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


Examination of Witnesses (Questions 620 - 639)

WEDNESDAY 16 JANUARY 2002

RT HON STEPHEN BYERS, MP AND SIR RICHARD MOTTRAM KCB

Chris Grayling

  620. I do find this extraordinary, Secretary of State. We are in a position where you have a significant number of projects on the shelf which could start tomorrow which are all in the-ten-year plan, whether the Department's ten-year plan or the SRA plan, which could start very quickly. We have had a number of schemes which have been submitted by local authorities around the country which are yet to receive funding and which would ease transport congestion and yet you are sitting on underspend. It is not a question of not being strategic, but there are projects which are currently being delayed because of a lack of investment because plainly you are not doing it.
  (Mr Byers) I think the notion that you can start today is an interesting one. If we took a decision today to fund some of those projects, I would be surprised if you would see actual spend appearing in the budgeting until the next financial year and you must be aware of that, let's be honest about that. We are in the middle of January, a commitment made today would almost certainly have a financial implication in the next financial year and that is the nature of the scale of the projects that we are dealing with. We announced £1½ billion of local transport schemes just before Christmas.

  621. Why do you not allocate £1.7 billion of your underspend?
  (Mr Byers) Because what we are doing is making sure that for that local transport plan, the biggest investment ever in local transport plans, that all of them are priorities and achieve value for money. It is easy to put in an extra £200 million, but are you achieving value for money for that? Our decision was that £1½ billion for the projects which are put forward would deliver real improvements and would meet our priorities. It allows us to spend £200 million elsewhere for other priorities. The important thing is to make sure that we get the underspend down and we do it in a way which achieves value for money and we will do that and I think the Committee will see because of the steps that I have introduced as Secretary of State that the underspend will be lower this year and it will be lower next year because that is important because we have got an allocation, we have a pressing need and it is something that we have got to meet and we will.
  (Sir Richard Mottram) Could I just illustrate one of the issues which is that one of the significant underspends, and I think this was in the material we sent to the Committee, one of the significant transport underspends was we had forecast that we would spend £42 million on the Channel Tunnel Rail Link and the outturn was £23.4 million. This was partly about forecasting and it was also partly about the basis on which it was being funded and getting additional money from other sources. The programme itself was basically running to time. If we took that money out and spent it somewhere else, what we would then find is that we did not have the money to complete the Channel Tunnel Railway project which is why a number of these big transport projects are organised on the basis that we have ring-fenced provision with the Treasury which we account for a particular project and if we do not spend the money in 2000-01, we put it into the budget of 2001-02 if it is needed there and we ensure that we fund the project, so it would not make sense to take that money and re-allocate it to local transport plans unless and until we were confident that we did not need it for that project. So that is what we are trying to do; we are trying to plan on a three-year basis and actually in the case of transport we are now planning on a ten-year basis as well and we reconcile these numbers to make sure we try and deliver what we are committed to delivering. That is the important consideration.

Mrs Dunwoody

  622. If you underspend £1 billion on ring-fenced capital programmes, it is a bit of a blip, is it not really, would you not think?
  (Sir Richard Mottram) Yes, I would, but another example would be that we made provision for trans-European networks, which is a European programme, where the problem we have there is that in order to be allowed to spend the money, we actually have to get the agreement of Europe to co-fund some of our projects and we have not been as successful as we would have liked to have been on that.

  623. Meaning you do not have a concordat for that?
  (Sir Richard Mottram) No. We have more than a concordat.

Chris Grayling

  624. Can you tell me, Secretary of State, if you are happy with your current departmental objectives and also whether you feel that you have the freedom to set them yourselves or whether you feel that they are over-imposed upon you by the Treasury?
  (Mr Byers) I think the objectives are right. They are balanced and they look broadly at what the Department is seeking to achieve. Within government there are agreements that are struck and I think they reflect the Government's priorities. I think we have a very good, positive relationship with the Treasury and it is one which will continue and I think our objectives are correct and they have not in any way been imposed upon us.

  625. What has been the advantage to you of the appointment of Lord Birt? Was that actually your own appointment or was it a Prime Ministerial appointment? What benefits does it bring to appoint somebody to look at transport issues who does not have direct transport experience?
  (Mr Byers) Well, Lord Birt is a member of the Forward Strategy Unit which is Number 10 and he is not involved with anything to do with the ten-year plan.

Mr Donohoe

  626. That is good!
  (Mr Byers) He is involved in looking at things that might arise in 15 or 20 years' time.

Mrs Dunwoody

  627. I hope he is not getting expenses!
  (Mr Byers) That means to me as Secretary of State I hope I am going to be in the job for a long time, but not when I am drawing my old age pension, but I am pretty relaxed about the work that Lord Birt is involved in.

  628. Yes, but it is not funny, is it, really? We joke about it, but in fact it is a bit embarrassing. How many civil servants do you have, Sir?
  (Sir Richard Mottram) How many civil servants do I have?

  629. Yes.
  (Sir Richard Mottram) Well, in the centre of the Department about 3,500.

  630. And are they to do with transport, some of them?
  (Sir Richard Mottram) Many of them are, yes.

  631. Now, Secretary of State, even at the risk of being mildly critical, I might suggest that the reason that you have those civil servants is that they do a job on transport, one of which I would hope was forward planning and frankly since Lord Birt has demonstrated very clearly that he could not run an arrangement in a brewery, it seems extraordinary that we are asking him to do something about which he knows nothing or is this the criterion for the future?
  (Mr Byers) I think we will see with interest the recommendations that Lord Birt brings forward. My priorities are delivering improvements between now and probably when the next Election is held and delivering a ten-year plan.

  632. Fine, but why do we have this fellow wandering about talking about what might happen in ten years' time?
  (Mr Byers) It keeps him occupied.

  633. All I want to know is that I assume it is at no cost to the taxpayer. I assume this gentleman did not walk away from his previous post without the odd bob or two, so are you assuring me that your Department and Number 10 are not giving him any help with his expenses?
  (Mr Byers) Well, certainly my Department is not funding that.

  634. Good. So when you are talking to the Treasury, you point out that expenditure on Lord Birt might be otiose, as they say?
  (Mr Byers) Well, it is a matter for the Prime Minister's Department at Number 10.

Chris Grayling

  635. So can we take it that you were not involved in his appointment?
  (Mr Byers) It was a Prime Ministerial appointment and we made that clear. I do not appoint members of the Prime Minister's Forward Strategy Unit. I do think, and it is something successive Prime Ministers have done and we are quite clear about this, that they do bring in people from outside to look at long-term planning. Actually if you think about some of the difficult issues we are dealing with today, it might have been helpful had Margaret Thatcher, when she was Prime Minister, begun to think about the problems that would be facing the transport system—

Mrs Dunwoody

  636. Yes, but, with respect, Margaret Thatcher did not have problems with the transport system.
  (Mr Byers) She created it.

  637. And that is a very simple set of criteria, that if you definitely do not know about the railway system and you are going to have lots of roads where we did not bother too much about putting any money into the infrastructure, you do not really need advisers. Even I could do that. What we are asking you is why has this man been brought in to do a job for which we already have not only a number of Ministers, who are not exactly underpaid, and a number of civil servants who are supposed to know something about it?
  (Mr Byers) Well, I think we should see it in the way in which Lord Birt will be making recommendations in addition to the work that is going on in the Department. We have a good working relationship with Lord Birt and the work he has done so far. I am quite relaxed about what he is doing.

Mrs Ellman

  638. As the Secretary of State for the Regions, how are you addressing questions of inequities in regional spending, for example, the fact that the North West receives 25 per cent less than Scotland on education, although it is poorer? What are you able to do about it in your position?
  (Mr Byers) You are inviting me to begin a very interesting debate about spending. The important thing, I think, is that we do see spending being allocated or finance being allocated on the basis of need. Certainly within England, what I have commissioned for the first time, I think, is a major piece of research to identify where each region is getting its funding from in terms of public expenditure. That work has not been done before, but for the first time we have now commissioned that to take place, so we will be able to see within each region of England where the money is going and who is funding it and then we can look between regions to see if there is an unfair allocation. I think that work then has to be done and that will then feed into the wider considerations within the United Kingdom about how we fund within the United Kingdom and not just for the regions.

  639. But the public expenditure statistical analysis, which has already been published, does show widespread disparities between regions and those disparities are not based on need. What influence do you have, as Secretary of State, on those funds?
  (Mr Byers) Well, I have influence in terms of we are just beginning the Spending Review for 2002 and we will be, as part of our submission to the Treasury, making the case very strongly of the need to have an active regional policy and that will entail funding to assist the regions of England and that funding will take a variety of forms. It can be support for the RDAs in terms of economic regeneration, and although we no longer sponsor the RDAs, we can still be advocates on their behalf and what is very clear to me is that if we are to see long-term sustained development in the regions, we do that where the economic performance of productivity within those regions improves. I do believe firmly that with an active regional policy we can achieve that. We also need to look at how infrastructure is developed so that we can support particular regions there and we can see how skills and training are allocated within regions.


 
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