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

Examination of Witnesses (Questions 40-45)



Ms King

  40. Could you summarise and state clearly for us what effect does additional funding for SMEs have on your ability at Urban Splash to get involved in projects requiring gap funding?
  (Mr Bloxham) It makes it much more complicated. From our point of view we really want to get a project. We can identify that the gap is there for the project and we want to know whether the public sector believe that is worth supporting. Because you have all these different factors—is it going to be SMEs going in there—we have to pre-determine what the occupants are going to be. There may be a hundred occupants, there may be one occupant in the whole lot. The potential is, if we have a tenant who wants to come and invest in that area which is not an SME we then would not be able to accept them to come in.

  41. David and Mel, has the Objective 1 gap funding scheme encouraged you to invest in South Yorkshire instead of in other deprived areas?
  (Mr Burrell) Objective 1 is only available in that area, so that is attractive and that is a positive regeneration stimulant. No, we have got business in other areas, in the north east and in Scotland.
  (Mr Hodgson) The same answer. I deal with property all throughout the UK.

Christine Russell

  42. We have got a very buoyant economy at the moment. What is your projection, all three of you, very briefly, if the economic cycle slows down? Will it in fact mean that there will be a greater need for gap funding than we have at the moment?
  (Mr Burrell) There will be a greater need for it, yes. Just from our company's perspective the opportunities being presented by Objective 1 have kept us investing and I believe that Objective 1 will be able to help override at least some downturns in the property cycle. That is a conscious commercial decision we have taken.
  (Mr Hodgson) I would just reiterate what Mel says. We have exactly the same view as that.
  (Mr Bloxham) The good spaces will keep good and will survive a downturn. The places that will be hardest hit will be the places which are already deprived, and the cost of doing nothing and letting those fall is far greater than the cost of intervening.

  43. Tom, earlier you mentioned all the public good benefits like good design, saving listed buildings, etc. If the state aid was available for those public good components of a regeneration scheme would that be helpful? Would that be a way round it?
  (Mr Bloxham) It would be arguably a way round. It would take a whole load of time, effort and money from various consultants to decide exactly whether the money was going into the listed building or was it going into the refurbishment, but yes, it would certainly help.

  44. And in your experience, Mel, do you think that would keep developers interested in regional schemes in inner city areas?
  (Mr Burrell) I think it would be helpful, yes. Exactly as Tom said, it becomes very complicated the more add-ons you bring into it. If I can use the Objective 1 example again, I found in applying for that that the financial elements of it, the property development elements of the application process, were reasonably logical and straightforward, as they would be. What became very complex was the whole gambit of other things which we had to bring, which were the community links etc, and the application process involved a huge amount of work and questioning on those where, at the end of the day, a good consultant will learn quickly how to fill in the boxes to get the points to score well. That actually is not going to help anybody. If you are looking for these additional benefits, quite rightly, I think the public/private sector relationship in implementation terms has to be much tighter because the actual process and then the monitoring of the process do not cover those issues. It is financially related at the end of the day.


  45. Now the Government is hosting a conference in about a fortnight's or three weeks' time with other European countries about this whole issue of gap funding. Are you in any way involved in that conference?
  (Mr Burrell) No. We did not know about it.

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

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