Urban Development Corporations in England (Area and Constitution) Order 2014
The Committee consisted of the following Members:
† Bain, Mr William (Glasgow North East) (Lab)
† Bingham, Andrew (High Peak) (Con)
† Blackman-Woods, Roberta (City of Durham) (Lab)
† Burns, Mr Simon (Chelmsford) (Con)
Farrelly, Paul (Newcastle-under-Lyme) (Lab)
† Freer, Mike (Finchley and Golders Green) (Con)
† Garnier, Sir Edward (Harborough) (Con)
Jackson, Glenda (Hampstead and Kilburn) (Lab)
† Jones, Susan Elan (Clwyd South) (Lab)
† Lavery, Ian (Wansbeck) (Lab)
† Nuttall, Mr David (Bury North) (Con)
† Perry, Claire (Devizes) (Con)
† Pincher, Christopher (Tamworth) (Con)
Ruddock, Dame Joan (Lewisham, Deptford) (Lab)
† Simpson, David (Upper Bann) (DUP)
† Stewart, Bob (Beckenham) (Con)
† Williams, Stephen (Parliamentary Under-Secretary of State for Communities and Local Government)
Danielle Nash, Committee Clerk
† attended the Committee
Eighth Delegated Legislation Committee
Wednesday 19 March 2014
[Mr Philip Hollobone in the Chair]
Urban Development Corporations in England (Area and Constitution) Order 2014
8.55 am
The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams): I beg to move,
That the Committee has considered the Urban Development Corporations in England (Area and Constitution) Order 2014.
It is a pleasure to serve under your chairmanship, Mr Hollobone. This is the first time that I have proposed a statutory instrument—I have sat in this and other rooms on many occasions listening to others do so, but this is the first time for me. Also, I am sorry if I sneeze and sniffle this morning; I have a bad cold.
Let me first give some background to the order, which was laid on 10 February 2014. The order formally revokes the statutory instruments under which the West Northamptonshire development corporation, the London Thames Gateway development corporation and Thurrock Thames Gateway development corporation were established in 2003. London Thames Gateway and Thurrock Thames Gateway development corporations have already been closed and dissolved, on 28 February 2013 and 31 October 2012 respectively. The West Northamptonshire development corporation will close on 31 March and be dissolved on 31 July 2014.
These three urban development corporations were originally set up to spearhead growth in their areas and drive local regeneration, but they have now achieved what they were set up to do and leave behind a legacy of thriving places and businesses. It was always the intention of the last Government, who set up these three urban development corporations, that they would be time limited, with a planned lifespan of up to 10 years. It is therefore appropriate that responsibility now be handed back to the relevant local authorities, which have democratic legitimacy, having been elected by local people.
The purpose of the order is to make the legislative changes necessary to reflect the closure of these three urban development corporations. It revokes the statutory instruments that set them up and provided them with their powers. The order is linked to two orders specifically related to the West Northamptonshire development corporation. The first is the West Northamptonshire Development Corporation (Transfer of Property, Rights and Liabilities) Order 2014, which transfers the corporation’s property, rights and liabilities to relevant local authorities in the area.
Mr Simon Burns (Chelmsford) (Con): I would be grateful for some clarity before we take a decision on this order. The Minister says that the corporation will be disbanded and its liabilities, assets and responsibilities
split between at least two local authorities in Northamptonshire. Can he tell the Committee the amounts of money involved in assets and, if there are any, liabilities, and how they will be split between the two authorities?Stephen Williams: I do not have that information readily to hand in my speech or background notes, but I will answer the right hon. Gentleman’s questions when I sum up at the end.
The second related order is the West Northamptonshire development corporation dissolution order. This will formally close down the corporation, but allow for any residual winding-up tasks, including the preparation of the final report and accounts by a skeleton team and board members on the audit and risk committee. The two linked orders are not being debated today.
There has been formal consultation on the transfer order, as required by statute. The consultation was limited to Northampton borough council, Daventry district council, South Northamptonshire council and Northamptonshire county council, as the authorities within West Northamptonshire development corporation’s geographical area of operation. All four councils participated in the consultation exercise, which began on 26 November 2013 and ended on 2 January this year.
Bob Stewart (Beckenham) (Con): Can the Minister tell me whether there is any property involved? What sort of property is involved in these development corporations?
Stephen Williams: Again, I will give the hon. Gentleman an answer when I sum up.
Officials also worked closely with the authorities for some time before the consultation, so the proposals did not come as any surprise to them. Three of the four local authorities formally responded to the consultation. The few issues they raised have all been satisfactorily resolved.
Mr Burns: Can the Minister enlighten the Committee on where there were areas of concern and how they were resolved?
Stephen Williams: Again, I will endeavour to do that when I sum up. I do not think the issues of concern were necessarily controversial.
The three urban development corporations achieved much in their lifetime, but it was always the understanding that they were time limited, and their lifespan has reached a natural end. It is therefore now appropriate to pass leadership to locally elected delivery bodies that are already rooted in their areas and can be responsive to the needs of local communities. The order gives legislative effect to the natural transfer of responsibilities and powers to local bodies that are best placed to build on what the urban development corporations have achieved. I commend the order to the Committee.
The Chair: We have up to 90 minutes in total to debate this fascinating topic.
9.1 am
Roberta Blackman-Woods (City of Durham) (Lab): May I say what a pleasure it is to serve under your chairmanship again, Mr Hollobone? I will do my best not to take up the whole of the 90 minutes.
Let me start by congratulating the Minister on moving his maiden statutory instrument. I should warn him that this is an unusually straightforward planning SI, in that it simply recognises that the Thurrock and London Thames Gateway development corporations are effectively defunct and winds up West Northamptonshire development corporation. However, I want to detain the Committee for a moment or two to go through the aims of the development corporations when they were set up, which will set a frame for some questions that I need to ask the Minister—and which hon. Members have already alluded to—about what is happening with the functions undertaken by the urban development corporations.
The aim of urban development corporations were typically to improve the local environment, making it attractive to business; to give cash grants to firms setting up or expanding in the area; to renovate and reuse buildings; and to offer advice and practical help to firms considering moving to the location. These basic aims were altered slightly by the last Labour Government, as has been mentioned, to focus on bringing growth to certain areas, particularly those seen to have deep-seated problems that might require a specific and co-ordinated approach to their development.
I do not think we heard enough from the Minister about whether it is the Government’s proposition that all the growth in the areas covered by these three development corporations has, in fact, happened or whether they think the myriad arrangements that appear to have replaced the urban development corporations are up to the task. I want to remind the Committee of the fragmented approach we now have even in areas such as London, with the closure of the London Thames Gateway development corporation. Indeed, rather strangely, under the Localism Act 2011 the Government set up the London Legacy development corporation—so, another UDC—and land assets were transferred to GLA Land and Property. Some functions went to a number of London boroughs and some went to the Greater London authority.
It would have helped the Committee’s deliberations on this instrument if we had known exactly how the new arrangements were working in practice and whether they were delivering the growth and co-ordinated approach seen to be necessary. The same applies to the Thurrock Thames Gateway development corporation, where again we have myriad arrangements to take on board the functions of the previous urban development corporation.
The Committee will know that the West Northamptonshire development corporation is still in operation. Indeed, over the last couple of years—well, just about—it has transformed itself into a smaller, leaner organisation and now operates perhaps more like a traditional UDC. Its board was streamlined and it also had a majority of local authority members. West Northamptonshire development corporation seems to have been reasonably successful in attracting the private sector—there seems to be a fairly good working relationship between the private and public sectors. Given that West Northamptonshire development corporation seems to be a model in transforming itself to adapt to new
circumstances, why do the Government consider it necessary to wind it up at this point and, critically, what will happen to take on board its functions?There can be some criticisms, too, of urban development corporations. With the new localist approach that we have all adopted for many years—not simply since the Government’s Localism Act—we might want more representation of local people in urban development corporations. It might be interesting to hear from the Minister whether the new arrangements to bring further development and regeneration to the areas affected take on board the Government’s localism agenda and, if so, exactly how. I note that the Government now often rely heavily on local enterprise partnerships—I do not think the Minister mentioned LEPs—and local authorities to revitalise their areas, but we all know that there is a very little money available, particularly in some local authority areas that are suffering really quite unfair cuts from this Government. We therefore need to hear how they will be supported in the task of continuing to regenerate their areas.
Lastly, I want to ask about the Government’s announcement about Ebbsfleet on Sunday. The reason why this is relevant—at least I hope you will rule that it is relevant, Mr Hollobone—is that I am trying to tease out from the Minister exactly what the Government’s approach is to urban development corporations. Just two years ago, the then Housing Minister, the right hon. Member for Welwyn Hatfield (Grant Shapps), said that he did not consider UDCs to be suitable for housing developments. In fact, he said that he thought that new housing development could happen only if quangos were abolished. He specifically referenced Ebbsfleet and blamed quangos, including urban development corporations, for the lack of development in the area, saying:
“If encouraging the proliferation of quangos really could deliver large-scale housing development, then the whole of the Thames Gateway would have romped home years ago.”
It therefore appeared to us in 2012 that the Government had rejected development corporations as a model for delivering growth to the area; yet on Sunday the Chancellor announced that a new garden city development corporation will be set up to support and enable development in Ebbsfleet. Obviously we are still waiting to hear what exactly the Chancellor means by a “garden city” and how the garden city principles will be applied to Ebbsfleet, because nothing was said about that when the announcement was made on Sunday. However, given that this happened against the background of a rejection of UDCs in 2012, we need some clarification from the Minister about the Government’s approach to UDCs and whether they intend to do anything to make them more accountable.
I say that because the chair of the Local Government Association, Sir Merrick Cockell, has said:
“While we support the Government's aims to build more houses, democratically accountable councils have been at the forefront of delivering local growth and the creation of a separate, remote quango is unnecessary. Residents will be concerned that such a body, unelected and accountable to central government, could have the power to make local decisions about investment, planning, development and possibly even local transport.”
Why does the Minister feel that a new quango, shaped and decided by central Government, is appropriate for Ebbsfleet but not appropriate for other places that
clearly need regeneration? Will the Minister enlighten the Committee about how this fits in with his Government’s localism agenda?9.10 am
Stephen Williams: I shall endeavour to answer some of the points raised in our brief debate. First, I shall deal with points made by the right hon. Member for Chelmsford and the hon. Member for Beckenham about concerns raised by the successor local authorities in the area formerly covered by the West Northamptonshire development corporation. The main concern was whether those authorities would have sufficient finance to discharge the remaining responsibilities in that area. To allay those concerns, the Department for Communities and Local Government has provided Northampton borough council with £1 million of additional funding over the next two years, directly from the Department. That will allay the only substantial concerns that were raised by local authorities in Northamptonshire.
The majority of West Northamptonshire development corporation’s assets have been transferred to Northampton borough council at nil value. These were land assets at Avon Nunn Mills, St Peter’s Waterside and some minimal associated liabilities. There is also a disused railway line that has been transferred to Northamptonshire county council at nil value. Any residual rights and liabilities that are minor have transferred directly to the Department. Daventry borough council has received a transfer of funding from the European regional development fund to discharge the agreement for the construction of the Icon centre.
Christopher Pincher (Tamworth) (Con): I am obliged to the Minister for giving way, particularly as he is labouring under a heavy cold. He said earlier that it had always been known that the development corporation in Northamptonshire was going to be wound up and he has just said that all the local authorities had only one substantive concern, which was about the transfer of responsibilities to them. Will he tell us why such an extravagantly long consultation of six weeks had to take place and why two months elapsed before the issue came to the House? Are we not using a rather heavy bureaucratic hammer to crack a small, local nut?
Stephen Williams: Hon. Members from the area in this Committee might say—you are from the area, Mr Hollobone, but you are unable to speak this morning—that consultation was a good thing, to make sure that all residual concerns are dealt with. The hon. Gentleman said it was an extravagantly long consultation period. I was careful to say that it ended on 2 January. I should be surprised if missives were being sent from local government offices to DCLG officials over the Christmas and new year holiday. I suspect that the consultation was, in effect, for the first three weeks of December, rather than over the rather more elongated period that he described.
Mr Burns: The Minister helpfully explained about the transfer of assets that were, according to his list, primarily buildings and railway lines. However, what about my specific question about money? Did the original organisations, when the time came for their dissolution, have either any cash in their funds or any monetary deficits, and what happened to that money?
Stephen Williams: I will answer that question in due course, once I have dealt with the questions asked by the hon. Member for City of Durham.
The hon. Lady first asked, essentially, whether all the growth happened in the areas of responsibility. Clearly, that would not necessarily be so, because growth is a continual process. Of course, the economy is strongly in recovery mode at the moment, with the strongest growth in the European Union, so growth is continuing. For example, the London Thames Gateway development corporation, which is one of the three that we are discussing today, has in a decade of operation achieved more than 10,500 new homes, 5,000 more jobs, 225,000 square metres of commercial floor space, £54 million of direct private sector investment in projects and £1.2 billion of private sector investment in its big eight locations, with the creation of nearly 15,000 square metres of new education space and the enhancement of nearly 300 hectares of open space. That is a good achievement over the 10-year period, but does it mean that growth in this area is over? I suggest not. One of the remarks made by the Chancellor in his interview on the Marr programme on Sunday was about Barking Riverside, although the hon. Lady concentrated on Ebbsfleet. It might be dangerous to anticipate too much of what might be said later in the Chamber today, but the Chancellor mentioned Barking Riverside on Sunday, so that should be in his speech or the accompanying Budget documentation, which is often how more is said about something.
The point is that the finite period of a decade for which the development corporations were set up by the previous Administration—before the hon. Lady and I were Members of this House—has been discharged. It is now appropriate, however, to hand over responsibility for driving growth in those areas to the local authorities.
The hon. Lady asked why—given the irony, I guess—on Budget morning we are abolishing three development corporations, but on Budget afternoon the Chancellor will be announcing the creation of a new one. We will have to listen to what the Chancellor says, but from a common-sense perspective, the reason is that we anticipate a complicated job of work to be done in Ebbsfleet, such as bringing together different parcels of land and some remediation and flood defence work, perhaps. It is appropriate to bring all those responsibilities within one special purpose vehicle that is charged with the sole aim of building a new garden city, which the Deputy Prime Minister was keen to happen, in Kent right next to High Speed 2.
Stephen Williams: High Speed 1, yes. I thank the right hon. Gentleman for that correction.
Roberta Blackman-Woods: I am glad that the Minister has acknowledged some of the success of the growth strategy of the previous Government. My specific question is whether a proper assessment has been made of how the arrangements worked in practice, compared with the arrangements that the Government are about to put in place, which are also likely to lead to more successful growth. That question needs to be answered.
Stephen Williams: I have given the hon. Lady the examples of the three areas that we are considering this morning. Success has without doubt been delivered by London Thames Gateway, although some potential remains in Barking Riverside, which I believe will feature in remarks later today.
Most of the West Northamptonshire projects, including the Avon Nunn Mills land assembly and demolition works, and the land assembly at St Peter’s Waterside, have been completed. That was one of the aims of the development corporation in Northamptonshire. The Castle station project has also been completed. In order to deal with the concerns expressed by the right hon. Member for Chelmsford about the Northamptonshire authorities ensuring that what remaining work needs to be done can be satisfactorily concluded, we have provided the authorities with £1 million over the next two years to ensure that their responsibilities are discharged.
Turning to Ebbsfleet, we will be working closely with all local authorities in that part of north Kent on the formation of Ebbsfleet to ensure that the project has the full confidence of all the people who have a democratic stake in the area. I understand that the Members of Parliament for the area have been consulted either by the Department or the Treasury are fully supportive of the course of action and look forward to the regeneration.
The hon. Member for City of Durham also asked about the assets of the London Thames Gateway development corporation, some of which were on the fringe of the Olympic park and have now transferred to the London Legacy development corporation. I imagine that there was consensus about that when the various delivery and legacy bodies of the Olympics were set up.
If there are no further questions—
Mr Burns: The hon. Gentleman very kindly said that, before he sat down, he would answer my question about whether any actual finances—cash—needed transferring. He also said he would answer the about assets in general with regard to Thurrock.
Stephen Williams: There was very little cash and what there was has been transferred to the Department.
Stephen Williams: I do not have an immediate answer on the amount, but if it is acceptable—as I do not think that it undermines the validity of the order—I will write to the right hon. Gentleman, setting out exactly what monetary assets or liabilities were transferred, although I do not believe they are of great significance.
Stephen Williams: I will write to the right hon. Gentleman on the remaining outstanding points, for which I do not have an immediate answer.
Roberta Blackman-Woods: I am grateful to the Minister for giving way. The Opposition asked about the transfer of assets, amounts, fragmentation and to which organisation the transfers were being made, so if he could extend his letter to the rest of the Committee, that would be most helpful.
Stephen Williams: It is my pleasure. I believe it is the normal courtesy when an hon. Member raises a question that cannot immediately be answered that the answer is copied to all members of the Committee. We will of course include answers to any outstanding points from the hon. Lady in the letter, which I am sure will be read with interest by all hon. Members.
I thank all hon. Members for their contributions. The order before us is the final step to give effect to the transfers, and I commend it to the Committee.