Members present:

RT HON JOHN PRESCOTT, a Member of the House, (Deputy Prime Minister and Secretary of State for the Environment, Transport and the Regions), RT HON HILARY ARMSTRONG, a Member of the House, (Minister for Local Government and Regions), RT HON NICK RAYNSFORD, a Member of the House, (Minister for Housing, Planning and Construction), and DR PAUL EVANS, Director, Urban Policy Unit, Department of the Environment, Transport and the Regions, examined.


1.    Can I welcome you to the Committee for the continuation of our inquiry into the Urban White Paper. Could I ask you to introduce your team for the record, please?

(Mr Prescott)  Yes. First of all, Chairman, can I start with an apology that I was not able to come here in December. As you know, I was doing Prime Minister's Questions, so it was not possible for that. I must say perhaps I have not been as well briefed as I would like with the bereavement in my family, and I have the funeral tomorrow, but I have two or three very good people who know all the answers in these areas and who will endeavour to give the best answers possible to the Committee. I have, on my right, Paul Evans, who is the Director of the Urban Policy Unit in the Department. Of course, Hilary Armstrong, who is the Minister for Local Government and Regions, who was before your Committee yesterday. And, of course, Nick Raynsford, who is the Minister of State for Housing, Planning and Construction. If I can I would just like to make one or two quick points before we come to the questioning. The Urban White Paper was published, of course, within a week or so of the Rural White Paper. That was because we do believe that the principles apply to both rural and urban, but you need to apply them in a different way and that was why we had two separate White Papers. We had some exchanges on that at the last meeting. Chairman, all the people who live in these areas deserve good quality services and facilities, and that is the design of the Urban White Paper, as indeed the Rural White Paper. They have fundamental similarities but there is a particular relationship between the cities and the suburbs as there is between the market towns and villages and surrounding hinterland. They are the sorts of factors that we have tried to recognise and are common to both documents. As the Committee will know, the Chancellor did announce an extra 33 billion a year for key services, which is the important point of our approach. It is not just economic regeneration we are concerned about, as indeed the Committee has often commented on, it is the importance of the social investment in facilities in both urban and rural areas. Indeed, that will help people throughout the country. The National Strategy for Neighbourhood Renewal, which I was launching with my ministers and, indeed, the Prime Minister a week or so ago will help people in deprived areas. Those are the areas we are trying particularly to target. The Urban White Paper is much more than about money, it is a very comprehensive paper which cuts right across my Department and, indeed, the whole of Government. I can recall in previous questions that you were concerned that we did address ourselves to joined-up Government and delivering in a more comprehensive way than simply just in a departmental way. It is our first policy statement about towns and cities for more than a generation and it is about what we want our urban communities to look like and how we want to live and it reflects our long-term commitment to towns and cities and, indeed, takes on a great deal of the advice that you made in your own recommendations to us in the preparation for that Urban White Paper. I am grateful for your Select Committee Report on our Urban White Paper and I hope you feel that your concerns are properly reflected in that White Paper. It also follows very many of the recommendations of Lord Rogers' Urban Task Force, not every recommendation, and we could perhaps follow that if you like, some we adopted, some we did not, some we did in a different way, but the broad thrust of it and the majority of the recommendations we have put into the White Paper. The new Cabinet Committee on Urban Affairs, which will see to the implementation of this White Paper, did meet yesterday under the chairmanship of Hilary. Fully realising the potential of our towns and cities does depend on partnership. We are spending a great deal of time and effort in emphasising partnership between Government, local authorities and other agencies and with local people. Frankly, without that we admit that we would not be able to achieve the kind of urban renaissance that we have set out in our White Paper. I thank you for that opportunity to say a few words.

Chairman:  Thank you very much indeed.

Mr Donohoe

2.    What plans does the Government have to now introduce an Urban Bill?

(Mr Prescott)  This was, indeed, one of the recommendations of Lord Rogers. We looked very carefully at it and I think we discussed it also at the last meeting of the Committee. We have rather taken the view that we have not accepted that we need an Urban Bill but that is not to say we will not have legislation. There were changes that were recommended, for example, on local authority financing that we will have in the Local Authority Finance Bill. There are some recommendations about housing that we have already got and are dealing with in our present Housing Bill. The transport plans, of course, and the commitment of resources to the Ten Year Transport Plan again has already been dealt with in a separate piece of legislation which we have already passed through the House. All in all we have taken the view that a lot of the work that was suggested to be in an Urban Bill is done in other legislation. The other main consideration is we have set very comprehensive targets in all of these areas and those targets are the ones that we expect and will be measuring against and, therefore, that can start now and not be delayed by the period of a new Urban Bill, and we will want to check it. Within 12 months we have committed ourselves to the kind of Urban Policy Study Group Conference that will take place within 12 months and we have promised a review of all of these activities to be printed and assessed within a five year period. Putting those things together, we are not convinced that the way is to go for a separate Urban Bill. I can tell you from my past experience of the first Government, it is always difficult getting pieces of legislation you want and then you are forever criticised by it. I am pleased to see we are well on the way with different pieces of legislation and targets to achieve those objectives.

3.    Are you confident in these circumstances that you will be able to implement the very good recommendations within the White Paper without legislation?

(Mr Prescott)  Certainly some of the recommendations of Lord Rogers when he was talking about the Urban Bill are to make some recommendations about the financial framework and recommendations, VAT and things like that which we have discussed in this Committee before, but they will be the proper preserve of the Finance Bill anyway. I am confident that the range of things we have got at the moment will be delivering, and are delivering, and we do not have to wait for the legislation. I will be judged on that, and indeed by the examination of your Committee, at the five year examination we intend to carry out provided, of course, we are elected at the next election.

4.    So you will be back in five years to tell us how successful or otherwise it has been?

(Mr Prescott)  That is a much more difficult question to answer. Let me say the Department will have that responsibility.

5.    If we look at what is going to be the case in three years' time, what will have changed? If you look three years down the road, what will have changed?

(Mr Prescott)  If you are asking me at this point in time what changes I thought there would have been three years ago, I would have thought we would have been advanced in some areas and not in others, so it is difficult but let me make a start. If we look at the amount of resources we are putting into the housing area and for refurbishment, we will get major advances in there but we want to tie that to a real improvement of the built environment, which the Committee has constantly been concerned about. So it is a decent type of housing in a built environment where the public services are of high quality and it is sustainable, so we have had to do the planning changes that Nick has been involved in, things like the housing, the regeneration, the Millennium Village that we are doing at the moment of a high quality standard of living. I hope also that we will be able to see an awful lot more of the brown land in our cities coming on stream and houses being used on it and less people coming out of the cities because they do not like living in the city either because the housing is not available or, indeed, the education is poor or crime is too high. We have to change those factors to begin that movement back. I do believe, and our policy will be judged on this, that more people do want to live in the towns and cities if we continue to make them attractive.

6.    Do you not think as part of that that it would be sensible to beef up what the powers are as far as compulsory purchase is concerned?

(Mr Prescott)  I think that is a very important point. Nick is very much involved in the review of compulsory purchase. It is something that any of us looking at urban development in towns and cities knows is a very tiresome and difficult problem. Perhaps Nick could give you an idea of how far we have advanced on making those changes towards compulsory purchase or making it more effective for local authorities and private bodies to be able to do something in the towns where with private properties there it is difficult to deal with at the moment.

(Mr Raynsford)  We have been in very detailed discussion with the Law Commission about a pretty fundamental change to the existing legislation affecting compulsory purchase. It is complex, it is very detailed, and it requires very thorough analysis if you do not want to end up with legislation which is unsatisfactory or contains new anomalies. That will take time and will require a lot of work. In the meantime, we have put considerable emphasis on helping authorities to streamline the procedures and to get through the processes with less red tape than sometimes applies under the current system. We will go on working at that because land assembly, particularly in urban areas, is important as a component to regeneration. Helping local government work together with the private sector to assure assembly of sites located for regeneration is obviously an important part of that business of rebuilding confidence in cities.

7.    If somebody objected to their property being subject to compulsory purchase at the present time that timescale is fairly long and in some cases it takes up to five years. What would you say that you will be able to achieve on the basis of what you are going to do?

(Mr Raynsford)  You will appreciate that the range of circumstances are so enormously wide that it would be impossible to give an average figure because the purchase of one or two individual properties is usually a very much quicker process than assembling a large site with a mixed bag of residential and commercial properties. There is no possible average but it is certainly our objective to speed the process up while at the same time respecting the right of the individual to receive proper compensation and, if necessary, to challenge an unwelcome Compulsory Purchase Order.

8.    Can you give me one example of how you expect to speed this up?

(Mr Raynsford)  In the first place by ensuring that local authorities are familiar with the procedures. A number have simply lost expertise over the last few years because compulsory purchase has not been the same part of their repertoire of activities as it was in the 1960s and 1970s when compulsory purchase was a fairly common occurrence. One element is ensuring that local authorities, either themselves or through links with other neighbouring authorities, have the expertise as to how to deal expeditiously with the quite complex processes they have to go through. That is something that can be done on the basis of guidance. Changes to the law, through our discussions with the Law Commission, obviously will take longer but that will help to speed things up in the longer term.


9.    Do you feel that there might be some problems of compatibility with the human rights legislation on compulsory purchase, or do you feel that area is perfectly safe?

(Mr Raynsford)  No-one in my position would say that anything relating to the Human Rights Act was perfectly safe because clearly there are very wide ranging implications. I did stress that the improvements that we want to see are subject to proper consideration of the rights of individuals to receive proper compensation and, if they wish to object, to object to the serving of a Compulsory Purchase Order. Those principles we are absolutely wedded to. I believe as long as we do maintain that, that the approach we are adopting is entirely compatible with the principles of the Human Rights Act.

Chairman:  Thank you.

Mr Donohoe

10.    If I can change the subject somewhat. Does the Government propose to take steps to prevent out-of-town business parks and office developments and all of these out-of-town stores we are seeing? If you really mean business as far as the White Paper is concerned one would expect that you would.

(Mr Prescott)  I think if we make the first comparison with the previous administration as to how many out-of-town shopping centres there are, there has been a complete collapse in those kinds of numbers. There has been an unnecessary feeling expressed in the last few months as to whether other shopping people were coming in, big store people, and were going to be outside. We have made it clear that is not acceptable and we have changed our planning arrangements to make that clear and Nick has been dealing with that. We do recognise that we are quite prepared in some circumstances where there may be a mix of housing and building that we can consider out-of-town. The Newcastle one is a good example. The Sage computer people, software, wanted to develop there but they also wanted to be near an airport and wanted to have the housing. We have been trying to adjust our planning to make it flexible to meet sustainable communities both with growth and jobs but not necessarily where it has gone outside with regard to outside shopping or for development. We have turned down some difficult and controversial applications for that because often it is either wrapped up with some other particularly good project or saying "you must do this to get the social objective" and people just change those objectives. We have been quite tough in the application of those planning rules which Nick has been implementing.

11.    What initiatives are you giving to those who may not come at all if, in fact, they are not allowed to develop, particularly on the office side, out of town? Is there any initiative, any incentive given to those who may be coming from abroad?

(Mr Prescott)  For an outside area or a greenfield area the incentive is very clear there, you try to discourage them because it works against the objective you want. There are clear decisions that have to be taken on industrial development, sometimes which whole communities are dependent upon. One is in Newbury, the telephone company Vodaphone, who were in 51 establishments said they wanted to develop in Newbury, but it would have to be outside the greenfield site or they would go to another part of the country or to Europe. You have to make a judgment about that. Our judgment at that time, backed by the planning inspector, was it made sense to be able to do that, to keep the community in a sustainable way, both the jobs, in a very big sense, and the community were kept as one. We have not found it necessary to offer any kind of incentives. Where I think it becomes a problem is cluster developments, which is an entirely different thing, as we have seen in Cambridge and in other areas where you see research and development. Indeed in the concentration in the Warrington area, which caused real problems with research and development there were very difficult questions about location.

12.    As far as specifics are concerned, with PPG 3 and PPG 6 there are provisions there for sequential testing of the whole question as to the sustainable locations. What plans does the Government have to provide a similar test as far as office and business sites are concerned?

(Mr Raynsford)  We have no specific proposals. We believe that the current framework, which generally encourages development in town centres, is the right approach and that is one that we have maintained. As you know, PPG 6 has been extremely effective in ensuring the re­focusing of shopping and leisure development in to town centres rather that out of central locations. With PPG 3 we are in the early stages, but there is very much a shift of emphasis towards the reuse of brownfield sites and development in existing town centres, rather than on greenfield sites. If we felt that there was a serious problem in relation to office developments I am sure we would be sympathetic to adopting a similar formal approach. At the moment it is certainly our perception that office developments, in general, are focusing predominantly in urban locations, close to appropriate transport or in business park locations, which have to be approved through the planning system. There are proper safeguards against inappropriate developments out in the countryside. Through the call­in procedures, which we apply quite rigorously, we are able to act against individual development proposals by companies seeking an out­of­town greenfield and sometimes greenbelt location which is inappropriate. Our records show that the existing powers are working effectively to achieve that objective.

13.    You will agree, will you not, there is very little point in ensuring that housing is located in urban areas when most of the jobs that are around are outside of these areas?

(Mr Raynsford)  We agree entirely. This is the purpose of the policy. The reason that we adopted a sequential approach and PPG 3 was that the existing policy was not achieving that result. Our existing policy and powers are successful at the moment in relation to office development. I said we would be happy to look at this further if there was evidence there - it was not.


14.    When you say you agree entirely, have you managed to convince the Department of Trade and Industry that this policy is right? There did appear to be constructive or, perhaps, destructive tension between the two departments; is that unfair?

(Mr Prescott)  Always constructive.

15.    Always constructive! What is going to happen with this new guidance on clusters? Is their view going to win or is your view going to win?

(Mr Prescott)  We were generally agreed when all departments came together to discuss clusters. When they were fashionable we had people coming over and saying what they were doing with clusters in these different countries. To my mind clusters have been around in economic history for the best part of 100 years. It is not a particularly new theory. What is new about it is that you plan it as a cluster and the supply industries come. You make a deliberate planning decision to achieve that. Some of them come quite naturally. If you look at the motor car industry around Silverstone, there is a tremendous development of high technology in a cluster sense. We did not have to do anything to improve that, although I think the latest application by Jaguar ­ I am not getting into that ­ wanting to go into the area, I am not going to comment on that because it will be a final decision between ourselves and the DTI. The DTI have made some announcements in the last day or so about encouraging development in these areas. They may be a bit more sceptical but they do not doubt it can be a source of growth. We want our Regional Development Agency to play a part in encouraging that where they can. Yesterday I was talking to the Regional Development Agency Chairman from the South East and he was telling me that someone he knew went to live on the Isle of Wight, he was from Australia but he married a girl from the Isle of Wight. He had been dealing with compound materials and he has now begun to produce a kind of material that the Danish wind farms are using on their propeller systems. They are building them there, but they have now found that the universities want to come and develop research. In that sense this is a concept of clusters. The Regional Development Agency can play a part in encouraging that, looking at what are the real strengths in the indigenous economies in the regions and seeking to exploit it. Clusters can play a part there. We have to leave a question mark as to whether they are highly successful. Well we can now, they are there, they have been for a while and they are an important source of growth.

16.    Are we going to be able to get the clusters on the brownfield sites or are they going to hold us to ransom and demand greenfield sites?

(Mr Prescott)  There are some cases where they are greenfield sites and they ask for more space, Cambridge is a classic example, the Welcome Trust. The more controversial one, as I mentioned, is between Warrington and Oxford, which caused considerable controversy. We hope they will use brownfield sites, but that is an argument about making the towns and cities more attractive, whether it is easier to get in and out on transport, whether it is easy to get the houses with easy access to. Those problems are so different from town to town. London's problems on housing and transport are different than in Hull. We are knocking houses down in Hull, it is a pity we cannot transfer them directly to London.

(Mr Raynsford)  We have made it clear through our regional planning guidance that this is something which ought to be looked at through the development of regional plans. In the first one we have proved for, the East Anglia region, this has been an important feature, naturally enough with Cambridge being a magnet for development in the computer software area. We do think that is the right way for the issue of clusters to be addressed by the regional authorities working with the Regional Development Agency to ensure that they are providing for the needs of business but doing so in a sustainable way as part of the planning process.

(Mr Prescott)  Can I also say, the DTI are publishing a map of all these cluster sites, I take that as an indication that they think that it is still important to indicate to the RDAs. I was struck in Stepney last week, where we were launching the National Strategy for Neighbourhood Renewal, that there was a desperate shortage of teachers, there was a skill content of 900 graduates in the Asian community there and no jobs for them. It means if skills are the essential requirement of any cluster industry it may well be that we begin to find with certain towns the skills are not there but not being not employed properly. That may require clusters to go where the skills are necessary to meet their demands.

17.    You want the Regional Development Agency to deal with clusters.

(Mr Prescott)  To encourage them.

18.    You talk about giving them some guidance, that presumably, is going to be planning guidance. When will that be available?

(Mr Raynsford)  It was issued in our Regional Planning Guidance, which is PPG 11, the guidance which applies to authorities when they are preparing for regional planning guidance. I mentioned the East Anglian region as the first one where there had been development of regional planning guidance and where the issue was addressed. I expect it to addressed in the other regional planning guidance as it is developed.

19.    But there is nothing more to be issued by the Government on this?

(Mr Raynsford)  No.

Mrs Ellman

20.    But some decisions on clusters are taken nationally, are they not, and this Committee, when looking at its previous report, identified the importance of concentrations of university based research and development not to stay in the South, as they are now, but to move to the North and, indeed, to the Midlands, yet there is nothing, or very little, in this White Paper which addresses that issue. Why is that?

(Mr Prescott)  The difficulty with clusters is we do not generate them, we do not pick the winners. We see the industries and we want to encourage them to develop, and I mentioned Silverstone and there is the offshore engineering, the electronics in the Thames Valley, in Cambridge computers. With the one at Warrington there was this difficulty of a combination of public and private money where one partner, I think it was Wellcome Trust, said "we want to be down in Oxford rather than up in Warrington" and that made it very difficult when quite clearly all the facilities were there in Warrington. One would like to see the imbalance perhaps between research and development improved between the North and South. Some of the monies given by the DTI, and I can answer for that, has been attempting to put more resources into research and development to counteract this differential between the North and South. Whilst we might try to provide the circumstances for it when you say it is nationally directed, we are not picking winners, we are encouraging and helping where we can. Where we do get nationally involved is where a decision is to be taken and it may require planning, such as Cambridge or those areas where a planning request comes in, because there are judgments to be made about the balances which we are involved in. We do not direct the cluster structure, we try to understand it, we try to assist and develop it, and we use the RDAs to encourage and to help.

21.    That is not quite correct, is it? In the case of Daresbury the decision was taken for whatever reason by the Government, and I agree that Wellcome played a large part in that, and major funds for research and development are in the Research Councils, yet the Research Councils do not have any guidance concerning the regional implications of their decisions in the decisions that are come to. The decisions appear to be made by civil servants and scientists without any consideration for regional implications, and that was the answer I got when I tabled a parliamentary question on this because if was of great concern to me. Do you think it is satisfactory for large amounts of what is public money to be spent in this essential area of research and development where we know there is a regional imbalance without the Government attempting to address that issue?

(Mr Prescott)  I am attempting to address it. Can I just say, and perhaps Hilary will want to come in, you are right in your interpretation and perhaps I did not put enough emphasis on that. I was trying to emphasise we cannot direct it. In that case in relation to Wellcome it was a balance of public and private money and we could have withdrawn ours and they could have withdrawn theirs and we would have got into this kind of situation, so in that sense you are probably right. I am trying to say that I do not think we are directing it, it is very difficult to do so. If we have a certain amount of public money we should have a certain amount of input, but I think we saw from the situation that developed at Warrington that it is not easy.

22.    I wonder if the Minister could tell us what it is you are going to do through your policies to make this change?

(Hilary Armstrong)  What we are trying to do is certainly encourage higher education institutions in the regions to become much more focused and to build the capacity to actually develop R&D in the regions. Yesterday when the DTI announced its £54 million allocation of funding for innovation and enterprise to the regions, they specifically took decisions which took account of levels of R&D as well as levels of unemployment and GDP. Because of that, the two regions that got the highest allocations were the North East and Yorkshire and Humberside because they have the lowest levels of R&D in the country. What the Government is doing is through trying to encourage innovation and enterprise, which has got to have the involvement of higher education, which is part of how you attract research and development, putting the bias specifically towards those regions that do not have R&D within them at the moment. As I said, the two key ones are the North East and Yorkshire and Humberside. It also means that, for example, the North West got more than it would have if you had simply taken the size of the population particularly to compensate for GDP per head. In the way that we are working with RDAs we are seeking to encourage activity in the regions, particularly in those regions that have not been sustainable because they have not got R&D because they have had other structural problems. Obviously this is going to take time. Government cannot tell companies where to go, they simply up and off to elsewhere in the world, it is very easy for them to do so. What we have to do is get the levels of support and activity in each region up so that they are able themselves to actually get that attraction of more R&D and more investment that comes along with successful R&D.

23.    Do you have any plans to address the issue of spending of massive amounts of public money by the Research Councils? Would you look at any possible guidance in that which looks at the regional implications?

(Hilary Armstrong)  We do not have responsibility for the Research Councils but this is something that is taken into account. As the Regions Minister I frequently discuss these issues with colleagues across Government and it is an issue that other ministers are well aware of and are looking to see what they can do. What they have to be also assured of is when they make that investment there is going to be the capacity within the higher education institutions and the surrounding community to actually develop that. That is why the role of the RDAs is absolutely critical, because that can be part of that building block.


24.    But there is actually resentment, is there not, from some academics in some of these parts of the country who believe that when they put in first class bids that get the right stars and so on to the Research Councils, for some reason they seem to go to those traditional universities which appear to be in the more physically attractive parts of this country?

(Hilary Armstrong)  Having once been at the edges of academia I know how the jealousies and partialities of different research institutions and so on are seen. What we want to make sure is that every research institution in every region is getting not just its fair share but is actually getting the sort of research that is going to develop into the real opportunities for commercial exploitation, for the development of other economic activity that will then grow and develop out from that.

Mrs Dunwoody

25.    With respect, Minister, at what point do commercial clusters take precedence over the interests of specific R&D programmes within the regions? A blanket decision to decide on a regional basis per GDP how much research goes into a region is not an answer if at the same time you are saying to a commercial cluster, whatever that is, presumably a group of companies ----

(Hilary Armstrong)  I have not talked about commercial clusters.

26.    Scientific clusters, let us use the English language precisely, I know how important that is. Can we just make it quite clear at what point your Department draws the differentiation because it seems to me that what you are setting out is a complete dichotomy. You are saying on the one hand that if there is a cluster it should be allowed to develop because that is, of course, a way in which since the Government cannot direct companies, it can only protect companies, we expect them to develop commercially, but on the other hand you saying that if people have not had any R&D in the past then we will give them blanket support across the region based on their GDP.

(Hilary Armstrong)  I am sorry if that is how it appears. That is not what I was saying. What I was saying was in directing money to Regional Development Agencies the DTI, with our very full support, has allocated its money for the next three years for innovation and enterprise on the basis of specifically trying to feed the early stages in the regions where there has been least activity and least ability to attract research and development in the past.

27.    So in planning laws you would say where there is an existing cluster of scientific development that should be allowed to develop, but where there is a general policy of R&D because there has not been sufficient put into it in the past we should encourage by planning laws some development of that kind in the region? Is that what you are saying?

(Hilary Armstrong)  I am saying that what we want to do is get each region able to sustain high levels of research and development and the spin-offs that come from that. We, through our Regional Development Agency policy, are seeking to do that. That does not mean that we are saying to the South East we do not want there to be further development and we only want development in the North East because actually there are some good developments in the South East that there can be spin-offs from in the North East. What I am saying is that in the way we work with Regional Development Agencies we are seeking to support increasing R&D particularly in those regions where there has not been because we know that you need that in order to attract particularly some of the new knowledge economy jobs. The planning issues were issues that Nick was dealing with and I do not think that he was expressing it in that way, but I am sure he can speak for himself.

28.    Let me ask Mr Raynsford, at what point does a planning cluster become too large for the region in which it is being developed? What guidance do you give to the planners in a particular area as to the line that should be drawn between the needs, in planning terms, for development of new scientific industries and the existing interests of "a cluster"?

(Mr Raynsford)  The guidance is set out in our PPG 11, which is the guidance for regional authorities and the development of regional plans, which I referred to earlier. It draws attention to the importance of clusters and their economic significance. It mentions the fact that geographic proximity is a factor and asks for that to be taken very much into account in the development of the regional plan. It also stresses, this is very important, that the plan should facilitate the establishment and the expansion of innovative cluster areas, but also should contain transport and other policies to assist the creation of the necessary physical infrastructure to support that. It is trying to encourage the regions to think in the long­term about the necessary arrangements to foster and develop clusters that may be emerging in their region. It does not address the issue, which is a wider one, of inter­regional decisions on the location of businesses.

Sir Paul Beresford

29.    Secretary of State, if I might ask, I think it is fairly well accepted that in many of the baron city areas we have a high proportion of our socially economically poorest people. From my own small experience of regeneration, and from a report from this Committee before I came here, the Rogers Task Force, etc have pushed towards the success being based, to a large degree, on the creation of mixed communities. Particularly, perhaps, encouraging the middle income groups back into the inner cities. I have certainly seen that in London and it has been extremely successful over the last two decades. What is the White Paper putting forward to encourage that, if you agree those are key factors?

(Mr Prescott)  I certainly agree that the regeneration programmes did have an effect on inner cities, that is attracting the people from outside to come back into the cities. I can think of Hull as a good example where they converted a marina and warehouses into housing. That is not new in many countries outside Britain, where you develop a good facility in the centre and people will come in because it is high quality, a good environment with good living facilities. That has certainly attracted them in. Our view is that you do have to do a lot more in regard to social provision, for example. People are discouraged from living in the city, it may be because of poor education, it might be high crime rates, all sorts of things add to the insecurity of living in as city. A lot more do want to live in cities and not travel from outside into cities. It is to improve that general environment. I think the resources that we have in the local transport plans to improve transport, to have a more sustainable environment, to improve the education and the Health Service, all of these programmes are beginning to have an influence in improving the quality of life and living. It is not just the house, is it? I talk to people who say, "I would like to live in that area but the schooling is lousy and I fear to death that I might get mugged", or things like that. I think that has been true over both administrations. What we are trying to do is correct some of those by putting more resources into them. If we make our cities more attractive, whether it is pedestrianisation, whether it is better housing, whether it is mixed communities, like the Millennium Estate in Greenwich, for example, 20 per cent of it is now social, affordable housing living alongside different social mixes, instead of having one big estate. If it is done in a good environment, as we see in the Greenwich Millennium Estate, you can get people to come back to live in the cities.

30.    A major factor, and I suspect you will agree, of the success of this would be local government working with you, working in partnership in getting it moved forward. Local government can make it go or local government can totally damn it. What would the reaction be were you to find your programme has been damaged by local government?

(Mr Prescott)  Like everything else, there is good and bad governments and good and bad local authorities. We should ask for the best value and the best standards for that. We have spent a bit of effort in legislation, that you have been involved in yourself, in trying to improve the quality of decision­making and standards in local authorities. Where we found that some local authorities are not actually doing what we think is the best standard to achieve that we have been quite prepared to take several measures out, to intervene with the local authority, to achieve the best standards, to change the local authority structure in some cases, a whole range of measure are involved in that. Local authorities are quite critical to it, I have no doubt about it. We can improve the quality and modernise it, and my ministerial has been very much involved in doing that.

31.    One of criticisms of the best value legislation and that aspect of it that you are talking about - it was effectively supported by certainly two of the members of the Committee when the Bill was going through - is the difficulty with it is that it takes too long. It is too long to act, it is a very slow decision­making process, very slow procedures. How long do you think it would take you to act on local authority that was impeding action under the best value legislation?

(Mr Prescott)  I suspect we are not always able to move as fast as we can. There are difficulties with every idea, from compulsory competitive tendering to best value. By making the structure changes that are now taking place in local government it should make it easier. Perhaps, Hilary Armstrong, who has been working on the results we have seen, some good, some not so good, can reflect on how committed the local authorities are in the best value area.

(Hilary Armstrong)  The legislation on best value only came into power on April 1st and we have already, through that legislation, assisted Hackney. We have not taken formal intervention of powers but what we have done is we have had the inspectorate in and we have had a return corporate inspection. The problems have been identified with the support of that authority. We have sent in through the Improvement and Redevelopment Agency key people in order to, firstly, find out the extent of the problem and now, this week, we have agreed to send in financial managers in order to address that particular issue. It may be slow, but I think if you remember the problems you had with CCT that has been certainly as fast as any CCT process, but I think also think more effective.

(Mr Prescott)  We are also getting quite a bit of criticism, it is not necessarily, "Come on, you say best value, compulsory competitive tender", in some areas they come along and say, "What is the damned difference?" I think there is a difference and we are trying to encourage them

to be that. It is not an easy option, but it is making a change.

32.    I will continue the other argument on another occasion. On a related matter, going back to my first question, when you walk into many of our big cities you wonder whether they should be bulldozed and rebuilt, so on and so forth, particularly if you are looking towards attracting middle income brackets back into the towns. Are you prepared to bring in the bulldozer into some of these cities and spread it down and start again?

(Mr Prescott)  I will ask Nick to respond to that. I notice tower blocks have got some attention now, there are about 1,600 of them and ten might be knocked down. We have been knocking tower blocks down because they were badly built and badly designed, and we all know that has been the

difficulty. In my constituency now they actually use the money for the conversion of them and they have redone them and made them up and they are very attractive. People are not leaving them. You would not necessarily knock them down, so it is horses for courses. When I went around that estate in Southwark a few years ago I think my impression was, yes, I would like to come in with a bulldozer.

33.    I think you will find that we did consult.

(Mr Prescott)  Yes, you did consult. We have seen areas where we have knocked them down, but it is not the total solution. We do believe you can make changes. It may be that you have to have less density in housing, less concrete. I am not a fan of concrete buildings, but a good quality environment shows in some areas you can achieve a good combination that attracts people in, both in the private and public sector. Our social mix is geared to achieve that.

(Mr Raynsford)  Could I stress that there are two separate dimensions but both of which are equally important. One is the physical dimension. There are some areas where the physical state of the stock is so bad that the right decision is to clear it and to start again. That does not mean going back to the policies of wholesale mass clearance that were adopted in the 1950s and 1960s and lasted through until the 1970s, which often destroyed communities. Although they may have created better housing - sometimes they did not but sometimes they did - they were usually very damaging to communities. A more selective approach is removing housing which is past its sell-by date which clearly has to be replaced but doing it very much with the community in mind. That takes me on to the second point, which is a sensitivity to both protecting and preserving existing communities but also creating mixed developments where people can live together whether they are owners or renting. The division between areas exclusively of owner occupation and exclusively of renting, which was very much a creation of the 20th Century, has not been a happy one in our view and it has led to social polarisation and social exclusion. We believe that new developments should contain a mix of housing, that is very much part of our PPG3 policy, which is why we have been prepared to intervene where some authorities have not been as assiduous as they should have been in seeking an element of affordable housing as part of developments but equally why we have been quite clear about new affordable housing to be developed as part of mixed communities rather than creating just ghettos of social housing.

34.    I agree with you that single tenure social housing in inner cities in the past in many areas was a disaster. The Deputy Prime Minister mentioned Southwark and Southwark used to have an extremely high proportion of social housing. Are you prepared in inner cities, despite the local authorities, to go beyond just low cost home ownership as an addition to social housing recognising that if you are going to get the mix that the Deputy Prime Minister is talking about you are going to have to get quality housing?

(Mr Raynsford)  Yes, and that is very clear in our Planning Policy Guidance PPG3 which talks about providing a range of housing to meet a range of needs, different income needs, and a mix of housing tenure, so there will be outright owner occupation, low cost owner occupation and affordable rented housing.

35.    How is that tackled in the White Paper?

(Mr Raynsford)  That is all tackled in PPG3 which was issued before the White Paper and the White Paper endorsed the policies which had already been put in place. There was a bit of a debate about whether we were implementing Lord Rogers' report. One of the points we made was that when PPG3 was published before the White Paper, 17 of the Rogers' recommendations were given effect, or were put into effect, by the recommendations of PPG3. It is absolutely integral to the White paper and it preceded it.


36.    A New Commitment to Neighbourhood Renewal, that was launched last week and that really addressed this area. I think there was some disappointment last week that there was not any money. Can you tell us any more about this?

(Mr Prescott)  Since it was 800 million I do not know whether you think that is no money but over three years I think that is a fair share of money and it was certainly welcomed by them. You are right to point out that the answer is not necessarily just to go and knock it all down, we can redevelop. I think what we are trying to do with the National Strategy for Neighbourhood Renewal is, in fact, to bring those social factors together to develop it as a community and deal with the very real social factors about jobs, about education, about health, all those things to make them more into a living community. What we announced last week, of course, was £800 million for this neighbourhood renewal of working areas. That is picking something like 88 of the worst areas of deprivation that we have in this country and then to say that these will now be in a three year programme, although I think it is a ten year involvement but a three year commitment of resources announced by the Chancellor in his last statement that the Neighbourhood Renewal Fund would be £800 million. They welcomed the money, of course, they do very much so in these communities, and the commitments, but what they said was the way it is spread out it will be £100 million in the first year, something like £300 million in the second year and £400 million in the third year and the concern was "Can we get off to a fast start? Can you not give us a little bit more money than you have given us there or can you spread it a little differently?" We listened to what was said about that when we had the exchanges last week and, indeed, I am able to say today that there will be an announcement made today for the first time to this Committee, of course, and there will be an announcement made to the House today in written form that we have listened to that and we are announcing another £100 million in the first year. So that should allow in these 88 areas more money to get off to a quicker start, so perhaps we can have an even better response. Instead of £100 million in the first year starting April 2001 it will now be £200 and it lifts the overall total from £800 million to £900 million, getting on for a billion, which is a fair whack of money.

37.    Do you think it is going to be spent in that time?

(Mr Prescott)  Hilary has been very much involved in developing these programmes. You will remember when we had the New Deal communities, of which there is one in my constituency in Hull, there was a tendency to say "there is the money" and that was £800 million over a ten year plan but a three year commitment on the £800 million, and that was directly for doing specific things, developing the housing, etc. I know your Committee has looked at some of the criticism made of whether we co-ordinate our activities with different departments, with education, different programmes being done by different departments, so we had an analysis done of that and thought that it was not as effective, did not really take into account a lot of these social provisions and we did not co-ordinate it and did not get the best effect and there was some confusion. This National Strategy for Neighbourhood Renewal develops on the Social Exclusion Committee that has been set up to co-ordinate its development. Perhaps I can ask Hilary to fill you in on how far we are on that. It is based on developing local partnership strategies with the community itself to make those decisions and then it is a matter of checking how this money is actually used to achieve the objectives and targets which are set for them.

(Hilary Armstrong)  The 88 authorities - they all know who they are - are setting up what are called Local Strategic Partnerships and are seeking to use the money with their partners to achieve what we call floor targets, in other words minimum standards in every area in terms of crime reduction, improvement in housing, improvement in educational standards, improvement in health standards. The money certainly will be used. It is being addressed as mainstream money because what we want to do, and this is what the Spending Review came up with, is if we are really going to turn around our most deprived areas then we have to make sure that public services in those areas work most effectively. The new money that was announced last week is money that will be specifically for community groups to make sure that they are able to participate, along with the public authorities, the health authority, the local authority and so on, so that they can really get their say in the way things happen. Over the next three years we really want to work hard in those 88 areas. There is a new Neighbourhood Renewal Unit within the Department being set up and that will work closely with the 88 areas to actually see how, through this additional mainstream money, we really can improve opportunities in each of those areas.

38.    Thank you. Is there not a tension between the Rural White Paper and the Urban one? The more attractive you make it to live in the countryside under the rural one, the harder it is going to be to get people to come back into the towns, is it not?

(Mr Prescott)  The presumption is that people want to get out of towns because they prefer to live in the rural areas but examination we have done on that shows that clearly people want to move into suburban areas, and that has happened, but a lot of them have been getting out for the other reasons I was referring to, that they do not think the quality of public services in towns are good enough and they want to leave them or, for example, they cannot get the type of housing they want in their area so they have sought it outside. To that extent, therefore, both the urban and the rural areas have this common problem of many people coming from the suburbs into the cities and to a certain extent we see some of that economic development and social movement between the market towns and the villages. What we have tried to do is say let us work on both. The needs of the people in the rural communities for housing are as desperate as they are in some of our cities and many of them are leaving rural areas simply because they cannot get a house. I think that is quite an important factor. Social housing in the rural areas is equally as important a factor as in the cities and towns. One reason might be about refurbishment, and it varies from town to town. In my City of Hull there are 5,000 empty houses. Population movement has made for considerable difficulties in the cities and no doubt if they move down to London they will find housing a very difficult thing to deal with. It is horses for courses. We still need to deal with the provision of social services that need to be guaranteed in the rural areas that perhaps discourage, if you like, people who want to live in the rural areas. I do believe that the majority of people like living in cities as long as it is a good life, good quality, good built environment, and if we can achieve that I believe we can affect those flows that way. I do not think there is a tension between the two but we need to direct our policies at both those rural and urban. That was why we did two separate papers and I think that has been generally welcomed and accepted.


39    You just talked about the number of empty houses in Hull. You can take that in most of the northern cities, take Manchester as an example. On the north side of Manchester you have some Edwardian terraced houses which are identical to ones on the south side. On the south side of Manchester they are going for very considerable sums of money, not quite London prices, the identical houses on the north side of Manchester are unsalable. They are within ten or 15 miles of each other. Would it not be a good idea for the government to put some floor into the market for those sort of properties, so if somebody buys it this year there is a chance in three years' time they can sell it.

(Mr Prescott)  To guarantee the price? I will leave Nick Raynsford to make a judgement about a floor. I can see great difficulties with that. Can I just give a response to 15 miles, I think in some areas you can be within a mile or so, where areas are very attractive and others are not so. If I can refer you to the Manchester, since you said Manchester, and I look at the areas that have been developed in the City of Manchester, they did not want to touch some of the housing, we see a massive almost renaissance in the bulk of the city centres. There is no doubt about it, people are flooding back to live in those areas. The house prices are going, up could have bought something for ten per cent of that a few years ago. People do want to go if we provide high quality living for them. Whether it is to be found in the mechanism, as you are suggesting, I am not sure about the consequences of that.

(Mr Raynsford)  I would be very doubtful about the government intervening to put a floor on house prices in any area. In PPG 3 we have put a presumption against new greenfield developments in areas where there is a brownfield alternative. In that particular location the impact of PPG 3 should be encouraging all new development in the brownfield areas and getting empty properties back into use. Secondly, by targeting money for the improvement of existing council housing, which we are doing, very considerable increases and investment, and encouraging new investment by registered social landlords in regeneration work, we can help to build confidence in those areas. That will, hopefully, lead to a rise in house prices over a period of time. Beyond that it does depend on wider planning policies that make areas attractive. John Prescott is absolutely right in stressing we will not be encouraging people to come back unless the wider issues of education, crime and the quality of life are all addressed. That is what we are keen to do.

40    I am just suggesting to you that in some of those areas those problems are being addressed but it is this fear that if you buy a house in the that neighbourhood and you cannot sell it in four or five years time, which means that suddenly a whole area becomes one where people are reluctant to purchase houses.

(Mr Prescott)  It is how the area begins to develop. Can I go back to my own experience in Hull, in the New Deal community we have there we have a river going through it and it is called a drain, because it is a flood plain area and it is an effective drain system. If that was a river going through the centre of a private estate people would say, "This is very up market". What we have found since we began to adjust the drain to make it look like as if there is a river, with trees, etc, an awful lot of the empty houses are being filled because people want to live in the area. We have changed the feeling of the environment and done something about it. That is true whatever it is. I do think that monies that were announced by the Chancellor in the conversion of shops, and things like that, and stamp duty and the conversion money have all helped to improve property in inner city areas, which does show if you get it right it does attract people into them.

Mr O'Brien

41    Secretary of State, the two papers that were published, the Urban White Paper and the Rural White Paper are welcome and a base to build future planning and the destinies of authorities. Obviously this is a matter that people take seriously. Are planning authorities complying with your policy to de-allocate land identified for housing which no longer meets the requirements set down by your initial approach? I refer to where there was land assembly before 1997 and those areas would not now qualify under PPG recommendations. Are you de-allocating that land for housing in greenfields?

(Mr Prescott)  I am not sure. I wonder if I can ask Nick Raynsford to answer that.

(Mr Raynsford)  The answer is we are taking a number of very significant steps to affect the change from the development of greenfield sites to the concentration on brownfield sites. PPG 3 set the framework. We have issued detailed guidance to local authorities arising from that, particularly on undertaking urban capacity studies and managing the release of sites so as to avoid all of the greenfield sites being seized when there are brownfield sites available for development. We have imposed a direction requiring local authorities to notify us of any proposed developments that involve greenfield housing on a significant scale. We have already had a significant number referred to us under that direction. There is already in place a direction which requires authorities to notify us of any departures from their plan, where there is a proposed development on a greenfield site that is not in conformity with the plan. We are answering a question today which will be giving the detailed figures, and that will be on the record as from tomorrow, which demonstrates that we have called in developments proposed, which have been referred to as under these notification requirements, 20 applications relating to around 320 hectares of land. I am confidant that the new procedures are beginning to bite and really will make a difference.

42    How are they monitored locally? Where there is a borderline case, where the application should have been rejected but because it was near to before the PPG 3 was published and it was likely to go forward, how are they being monitored?

(Mr Raynsford) The policies are being monitored locally by the local authority, which is required to look at any development proposal in relation to its existing plan. Secondly, by the government office which will, if necessary, serve a holding direction where there is doubt as to whether a development should proceed. Thirdly, by our department looking at all of the cases that are referred to us under the notification procedures that I have outlined. I am confident that there are good monitoring arrangements in place and as these policies bite, and they are biting, we will see the figures proving the change in emphasis and development patterns.

43    Secretary of State, you did outline the importance of urban renewal, the fact that we have to improve the quality of housing in our areas. The minister did refer to funding for housing and he referred to council housing, what are the options for funding for council housing, because there is a great deal of concern of the situation as it is at the present time, and fear, in some local authorities, that they are going to lose their landlords, ie housing authorities?

(Mr Prescott)  The biggest challenge for us in housing at the moment is the need for housing in London, quite apart from the good quality of it in the south east, whereas in Hull and some northern areas the population has left us with a lot of empty houses. The real problem there is how do you deal with what is estimated to be something like £20 billion? How do we deal with that kind of rehabilitation and improvement and reinvestment in property. We made a decision to do that, the first time it was about £5.5 billion that we put in and then at a later stage another 2.5 million towards that. We have chosen to try and deal with that problem by giving former housing investment to them. Also in the repair programmes, of course, they have had something like £1.6 billion. I think the point you are referring to is causing some concern when the local authorities seek to find other ways of raising money, which started by the previous administration going to the private sector, coming to some understanding about it, losing their landlord status and passing the whole thing over. What we have done is to make clear we are not necessarily against that, and Nick Raynsford made an announcement to the House about that when we did the housing paper, we are prepared to do that. To give the qualification the tenants are going to have to agree, they cannot have it overridden, they have to agree whatever it is. We did go a little further in our housing paper, it always seemed a bit unfair to me that local authorities have a rent income, all you are doing with the private sector is giving it to the private company and they make a judgment about the rents as to whether they can refurbish and recover their investment. Why, if there is an income flow, local authorities could not borrow themselves using their income. We gave them an opportunity, Nick Raynsford will give you more details about that, to be able to raise the money, remain as the landlord, kind of one removed from that estate, but still keep their housing stock and use the private finance to improve it instead of waiting for how much money will be available from government. If the bill is £20 billion and if we wait to improve it each year it is going to be a number of years before you can achieve that. This allows them to do that on one very important condition, which we come back to, are there good authorities, bad authorities, bad standards or good standards? They have to meet certain conditions as an authority in order to be able to use that facility which does allow the public sector to retain its landlord role and, indeed, the tenants to have more say in their decisions and, indeed, hold the right to be able to make a decision as to whether they want to go through that way. Perhaps, if Nick could just supplement it.

(Mr Raynsford)  There are essentially four options open to local authorities. Those who retain their stock within the existing arrangement will benefit from April from the new major repairs announced, which is funded to the tune of £1.6 billion nationally, which gives each local authority a sum related to the ongoing maintenance needs of each of their properties. The figure that has been agreed with the Local Government Association is very widely seen to be a generous settlement to ensure that authorities can maintain their stock. Secondly, the arm's length company option, which the Deputy Prime Minister referred to, is funded with a further £460 million over the coming two financial years, sorry not this coming year the two years after that, which will support those authorities who want to put their housing at arm's length, who achieve excellence, they will qualify for additional borrowing funded from those resources. Thirdly, we have allowed some £600 million for PFI credits following on the successful pilot projects under which eight authorities explored the option of PFI in relation to housing. The fourth is the large scale voluntary transfer option in which we have made provision for transfers of around 200,000 homes a year if local authorities and tenants want to pursue that option. The key thing to emphasise is it is the tenants and local authorities who decided but there are a range of options and it is all geared to achieving our highly ambitious target of ensuring the entire backlog of substandard council housing is brought up to a decent standard within a ten year timetable.

44    This will impact, will it, on the Cabinet Committee which is responsible for looking at urban development, the fact they are going to be looking at estates that need the face lift, they need money investing in that and it will be part of the urban development one assumes? Can I turn to the question of planning now.

(Mr Prescott)  I do not know whether that is right. Could I just enquire about that. The Urban Development Committee --- We get confused these days because we have the cabinet in local authorities and we have the Cabinet here. It will be the decision, of the Cabinet itself in the local authority to make that decision or the local body as it is. Our resources in this are additional to what has ever been used in I think the Urban Development Renewal Strategy. So it does not take any of those resources. These are additional to that and part of the housing finance.

45    I see. I am just going to refer to planning and the fact that under the Urban White Paper and the PPG3 that has been published there is a greater responsibility on some local planning authorities. What extra funds are being allocated to planning authorities to carry out the duties and the responsibilities that the Department is placing upon them?

(Mr Prescott)  This was a concern of Lord Rogers.

46    That is right.

(Mr Prescott)  Nick, could you answer that.

(Mr Raynsford)  Local authority funds for planning are part of the overall framework of local government finance. There is not a separate stream specifically ring fenced for planning purposes. We encourage local authorities to ensure that the planning service is operated in an efficient way and we do issue guidance to help local authorities deal with applications in an efficient and prompt way. I have to say that not all achieve a reasonable standard. There is an enormous variation in the performance levels which cannot be explained by workload. We have looked very carefully at the performance figures and authorities with very comparable levels of applications achieve fundamentally different turnover times in terms of the length of time they take to deal with cases. So we have, under the Best Value Regime, set performance standards for those authorities who have over the previous two years failed to meet the target of 50 per cent of all applications dealt with within eight weeks. Our actual target is 80 per cent to be dealt with within eight weeks and it is an indication of how far some have fallen that they have not even managed to achieve 50 per cent. Those authorities have been notified that they are subject to a performance standard which will require them to achieve 65 per cent in the coming year. We hope that will both encourage those authorities to improve but send a message to local government that it is right that local authorities should deliver an efficient service and if they achieve the performance of the best it is well within their capability.

47    I can accept that there should be no ring fencing of this. The situation is that in local authorities when they have statutory responsibilities for housing, social services and all the rest of it, and the allocation for that purpose maybe four per cent but it is costing six per cent to do it, the money which should be spent on planning is channelled into other heads of expenditure. It is unfair to say that where local authorities have missed out in meeting targets without proper examination that action is going to be taken against them. I think that matter should be looked at, would the Minister agree?

(Mr Raynsford)  As I said, when we looked at the figures it was clear that authorities with very comparable workloads operating in very similar circumstances were achieving radically different levels of performance. Talking to both councillors and officers it is quite clear to us that there are different emphases in the degree of importance attached to planning by different authorities. We think this is regrettable because planning is fundamental to achieving in the long term the economic development of the area. A business that is kept waiting for several months before it gets a planning permission may decide to go to another area, so it is counter-productive for authorities to run down investment or expenditure on their planning side on the grounds that they have other priorities. It will actually work against their own interests. We are engaged in discussion with the Local Government Association about funding and we are not unsympathetic, but I have to say our evidence is that those authorities who achieve a high standard do so without the need for additional resources, they manage their service well, and if others match the performance of the best performers they would achieve considerable improvements in their standards.

(Mr Prescott)  We tried to prevent, I think, your general fear, that when we talk about targets it is to almost determine the priorities for local authorities by saying "that is your order and you have got to put your resources to meet those targets". It is always a difficulty in giving resources to local authorities. What we try to do is to look at the performance of similar authorities and ask "Why can you not do it there" and I think that is what we try to do rather than determine the priority by setting the targets and then making it more difficult for local authorities or determine their priorities and expenditure. It is a balance, some are good, some are bad. We want better standards.

48    If I could just follow on, also continuing with planning and transport. PPG13 has been suggested, it has been highlighted but not published, why is that, Secretary of State?

(Mr Prescott)  That it is not published? It is true that we have been involved, I think, in it since 1999 on this controversial --- It is controversial, yes, because we are talking about lots of planning requirements, probably the one about car parking is the one that gets most controversial in it. It is about transport. Because we have produced our transport plans and we have extended some of the consultation about it, it is controversial but you are going to have to make a judgment about it. We hope shortly to be able to publish the plan. Nick, perhaps you could say the date of publication?

(Mr Raynsford)  The consultation took place around a year ago. It was a very full consultation with a lot of responses and, not surprisingly, some widespread differences and opinion in response to that consultation. So it has taken longer than ideally we would have liked in reaching conclusions on how we take this forward but we are at an advanced stage and we hope to be able to publish in the very near future.

49    What do you call the "near future"?

(Mr Raynsford)  How long is a piece of string?

(Mr Prescott)  It will be quite near. Can I just give you one difficulty we have been looking at in this. People say you want less regulation rather than more regulation and there is always this balance. Government departments who have the responsibility of saying there should be less of this naturally say "Are you not actually making this more difficult in regard to regulation?" We have to say it is important in the planning and the kind of environment that we get a proper standard. So do you actually make it a recommendation or do you make it a standard that you have to implement in your plans? That is controversial not only outside but sometimes inside Government.

50    Can I look forward to it in the near future?

(Mr Prescott)  Pardon? I tell you, I will write to you about that.

51    Thank you very much.

(Mr Prescott)  I will write to the Committee.

Mrs Ellman

52    When will you have agreed a replacement for Gap funding of the European Commission?

(Mr Prescott)  This is a very difficult one. It concerns us a great deal. Hilary has been very much involved in negotiations. It affects right across many of these programmes, as you well know. Hilary, can you tell us where we are on that because some countries in Europe certainly agree with us, there is a lot of discussion going on with the Commission, but it has had an effect on a number of the programmes as you know already.

(Hilary Armstrong)  I can tell the Committee that the Commission have informally indicated that they have approved the Direct Development Scheme and written confirmation is due imminently. Once it has been received RDAs will be able to begin operating that scheme. As you know, there are two other schemes that we submitted to them, the two Gap funding schemes and whilst it is always risky to give a specific date when the Commission is involved, nonetheless they have said we can expect a decision on the schemes by the end of February. They have recently approved two schemes from the Welsh Development Agency that are very, very similar and so we do not anticipate that there are going to be any problems and we see no reason why they should not be approved by the end of February as indicated. The other two schemes that we have proposed to them, Neighbourhood Renewal and Environmental Regeneration, are still being considered by the Commission and again we are pressing them for early positive responses.

53    How will this affect the 32 schemes from the Merseyside Objective 1 programme which are currently in the State Aid Unit of the Department of Trade and Industry? These are essentially schemes with private sector involvement which have been held back for the same reasons as the reasons for the cancellation of Gap funding. One of those schemes is a Beatles-themed hotel in Liverpool, the other is a business centre in Toxteth and I understand there are great difficulties about the private sector elements of those schemes waiting, what I was told only this afternoon, would be several months before those schemes could proceed. How will the statement you have just made relate to those projects?

(Hilary Armstrong)  I obviously do not know the detail of those schemes and I do not know whether these schemes link into the criteria which we have applied for the schemes that we have sought approval for. The RDAs do know the criteria, the shape of those schemes. The public knows now because the Welsh Development Agency programmes, as I say, have been approved. The Gap funding schemes will be ones that are applicable certainly in the Objective 1 area because they are specifically for those areas. I do not know those individuals schemes, but if they have been prepared knowing that the earlier Gap funding scheme is not possible and they have been prepared within the remit that there is this time, then they will be acceptable. If they involve direct development, they will be acceptable. However, as I say, the individual programmes will have to be assessed alongside the new overall programmes that we are submitting and seeking approval from the Department for.

54    I am a little concerned because your answer suggests that those are not of any particular concern to you. Those schemes were worked up by the Government and the Government Office, they are not the responsibility of the Regional Development Agency. Could I ask you to investigate that programme ­­­

(Hilary Armstrong)  I am really sorry.

55    --- A major part of the European Objective 1 programmes. Those schemes were put together before the Gap funding ruling and discussions have been taking place ever since. Could I ask you to look at those? I have been pursuing this elsewhere, as you are aware, and these are major issues for regeneration in Merseyside.

(Hilary Armstrong)  Of course they are and I am not taking this lightly at all. As you know, I have been pursuing this fairly vigorously for some period of time. What I do not know is the individual details of those schemes, that is all. I am putting my hands up and saying I do not know the individual detail so I cannot give you an answer which deals with that, but I know that people are looking at that very carefully. Yes, I should have said that the Government Office as well as the RDA are very involved in all of this, and certainly I will have another look at it. What we have been trying to do all the time is to make sure that whatever proposals we have we see how they can be adjusted to fit within new rules.

56    Why do you think it was that the Welsh Development Agency and the Welsh Assembly were able to find a solution to the problems of regeneration in Wales sooner than central government was able to find a solution for problems in the North West region?

(Hilary Armstrong)  They withdrew the Gap funding scheme earlier. They just decided they were going to move earlier, that is all.

57    Could I turn ­­­

(Hilary Armstrong)  I was criticised last time for having moved at all.

58    So devolved governments move quicker, earlier and more effectively than central government?

(Mr Prescott)  That is not necessarily so, not even by the evidence.

(Hilary Armstrong)  They simply took the decision earlier. They may decide to put their hand up earlier, that is all.

59    Could I turn to the question of the Urban Regeneration Companies, like Liverpool Vision. What powers do the Urban Regeneration Companies have which distinguish them from any other partnership such as the Single Regeneration Budget partnerships? What makes them different?

(Mr Prescott)  Hopefully in Liverpool you saw the differences ­ (inaudible) is involved in the one and of course the other one now being advocated is the kind that the Heseltine innovations played some part in, but the fundamental difference, of course, is that a criticism was made by Committees in this House that just dealing with this as an economic problem is not a satisfactory way of dealing with urban renaissance, you have to deal with social investment. Of course, the Urban Regeneration Companies involve the community and not simply the local authority or one body that is basically the Government taking consultation and that is one of those differences. We now have the ones in Liverpool, Manchester, and wherever it is. Hilary, would you be able to give a more definitive response?

(Hilary Armstrong)  An SRB largely deals with one community. The Urban Regeneration Company is covering a much wider area and is looking specifically at brownfield sites that need development which very often in the past would be developed without any consideration of the context that the Urban Regeneration Company is operating within or the development would be operating within. What the Urban Regeneration Company has been able to bring, and this is certainly what people said in Liverpool when I was there, is that they are able to think about development which will be of better quality and so on because it is not spec development, it is not somebody coming in quickly because nobody else is around and watching. It actually is how do you get a strategy which covers more than one site, but that means that what you develop on one site actually feeds into the overall development that you are looking for. I think in that way certainly Urban Regeneration Companies are bringing that added perspective which, when you are looking at the development of a single neighbourhood, you get in very different ways.

60    The Rogers Report recommended that the Urban Regeneration Companies have more powers. You seem to have rejected that. Could you say why?

(Hilary Armstrong)  We did because those powers in many ways intervene with the powers of local government and there were lots of criticisms of the Urban Development Corporations, the previous vehicles, precisely because they interfered with the planning powers of local government, and so we believe that rather than take those powers again from the local government and give them to URCs we should look for a more partnership approach involving the local democratically accountable body, making sure that they still had those overall planning powers. That will be a matter of judgment. We are looking at this very carefully. There is real enthusiasm in the rest of the country to set up URCs but we are watching that and monitoring it and talking to the URCs at the moment about whether they think the vehicle is sufficiently effective.

(Mr Prescott)  That accountability issue is a real issue in Liverpool. When we came in with all the bankers and the businessmen they picked out the economic projects but there was not a great deal of accountability for that. Lord Rogers has gone somewhat further than that but at the end of the day it is still an issue of accountability. Where it is public money, elected representatives should have some say in it. We tried to mix it in the strategies by bringing in businesses and different communities into these partnerships.


61    Can you tell us whether you have defined the areas that are going to be exempt from Stamp Duty yet?

(Mr Prescott)  No, I do not think we have.

62    How soon?

(Mr Prescott)  You have caught me. Can I write to the Committee?

(Hilary Armstrong)  It is a matter for the Chancellor.

(Mr Prescott)  That is obviously the answer I should have given automatically, in time for the Budget, but I will gee it up and make sure and write back on that. If it is just the line "wait for the Budget", well, we are nearly there.

63    What about harmonising VAT rates on refurbishment, is that a dead duck?

(Mr Prescott)  The same answer really. When I appeared here before I said I was an advocate of trying to get a better situation on VAT, as you well know. We made some steps towards it and we will keep on pressing the issue.

Chairman:  On that note can I thank you very much for your evidence.