Examination of Witnesses (Questions 155-194)
BARRIE WILLIAMS, KEVIN LAVERY, LOUISE BENNETT OBE,
ANDREW LEWIS AND HILARY CHIPPING
12 OCTOBER 2010
Q155 Chair:
I welcome you to this inquiry, and thank you for your attendance
and your patience. I didn't identify all of you, but I suspect
you've been sitting at the back, so you may well have rehearsed
some of your answers. Can I just reiterate what I said in my
introduction to the previous panel of speakers? Obviously, we
recognise that you're here arising from the evidence that you
sent to us concerning your bid, but the fact that we have selected
you to be interviewed doesn't in any way imply that we are backing
a bid; it is not within our power to do so. Can I also say again,
do not feel that everyone has to answer every question? If we
feel there are any gaps, we will direct a question personally
to you. Once again, thank you for coming. Please give your name
and the organisation that you represent in order for us to check
our voice levels.
Barrie Williams:
Barrie Williams, Chairman of Business Voice West Midlands.
Kevin Lavery: Kevin
Lavery. Chief Executive of Cornwall Council, but I do have a
background in the private sector.
Louise Bennett:
Louise Bennett, representing Coventry and Warwickshire. I am
the Chief Executive of Coventry and Warwickshire Chamber of Commerce,
and I do have both a public and a private sector background.
Andrew Lewis: Hello.
I am Andrew Lewis from Newcastle City Council. I am here representing
Newcastle and Gateshead, and we are also a signatory in the North
East Economic Partnership.
Hilary Chipping:
I am Hilary Chipping, and I am here today representing the Businesses
Local Authorities Higher Educational Institutions and all partners
involved in the South East Midlands LEP. I have also had a background
in enabling sustainable growth across the Milton Keynes-South
Midlands growth area.
Q156 Chair:
Thanks very much. I'll open with the same question as
I did before. Basically, why are you needed? Why are LEPs there?
Could the local economies flourish without either RDAs or LEPs?
What is your particular offer?
Barrie Williams:
Shall I start?
Chair: Yes, you
can start.
Barrie Williams: I
think as far as LEPs are concerned, the economy has obviously
been failing; we haven't been creating the number of jobs that
we need to create, and as a consequence of that we need to look
at what we have been doing and take a new approach. I think enterprise
is the key to that, and enterprise at a local level. So we would
support LEPs to encourage and invigorate enterprise at a local
level as the means to accelerate the growth of jobs.
Kevin Lavery: Yes,
we do need them. I think successful economies can grow best if
the public and private sectors work together. The public sector
can't create the jobs, but it can help create the conditions for
the private sector to succeed, and that means that infrastructure,
planning and what have you have to be tied into the vision of
the business community.
Louise Bennett:
I think the private sector is opportunistic by nature, and I think
this is an opportunity for much stronger public-private working.
I think we can build on solid foundations, certainly in Coventry
and Warwickshire. I think that having the private sector at the
table gives you a stronger barometer of what's going on in the
economy, both locally and globally, and I think it gives us a
real opportunity to have very much demand-led local economies.
Andrew Lewis: I
think we recognise in the North East region the critical importance
of growing the private sector at a time when the public sector
is likely to become relatively less strong, and we don't feel
that can be delivered without a really strong partnership between
the public and private sectors. It can't be delivered from London,
but nor can it be guaranteed from individual local authorities
working alone, so we need to find arrangements to collaborate
across a geography that makes sense to deliver the public-private
partnership arrangements that we think will deliver economic success.
Hilary Chipping:
Yes, I think we definitely need LEPs, and what's more important
is that businesses across the South East Midlands feel that very
strongly too. We have learned a lot about delivering sustainable
growth across this area and the need to work together, and, as
some of the speakers earlier today said, in a time of scarce resources
it's going to be even more important to work in partnership and
use those resources effectively.
Mr Binley: Chairman, forgive
me--
Chair: Just a moment Brian.
Just before I ask my next question, as you can see, something
has been said that has stirred up Brian Binley. Brian, I'll let
you come in.
Q157 Mr Binley: Businesses
across the so-called South East Midlands LEP region are in support
of this proposal—what evidence do you have for that? Bearing
in mind that I run two businesses in Northamptonshire—or
part of two businesses in Northamptonshire; I do not run them
any more--it just is not the case.
Hilary Chipping:
A number of the developers that have played a big part in delivering
sustainable growth across the former Milton Keynes South Midlands
growth area are based in Northampton, and they were some of the
first private-sector people to write in support working across
the area. I am very well aware that there are differences of
view around the county council and the Northamptonshire Chambers,
but equally we've had a number of events to engage with small
and medium-sized enterprises, and large businesses, and hosted
one at Cranfield University and one recently at the University
of Northampton, so I think that there are differences of view
between business and the county council.
Q158 Chair:
I think it's fair to say there's divergence within the business
community on the appropriateness of LEPs to deliver; certainly
in my own local area in the Black Country the local business community
is burning to make something of it. We have had a submission
from Dr Marshall of the British Chambers of Commerce who said,
"We want to see areas like Newcastle and Gateshead, and Birmingham
and Solihull working more closely with their neighbours to try
to get a more sensible economic scale and geography." The
implications of that being that at least one major sector of the
business community feels that the submissions are too small and
inadequate. So what do you think are the main challenges facing
LEPs in delivery, and what do you think are the benefits of smaller-scale
working over and above those that were obtained by the RDAs?
Louise Bennett:
Shall I start, bearing in mind that comment was made by Adam at
the British Chambers. I think essentially what Adam was trying
to say was at the end of the day it has to be the right economic
geography when he referred to Birmingham and the Black Country
clearly working together. I suspect many of us are in agreement
that--
Chair: Sorry, he said
Birmingham and Solihull working together. It might have been
rather more inflammatory if he had said Birmingham and the Black
Country.
Louise Bennett:
I think he said Birmingham and the Black Country in the transcript.
Birmingham and Solihull are a LEP; they are working together.
I think what is important is having the right economic geography;
certainly for Coventry and Warwickshire, if I can talk about Coventry
and Warwickshire, we have a population of just under 1 million
population. We are like a mini-England, and we are very diverse
in our industrial base, in our people base. We have seven local
authorities, but essentially 85% of our people live and work in
our economy, so our whole focus, our whole world, is around wealth
creation and jobs for those people. If you talk to local businesses
on the ground, that is what matters to them—where they get
the people, have they got the right skills, how well they can
work with partners as the private sector? I think it's about economic
geography and not just about size.
Chair: I can come back
to Dr Marshall; he did say Birmingham and Solihull, but he did
say working more closely with their neighbours, which I presume
in this context means the Black Country.
Louise Bennett:
He did, bless him.
Barrie Williams:
I think that, as a previous speaker said, it's about areas of
business that have an affinity with each other. There are natural
communities of businesses that work around specific industries
very often, and whether they cross borders or are on the borders
or not, that's the group of people that want to come together,
because they are the people who can really make the thing work.
I think smaller LEPs is not a problem; I'd rather think that
if you had only 15 LEPs you'd almost have the RDA situation repeated.
So I think that they should be more community based, and they
should be depending on what the natural size is of the business
community and the industries that they represent.
Andrew Lewis: Can
I come in there, because Newcastle and Gateshead was also mentioned
by your correspondent? Let me say straight away that I think I
agree with him. It's really important that Newcastle and Gateshead
work very closely with our neighbours, and that's exactly what
we're planning to do, and indeed are doing. I introduced myself
as representing Newcastle and Gateshead, but also the North East
Economic Partnership, which was explicitly put together in order
to retain the cohesion that we need working across a bigger geography
where it really makes sense. We have identified a number of areas
where that's particularly valuable, and we want to see a deal
with central Government that would allow us to retain the critical
mass that we need across the North East region as a whole.
We are also very clear that Newcastle and Gateshead
has a critical role to play in that, because strong regions need
strong cities, and we have a lot of positive experience of working
together with our business base across the River Tyne. We would
see form following function; it is very important that we bring
together the partnerships that are necessary to deliver the right
functions, and that this arrangement is flexible enough to be
able to deliver critical mass alongside really effective local
delivery.
Hilary Chipping:
That is absolutely right. Also, from the point of view of the
South East Midlands, one of the challenges would be to engage
effectively with businesses of all sizes across a relatively large
area, and we've already put in place a number of ways of doing
that. I also agree with my colleagues that it would be important
to look at wider areas for particular issues. For example, from
a transport point of view, it is really important to look beyond
the South East Midlands, to join up with Oxfordshire and Cambridgeshire
for our east-west links, and Northamptonshire and Hertfordshire
to the south. It is a case of working with your partners, depending
on the particular issues that you're focusing on at the time.
Kevin Lavery: Perhaps
I could come in. I represent Cornwall, which is one of the smaller
LEP submissions, but I think size isn't the key thing here: ambition,
vision, funding and having a strategic approach to economic development
rather than a lot of very, very small projects, which have little
impact; having a real partnership between the public and private
sector; and having the ability to move quickly, rather than spending
lots of time trying to get everyone to agree on things, are more
important. In Cornwall we are quite small; we are smaller than
Birmingham, but actually, as a Geordie, we're bigger than Newcastle
and Gateshead. We have a population of 550,000; we've two local
authorities in the partnership; and the largest development company
in the South West region. We are 10 times the size of SWRDA,
and we manage a convergence programme of £750 million, so
there is some critical mass there.
We have also had a very high level of growth against
a low economic pace over 10 years, so we've been doing pretty
well, and we want that to continue. We have a series of landmark
investments, including most recently super-fast broadband, the
biggest broadband investment programme in Europe, but the key
thing is we know that we have to work with other areas too. We
have been talking to Bristol and the West of England about what
we can do together on creative industries and aerospace, and we'll
work with Devon and Plymouth on the A38 and the A30 connections,
because those things cross boundaries, and you have to work with
that.
Chair: You have partly
touched upon the areas I know Nadhim was going to come in
on.
Q159 Nadhim Zahawi:
Yes, Chair. I think that the previous panel touched upon the
critical mass question—we had answers from 800,000 to 1.2
million in a couple of submissions to 3 million from the bigger
cities. Louise answered it concisely in the sense that in your
area it's just below 1 million, and 85% live and work there.
Can I challenge the other panellists to just tell me what they
think the critical mass is for their LEP—whether it's GDP
or population?
Barrie Williams:
I find it very difficult to be reasonably specific about a figure
for critical mass, because for me it's the natural business grouping
that works together, so employment and the population, but also
the industries within that group and the supply chains that apply
within that broad area. I think the critical mass would vary
quite significantly from one location to another.
Hilary Chipping:
Yes. From the South East Midlands point of view, I think it is
very much about what works in terms of a functional economic area,
what works for businesses, what works for the health sector, and
transport. In terms of the South East Midlands proposal, at the
moment we have around 1.8 million people. We've made it very
clear that we're very much open to working with other authorities,
and possibly with Northamptonshire County Council and the other
two districts in Northamptonshire as well. In terms of the size,
I don't think it's a numbers issue; it's about what really matters
to people, how you can make something work effectively, so if
it is a wide area, you have to make sure that you really do engage.
Q160 Nadhim Zahawi:
Could I just push both of you on that? What does that mean? How
are you going to measure it, and what has the health sector got
to do with it?
Hilary Chipping:
Because we've been working as a partnership of authorities across
this area for some time, we have three PCTs that have been looking
at the important links between the hospitals across this area.
With a growing population, there's a need to provide more health
facilities. If you can do that across this functional economic
area and link it up with well-being, transport, better connectivity
and better broadband connections to support telecare, you've got
something that really works for the community and for businesses.
Andrew Lewis: On
your question about critical mass, when it is important and how
we deliver it, we are very clear that certain economic development
functions require critical mass. They need to be delivered at
sub-regional level, or regional level, but they need to cover
sufficient geography that they make sense to be delivered at that
level, and we would put in that category inward investment and
technology support, cluster development and some of the work that
we've done in the North East on access to finance through public-private
partnerships. These arrangements don't make sense over a relatively
small geography; they need a critical mass to deliver them. Equally
there are much more local, say, regeneration projects, where we
naturally want to work with a more limited set of partners at
a much more local level. I think it's quite important that we
don't see a one-size-fits-all geographical solution that ignores
the complexity of economic development in the modern world, which
requires different functions to be operated at different levels.
Q161 Nadhim Zahawi:
Just on that point of co-ordination, we heard in a previous evidence
session from the Chair of Advantage West Midlands that it would
be very difficult for six LEPs separately to address either the
issues of supply chain or of international competitive advantage.
Major industries, such as automotive and aerospace, which spread
right across the West Midlands, would not to wish to deal six
times with six different bodies. Do you agree with that?
Barrie Williams:
I agree with that in part in that I think from an enterprise point
of view, and sharing business contacts, experiences in different
markets and so on, the local enterprise model still works, but
when it comes to inwards investment, cluster management, innovation,
technology transfer maybe, and even European funding I guess,
I would see the LEPs as being not of sufficient mass in that situation
to do that, and I think a co-ordinating body would serve that
purpose.
Kevin Lavery: Can
I just come in? I think you're absolutely right. There are some
things that go beyond LEP boundaries. The example you quote,
the motor industry, goes well beyond West Midlands too; there
are very important parts of the industry in the North East and
the North West too. You're never going to get a boundary that
fits everything; economies are complex things, but there are ways
of making these things work. In Cornwall, we have a very important
renewable energy function, now and for the future. We'd be happy
to do things nationally; things don't have to be done in Whitehall,
but absolutely we have to be open-minded and not insular.
Louise Bennett:
I prefer to use the word "collaboration" rather than
"co-ordination". Co-ordination almost sounds like being
done unto, so I tend to think in terms of collaboration and LEPs
collaborating with each other. Certainly in our proposition we
clearly talk about the need to collaborate with other LEPs. I
can give you three very quick examples of that, which I gave some
thought to this morning: first, high performance engineering,
which is not just about Coventry and Warwickshire as a LEP; it's
also about Northamptonshire in terms of Silverstone, and brings
in MIRA in Nuneaton, which is part of Coventry and Warwickshire,
WMG—Warwick Manufacturing Group—which is part of Warwick,
the JLR R&D centre and Prodrive out in Banbury. It goes beyond
the Midlands, and I think there will be a clear need for collaboration
around the LEPs.
Tourism and leisure is completely different. We
have some iconic brands in Coventry and Warwickshire, obviously
with our town centres, but also with Stratford on Avon. We are
more likely to look to the Cotswolds in terms of collaboration
as we are to Birmingham for things like business tourism. You
can come up with lots of different examples and they are all about
matters of joint interest and collaboration, and the evolution
of that collaboration rather than structural co-ordination.
Andrew Lewis: I
have a really important case study that gets to the heart of your
question around the low carbon and offshore wind sector off the
North East coast. It requires a huge, effective public-private
partnership arrangement to make that work and to deliver the investment
that we know will generate tens of thousands of jobs. It requires
local action, because to some extent we are often owners of the
assets as local authorities—with the Port of Tyne, for example.
It requires integration of supply networks right across the whole
of the North of England. It requires innovation and support,
some of which is in a national centre, which is based in Northumberland.
It requires a really effective partnership arrangement to make
it work.
In the past One North East, our RDA, would have taken
the lead on much of that work, so we've got to respond to that
as local authorities and business networks to put together the
sort of partnership that will retain and keep the momentum going
on what is an incredibly important investment for us. Now, at
the moment, we are in a position where the LEPs' geography does
not really help us with that in the North East, so we are continuing
to work with our neighbours to see if we can put together a much
stronger partnership arrangement to be able to deliver really
important investment opportunities like that.
Q162 Nadhim Zahawi:
I absolutely get your idea about collaboration, and I see it in
business all the time, when businesses come together, but let
me just push you a little bit further. Do you really believe
that it is sufficient leverage to get a big voice with national
Government and with other outside bodies—the EU? Will you
have the ability, because of your size, to do that?
Louise Bennett:
I think if you have the right composition of any board or any
organisation, you can certainly punch above your weight. Coventry
and Warwickshire has been punching above its weight for an awful
long time, which is why we are considered to be the engine of
growth for the West Midlands, which is great, albeit we think
we would want to set ourselves against some more leading-edge
economies in the South and globally. I think it is about punching
above your weight, and that is about, obviously, getting the right
people around the table, but in Coventry and Warwickshire we have
been doing it for some time now, for about 15 years based on public-private
partnership.
Q163 Nadhim Zahawi:
Just a final one for Kevin. In our second evidence session, Kevin,
the Institute of Directors mentioned having received a letter
from Cornwall County Council saying, "Thank you for wanting
to engage with us about the LEP proposal. Yes we have filed one.
Sorry we haven't spoken to you. If it is granted, we will talk
to you." The local FSB also tells us that they and other
local business organisations have doubts about your bid, and would
prefer to include Devon. Do you want to comment on that? Do
you think there would be advantages to a larger LEP that did include
Devon?
Kevin Lavery: First,
in terms of the FSB and the IoD, the FSB at the time did support
the submission; the chairman of the local FSB branch was a signatory
on our bid. If you look at the bid, it's there. In terms of
the Institute of Directors, the local branch chair also supported
the bid. There are differences in the local business community;
there is no question about that. We had two months to prepare
a bid and carry out a series of consultations; I personally took
part in a lot of those. We've done an awful lot. I would say,
overall, we've had an awful lot of support across the business
community and it's demonstrated in the bid document and the senior
business figures who have got themselves behind it. So that's
the first part of your question.
In terms of whether Devon is better or not, we did
have extensive discussions with Devon. I think there's strong
local feeling. We've had a very successful recent track record
doing it at the Cornwall and Isles of Scilly level. We've been
the third highest GVA growth over 10 years. It's from a low base,
so we've done an awful lot. We have a major European programme,
which we're spending well; it's highly regarded across Europe.
We do need to work with Devon on transport in particular, and
on tourism, which we do, as well as on sharing resources in various
areas, which we do. As a council, we meet six-weekly with our
counterparts for the three principal authorities in the Devon
area, so we do do that. We think, on balance, it is going to
work better at the Cornwall level, and we know that is going to
be strongly supported by the local community.
Chair: I have three Members
indicating they wish to ask a supplementary—Rachel Reeves,
Margo James and Brian Binley. I'll take them in order. If it
has been answered, please feel free to forego that. Rachel Reeves.
Q164 Rachel Reeves:
Two quick questions. When Tom Riordan spoke this morning about
the LEP for Leeds City Region, he talked about the community interest
company, Yorkshire Enterprise Partnership, which the Yorkshire
bids hope will coordinate tourism, transport, low carbon and some
of those more strategic issues. Would you like to see that in
your own regions—some sort of regional structure remaining?
If so, what powers would that have? Today, we are, I fear, talking
about devolving to more functional economic areas and whether
that's the right level at which to engage in regional economic
regeneration, but at the same time the plans seem to involve centralising
a lot of powers back to Whitehall. Tom Riordan said this morning
that it's not possible to rebalance the economy from Whitehall
and Victoria Street. Do you think that it's right that powers
like innovation, inward investment and business support, come
back to London? If you do not think that is right, do you think
there is flexibility in the plans?
Barrie Williams:
I would like to take that first. Business Voice West Midlands
is a body that represents 26 different business representative
organisations, including the five major ones. Our members are
very clear about this: they believe that there is a need for some
form of co-ordination between national Government and the LEPs.
In our submission we did not propose a community-interest company,
but we raised the question that the form could be a community
interest company. It was something that interested us within
our bid. On the things that we would like to see, there are infrastructure
issues, but there are the things like innovation, inward investment
and clusters. Earlier, MAS was mentioned. It would seem daft
to us to have MAS with every LEP, however many there were, and
would we lose it in the transfer process? It's a valuable service.
We very much feel that that is the case; those are the things
that we would like to see in that.
Andrew Lewis: I
would just like to echo that. I think that the letter that was
sent on 29 June from the Secretaries of State talked about a lot
of these functions being led nationally, and that rang a lot of
alarm bells in the North East, particularly from our business
community, which in the past has seen that about 80% of inward
investment into the North East has come through the RDA rather
than through UKTI, which in the past was never seen to be as effective
in the North East region. That is why I think we responded with
this offer to Government that we would create a North East economic
partnership that would help them to deliver these nationally led
functions more effectively at regional level, and we would be
keen to develop some influential capacity to deliver those functions
in the region.
The European Structural Fund Programme is clearly
designated at regional level, so we need to maintain some capacity
to be able to get the most out of that before the end of the current
European funding programme, and we have some existing public-private
partnership arrangements at the regional level, which have been
developed within our region and which we want to see maintained
in the region. All those arguments necessitate, for us, some
degree of regional capacity to continue to deliver where it makes
sense at that level, and that's the proposition we put forward.
We have a really strong and effective lobby for that from our
business communities.
Kevin Lavery: If
I could come in on the South West—no is the answer. We
do not want to see regional arrangements in the South West. It
is an artificial region, not an economic entity. We have very
little in common in Cornwall with Swindon and Gloucester, to be
honest—they are more linked with other economies—but
we do need to co-operate across our boundaries. Particularly
important linkages for us are in the South West Peninsular and
with the Bristol City Region.
In terms of central co-ordination, yes, of course,
there is some required, but we need the centre to act more as
a facilitator and to start joining up government. If we are going
to have LEPs that cover transport, infrastructure, planning and
business support, and link these things together, BIS has to be
able to do that across Whitehall. We are much better at that
locally than BIS is nationally, and some things can be co-ordinated
nationally, but they don't need to be in Whitehall. They can be
in localities.
Louise Bennett:
Could I just respond very quickly
to that, Chair?
Chair: Yes.
Louise Bennett:
Very quickly. On your first question, Rachel, I do think collaboration
is important, but the key would be, do not be too prescriptive
too early. Allow some flexibilities. Let us be very clear about
the LEPs' intentions and what the matters of interest are. To
agree with my colleague, it is important we do not throw the baby
out with the bathwater—absolutely. On your second point,
this whole national versus local issue reminds me of the private
sector some 10 years ago where their strap line was "going
global but being local". It reminds me of that, because
I think, particularly for things like inward investment, there
clearly is a need for national policy, national promotion, but
local progression. There is clearly a need for that marriage.
Chair: Margot?
Q165 Margot James: Thank
you. In fact, Louise, you've just touched on what I wanted to
ask about. Your proposal talked about the benefits of local LEPs
coming together when it mattered beyond the LEP boundaries. Would
you agree with some witnesses that we heard in the earlier session
this morning who mentioned that it was very important that such
a means of collaboration across LEPs emerged from the LEPs that
are established, rather than be imposed down by some regional
structure?
Louse Bennett:
I do, because I believe you just have to give us time; you have
to allow evolution to happen. You have to give us a little bit
of flexibility, give us our heads. Let us be very clear about
what the matters of interest are, and then, absolutely, collaboration
and co-ordination will be critical; it will be.
Q166 Margot James: In
that case, if may follow up with Barrie Williams from Business
Voice West Midlands, do you not think Business Voice West Midlands
has got slightly ahead of itself in creating a proposal before
it had even seen the other LEP proposals, without the support
of many of the stakeholder communities in the West Midlands?
Barrie Williams:
We did not take our view lightly; we had talked to the local authorities
in the region totally, and the West Midlands Leaders Board—we'd
spoken to them. It is the view of our members that we do not
think that LEPs will work together very easily across a broad
area. RDAs didn't work together; very often, councils don't work
together, and it's very difficult to see why LEPs over such a
large area would do that. Our members overwhelmingly feel that
a lot will be lost in the co-ordination of many of the services.
We do not believe that distribution nationally is a good idea,
and we think that LEPs ought to concentrate on the enterprise
dimension at the local level really to get businesses operating
together and moving forward within a defined area.
Q167 Margot James: Do
you not think that your mistrust of LEPs managing their functions
right from the outset might disadvantage your proposed body in
actually working with those LEPs that you've mistrusted from the
outset? I presume you are aware of the regret expressed by various
councils in the West Midlands, which I won't quote. Well, one,
Coventry—your council, Louise—mentioned that the submission
by Business Voice West Midlands was counter-productive and damaging.
Presumably they meant the timing thereof, but have you any comment
on that?
Barrie Williams:
We know full well that they didn't welcome our approach, because
we have a different view. That is the view of our members, and
outstandingly of our members. We have to represent that view.
We feel there is a case of throwing out the baby with the bathwater;
I hear what Louise says about the evolution of LEPs, and I think
evolution of LEPs will take place, but if on day one you do not
have evolution, what do you do with the MAS? Do you suddenly
stop it? It has been a very valuable tool at increasing business
performance; no one can answer that question. That question may
change the views of our members, but at the present time they
see a lot of things that would just fall away, which they already
regard as being quite valuable. I thought the purpose of LEPs
was the whole emphasis on the word "local". If you
are going to have 15 or 20 of them, well, what's the difference
from RDAs?
Q168 Margot James:
If I might just come back once more Mr Chairman. You mention your
members are in support of the proposal and that's what has driven
you to make it, but presumably you count among your stakeholders
the local Chambers of Commerce?
Barrie Williams:
Chambers are one of our members, yes.
Q169 Margot James: And
some of them are absolutely opposed to what they see as the precipitate
way you have gone about making your proposal without consultation?
Barrie Williams:
I agree, but also, of course, we have EEF, the IoD, the FSB and
the five major bodies on our board, together with people like
the Co-op, the NFU and a large number of members. The Chambers
were one voice in our organisation; we have a disagreement, but
we are a democratic board. Our board's view was we have 25 members
going down one route, and one member wanted to go down another
route and disagreed with us, but we took the view that this was
what the majority of our members wished to see.
Q170 Chair:
Louise, you obviously wish to add to that?
Louise Bennett:
Very quickly. Margot, I think you hit the nail on the head--sorry
to dominate this. I think it was a timing issue. I think Business
Voice West Midlands quite rightly flagged up the challenges that
the whole LEP structure presents us in terms of not throwing baby
out with the bathwater, but the timing was divisive. To be fair
to Business Voice West Midlands, it was about trying to flag up
those challenges—back to BIS, back to CLG, and say, "Look,
you need to think carefully about how we progress this."
The pessimism is that local authorities won't talk
to each other. I only ever have one response to that, and that
is that the private sector will walk away from the table if it
doesn't happen.
Chair: Can I bring in
Brian Binley for an East Midlands perspective?
Q171 Mr Binley: We
have no feeling for the concept of East Midlands at all in Northamptonshire
and therein lies one of the problems with whole putting together
this rather disparate jigsaw. I want to probe the motivation
for selecting a given area—in your minds, because you were
very involved in the very early processes in that respect. I
am going to use the South East Midlands thing to do it. I recognise
the problem of time, and I recognise that meant a serious lack
of consultation. That is the truth of the matter. I really do
want to understand what, Hilary, you see as cohesive about an
area that seems to many in my part of the world to lack cohesion
totally, and seems to be created from a perspective based on a
sustainable communities area that in many respects has a very
variable performance; some of us would say it was quite disastrous
in certain areas. The second point is it seems to be put together
on the one cohesive perspective of Milton Keynes as a regional
centre, and so I'd like to know what you see as the cohesive elements
that put this rather odd conglomerate together, other than those
two factors, which are not held very highly, I must tell you,
by many people in my part of the world?
Hilary Chipping:
Thank you. Well, we have a track record of working across local
authorities and across the three regional boundaries in this area,
which has indeed given us a lot of challenges in the past, but
also enabled us to learn a lot about working together and the
way things are carried out in the different regions. Yes, we
have focused particularly around the sustainable communities agenda
in the past, which has very much been around growth in jobs and
everything that is needed to deliver that agenda. We have a lot
of evidence demonstrating what the travel-to-work area covers.
You mentioned Milton Keynes, but it's much wider than that: Bedford,
Milton Keynes, Northampton, Luton and Aylesbury. There is a lot
of evidence to support that as a cohesive area in which people
will travel to and from work. I have already mentioned the health
sector; there is a range of hospitals across the area. You've
already mentioned that the consultation, of necessity, took place
over the summer, but we had a lot of support from businesses of
all sizes.
We are very fortunate in having such a wide range
of higher education institutions across this area. We have Cranfield
University, which is a post-graduate university specialising in
engineering; the Open University; the University of Northampton;
the University of Bedfordshire; and University Centre Milton Keynes.
They joined together over the summer, and Cranfield hosted an
event, which had over 160 representatives, a lot of them from
businesses, and we have had wide support from the Chambers, the
FSB, and the IoD across that area. You've already mentioned that
Northamptonshire Chambers has been looking in a different area.
Those organisations have used their networks of members
to draw in support for this particular partnership. Not just
in my view, but in the view of businesses, the voluntary sector,
the social enterprise sector and higher education institutions
across this area of South East Midlands—you mentioned Milton
Keynes, but it certainly does not feature in the title of this
partnership, nor does it wish to take a dominant role over other
partners—it is important to work with those areas that wish
to work together.
Finally, because we have worked together across this
area, and we produced something called a collaborative working
agreement, we have in some ways gone, with the help of the three
RDAs, beyond identifying particular sectors, such as high performance
engineering and the other sectors of logistics and sustainable
construction, which are important across the whole area. We have
identified that skills connectivity, both through transport and
broadband, are really important issue, and those are the issues
that businesses of all sizes come and tell us are important to
make sure that we provide those highly skilled people that businesses
need to grow in the area.
Q172 Mr Binley: Let
me press just a little further, Mr Chairman, with your indulgence.
The arguments that you've just given me can be made about any
number of variable conglomerations. Right around the area that
I live in, I see nothing specific about an identity for the South
East Midlands that makes the case convincingly, and therein lies
the problem, other than, right at the centre of it, sits Milton
Keynes. There is a fear of the great regional Milton Keynes centre
amongst many people. I still want to know, where is the passion
coming from for this particular conglomerate that didn't exist
in the East Midlands, and was one of its downfalls, and I fear
will not exist in this conglomerate, as well as in a number of
others that my colleagues have been concerned about?
Hilary Chipping:
May I pick up one of the comments that you made in the earlier
session about Northamptonshire County Council? Clearly, people
who live in the community of Northamptonshire feel passionate
about that. No doubt they support football and rugby teams.
You can be passionate about one particular area, but you can also
feel that it's important to be part of a partnership that is going
to support economic growth involving a number of partners. Certainly
the passion that has been coming across to me from the business
and higher education communities in particular is that this South
East Midlands area does make sense. People would be very happy
if the County Council would come on board as part of the partnership,
but whether they do or not, as has been said on a number of occasions
already this morning, collaboration with other surrounding LEPs
is absolutely essential.
We work very closely already with Northamptonshire
and Buckinghamshire around transport issues. I hope we are going
to work with Oxfordshire and Cambridgeshire as well. Partnership
working will continue whatever happens in terms of LEPs.
Q173 Mr Binley: What
can you do that can't be done in different ways through partnership
working on a needs basis, recognising that the needs in geographical
terms change?
Hilary Chipping:
I believe, as has already been said this morning, that now is
the time when it's going to be essential to work in partnership,
because resources are scarce. We are going to need resources
and will need to use those resources efficiently. We are going
to need to be really clear about what will enable businesses to
grow. In my view, and in the view of partners and potential partners
across this South East Midlands area, if we try and work in isolation
in smaller areas, first, we risk duplication of effort. We risk
not being able to have that dialogue with central Government,
which has already been mentioned, and I particularly support what
was said by Alex Plant in the earlier session about the importance
of working across the CLG, BIS and transport agenda, because that
is absolutely critical in terms of supporting business growth.
I feel that only by having that partnership of authorities, businesses
and higher education institutions, and the voluntary sector, on
the scale of the South East Midlands, and possibly slightly larger,
are we going to be able to be effective in terms of delivering
that agenda of economic growth.
Mr Binley: Thank you.
I am not convinced, but I do thank you for your answer.
Chair: Thank you. We
have had a fairly long and robust debate on this. There are a
couple of other questions that I know we wanted to ask on this
subject, part of which I think has been covered, but Margot, you
had something. Is there anything you wanted to bring in?
Q174 Margot James: I
think we have probably covered question 7, and somebody touched
on the issues of when--I think it was you Louise--when you have
LEPs that are overlapping geographically there is a case for working
together, but what about when there is some economic interest
with a remote LEP, in a certain research area or something of
the sort, can you envisage a way of bringing in a LEP from some
distance away where it has some economic commonality with the
main LEPs in your particular region?
Louise Bennett:
That's the beauty of LEPs that did not exist in our previous world.
We could exactly do that. As my colleague here was talking about
the power industry I was sitting here thinking, "I must talk
to him," because we obviously have one of the largest wind
turbine manufacturers in our patch in Warwickshire.
Q175 Margot James: You
see no barrier to that?
Louise Bennett:
No.
Margot James: I think
most of the other points have been covered.
Chair: David?
Q176 Mr Ward: We've
had a fair look really at this brave new world of mutually beneficial
collaboration. Have you any concerns about competition between
LEPs?
Louse Bennett:
Do you want me to go? I think there will be inevitably competition
around inward investment. I think it is about marrying national
policy, national promotion, local progression, but that local
progression could exist across a number of LEPs who may want to
bring forth that inward investor to their level. But what is
wrong with a bit of competition in terms of thereby improving
our offer, and getting it right for the potential inward investor.
So there may be, but what's wrong with a little bit of competition
I say?
Andrew Lewis: I
think that is right. We need to distinguish between productive
and unproductive competition. What I would not want to see is
a national framework that was so cautious and so careful about
the competition between local areas that they impose some really
heavily prescriptive centrally defined structure here; that would
not be appropriate, and it would not work either, because people
naturally want to compete for their area and, as Louise says,
it is not a bad thing if they do. We need to watch carefully
that we get the proper balance between competition and collaboration
at a local and regional level; we certainly would not want to
be in the position where we were in a competition with other parts
of the North East region, because we've had such a long history
of working together on issues like low carbon economy and so on.
It's important to maintain those links and that cohesion
and to work right across the boundary, either across the country,
or across the North; whatever geography makes sense. The core
cities network remains very important for us, and collaboration
between major English cities is really important. All right,
it's competitive sometimes, but there are also areas where we
need to work together.
Hilary Chipping:
Can I just add briefly; across the South East Midlands we've learned
a lot about healthy competition and the need to work in a complementary
way. We have already heard the Milton Keynes/Northampton issue,
and I think across the South East Midlands people have learnt
that by working together we can add value, and it is actually
better for the whole area, and I believe that the LEPs will work
together and add value across the wider range of LEPs.
Barrie Williams:
I actually think competition is inevitable, and almost certainly
good, because if it is about job creation, as I think it should
be, then a nearby LEP may well in fact say, "Well what have
they done that is actually better than we have done, and what
can we do to change our operation to create further jobs?"
I think it is probably a good thing.
Q177 Mr Ward: Question
8, which is the same as with the previous panel, which is the
skills agenda, and where you see that?
Andrew Lewis: I
think I would echo the comments that were made to you in the previous
session. We are finding our way in a new policy environment,
and skills and the allied policy area of employment support and
new employment programmes is also relevant here. Increasingly
what we are seeing is a model of delivery for employment skills
that is not closely aligned to the policy delivery model that
is being promoted by Communities and Local Government, for example.
It is much more about local providers working within a national
framework, and in that context the key role at a local level is
to provide a partnership arrangement where the local providers,
the HE and FE institutions, know and understand the needs of their
local economy. By working together with business, and by bringing
universities and colleges into that partnership, we think we will
be in a better place to ensure a more effective skills offer,
particularly in those areas where the economy is changing radically,
and the skills mix needs to change with it.
Hilary Chipping:
Can I just say that skills is an area that we are particularly
focusing on in the South East Midlands proposal, as we did within
the Milton Keynes South Midlands growth area. We have focused
a lot of attention on that area; we know that, for example, South
East Midlands is below the national average in terms of NVQ Level
4 skills, and we are very keen to increase that. What I think
we have learnt is that it's really important, particularly in
the changing environment, with the Learning and Skills Councils
going, and the importance of working across local authorities
in order to improve skills levels and work with higher education
institutions, that it's an area in which collaboration can be
extremely beneficial. Getting the right skills in response to
employer demand does not just happen unless you have somebody
working really hard to co-ordinate that between the providers
and those people that need the skills. We will continue to work
in that area, and the area of apprenticeships, working with the
National Apprenticeship Service, is something that we found particularly
beneficial.
Louse Bennett:
I think it is again about national and local; I think that it
should be about national policy, particularly in schools education.
It should be about national policy that thinks through and sets
possibly volumes, funding, some market making, but I equally think
that it has to be about locally demand-led, and then local delivery.
I can give you some nice examples of that in our patch. We have
an industry, a business, Converteam, who, because it needed semi-skilled
and skilled workers in its patch, basically worked with Warwickshire
College to develop a power academy to get all of its technicians
coming through the college into its industry. Triton Showers,
another part of Warwickshire, rely quite heavily on apprenticeships,
and apprenticeships are wholly demand-led, they wouldn't work
if they weren't demand-led. Equally we have our challenges, like
JLR, who desperately will need thousands of more graduate engineers;
it is about engineers and it is about just getting our heads around
that in terms of marrying national policy with local influence,
and local delivery.
Barrie Williams:
I agree with Louse.
Kevin Lavery: I
think Louise is right; it is about getting the balance right.
We also know in Cornwall that we have to look across the border
and work with our colleagues in the peninsula to get it right
for the locality.
Chair: You all seem to
be pretty consistent on that. Could we just move on to another
question, which touches on it? Rachel, it was question 19.
Q178 Rachel Reeves: Yes,
about the links between LEPs and further education and higher
education. Yorkshire Forward, on the board there, Michael Arthur,
who was Vice Chancellor, or is Vice Chancellor of Leeds University,
sat on the board, but my understanding is that the local enterprise
partnership should have 50/50 local authority and business representation
on it. A big part of the local economy, certainly in Leeds, is
the university and the FE sector, which is also very important
in terms of skills and up-skilling the local economy. I was wondering
what role you might see for the education sector, but also the
third sector in the structure of LEPs?
Andrew Lewis: In
our case it's a central role, partly because universities and
colleges are right at the heart of what we want to achieve for
our area. Certainly, within Newcastle and Gateshead we have two
universities and two colleges, all of which need to be engaged
in this programme, and certainly have lent their support to the
work we're doing. They, along with a number in our business community,
would also want a wider geography, which is precisely one of the
reasons and drivers for us to continue to try and patch that together.
As far as the third sector is concerned there is a really important
role that LEPs can play in stimulating the social enterprise sector,
and certainly the leader of our council is particularly keen to
use LEPs and also our own role as a city council to create better
conditions for the development of social enterprise, so again
right at the heart of this agenda.
Barrie Williams:
I think it is really very important that LEPs work together again
on this particular area, because not all FE colleges or all local
universities will carry the courses or the training that's required
in a particular LEP area, so I think collaboration between LEPs,
and education represented within that, is quite necessary.
Kevin Lavery: In
Cornwall we have six FE and HE institutions that have come together
in the Combined Universities for Cornwall. They have tripled
in size in the last 10 years; we have opened a number of world-class
research facilities in Cornwall, which includes Exeter and Plymouth
Universities as part of the club. It is very much part of the
economic future, and at the heart of our LEP, and they are already
on the governance of our existing development company.
Q179 Rachel Reeves:
Will they be on the board of your LEP?
Kevin Lavery: We
currently have a development company with a board of 11: six from
the private sector, five from the public sector, and that includes
one representative from the Combined Universities of Cornwall.
Q180 Mr Binley: How
is the private sector contingency made up?
Rachel Reeves: I thought
there was supposed to be 50% business--
Mr Binley: I am just asking
generally.
Chair: We have taken enough
time asking the panel, let's not start asking each other.
Mr Binley: I am asking
the panel, but I am looking to you to allow me to. How is the
contingency made up? Tell me who they are?
Barrie Williams:
I do not think that's actually been resolved yet. Approaches
have been made to numbers of business people with a view as to
whether they would be prepared to participate in LEPs. Many of
them have said, "Well, let's wait and see how and what is
required." In principle they say, "Yes, we would like
to be involved," but it varies, and Louise may say they have
a set number of business people, I don't know, but certainly in
our discussions that's the way it is.
Kevin Lavery: Just
picking up what Nadhim mentioned earlier about the FSB in Cornwall.
I think one of the tensions has been about who is going to be
on the board. What we've been concerned about in Cornwall is,
let's get the thing first, let's be clear on what we're trying
to achieve, and then let's look at having the right governance
to make that work. What we did with the Cornwall Development
Company, where we have a majority of private-sector representatives,
was to have a headhunting company actually find people from the
local area, and we went through a process; we wanted gifted individuals
on that board. Now, this is for discussion, but that's the sort
of approach we'd want to explore, doing it jointly with representatives
from the private sector.
Louse Bennett:
In Coventry and Warwickshire, Rachel, we will keep to the spirit
of the letter. We want a business leader clearly in the chair,
someone who is in business; then we will have 50/50 representation,
but we will bring in the universities. Interestingly, it is not
just about the skills side, which is the supply side, it is about
the work they do on the demand side, and jobs, which is the transfer
of knowledge into the private sector, so you create wealth, you
create jobs.
Mr Ward: If I remember
rightly the IoD nuance was that they were happy for them to be
on the board as a business; as a big business in the locality,
creating jobs.
Chair: I think
we've covered this pretty adequately. Can I just move on to the
issue of timing and transition? I would reiterate, no need for
everybody to repeat what others have said; only if your view either
contradicts or is a significant addition do you need to say anything.
Rebecca Harris.
Q181 Rebecca Harris: I
think we have already seen a little bit of evidence here about
how controversy has built up in certain area, perhaps because
of the speed this process has been going on at, so perhaps no
consultation was possible. Really, what, if any, immediate concerns
do any of you have in terms of the transitional arrangements,
the timing with which the Department is driving this process,
and what would you change or have changed in terms of getting
things off the ground?
Andrew Lewis: I
can kick off on that. I think we do have concerns about it.
I think there are a number of really quite critical elements of
the transition that we are not very clear about at this stage.
I think it was said in the previous panel that 2011-12 as a year
is a transition year, but it seems to be a transition year without
very much capacity available, and certainly not funded for that
year. So although the abolition of the RDAs is timed for I think
March 2012, the reality of winding down big organisations is that
you lose that capacity very rapidly and, of course, the RDAs are
already in the process of delivering that.
We are losing some really quite important bits of
capability at the regional level. We, as local authorities, cannot
simply step in and fill that gap because of the pressures on our
own budgets. It won't be until December that we know our own
local government settlements. The opportunities for us to be
able to maintain that capacity are really very limited. The RDA
in a region like the North East has had a big hand in a lot of
activities, so we have regeneration schemes, like our Science
City, where the RDA is a one-third partner with the university
and the council. We would like to see that become a bilateral
partnership between the council and the university; we think that
is entirely in line with the Government's aspiration for localism,
but we are just waiting. We are waiting for the Government to
give the green light to that proposition, and it is a bit tied
up with the wider question of RDA assets and how they can be managed
out.
We feel at the moment that there are a lot of really
critical things to get right in the transition, and we don't yet
have the clarity of how that is going to be managed. There are
a lot of organisations that are just waiting to understand what
will be available next year, what the councils will be able to
do to step up to the plate on this, and there's a genuine concern
about how we will get to what ought to be a good end point, but
the process of getting there could destabilise us.
Louse Bennett:
I think we are all worried about the transition. I think there
are challenges around devolution of powers and funding, but there
is just one point I would like to make that did not come up in
the previous session and may not come up here. That is just to
say to the panel: do not undervalue or underestimate the skills
and competencies, and the knowledge, that sit upon the ground
within your local authorities, within enterprise support agencies,
within universities, who for years have been doing all of the
sorts of things that equally we do at the regional level in terms
of collaboration over bidding for EU funds. A lot of those competencies
and skills equally sit at the local level.
Hilary Chipping:
Could I just say that clearly the timing is tight, but in terms
of the transition we are very fortunate that we work with three
RDAs: East of England, South East, and East Midlands. We have
been having regular discussions about how we can ensure that we
don't lose the excellent work that we have put in place with them.
So, for example, we have identified work streams such as improving
broadband connectivity across the whole patch that is now being
passed across to people within my team, and there are also skills
and resources around the delivery vehicles across the South East
Midlands; there are six delivery vehicles, two in Northamptonshire.
There are a lot of very skilled people, particularly in the area
of funding--we will come on to that in a moment--but we have learned
a lot about innovative forms of funding and working with private
sector, and we are keen not to lose those skills as we move forward
into the LEP.
Kevin Lavery: I
do not want to prolong this--we are worried about losing key personnel,
and we have already recruited a number of people into our organisations
to help overcome that. I think dealing with the pension issue
that was mentioned earlier would really help, because it reduces
the risk in actually taking somebody on.
Chair: I think Rachel
Reeves has got a particular supplementary issue she wishes to
ask to Coventry and Warwickshire.
Q182 Rachel Reeves: Yes.
Louise, you've said that Coventry and Warwickshire LEP will set
up a shadow board by 1 October. Is that running and can you tell
us a little bit about how it's going?
Louse Bennett:
It is, because in Coventry and Warwickshire there is a public-private
partnership that was founded some 15 years ago, and it was founded
by private sector working with the Chamber of Commerce and others,
with the county, and with the city, and with our districts. So
what we have done is very simply say that that partnership will
service and will host our LEP until we're at the point where we're
absolutely up and running. So it is being serviced and it is
being hosted.
Rachel Reeves: Thank you.
Chair: Nadhim?
Q183 Nadhim Zahawi: Thank
you Chairman. Just on to funding. How realistic is it to suggest
that you can resource yourselves on the back of volunteer time
from the private sector, and minimum back office functions? I
mean, how are you going to handle administering EU funding, for
example, or major project management? Or deal with land assets?
How realistic is it that you can do this?
Kevin Lavery: I
cannot speak for my colleagues here, but certainly in Cornwall
we are already running a major European programme which is £750
million; we have a property portfolio that is bigger than the
RDAs in our area, so we have the skills to do that. We have our
own development company, which is the largest in the South West
region, so even for a small LEP we have the money and we have
the personnel.
Louse Bennett:
Very much the same. Funding will be a challenge, but we have
an existing public-private partnership that will, as an interim,
service the LEP. It has an executive, it has a secretariat and,
on the European funding issue, already within Coventry and Warwickshire
we are a very successful sub-region in terms of our bids for non-structural
funds, and equally ERDF or ESF.
Andrew Lewis: Certainly
Newcastle and Gateshead has a long history of pooled funding and
pooled capacity on economic development, so we have a city development
company, 1NG, that works across the boundary, both Newcastle and
Gateshead, and is jointly owned by the two councils. We have,
for 10 years, had a destination marketing and tourism and culture
agency, the Newcastle Gateshead Initiative, which has business
membership and secures some of its funding directly from the business
base. There are a number of organisations working on a public-private
partnership basis between Newcastle and Gateshead, so that does
demonstrate that, where the councils see the real benefit of working
together and pooling their economic development capacity, they
can do that.
We have a bit more of a challenge making that work
across the whole of the North East region, because, of course,
that has been funded by central Government through the RDA. As
I said before, we can't step in and compensate for that. What
we want to do at that level is come to an arrangement with central
Government on those functions which are going to be led nationally.
We assume they are going to be funded nationally, but we need
to step up to that and to put in place a partnership arrangement
between central Government and business and local government in
the region to be able to deliver those functions going forward,
and that would certainly include the European Structural Funds
Programme where there is considerable resources there to be spent
within the North East region. The challenge is to have a continuing
capacity to deliver that and the matched funding that is required
in order to be able to unlock the money from Brussels.
Hilary Chipping:
In terms of the South East Midlands, building on the experience
with the growth area, we do have a model of very small contributions
from the local authorities, and some money from CLG, the Homes
and Communities Agency. At the moment we have not had any RDA
funding, and we have really learnt how to deliver growth across
the area by using the limited resources that we have effectively.
Clearly, as you say, where you need particular skills, such as
project management and bidding for European funding, we will need
to call on resources to do that. I think we are strong believers
that, if you can demonstrate that there is added value through
this partnership working, then you are much more likely to attract
funding rather than asking for the resources up front.
Barrie Williams:
I do not really have a very strong view about the ERDF funding,
although I have participated in it to quite a large degree, but
I think it's really a question of having the resources in the
appropriate point, and with the transfer of people who have skills,
I think looking after those skills is, as I said, exactly the
right thing to do.
Q184 Nadhim Zahawi: Just
a supplementary for you Barrie; you are proposing to cut staffing
costs from £20 million, which is the old RDA, down to £3
to £4 million. How did you reach a figure of £3 to
£4 million for your staffing costs?
Barrie Williams:
We felt generally that we were looking at the things that we felt,
and our members felt, should be kept in some co-ordinating body,
and that the best view of the costs of those functions that we
would want to keep, one of which was ERDF funding, was this £3
million to £4 million figure for labour cost. I wasn't actually
involved in the assessment of it, but--
Q185 Nadhim Zahawi: So
what would you cut out? You said there were some things you felt
you do not need to do; what are those?
Barrie Williams:
Well, there was a large number of things done by the RDA--
Nadhim Zahawi: Sorry,
I can't hear.
Barrie Williams: A
large number of things were done by the RDA. I mean, the massive
chunk of business support, for instance, through Business Link
obviously isn't going to be there in the future. There are things
like regional strategies and regional spatial strategies, which
have disappeared. There are a huge number of things which have
been done by the RDA. We are not trying to recreate an RDA; we
are simply trying to set up, or to have set up, not necessarily
by us, a co-ordinating mechanism for things like inward investment,
innovation, and MAS and so on, to ensure that those organisations
and those three things, the LEPs themselves--it is difficult to
know how this is going to happen, but it's difficult to see how
the LEPs in the first phase are going to support those.
Q186 Nadhim Zahawi: So
just pushing a bit further on that, if you don't mind, the £3
to £4 million; what is that supporting? What is the
headcount?
Barrie Williams:
I think the head count was 30 people.
Q187 Nadhim Zahawi: Right.
How did you come up with the number—what are the things
that it will deliver?
Barrie Williams:
Well it would deliver the things that we had in our submission,
which were the functions such as hosting an inward investment
and aftercare team, cluster working with companies, we'd have
someone doing that job; we'd want to be involved in European programmes,
administration of EU funding through the ERDF scheme, and generally
that group of services.
Chair: We are reaching
the 1 o'clock deadline, so moving into time added on. There is
just a couple of quick questions I want to finish off. Yes, you're
next David.
Q188 Mr Ward: We covered
the EU bit, I'm not sure we covered this in the previous panel
session, that's the assets, and in many cases those assets—certainly
in our part of the world—are actually liabilities. Now,
with the economy as it stands and the requirements for development
funding, which is not there, what about the assets run by the
RDAs? I know what you'll say: the assets aren't just the physical
things, it's the staff, but I think we've covered that bit.
Kevin Lavery: In
terms of the physical, you are right, there are some liabilities,
but there are also some assets that provide income, and there
are some assets that are crucial to future development. Those
assets crucial to future development, and the ones that provide
an income stream, are really needed to make these LEPs work.
Okay, there is not going to be much money in the regional growth
fund, and there is not going to be much, if any, core funding
available, but if you can have some of those income stream assets
then actually that can help fund some of the core funding requirements
going forward. In terms of the assets for key developments, it's
absolutely vital if we are going to get some really good bids
together for the regional growth fund to have that transfer, and
have it pretty quick.
Louse Bennett:
To concur with my colleague; the asset transfer, certainly some
of the physical assets, although they may come with some risks,
is crucially important to Coventry and Warwickshire, Ansty being
one of our largest examples, which is a large technology park,
a piece of land, that we would want to see come home into Coventry
and Warwickshire.
Andrew Lewis: There
has been a certain amount of confusion about this, because, as
you say, assets are different in different places, and they have
different functions. We have drawn a clear distinction between
assets that are integral in the regeneration in a particular area.
I mention the Science City site in Newcastle as a good example
of that. Now, in that case it's not an asset that has a market
value, but it is really important to the future development of
that site, and some transfer arrangement does need to take place
in order to retain momentum on those regeneration aspirations.
There are also sites that are linked closely to the innovation
agenda, and they need to be considered in that context.
Finally, there are revenue-raising assets, so
in the North East we have Buildings for Business, and On Site,
which are two public-private partnerships where the RDA has been
a 50/50 owner. Those are assets that have been generated within
the region, and they are generating income which supports activities
in the region, and it is our firm view that they should be kept
in the region and used to deliver economic development for the
future.
Q189 Mr Ward: There
are seven sites in Bradford which Yorkshire Forward owns. Would
they go to the LEP or Bradford Council?
Andrew Lewis: You
would need to take a case-by-case assessment of what is the purpose
of that asset; is it integral to an economic development site;
who are the other partners on that, and then come to an asset-by-asset
agreement about the best way to deliver that functionality going
forward. What I wouldn't want to see is a single, one size fits
all, central solution where all the assets are owned by some holding
company that then is very remote from local decision making.
Barrie Williams:
I think we would prefer to see the assets transferred locally
to the LEPs, certainly not put into a national situation.
Louse Bennett:
I think there isn't a 'one size fits all', I agree with my colleague
here, and certainly in Coventry and Warwickshire, because we have
such strong partnership working we'd be more than comfortable
to see assets transferred back into the local authorities, because
what we are trying not to do is recreate a mini-RDA within Coventry
and Warwickshire.
Q190 Chair:
There are really two very quick questions. First, I want to pose
to Cornwall and the Scilly Isles: in your submission you mentioned
a local investment fund, could you just very briefly tell me a
little bit about that?
Kevin Lavery: In
Cornwall Council we have seven councils coming into one, so we're
in a very fortunate position where we can actually deal with the
financial crisis we're all facing in the public sector; we're
well prepared for that, we have a lot of synergies by bringing
seven into one. Our ambition is to reinvest some of the savings
out of that process, and put it back into the local economy.
Next year we are still in the very early stages of looking at
our capital programme, but we are looking at a very substantial
capital investment in key projects around the economy. Our aspiration
is to have something of the order of our European grant programme,
without any red tape around it, which would be at the disposal
of the LEP.
Q191 Chair:
I do not want to labour this point, but I think in your submission
you also mention a business investment and so on; now, rather
than deal with it now I'd be grateful if you could perhaps send
me a further briefing on--
Kevin Lavery: Very
happy to do that.
Chair: To finish off,
Brian Binley.
Q192 Mr Binley: If
LEPs become politicised you have problems, and it is a real danger,
and we've already seen in my part of the world politicisation
based on rather traditional divisions, quite frankly. The thrust
for the creation of a LEP has been pretty much from a political
arena, and not a business arena. How do you stop it being politicised,
or continuing to be politicised, because if you don't business
won't be involved, and if business isn't involved, you fail?
Andrew Lewis: It
is clearly a balance. I think we are where we are because the
RDA architecture was not seen to be sufficiently accountable to
local people, and politicians. We are looking at structures that
are more locally accountable and have that closer link to the
local democratic process. I think we are very clear that we want
these to be business-led, we want them to have a degree of operational
independence, so not every decision has to be signed off by every
local politician, and we want to put in place structures that
deliver that. It is about accountability on the decisions that
really make sense, key policies on the frameworks and the way
in which the operations are conducted, but then you need to give
a degree of arms-length operational delivery, business-led, in
order for it to be effective and meaningful for the business community.
It is that balance that we all need to strike in the Governance
models that we put forward.
Q193 Mr Binley: I
admire your desire, and I do quite like your management talk;
I thought it was very impressive. What are you going to do on
the ground to ensure these people are involved?
Hilary Chipping:
Can I just perhaps try and say what we've done already? I think
absolutely it is the challenge, as my colleague here has said,
to move from where we are now, and there's been a lot of to-ing
and fro-ing over the summer and all the politics and suchlike,
and different geographies emerging. We need to move from here
to an effective business-led organisation that is clear about
what it is doing, and about the ability to do it, without losing
the local politicians on the way. Across the area that I work
in, the South East Midlands, at the moment we've 14 local authorities,
we're still hopeful we might have a few more join us in the Northamptonshire
area, but we're all quite clear that business will not want to
be involved in an endless meeting with 14 or 16 local authorities
involved.
On the other hand, we do not want to lose people
in the process. We started in the summer, as I said already,
with a big event focused on business engagement, hosted by Cranfield
University; we've had another, smaller workshop teasing out what
businesses actually will want the LEP to do; I think there's some
very interesting issues coming out of that in terms of the larger
businesses and the smaller businesses perhaps focusing in different
areas. We have another event in November, and in the meantime
the FSB, the Institute of Directors and Chambers across the area
have been holding their own local meetings; we have been using
their networks, we have an update that has gone out to our 300
or 400 contacts. It's a process of engagement, being open and
inclusive, while not taking too long to get to a position where
people feel that those on Board, are people they can respect and
are representative, but the Board doesn't have to have somebody
from each business in each area to be representative.
Q194 Mr Binley: Forgive
me, I want to know the mechanisms that you are using to contact
businesses and get them involved.
Hilary Chipping:
I can be specific then; following the event in Cranfield we have
a contact list; we have contact lists from all of the Chambers
and the three organisations I mentioned, which we are going out
to on a regular basis. We have already dates in the diaries for
regular meetings with the business organisations, which we held
all through the summer--there is one happening the week after
next. We are setting up a working group and a steering group,
which is a step towards a shadow board, because we know that we
need to have that inclusivity of higher education institutions,
the voluntary sector, further education colleges, and businesses,
small and large, and the business organisations, and all the local
authorities.
That is far too big to actually run an effective
LEP, but we feel that we need to be absolutely open and transparent
about going through those stages and collecting views as to what
people want us to do, and then being realistic about what we can
do, and the form of the organisation that is best placed to do
that. So that's why the partners have not made up their minds
at the moment as to whether it's going to be a community-interest
company or quite what we need in order to deliver the things that
are most important to businesses across the area.
It probably sounds a little bit sort of process-led,
but we need to have open and transparent mechanisms for actually
getting everybody, in rooms all over the South East Midlands,
dealing with some clear questions: what we want the partnership
to deliver; what are we going to take over from the RDAs and the
delivery vehicles and all the other organisations across the patch
so that we don't lose that; and what can we do that will really
make a difference and enable the private sector to grow in the
future.
Chair: We are now 12 minutes
over time. If you have anything else to add then please feel
free to put it on paper. I think we can prolong this debate for
a long time, and I do not wish to. I thank you for your attendance,
and I'll once again say to you, if there is anything that you
would like to go to Committee that you feel that you haven't been
able to fully elaborate on then please feel free to send it to
us.
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