Examination of Witnesses (Questions 1110
- 1119)
THURSDAY 29 JANUARY 2004
MR NICK
GERRARD, MR
REG HASLAM
AND MR
ANTHONY JENNENS
Q1110 Chairman: Can we welcome Nick Gerrard
from the North West Development Agency and Reg Haslam, head of
planning and transportation at Blackpool Borough Council. Some
Members of the Committee have fond memories of our visit to Blackpool
at the beginning of December and the hospitality and welcome you
gave us. We are very glad to see you here again today. Can I also
welcome Anthony Jennens, a planning consultant? Can I ask you
to note that Colin Perry of the Bill team is present should we
need to speak to him. There will be a transcript of the evidence
produced and placed on the internet within about a week. A full
declaration of all the interests of Members was made at the beginning
of our first meeting and that information for the public and for
you is available. I am sure you will have observed that it is
not necessary for you each to answer every question but do seek
to catch my eye as we progress if you want to add something to
an answer. The Bill appears to have, it seems to us, a fourth
objective of securing regeneration and economic benefits from
the development of large casinos. How do you think this objective
can be achieved within the regulatory framework set out within
the draft Bill?
Mr Gerrard: This of course is
the prime interest of the Regional Development Agency and the
North West Development Agency in this Bill, this ability to secure
economic and regenerative benefits. In terms of how we think the
objective could be achieved, first of all, it needs to provide
a clear context within which investment can take place and provide
a context for that investment in casinos, to concentrate that
investment in areas where the economic benefits and regeneration
can be achieved. Secondly, there is the need to avoid proliferation.
In other words, to avoid the possibility of those benefits being
dissipated. Thirdly, there has to be the means whereby contributions
towards those wider objectives can be met from the private sector
towards achieving those objectives on the back of the casino investment.
In terms of the first of those, the means of concentrating the
investment, the Bill obviously goes a long way but it needs strengthening.
The reference in the policy document to the regional planning
bodies identifying areas where there are major leisure developments,
including casinos, where there they should be located, is a good
start. The fact that there is no reference to the only existing
statutory document which identifies the tourism and economic development
priorities for the region is a weakness and does need to be specifically
included. I am referring there to the regional economic strategy
which all of the RDAs have, so the whole of England is covered
by that. In my evidence, I give detailed reasons as to providing
the context for Blackpool but it is a general point. That needs
strengthening. In terms of avoiding proliferation, the sizing
proposals in the Bill will help to achieve that but the absence
of a definition about resort casinos or clear guidance in relation
to that within the Bill in terms of the largest with all of the
ancillary benefits which, from a regional point of view and from
the point of view of achieving economic benefit and regenerative
benefits are the prime things we are interested in, is unhelpful
for the achievement of those objectives. In terms of making contributions,
the existing framework through section 106, as that has been reformed,
is a means of achieving that. I do not think any more needs to
be done there, but there are areas of concern in the first two
headings.
Mr Haslam: The fact that we have
this regeneration emphasis means it is imperative to use the legislation
if possible to bring about regeneration. Behind that there is
an acceptance that without it the industry would not naturally
direct its investment to regeneration. I believe there has to
be a recognition that, through the legislation and supporting
legislation, as soon as we talk about regeneration, we are talking
about planning and economic legislation and they are bound together
in a simple but precise and transparent way. That investment must
be guided and directed. Without it, we will not see the regeneration
benefits. It is how we guide and direct that is important. Also,
that guidance and direction in terms of location, to get the spatial
pattern that will favour regeneration, has to influence size and
form. There are concerns about the present suggestion of below
and above 10,000 square feet which we can come to later.
Q1111 Viscount Falkland: Brigid Simmonds
of Business in Sport and Leisure has said to the Committee that
one of the things that is unclear is whether the Regional Development
Agencies are going to look at all casinos which are over 10,000
square feet of gaming area or if they are only going to look at
resort casinos, if that concept becomes a reality. Perhaps you
could clarify that. As a rider to that, do you consider that the
draft Bill or any associated guidance that goes with it should
distinguish between large casinos and resort casinos? Does the
fact that they are currently covered by the same definition complicate
the role of the development agencies?
Mr Gerrard: We need to clarify
the role of the Regional Development Agencies. They have no planning
powers. They have statutory responsibility for the regional economic
strategy which provides this framework for identifying the priorities
for economic development and regeneration within the region and
other things, but those are prime focal points. Recently, last
year, Regional Development Agencies were given the responsibility
to become statutory consultees on planning applications. I assume
this is what Brigid Simmonds was referring to. At the moment,
we have only dealt with the regulations governing our statutory
consultee status. They have only gone past the first stage. In
other words, at the moment, with effect from last September, we
can be consulted on major infrastructure development and proposals
that have had major employment or investment policies in the statutory
regional economic strategy. There is going to be an extension,
we believe, to our ability to be consulted to cover a certain
development of any nature above a certain threshold but that has
not yet been resolved. It is being looked at by the ODPM at the
moment. The reason I mention that is because that will provide
the context within which the RDAs are obliged or not to be able
to look at these developments. In answer to the question, therefore,
it obviously depends on what emerges out of this Bill in terms
of size differentiation and also whether or not we are given that
further statutory responsibility for consultation. What do we
want? The reason we wanted statutory consultee status was to ensure
that the economic development aspect of major applications within
the region were taken into account. We are not interested in small
ones. For example, in the status that we already have, we have
only identified it applying to major infrastructure developments
which are listed and certain major, strategic sites within the
region. Within the context of this legislation, if it goes through,
we will only be interested in the largest. If there is a definition
of resort casinos, which we would advocate, we would be primarily
interested in those. We certainly would not be interested in the
less than 10,000 square feet. The issue though is complicated,
in answer to your second question, because of the lack of definition.
At the moment, it is just 10,000 square feet and over and that
does complicate matters. What it does not do is help to clarify
what we are talking about: major developments of regional significance
within which casinos could be a key driver to their delivery.
First and foremost, that is what we are interested in from a regional
point of view. The lack of clarity at the moment is a problem.
I do not know whether it is better to go straight for a division
between small, five to ten, and the resort casinos, however they
are to be defined, as being much larger than the 10,000, but it
is unhelpful. We would only be interested in the largest, definitely
resort casinos, possibly the larger ones, however they were defined.
Mr Haslam: It is very important
to recognise the relationship between regional economic strategies
and regional planning guidance as it is now, regional spatial
strategy as it will become. There is a close link between policies.
One expresses the other. One helps the other occur. The statutory
document is the regional spatial strategy and that should reflect
the economic priorities of the region and embody and strengthen
that statutory consultee role through statute. It is important
to recognise the responsible approach of determining a strategy
regionally, securing the maximum benefit from this new industry
that this piece of legislation will create and great holes could
be blown in the regional strategy if casino use does remain within
the existing use class order. Large establishments are able to
slide out of one entertainment use into casino use. I think the
casino use has to be sui generis. It is also important
to recognise that permissions granted now by sleight of hand in
the hope that a licence will come automatically could also puncture
a sensible regional strategy. Perhaps there is a need here to
ensure that new licences for casinos emerging from the new legislation
should be associated with planning applications considered and
granted after that legislation is enacted.
Mr Jennens: If I were a casino
operator and I were now to purchase the David Lloyd tennis clubs
throughout the land of which there are 28, I could turn all of
those immediately into casinos and put in 40 tables and whatever
the statutory amount is now for machines, wait and get grandfathered
in and have 28 very large casinos around the country. I am sure
that is not the aim of the Bill and there would be no regenerative
benefits at all.
Q1112 Chairman: As long as they were
in permitted areas.
Mr Jennens: We are rather assuming
that permitted areas go and most of them are anyway.
Q1113 Chairman: I take your point.
Mr Jennens: The difference between
large and resort is confusing because if you are talking about
large you are talking about over 40 tables and therefore unlimited
numbers of machines, which is what these casinos are all about
because that is where the money comes from. There is no point
in that definition and "resort" also confuses because
it tends to make people think of the seaside. We are not talking
about the seaside; we are talking about resort casinos. It may
be the case in Blackpool but many of the resort style casinos
are being planned. Yesterday, there was an announcement about
a resort style casino at Wimbledon dog track from MGM.
Q1114 Chairman: In your submission, in
trying to define the definition of resort casino, you suggested
15,000 square feet of gaming area as the minimum entry point for
the large, destination casinos. Why did you settle on that figure?
Mr Haslam: I do not believe that
is precise. We used 15,000 as one of our suggestions but we are
talking about lightweights and heavyweights. There is this potential
cruiser weight coming in. Our feeling was that one way forward
was to raise the limit of 15,000 square without increasing the
ratio and then to have clear water in beginning to define what
a large casino is. We have sought not to use the words "resort
casino" but "destination casino".
Mr Jennens: We mean table gaming
space.
Mr Haslam: Yes, with a three to
one ratio for small casinos and clear water for beginning to think
of a definition for what we believe a large casino is.
Q1115 Lord Wade of Chorlton: In the submissions
we received from the North West Development Agency and Blackpool,
you note that resort casinos are in effect the only viable means
of generating the massive, private sector investment required
to turn around the economic decline of Blackpool. How do you intend
to harness large casinos in such a way as to provide this economic
regeneration?
Mr Haslam: At its simplest the
common parlance now is the 24/7 economy, 24 hours, seven days
a week, associated with our cities. If you look at a coastal resort
location over one year, you will not find a plateau of income.
You will find something rather like a two humped camel and it
is unsustainable. Resort regeneration is a real, genuine opportunity
that can be grasped if the resorts can find a way, first of all,
to secure a seven day a week, 52 week a year economy, a plateau
of income, a stream of income that would support a wide range
of complementary investments in other forms of leisure and entertainment.
At the heart of our strategy are resort casinos because they bring
that even plateau of visitors and income over the whole area.
We can build on these real foundations. We know that with that
kind of income stream other leisure operators will invest in coastal
locations. Over the last 20 years they have drifted away from
coastal locations to 52 week a year cities. That is fundamentally
what the destination casino is. We have looked at a destination
definition of a large casino because it would be differentiated
from other casinos in terms of quality, choice and the whole experience.
It would create for us an "I must visit Blackpool" experience
within a wide market area. That is not just the UK. What is crucially
important to recognise is that 73 per cent of Blackpool's visitors
live outside the Granada TV region. It is already a UK centre
and it has potential to link with northern Europe and Eire. We
have an airport and we have the Ryan Air flights making some of
these links already. It is the 52 week a year economy that we
are searching for.
Mr Jennens: In relation to how
to capitalise in this area, you need a clear strategic context
which we provide through the regional economic strategy. That
clear context then provides the basis on which private sector
confidence in an area can be attracted because without that the
investment will not follow. The challenge that Blackpool faces
as opposed to some of the other major centres which will undoubtedly
benefit from major casinos is that there is not that opportunity
for a whole series of other investment. This is really the only
significant opportunity for levering in major private sector investment.
That is why we are interested in it specifically to achieve these
benefits. If you do not provide a strategic context backed up
by serious public investment to deal with matters of the public
realm, it is not just a question of plonking these casinos in
there; there has to be the infrastructure around them for them
to give the private sector confidence to invest. The other critical
thing is you have to have other programmes built in place to take
advantage of the jobs that are thereby created. Programmes are
in place in the north west to help achieve this and in Blackpool
specifically for training local people, for encouraging businesses
and providing them with support to supply the new industries coming
in. It is all of that package that sits around this key driver.
Without the major casino investment though you have nothing to
gather around. That is the problem.
Q1116 Lord Wade of Chorlton: Do you think
that all large casinos should have the capacity to create regenerative
economic benefits, wherever they may be? Do you see that as part
and parcel of the benefits they can bring?
Mr Jennens: I do. I think that
is what we should be aiming to do.
Q1117 Lord Wade of Chorlton: Clearly,
the RDAs in Blackpool want to see these large casinos in Blackpool.
What is the view of the rest of the north west? Are other communities
and other local authorities in the north west prepared to support
this as a priority?
Mr Gerrard: The priority that
Blackpool has in terms of the status of the regional economic
strategy, the supporting regional tourism strategy and the coastal
resort strategy, is something that has been produced with partners
in the region so it already has that status and support. The issue
that will challenge the region, as in any region, is this responsibility
that has been given to the regional planning body to identify
the major areas within it and raise the issue of where else or
where not else. That Blackpool has a priority is undoubted but
it does not deal with the other issues.
Q1118 Lord Wade of Chorlton: Do you think
they are going to be big issues?
Mr Gerrard: At the moment, we
have a number of places which in my view are completely inappropriate
for the purposes of casino led regeneration. You have a number
of proposals coming up where people are grasping hold of this
because they are seeing it as an opportunity. The reason it is
relevant to Blackpool is not only because of the broader strategic
context but because of the visitors that already go there. There
is a clear context there. Casino investment is not a panacea for
solving all the north west regeneration problems.
Q1119 Chairman: Or all of Blackpool's.
Mr Gerrard: Indeed.
Mr Jennens: This is turning into
a bit of a Blackpool case. Other regions that are sadly not represented
here might have different views, as indeed might other parts of
the north west. The next question is how one says no to Manchester
and what are the effects of a large casino outside Manchester.
Mr Haslam: On the second question,
how would we harness the benefits, reference has been made earlier
to section 106 agreements. If you do take a proactive approach,
if you seek to plan for this new industry as we have, a whole
range of potential opportunities arise from that planning. For
example, the area for which Blackpool has a master plan for resort
casinos is in the government's pilot for business improvement
district status. Through the business improvement district, substantial
revenue income will be won to ensure that we do not build a new
Blackpool and then stop the evolution process. Blackpool must
change and continue to evolve. There are many other ways we have
looked at. We have talked to the industry. We have looked at the
possibility of building shells and leasing them to casino operators
who would fit out and lease. That would create for the regeneration
process a revenue stream that could be directed towards the evolution
of the product in Blackpool and conceivably to a wider regional
area if the basic funding is a partnership of the region. There
are many opportunities to take advantage of this investment if
it is planned for and that is what we are seeking to do.
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