Examination of Witnesses (Questions 308-319)|
TUESDAY 5 MARCH 2002
308. Can I welcome you to the last session this
morning and ask you to identify yourselves for the record.
(Mr Edwards) I am John Edwards, Chief Executive of
Advantage West Midlands, the regional development agency for the
(Ms Hancock) I am Heather Hancock, Environment
Director for Yorkshire Forward, the regional development agency
(Mr Piper) I am Ian Piper. I am Head of Regeneration
and Policy at the South West RDA.
309. Do you want to say anything by way of introduction?
(Mr Edwards) If I may, Chairman, just very briefly.
You have had the submission from the East Midlands Development
Agency on behalf of the RDAs so I will not duplicate that.
310. Although we did wonder because it did seem
to brush over one or two of the slight differences of emphasis.
(Mr Edwards) We agree on most things, Chairman. To
set out for the Committee's benefit, the RDAs have been in existence
now since April 1999 and brought together 11 separate funding
streams, four different organisations and we have five key purposes:
promoting economic development and regeneration; improving skills;
increasing competitiveness; reducing unemployment; and promoting
sustainable development. So from the outset, the regional development
agencies have a strong economic regeneration remit and that was
reinforced by the Chancellor of the Exchequer in March of last
year when he gave the RDAs the role of leading economic regeneration
in the English regions. We do now have a framework to deliver
economic regeneration in the English regions called "regional
economic strategies". Each region has one and they reflect
the differences and the similarities within and between regions.
We do regard brownfield development as a key tool in delivering
sustainable development and sustainable economic regeneration,
but we deliver it in the framework of the regional economic strategies
and we do focus the bulk of our resources in the urban regeneration
agenda, in leading that agenda, on brownfield development. It
is unfair and wrong to say that the RDAs promote greenfield development.
311. In regard to the five main programmes that
were envisaged when the RDAs were set up, are you supporting projects
through each of them and how?
(Mr Edwards) When you say the five, do you mean the
five new programmes?
312. The five under the Single Regeneration
(Mr Edwards) We have continued to deliver the programmes
and projects that we inherited when the regional development agencies
were formed. I think it is fair to say that in the first two years
of the regional development agencies' life, that has been predominantly
what we have done.
313. But those are basically the old schemes,
are they not?
(Mr Edwards) Those are basically the old programmes.
314. So what we are after is how of the many
new schemes are you supporting?
(Mr Edwards) From the 1st April 2002 we have a single
pot of funding which allows the regional development agencies
to use their resources in line with the drivers set out in the
regional economic strategies and, in doing that, we will support
enterprise development, we will support land and property programmes,
we will urban regeneration, business development, inward investment,
and programmes to improve and increase the skills of the regions.
(Ms Hancock) It might be helpful just to give some
figures around that. If we look at the budget that we are working
for land and property in Yorkshire and the Humber region, it is
about £57 million and of that, 26 per cent of it is inherited
largely PIP-style schemes, about 55 per cent of it is what is
broadly in the compass of English development and between 15 and
20 per cent is on the new kind of interventions under the five
(Mr Piper) In South West, the comparable figures are
a land and property budget of about £45 million for this
year, of which 75 per cent approximately is being spent on Direct
Development. PIP survivors are about 2 to 3 per cent.
315. What about replacements to PIP?
(Mr Piper) The replacement schemes, obviously Direct
Development was one of those and we are using that as a primary
tool. We are now starting to see some schemes coming through,
using the new gap funding schemes, though they have been quite
slow in coming through, but we are actually dealing with two or
three of those at the moment and we have been using the environmental
and the community regeneration schemes as well.
316. Those are the figures for this year?
(Mr Piper) Yes.
317. How do they compare with two years ago
and how do they compare to your forecasts for the next two years'
(Mr Edwards) If I can deal with the figures for the
West Midlands, in the first year of the RDAs' establishment, 1999/2000,
our land and property budget was around £30 million. Of that,
£23 million was the gap funding programme and just over £6.5
million was Direct Development, so the bulk of it was focused
on delivering the inherited gap funding programmes. For 2002/03,
the coming financial year, our current predicted land and property
budget is close to £48 million, so we are seeing an increase
in the amount of resources devoted to land and property. About
half of that will be dealing still with the inherited gap funding
programmes and the other half will be supporting Direct Development.
At the moment we are using Direct Development as the primary tool
largely assembling rather difficult sites and ones which need
318. Do you think in terms of the impact on
your budget that there has been a disproportionate effect of gap
funding ceasing to be on previous schemes on UK RDA budgets to
regional budgets elsewhere in the European Union?
(Mr Edwards) I do not think any of us can comment
really on budgets elsewhere in the European Union. We looked at
27 PIP schemes approved under the old programme and of those 27
PIP schemes, 14 would be ineligible under the new programme, 13
we could still do and they were ineligible because they were predominantly
housing or the levels of intervention were above the rates at
which we can now currently intervene. Our estimates are that it
would take approximately three times as much resource to deliver
the same output in Direct Development if you took it to its conclusion
and you completed the development as it would if one used the
gap funding scheme. I think that is rather a blunt way of approaching
it because we would not see, I do not believe, certainly not in
the West Midlands, the regional development agencies, except in
very exceptional circumstances, doing other than land assembly,
remediation and then make the completed site available to the
private sector and other developers to take forward.
319. So actually you are saying that without
the gap funding schemes, really you need three times as much money
as you have got?
(Mr Edwards) What I am saying is that to deliver the
end result, if the public bodies like the RDAs were to take a
development through to its conclusion, we would need at least
three times the budget that we have currently got.