Examination of Witness (Questions 280
TUESDAY 4 DECEMBER 2001
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.
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 rightand this has been warmly welcomed by
local governmentto have a floor below which no authority
falls and to pay for thatclearly that does have a costand
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
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.
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
(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
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
(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
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
(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 Londonobviously I would hope that you would excel at
that jobwould 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
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.