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Baroness Hamwee: Amendment No. 226 refers to local authority powers as they are affected by the exercise of the Secretary of State's powers. As regards Amendment No. 225, the Minister said that it would be retrograde. It is sad that allowing local authorities to play their part as I have suggested is regarded as a retrograde step. It is perhaps a little odd too in these days when the use of private finance is encouraged. It also tends to suppress the community leadership role of local authorities, which is a role that I should like to see supported. The hour is late and I shall not pursue the point now. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 226 not moved.]

Clause 123 agreed to.

Clause 124 [Regeneration and development: terms on which assistance is given]:

Lord Williams of Elvel moved Amendment No. 227:

Page 73, line 3, leave out subsection (1) and insert--
("(1) The Secretary of State shall consult local authorities and relevant interests regarding the regeneration and development of the regions and publish regional strategies for regeneration and development, in which he shall have regard to the views expressed in such consultation.
(1A) Financial assistance under section 122 shall have regard to the strategies published in accordance with subsection (1) above and may be given on such terms as the Secretary of State, with the consent of the Treasury, considers appropriate.
(1B) The Secretary of State shall make arrangements for the reimbursement of the costs of preparing applications for funding under this section.
(1C) The Secretary of State shall determine--
(a) those applications which are eligible under subsection (1B) above for reimbursement; and
(b) the level of such reimbursement.
(1D) The Secretary of State shall give reasons in writing to applicants for financial assistance under section 122 for the success or failure of their application on the same date as he publishes his decisions on the allocation of such financial assistance.").

The noble Lord said: In moving Amendment No. 227 I shall speak also to Amendment No. 228. No doubt the noble Baroness, Lady Hamwee, will speak to her Amendment No. 229. The purpose of the amendment is to provide what I would call a strategic background against which to judge bids for support from the single regeneration budget and other funding sources. Perhaps I ought to declare a minor interest in that I am President of the Federation of Economic Development Authorities. It is purely an honorary position but the economic development authorities--district councils which have economic development departments--are involved in bids for the SRB.

Judging from my experience of the Federation of Economic Development Authorities and other bodies, there is a difficulty about the transparency of decisions regarding the allocation of funds for regeneration and

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development. The purpose of the amendment is to improve that transparency and to encourage collaboration between central government, local authorities and others in developing some kind of strategic framework for the future development of United Kingdom regions.

There is anxiety among local authorities and others preparing SRB bids that the process of deciding which bids should be accepted and which should be refused is not transparent. Amendment No. 227 achieves three aims. First, it requires the Secretary of State to consult local authorities and other relevant bodies about the future regeneration and development of their region and to have regard to their views when deciding on the priorities or criteria to be used in deciding between different SRB bids. Currently there appears to be something of a policy vacuum within regional offices where decisions on individual SRB applications are taken. I am afraid that that gives rise to some suspicion, however unworthy, that decisions are taken on political grounds rather than on grounds of a contribution to a particular area. A strategy, if put in place, would provide an indication to bidders of the types of project which should be brought forward for further local regeneration.

Secondly, it appears that the government regional offices vary very markedly in the extent to which they provide to those submitting SRB bids feedback as to why the bids were successful or unsuccessful. Indeed, when consulted--and I am advised by the federation of which I am president--government regional offices vary widely in the advice which they are prepared to give to local authorities in putting forward a bid. Some regional offices are very forthcoming and others not so forthcoming. The amendment requires the Secretary of State to give reasons in writing, which is reasonable, to bidders as to the success or failure of specific bids.

That feedback is particularly important because it will encourage bidders in future rounds to improve their submissions; to improve the way in which they present their case; and will improve their chances of success. That would be seen as at least a minimum level of courtesy following the expenditure of large amounts of time and money in preparing the bids. One local authority I know spent over £1 million of its council taxpayers' money in preparing a bid. That is a great deal of money. As it happened, the bid was successful. But many bids which have cost a great deal of council taxpayers' money as well as public money have been unsuccessful. Feedback will also provide proof that all bids have been considered carefully.

Thirdly, because the costs of preparing SRB bids are high, this amendment gives the Secretary of State discretion to reimburse some or all of the costs incurred in making bids which are commendable although unsuccessful. That happens frequently. Local authorities are told, "It was a very good bid, quite right, but unfortunately you were unsuccessful". This amendment would ensure that what are known in the trade--if I may use the expression--as near misses are not disadvantaged by the bidding process since costs of bids can be considerable.

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I very much hope that the Government will take seriously these two amendments because there is a genuine problem in relation to the costs of SRB bids and the strategy which lies behind the single regeneration budget itself. I beg to move.

9.45 p.m.

Baroness Hamwee: My name is down to Amendments Nos. 227 and 228, and Amendment No. 229, which is in my name, has a very similar aim to the amendments to which the noble Lord, Lord Williams, has just spoken.

The fact that the implementation of the budget is not consistent across the country is not necessarily bad because, after all, there are different needs and different priorities in different places. But what is worrying is that it is not possible to understand the basis for decisions, as the noble Lord has said.

The effect of the SRB so far has given rise to concern that funds have been allocated on a basis less closely related to the needs of different areas than has been the case in the past, as well as the basis for the allocation of funding between areas having become less explicit. I understand that the Association of London Government has assessed the degree of relationship between the SRB and the Government's own index of local conditions and, further, that the effect of the SRB so far has been to reduce the degree of fit between resource allocation and need. Indeed, I believe that some areas of high need have been missed out.

As I said, patchiness is not necessarily wrong but it seems in this case that perhaps it is. The effect of the proposed clause is to suggest that, rather than being reliant on a bidding system the Government might decide in advance how much an area should receive, so that the basis of allocation of funding would become more explicit. I was surprised to learn that it is only in London that there is real evidence of competition for resources, and that in most other regions the number of bids submitted does not greatly exceed the number that are funded. It seems, therefore, that there is perhaps not the competitive process that was originally envisaged. Again, that is not necessarily a bad thing. It may be the natural result of key partners in an area working together to submit a joint bid under the leadership of the local authority. However, in London it seems that particular bids each year are especially favoured by the regional office. Major established partnerships--one can think of Park Royal, Stratford and the South Bank--bid each year, and are likely to be funded each year. I question whether that approach is an appropriate one. As I have said on previous occasions, I have my doubts--indeed, more than doubts--about the benefits of competition. If it is to be the same projects which are to receive the lion's share of resources, that negates the objective of a competitive system. I support this group of amendments.

Earl Ferrers: These are meaty amendments, if I may so express it. I refer to the first two amendments in the group, Amendments Nos. 227 and 228, which stand in the names of the noble Lord, Lord Williams, and the noble Baroness, Lady Hamwee. The amendments return to concerns which have been expressed in the past,

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primarily by local authorities, about the operation of the single regeneration budget challenge fund. The Environment Committee in another place considered these areas in its first report on the operation of the single regeneration budget, and most of these points have been covered in the Government's response to that report.

We welcome the committee's general conclusion that the single regeneration budget challenge fund has already demonstrated its potential to achieve excellent value for taxpayers' money; and that it does not think the Government should make major changes to the programme's operation. The Environment Committee felt that the Government were on the right course. That is encouraging. Amendments Nos. 227 and 228 cover several points. First, Amendment No. 227 would require the Secretary of State to consult local authorities and other relevant interests, and publish regional strategies for regeneration and development. There is a regular dialogue between government offices and key local players to discuss regeneration issues and priorities. That is a prime function of government offices. However, we do not believe that it would be practicable to try to incorporate the existing diverse arrangements into a formal exercise, nor that it is necessary to publish the results. The Environment Committee concluded that regional regeneration strategies--if we were to have them--would add a layer of bureaucracy, and risk making the bidding process for the single regeneration budget challenge fund unnecessarily cumbersome and restrictive. We therefore would not wish to adopt that course.

Secondly, the amendment would require financial assistance under Clause 122 to have regard to published regional strategies.

As I said earlier in relation to Amendments Nos. 221 and 222, we agree that bids for support under the single regeneration budget challenge fund should take full account of the planning policy guidance of the Secretary of State for the Environment and local authority development plans, as well as other regional strategies such as single programming documents prepared in relation to European structural funds. The bidding guidance for rounds one and two drew specific attention to this; and it has been reaffirmed in the guidance for round three.

The amendment would require the Secretary of State to make arrangements to reimburse bodies for the costs of preparing applications for funding, to which the noble Lord, Lord Williams, referred.

The Select Committee agreed with Ministers that resources invested in bids for the single regeneration budget challenge fund were not necessarily wasted. Most losing partnerships have stayed together, and have looked for other funding or have put in new bids. The noble Lord, Lord Williams, said that if they were to be reimbursed it would encourage the bidder to continue to bid. I dare say it may. But the fact is that there would be no extra money available. Therefore that which was paid out to the losing bidders would not be available to other constructive bids. Although there is clearly an

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expense and a drawback in losing a bid, nevertheless it has been shown that those who bid tend to stay together and are successful in later bidding.

Partnerships not successful in round two will be able to bid again for round three funding. Government offices will give advice to them, and other bidders, to assist in drawing up bids. The bidding guidance for the challenge fund deliberately stresses that bids for support should not be presented in a glossy or elaborate form. They should include the minimum information necessary to enable a bid to be assessed, and translated into action if it is successful.

Finally, the amendment would also require the Secretary of State to write to applicants, giving them reasons for the success or failure of their bids for funding, on the same date as the decisions are announced. In fact, that is what happens. Government offices wrote to all partnerships who were unsuccessful under the first two single regeneration budget challenge fund bidding rounds. They offered such partnerships a meeting to discuss why their bid failed, how it might be strengthened in subsequent rounds, and what alternative sources of funding might be available. Most of the partnerships took up the offer of a meeting, and many were subsequently successful in round two or are bidding again in round three. For those reasons I do not think that the first amendments are desirable.

Amendment No. 229 stands in the name of Lady Hamwee alone. She has lost the noble Lord, Lord Williams, on this amendment. I do not know why; perhaps he did not approve of it. The amendment would enable financial assistance to be given to local authorities on the basis of annual regeneration plans. Our view is that local authorities have important roles to play both as members of local partnerships and with other interested parties in helping to bring together bidders. The bidding guidance we have just issued for round three of the single regeneration budget challenge fund reflects our wish to see local authorities playing this central role. But we are looking for real local partnerships, which fully involve other parts of the community; and we agree with the Select Committee's recommendation that we should not give local authorities a formal strategic role in relation to the bidding stage of the single regeneration budget challenge fund process.

Overall, we believe that the present arrangements for the operation of the single regeneration budget challenge fund are adequate, although we will certainly keep them under review and see how they can be improved as time goes by. This reflects the Select Committee's advice against making major changes to the programme. We do not think it would be helpful to specify certain aspects of the arrangements in legislation, as this might limit the continuing process of improvement.

The simple and short answer to all three amendments is that the single regeneration budget challenge fund is working quite well. The Environment Committee said it thought it was working well and advised against making too many alterations. I suggest to the Committee that it would be inadvisable, after that advice, to change what

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we are doing by primary legislation. That is why it would be best not to accept the amendments as part of the Bill.

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