Examination of Witnesses (Questions 500-519)
LORD FALCONER OF THOROTON, MR PAUL HOUSTON AND MR STEPHEN STRINGER
TUESDAY 30 APRIL 2002
500. Let us take another example: the Framework for Aid to Deprived Urban Areas in the UK. That has been in existence since 1999. Have you got some examples?
(Mr Houston) Shall I respond. On the first matter, the Environmental Aid Guidelines, we are actually designing a scheme for notification to the Commission on dereliction aid, which could take, as part of its rationale, the Environmental Aid Guidelines. So that is something we do have our eyes very firmly fixed on.
501. You have had your eyes fixed on it for 15 months now?
(Mr Houston) Yes, we have been looking carefully in that time.
502. Let us say you have been looking carefully for 15 months. When would you think you will have completed your looking and actually something could happen?
(Mr Houston) We have a draft of a scheme for Dereliction Aid almost ready to go to the Commission.
503. What about the Deprived Urban Areas?
(Mr Houston) That is much more difficult because that is a framework which was apparently, I understand, originally created in response to a French request some years ago and it was very tightly tailored to their requirements. Although we have looked at ways in which we could build on this, it is so restricted in terms of the purposes for which it can be used and the areas in which it can be used that we have rather concluded that it cannot be used in its present form. One of the things we are talking about with the Commission is whether there might be a better Deprived Urban Areas Framework
504. It runs out in May. Are you hoping to widen the scope or forget it?
(Mr Houston) That is something we will certainly want to talk to the Commission aboutwhether a better one could be put in place.
505. These two have been drawn to my attention. Are there others on the shelf that you have not dusted down?
(Mr Houston) There is quite a wide range of extant frameworks and guidelines, of which the Risk Capital Guidelines are another example. Part of our approach at the moment is to look at all of these to see what schemes might be designed within the ambit of those frameworks to notify the schemes to the Commission and to build up a body of permissible State Aid, on which, at a further stage, the Commission can then design a regeneration framework. As somebody said earlier, it is a messy process and it is a long process but it is one we are taking forward.
506. Can I ask you about culture and heritage? What activities do you feel could be supported through a culture and heritage scheme?
(Lord Falconer of Thoroton) Culture and heritage is an important source and means of driving forward regeneration. There is a heritage scheme that we are shortly going to notify to the European Union at the same time as we are notifying the dereliction scheme. The rate of intervention for the heritage scheme would be what?
(Mr Stringer) It would be up to 60 per cent, I think, or in some cases, where you have a listed building, you could actually fill the gap entirely that is created by the difference between the value of the properties at the end of it and the cost of the renovation and works.
507. Do you know what the rules are going to be? For instance, will all this development be eligible or will it depend on the end-use?
(Mr Stringer) No, the rules will be designed around a very similar scheme that is already being run by English Heritage, so the two would fit seamlessly together. So they will be designed around listed buildings, conservation areas and, also, what is described as historic parks, gardens and land. They will fit with those sorts of schemes, so it is not the end-use that is important, it is the actual categorisation and distinction of the actual property and land that will fit with it. We have designed it so that the RDAs, English Partnerships and, probably, local authorities will be able to contribute to schemes where English Heritage buildings are in need of development, such as listed buildings in town centres that they want to bring back into economic use.
508. So it will not be restricted to activities that are developed by RDAs and English Partnerships, it will be wider than that. You have just mentioned local authorities.
(Mr Stringer) That is right. The scheme will allow local authorities to be able to contribute to these schemes. I think where you have to be a bit cautious is the fact that the RDAs, clearly, have an economic regeneration remit and so, therefore, where they invest in these schemes there has to be a linkage between their responsibilities and the heritage and conservation of the property. Provided those two fit together, as they do in a lot of schemes (and I suppose Manningham Mill is a classic example of that), then there is no reason why the RDAs and English Partnerships and local authorities should not invest.
509. Who is responsible for ensuring that the RDAs adhere to the remit?
(Lord Falconer of Thoroton) Central Government is responsible for them deciding that they adhere to their remit, but as I said before, it is not for us
510. If they are not adhering to that particular remit in respect of the listed building you have just been talking about, what sanctions do you have against them? Who monitors that?
(Lord Falconer of Thoroton) The DTLR and DTI monitor what goes on in relation to RDAs, and the DTI is in the lead in relation to that. Ultimately, it is for the RDAs to decide how they spend their single pot, it is not for us to say "You should spend this amount of money on a heritage revitalisation scheme; you should spend that money on Manningham Mill". They have got to make those decisions within the broad remit of the targets that we set them.
511. Have you already submitted the heritage and cultural scheme to the Commission?
(Mr Stringer) No, we have not. We are actually, at the moment, discussing the final drafting of the notification with the RDAs, English Partnerships and English Heritage to make sure that it fits within decisions that have been made on similar sorts of schemes under the heritage heading. So we hope to notify it in the next few weeks.
512. How long will it take to be ratified?
(Mr Stringer) It is very similar to what Paul was describing on the housing scheme. On average it takes something like four to five months to get a scheme through, so we would be hoping that we would get one through within six months.
513. How would you rebut the criticism that you should have put the scheme in two years ago?
(Mr Stringer) I think the answer to that is that we were aware that there some difficulties with these sorts of schemes, but it was not until that long ago that English Heritage came to us with a way in which they could actually tie in the work of the RDAs and economic regeneration with the sort of scheme that they had notified to the Commission. As you know, one of their schemes has been before the Commission since July last year. They see this as being part of that package going forward, and I think it is the case that it took them sometime to work out how the two organisations could work together before they could come with a notification.
514. We discussed earlier the Scottish scheme and that it was, essentially, based on the Risk Capital Guidelines. Could you tell us when the Risk Capital Guidelines were actually approved by the Commission?
(Mr Houston) November is the date in my mind.
515. At the same time as the Scottish scheme went through?
(Mr Stringer) No, in November 2001 the Risk Capital Guidelines were finally issued by the Commission.
516. That is when the Scottish scheme was approved as well, was it not?
(Mr Houston) I am not sure.
(Mr Stringer) It may well be that the guidelines were issued earlier than that. We would have to check for you.
517. Looking at those guidelines and the fact that they have been a useful peg on which to hang the Scottish housing scheme, have you given any thought to whether other forms of development could be justified on the same basis?
(Mr Stringer) Yes, we have. The principle set out in the Risk Capital Guidelines is actually quite important in establishing firmly that gap funding is the way in which we can move forward in regeneration. One of the things that we have been doing and will be doing in the future is talking with the RDAs and English Partnerships and our own lawyers about how we might interpret this to make sure that future schemes would be accessible. Likewise, the housing scheme we are using based on this premise, and we could see other types of gap funding schemes in the future using this same principle.
518. Have you got a timetable for those discussions?
(Mr Stringer) We have regular discussions with the RDAs about the nature of different types of schemes that we might put forward. We do not have a timetable but this is on-going work that we are doing with them and it is really understanding how far the Commission would be willing to push that principle that is something we are working on, and working on with our permanent representative in Brussels as well.
519. So within the next three months we can expect to see some other schemes coming forward?
(Mr Stringer) I expect we might well be able to see how they can be used in different ways.
2 The rate of intervention might actually be up 100 per cent. Back