
but there are scores of others where we have got people to step
back and see where they sit in the broader picture. That has to
be of benefit to the communities that the local authorities look
after and to us all as citizens.
Pam Alexander: May I add that
I think this is a dynamic picture because what is appropriate
to different levels varies over time? At the moment, we are certainly
looking at where our focus should be and drawing away from some
of things we have done in the past. There are at least three different
levels at which if GOSE is the Government in the region, we seek
to be the region in Government. We are also trying to achieve
interventions ourselves. At the place-based level, for example—as
the Minister has suggested in relation to Hastings—it has
been about building capacity, going into Government, finding resource
and drawing it down into the area. Increasingly, it is also about
trying to help the area to work together in a way that will hopefully
help it to sustain itself into the future. At a level that requires
consistency across the region, but with local variations, we may
have economies of scale—for example, in the Business Link
contract—which can then be directed by local area agreements
at the local level. At some levels—for example, in relation
to our inward investment activity around the world—it makes
sense to have it at a regional level. In some places, it makes
sense to have it at a pan-regional level, so that, for example,
we can work with other Greater South East authorities or, in Milton
Keynes and the south midlands, with that whole area. The level
at which it is appropriate will change all the time.
Chairman: Okay. Perhaps we should have
some questions about the budget now, Mr Lepper?
Q148 David Lepper: It is true
that, despite what has been said about the importance of the South
East region in the national economy, SEEDA has the second lowest
budget of the English RDAs and, I think, the lowest budget per
head of population of any of them. Pam, when we met you and the
chairman in Kent back in May, we asked about the effects of the
cuts or reductions in budget that had been announced in the comprehensive
spending review. I think you told us about losing £52 million
off the corporate plan budget, so that you would be refocusing
priorities and taking proposals to the Department for Innovation,
Universities and Skills at, I believe, the end of May. Is that
process complete now? Have you presented a new or revised corporate
plan?
Pam Alexander: It is still in
draft, and it is still under discussion, but yes, we have worked
down that road to try and identify, where we have flexibilities,
what they should be focused on. Of course, as I said then, I believe
that a very large proportion of the budget that we have over the
next two years is already committed.
Q149 David Lepper: Okay. When
do you anticipate that your revised plan will be available for
taking to the Department?
Pam Alexander: Well, the Department
has the draft at the moment, and we are waiting for their comments
on it.
Q150 David Lepper: I see. Thank
you. You said that much of the major spending is committed for
the next two years. Does it look as if there are any schemes—perhaps
looking a bit further ahead than that—that you might not
be able to proceed with, or indeed any that you have had to call
a halt to already?
Pam Alexander: Indeed; already.
We have taken an approach that starts with our legal commitments.
Legal commitments are £212 million of the budget of £251
million, which is a very substantial proportion. When we did that
budget review, we had a pipeline of very much more than the remaining
gap. By the time we had identified those projects which were not
sufficiently far ahead for us to consider as part of that review,
we still had a pipeline of over £50 million-worth of projects
which we had been looking at. Our approach has been, first of
all, to identify whether there are other funding sources for some
of those. So, for example, we have worked very closely with the
Homes and Communities Agency to identify areas where they might
be able to come in behind projects. One is the Brownfield Land
Assembly Company, for example, which we set up to invest in small
housing sites in order to make them of sufficient critical mass
to be of interest to developers. With the new architecture of
the Homes and Communities Agency, we feel that it is more appropriate
that they take that forward. Although we will remain involved
in the company, they will be putting in the £4 million that
we had originally anticipated spending there. So there are some
examples like that. There are some very clear priorities which
we have set out, on the basis of a number of different things.
First of all, there is the evidence of the impact evaluation work
done by PricewaterhouseCoopers, which I think we discussed at
the last hearing and which suggested there are some interventions
where we get a really good return. Many of those were to do with
supporting businesses specifically, whether through sectors or
through inward investment or trade activities. We want to focus
on those areas where we can make the biggest difference, so those
will have a priority going forward, whether it is collaboration
in research and development programmes—we have a number
of those—or whether, as I said, it is our inward investment
activity, where we actually had the best year ever last year,
with 90 successes of companies attracted into the South East from
around the world. Our core purposes are very clear at the moment:
helping business to survive the recession and developing the capacity
to make the most of the upturn. That, again, will be part of the
priority in selecting projects to go forward. Then, our new focus
is on our core offer, the high-growth businesses that we can support
and the regeneration activities which we will give priority to.
We have given some very clear guidance already that the eight
diamonds for investment in growth and the four existing priority
regeneration areas, which we have set out, will be taking precedence.
So there is both functional and spatial priority within all of
that, and we have been working very closely with partners to try
and make sure that wherever possible, we manage an exit from those
things that we can't take forward ourselves.
Q151 David Lepper: Have there
been any points over the last few months where you have had to
say to the Minister, "In developing this revised plan, it
looks as if some really crucial things could suffer"? What
leverage can you, Minister, put on the Government?
Jonathan Shaw: I will say something
in respect of that. The reason why the South East regional development
agency has had some of its money taken away—all the RDAs
have—is that we have put it into other priorities to help
us get through the recession. For example, we have recruited more
people into Jobcentre Plus, because we have to give a good service.
We have to bring forward more housing, which you want desperately
in Brighton for your constituents, David. We are also making training
much more flexible and accessible. Those are decisions that the
Government have taken for the greater good, as it were, so that
we can grow our way out of the recession as quickly as possible.
Such an approach will not be without consequences. There are consequences
for us in the South East and for every region. As Pam has said,
some of the projects that were worked up and ready to go, such
as the one in Southampton, will not be proceeding now. Those are
difficult decisions, but the right ones in terms of the broad
economic policy for the country.
Pam Alexander: It has been very
helpful to know that we have a Regional Minister who is able to
spell out some of the difficulties that we may face if we were
to have any further raids on our budget, and to help us understand,
at a political level, how we can make this as easy as possible,
even though it is painful.
Jonathan Shaw: Of course those
reductions do not go down well in the region, but the extra money
coming into other areas is always well received. It is part of
our job to deliver that tough political message.
Q152 David Lepper: Twelve or 13
years ago, there was this perception about the South East that
because it was prosperous and doing well, it did not need the
investment that other parts of the country did. From time to time,
all of us here still hear that view being put forward. This afternoon,
you have all talked about the importance of the South East to
the national economy. Jonathan, is there still a battle to be
fought in terms of making sure that, across Government, the importance
of not only the economic dynamism of the South East but dealing
with some of those black spots and problem areas is still properly
recognised? Have we moved on a great deal from that period of
12 or 13 years ago?
Jonathan Shaw: I think that we
have. If you look at the spend in areas such as public infrastructure—whether
it is on transportation, hospitals or schools—you see that
we have done well. One of the questions that I have slightly anticipated
is the issue about the colleges. Of course, that is the difficulty.
However, let's not forget that £443 million has been spent
in our colleges. Now, 12 or 13 years ago, the total capital spending
for colleges was nothing. So, that in itself—getting on
for half a billion pounds—demonstrates investment. I can
point to a number of different projects, not least the channel
tunnel rail link, which will provide enormous opportunities for
the constituency of the Chairman and that of Mr Prosser in Dover,
not to mention my own. That would not have happened if we had
not been determined to build the first high-speed rail link in
this country in hundreds of years. I think that, absolutely, we
have moved on, but I am not complacent. Everyone understands the
differences within the region and between the regions. To the
west, in Oxfordshire, we have some of the highest levels of PhD
anywhere in the country. To the far east, in Steve's constituency,
we have one of the highest levels of households with no one in
employment anywhere in the country. There is every disparity you
could possibly think about in the South East.
Pam Alexander: I see our role
as ensuring that we focus constantly on the importance of the
South East to the upturn. If we do not grow the South East economy
at the head of the upturn, we will not grow the UK economy either.
We need the investment that will enable that to happen. The second
aspect is that we welcome the increasing flexibilities that we
have achieved to get decisions made regionally and sub-regionally
about Government spending in the regions. The Minister has already
referred to the Hindhead tunnel. That was one of the first areas
where the regional funding advice enabled us to say not only that
we want more money for the South East, but that we want it spent
on the things the South East feels are the most important. We
will continue to press for increasing flexibilities in the major
areas, particularly housing, transport and skills, which are the
three areas that all businesses identify as their most burning
priorities.
Q153 Gwyn Prosser: It grieves
me to bring us back from the high spots of the high-speed train
success to the low spots of budget reductions, but I want to stay
with it a little longer. You will know that when Lord Mandelson
appeared before the Business and Enterprise Committee and was
pressed about budget cuts in the RDAs, he said, "we have
dipped into their budgets from time to time." That Committee
recommended that if RDAs need anything, they need some sort of
security in terms of their budgets so that they can plan ahead.
Dipping into RDA budgets is no way to do that. Don't you agree
that that is the case, priorities aside?
Jonathan Shaw: I have to say that
they were operating in glorious isolation from the rest of the
world. Okay, so we continue with the budget as it is, but then
we do not have the resources to increase the number of people
working in Jobcentre Plus and we do not have the opportunity to
bring forward moneys for extra house building. People need houses
in your constituency. We need to keep construction workers working.
One can present this as budget cuts, but the money has been reprioritised
in light of the circumstances that we face in the recession. If
we just stood back and did nothing, saying, "No, we have
to continue in vain and there will be no change," we would
stay in the recession for longer. If you look at past recessions,
there is ample evidence to demonstrate that with active intervention,
you can make a recession shorter and shallower. That is what we
have to do so that we get back to a point where we can see the
further growth opportunities that we want for your community and
the rest across the country. Just to look at the RDA budget in
isolation is wrong. You have to look at how it interfaces with
the resources we have available for all priorities across Government.
Pam Alexander: I think you would
expect me to say that I have a responsibility to recognise the
constructive tension in the relationship and that, of course,
having secure budgets enables us to plan in a more sensible way
than having to respond. Having said that, all RDAs have been very
responsive to the needs of the recession. As we have had to reprioritise,
that is what we have done.
Q154 Gwyn Prosser: We all accept
that politics is all about priorities; that is the centre of it
all. But our priority in this Committee has to be the South East.
That is the way of the world. When Lord Mandelson was pressed
on that same issue, the Business and Enterprise Committee effectively
said, "Look, we want more money for these budgets."
To paraphrase him, he replied, "Well I will go back to the
Chancellor and the Chief Secretary and communicate your concerns."
Do you think it is part of your responsibility, as a champion
for the South East, to press the Treasury for more money for the
South East and for SEEDA in particular?
Jonathan Shaw: It is interesting,
because it defines part of the role. I'm not going to be outside
the Treasury with a board saying, "What do we want? More
money now. Rotten Government, why aren't you giving it to us?"
I am not going to do that, because I am bound by collective responsibility.
I ensure that there is a flow of information to the various partners,
and that information from partners in the South East comes up
the line as well. For example, businesses were finding credit
insurance difficult, and there were announcements in the Budget
about that. Pam has referred to the Hindhead Tunnel regional funding
allocation, which I am very much involved in. Most certainly,
the job of GOSE and SEEDA on the ground, talking to partners,
is improved and enhanced if they have someone right at the heart
of Government talking to Ministers, making sure that the priorities
and the messages are getting through. I do that a lot, whereas
it might take a little while longer through the traditional route—via
the civil service, up to the Department, which will filter that
information and perhaps provide the Minister with an interpretation
that might have been nuanced a little bit in the journey from
the region to the departmental Ministers. But, obviously, I can
get it straight from the Government office or from SEEDA, or from
other areas, and speak to colleagues directly.
Q155 Gwyn Prosser: In terms of
who gets what portion of the overall funding pot, David Lepper
referred to whether the South East is still looked upon as a prosperous
South East that has enough anyway. Of course, there will always
be arguments by Back Benchers in the House about where the money
should flow, but lots of us in the South East—the South
East chamber of commerce in particular—have made the point
that anything invested in the South East, because of its bigger
returns and compound growth effects, has a much more positive
effect on the national purse in terms of banging money into UK
plc. So that is all for the good and more money should come in,
rather than less, because of our relatively prosperous overall
position. What is your view on that?
Jonathan Shaw: There are funding
formulas across Government that you are familiar with, in terms
of where money is placed in respect of deprivation levels; for
example, in the region, two areas have the working neighbourhoods
fund—the Chairman's constituency and in Hastings and Rye—because
they hit the criteria in terms of deprivation levels. Your district
authority may make priorities for that within its own boundaries;
I know that the county does. My district council in Tonbridge
and Malling does that and prioritises where the need is greatest.
But in terms of the bottom line and investment, we have all had
an equal proportion in important things like access to the health
service. Whether you live in Birmingham, Norfolk, Manchester or
Dover, you don't wait any longer now than 18 weeks for your hospital
operation. So there are some things that are universal and some
that are, perhaps, means-tested. That is the way the benefits
system works, as well.
Q156 Gwyn Prosser: Lastly, do
you think it's appropriate that SEEDA should be accountable to
the Secretary of State in the Department for Business, Innovation
and Skills, rather than be responsible to someone who has representation
within the region—someone like you?
Jonathan Shaw: I work closely
with the chairman of the RDA and I have a role in the appointment
of the chair. As part of the Chair recruitment process, I am asked
to offer my recommendations to my colleagues in BIS. Obviously,
I am in a good position to know the qualities of the individuals
coming forward from this region . Those recommendations then go
to the Prime Minister. So I have that responsibility. That obviously
has an impact on the relationship, so there is a degree of authority,
but my work with the chair is a partnership. We chair the South
East Economic Delivery Council. I want to see business and the
Government working hand in hand, and I want the rest of the world
to see that, particularly at this time.
Q157 Mr Smith: Turning to the
regional economic strategy, I have a question for Pam. SEEDA has
now produced three regional economic strategies. What, if anything,
has been the change in emphasis with each one? In particular,
are you becoming more focused on particular sub-regions, or has
your focus stayed constant?
Pam Alexander: Of course, the
regional economic strategy is not SEEDA's corporate plan—it's
the strategy for the whole region. The region, which didn't exist
before 1999, has taken some time to work through its priorities.
Obviously, I was personally involved only in the last one, which
we delivered in October 2006. In the first RES, the organisation
had come together from English Partnerships and had a legacy of
regeneration projects and programmes, and we have a clear focus
on making sure that those and the single regeneration budget,
which we were also responsible for, clearly focused on the priority
regeneration areas in the region. That was very much the thrust
of the first RES. As we came through the second RES, we got into
a very clear focus on the drivers of productivity—employment,
skills, innovation and so on. That enabled us to become even more
clearly focused on how to lift areas of underperformance and lower
productivity, as well as investing in areas of high performance
and growth to get the highest return on that investment. The third
RES, which we produced in 2006, really focused on what it means
to be a world-class region—what innovation and investment
in science and technology and what the real drivers of top-class
innovation required—in a world that was also beginning to
address the value of quality of life in terms of the elements
that we market as being why companies and people enjoy living
in the South East. For the first time, we put a real meaning behind
sustainability in terms of sustainable economic development. We
looked at it in terms of sharing the proceeds of growth by trying
to grow productivity per head across the whole region. We also
looked at the ecological footprint, and there were clear commitments
that we would try to achieve growth that reduced, rather than
increased, our ecological footprint. In achieving that, we have
drawn together a group of bodies to implement the regional economic
strategy that have, for the first time, taken real individual
responsibility for the different elements of the programme and
the different targets in it. As we have monitored it together
through what we have called the living RES process—our conferences
of RES partners and the RES steering group, which has changed
over the period of delivering the RES to become its implementation
group and which will now, as we go forward, probably become part
of the economic development and skills board that will underpin
the regional partnership—we have got a much clearer focus
through looking at sustainable productivity on what not only drives
growth, but spreads it.
Q158 Mr Smith: Thank you. On this
focus on world-class performance, what other world-class regions
do you benchmark yourselves against? How are we doing?
Pam Alexander: We have benchmarked
ourselves against a group of regions around the world, most of
which are not capital cities but are closely linked to the capital
cities of their countries. We had an evidence base that we developed
in order to justify those selections—places such as silicon
valley in California, Shanghai in China and the heartlands of
Europe. In terms of the international league tables, we are slipping
down them, and we are slipping down them for two reasons: first,
the emerging economies are moving up them extremely fast with
rates of growth that are very dramatic indeed, and secondly, the
emerging economies of Europe have themselves been offering more
challenge than in the past. Also, we need to ensure that we get
an increasing return on investment and we need to be sure that
we are doing the things that will keep our businesses at the forefront
of global economies. We are reviewing the sectors in the South
East that will really drive that growth and ensure that we are
leading world-class development, whether it is in environmental
technologies, aerospace or the creative industries, to see what
our businesses need to support them in those markets.
Q159 Mr Smith: Thank you. This
is a question to the Minister. Is the question of the definition
of the identity of the South East still an issue or a problem,
and do you think the regional economic strategies are adding any
value?
Jonathan Shaw: As I said earlier,
there will be parts of the region where you could make a reasonable
argument that it should be in the eastern region or it should
be in the south-west or indeed in London. But the boundaries have
been around for a long time now—not boundaries put in by
this Government but by the previous Government when the Government
offices were set up. I think that most organisations now, particularly
since the advent of the RDA, have mirrored themselves around those
boundaries, not just here in the South East but elsewhere in the
country. It is far better for the RES, for the economy generally,
if you've got the public, private and voluntary sector around
the same boundaries, because that increases the likelihood of
co-ordination and co-operation and getting as many bangs for our
bucks, which we need to do in the South East, as we have heard.
I think things have moved on. Occasionally, when someone says,
"Don't you think this part should be in it?" I say,
"Shall we have a wholesale review, because we won't be able
to do it just for ourselves? How much time and energy will that
be? Or shall we talk about outcomes and what is best?" Then
it goes away. There is a small minority, but the majority of players
say, "This is it. Let's focus on outcomes."
1 Correction by Witness: The number of local
authorities in the South East is 74. Back
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