Examination of Witnesses (Questions 40-45)|
TUESDAY 26 FEBRUARY 2002
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 factorsis it going to be SMEs
going in therewe 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.
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
(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.