Examination of Witnesses (Questions 240-248)
TIM GEBBELS,
RICHARD HUTCHINS
AND MICK
LAVERTY
29 JUNE 2009
Q240 Joan Walley: I am a bit unclear
about how people can access that. I know that there have been
questions asked, for example, in North Staffordshire about how
to access that. Is it easily and readily available?
Richard Hutchins: There are six
or seven operators of CDFI loans in the region. We can certainly
provide you with a list of them. Alternatively, Business Link
is fully aware of the CDFI operators in the region.
Mick Laverty: It covers the whole
region as well. Every part of the region is covered.
Q241 Joan Walley: Do you think
that more could be done with the European funding that is available?
Richard Hutchins: More European
money is going to be matched in CDFI loans to AWM or local authority
funding.
Q242 Joan Walley: So it will be
down to the local authorities in terms of how that gets picked
and taken off.
Richard Hutchins: Not exclusively.
Some of them are able to put some of their own funding into CDFIs,
along with additional AWM funds. Just in the past week, they have
proved to be an additional tranche of the public money. We can
match all of that to European money. The programme is getting
on to a footing where it is able to cope with the doubling of
demand.
Mick Laverty: The European programme
has been designed to support the economic strategy, so all the
key drivers in the strategy around enterprise, innovation and
skills are all reflected in the European programme, and that is
all about improving the productivity of the West Midlands, so
there is a real consistency there.
Q243 Joan Walley: Do you feel
that the loans offer good value for money? Are you also assessing
the local authorities, so that you can be sure that all of them
are pulling their weight in terms of making sure that they are
contributing to it?
Mick Laverty: The CDFIs do offer
value money. There has been some evaluation of their work, which
bears that out. As for assessing the local authorities, we do
not do that. It is not really our role, which is to work with
the existing providers in all parts of the region to support them,
not replicate what they are doing. We are not trying to confuse
the landscape.
Q244 Joan Walley: But who would
be making sure that there was access to it right the way across
the region, and that there were no black spots that stopped access?
Mick Laverty: We have made sure
that a CDFI covers every part of the region, and I can say categorically
that a CDFI covers every single part of the West Midlands.
Richard Hutchins: The regional
finance forum has oversight of this work, and it has local authority
membership as well from Coventry.
Q245 Joan Walley: It would be
helpful to have the details of how it is working. Finally, what
other products can AWM provide as an alternative to the banks,
as a source of finance?
Mick Laverty: There is a Government
grant scheme called the grant for business investment—it
has recently changed its name. It used to be described as regional
selective assistance and then selective finance investment in
England. It is a national grant framework that we administer on
behalf of the Government, who put a percentage of funding into
a company if that company is looking to increase its capital expenditure
or buy new equipment to safeguard or create new jobs. There is
a scheme when the amount of money that we are spending on GBI
grants is going through the roof and the increase is increasing.
There is another grant scheme that is meeting a demand, and we
are just having to manage that demand very carefully.
Q246 Chairman: In a moment, I
shall ask you a little about the future and how you see it. However,
before coming to that, will you say a few words about partnership
working in the region? A lot of your answers have referred to
the task force, the regional finance forum and other networks
that are operating at the moment. How are they working? Do you
think that the links between them are as robust as they should
be? What lessons have come out of the, albeit very different,
context of the MG Rover Task Force that have been translated successfully
to the new working task force arrangements? Looking hopefully
to an upturn in the not too distant future, what things can we
learn about how such things work, who should be on them and how
they can communicate more co-ordinately in the region?
Mick Laverty: The first thing
to say is that it is not a given in any situation that partners
all work well together. You have to keep reminding yourself of
that, because actually in this region, all the partners work extremely
well together. I know from discussions with other RDA chief execs
in other regions that that is not always the case. We work well
with the Government Office, the Learning and Skills Council, the
Homes and Communities Agency, the Highways Agency, the Department
for Transport and local authorities. There are some public sector
partners slightly outside that club which we would like to get
inside, but those are the core members and work well. The health
authorities traditionally have been slightly apart from us, and
in the current climate it would be useful to get them in because
of the amount of money they spend on procurement and innovation.
They are also big landowners and regenerators in their own right.
There is some more work to be done there. It is not a given that
the partners work well together, but in this region they do. That
is one of the things that people almost take for granted. Ian
set up the task force, and there will be other regions around
the country where in the first few months, the partners who did
not work particularly well together, right from the very start
have taken it as a continuation of what we do and that we work
well together. The most recent and obvious manifestation of that
is the regional funding advice that we signed off and sent to
the Government. It identified those impact investment locations.
To have a region come together and pick 20 investment locations
is pretty impressive, given the vast number of projects that could
have been picked. The region is enormous and 20 investment locations
does not mean that everybody gets something—it can't mean
that everybody gets something. We came to a conclusion as partners
that those were the most important investment locations before
us as a region going forward. That is a strong manifestation of
our realism about the way public finances might be, and about
what we need to do to get some of these projects away. It is no
surprise that out of the 13 projects that have recently been announced
by the LSC, we have got two. Out of 13 you might expect every
region to get one, but we have got two and our two are near the
top of the list.
Joan Walley: You wanted three.
Mick Laverty: Yes, it is disappointing
that we didn't get three, but two out of 13 is pretty impressive
because of the way we prioritise our spend. It is a clear signal
to the Government—this is what we will all sign up to spend
our money on. In terms of the lessons going forward, you can never
have enough partnership working when you are in a crisis. We know
that from our experience. MG Rover is the most recent experience,
which is why the partners came together very quickly, and started
working together right from the off.
Richard Hutchins: Working with
the business community through all the advisory boards, the Regional
Finance Forum, the Enterprise Board, the Innovation and Technology
Council, the Regional Marketing Board and the Council of Economic
Advisers, having a business voice and relationships with the business
representative organisations is absolutely critical.
Q247 Chairman: One of the things
that some of the business organisations have said to us is that
they felt that there needed to be more direct business representation
on some of these bodies. How would you respond to that?
Mick Laverty: There are two things
going on here. There is a task force which is mainly the public
sector partners co-ordinating our interventions. There is the
West Midlands Council of Economic Advisers, which is predominantly
business, and the business organisations which, through Ian, feed
up to the Government what business would like and what it wants.
At the last session of the task force, Ian brought the two together.
Nobody has been excluded, and there is a role for the public sector
organisations to be brought together, which Ian does, to make
sure that we are working as collaboratively as possible. Lots
of the things that we talk about as the eight public sector organisations—the
big eight, as Ian refers to them—in the region, will be
of little interest to people outside ourselves. It is not sensible
to have everybody there observing everything we do all the time,
but only when it is appropriate—mainly through the Council
of Economic Advisers, which is where the business organisations
and businesses themselves get a voice straight through to the
Government via Ian.
Q248 Chairman: This is the last
set of questions, and it really is about the future. A number
of the witnesses we have had before us, whether that be Unite
in its evidence, or in a different context such as the West Midlands
Developers Alliance, have said that actually, if you look at the
titles of what the region needs to be doing in the future—it
needs to be building a low-carbon future and maximising its impact
in environmental technologies—the titles are all there but
they are all saying that we somehow just need to raise our ambitions
about really delivering what we can deliver there. They were saying
that it is not entirely within your control. Many of these things
are perhaps broader matters for Government nationally. For example,
Unite were talking again about LDV. They were saying that if we
are serious about moving to green technology around van production—LDV
goes back to my previous question about strategic companies—something
more needed to be done there. In relation to the WMDA, they were
saying that we could do an awful lot more in relation to making
homes more carbon neutral in the future. How would you respond
to that? Are we doing enough to build and realise the kind of
vision for the West Midlands in the future coming out of the current
recession that your documents, Government documents and the rest
of it say?
Mick Laverty: The answer is clearly
not. The West Midlands is not outperforming the national average.
The RES clearly sets out the issues. This region is not innovative
enough. We have not got enough product and service innovation.
This region is not entrepreneurial enough. This region has a problem
at both ends of the skills spectrum. We have less people with
high-level skills and more people with no skills or low-level
skills than most other regions. We have not had the investment
in infrastructure that we need. We have got too many people who
are workless. We know the issues. The big challenge for us is
getting businesses in some of the areas that Joan has mentioned
in her constituency or in the black country to realise that investing
in the skills of their work force is not a cost to the bottom
line. It is a benefit to the bottom line. There is the challenge.
We know what we need to do. It is just trying to get momentum
behind enough businesses. It mainly is the private sector. Yes,
it is great to have the public sector efficient. Yes, it is great
to have the public sector innovative, but the public sector is
not the wealth-creation sector. We have to get a groundswell of
businesses systematically innovating their products and their
services, systematically investing in their work force. We have
to get kids coming out of school systematically looking at setting
up their own businesses. We have got to get people who have had
more than one generation of not working breaking out of that cycle.
We know the issues. But the direct answer to your question—is
it working—is no, because we would not be near the bottom
of the league table if it was working. But does that mean we do
not know what to do? No. We do know what to do; we just need to
all pull behind the RES, because it sets it all out there. It
is not talking low-carbon jargon stuff that confuses people; it
is around skills and innovation. It is things that people can
understand. It is in the RES. We just need to get behind it and
deliver it.
Chairman: On that, thank you very much
indeed.
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