Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Gisborough: My Lords, while the noble Lord's figures may or may not be true, does he agree that the

8 Feb 1995 : Column 239

reason for it is that those who are not living in poverty have done so much better? Previously everyone was at a much lower level.

Lord Ennals: My Lords, that is true. I do not question that, because the figures show it. Ten per cent. of the population has done extremely well, but it has done so at the expense of the lowest section of society.

Lord Gisborough: My Lords, no.

Lord Ennals: My Lords, the noble Lord says "No". It is true. If we look at the levels of remuneration, we see examples day by day of absurd, ludicrous and sickening levels of remuneration at the top while there is a virtual freeze on the pay of those at lower levels. Of course, that is a factor that we must take into account.

A survey undertaken by the Association of London Authorities showed that in 1993 25.1 per cent. of primary school pupils and 18.5 per cent. of secondary school pupils received free meals in London. That is another way of testing poverty. That compares with 17.8 per cent. and 12.4 per cent. in 1991. Again, that is a sad commentary on the state of those whom some would call the lower classes.

If income for 1979 is converted in line with 1992 prices, the poorest 10 per cent. of families with children had an average household income which was £438 per year lower in 1992 than it was in 1979. By contrast, the disposable income of the average household among the richest 10 per cent. rose by £13,900 per year between 1979 and 1992.

I believe that the Government have a great deal to answer for and I hope that we shall hear some positive proposals from the Minister.

4.31 p.m.

Lord Gladwin of Clee: My Lords, I thank my noble friend Lord Dubs for initiating today's debate. It gives the House an opportunity to look at the effect of two government decisions. The first was the bringing together under one roof of the regional activities of four major spending departments; Employment, Environment, Transport, and Trade and Industry. That created the 10 integrated regional offices to which noble Lords have referred.

One of the major tasks of the regional offices has been to administer round one of the single regeneration budget. When the regional offices were created and the SRB was launched they had friends in local industry and commerce and in local government. People heaved a sigh of relief because there appeared at last to be government recognition of the need to co-ordinate activities in the regions. Furthermore the SRB brought together 20 separate funding regimes from five separate government departments.

That pooling of funding and the creation of one vehicle for urban regeneration in England was welcomed. However, doubts were expressed at the time about the total amount of money made available. The Policy Studies Institute stated that the SRB had many welcome features but it expressed concern about the cut in urban spending from £1.6 billion in 1993-94 to £1.3

8 Feb 1995 : Column 240

billion in 1995-96. That concern was well founded. There have been significant cuts in programmes. Those cuts have had a direct impact on urban regeneration. According to the Guardian of 11th January 1995:

    "Figures provided by the Department of the Environment show that there is £6.1 billion reduction over a five year period beginning 1993-94. The cuts amount to a 21.2 per cent. reduction during the period 1993-94 to 1997-98 under the Department of the Environment's heading, 'Housing, Construction and Energy Efficiency' and the 'Urban Regeneration and Countryside' heading".

So, instead of providing more resources to meet the undoubted need of urban regeneration, the Government are providing less.

The second reason why the SRB has lost friends is because, having brought together under one roof and one director the regional activities of four major departments, there seems to be no regional framework—no recognisable, let alone agreed, regional strategy against which SRB bids can be considered. Together with other noble Lords, perhaps I may urge the Government to reintroduce the proposal that they made in November 1993, but subsequently dropped, that a regional regeneration statement be drawn up in every region.

Consultation with local authorities, training and enterprise councils, and other interested bodies should take place. As the Minister knows, there have been a number of complaints from unsuccessful bidders for SRB funds. Of course, if you allocate funds by a competitive process there are going to be losers as well as winners. That is understood. But, surely, the winners and the losers should know why they have won or lost. At the moment, it is a lottery or, as one chief executive put it to me, "You never see the ball hit the back of the net".

Let us not forget the amount of time and money spent in bringing together the bidding partnerships by private-sector companies, which are responsible to their shareholders; by voluntary organisations; by training and enterprise councils; and by local authorities. More than 450 bids were made and there were only 200 winners. Among the unsuccessful bids were 192 by local authorities; a lot of money was wasted.

The money was wasted by over-bidding for a relatively small amount of money in a competition where the rules were unclear and the criteria for success unknown. Before round two of the bidding process gets under way, will the Government enter into discussions with the major players—the local authorities and the TECs—to explore ways of making the process more transparent, more cost effective and more relevant to the needs of deprived urban communities, in particular if they expect the private sector to meet the shortfall in public spending on urban regeneration?

My fear is that local industry will begin to walk away from the process. I hope that I am proved wrong but before concluding I wish to draw your Lordships' attention to a speech made two days ago by Howard Davies, director general of the CBI. He said:

    "Although... the establishment of Integrated Regional Offices, are seen as positive developments, companies are not clear that the new 'prefectoral' system is right. They are confused as to whom to

8 Feb 1995 : Column 241

    consult and what criteria they take into account. There is... a growing consensus that a regional focus for decision-making across the public sector needs to be created".

I hope that the Government take note of that concern and act accordingly along the lines suggested by noble Lords who have participated in today's debate.

4.38 p.m.

Baroness Hamwee: My Lords, at this stage of a debate it is almost inevitable that there will be a good deal of repetition. Perhaps the only excuse is to emphasise the seriousness of the points already made. All noble Lords have made similar points and I apologise that mine will not be very different, even though each of us may put a slightly different gloss on our analysis of the position. Perhaps another reason for repeating points is to give noble Lords speaking in the next debate the opportunity to get here because we shall finish a little early.

After preparing for today's debate, the question that remains is: what have the Government learnt from the bidding process? I say specifically "from the bidding process" because we shall not know for a little while the success on the ground—"ground" perhaps being the operative word—of the particular projects to be funded. Like other noble Lords I am concerned about a lack of transparency and a lack of clarity in the criteria on which the bids have been judged. I accept that criteria have been published but they have tended to be technical criteria unrelated to the type of project which would be acceptable. I am concerned at how the criteria may be publicised and I am also concerned—this perhaps should have been the first point—at how the Government and all the parties involved consult on establishing those criteria. As many noble Lords, especially the right reverend Prelate, have emphasised, unless the criteria used are based on the communities which the projects are to benefit, they will not be successful.

It should not have taken so much effort to second guess what the Government and the regional offices have been about. There is a great deal of commentary attempting to analyse the process after the event but the parties who should really be explaining the position are not the ones who are doing so. I am not the only one who is relying on newspaper commentary for this afternoon's debate.

The strategic—or, if one likes, the holistic—nature of the assessments made by the regional offices is unclear. That goes along with a lack of accountability. The integrated regional offices' papers are not available even though there is no regional regeneration statement, as has been mentioned by my noble friend Lord Tope and the noble Lord, Lord Gladwin. One must assume that there is some sort of regeneration framework which is capable of being articulated. However, I do not believe any of your Lordships would be able to agree what that is, as we have not been told.

8 Feb 1995 : Column 242

I looked at the Conservative manifesto to see what it had to say on the subject. In promising to bring together resources for targeted inner city programmes into a single budget, it stated:

    "This will mean that funding will go where it is most needed locally rather than according to a set of priorities determined in Whitehall".

One must hope that that is so, but how do we know that it is? The integrated regional offices are not a substitute for accountable government, or indeed—as the noble Lord, Lord Gladwin, said—for regional government. I think he described them as co-ordinating central government activities. He did not emphasise the adjective "central" but it is, I think, the apposite term.

It is beginning to be clear that there is an over-emphasis, in the acceptance of bids, on the leverage of the private sector. I understand that the Government's press release on the successful bids showed a ratio of £1 SRB money to £4 private and other public sector moneys. Like other noble Lords, I welcome the partnership that is being fostered by the process. The process is not all bad. I welcome the opportunities that are being given for each of the partners to talk to one another and understand one another. I have a little experience of this myself—in what is certainly not "son of strategic London government"—in London First, which, I suggest, is quite far related from any sort of democratic government. However, it has been fascinating to see how difficult it is for those who represent industry and business to understand the processes undertaken by local government, which naturally moves at a slow pace because it is concerned to ensure that all those to whom it is responsible so far as possible are taken along and are part of the process. Those who are responsible to a small group of people for their decisions are able to take those decisions much more quickly. They find it difficult to understand the slow and consultative processes both of local government and of the voluntary organisations. On the other hand, it has been salutary for those in local government to see the frustrations of those in the private sector when they experience the snail's pace at which local government sometimes moves.

The question of competition has been referred to. I agree with those noble Lords who say that competition is not the right way to approach strategic matters and in particular is not suitable for tackling deprivation. I suggest that urban deprivation should not be a matter for the market. The costs of bidding have also been referred to. It costs about £2 million to prepare bids for an allocation of some £36 million. The right reverend Prelate was right to comment on the raised expectations and of course the sense of anti-climax among those who undoubtedly put an enormous amount of effort into what turn out to be unsuccessful bids. I hope that the lessons learnt can be spread among those who need to understand them as to why some bids, encouraged at the outline stage, eventually failed.

There are certain policy areas which concern me. The noble Lord, Lord Gladwin, and the noble Lord, Lord Dubs, referred to housing and cuts amounting to a figure which I believe the noble Lord, Lord Gladwin, said

8 Feb 1995 : Column 243

amounted to over 20 per cent. during the period 1993-94 to 1997-98 in budgets under the DoE heading of housing, construction and energy efficiency, urban regeneration and countryside. Those are real cuts.

The noble Baroness, Lady Fisher, referred to air quality. That is a matter to which noble Lords will return tomorrow in the context of the Environment Bill. It would be helpful if the Government, today or tomorrow—preferably both—indicated their concern for our deteriorating air quality and the need for real steps to be taken to improve it.

There is also, of course, the question of education which one might describe as being investment in people. In the context of the current protests by school governors and others we must all be concerned about the fact that education may well have been a loser in this exercise. The noble Lord, Lord Ennals, referred to Section 11 funding. I will not repeat the figures he gave but I would endorse the concern he expressed.

We have all talked about clarity. The relationship between Section 11 funding and the SRB is one that needs to be much better understood so that boroughs bid in the right budget. I understand that they have been discouraged in many cases from bidding for Section 11 projects because, although the SRB may now be the vehicle, they have been told that their best chance of success from the SRB is physical regeneration rather than thematic Section 11-style bids. I believe, too, that central government argues that the SRB has been very popular with regard to Section 11-type bids and that the evidence given in support of this view is that a large number of bids have been received. That seems a somewhat circular point but it perhaps emphasises if anything the need and anxieties concerning Section 11 funding.

Noble Lords will be familiar with the needs. Indeed, many have been involved at an individual level in promoting the sort of undertakings which have addressed those needs. I shall give just two figures. A recent survey showed that 198 languages are spoken by pupils in London schools. In the borough of Kensington and Chelsea 37 per cent. of pupils in schools had English as a second language, 23 per cent. of pupils were not fluent in English and a total of 92 first languages other than English were spoken in the borough.

Sadly, given that physical regeneration seems to have been, by a long way, the priority in the recent round of successful bids, I have come to the conclusion that PR and the public impact of the announcements must have been at least as important as tackling deprivation and regeneration. Are the Government going for big splashes in the form of physical regeneration and new buildings to which they can point and say, "Look, we did that"? That is much easier to identify than investment in people through education and training which will have an important long-term benefit. I do not deny that physical regeneration in itself is important. It is important not least in giving people a feeling of well-being and confidence in themselves and as an expression of their own concern for their surroundings, but it should be part of a total package.

8 Feb 1995 : Column 244

I make that comment bearing in mind a completely different area of expenditure, the National Lottery. I do not mean the big prizes but the Millennium Fund and the good causes that will benefit. Again, those are important PR items rather than mainstream funding. I agree with the right reverend Prelate that that must not be a substitute for mainstream funding. If the mainstream funding suffers we must look at the budgets together.

I believe that we must look at long-term integrated programmes and tackle the root causes of deprivation. I conclude as I began by asking what the Government have learnt. I hope that the Minister can assure us that they are more concerned with investment than PR.

4.52 p.m.

Lord Williams of Elvel: My Lords, I have to declare an interest, like many noble Lords. I am unpaid President of the Federation of Economic Development Authorities, many of whose members have been involved in bidding for funding under the single regeneration budget.

Secondly, I should like to congratulate my noble friend Lord Dubs on both initiating the debate and also on the way he introduced it with great clarity and conviction. The debate comes at a very opportune moment since the Government are now reviewing the first round of the SRB and are preparing guidance to be issued for the second round. This is therefore the right time for your Lordships to be debating the matter, in the hope—which I hope is not entirely vain —that the Government may actually listen to what your Lordships say and take account of your Lordships' views in formulating the future approach to the SRB.

Many noble Lords concentrated on the problems of inner cities. My noble friend Lord Dubs and the noble Lord, Lord Tope, spoke about the areas of London that they know well. The noble Lord, Lord Gisborough, talked about Middlesbrough in a very moving manner. My noble friend Lady Fisher talked about Birmingham, bringing in not only deprivation, homelessness, unemployment and poverty but the ill health that follows from those. I am glad that my noble friend did not accuse the water that Birmingham gets from mid-Wales as being responsible for that ill health! My noble friend Lord Ennals, at a different level, spoke of the problems of ethnic minorities in the inner cities. All these are matters which are still with us and will no doubt remain with us for many years to come. Therefore, we have to ask ourselves how effective the single regeneration budget is and how effective it could be. I propose to concentrate my remarks on those two questions.

In our view the introduction of the single regeneration budget was potentially an extremely significant step in improving the way in which regeneration strategies were formulated and implemented. As many noble Lords have said, before it was introduced there was widespread criticism of the variety of funding schemes—some 20 in all—and of the way in which they operated. Therefore, bringing them together was potentially a sensible move. Furthermore, the new arrangements at least allowed the possibility that

8 Feb 1995 : Column 245

funding would be allocated in a way which would truly reflect local needs and priorities rather than centrally imposed rules and regulations.

I have used the word "potentially" because, like other noble Lords, we do not believe that the SRB has yet achieved anything like the results that it should. I propose to set out to your Lordships what we believe has gone wrong and what needs to be done if we are to avoid those mistakes in the future.

Before I do so, I want to make one thing clear. I am not going to go into the level of resources that are available, although like other noble Lords I regret the overall cut in inner city programme funding illustrated with great clarity by my noble friend Lord Gladwin of Clee. I accept that the overall funding must be a function of the overall financial situation of the country at the time. But I hope that when the noble Earl replies we will be spared the kind of specious double counting to which we have been treated in the past. If we are told that nearly £4 billion will be spent under the SRB I shall have to point out that of that total only £800 million will be available for new projects over the five years, and that organisations submitting bids in the second round later this year will be competing for a meagre £40 million in 1996-97. It is even doubtful whether that is new money. That is thin gruel, and I hope that the noble Earl will not try to fool your Lordships by dressing it up as the richest gravy.

So what mistakes have been made in the first round? I put first the way in which the bidding was conducted. I know, as the noble Baroness, Lady Hamwee, said, that Ministers have boasted about the number of bids received. Of 469 bids submitted last September 201 were successful. However, there is nothing to boast about. In the majority of cases those who were successful, like Birmingham, received substantially less than they asked for.

Although the number of bids sounds good, there are two problems of which I have become aware as President of FEDA. The first, as other noble Lords have said, is that the awards seem to many bidders to be something of a lottery. That is particularly true of those who submitted preliminary bids in June, were encouraged to work out full bids for the deadline of 7th September (thus in many cases having to cancel annual holidays) and then lost.

The second problem, which was mentioned by the noble Lord, Lord Tope, is cost. I can supplement some of the figures which the noble Lord gave. One bidder reported to FEDA that it had cost some £75,000 to put together a bid. That bidder was successful and is not complaining. However, the 250 losers also spent similar amounts—a total of over £15 million of taxpayers' and council tax payers' money—which have gone down the drain. Think, my Lords, too of the morale of those who have spent the money and, after initial encouragement, have had their hopes dashed.

Furthermore, the key point of contact between bidders and the Government has been through regional offices. I am advised that the various regional offices have adopted significantly different approaches to the administration of the budget, both in the indications to prospective bidders on the level of resources available

8 Feb 1995 : Column 246

and, even more important, in the nature and extent of contact between the offices and bidders once the preliminary bids were in. Regional offices have also varied in the amount of regional interpretation that they have put on the national criteria, and the indications that they have given of the size of bid which they would favour. Some favour large bids; others try to spread their resources more thinly and more widely.

As the noble Lord, Lord Gisborough, pointed out, even if you win it is a hard task because you then have to submit a delivery plan. In that delivery plan you then have to provide milestones. As a successful bidder, you can only draw quarterly in arrears. If you fail on the milestones, you do not obtain your money. That is a pretty tough programme for bidders to achieve. Many bidders now—I speak of many members of the federation—find it extremely difficult to put together exact timetables in the way that regional offices require simply because firms outside are unable to bid within the time-frame required; and that is another problem.

In the light of the experience of the first round, I suggest that there are three objectives for the second round. Having stated them, I shall suggest how they could be met.

The first objective should be to reduce wasteful overbidding. That will be particularly important if 469 bidders will again bid, but this time for only £40 million. The way to meet that objective must be to involve local authorities at an early stage in the co-ordination of bids so that decisions between competing bids for the same area could be taken earlier, and locally rather than by the regional office. It was one of the great virtues of City Challenge that local authorities were invited to co-ordinate the preparation and submission of bids for City Challenge designation. That role has been lost in the transition to SRB and should be restored.

The second objective should be to remove what the noble Lord, Lord Tope, called the beauty contest element inherent in the current competitive process. It is absurd and wasteful. It is right—indeed it is desirable—to preserve regional diversity, but it cannot be right for regional offices of London departments—after all, they are only satrapies of Whitehall—to decide unilaterally what the features of that diversity should be.

This brings me to my third objective: to build on the regional office concept in a way which involves to the full local authorities and other organisations in the regions. I believe that this is the key to the matter, since if that can be done my second objective would be met. The key to strengthening the regional offices in the way that I suggest is, as the noble Lord, Lord Tope, suggested, and others have confirmed, to revive the notion of regional regeneration statements which were mentioned in the original announcement of November 1993. Those statements should be drawn up by regional offices and local authorities in partnership and would serve—as the original plan intended—as a policy context within which the SRB would be administered. Regional statements, once agreed between regional offices and their local partners, would be submitted for ministerial approval. Once that was given they would

8 Feb 1995 : Column 247

provide a framework, endorsed politically both locally and nationally, within which the SRB could be administered, more tightly, by the regional office.

The Association of Metropolitan Authorities and other local authority associations support that approach. I hope that the noble Earl will give us his assurance and that the Government will see its merit and go back to the plan announced in February 1993. If there is to be a genuine truce in the war which the Government started between central government and local government, this is the way to start. It is only if the lessons of City Challenge are learnt and not cast aside—that there must be partnership between local authorities and central government—that we shall make progress. Only in that way will there be a resurgence of hope in our inner cities, to which the right reverend Prelate the Bishop of St. Albans referred. It is only if we can recreate hope that the single regeneration budget scheme will achieve the success which we believe it should.

5.5 p.m.

The Earl of Lindsay: My Lords, I begin by thanking the noble Lord, Lord Dubs, for bringing to the attention of the House the important issues concerning the condition of our inner cities and the role of the single regeneration budget. As the noble Lord, Lord Williams, said, the debate comes at an opportune time.

We have had a number of speeches from noble Lords with a great regional expertise and experience in inner city matters—not least from the noble Lord, Lord Dubs. Although it will not be possible for me to comment in detail on all the individual issues raised, I welcome this opportunity to underline the Government's determination and commitment to tackling the problems of the inner cities.

The most important factor in regenerating our inner cities is a healthy national economy. It is for this reason that the Government are determined to bear down on inflation, control public expenditure and raise standards of education and training. At the same time, the Government recognise that special measures may need to be taken to ensure that our inner cities benefit from overall economic recovery.

The type of measure applied depends very much on the individual circumstances of cities; there is no single-club solution. We should therefore make no apology for introducing a range of tailored measures to address inner city problems. Indeed, Lord Pitt (whose knowledge and insight on inner city matters is greatly missed) said in the House when we debated inner cities nearly two years ago:

    "The problem requires local participation, support, and flexibility so that different methods can be adopted in different areas".—[Official Report, 24/3/93, col. 356.]

The single regeneration budget is crucially important. It is thus that we wish to learn from and feed off the rich experience of inner city initiatives. It was for that reason that the Secretary of State for the Environment announced in November 1993 the formation of the SRB. From April 1994 that has brought together, as many

8 Feb 1995 : Column 248

noble Lords said, no fewer than 20 separate programmes, each with its own rules and methods of working.

The noble Lord, Lord Dubs, referred to the casualties of the SRB, in terms of the number of individual programmes which were brought together at one stage. Government policy had been criticised for being too fragmented. For example, the Audit Commission reported in 1989 that the programmes were seen as being "a patchwork quilt" which encouraged compartmentalised policy approaches rather than a coherent strategy. A report by the Association of District Councils in 1993 stated that what is required is a strategic approach which encompasses all relevant objectives. Therefore the general welcome to the SRB was legitimate. The criticism of the "patchwork quilt" had to be, and was, answered by the formation of the SRB.

It places the initiative with local communities to come up with solutions tailored to their needs and priorities. It recognises that although the most deep-seated problems are focused in our inner cities, there are other areas with pockets of need which require a flexible approach. The noble Lord, Lord Tope, and the right reverend Prelate recognised that point. That approach recognises that regeneration cannot be brought about by an edict from Whitehall or by any single local player alone. Thus a condition of success in competing for single regeneration budget resources is the formation of a broadly-based and active local partnership. That partnership should not simply be a talking shop. Those taking part in single regeneration budget projects have a genuine responsibility and a clear stake in the activities which are being promoted.

Many noble Lords today have questioned the concept of competition for resources. The noble Lord, Lord Dubs, suspected that it might have been the main criterion on which the SRB was being run. I stress to noble Lords that the competitive mechanism was the methodology and had nothing to do with the criteria on which schemes were assessed. The Government are convinced that the very process of competition improves the standards of projects which are brought forward and, even in the case of unsuccessful bids for resources, managed to promote effective local partnerships which might not previously have existed. This is not the Government's view alone; local authorities, TECs and the private sector have all acknowledged the strengths of the competitive approach. Competition produces judgment by merit (I stress to the noble Baroness, Lady Hamwee) and has already proved successful with programmes such as City Challenge, of which my noble friend Lord Gisborough thoroughly approved.

In this process, various noble Lords have questioned the role—or the lack of role—allocated to local authorities, but I stress that local authorities are at the very centre of the Government's urban policies. Within the SRB bidding Round 1, they led in 53 per cent. of the bids and were involved in 90 per cent. of bids. They quite clearly had an important role. That role was laid down and anticipated by the bidding guidance. I stress to the right reverend Prelate that through the

8 Feb 1995 : Column 249

involvement of local authorities and the creation of local partnerships, it is a genuine objective of the SRB to create local sensitivity and local confidence.

Some noble Lords have maintained that the single regeneration budget is a cover for cuts in public expenditure. I ask the noble Lord, Lord Williams, to be patient while I explain how the finances work, because he will no doubt recognise some of the figures that I am about to set out.

The Chancellor of the Exchequer's Autumn Statement preserved the baseline for the single regeneration budget at more than £1.3 billion per annum over the next three years, adding up to almost £4 billion in total. These resources will go to support ongoing investment in housing and other regeneration initiatives. In particular, more than £1 billion of the £4 billion will be spent on estate action and housing action trust commitments.

On top of meeting commitments, over £800 million will be available for new regeneration projects over the next three years, with more to come in later years. This £800 million will support both the first bidding round, and the initial years of the second bidding round announced by my right honourable friend the Secretary of State for the Environment on 5th December 1994. I should add that we have been able to secure, within the overall baseline for the single regeneration budget, an additional £25 million per annum for each of the years of the public expenditure survey to boost the resources available for the first bidding round.

The first single regeneration bidding round has been outstandingly successful; local people have risen to the challenge—

Next Section Back to Table of Contents Lords Hansard Home Page