Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witness (Questions 280 - 299)



  280. You are saying that your concern is with the framework, not the content and not the application of resources?
  (Mr Raynsford) I did not say that because I pointed out that I had spent quite a lot of time on the local government settlement which is one of the main ways in which government money is allocated to the regions, but I also pointed out that other colleagues in government are responsible for different spending decisions relating to the regions.

  281. Are you proposing that the elected regional assemblies have tax raising powers?
  (Mr Raynsford) That is a matter for the White Paper.

Dr Pugh

  282. Just on the issue of the local government settlement, would you accept that, in certain regions, this is looked upon as a bit of fiddle over the year and that there is no consistency from year to year and last year the new concept of floor and ceilings came in, which had been completely unheard of before and does seem to be an attempt on your part to adjust the inequalities, and would not the better procedure be to relook at all the formulae including the Barnett formula?
  (Mr Raynsford) The answer to that question is that we will be conducting an extensive review of the formula next year with a view to it being introduced in 2003/04. That is our commitment. That will not cover the Barnett formula but it will cover the allocation of resources of local government. In the meantime, we felt that it was right, insofar as it was possible, to provide local government with as great a certainty as possible about a future spending pattern. So, over the last three years, we have not changed the methodology for assessing the allocation of resources. We have obviously taken into account changes in data reflecting population increases or reductions, changes in costs, the area cost adjustment applies there, and data reflecting changes in deprivation. We have not otherwise made changes to the formula. The floors and ceilings that you referred to was introduced in response to concerns expressed by local government that, in a supposedly stable position where there was no change in methodology, there were still very wide variations between outcomes because a change in population or a change in costs could have a significant effect, positive or negative, on individual authorities' budgets and, to give a greater degree of certainty, we felt it was right—and this has been warmly welcomed by local government—to have a floor below which no authority falls and to pay for that—clearly that does have a cost—and there would have to be a ceiling above which no authority could receive a payment. That has been regarded as a fair framework.

  283. It is not a predictable framework though.
  (Mr Raynsford) The whole process is not predictable because I have to say that the elements that go in, the changes in school population, the changes in population, the changes in costs, can have quite significant and sometimes unpredictable effects.


  284. Can I just take you back to the Barnett formula. Do you want to make a comment on the Barnett formula yourself? Is it being reviewed as part of the Government's spending review for this summer?
  (Mr Raynsford) Not that I know of.

Dr Pugh

  285. Specifically on the Barnett formula moving on now to look at the whole business of regional development agencies, if certain areas are losing out, they do look for support from the regional development agencies and they do look for some kind of regeneration in addition to simply having a regional development agency producing, as they do very well, a great number of plans. Do you think the emphasis on regional development agencies on job creation is too narrow a focus?
  (Mr Raynsford) I think it is right that the regional development agencies should have a focus on economic development and job creation, but clearly they have a wider remit as well and it is important that their work should tie in with the regeneration programs that are operating in the region to ensure that deprived areas do get the benefits not just of jobs but of improvement in physical fabric of the area, reductions in crime and other measures that will create a happier, more successful community. So that wider regeneration focus must not be ignored though, as I have stressed, I believe it is right that regional development agencies should be primarily focussing on economic development.

  286. Would you put any limits on how far that focus on a wider role would go in regional development agencies? Obviously other organisations would be jealous of their role and would not wish to see regional development agencies encroached too far.
  (Mr Raynsford) This is one of the classic areas where there is a tension between the role of central government as exercised through various bodies that are answerable to central government including regional development agencies and local government and it is one of the issues that we will be considering in our regional government White Paper to ensure that there is a coherent relationship between the activities of local government which will continue to be fundamental to regeneration but that those must mesh with the activities at the regional level.

  287. The Committee hope to see the DTI as part of its inquiry into empty homes to discuss the interface between regional economic development strategies and housing strategies. We were told that Sally Keeble from your department, who by a strange coincidence is attending a meeting in my constituency today, possibly on this subject I do not know, would be the right minister to deal with this subject. Can you explain this?
  (Mr Raynsford) Sally Keeble is the Commons Minister with responsibility for housing and that is the reason that she was proposed.

  288. What is the connection between the DTI and the RDAs?
  (Mr Raynsford) The DTI is overall responsible for the RDAs which transferred, following the last General Election, from our department to the DTI.

  289. Are you happy with that?
  (Mr Raynsford) That was a government decision.


  290. It was put to us during that inquiry, perhaps over-simplistically, that the best way to get more empty homes in Liverpool was to create jobs for people in Liverpool because, as soon as they got jobs, they were keen to move out of the area. Have you tried to integrate this issue? Is it not logical that the DTI and your department work much closer together to make sure that creating jobs does not drag people away from an area like Liverpool?
  (Mr Raynsford) There is an obvious need to try and ensure that policies dovetail and do work together, and that has been very much the theme of what I have said in response to a number of questions earlier on, but I have to say that it is not always possible to predict people's choice of location for their home and it would be difficult to tie people down to forcible occupation of housing in certain areas. We have to work with the fact that people do expect, and rightly so, to exercise choice and, if they feel that a neighbourhood is unsatisfactory and unsafe, they will probably want to move elsewhere. Therefore, the key is to ensure that the economic programmes to do with job creation are matched with regeneration programmes. As I have said, that will help to tackle those deprived neighbourhoods and make them attractive places once again for people to live in if there is still a need for housing in that area. There will be some areas where it may well be concluded that a fall in the total resident population is inevitable and that should be reflected in terms of housing policy.

  291. It would be possible for regional development agencies to make grants and to do other things on the basis that they employ local people, would it not?
  (Mr Raynsford) Certainly that kind of initiative to encourage local labour schemes, to give jobs and training to local people who are unemployed to help them into employment as well as possibly creating housing or other facilities for them are very attractive schemes and I have supported many schemes of that nature in the past and hope they will continue.

  292. Have you been able to persuade your colleagues at the DTI that that should happen?
  (Mr Raynsford) We have a continuing discussion with colleagues at DTI about that.

  293. That was not quite the question I asked. I asked, have you been able to persuade them?
  (Mr Raynsford) The answer is that, yes, in a number of important economic development projects, there is a strong local labour component. I hesitate to raise a controversial one but, in my own constituency, the regeneration of the Greenwich Peninsular has been a major economic development initiative but it has also been associated with a very, very successful local labour scheme.

Ms King

  294. Will there be a chance to alter the structure of the GLA in any forthcoming regional legislation?
  (Mr Raynsford) It is not our intention to revisit so quickly the structure of the GLA after its creation. I qualify that by saying that that would not necessarily preclude minor amendments to cope with anomalies or manifest weaknesses that need to be changed, but it is certainly not our intention to contemplate fundamental changes in the powers or the structure of a body which has only come into existence within the last two years.

  295. Do you see any conflict between your two roles, one as Minister for London and one as Minister for Local Government?
  (Mr Raynsford) I can see potential conflict but I do not in practice because I try to handle those two in a way that avoids those conflicts. Inevitably in government, ministers do have different responsibilities and they sometimes can involve priorities pushing one way or another. I think it is very important that one should be clear about how one discharges one's responsibilities to avoid a conflict of interest.

  296. If it is your job to get the very best for London—obviously I would hope that you would excel at that job—would that not be in conflict with your other role in terms of having responsibility for local government finance?
  (Mr Raynsford) I see my role as ensuring that there is a fair and the best possible settlement for local government as a whole and clearly I would expect London to share in that but not to have any special favours as a result of me being London Minister as well as Local Government Minister. I am the only London member in our department and therefore it is almost inevitable that I would be the minister charged with London responsibility.

  297. The Mayor has been accused of encroaching on the territory of some of London's local authorities. Do you think that he should be given a formal co-ordinating role in respect of some of their functions?
  (Mr Raynsford) The Mayor has substantial roles as defined in the Greater London Authority legislation which you have a very considerable familiarity with having served on the committee that brought it into existence. We believe that those powers are broadly right. I hope that the Mayor will want to continue to work constructively with the London boroughs because that kind of partnership between the strategic authority and the boroughs is necessary for good governance in London and for the promotion of the economy and regeneration in those parts of London that are deprived. In just the same way in our regional government's proposals, we will want to see a close and effective working relationship between the regional assembly where regions vote for that and local government.

  298. I want to turn to the local government White Paper and the regional White Paper. Do you think there has been sufficient co-ordination between the civil servants preparing those White Papers?
  (Mr Raynsford) Yes.

  299. Would you be able to take any measures or do you think there should be any measures taken to ensure that those departmental civil servants work more closely together?
  (Mr Raynsford) No. As both groups report to me and as I have been responsible for the detailed work on the preparation of the local government White Paper and doing the detailed work on the preparation of the regional government White Paper, I am in a strong position to ensure that they do work closely together.

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