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



Examination of Witnesses (Questions 420-439)

LORD FALCONER OF THOROTON, MR PAUL HOUSTON AND MR STEPHEN STRINGER

TUESDAY 30 APRIL 2002

Sir Paul Beresford

  420. Do you understand that many of us on this Committee feel that there is too much of the Nero syndrome, everybody sitting round playing violins, writing papers and talking to each other while the cities fall apart?
  (Lord Falconer) I can understand that. I think the difficulty about all of this is that you have to press the European Union to get a solution which is as many schemes as possible approved for you to open the door in relation to individual schemes, bringing you up towards a regeneration framework which I think everybody agrees, assuming it said the right things, would be the best solution to the problem that one has. That does require a period of persuasion and discussion with other Member States and the Commission.

  421. Twelve months, two years, three years, four years, five years?
  (Lord Falconer) I have no idea how long it is going to take but it should take as quickly as we can make it take. The problem is that it is not entirely in our hands.

Mr Betts

  422. It probably does not really matter whether you understand the guidance of the scheme but it rather helps in the potential development if surveyors can. From the evidence we have taken so far, people have used the terms "incredibly difficult", "mystifying", and "a complete lack of advice from the RDAs." Are you aware of these problems and is anything being done about it?
  (Lord Falconer) I am aware of those problems. I have also read the evidence you have in relation to it which is pretty powerful when it comes from people like Chris Brown and Tom Bloxham who are of pretty high standing in the physical regeneration industry. As Mr Stringer pointed out, a joint exercise was done with the RICS in order to try to make it as comprehensible as possible. We must obviously, in the light of the evidence that has been given and the general atmosphere around the guidance, look to see whether or not, perhaps again working with the RICS, we can make it more comprehensible, but there is this fundamental difficulty that it, to some extent, reflects the complexity of the schemes.

  423. But there will be an effort to make it more transparent?
  (Lord Falconer) Yes, we will see what we can do in relation to that because the noises about this are pretty strong.

  424. Is not one of the problems that was identified that while there may be a wish within the department for something to happen, down on the ground, the RDAs are actually not that keen? In the evidence from Yorkshire Forward, it was said, "We are not interested in operating reactive grant programmes." In other words, "We know they are there but we are not going to do anything about it." Is that not something that has to be addressed?
  (Lord Falconer) I think there are a hugh range of gap funding schemes and that, if the scheme were opened, people like Yorkshire Forward would be interested. However, we have to first of all get to the stage where the door is much wider open for those schemes than it is at the moment.

  425. But the door is a little open?
  (Lord Falconer) It is.

  426. Should the RDAs not be doing something to promote the availability of the schemes which do exist rather than saying, "We are not interested"?
  (Lord Falconer) When you say "promote the availability", I think as wide as possible a circulation of the availability of these schemes to potential developers should be made. If you mean further than that, should Yorkshire Forward be starting to, as it were, make up the gap with their funding, I think they should be looking at all the options they have in terms of schemes to see what is best in the context of their strategic view of what is done in Yorkshire.

  427. Has any guidance come from the department to encourage RDAs to do precisely that because the evidence we were getting indicates that some of them were doing it and some were not?
  (Lord Falconer) These questions are to some extent touching on an issue that has come across in earlier parts of the evidence that were given to you about whether RDAs are too interested in economic development and too little in regeneration? They recently, in a joint statement made with the department, committed themselves to being just as committed to regeneration as they had ever been and were determined to —

Chairman

  428. As committed to it as they had ever been? You just told us that they were not very committed to it; that is not making much progress.
  (Lord Falconer) That is a lawyer's point, if I may say so. They were seeking to convey to the department—and I accept this—that they are committed to the regeneration aims which are in their statute, were agreed again with the Chancellor and with the Deputy Prime Minister in March 2001. So they are committed to the —

Mr Betts

  429. That is not the evidence we have had.
  (Lord Falconer) It is what the RDAs are telling the Government. I did not detect from the evidence of the woman from Yorkshire Forward that she was saying they were not committed to regeneration. They were saying that they were committed but they obviously also have economic development aims. From where the Government sit, we would be keen to see them taking the role that they say they are taking in relation to regeneration. We would also be keen to see them making maximum use of the gap funding schemes that are available.

Christine Russell

  430. What guidance do you actually give to RDAs on the selection of sites for direct development?
  (Lord Falconer) We do not give specific guidance about the selection of sites. We in effect say to the RDAs, "You have to work out what the economic strategy for your region is. You have roles to regenerate and roles to promote economic development. You have a single pot of money and the decisions about how and where you invest in the context of those overall gains/issues are a matter for you, not for Central Government."

  431. So you give them no guidance for direct development. So, if they want, they can go and get involved in commercial development on greenfield sites rather than regeneration of mixed development sites in city areas.
  (Lord Falconer) Government has a whole range of policies like, for example, promoting brownfield development before greenfield development. The decisions they make about specific investments and specific sites should be in accordance, like as with everything else, in the context of basic Government policy on those sorts of issues, but the extent to which, for example, they decide to do direct development as opposed to development in partnership with the private sector or leaving the private sector to do a particular thing are essentially decisions for them and not for Central Government.

  432. Do you know how much money RDAs actually spend on urban renaissance type projects and greenfield development projects?
  (Lord Falconer) No, I do not. I have some figures but they would not be done by reference to urban renaissance but I am told that they are quite unreliable figures, but I will give them to you —

Chairman

  433. Thank you very much!
  (Lord Falconer) Unreliable because they are plainly based upon not, as it were, an analysis of particular statistics but a pretty rough and ready approach. It is about, in terms of direct development by the RDAs, 200 million per annum and set to rise.

Christine Russell

  434. But you do not know where that 200 million is spent?
  (Lord Falconer) I do not know where that 200 million is spent. I can give you —

  Christine Russell: I think we would find it helpful if you could find out where that is spent.

Chairman

  435. If you could give us a note on that.
  (Lord Falconer) I certainly will. I can give you an example but that is not really what you are after. An example is the project in Liverpool, the Mann Island project, which involves the acquisition and development of a prominent site on Liverpool's waterfront which is 9.8 million by the North-West RDA which is an example of direct development, but you are not after an example, you are after the sort of scale of the activity.

Christine Russell

  436. Really, what you are saying is that the department gives no clear guidance to RDAs on really what their number one priority should be, whether it should be tackling the most difficult sites or ones where perhaps the market failure is less. You are saying that that kind of guidance is not actually given.
  (Lord Falconer) That sort of specific guidance would be contrary to the approach which is saying that it is for the Regional Development Agency to develop the economic strategy for the region; they have to promote regeneration and economic development. How they do it within existing overall Government policy —

  437. How do you then tell them that they should not be competing with the private sector because some of the criticism we have had in earlier evidence is that in fact the RDAs, instead of going in and tackling really difficult sites where the need is greatest, are in fact competing with the private sector on the more juicy greenfield sites alongside motorways?
  (Lord Falconer) They should obviously be making a difference in terms of where they spend their money in a way that it would occur anyway. I am not giving a particular case but, if they are intervening to compete with the private sector in relation to a site that is bound to get developed anyway because the private sector would do it, then obviously a question mark arises as to whether or not that is a sensible use of money, but if the principle of the RDAs is that they should make the essential detailed decisions about how they spend the money in their single pot of finance, then it would be wrong for Government to start prescribing the precise circumstances in which they should be in partnership with the private sector, in which circumstances they should compete with the private sector and in which circumstances they should deal with difficult sites because that would be quite contrary to giving the RDAs a significant degree of freedom in how they spend their money.

Mr Cummings

  438. What criteria do you use to measure the degree of success?
  (Lord Falconer) They produce a regional economic strategy, they report to the Regional Chambers; their success depends upon what they deliver by reference to —

  439. What criteria do you use?
  (Lord Falconer) Are they successful in delivering their regional economic strategy? We also have targets for things like the remediation of contaminated land and that is a very clear indication of whether or not they are making progress in dealing with areas that need regeneration.

 


 
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