House of Commons East Midlands Regional Committee
East Midlands Development Agency and the Regional Economic Strategy
First Report of Session 2008–09
Report, together with formal minutes, oral and written evidence
Ordered by the House of Commons to be printed 20 July 2009
HC 406 Published on 29 July 2009 by authority of the House of Commons London: The Stationery Office Limited £0.00
East Midlands Regional Committee
The East Midlands Regional Committee is appointed by the House of Commons to examine regional strategies and the work of regional bodies.
Current membership Paddy Tipping MP (Labour, Sherwood) (Chairman) Mr John Heppel MP (Labour, Nottingham East) Mr Bob Laxton MP (Labour, Derby North) Judy Mallaber MP (Labour, Amber Valley) Sir Peter Soulsby MP Labour, Leicester South)
Powers The East Midlands Committee is one of the Regional Committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No.152F. These are available on the Internet via www.parliament.uk
Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at www.parliament.uk/parliamentary_committees/emid/emid_reports_and_publicat ions.cfm
Committee staff The current staff of the Committee are: Rhiannon Hollis (Clerk); Anwen Rees (Inquiry Manager), Emma Sawyer (Senior Committee Assistant); and Ian Blair (Committee Assistant).
Contacts All correspondence should be addressed to the Clerk of the East Midlands Regional Committee, Committee Office, 7 Millbank, London SW1P 3JA. The telephone number for general inquiries is: 020 7219 0654; the Committee’s e- mail address is: [email protected].
East Midlands Development Agency and the Regional Economic Strategy 1
Contents
Report Page
Summary 3
1 Introduction 5 Background to the Committee 5 Inquiry 5 Future Inquiries 6
2 East Midlands Development Agency 7 Additional Responsibilities 8 Tensions between Regional and Government Policy 9 emda’s Board 10
3 Regional Economic Strategy 12 Partnership Working 13 Use of Data 15 Measuring Effectiveness 16
4 Response to current economic climate 19 Data Collection 21 Access to Finance 22 Regeneration Projects 22 European Regional Development Fund 23
5 Funding 25 emda’s Budget 25 Decreasing Budget 25 Carry-forward 26 Project Appraisal 27
6 Sub-National Review 29 Single Regional Strategy 29 Role of Regional Minister 30 Stakeholder Involvement 30 Accountability 31 Sub Regional Authorities for Economic Development 32
7 Sustainability 34 emda’s Progress on Sustainable Development 34 Environmental Expertise 35 Lead on Sustainable Development in the Region 36 Tensions between Economic and Sustainable Development 36 Regional Index of Sustainable Economic Welfare (R-ISEW) 37 Sub-National Review 38 Rural, Semi-rural and Urban Divide 39
2 East Midlands Development Agency and the Regional Economic Strategy
Broadband 40 Market Towns 40
8 Conclusion 42
Conclusions and recommendations 43
Formal Minutes 48
Witnesses 49
List of written evidence 50
East Midlands Development Agency and the Regional Economic Strategy 3
Summary
Our inquiry arose from our belief in the importance of emda’s role in the region, and its key role in driving and co-ordinating economic development. The first Regional Economic Strategy (RES) for the East Midlands in 1999 set an ambitious target for the region to be a top-20 region in the EU by 2010. emda is to be congratulated on its work towards that goal and its continued vision and ambition for the East Midlands to be a flourishing region by 2020, which has been recognised by the conclusions of an independent evaluation, and of reviews by the National Audit Office and PricewaterhouseCoopers.
The single pot of funding from contributing departments gives emda flexibility to manage its resources. However emda’s budget will decrease over the forthcoming years, and it will receive £20 million less cash over 3 years in the Single Programme Grant in Aid. It has also been affected by the diversion of funds to establish HomeBuy Direct and the need for DEFRA to set a balanced budget. This frustrates emda’s strategic priorities and causes difficulties to projects in the region. There is also a tension that exists between emda’s role in promoting the region’s economic interest, and its role in managing government funds.
Since its establishment emda has taken on a large number of additional responsibilities. It has moved away from its original strategic role and has become responsible for the delivery of a number of grants and European Regional Development Funds. There is a perception in the region that this has lead to a loss in business focus by emda. emda’s board members are chosen by Ministers in the Department for Business, Innovation and Skills (BIS), and are selected on an individual basis and not as representatives of organisations in the region. With increased responsibility within the region, emda’s remit is now significantly broader than the area overseen by the Department for Business, Innovation and Skills and we recommend that the Regional Minister should take the lead role in board appointments.
While the RES is developed and championed by emda, it is owned by the region. It is therefore vital that key partners work together to develop the RES and to ensure they share a common strategic vision. While some sectors have spoken of the close working relationship they have with emda, there is a perception that it does not consult sufficiently with some key sectors, such as micro businesses, trade unions and the environment sector. It is vital that emda establishes and maintains improved relationships with key partners in the region, while continuing to make use of the strong links it already has with many sectors. There is also some concern regarding emda’s data collection within the region, which is commissioned from academics and universities. We urge emda to utilise the expertise and knowledge of its regional partners on data collection and analysis.
The financial and economic downturn has affected all businesses in the East Midlands region, and major job losses have been experienced. Following initial delay in the Government’s reaction, emda has responded well to the current economic climate. It has adapted its role from growth to survival and has acted swiftly. Its ‘Survive and Thrive’ events have been very successful in the region, providing support to businesses. Its primary channel for the marketing of its business support products is through Business Link. We
4 East Midlands Development Agency and the Regional Economic Strategy
are concerned to hear from witnesses that awareness of Business Link and its services is not as good as it should be and that there is a need to improve the business community’s awareness of its role. We urge emda to continue working with the banks in order to make them aware of what support is available and to urge banks to assist companies as appropriate. We also note concerns regarding access to funds via the European Regional Development Fund and we look to emda to improve the process.
Under the Sub-National Review, the production of a single integrated strategy will allow better alignment of policy in the region. However, the dissolution of the Regional Assembly removes a dedicated regional scrutiny body and a formal mechanism for stakeholder engagement. emda’s efforts to develop mechanisms in the region, to ensure the involvement of regional partners in policy decision making, are welcomed. As emda moves forward, it is imperative that it develops and maintains close working partnerships in the region.
Contributing to sustainable development is one of emda’s five statutory functions. However increasing GVA is a key performance indicator for emda as a Regional Development Agency and this creates difficulties between economic and sustainable development. The emphasis on economic indicators and the need to demonstrate economic impact for every environment project is detrimental to emda’s ability to deliver sustainable development. emda had led the development of the Regional Index of Sustainable Economic Welfare and we recommend that this is used as an alternative to the traditional GVA measurement of the RDAs’ economic performance. There is concern that the sustainability ethos is not embedded as a priority within all aspects of the organisation. There is no requirement to have environmental expertise on emda’s board and we recommend that the Department for Business, Industry and Skills and the Regional Minister examine the criteria for appointment on emda’s board. There is also no one body that takes the lead on sustainability issues in the region and we encourage partners to establish whether this is a role best suited for emda or another body.
The East Midlands is predominately a rural region, with a number of principal urban centres. There is concern that the urban centres of Leicester, Nottingham and Derby dominate. emda’s approach is one of ‘rural mainstreaming,’ and no specific rural strand or budget exists. Instead emda looks at where it can prioritise actions to deliver the greatest impact or tackle specific needs within the region. emda must ensure that its support is suitable for areas that are “semi-rural” and that such areas do not fall through the gaps. The availability of broadband is an essential tool for businesses and there are areas in the region where availability is patchy, if not non-existent. We urge the Government to invest in broadband infrastructure and coverage in the East Midlands and look to emda to continue to lobby Government on this issue.
East Midlands Development Agency and the Regional Economic Strategy 5
1 Introduction
Background to the Committee
1. The Government proposed the establishment of Regional Committees in its Green Paper, The Governance of Britain, in July 2007.1 Following its publication, the House of Commons Modernisation Committee conducted an inquiry into Regional Accountability, which concluded that “there is clear evidence of an accountability gap at regional level”, and that although RDAs and other bodies were accountable to Ministers, “many of their activities in the region are not subject to regular, robust scrutiny.” It therefore proposed “that the most effective way to strengthen regional accountability to Parliament is to establish a system of regional grand and select committees […] There should be one grand and one select committee for each of the administrative regions in England.”2
2. Eight Regional Committees were established by the House of Commons on 12 November 2008,3 to “examine regional strategies and the work of regional bodies” 4 in their region. Only Labour members were appointed to the Committees, as other political parties declined to take up their places. The East Midlands Committee has attempted to follow the practice of other select committees, and to carry out its work as impartially as possible. We hope that political disagreements regarding the establishment of Regional Committees will be resolved and look forward to welcoming opposition Members to the East Midlands Regional Committee. We welcome the establishment of the East Midlands Grand Committee.
3. During this inquiry, we were eager to ensure that the Committee was representative of the region as a whole and held meetings in the region as much as possible, in Nottinghamshire, Leicestershire and Derbyshire; both rural and urban locations were used. We will hold future meetings in other parts of the region. Our meeting with Ministers and our final meeting with emda were the only exceptions and were held in Westminster.
Inquiry
4. On 2 April 2009, we announced an inquiry into the East Midlands Development Agency (emda) and the Regional Economic Strategy (RES). Our intention was to:
• examine the role, responsibilities and accountability of emda;
• examine the process by which the Regional Economic Strategy was drawn up and the level of involvement of regional stakeholders;
• evaluate the effectiveness of the RES for the East Midlands in delivering against its targets;
1 The Governance of Britain, Ministry of Justice, Cm 7170 2 Select Committee on Modernisation of the House of Commons, Third Report of Session 2007–08, Regional Accountability, HC 282 3 The establishment of a Regional Committee for London was agreed by the House on 25 June 2009 4 Standing Order 152F
6 East Midlands Development Agency and the Regional Economic Strategy
• assess the effect of the financial and economic situation on businesses in the region including the effect on different sectors and the impact on local employment, and how well emda is meeting needs in the challenging economic climate;
• examine the changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential work of emda;
• examine the role of other Government agencies such as the Government Office for the East Midlands, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES;
• examine the way emda’s resources are divided between rural and semi-rural parts of the East Midlands, and whether the division is appropriate; and
• evaluate how well emda is performing on sustainability.
5. We received 33 submissions from organisations and individuals around the region. We took oral evidence from the East Midlands Development Agency, Federation of Small Businesses East Midlands, Unite the Union, East Midlands Chamber of Commerce, East Midlands Regional Assembly, Local Government East Midlands, University of Nottingham, University of Derby, Loughborough University, East Midlands Environment Link, Natural England, Environment Agency, Phil Hope MP, Minister for the East Midlands, Tom Levitt MP and Government Office East Midlands. We are grateful to everyone who provided oral and written evidence to our inquiry.
Future Inquiries
6. Due to the importance of emda’s role in the region, we felt this was an appropriate subject for the Committee’s first inquiry. We will continue to monitor the work of the East Midlands Development Agency and to hold further inquiries to look in more detail at specific aspects of its role, as well as into issues affecting the region.
East Midlands Development Agency and the Regional Economic Strategy 7
2 East Midlands Development Agency
7. The East Midlands Development Agency (emda) was created in April 1999, to “drive and co-ordinate regional economic development and regeneration and to improve [regions’] relative competitiveness and reduce imbalances within and between regions.”5 It has five statutory purposes:
• to further economic development and regeneration;
• to promote business efficiency, investment and competitiveness;
• to promote employment;
• to enhance the development and application of skills relevant to employment; and
• to contribute to sustainable development. emda’s Corporate Plan 2008–2011 states that its mission is to, “Use our influence and investment to deliver a measurable improvement in the sustainable economic performance of the East Midlands.”6 In oral evidence to the Committee, Jeff Moore, Chief Executive, emda, described its role:
… bring[ing] a regional focus, coherence and co-operation on a regional strategic level to economic development … one of the key roles that we have is strategic economic leadership in the region, and that takes its main focus through the statutory role of producing the regional economic strategy.7
8. Some witnesses expressed concern over the varying levels of awareness of emda’s role in the region. In oral evidence to the Committee, Stephen Woolfe, former Chair of East Midlands Chamber of Commerce, stated:
You see the awareness at different levels. Clearly, the larger businesses in the East Midlands are only too well aware of emda. If you look at the bulk of chamber members … in general they are the dynamic small and medium-sized enterprises that form the backbone of what the East Midlands is all about. The awareness of emda is probably a bit variable across some of those businesses.8
9. The East Midlands Regional Assembly commented on the need for better marketing and communication:
… due to emda’s complex role they have been occasionally criticised for issues beyond their control or the value of their activity is not understood. However, more
5 Governance of Britain, para 115 6 emda Corporate Plan 2008–2011 7 Opening statement, oral evidence on 27 April 2009 8 Q 34
8 East Midlands Development Agency and the Regional Economic Strategy
importantly, where the service that emda provide has been seen to be good and effective, such as in business support, it is important to increase market penetration.9
In oral evidence to the Committee, Jeff Moore stated:
… we [emda] are not complacent about our profile, but in terms of small and medium-sized enterprises […] we feel that we engage with them a great deal. Obviously, you can always do more if you have limitless resources to do more. We think that we are doing as much as we possible can within the constraints that we have in how we spend our budget.10
10. The East Midlands Development Agency (emda) has a key role in driving and co- ordinating regional economic development. We notice that witnesses have expressed varying levels of awareness of its role in the region. We urge emda to improve its marketing and communication in order to further awareness of its role, and to make businesses better aware of the support it can provide, particularly during the current economic climate.
Additional Responsibilities
11. Since their creation in 1999, RDAs’ responsibilities have increased, taking on the administration of regional development grants (April 2002), research and development grants (April 2005), Business Link (April 2005), the economic and social funding elements of the Rural Development Programme (April 2006), European Regional Development Funds (EDF) 2007 and the Manufacturing Advisory Service (MAS).
12. Some witnesses commented that the additional responsibilities had led to a loss in emda’s business focus. Stephen Woolfe, former Chair of East Midlands Chamber of Commerce, stated that “the very, very strong focus it had in the early days has been weakened […] it has lost the strong focus that it had on its creation and in its very early days.”11
13. In oral evidence to the Committee, emda recognised that businesses were concerned about their wide remit. Jeff Moore, Chief Executive, emda, stated:
… it is a thing on which we have to have constant vigilance, so that it does not take us away from our core role. We do not believe that we have fallen into that trap yet. We believe that we would have heard from a whole ream of people if we had taken away from our core services.12
14. The East Midlands Regional Assembly recognised that these additional responsibilities raised the question of “whether emda is more suited to being a strategic or delivery organisation or an organisation that procures the delivery of outputs from others. At the
9 Ev 93 10 Q 219 11 Q 38 12 Q 299
East Midlands Development Agency and the Regional Economic Strategy 9
moment, it has a combination of these roles but appears to have increasingly moved from strategy to delivery.”13
15. This issue was also raised by the Federation of Small Business East Midlands, who commented that:
emda’s role in the region has consisted of strategic economic development coupled with delivery, and this has sometimes caused confusion. In the past emda was regarded as a principal source of funding. Although they have tried to change this perception, there is still some uncertainty about its precise role and responsibilities.14
It went on to comment on the need to divide these functions:
… the FSB […] believe that it is right that there is an organisation that performs a strategic overseeing role of economic development in the region. The strategy must drive delivery but delivery must also inform the strategy, and it is less confusing if these functions are undertaken by separate bodies.15
Jeff Moore defended emda’s increased role as a delivery body:
Our agenda has got extremely broad and some see that as a potential weakness. It has got so broad, I believe, because we have been successful. We have been seen since 1999 as successful deliverers on the Government’s agenda. […] We have been successful in providing efficient, effective delivery of those services for Government, and that has continued to broaden our remit. 16
16. emda was originally established to provide strategic economic leadership in the region. Since its establishment it has taken on a large number of additional responsibilities and has moved away from its original strategic role, becoming responsible for the delivery of a number of grants and European Regional Development Funds. We note the concerns raised by witnesses that this may cause emda to lose its business focus and urge it to ensure it remains intent on its economic focus.
Tensions between Regional and Government Policy
17. In addition to working for the region in promoting the region’s economic interests, emda is also responsible for managing government funds to achieve the targets in its Corporate Plan. The East Midlands Regional Assembly stated that “there is an inherent tension between these roles, especially where government policy and the interests of the region may diverge.”17
18. In oral evidence to the Committee, Councillor Martin Hill, Chair, Local Government East Midlands, commented:
13 Ev 93 14 Ev 90 15 Ev 168 16 Q 228 17 Ev 93
10 East Midlands Development Agency and the Regional Economic Strategy
… it is quite clear that emda is a creature of the Government, and is appointed by Government … It isn’t a devolutionist structure, it is a command control. So you can’t blame emda if they say ‘Yes, we listened to what was said by the sub-regional areas and by councillors and business people, but frankly we have to keep the Minister happy.’ That is the fundamental problem .18
19. Jeff Moore, Chief Executive, emda, commented that they managed these tensions “creatively”19 and that the Government Office for the East Midlands was “a critical friend.”20 He acknowledged that emda had to change priorities to meet Government requests:
… which would inevitably entail making difficult choices and disappointing people. That can lead to a lot of press and media bad publicity […] we acknowledge and identify that we are part of the taxpayer-funded businesses, and we have to bear our share of supporting the new priorities that the Government have.21 emda’s Board
20. emda’s board is recruited through a process directed by the Department for Business, Innovation and Skills, and its members are chosen as individuals with specific sector- related competencies and experience.22 Witnesses expressed concern over how their sectors engaged with, and were represented on, emda’s board. As Stephen Woolfe commented, “There are people who are business men and business women on the emda board, but they are there because of who they are in reality; they are not seen as representatives of business.”23
21. The Royal Institution of Chartered Surveyors noted that:
Board Members are not appointed as stakeholders with accountability to regional constituencies of interest. They undoubtedly have valuable skills and insight in their sectors, but do not necessarily have arrangements to reach into the diversity of their sectors to provide this wider expertise for emda. Individuals serving as board members therefore do so on a personal basis with a sole accountability to emda, which delivers central government economic priorities in the region, and not to the organisations or sectors with which they are connected.24
In oral evidence to the Committee, Jeff Moore, Chief Executive, emda, emphasised that recruitment to the board was done by the Department for Business, Innovation and Skills (BIS) “who very much have an eye on political, ethnicity, and geographical representation on our board.”25 He recognised the difficulty of addressing the diversity of the region
18 Q 63 19 Q 227 20 Q 225 21 Q 19 22 Ev 99 23 Q 34 24 Ev 99 25 Q 26
East Midlands Development Agency and the Regional Economic Strategy 11
within the board, but highlighted that emda’s board had been increased from 13 to 15 people to try and address “the breadth, depth and diversity of our geography, our various communities, and our various sectors.”26
22. Phil Hope MP, Minister for the East Midlands, commented that:
… the board comprises people who represent specific sectors, such as local government, businesses, trade unions and so on. Within that, people are selected on merit so that the board is made up of all the key players as well as having the best people for the job.27
In describing his role in the process, he stated that, “Along the way, I will offer my comment on the two or three people who have been shortlisted for that job. It is for the individual Minister [from BIS] then to make that decision.”28
23. The appointment of board members by a Minister from the Department for Business, Innovation and Skills, predates the establishment of Regional Ministers and the broadening of the role of the Regional Development Agencies. When asked if he thought that, as Regional Minister, he should take a lead role in the appointment of emda’s board, Phil Hope MP replied:
… it seems right to me that, as a primarily economic development function, it is the Department for Business, Innovation and Skills that has responsibility and, therefore, ultimately has the job of appointing the members of the board after a competitive process.”29
24. emda’s board members are chosen by Ministers in the Department for Business, Innovation and Skills. We note that they are chosen on an individual basis and not as representatives of organisations in the region, and so are not formally providing sectorial and wider expertise for emda. With increased responsibility within the region, emda’s remit is now significantly broader than the area overseen by the Department for Business, Innovation and Skills. We recommend that the Regional Minister should now take the lead role in board appointments, and should consult with stakeholders in the region and the full range of relevant Government Departments.
26 Q 233 27 Q 174 28 Q 175 29 Q 177
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3 Regional Economic Strategy
25. emda leads the development of the Regional Economic Strategy (RES), which is the blueprint for the region’s economic development. As Jeff Moore, Chief Executive, emda, stated in oral evidence to the Committee, its “core aim is to set a vision.”30 A Flourishing Region is the third Regional Economic Strategy for the East Midlands and it describes the vision that “by 2020, the East Midlands will be a Flourishing Region—with growing and innovative businesses, skilled people in good quality jobs, participating in healthy, inclusive communities and living in thriving and attractive places.”31
26. In oral evidence to the Committee, Jeff Moore commented that:
We are particularly proud of the fact that we were the only RDA at the outset, in 1999, to set a specific measurable target. That target was that by 2010 we would be a top-20 region in the EU’s 77 regions—there were 77 at that time. We started in the low 40s, have gone through the 30s and are now in the 20s, and we continue to measure that target.32
27. The RES vision is supported by three Structural Themes or cross-cutting principles, and ten strategic priorities:
Structural Themes Strategic Priorities
Raising Employment, learning and skills Productivity Enterprise and business support
Innovation
Ensuring Sustainability Transport and logistics
Energy and resources
Land and development
Achieving Equality Cohesive communities
Economic renewal
Economic inclusion
The Regional Economic Strategy also outlines a number of challenges which the region must address if the region is to achieve its economic ambition:
• Globalisation;
• Reducing the productivity gap;
30 Opening statement, oral evidence on 27 April 2009 31 A Flourishing Region, East Midlands Regional Economic Strategy 2006–2020 32 Opening statement, oral evidence on 27 April 2009
East Midlands Development Agency and the Regional Economic Strategy 13
• Diversifying and strengthening the economic base;
• Enhancing learning, skills and employability; and
• Reducing intra-regional disparities.
28. The first Regional Economic Strategy for the East Midlands in 1999 set an ambitious target for the region to be a top-20 region in the EU by 2010. We congratulate emda on its work towards that goal, commend its regional priorities and fully support its continued vision and ambition for the East Midlands to be a flourishing region by 2020.
Partnership Working
29. While the RES is developed and championed by emda, it is owned by the region,33 and emda’s resources alone will not achieve the objectives of the Regional Economic Strategy. It is therefore vital that key partners work together to develop the RES, to ensure that they share a common strategic vision and a shared understanding of the key issues for the region.
30. emda stated that the production of the RES followed the most extensive public consultation process ever undertaken in the region and was informed by “the most comprehensive evidence base assembled on the East Midlands, its economy and its strengths and its challenges.”34 emda attended over 100 events reaching around 1,400 regional stakeholders and partners, and held roadshows in 11 public venues across the region, including city centre and tourist attractions.35 For the first time, members of the public were invited to join the consultation through an advertising campaign on billboards and public transport and through a dedicated website.
31. Some witnesses commented on the extensive involvement they had in the preparation of the RES. Professor Coyne, Chair of East Midlands Universities Association (EMUA) stated that:
As individual universities, we had an opportunity to provide expertise, opinions and our balance of priorities. As the EMUA, we also formally engaged in the process to ensure that the university body’s collective view was well represented. However, we found emda to be very proactive in seeking our advice, expertise and support.36
32. John Hardwick, Chair, Area Policy Unit, Federation of Small Businesses East Midlands, commented on the good relationship they had with emda, but stressed the need for it to have more involvement with entrepreneurs and micro-businesses.37 He noted that:
33 Ev 102 34 A Flourishing Region, Regional Economic Strategy for the East Midlands, 2006–2020 35 EM 102 36 Q 88 37 Ev 90
14 East Midlands Development Agency and the Regional Economic Strategy
Sometimes we feel as if the emphasis is too much on the larger businesses, which make up a small minority. It tends to forget the 99.2% in the small business sector. While we accept that it is business orientated, we have to define what we classify as business.38
Industry and local government representatives39 also highlighted the desire to contribute at an earlier state of the RES’s development and to ensure that “stakeholders are not just seen as people to consult on a finished article. We also want to be involved in consulting on the draft finished article and then in agreeing a set of principles moving forward.”40
33. Some witnesses expressed concern regarding the lack of engagement with emda. In its written evidence, the East Midlands Environment Link stated that emda had not:
… been as inclusive as they could have been in developing their policies and in who they regard as partners. In particular, emda tend to see environmental NGOs not as partners, merely as consultees, who are asked for their views at a relatively late stage of policy and project development […] It also seems to us that emda do not always appreciate the distinctiveness of our sector.41
34. The strongest criticism came from trades union representatives who spoke of their “difficulty in communication with emda.”42 David Jeffrey, Skills and Development Officer, Unite the Union, commented that there was a “disjoint between this idea of championing in a region and not being prepared or willing to talk about some of the key people within that region.”43 This was compared with the situation in the West Midlands, where he said that there was a different approach, and “much more an open door as far as the trade unions are concerned.” 44
35. emda challenged the views held by the Federation of Small Businesses East Midlands and the East Midlands Environment Link, stating that they were “surprised and frustrated by it,”45 and that “these [concerns] were not raised with us direct, so they have come out of the blue to us.”46 In commenting on concerns raised by East Midlands Environment Link they noted that:
… in developing the RES evidence base we dealt with a number of regional stakeholder organisations—the British Geographical Survey, the Environment Agency, English Nature, English Heritage and the Countryside Agency—who were
38 Q 31 39 Q 65 40 Q 48 41 Ev 121 42 Q 32 43 Q 37 44 Ibid. 45 Q 220 46 Q 222
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all engaged in assisting with the development of the environmental chapter of the RES evidence base.47 emda stated that they had good working relationships with the unions, but noted that they would “look to learn what we can from the new conversations that we have had as a result of this scrutiny process to make what we already think is working well better for the future.”48
36. The Regional Economic Strategy (RES) is owned by the region, and emda alone cannot achieve its objectives. It is therefore vital that key partners are brought in early to develop the RES, ensuring that they feel they have an investment in working towards the region’s goals. While some sectors have spoken of the close working relationship they have with emda, there is a perception that it did not consult sufficiently with some key sectors, such as micro businesses, trade unions and the environment sector, and some witnesses felt they were involved at too late a stage. We urge emda to establish and maintain improved relationships with key partners in the region, whilst continuing to make use of the strong links it already has with many sectors.
Use of Data
37. A large amount of evidence was gathered in support of the RES. As Jeff Moore described:
It is the size of several breeze blocks. It was produced by our own people, using industry-standard mechanisms with experts from outside – universities and academics. It is a fundamental piece of work that really does help us to decide our priorities for our own investment and the rest of the public sector’s investment in the East Midlands, and it has driven up the quality of decision making on what priorities we adopt through our economic development.49
38. While the East Midlands Regional Assembly acknowledged that a wide range of work was commissioned as part of the RES evidence base, it commented that not all the evidence was reflected in the policy. As it stated in its written evidence to the Committee, “How strategic opinions were developed on the back of evidence and prioritised was not always clear.”50 East Midlands Environment Link also commented that evidence commissioned and published to support the RES was difficult to obtain from the website, and that there were no discussions regarding their content. These issues made it “difficult to understand or challenge emda’s underlying assumptions about the relationship between the natural environment [and] the RES and find the appropriate time or opportunity to engage emda on these matters.”51
47 Ibid. 48 Ibid. 49 Opening statement, oral evidence on 27 April 2009 50 Ev 93 51 Ev 133
16 East Midlands Development Agency and the Regional Economic Strategy
39. In oral evidence to the Committee, emda commented that it “believe[s] our research is extensive and does have the breadth that it needs to have and the depth that it needs to have.”52
40. In its written evidence, the Federation of Small Businesses East Midlands highlighted data collection done by itself and other support organisations on a quarterly basis, which was “current and reliable.”53 The FSB East Midlands said that, rather than utilise the expertise of these organisations, emda spent considerable time and resource undertaking large research projects to gather evidence. It commented that, “This has meant that data has been unnecessarily duplicated at additional expense, and by the time the research projects have concluded the data gathered is out-of-date and its reliability and usefulness has diminished.”54
41. Concerns were also expressed regarding the lack of an annual assessment to examine changes in data. The Federation of Small Businesses East Midlands commented that:
This means that the data and intelligence underpinning the delivery of the RES is static and historic, whereas an annual assessment of the data could have usefully shown statistical trends, and the progress made towards sustainable economic growth. […] The achievement and promotion of the output targets achieved is all well and good, but progress made towards a broad set of baseline indicators would be more timely, meaningful and illustrative of how emda’s activities are having a positive economic, social and environmental impact.55
The East Midlands Regional Assembly also highlighted the need to ensure that “appropriate monitoring procedures are in place to assess and demonstrate the effectiveness of activities in achieving the objectives of the Regional Economic Strategy.”56
42. The range of data and statistics that emda has to gather is immense. While we acknowledge the large evidence base used by emda to underpin the current RES, which it commissioned from academics and universities, we urge emda to utilise fully the expertise and knowledge of its regional partners on data collection and analysis. We also urge emda to examine its procedures so that emda can make informed decisions based on accurate and timely data. This should ensure that emda uses a variety of sources of information and analyses, not just the large evaluation studies it commissions.
Measuring Effectiveness
43. emda’s Corporate Plan sets out the high level targets and activities that it is expected to deliver, which are consistent with RES objectives. In its written evidence, emda highlighted the fact that since 1999/00, it had:
52 Q 224 53 Ev 168 54 Ibid. 55 Ev 90 56 Ev 93
East Midlands Development Agency and the Regional Economic Strategy 17
• created or safeguarded 81, 231 jobs;
• created or supported 95, 645 businesses;
• assisted 117,130 people with their skills development needs; and
• remediated 1,579 hectares of brownfield land.57
44. In 2007, the National Audit Office conducted an Independent Performance Assessment (IPA) of all RDAs at the request of the then Department for Trade and Industry. Overall emda was seen as “performing strongly”, scoring 22 points out of a maximum of 24 points, particularly in areas of ambition and performance management.58
45. The Federation of Small Businesses East Midlands criticised the targets set by emda. In its written evidence, it stated:
The continuous over-achievement of targets could suggest that either the targets have been deliberately set low in order for them to be easily attained, or that emda has focussed its support on delivering activities that meet the core output targets (‘low hanging fruit’) rather than on activities which would tackle the region’s most difficult issues and deliver strategic added value.59
46. In December 2007, PricewaterhouseCoopers LLP (PwC) was appointed by the then Department for Business, Enterprise and Regulatory Reform (BERR) and the Regional Development Agencies to:
• Provide an independent assessment of the impact of the spending by each of the nine RDAs and the RDA network as a whole; and
• Assess RDAs’ achievements against objectives of both their Regional Economic Strategies and their Corporate Plans, and each specific programme and project.
47. The report stated that emda had generated substantial outputs with over 64,000 jobs having been created and safeguarded, of which 44% were additional at the regional level. Additional future potential outputs were also anticipated as schemes were completed, although these estimates were less certain. In addition to the impact of its project and programme expenditure, the report stated that Strategic Added Value (SAV) was a key element of emda’s impact, particularly in terms of providing strategic direction, leadership and innovative activities. It highlighted the example of emda’s lead in enabling and managing the remediation, reclamation and redevelopment of the Avenue Coking Works in Derbyshire, which was one of the most polluted sites in Western Europe, through a programme involving broad partnership and engagement with stakeholders.60
48. On 31 March 2009, the East Midlands Development Agency published the results of an independent evaluation of the agency’s spend and activities. Carried out between 2005–08,
57 Ev 102 58 East Midlands Development Agency, Independent Performance Assessment 2007, National Audit Office 59 Ev 90 60 Impact of RDA Spending, Department for Business, Enterprise & Regulatory Reform, March 2009
18 East Midlands Development Agency and the Regional Economic Strategy
it was an extensive evaluation of the agency’s impact since its establishment in 1999 and was carried out by Ecotec Research and Consulting. In its written evidence, emda referred to the evaluation as:
… a ground-breaking piece of work and one that few other public sector bodies have been subject to before. The Ecotec study into emda’s impact was gold standard in terms of breadth and depth of coverage and was able to look at issues in more details than the national RDA evaluation commissioned by BERR.61
The independent evaluation showed that emda had:
• Had a significant impact on the regional economy;
• Generated economic benefits that substantially outweigh its overall costs;
• Generated £9–15 of economic output (or GVA) for the regional economy for every £1 it spends; and
• Produced more than £1 billion in economic benefits per year.
The evaluation also endorsed emda’s organisational approach:
• 90% of emda’s projects were judged to be effective or very effective in meeting their objectives;
• 94% of all projects assessed were judged as delivering good or reasonable value for money;
• Most projects would not have gone ahead without emda support; and
• Significant financial leverage has been generated by emda—Ecotec suggest a potential leverage for all project expenditure to be approximately £1.5 billion.
49. emda was the first Regional Development Agency to commission an independent evaluation of all its activities and we welcome its findings. This was a ground-breaking piece of work carried out by Ecotec and highlighted the significant impact emda has had on the region. We are also reassured by the conclusions of the National Audit Office and PricewaterhouseCoopers reports, and all provide a positive endorsement of emda’s work and its benefits to the regional economy.
61 Ev 102
East Midlands Development Agency and the Regional Economic Strategy 19
4 Response to current economic climate
50. In its written evidence, emda described the effects of the current economic climate in the region:
The financial and economic downturn has affected all businesses in the East Midlands region, particularly in the manufacturing and construction sectors, but with knock on effects on retail and service sectors, as consumer expenditure in the region remains flat. Major job losses have been experienced in the region leading to increased unemployment.62
The Federation of Small Businesses East Midlands detailed the experience of small businesses:
33% of the respondents to our quarterly survey in January 2009 rated the decline in their confidence as ‘substantial’ since October 2008. The continuous decline in business confidence is coupled with decreased turnover for the majority of small businesses over the same period of time. In January 2009, 51% of our members reported a drop in sales and turnover, of which a staggering 31% reported significant falls of over 3%. Our most recent survey data for April 2009 shows only a slight improvement, with 48% of our members still reporting a decrease in trade.63
51. Witnesses spoke of the difficulty they had in convincing emda and the government of the seriousness of the situation businesses faced. John Hardwick, Chair, Area Policy Unit, Federation of Small Businesses East Midlands, stated:
We started to flag up that there were significant problems from January 2008. We raised that through the East Midlands Business Forum and in direct meetings with the regional Minister. That was reinforced by our findings in April 2008 and it then culminated in quite heated discussions in July and August 2008 when the responses had shown a gradual decline.64
Stephen Woolfe, former Chair of East Midlands Chamber of Commerce, agreed that the gravity of the situation had not been fully appreciated, “I am not sure about how much the delays at emda reflected a lack of appreciation at […] central Government level about the recession that we were entering.65
52. Once the extent of the decline was realised, witnesses commented positively on the speed of emda’s response. John Hardwick commented that emda was “one of the first RDAs to make a response and we cannot fault it.”66 Stephen Woolfe also noted that, “in terms of what they are doing now, I certainly feet that there is very great concern within
62 Ibid. 63 Ev 90 64 Q 39 65 Q 40 66 Q 39
20 East Midlands Development Agency and the Regional Economic Strategy
emda […] to try and help, wherever they can.”67 Quadrelene, a company manufacturing detergents and disinfectants, commented that, “There have been good initiatives launched quickly and effectively in response to the global recession, which different members of our team have attended and gained helpful advice.”68
53. In announcing the publication of the PwC independent evaluation of RDAs, Lord Mandelson’s speech to Parliament included the following statements on his expectations of the RDAs in the current economic conditions:
I am asking the RDAs to focus, working with and through others; as an immediate priority, on providing assistance to business; for the medium-term, on stimulating the recovery and growth; and for the longer term, on restructuring and developing each region’s strengths, supporting its growth and competitiveness in the future.69
54. emda acknowledged that their role had changed and that “overall we have been focusing our attention on support. We clearly have had to re-focus in the current climate.”70 The East Midlands Regional Assembly also commented that, “emda have revised their delivery of services to businesses to reflect current economic conditions.”71 However, the University of Nottingham warned that “The RDA’s response to this situation should not be to the detriment of long term investment in skills, capacity and infrastructure needed to sustain and grow the knowledge economy.”72
55. The East Midlands Regional Assembly expressed concern that the economic strategy “that was developed in times of growth” remains in place, and asked for it to be looked at again.73 On 18th July 2008, EMRA passed a motion that called on emda to “undertake an urgent review of elements of the Regional Economic Strategy in order to take account of the new economic challenges facing our region.”74 emda stated that there were two reasons why a review of the RES was not felt to be in the best interests of the region:
Firstly, the RES is a long-term strategy, which seeks to address and negate long-term barriers to our economic competitiveness. As a result, the broad themes and priorities of the RES remain valid. Secondly, instead of undertaking a time consuming review of a long-term strategy, emda has proactively put in place a range of measures to help support businesses through the economic downturn, whilst undertaking initiatives and investments that will prepare the region for recovery and future growth. This approach was endorsed by Government and the Regional Minister and we remain convinced that this was the most appropriate course of action.75
67 Q 40 68 Ev 152 69 HL Deb, 31 March 2009, WS 81 70 Q 15 71 Ev 93 72 Ev 131 73 Ev 93 74 Ibid. 75 Ev 163
East Midlands Development Agency and the Regional Economic Strategy 21
56. emda described the support they were providing to businesses through the current economic downturn. They ran a series of ‘Survive and Thrive’ events across the region in December 2008, which provided master classes for businesses and were attended by over 2,000 businesses. Jeff Moore, Chief Executive, emda, commented that, “It is fascinating to hear “survive and thrive” used all over in Government and industry speeches. It has been a very positive soundbite for us.”76
57. emda commented that “the primary channel for awareness raising and marketing of its business support products is through Business Link.”77 During 2008/09 over 67,000 businesses used the Business Link service in the East Midlands; 70% of which had 10 or fewer employees. Michael Carr, Executive Director of Business Services, emda, stated:
… we have been working extremely closely with businesses, making them aware that the support is there, and we have seen a significant inflow of established businesses coming to talk to us. In many ways, this recession has brought Business Link to the fore, and it has been seen to respond very strongly in the eyes of businesses … 78
58. John Hardwick, Chair, Area Policy Unit, Federation of Small Businesses East Midlands, commented that the “good thing is that Business Link has changed its emphasis to survival from growth.”79 However he noted:
Making business people aware of what they can access through Business Link still leaves a little bit to be desired. There has been a bit of TV advertising, which is good. Any advertising is good advertising, and makes people aware of what is available to them, but it is generally not perceived as the first port of call.80
59. emda has taken positive and effective steps to provide support to business. We are concerned to hear from witnesses that awareness of Business Link and its services is not as good as it should be. We urge the Government, working with emda, to improve its marketing and advertising in the region, to ensure that businesses are aware of the services they can access.
Data Collection
60. Jeff Moore commented that a key part of emda’s role is “about a gathering of intelligence and influencing Government in what they need to do to respond to the credit crunch. That is a major part of our work, which is that strategic research-type work, as well as delivering.”81
61. However, the Federation of East Midlands commented:
76 Opening statement, oral evidence on 27 April 2009 77 Ev 164 78 Q 20 79 Q 42 80 Ibid. 81 Q 242
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One particular tool which could have helped emda […] is more timely and accurate data on which to base decisions. emda’s statistics are significantly out of date, and decisions are being based on data that is at best eighteen months old and at worst five years old … during the recession we have found that emda had been reliant on the data gathered by business representative organisations. As a business-led body with a considerable budget, the collection, analysis and dissemination of up-to-date economic data should be better.82
Access to Finance
62. Access to finance was recognised as a key concern for businesses. Michael Carr, Executive Director of Business Services, emda, described how the banks stopped lending “around Christmas-time and we recognised there was a need quickly.”83 emda established a Transition Loan Fund of £6 million that made loans of up to £250,000 to businesses that had been affected by reduction in the availability of banks’ finance. In addition, emda sought to support micro businesses in some of the region’s more disadvantaged areas through Enterprise Loans East Midlands. This £5 million loan fund provides loans of up to £20,000 to viable small businesses that traditionally struggled to raise bank finance.
63. Michael Carr commented that emda had now developed good relationships with the banks:
… what is coming out of this is a clarification to the relationship managers of banks as to exactly what support is available, so that they are clearer about being able to direct their clients to business support.84
64. Despite emda’s assurances about their good relationship with the banks, we remain concerned about the ability of businesses, in difficulties with their banks, to access information about the support available to them.
Regeneration Projects
65. In its written evidence, emda highlighted its focus on regeneration schemes, and had worked with the Government Office for the East Midlands to identify schemes whose delivery could be brought forward. These schemes would have “major regeneration impact and will create and safeguard jobs, through bringing forward mixed-use developments in support of sustainable communities.”85 Schemes identified by emda include:
• The redevelopment of Derby’s Cathedral Quarter;
• Development of a new Business Quarter for Leicester adjacent to the city’s railway station; and
82 Ev 90 83 Q 15 84 Q 20 85 Ev 102
East Midlands Development Agency and the Regional Economic Strategy 23
• The re-development of Nottingham Railway station to create a new transport hub supporting regeneration of the surrounding area.86
66. Jeff Moore highlighted the effects of the current economic climate on regeneration projects:
By far the biggest, obvious area where the credit crunch is impacting on us is the amount of private sector resource there is to fund regeneration schemes […] as the private sector cash dries up, you see lots of schemes stopping or not being taken forward. That is certainly the biggest impact that we have.87
67. We welcome emda’s focus on regeneration schemes in order to create and safeguard jobs during the current economic climate.
European Regional Development Fund
68. The European Regional Development Fund (ERDF) helps stimulate economic development and regeneration in the least prosperous regions of the European Union (EU). These programmes are designed to meet current needs by targeting employment, small and medium-sized enterprises (SMEs), innovation, and high-tech business investment, among other key priorities identified by each region.
69. In its written evidence, the EMUA notes:
… that the implementation of the ERDF [European Regional Development Fund] competitiveness programme by emda in this region is bureaucratic and difficult. Universities here, unlike in some other regions, have been unable to apply for ERDF match funding for recession-related initiatives such as the HEFEC ECIF Challenge fund, because the short timescales cannot be achieved in the ERDF scheme.88
In oral evidence to the Committee, Professor John Coyne, Chair of East Midlands Universities Association, commented that other RDAs had been “a little speedier and more flexible in their interpretation than has been the case in the East Midlands.”89
70. Jeff Moore accepted that there had been problems with the previous programme which ran from 2001 to 2006, although not in the East Midlands. He stated that emda “had the right processes in place”90 to prevent any potential clawback and penalties from the European Commission, which he said was a current problem for three English regions.
71. emda has responded quickly and positively to the current economic situation. They have worked hard to support business in the region, and we urge them to continue to work with banks in order to make them aware of what support is available and to urge banks to assist companies as appropriate. We note the concerns surrounding the
86 Ibid. 87 Q 242 88 Ev 147 89 Q 105 90 Q 252
24 East Midlands Development Agency and the Regional Economic Strategy
European Regional Development Fund and encourage emda to examine the process to make it easier to access.
72. emda needs to work with timely and accurate data on which to base decisions in the current economic climate and we urge them to improve the collection and analysis of data and to work with regional partners.
East Midlands Development Agency and the Regional Economic Strategy 25
5 Funding emda’s Budget
73. Regional Development Agencies are funded by the Departments for BIS, CLG, DEFRA, DCMS, DECC and UKTI. These funds from the contributing department are pooled together into a ‘single pot’. The Single Programme allows the Agency to effectively influence regional economic priorities and gives greater flexibility to manage the available resources. The Single Programme replaced the many different funding schemes previously received from Government departments, which were allocated for specific legacy and inherited programmes. The Single Programme funding is also supplemented by European Funding, funding from English Partnerships under the Coalfield Programme, and capital receipts from the disposal of assets.91
74. In its written evidence, the East Midlands Regional Assembly commented that:
emda has benefited from single pot funding and using influence to bring strategic coherence between diverse economic development functions such as skills, business support, regeneration and foreign and direct investment. This flexibility and strategic coherence is a strength of the current approach.92
75. emda receives its budget allocation from the Department for Business, Skills and Innovation (BIS) once BIS has approved the Corporate Plan.93 When emda receives its budget from BIS, it receives a set amount of:
• Programme Funding—which is to be spent on the core operations of the business; and
• Administrative Funding—which is to be spent on overheads and administrative costs.
Decreasing Budget
76. emda’s budget will decrease over the forthcoming years; £159 million in 2008–09, £158 million in 2009–10. £154 million in 2010–11. The tighter budget allocation is a result of the Comprehensive Spending Review 2007. This called for a 5% real reduction in overall RDA funding and a ceiling on administrative costs. For emda, the CSR 2007 will mean that it will receive £20 million less cash over 3 years in Single Programme Grant in Aid, and a £1.2 million reduction in administration costs over the 3 years.
77. RDA budgets have also suffered further cuts. £300 million was diverted from the Department for Communities and Local Government’s funding stream to the single pot to establish HomeBuy Direct in September 2008: the Winter Supplementary Estimate 2008–
91 emda: Annual report and Accounts 2007–08 92 Ev 93 93 The Corporate Plan is a three year strategy that sets the corporate priorities for emda to focus on and allocates the total budget to these priorities for each of the three years
26 East Midlands Development Agency and the Regional Economic Strategy
09 made further reductions, and DEFRA’s contribution to the single pot was reduced by £17.088 due to DEFRA’s need to set a balanced budget for 2008–09.94
78. Jeff Moore, Chief Executive, emda, commented on the frustration caused by the Departmental withdrawal of funds and spoke of the short notice that emda sometimes received:
The bigger the cut, the shorter the notice, the harder it is to cope […] Inevitably, that will mean prioritisation and difficult decisions being made.95
79. In its written evidence, emda highlighted the challenges it faced in accommodating the significant funding reduction taking place in 2010–11:
… the majority of this reduction is to capital expenditure and so clearly those projects at risk are inevitably the large scale regeneration projects […] the areas affected will primarily be Land & Development (supporting large regeneration schemes across the Region), Innovation and Business Support (grant aid to businesses).96
Jeff Moore underlined the difficulties this caused to capital projects , which were:
Complex, long-term projects involving issues with state aid, partner funding contributions and all sorts of planning issues as well […] You can be so far down the line with lots of expectation from partners, and lots of moral obligations, and then you lose money and have to cut schemes. It has a political, economic and moral impact.97
Carry-forward
80. emda stressed the problems that arose due to the withdrawal of end-year flexibility to carry over unspent monies, which “was taken away two years ago.”98 Glenn Harris, Executive Director of Corporate Services, emda, illustrated the problems that this caused the organisation;
Without end-year flexibility, the problem is twofold: first, you need to use the funds that cannot be spent on that project in the year, so you have to have additional projects that can come forward to spend the money in the right way; secondly, because the project has slipped but is still contracted and something you would like to do, you then have to find money out of the following year’s programme, which itself already has commitments from previous years. You effectively have two problems: one, how you use the funds this year; and, secondly, finding the money again for the scheme next year. That is the main issue.
94 Business and Enterprise Committee, Fourth Report of Session 2008–-9, Regional development agencies and the Local Democracy, Economic Development and Construction Bill (HC 89-I) 95 Q 19 96 Ev 153 97 Q 240 98 Q 7
East Midlands Development Agency and the Regional Economic Strategy 27
81. Jeff Moore highlighted the “tough job” of ensuring that money did not return to the Treasury at the end of the financial year, and stressed that in 10 years no money had been returned to the centre. As he commented, “That is not easy, because if you cannot carry forward and you cannot have opening and closing balances, it is quite a piece of fine-tuned choreography to do that.”
82. He stated that direct monitoring of projects ensured that no money was underspent. However he commented on the mechanism which, as a last resort, ensured that money was not returned to the centre. This involved an internal market which had been created with other RDAs:
So, if we are going to underspend—and we have not, but let us use your example—by £2 million and let us say, for the protection of the innocent, the LDA is struggling because it needs another £2 million for the Olympic park, we could lend them that on 31 March and get that back at 8 o’clock on 1 April the next day.99
83. We welcome the Single Programme Grant in Aid which allows emda to effectively influence regional economic priorities and gives greater flexibility to manage the available resources. However, its effectiveness is harmed by the reduction in its budget. These reductions can be at short notice which affects expenditure already allocated. It has also been affected by the removal of the ability to carry-forward its budget. We recommend that emda has no further reductions in its budget in order to enable it to take strategy decisions for the good of the region on a stable and agreed budget. We also recommend that emda’s ability to carry-forward its budget is reinstated.
Project Appraisal
84. Witnesses from the higher education sector expressed concerns over the project appraisal system.100 The University of Nottingham commented that:
Timelines from initial submissions to project start are often long and unpredictable. Processes do not seem to be able to provide either a robust “no” at early stages of the appraisal process nor a “conditional yes” to substantive strategic projects. Certain funding schemes are, by design, highly inefficient in terms of the relative cost to administer the scheme and are difficult to access. This can lead to projects that are small but considered to be significant not being presented to emda for appraisal.’101
The East Midlands Regional Assembly also highlighted the need for emda to speed up decisions, “to ensure that decisive and timely investments are made in the economy.”102
85. Mr Martin Traynor, Chair, East Midlands Regional Assembly’s Regional Scrutiny Board, commented that the problems were not of emda’s making, but that of the system devised by the Government and the interpretation of state aid rules:
99 Q 11 100 The process of assessing and questioning proposals before resources are committed. 101 Ev 131 102 Ev 93
28 East Midlands Development Agency and the Regional Economic Strategy
The processes that emda has to undertake to make sure that it is compliant with state aid rules are making the whole process laborious […] This is not a criticism of emda, it is the way the system has worked. You have a situation now in which the SPPs have an application form of something in the region of 65 pages—whether for £500 or £5 million, which is of course ridiculous.103
86. Jeff Moore stated that emda applied the rules of the Treasury Green Book and wanted “to get that right.”104 He considered that the criticisms regarding the length of the appraisal process in fact stemmed from the time taken to work up projects that could be hugely complex:
What you will find is that in most projects, the original idea becomes something completely different by the time it gets to the appraisal level, and then that goes through in 15 days. But it is working up major projects. We do not think it is a criticism that is legitimate … 105
87. It is vital that projects receive funding in a timely manner and that emda is able to respond to changing economic circumstances. We have received assurances from emda that they process requests as quickly as possible. However, they are hampered by state aid rules which ensure that the system is inefficient. We urge the Government to re- examine the Treasury Green Book and recommend that the process regarding state aid rules are streamlined.
103 Q 59 104 Q 255 105 Ibid.
East Midlands Development Agency and the Regional Economic Strategy 29
6 Sub-National Review
88. In July 2007, the Government published its proposals to reform economic development and regeneration policy making and delivery at sub-national level, in the Review of sub- national economic development and regeneration (SNR). Following its consultation on the proposals, launched in March 2008, the Government published its revised proposals on 25 November 2008 in Prosperous Places: taking forward the review of sub-national economic development and regeneration. The Government decided:
• To legislate to create a duty on county councils and unitary authorities across England to carry out an economic assessment of their area, underpinned by statutory guidance;
• To legislate to allow for the creation of statutory sub-regional authorities for economic development—economic prosperity boards—that will be voluntary in nature, and to legislate for the option of a similar underpinning of duties on partner agencies in Multi -area Agreements as in Local Authority Agreements;106
• To refine its plans for producing the regional strategy and ensuring appropriate regional governance arrangements; the Government will, in each region, give the RDA and a board of local authority leaders joint responsibility for the regional strategy, including its drafting, implementation planning, sign-off and monitoring; and
• To legislate to create duties on county councils and unitary authorities to promote democracy and to operate a petitions scheme, and to create a duty on certain public authorities to secure involvement in the exercise of their functions.
Implementation of those elements of the review that require legislation is in the Local Democracy, Economic Development and Construction Bill.107
Single Regional Strategy
89. Clause 67 of the Bill provides that “there is to be a regional strategy for each region other than London.”108 The Government intends that the regions develop a single regional strategy, bringing together the Regional Economic Strategy and the Regional Spatial Strategy, giving RDAs new responsibilities for transport, planning and housing matters.
90. Phil Hope MP, Minister for the East Midlands, described the integrated regional strategy as “the most crucial part of the region’s development as a region.”109 As he explained, “it will integrate economic plans with spatial plans, so that we can merge
106 Such MAAs would provide for local authorities and partners to be placed under a duty both to co-operate in developing the MAA and also to have regard to the targets within the MAA that relate to their functions. 107 The Local Democracy, Economic Development and Construction Bill will have its Third Reading in the House of Commons on 13 October 2009. 108 Clause 65, Local Democracy, Economic Development and Construction Bill 109 Q 209
30 East Midlands Development Agency and the Regional Economic Strategy
together issues around housing and planning with issues around jobs and employment. I think it is a crucial part of the region’s future for years to come.”110
91. Witnesses were in favour of the move to a Single Regional Strategy; as emda said, “the separate timescale, overlapping processes and different evidence bases of the RES and Regional Spatial Strategy (RSS) made it challenging to fully integrate economic and spatial policies.”111 Lindsey Bunn, Policy Manager, Federation of Small Businesses East Midlands, commented:
It is incredibly useful to have a single document that outlines exactly what economic document is going to happen, when and where, and how it is going to benefit communities and individual citizens, not just businesses.112
Role of Regional Minister
92. The Sub-National Review gives emda and the Local Authority Leaders’ Board joint responsibility for the regional strategy, including its implementation plan and monitoring of its delivery. However, “where they are unable to reach agreement, or where one side acts unreasonably, the Government will take a power to allow Ministers to direct the process for producing the draft strategy, with the expectation being that the task of leading the strategy’s development would then fall to the RDA.”113
93. EEF expressed doubts about how effective this would be.114 Jeff Moore, Chief Executive, emda, was confident that any matters could be resolved and there would be no need to go to the Regional Minister for the solution. He recognised however that it would be a “complex and difficult task, given the spatial elements added to the economic elements and the point that the planning dynamic is a vibrant focus of public interest, but we believe we can get there.”115
94. We fully support the production of a single integrated strategy, allowing better alignment of policy in the region. We look forward to emda and the Local Authorities Leaders’ Board establishing a good working relationship and to the production of the region’s first integrated strategy.
Stakeholder Involvement
95. The Sub-National Review announced that Regional Assemblies would be abolished by 2010. They had been established at the same time as Regional Development Agencies and part of their remit had been to scrutinise the work of the Regional Development Agencies. They were informal bodies with no legal powers, made up mainly of local authority councillors, alongside social and economic partners.
110 Ibid. 111 Ev 102 112 Q 48 113 SNR, para 2.7 114 Ev 160 115 Q 264
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96. The Review contained proposals for the establishment of Local Authority Leaders’ Boards, made up of local councillors in the region. They will have joint responsibility with the Regional Development Agency for preparing the single integrated strategy. They will no longer have a scrutiny function over RDAs.
97. Witnesses had strong reservations regarding the abolition of Regional Assemblies. They expressed concern regarding the lack of stakeholder involvement in policy decisions under the new arrangements, and the lack of regional accountability over emda. In its written evidence, the Royal Institution of Chartered Surveyors commented that:
The evolution of the East Midlands Regional Assembly into a purely local authority body means that it will be less easy for the voices of key stakeholders from the economic, environmental, social and third sectors to be heard and to contribute to policy decisions at regional level.116
The Federation of Small Businesses East Midlands also noted that:
The role of businesses and other stakeholders under the proposals appears to be strictly limited […] the role of businesses under the new arrangements must be much more than a consultee, otherwise there is a strong possibility that businesses will become disillusioned and disengage.117
98. emda described how they were currently working alongside the Shadow Local Authority Leaders’ Board to develop the regional Change Management Plan that “sets out […] the key principles in terms of groups and structures to support the Joint Strategy Board and wider stakeholder engagement.118 In oral evidence to the Committee, they gave examples of discussions taking place to discuss mechanisms for involving regional partners, and had recently held an event in the region:
The event was well attended. There were nearly 80 stakeholders there from a range of organisations across the East Midlands, from the economic sector, the environmental sector and the social sector. There were organisations such as Social Enterprise East Midlands and Emerald, the environmental organisation, through to business organisation, like the IOD and the CBI.119 emda said it would continue to examine scenarios with a variety of stakeholders, reporting on stakeholder arrangements by the end of the year.
Accountability
99. Lyndsey Bunn, Policy Manager, Federation of Small Businesses East Midlands, described the “significant accountability gap”120 that will be left by the dissolution of the regional assemblies. She added that:
116 Ev 99 117 Ev 90 118 Ev 102 119 Q 259 120 Q 46
32 East Midlands Development Agency and the Regional Economic Strategy
In terms of the role that regional assemblies have played, local councillors, business representatives, environmental partners, trade unions have been able to ask them searching questions.121
Councillor David Parsons, Chair, East Midlands Regional Assembly, also agreed that a “huge amount of detailed scrutiny and the detailed recommendation that could have been made to the development agency on how it could have done things better” would be lost.122
100. In written evidence to the Committee, the East Midlands Regional Assembly commented that “the loss of a dedicated regional scrutiny body, comprising of Local Authority members and regional stakeholders, takes away the opportunity for an in-depth examination into the key aspects of these regional agencies’ work in the East Midlands.”123 It described the potential for East Midlands Councils (the body established to represent Local Government in the East Midlands) to play a leading role in “plugging the accountability gap.”124 It noted that joint local authority regional committees are permissible under Clause 31 of the Draft Local Democracy, Economic Development and Construction Bill. These powers also currently exist under the Power of Wellbeing.125
101. We are concerned that the abolition of a regional assembly removes a dedicated and knowledgeable regional scrutiny body. We are also concerned that this removes a formal mechanism for stakeholder engagement. We welcome emda’s efforts to develop mechanisms in the region to ensure that the involvement of regional partners in policy decision making is maintained and look forward to emda’s report at the end of the year. We will revisit the issue of regional accountability once the Assembly has been disbanded and any new arrangements are in place.
Sub Regional Authorities for Economic Development
102. The Local Democracy, Economic Development and Construction Bill allows for the creation of statutory sub-regional authorities for economic development. Witnesses commented on the current lack of clarity over which functions were likely to be assigned to emda, sub-regional and local authority levels. Councillor Martin Hill, Chair, Local Government East Midlands, stated that “there is not clarity, but hopefully we will try and work through and get the job done in the best interests.”126
103. Witnesses from the Higher Education sector expressed greatest concern. The University of Nottingham stated that, “with sub-regional economic development responsibilities moving to the City/County Councils, we do have concerns about the
121 Ibid. 122 Q 61 123 Ev 169 124 Ibid. 125 Section 2 of the Local Government Act 2000 allows principal Local Authorities in England and Wales to do anything they consider likely to promote the economic, social and environmental well-being of their area unless explicitly prohibited elsewhere in legislation. 126 Q 70
East Midlands Development Agency and the Regional Economic Strategy 33
fragmentation and weakening in the economic and social development of the Nottingham conurbation.”127 The East Midlands Universities Association commented that:
If devolution of funds to Local Authorities shifts the focus and type of investments to very local priorities confined to small administrative areas, this may limit the role of Universities as delivery partners, and the significant funds they can raise against regional investment. The economic footprint of universities does not always map easily on the administrative boundaries of local authorities.128
104. emda stated that they had a very strong record of working successfully at the sub- regional level, and were “leaders in the devolution of funding to our sub-regions:”129
… we’ve given over a third of our money consistently—some £200 million has been delegated to the sub-regions for them to decide what to spend and where.130
105. We understand the concerns expressed by witnesses over the lack of clarity for sub- regional arrangements. We look forward to clarification from emda.
127 Ev 131 128 Ev 147 129 Q 261 130 Q 261
34 East Midlands Development Agency and the Regional Economic Strategy
7 Sustainability
106. Contributing to sustainable development is one of emda’s five statutory functions as embodied in the Regional Development Agency Act and reflected in the collective mission of RDAs to “transform England’s regions through sustainable economic development.”131 They work within the definition of sustainable development which is concerned with “meeting the needs of the present without compromising the ability of future generations to meet their own needs.”132
107. In its written evidence, the Government Office for the East Midlands states:
The Government expects emda to contribute to sustainable development across its statutory, corporate, regional influencing and grant-making and investment functions to promote a strong, healthy and just society, and ensure we live within environmental limits.133 emda’s statutory obligations in this area include: carbon reporting134; having regard to conserving biodiversity135; the duty to promote equality; and the forthcoming requirement to monitor and manage effectively equalities and diversity impacts.136 emda also has a devolved responsibility for the design and management of the European Regional Development Fund Operational Programmes and for reporting on the ERDF OP cross- cutting theme of environmental sustainability. emda’s Progress on Sustainable Development
108. In its written evidence, emda highlighted projects in which it had invested which are delivering the sustainable development agenda. Examples include:
• Development of a new sustainable eco-visitor centre at the Attenborough Nature Reserve, providing new facilities to support the financial sustainability of the nature reserve;
• Genesis Social Enterprise Centre in Alfreton, a mixed development of managed work space, educational and community facilities designed to enhance local service delivery and create new economic opportunities for local people;
• Supplier Diversity East Midlands, an innovative business support programme working with large multi-national household brands (including PepsiCo, ExxonMobil, Eversheds, KPMG, and IBM) to open up their supply chains to the region’s black and minority ethnic business community; and
131 http//:www.englandrdas.com/who_we_are/mission 132 Brundtland Commission 133 Ev 123 134 Energy White paper 2007: Meeting the Energy Challenge 135 Section 40 of the Natural Environment and Rural Communities Act (2006) states that ‘every public authority must, in exercising its functions, have regard, so far as is consistent with the proper exercise of those functions, to the purpose of conserving biodiversity.’ 136 Equality Bill 2009
East Midlands Development Agency and the Regional Economic Strategy 35
• National Energy Technologies Institute hosted at Holywell Park, Loughborough University, a partnership between Government and the private sector to invest up to £1 billion in the development and deployment of new energy technologies to support the UK’s emergence as a world leading low carbon economy.137
109. emda did not highlight equality in their initial presentation to us, although they have a statutory duty to promote equality. Questioned by the Committee, emda told us about their equalities impact assessment process and said they were working on an integrated equalities scheme. emda highlighted that “on every business support product that we have, we require the partner to monitor the customer base that they are dealing with from a diversity point of view”.138 They also noted that:
we have seen a growing trend in terms of penetration into areas like black and ethnic minority businesses and gender-based businesses, in terms of women’s businesses. So we are actually already seeing a quite significant swing in the impact of our programmes in these areas.139
110. We were disappointed that emda’s presentation did not mention equality issues, and their success or otherwise in fulfilling their duty to promote equality. We would have liked further analysis assessing the impact of their programmes, and of economic change, on diverse communities in relation to race, gender, disability, socio-economic background and other areas covered by the duty.
Environmental Expertise
111. While witnesses recognised the work that emda had done towards sustainable development, some felt that the sustainability ethos was not embedded within emda. The East Midlands Environment Link stated:
emda’s corporate culture creates barriers to sustainable development. The SD [sustainable development] ethos does not yet appear to have become an integral part of the corporate culture and board members with SD responsibilities have not had the necessary expertise or seen the bigger SD picture.140
112. Witnesses noted that while emda has a statutory responsibility to contribute to sustainable development, at present there is no requirement to have environmental expertise on emda’s board. East Midlands Environment Link noted, “We have argued consistently, as have our national organisations, that there should be a requirement to have environmental expertise on the emda board, which currently there is not.”141 emda commented that, although board members brought with them their own interests, such as an interest in the environmental agenda, this was not a requirement.142
137 Ev 102 138 Q 270 139 Q 271 140 Ev 121 141 Q 147 142 Q 233
36 East Midlands Development Agency and the Regional Economic Strategy
Lead on Sustainable Development in the Region
113. Witnesses commented on the absence of a body leading on sustainable development in the region. The East Midlands Regional Assembly stated that “emda do not consider themselves to be the lead organisation in the region on sustainable development,”143 while Natural England commented that “emda’s reluctance to own the RES on behalf of the region or explicitly champion the RES’s role to deliver sustainable economic development, was disappointing.”144
114. Sarah Fowler, Area Manager, East Area, Environment Agency, highlighted the lack of a champion body for sustainability in the East Midlands:
It is stark that, in the East Midlands, there is no champion body. For example, there is sustainability North East, Sustainability South West and Sustainability West Midlands. […] A part of what is lacking in the East Midlands is that senior voice provided by all partners working together.145
Anthony Payne, Executive Director of Strategy and Communication, emda, commented that following a review in the region, regional parties concluded that sustainable development needed to be embedded “with Sub-National Review frameworks going forward and strategies rather than a specified SD [Sustainable Development] body.”146
115. emda has a statutory responsibility to contribute to sustainable development. While we congratulate emda on its work towards sustainable development, we are not convinced that it is embedded as a priority within all aspects of the organisation. We are concerned that there is no requirement to have environmental expertise on emda’s board. We recommend that the Department for Business, Industry and Skills and the Regional Minister examine the criteria for appointment on emda’s board and seek to include representation from the environmental sector.
116. We are concerned that no one body takes the lead on sustainable issues in the region. We urge further discussion in the region to establish whether that is a role best suited for emda or another body. We also encourage that this discussion revisits the need for the establishment of a sustainable champion in the region, similar to that already established in other regions in England.
Tensions between Economic and Sustainable Development
117. Increasing GVA is a key performance indicator for RDAs and witnesses commented on the difficulties this created between economic and sustainable development. Bettina Large, East Midlands Environment Link, commented:
The key performance indicators are not sustainable development indicators, rather they are an increase in GVA and GDP, which are very conventional economic
143 Ev 93 144 Ev 133 145 Q 124 146 Q 265
East Midlands Development Agency and the Regional Economic Strategy 37
indicators. As far as we understand it, those indicators are structurally incapable of reflecting whether or not the environmental side and to some extent even the social side of sustainable development is being advanced or hindered. So that is the fundamental problem.147
East Midlands Environment Link developed this argument further in written evidence to the Committee:
There is a clear tension between emda’s SD (sustainable development initiatives) and the continued commitment to economic growth almost for its own sake, between emda’s wellbeing focus and GDP/GVA performance indicators—a tension between aspects of emda’s work and central government requirement, the latter shared by parts of emda. 148
118. Witnesses recognised that emda was originally set up to have an economic focus and could not be criticised for having a focus on economic development. Indeed, Groundwork Greater Nottingham stated that:
emda had been ‘hogtied’ by the requirement to demonstrate economic impact for every environment project. My assertion is that each project does generate positive economic impact but it is sometimes difficult to evidence these precise outcomes.149
Regional Index of Sustainable Economic Welfare (R-ISEW)
119. The Index of Sustainable Economic Welfare (ISEW) is an economic indicator intended to replace the gross domestic product. Rather than simply adding together all expenditures like the gross domestic product, it balances consumer expenditure with such factors as income distribution and cost associated with pollution and other unsustainable costs.
120. emda were “leaders in developing”150 a regional variant of the ISEW, and incorporated the R-ISEW into their Regional Economic Strategy as the top level indicator of progress towards their vision of a “flourishing region.”151 In the National Audit’s 2007 performance assessment of emda, the development of R-ISEW was welcomed as a positive and innovative step. Jeff Moore, Chief Executive, emda, stated:
[the ISEW is an] unique and groundbreaking index […] What ISEW seeks to do, as well as measuring the capital benefits from investment, is to take account of the costs of crime and pollution, and the benefits and advantages of volunteering, labour, caring and those sorts of things. So this tries to bring a more comprehensive index together.152
147 Q 120 148 Ev 121 149 Ev 120 150 Q 267 151 A Flourishing Region, East Midlands Regional Economic Strategy 2006–2020 152 Opening Statement, oral evidence on 27 April 2009
38 East Midlands Development Agency and the Regional Economic Strategy
121. In its written evidence, Natural England welcomed the development of the R-ISEW as a measure for regional performance. However, they commented that it still needed development as “this still only values the environment in an economic context and as a limited range of negative costs.”153 East Midlands Environment Link also recognised that, having been previously weak on economic indicators, the ISEW was now “approaching more meaningful indicators.”154
122. Jeff Moore acknowledged that R-ISEW was still relatively new and was a developing measurement index with the possibility of learning more about developing, “the measurement of crime, the impact of crime, the benefits of volunteering, the impact of accidents and things like that.”155
123. Jeff Moore detailed the interest R-ISEW had received throughout England and commented that “it had been taken on by a number of politicians as a key element of how to develop. Other regions have started to address it, look at it and show an interest in it.”156 Sarah Fowler, Area Manager, East Area, Environment Agency, stated that “the index has great potential value.”157
124. We congratulate emda for leading the development of the Regional Index of Sustainable Economic Welfare, and its incorporation into the Regional Economic Strategy. We look forward to its further development to give greater emphasis to environmental indicators. We are concerned that the emphasis on economic indicators and the need to demonstrate economic impact for every environment project is detrimental to emda’s ability to deliver sustainable development. We recommend that the Government use the Regional Index of Sustainable Economic Welfare as an alternative to the traditional GVA-only measurement of the RDAs’ economic performance.
Sub-National Review
125. Under the Local Democracy, Economic Development and Construction Bill, as currently drafted, emda will have a responsibility to ensure that the new Regional Strategy delivers sustainable economic growth which contributes to sustainable development.
126. Witnesses welcomed this proposal.158 In its written evidence, the East Midlands Regional Assembly stated that, “it supports a single regional strategy based upon sustainable development.” 159 However it noted that, “RDAs single objective is economic growth. How emda and local authorities can work together in the production of the Single Regional Strategy will be a key test of these new arrangements.”160
153 Ev 133 154 Q 134 155 Q 268 156 Ibid. 157 Q 134 158 Ev 133 159 Ev 93 160 Ibid.
East Midlands Development Agency and the Regional Economic Strategy 39
127. In its written evidence, emda emphasised the need for the Bill to protect and enhance the benefits of the business-led RDA model when addressing sustainable economic growth:
Business leadership of RDAs, clear decision making based on our capacity and expertise in key areas, and our financial flexibility have been critical factors in the progress we have made to date .161
128. We welcome the responsibility contained in the Local Government, Economic Development and Construction Bill to ensure a single regional strategy based upon sustainable development. We recognise emda’s concerns but urge them to continue to work towards sustainable development in the region.
Rural, Semi-rural and Urban Divide
129. The East Midlands is predominantly a rural region, with a number of principal urban centres. The RES notes that it is England’s third most rural region with over 30% of the population living in rural areas—almost ten percentage points higher than the England average.162
130. Witnesses expressed concern regarding a perceived focus of emda’s investments in urban areas. The Federation of Small Businesses East Midlands commented that, “Lincolnshire, Rutland and South Northamptonshire often feel that they are on the periphery of public investment, with emda’s funding being largely focussed on the three core cities of Derby, Nottingham and Leicester.”163 While Stephen Woolfe, former Chair of the East Midlands Chamber of Commerce, felt the debate was not simply about rural versus city, he commented that, “I certainly agree that Leicester, Nottingham and Derby dominate.”164
131. In evidence to the Committee, emda highlighted that their approach was one of ‘rural mainstreaming,’ and that no specific rural strand or budget was reflected in the Corporate and Business Plans. In practical terms, “that means that we rural-proof all our programmes, priorities and policies, as well as every project.”165
132. emda outlined in both its written and oral evidence that it did not seek to spread its funding equally across all parts of the region. As Jeff Moore clarified, “we are not about making sure that each of the 42 or 44 districts in the region gets one forty-second, as it were, of our total budget.”166 Instead emda looked to prioritise activities that deliver the greatest impact or tackle specific geographical needs and challenges within the region. The East Midlands Regional Assembly gave their support to this policy.167
161 Ev 102 162 Ibid. 163 Ev 90 164 Q 45 165 Q 9 166 Ibid. 167 Q 77
40 East Midlands Development Agency and the Regional Economic Strategy
133. We agree that the interests of rural parts of the East Midlands should be a mainstream concern for emda. However, this should not mean that rural areas do not receive targeted resources. emda must also ensure that its support is suitable for areas that are “semi-rural”, with towns and villages interspersed with countryside, and that such areas do not fall through the gaps.
Broadband
134. A specific concern raised by witnesses regarding those living in rural communities was the lack of access to broadband.168 John Hardwick, Chair, Area Policy Unit, Federation of Small Businesses East Midlands, highlighted that there were areas in the region where broadband was more or less non-existent, with Lincolnshire a particular area of concern:
Everybody from the Government down is saying that we should take advantage of new technologies, but that is difficult if the companies and providers basically say that they will concentrate on the areas that give them the biggest return, and will get to other areas eventually.
135. In oral evidence to the Committee, emda highlighted that projects they had run had significantly increased the opportunities for people to have access to broadband.169 They commented that they were not responsible for delivering broadband infrastructure, which was the Government’s role, but delivered e-adoption policies and products to try and encourage people to use the facilities available, “because you can take the horse to water, but you’ve got to find a way of making it drink to make our businesses competitive with broadband.”170
136. The availability of broadband is an essential tool for business. While we recognise that much has been done in the region, there are still areas, particularly in the rural parts of the region, where availability is patchy, if not non-existent. We urge the Government to invest in broadband infrastructure and coverage in the East Midlands to allow businesses to take advantage of new technologies. We look to emda to continue to lobby Government on this issue.
Market Towns
137. The Federation of Small Businesses East Midlands raised concerns regarding the lack of appropriate space units in declining market towns, where they “were not seeing the major support.”171 It commented that while the cost of work premises was cheaper in less urban areas, the availability of suitable business premises outside of the region’s cities and principal towns was severely limited.
138. In written evidence to the Committee, emda highlighted their proactive work in supporting the demand for higher quality employment land within rural localities, giving
168 Ev 90 169 Q 274 170 Ibid. 171 Q 45
East Midlands Development Agency and the Regional Economic Strategy 41
the example of Cransley Park in Kettering. As they specified in their evidence, “this development will generate 32,000sqm of new commercial floor space and has the potential to create a further 900 jobs for the country which will support the Northamptonshire Growth Agenda.172
139. We welcome the work emda has done towards supporting the demand in appropriate work space units in market towns. We congratulate them on the initiative they have shown in the development of Cransley Park, and encourage them to continue to work to support small businesses in rural areas.
172 Ev 164
42 East Midlands Development Agency and the Regional Economic Strategy
8 Conclusion
140. The Regional Economic Strategy, with its aim of making the East Midlands a flourishing region, highlights the ambitions of the East Midlands. We believe that emda plays a key role towards achieving that vision, driving and co-ordinating regional and economic development and regeneration. It has delivered measurable outputs and its beneficial impact has been recognised in the reports by Ecotec, the National Audit Office and PricewaterhouseCoopers.
141. The financial and economic downturn has affected all businesses in the East Midlands region and major job losses have been experienced. Following initial delay in the Government’s reaction, emda has responded well to the current economic climate. It has adapted its role from growth to survival and has acted swiftly. Its Survive and Thrive events have been very successful in the region, providing support to businesses. However, emda must give continuing attention to ensuring businesses can access financial support. The Single Programme Grant in Aid allows emda to be flexible in its approach and to prioritise the available resource. However, this action is jeopardised by the reduction and cuts in emda’s budget, some of which are at short notice. This affects emda’s ability to take forward strategy decisions for the good of the region.
142. However, there are areas where improvement is needed. emda’s resources alone will not achieve the objectives of the Regional Economic Strategy. It is therefore vital that key partners work together to ensure that a common vision is shared. It is also important that the knowledge and expertise of key partners in gathering and analysing data is utilised. Contributing to sustainable development is one of emda’s statutory functions. While it has led the way in the development of the Regional Index of Sustainable Economic Welfare, the sustainability ethos needs to be further embedded in emda.
143. The Sub-National Review means another period of change for emda. It will result in additional responsibilities and the need to build working relationships with new bodies, and to develop new working methods. As it moves forward, it is imperative that it develops and maintains close working partnerships in the region. However, the dissolution of the Regional Assembly removes a knowledgeable regional scrutiny body and a formal mechanism for stakeholder engagement. emda’s efforts to develop mechanisms in the region to ensure the involvement of regional partners in policy decision making is welcomed. As emda moves forward, it is imperative that it develops and maintains close working partnerships in the region.
East Midlands Development Agency and the Regional Economic Strategy 43
Conclusions and recommendations
1. We hope that political disagreements regarding the establishment of Regional Committees will be resolved and look forward to welcoming opposition Members to the East Midlands Regional Committee. We welcome the establishment of the East Midlands Grand Committee. (Paragraph 2)
2. The East Midlands Development Agency (emda) has a key role in driving and co- ordinating regional economic development. We notice that witnesses have expressed varying levels of awareness of its role in the region. We urge emda to improve its marketing and communication in order to further awareness of its role, and to make businesses better aware of the support it can provide, particularly during the current economic climate. (Paragraph 10)
3. emda was originally established to provide strategic economic leadership in the region. Since its establishment it has taken on a large number of additional responsibilities and has moved away from its original strategic role, becoming responsible for the delivery of a number of grants and European Regional Development Funds. We note the concerns raised by witnesses that this may cause emda to lose its business focus and urge it to ensure it remains intent on its economic focus. (Paragraph 16)
4. emda’s board members are chosen by Ministers in the Department for Business, Innovation and Skills. We note that they are chosen on an individual basis and not as representatives of organisations in the region, and so are not formally providing sectorial and wider expertise for emda. With increased responsibility within the region, emda’s remit is now significantly broader than the area overseen by the Department for Business, Innovation and Skills. We recommend that the Regional Minister should now take the lead role in board appointments, and should consult with stakeholders in the region and the full range of relevant Government Departments. (Paragraph 24)
5. The first Regional Economic Strategy for the East Midlands in 1999 set an ambitious target for the region to be a top-20 region in the EU by 2010. We congratulate emda on its work towards that goal, commend its regional priorities and fully support its continued vision and ambition for the East Midlands to be a flourishing region by 2020. (Paragraph 28)
6. The Regional Economic Strategy (RES) is owned by the region, and emda alone cannot achieve its objectives. It is therefore vital that key partners are brought in early to develop the RES, ensuring that they feel they have an investment in working towards the region’s goals. While some sectors have spoken of the close working relationship they have with emda, there is a perception that it did not consult sufficiently with some key sectors, such as micro businesses, trade unions and the environment sector, and some witnesses felt they were involved at too late a stage. We urge emda to establish and maintain improved relationships with key partners in the region, whilst continuing to make use of the strong links it already has with many sectors. (Paragraph 36)
44 East Midlands Development Agency and the Regional Economic Strategy
7. The range of data and statistics that emda has to gather is immense. While we acknowledge the large evidence base used by emda to underpin the current RES, which it commissioned from academics and universities, we urge emda to utilise fully the expertise and knowledge of its regional partners on data collection and analysis. We also urge emda to examine its procedures so that emda can make informed decisions based on accurate and timely data. This should ensure that emda uses a variety of sources of information and analyses, not just the large evaluation studies it commissions. (Paragraph 42)
8. emda was the first Regional Development Agency to commission an independent evaluation of all its activities and we welcome its findings. This was a ground- breaking piece of work carried out by Ecotec and highlighted the significant impact emda has had on the region. We are also reassured by the conclusions of the National Audit Office and PricewaterhouseCoopers reports, and all provide a positive endorsement of emda’s work and its benefits to the regional economy. (Paragraph 49)
9. emda has taken positive and effective steps to provide support to business. We are concerned to hear from witnesses that awareness of Business Link and its services is not as good as it should be. We urge the Government, working with emda, to improve its marketing and advertising in the region, to ensure that businesses are aware of the services they can access. (Paragraph 59)
10. We welcome emda’s focus on regeneration schemes in order to create and safeguard jobs during the current economic climate. (Paragraph 67)
11. emda has responded quickly and positively to the current economic situation. They have worked hard to support business in the region, and we urge them to continue to work with banks in order to make them aware of what support is available and to urge banks to assist companies as appropriate. We note the concerns surrounding the European Regional Development Fund and encourage emda to examine the process to make it easier to access. (Paragraph 71)
12. emda needs to work with timely and accurate data on which to base decisions in the current economic climate and we urge them to improve the collection and analysis of data and to work with regional partners. (Paragraph 72)
13. We welcome the Single Programme Grant in Aid which allows emda to effectively influence regional economic priorities and gives greater flexibility to manage the available resources. However, its effectiveness is harmed by the reduction in its budget. These reductions can be at short notice which affects expenditure already allocated. It has also been affected by the removal of the ability to carry-forward its budget. We recommend that emda has no further reductions in its budget in order to enable it to take strategy decisions for the good of the region on a stable and agreed budget. We also recommend that emda’s ability to carry-forward its budget is reinstated. (Paragraph 83)
14. It is vital that projects receive funding in a timely manner and that emda is able to respond to changing economic circumstances. We have received assurances from emda that they process requests as quickly as possible. However, they are hampered
East Midlands Development Agency and the Regional Economic Strategy 45
by state aid rules which ensure that the system is inefficient. We urge the Government to re-examine the Treasury Green Book and recommend that the process regarding state aid rules are streamlined. (Paragraph 87)
15. We fully support the production of a single integrated strategy, allowing better alignment of policy in the region. We look forward to emda and the Local Authorities Leaders’ Board establishing a good working relationship and to the production of the region’s first integrated strategy. (Paragraph 94)
16. We are concerned that the abolition of a regional assembly removes a dedicated and knowledgeable regional scrutiny body. We are also concerned that this removes a formal mechanism for stakeholder engagement. We welcome emda’s efforts to develop mechanisms in the region to ensure that the involvement of regional partners in policy decision making is maintained and look forward to emda’s report at the end of the year. We will revisit the issue of regional accountability once the Assembly has been disbanded and any new arrangements are in place. (Paragraph 101)
17. We understand the concerns expressed by witnesses over the lack of clarity for sub- regional arrangements. We look forward to clarification from emda. (Paragraph 105)
18. We were disappointed that emda’s presentation did not mention equality issues, and their success or otherwise in fulfilling their duty to promote equality. We would have liked further analysis assessing the impact of their programmes, and of economic change, on diverse communities in relation to race, gender, disability, socio- economic background and other areas covered by the duty. (Paragraph 110)
19. emda has a statutory responsibility to contribute to sustainable development. While we congratulate emda on its work towards sustainable development, we are not convinced that it is embedded as a priority within all aspects of the organisation. We are concerned that there is no requirement to have environmental expertise on emda’s board. We recommend that the Department for Business, Industry and Skills and the Regional Minister examine the criteria for appointment on emda’s board and seek to include representation from the environmental sector. (Paragraph 115)
20. We are concerned that no one body takes the lead on sustainable issues in the region. We urge further discussion in the region to establish whether that is a role best suited for emda or another body. We also encourage that this discussion revisits the need for the establishment of a sustainable champion in the region, similar to that already established in other regions in England. (Paragraph 116)
21. We congratulate emda for leading the development of the Regional Index of Sustainable Economic Welfare, and its incorporation into the Regional Economic Strategy. We look forward to its further development to give greater emphasis to environmental indicators. We are concerned that the emphasis on economic indicators and the need to demonstrate economic impact for every environment project is detrimental to emda’s ability to deliver sustainable development. We recommend that the Government use the Regional Index of Sustainable Economic Welfare as an alternative to the traditional GVA-only measurement of the RDAs’ economic performance. (Paragraph 124)
46 East Midlands Development Agency and the Regional Economic Strategy
22. We welcome the responsibility contained in the Local Government, Economic Development and Construction Bill to ensure a single regional strategy based upon sustainable development. We recognise emda’s concerns but urge them to continue to work towards sustainable development in the region. (Paragraph 128)
23. We agree that the interests of rural parts of the East Midlands should be a mainstream concern for emda. However, this should not mean that rural areas do not receive targeted resources. emda must also ensure that its support is suitable for areas that are “semi-rural”, with towns and villages interspersed with countryside, and that such areas do not fall through the gaps. (Paragraph 133)
24. The availability of broadband is an essential tool for business. While we recognise that much has been done in the region, there are still areas, particularly in the rural parts of the region, where availability is patchy, if not non-existent. We urge the Government to invest in broadband infrastructure and coverage in the East Midlands to allow businesses to take advantage of new technologies. We look to emda to continue to lobby Government on this issue. (Paragraph 136)
25. We welcome the work emda has done towards supporting the demand in appropriate work space units in market towns. We congratulate them on the initiative they have shown in the development of Cransley Park, and encourage them to continue to work to support small businesses in rural areas. (Paragraph 139)
26. The Regional Economic Strategy, with its aim of making the East Midlands a flourishing region, highlights the ambitions of the East Midlands. We believe that emda plays a key role towards achieving that vision, driving and co-ordinating regional and economic development and regeneration. It has delivered measurable outputs and its beneficial impact has been recognised in the reports by Ecotec, the National Audit Office and PricewaterhouseCoopers. (Paragraph 140)
27. The financial and economic downturn has affected all businesses in the East Midlands region and major job losses have been experienced. Following initial delay in the Government’s reaction, emda has responded well to the current economic climate. It has adapted its role from growth to survival and has acted swiftly. Its Survive and Thrive events have been very successful in the region, providing support to businesses. However, emda must give continuing attention to ensuring businesses can access financial support. The Single Programme Grant in Aid allows emda to be flexible in its approach and to prioritise the available resource. However, this action is jeopardised by the reduction and cuts in emda’s budget, some of which are at short notice. This affects emda’s ability to take forward strategy decisions for the good of the region. (Paragraph 141)
28. However, there are areas where improvement is needed. emda’s resources alone will not achieve the objectives of the Regional Economic Strategy. It is therefore vital that key partners work together to ensure that a common vision is shared. It is also important that the knowledge and expertise of key partners in gathering and analysing data is utilised. Contributing to sustainable development is one of emda’s statutory functions. While it has led the way in the development of the Regional
East Midlands Development Agency and the Regional Economic Strategy 47
Index of Sustainable Economic Welfare, the sustainability ethos needs to be further embedded in emda. (Paragraph 142)
29. The Sub-National Review means another period of change for emda. It will result in additional responsibilities and the need to build working relationships with new bodies, and to develop new working methods. As it moves forward, it is imperative that it develops and maintains close working partnerships in the region. However, the dissolution of the Regional Assembly removes a knowledgeable regional scrutiny body and a formal mechanism for stakeholder engagement. emda’s efforts to develop mechanisms in the region to ensure the involvement of regional partners in policy decision making is welcomed. As emda moves forward, it is imperative that it develops and maintains close working partnerships in the region. (Paragraph 143)
48 East Midlands Development Agency and the Regional Economic Strategy
Formal Minutes
Monday 20 July 2009
Members present:
Mr Bob Laxton Sir Peter Soulsby Judy Mallaber
In the temporary absence of the Chairman, Mr Bob Laxton was called to the Chair for the meeting.
Draft Report (East Midlands Development Agency and the Regional Economic Strategy), proposed by the Chairman, brought up and read.
Ordered, That the draft Report be read a second time, paragraph by paragraph.
Paragraphs 1 to 143 read and agreed to.
Summary agreed to.
Resolved, That the Report be the First Report of the Committee to the House.
Ordered, That the Chairman make the Report to the House.
Several Memoranda were ordered to be reported to the House for printing with the Report.
[Adjourned to a date and time to be fixed by the Chairman.
East Midlands Development Agency and the Regional Economic Strategy 49
Witnesses
Monday 27 April 2009 Page
Michael Carr, Executive Director of Business Services, Diana Gilhespy, Executive Director of Regeneration, Glenn Harris, Executive Director of Corporate Services, Jeff Moore, Chief Executive, and Anthony Payne, Ev 1 Executive Director of Strategy and Communications, East Midlands Development Agency (emda).
Friday 22 May 2009
Adrian Axtell, Regional Secretary, Unite the Union, Lyndsey Bunn, Policy Manager, Federation of Small Businesses East Midlands, John Hardwick, Chair, Area Policy Unit, Federation of Small Businesses East Midlands, David Ev 21 Jeffery, Skills and Development Officer, Unite the Union, and Stephen Woolfe, former Chair of East Midlands Chamber of Commerce.
Councillor Martin Hill, Leader of Lincolnshire County Council, Chair of Local Government East Midlands Improvement and Efficiency Partnership, Councillor David Parsons, Leader of Leicestershire County Council, Chair of East Midlands Regional Assembly, Chair of the Shadow Local Government Ev 29 Leaders Board, and Martin Traynor, Managing Director of Leicestershire Chamber of Commerce, Chair of the East Midlands Regional Assembly's Regional Scrutiny Board.
Monday 8 June 2009
Dr Roger Brooks, Deputy Director of Research Innovation Services, University of Nottingham, Professor John Coyne, Vice-Chancellor, University Ev 39 of Derby, Chair of East Midlands Universities Association, and Professor Phill Dickens, Pro-Vice-Chancellor (Enterprise), Loughborough University.
Sarah Fowler, Area Manager (East Area, Midlands Region), Environment Agency, Maddy Jago, Regional Director North East, Natural England, Ev 45 Bettina Lange and Charlotte Gault, East Midlands Environment Link.
Monday 29 June 2009
Phil Hope MP, Minister for the East Midlands, Tom Levitt MP, and Jonathan Ev 55 Lindley, Regional Director, Government Office for the East Midlands.
Tuesday 7 July 2009
Michael Carr, Executive Director of Business Services, Diana Gilhespy, Executive Director of Regeneration, Glenn Harris, Executive Director of Ev 71 Corporate Services, Jeff Moore, Chief Executive and Anthony Payne, Executive Director of Strategy and Communications, emda.
50 East Midlands Development Agency and the Regional Economic Strategy
List of written evidence
1 Catapult Ev 89 2 Mercia Marina Ev 89 3 Federation of Small Businesses Ev 90 4 East Midlands Regional Assembly Ev 93 5 Royal Institute of British Architects East Midlands Ev 97 6 Royal Institution of Chartered Surveyors (RICS) Ev 99 7 East Midlands Development Agency (EMDA) Ev 102 8 Lincolnshire Enterprise Ev 112 9 Nottinghamshire County Cricket Club Ev 114 10 BPR Medical Ltd Ev 116 11 Peak District National Park Authority Ev 118 12 British Waterways Ev 119 13 Groundwork Greater Nottingham Ev 120 14 East Midlands Environment Link Ev 121 15 Government Office East Midlands Ev 123 16 University of Nottingham Ev 131 17 Natural England Ev 133 18 University of Nottingham Ev 137 19 Mr Stuart Marland Ev 137 20 The National Forest Company Ev 138 21 The Waterways Trust on behalf of the River Soar and Grand Union Canal on behalf of the River Soar and Grand Union Canal Strategy Steering Group Ev 139 22 Sport England East Midlands Ev 141 23 Mr Ken Grundy Ev 143 24 Mr David Larmour Ev 143 25 Mr R D Cotterill Ev 144 26 Loughborough University Ev 144 27 Dynex Semiconductor Ltd Ev 145 28 East Midlands Universities Association (EMUA) Ev 147 29 Environment Agency Ev 150 30 Quadralene Ltd Ev 152 31 emda (supplementary) Ev 153 32 East Midlands Biodiversity Partnership Ev 159 33 Engineering Employers Forum (EEF) Ev 160 34 Government Office East Midlands (supplementary) Ev 163 35 emda (further supplementary) Ev 164 36 Federation of Small Businesses (supplementary) Ev 168 37 EMRA (supplementary) Ev 169 38 Mr David Gale, CEO, SITFO—Strategic IT Framework Organisation Ev 171
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East Midlands Regional Committee: Evidence Ev 1 Oral evidence
Taken before the East Midlands Regional Committee on Monday 27 April 2009
Members present:
Paddy Tipping (Chairman) Judy Mallaber Mr John Heppell Sir Peter Soulsby Mr Bob Laxton
Witnesses: Michael Carr, Executive Director of Business Services, Diana Gilhespy, Executive Director of Regeneration, Glenn Harris, Executive Director of Corporate Services, JeV Moore, Chief Executive and Anthony Payne, Executive Director of Strategy and Communications, East Midlands Development Agency (emda), gave evidence.
Chairman: I welcome everyone to the first ever is always useful to reiterate what our role in the public meeting of the East Midlands Regional region is, some of our major successes and Committee, and I am delighted to welcome achievements, and some of the challenges that are colleagues from the East Midlands Development facing us in the current economic downturn. So if Agency. The Select Committee set out its priorities you are okay with that, we have given each of the for its work and put emda at the top of the list. JeV, Members a pack of the slides and there is space for I am sorry if you feel that you have been scrutinised you to take notes and questions as you go through. and over-scrutinised, but my perception is that this I hope that you have all got those; I think that I can is an opportunity for you to talk to a democratically see that you have. First, regional development elected body. So I hope that we can build a strong agencies were set up in 1999, to bring a regional and useful relationship that lasts for a bit of time. I focus, coherence and co-operation to economic should explain what will happen this afternoon. JeV development. Why were they set up? Basically, since Moore and the team from emda will make a the Second World War, there had been a host of presentation to begin with. That is not normal for a industrial and economic development policies, and Select Committee—this is an abnormal while some had been successful, they had been less occurrence—and I know that a lot of work has gone successful than perhaps they might have been. So, into the presentation. We will hear JeV and his team the Government wanted to bring coherence and co- to begin with, and then Members of the Select operation on a regional strategic level to economic Committee will pursue some questions with emda. development. As it says on the slide, under our To those of you who are listening to our proceedings, public service agreement we have two targets. One is we have put out a call for evidence. We are keen to to increase the absolute performance of the East talk not just to emda but to other stakeholders in the Midlands economy and the other is to reduce region. If you would like to submit evidence, please disparity between the East Midlands and those do, and you can do so by way of written evidence, or regions that are seen as performing more highly, we may ask people who have given written evidence particularly the South East of England. But what we to come to give oral evidence. But we will try to keep do is not just about investing in economic this informal, relaxed and friendly, to have a kind of development projects that you can go round and tap local style, rather than a Westminster style. With with a hammer; one of the key issues and one of the that, JeV, I will hand over to you. Perhaps you would key roles that we have is strategic economic introduce your team. leadership in the region, and that takes its main focus JeV Moore: I will do, indeed, Paddy. Good through the statutory role of producing the regional afternoon, ladies and gentlemen. Thanks very much economic strategy. We believe that is particularly indeed for inviting us here today. With me, I have the important in the region because, as I said, for the whole of my executive team. On my left, I have first time since probably the Second World War, Diana Gilhespy, who is my director of regeneration everybody within the region—local authority and partnerships. On her left, we have Anthony partners, business partners and third sector Payne, who is our strategy and communications partners—has their shoulder pushing the wheel of director. On my right, we have Mike Carr, who is our economic development in the same direction. What director of business services, and on his right, we is unique about our RES (Regional Economic have Glenn Harris, who is our director of corporate Strategy)? Everybody has a RES, obviously. We are services. Thank you for inviting us here and particularly proud of the fact that we were the only particularly for giving us the opportunity to present. RDA at the outset, in 1999, to set a specific As we discussed, I have got about 25 minutes’ or half measurable target. That target was that by 2010 we an hour’s presentation. It is great to be here; it gives would be a top-20 region in the EU’s 77 regions— us an opportunity to explain to you—and to the there were 77 at that time. We started in the low 40s, much wider audience, obviously—what we do. have gone through the 30s and are now in the 20s, What I will do in that is focus on our role, because it and we continue to measure that target. We are now Processed: 23-07-2009 23:50:27 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 2 East Midlands Regional Committee: Evidence
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne in our third iteration of the RES—you have to do political parties found it an interesting way of these things every three or four years. It is called “A perhaps capturing prosperity and development. I Flourishing Region” and was published in 2006. We have talked about our regional role and the statutory will do our next one probably in 2009-10 or 2010-11, requirement, the RES, but what is the East Midlands depending on the progress of the sub-national economy like? We all live and work here, but quite review. That is why you have not seen a review since often we are not exactly sure in some corners of the 2006. We are proud of that iteration as well, because region what the East Midlands economy is actually no other RDA in the country went as far as we did like. Compared with other regions, it is not in terms of public consultation. We held more than dominated by one single conurbation; if you are in 100 events, with 1,400 direct participants. We also Advantage West Midlands across our western ran advertisements on buses and radio stations and border, Birmingham dominates that economy, just had a “Have Your Say” website. We got to the as Manchester probably constitutes about 70% of audience that people often cannot reach, and so we the gross domestic product in the North West. Lots think of it a bit like the Heineken ad—we got to of regions are dominated by one particular city, but those that you could not get to. Why is that we are not. Clearly, the focus of much of our important? It is important because you need to economic activity is in the three cities of Leicester, consult widely on these things anyway, but also Derby and Nottingham, but there are also hugely because it is the region’s strategy, not emda’s.We important urban centres, such as Northampton, repeat that wherever we go. The RES, “A which is growing very rapidly and might overtake Flourishing Region”, is a strategy for the region, and Derby within the next 10 to 15 years in population the fact that we consulted so widely was very widely terms. We also have Lincoln, Chesterfield, Mansfield praised by the National Audit OYce in its 2006-07 and many other important areas. It is quite performance assessment of us. What is the core aim striking—I am sure that many people will be of the RES? As you can see on the slide—I shall not interested in this today—that we are the third most repeat it—the core aim is to set a vision. What does rural region in the UK. Some 30% of our population it do? It eVectively galvanises the partners in the live in rural areas, which is 10% above the UK region. We are here today to account for our £178 average as a whole, so a key role is played by market 1 million or so budget, but the public sector in the towns. As an example of that, because I know that East Midlands is probably worth £25 billion to £26 your inquiry notes the test of rural, we actually get billion and our overall economy is worth about £75 3% of our cash from DEFRA, yet we deliver 38% of billion or £77 billion. It is the influence that the RDA our outputs to rural parts of the region. Until can bring on that £77 billion that is important, and recently, before 2008–09, we enjoyed relatively high that is why we try to galvanise partners. It is not just levels of economic growth; in 2007 we were one of about warm words and apple pie and motherhood the fastest growing regions in the UK, but we still though. One of the key underpinning documents— have major challenges economically. We have we could have buried you in evidence today—is the performed less well on productivity than some of our evidence base for the RES. It is the size of several competitor regions at about 92% of the UK average breeze blocks. It was produced by our own people, for gross value added. We have pockets of serious using industry-standard mechanisms with experts deprivation centred in our cities, but there is also a from outside—universities and academics. It is a huge amount of deprivation in the former coalfields, fundamental piece of work that really does help us and there are specific, small pockets of deprivation to decide our priorities for our own investment and in rural areas. Furthermore, the Lincolnshire coast is the rest of the public sector’s investment in the East not the gem that it once was and needs considerable Midlands, and it has driven up the quality of economic intervention. As a region, we have decision making on what priorities we adopt traditionally had high levels of employment, but that through our economic development. There is also a has generally tended to be in low-pay, low-skill jobs. uniqueness about the current RES, in addition to its We have also found from the start that the region has consultation. It contains a unique and traditionally had low ambition and aspiration. As a groundbreaking index called the index of sustainable Nottingham lad myself, Nottingham was only ever economic well-being—ISEW. As we have gone interested in whether it was beating Derby—I do not through iterations of the RES, we have worked out mean that in just a football sense—or whether it was quite clearly that it is no longer simply a matter of measuring GDP prosperity. If your GDP increases beating Leicester, when we should really be massively but everybody is in fear of crime and living concerned about the regions of Singapore, in a polluted atmosphere, your region is not actually Australasia and South East Asia, which are growing that much better oV. What ISEW seeks to do, as well and developing, so we have had to address that as measuring the capital benefits from investment, is concern. Things are starting to change. As members to take account of the costs of crime and pollution, of the Government party, you know that the and the benefits and advantages of volunteering, development of knowledge-based industries is labour, caring and those sorts of things. So this tries crucial. They are growing at a faster rate in the East to bring a more comprehensive index together. Lots Midlands than elsewhere and currently have a 14% of people are following that, and it is quite growth rate here compared to an average of 9% in interesting that, after we introduced it, one or two the UK. I have talked about the RES, which is designed to tackle the deep-seated challenges within 1 Correction by Witness: I meant to say £157 million not the economy,but I suspect that one of the things that £178 million. you are going to ask me today is how we are Processed: 23-07-2009 23:50:27 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 3
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne responding to the economic downturn. We believe team and the team in emda itself, and we stay very that our funding of around £100 million2 is close to both large and small businesses to suYciently flexible to respond to the current understand their needs. The down of the downturn downturn, and we are fairly fleet of foot in that happened to coincide with our period as chair of respect. Like all regions, ours is suVering from the chairs, which comes round every four years, and we downturn—output is falling, confidence is low and could not have had a more interesting time for it, unemployment is rising. The claimant count in could we? We were chair of the RDA family from 1 February rose at a higher rate than it has for two October to 31 March this year. We acted as a clearing years. Although, as we saw in the papers through the house and an ideas factory for Government on what late summer and early autumn, construction and could or could not work. Some quick snippets of property were hit first, all small businesses are things that we have done: we have massively beginning to struggle, as are some of our large simplified business support in the region as part of national and international ones. That is particularly national policy and gone from some 3,000 products true of the region’s manufacturing sector. I am often nationally to 30 and fewer; we took over the Business in Whitehall and confronted with comments about Link service two years ago, reducing five Business how manufacturing is desperately aVected in the Links to one, which has allowed us to increase the north of the country and financial services in the number of front-line advisers by 40% and reduce south, but a higher proportion of our workforce back oYce costs by over a third; and we have work in manufacturing compared to almost all other refocused our Business Link adviser service so that regions. 17% of the East Midlands population work it is giving direct advice on cash flow, credit in manufacturing compared with an average of 13%, management, downsizing, and bank and investment so when manufacturing catches a cold, the East dealing to companies. We were particularly pleased Midlands catches a cold as well. Perhaps one to launch what we called our “Survive and Thrive” interesting statistic that you will be really fascinated initiative in November and December of last year; I to find out is that in the Peak Park, the second most do not know whether any of you were able to attend. visited national park in the world, more people work Over 2,000 businesses attended. It was about how in manufacturing than in tourism—that is quite an the businesses in the East Midlands could manage astounding fact. There are serious threats that on a day-to-day basis. It is fascinating to hear businesses will cut investment in the long term. We “survive and thrive” used all over in Government have talked about challenges, innovation, enterprise and industry speeches. It has been a very positive and skills. The construction industry is really soundbite for us. We also deliver and commission struggling and there is no or very little private sector millions of pounds worth of general business cash for regeneration schemes, but, while we would support advice, which has continued to be delivered. not wish to talk about green shoots of recovery,there We could talk at length about the ability to raise is anecdotal evidence that we may have reached the finance. We have an escalator of finance products bottom. We will test that out as we carry through, and a strong tradition of leading the way. We were but we are beginning to get more anecdotal evidence the first RDA in the country to launch a regional from some companies that they feel that they have venture capital fund and we raise funds from all the stopped declining, but it is about how long they will local authority pension funds in the region, apart progress along the bottom. How is emda responding from Lincolnshire. That was quite an achievement. to the recession? We have an excellent track record Nottinghamshire County Council invest in it. There of responding swiftly and decisively to shocks. After is a range of loan and grant funds: perhaps the 9/11, Rolls Royce downsized quite significantly and newest and latest is the East Midlands transition we were instrumental in making sure that the loan fund. We have a £6 million fund that gives direct engineers who were losing their jobs were not lost to support for those businesses that cannot get money become sandwich makers or driving instructors. We from the banks or the Enterprise Finance Guarantee set up a programme—a dating agency—that Scheme and need that money to survive. Our married them to other engineering companies in the products are not just about funds; they are also East and West Midlands. We responded massively to about investment advice. Many businesses need the foot and mouth, particularly with some of those advice about how to be investment-ready and how to manufacturing businesses in the Peak that could not deal with their funds—that is what we do. Quickly get access to sell their services. We worked with road manufacturing businesses, for instance, to keep touching on key regeneration schemes, I talked them going. We also responded in the floods of 2007, about regeneration being flat on its back—it really is. when North Notts and North Derbyshire were We have done a lot with Derby, Leicester and particularly badly aVected, and we launched a Nottingham to bring forward some major schemes recovery programme on marketing issues within that will create and safeguard jobs: the cathedral days. One reason why we were able to do that is that quarter in Derby, the new business quarter in we stay very close to business and understand the Leicester and the regeneration of Nottingham needs of business. We have not talked about it much station and its new hub. Finally, we have launched so far, but our board is dominated by business “Career Chain”, which is a similar policy to the one representation—they make up the majority.We have I talked about in relation to Rolls Royce and 9/11, a lot of private sector expertise around the executive and that is matching those who are becoming unemployed in the construction industry with 2 Correction by Witness: I meant to say £157 million not opportunities elsewhere—on building skills for the £100 million. future, for instance. We still need to develop Processed: 23-07-2009 23:50:27 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 4 East Midlands Regional Committee: Evidence
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne innovative and knowledge-focused businesses to sector finance. Other examples include Nottingham compete with the regions of the world, and our Science Park, the green and yellow building that you evidence base has allowed us to identify those key see on the slide. The site had lain derelict in the sectors that work with large businesses and public sector’s hands for 18 years. Within 18 universities to build on them. Just one example is months, they have put the acquisitions together, Loughborough University, where we are developing dealt with the planning issues and delivered a zero a low carbon cluster. We are very pleased that the carbon, state-of-the-art building for the East Energy Technologies Institute was won by Midlands, alongside Castle College Nottingham Loughborough University with other partners in and Toyota Academy for the engineers of the future. competition against the rest of the country. A lot of In Peter’s constituency, or city, they are working on work is done by Rolls-Royce on fuel cells there, and a digital media centre in the centre of town near the that has levered in £1 billion-worth of work into Curve, and they have made some major changes, research for the new energies that we need in the 21st and are working through the recession as we speak century.We have lots of other investments there. The to bring about schemes that have dropped to the Systems Engineering Innovation Centre is a world floor with others. But clearly, our biggest leader, globally recognised, and is a partnership regeneration challenge is the coalfield. Not only is it between Loughborough and British Aerospace. our biggest challenge, we have more of it than Regarding the Sports Technology Institute, sports is anybody else: we have 27 sites with a total required a massive business in this region, equipping our investment of well over £300 million. Our USP is Olympians and other sports to succeed. It is hugely that we are involved through the life cycle of important, with major investments there. They are development, so we actually acquire, remediate, just some of the examples, including, in the ETI’s redevelop and then move on to the private sector. case, a manufacturing technology centre, which we The one that you see up there is the Avenue coking are bringing along with Rolls-Royce. We have works, which is the most polluted site in Western examples where we work across boundaries—RDAs Europe—possibly in Western and Eastern Europe. are often criticised for not working across When it was built, it was not a pit, it was a coking boundaries. Both the ETI and the MTC are in co- works, built in 1956. The gas journal at the time said operation with Advantage West Midlands, and we it was: “undoubtedly one of the finest in the have done lots of motor sport work with colleagues world”—it was at that time. Now it is one of the in the South East and elsewhere. You will all have finest in the world in terms of the remediation heard of this other example, particularly any of you technologies that we are applying there to clean the who read the Nottingham Evening Post. Every time I site up. So, we clean it up on site; we do not transport look at it, there is someone of significance standing lorry-loads of muck through the five villages nearby. in front of BioCity, claiming credit for it. It is a We have received lots of awards for that. One of the classic and world-beating example that success has particularly pleasing things is that, on a site of well many fathers. What we would say is that without our over 100 hectares, there is lots of rich biodiversity involvement, it just would not have happened. We and rare insects and animals. We have worked all the were responsible for acquiring it from BASF and for while with Derbyshire Wildlife Trust to create nature bringing the two universities round the table reserves there, to make sure that there is the least together, and we have put millions into refurbishing disruption possible to the wildlife. And we have it. What we would say is that that is industrial worked throughout with the local community. So activism in action. Some 57 knowledge-intensive Phil Reeve, and Mike Fenton after him, have businesses have been brought about out of there, knocked on every door every time we did something levering in £27 million-worth of investment. It also there to explain to residents what was happening. All has national and international recognition—as I the schools have taken part in competitions, to said, it is very successful. But the problem it has decide names for things and to help us, and we use created for us is that everybody wants one. They the community to monitor activity on the site, not in want one in Market Deeping, one in Glossop—they an aggressive, adversarial way, but in a joint, want them all over the region. Deciding whether we supportive way. Another example of partnership extend on that side, or whether we want somewhere work, and this is something that I would recommend else, is a key challenge. There is another thing that if the Committee want to see something on site at the we are particularly proud of—I know that you are moment, is at Steetley,which crosses the Derbyshire- getting a bit of an overload of achievements here, but Notts border—the Bassetlaw-Bolsover border. It is we will come on to some of the challenges in a really an interesting scheme in partnership. It was minute. Blueprint is the first of its kind in the UK: a struggling to come forward, we have put £5 million 50:50 public-private split. emda and English into it, it has levered in £57 million of private-sector Partnerships each own 25%, with 50% owned by development and it will eventually lead to 270 jobs. Igloo Regeneration, which has sustainable Laing O’Rourke, a major, multinational, world- development as its strategic key objective—it is not leading company, is going to use it as one of three a “build boxes and move on, cheaply make a profit” major hubs in the UK—one of its biggest organisation. That has kick-started a lot of construction hubs—and it is going to be developing development that would not have happened the construction techniques of the future. You otherwise, by levering in its private sector expertise manufacture oV site and then you can make a lot and our public sector expertise into areas of market quicker development. Perhaps last on the coalfield is failure. That has levered in £31 million in private Shirebrook—£23 million investment in the Processed: 23-07-2009 23:50:27 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 5
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne
Shirebrook site. This is one that is further on. We are given by the taxpayer. For every pound that emda delighted that we managed to get Sports World spent, it generated £9 to £15 worth of economic International there—Mr Ashley has had some benefit. That compares with the national average in diYcult times over the past year with his football the PWC report of £4.50. We have invested wisely in club, but his plant up at Shirebrook has been quite output and objectives, and it is all in the ECOTEC successful. It takes two thirds of the site and employs report. Even that is an under-representation of our well over 1,000 people—more and a more diverse added value. All the stuV about strategic added background than with the pit. It is an excellent value, leadership and research that I talked about example of development, inward investment, does not score—that is just from the projects that we marketing and skills development, so local people have delivered. Having a RES, developing motor can develop jobs. At the softer end, economic sport in the UK, Rolls-Royce on the development is also about skills and upskilling. environmentally friendly engine, and making sure There are others in the region that do lots of skills that our region benefits as much as possible from development—maybe one day the LSC will be here competing for and the delivery of 2012—none of to answer questions before the Committee—but we that counts in there. The report recognises that we use our marginal skills budgets to pilot ideas and to have a unique role in bringing together partners to test them in other areas. So, we do a lot on science, tackle economic, complex situations and it technology, engineering and maths—STEM. We confirmed what we had done. The National Audit have had a whole partnership with education and OYce reviewed our performance management in business—what skills are missing, what is the region 2006, and we scored 22 out of the 24 and were one of short of? As a result, we have invested £10 million the top performing RDAs in the country, which we over three years, which is bringing forward share with our colleagues in the North East. We are innovative, exciting projects to get kids engaged with not complacent. We need to do much more. We have science, technology, engineering and maths. An not made a big fuss about the £9 to £15 because if example of that is A Lab in a Lorry,which thousands you are unemployed at the moment or your business have benefited from. Bringing it towards a close now, is in diYculty, the fact that I say we are worth £9 to I would say all that, wouldn’t I? I am the Chief £15 for everything that we do does not cut that much Executive of the organisation that has done things. ice. We need to be constantly vigilant. The regional If I don’t claim praise and call those big economy is fairly resilient, but we need to continue achievements, no one will. What do they actually the long-term challenge of low skill, low pay, low amount to? What independent evidence do we have ambition and low aspiration. I believe that emda is for the statements that I have made? That, I am sure, best placed to deliver on that and that we can make is of great interest to the public here today and to the eVective responses to local and regional challenges. parliamentarians. We are committed to setting long-term, strategic What I have said is that our strength lies in taking priorities, but also to be flexible enough to respond evidence-based risk. That is what RDAs were to short-term diYculties. The Prime Minister and created to do. They were created to take those risky, Lord Mandelson launched “industrial activism” edge-of-action projects that others would not do. So, only a week or so ago in Loughborough and that is we do flagship, demonstrator and beacon projects, what we do all the time. A company that was as well as mainstream business support. That is a key developed out of the regional venture capital fund is knowledge point about RDAs: it is the risk-based now based at Nottingham Science Park. It has stuV that we do. We believe that then sets an example world-beating technology on cooling telephone to the rest of the region and those things are then exchanges and many other applications. It started in taken on by mainstream, public and private sector the region in the past few years. And it may now be partners. We have met every one of our targets each worth well over £100 million and will become year in the past 10 years and we have done that with massive. We do industrial activism. Our business one of the most cost-eVective staV bases, so we are leadership and insight is crucial. Our board and probably, in absolute terms, the lowest-cost—in leadership can make decisions that are not terms of salaries—RDA going. Most important, necessarily aVected by parochial issues and what has been our impact? In 2005, when I started sometimes the pressures of the political cycle. We can as Chief Executive, before anyone else did it—before take brave and tough decisions. BioCity was a tough BERR and PWC—emda commissioned ECOTEC decision. No one else wanted to take it. We took it, to undertake a full evaluation of everything that we and look at how successful it now is. We work over did between 1999 and 2007. It is regarded as the gold administrative boundaries, such as with Steetley, standard study for this kind of work. It looked at all Energy Technologies Institute and Making the our activity and found that we had a significant Connection. We undertake ground-breaking impact on the region. It was used as the fundamental activities and research that others do not. No one underpinning evidence for the national impact else has measured what impact congestion has on the evaluation framework that BERR did with PWC. East Midlands. We did. No one else had even dreamt We found our headline figure, which we published in of the ISEW when we did it. We have had £9 to £15 March. It was actually available in June last year, for every £1 that we have invested. but we were told not to publish it while the national In closing—it is exactly on the half hour that I was study was being completed by PWC. We have no given—I come now to the key point of my speech. I money of our own—it is the taxpayers’ money. The started work in the public sector way back in March Government have no money of their own—it is 1973, some 36 years ago. When I joined, everyone in Processed: 23-07-2009 23:50:27 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 6 East Midlands Regional Committee: Evidence
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne the public sector had an ethos of doing the best for is your document? Or how far is it a document that the public they served. I do not think that that has belongs to partners and stakeholders in the East necessarily changed much. People still have that Midlands? ethos. I get out of bed every day because I am JeV Moore: As I said in the presentation, it is the enthusiastic about what we can do for the people of region’s RES, not our RES, because of that degree the East Midlands. emda, through the sponsorship of consultation that we went into. The kid at the bus that it gets from the Government and the support stop is often quite a challenge to engage with the that it gets from the public and private sector region’s RES, but we attempted to do that. We went partners, makes a real diVerence to the lives of the beyond where everybody else went. We also had 4.3 million people who live in the region. I am about 190 partners3 sign up to the implementation extremely proud to be emda’s Chief Executive. We plan for the RES in 2006, and I think we have had a are all very passionate. I have a supportive network. great deal of support from our business, public- We make a diVerence to the lives of those in the East sector and third-sector partners. So I think it is the Midlands for the better and I want to continue to do region’s RES. I do not know if you want to add that as much as possible. I would now be delighted anything to that, Anthony. to answer any questions that you have. Anthony Payne: Undoubtedly, it is the region’s RES. We went out much more than any other RDA to Q1 Chairman: After that performance, I am not sure consult on the RES. We brought in more partners to whether there are any more questions to ask—it was the consultation on the development of the RES, V full on. JeV, I have come across this phrase, “survive and we took forward the development, as Je said, and thrive”, which is on a card that is issued to every of the implementation plan. We work day to day member of the Cabinet. You have told us a lot about with partners across the region to actually make that the successes, and at one point you mentioned happen. I do not think the RES would be challenges. Can you tell us about two or three big delivered—it certainly would not be delivered—if it challenges or problems that you are facing at the was just left to us as an organisation to deliver it. The moment? only way it can be delivered is in partnership with a JeV Moore: There are lots of challenges. Lots of range of organisations. In my current role, I am the small businesses are finding it diYcult to get orders, executive director for strategy. Previously I led on a so we see companies every day that are struggling lot of the development and regeneration work. A lot V with trade credit insurance. We also see those who of the examples that Je has given, like Steetley are having diYculties with access to finance. We see Colliery and so on, would not have happened unless good companies that are finding it diYcult to get we had brought partners to the table to make finance from their normal lenders or having projects become realities. Absolutely it is the region’s restrictions that could tip them over the edge. So RES. Without regional partners getting behind the V they are immediate business challenges. Also some wheel, as Je said in his presentation, we would not of our multinational, internationally renowned make the progress we are making. names need major support to continue to compete in this marketplace. One of our biggest employers is Q3 Chairman: So if I can just follow that through a Toyota in Derby. The automotive industry is down little bit, one of the partners, which JeV mentioned, on its knees, as we all know. Toyota is an excellent was the Learning and Skills Council—the LSC. One company. It has been able to deal with it better than of the issues for the East Midlands is that in many others, particularly some of those in the US, comparative terms we lag behind. I do not want to but it no doubt impacts on their ability, so that be critical of a body that is not here, but I will be. V a ects right across the piece. Everything is a They have made a bit of a mess of their capital Y challenge in these di cult times, but the other big programme. How far are you as a body able to challenge is there is no private sector cash out there influence organisations such as the LSC? for hugely, fundamentally needed regeneration JeV Moore: I will try to answer that one, Paddy, but schemes. You cannot find lenders to fund them. If then I will call Mike in to talk about how we bring you can find lenders to fund them, the limits are too some alignment of university funding behind the small. You cannot find lenders to finance the buying RES to show it is the region’s RES, because higher Y of them. Regeneration schemes are hugely di cult, education is also a very major contributor to the so work has stopped in town centres—the Westfield skills that are generated in the East Midlands. Our Broadmarsh centre has now gone into a cold corner eight or nine universities are very big businesses. The for two years or so, and there will be lots of others. LSC has a budget approaching £750 million, which In rural areas, people still want enterprise is almost five times the size of mine. But when it was development, so how do we give enterprise to rural created I think that it had a degree of commitment areas? We developed a whole set of centres and a degree of pipeline that it had to follow throughout Lincolnshire—Market Deeping, through. I think we have been able to influence them Holbeach, Lincoln and elsewhere. It is quite tough quite well—they are very receptive to our out there in all senses of the word. Access to finance conversation—but our influence in their marginal continues to be on our register every day. and discretionary spend is less than it otherwise might be. They have a whole series of programmes Q2 Chairman: You talked to us about the RES. that they need to continue to deliver and I think our Clearly, that is an important document, the way you consulted about it. How far do you feel that the RES 3 Correction by Witness: I mean to say 102 partners, not 190. Processed: 23-07-2009 23:50:27 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 7
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne degree of influence on that is less than on their and the regeneration of Derby. So, we have done discretionary spend. However, they are part of the that. I will just say that we have not got the funds to region’s Employment, Skills and Productivity bridge the gap that there currently is within the LSC Partnership, of which I am the chair. They attend capital programme, and even less so at the moment. that and try to flex their programmes as much as So I just wanted to mark that up. As I say, we are possible for us in that direction. I will now ask Mike, aligning funds where there are clear regeneration and then Diana, to comment on that. Mike will talk benefits, not in order to displace LSC skills funding. a bit about universities and Diana will talk a bit The other area that we have co-operated with the about the LSC and our work with them. It is LSC is through the Employment, Skills and probably best if I announce them like that each time, Productivity (ESP) partnership that JeV chairs. In because it forewarns them to tap the microphone on particular, I would like to give the example of the when I tap mine oV. work that we have been doing with Jobcentre Plus as Michael Carr: Thank you, JeV. Just to follow up on well as the LSC, who are also partners of the ESP, in the points around sectoral alignment, I think it is tackling worklessness. Collectively, what we agreed quite important to emphasise and use the was an approach to disbursement of European universities as an example. Giving sectoral priorities social funds that would particularly take some of the very clearly within the RES—sometimes a little bit good examples of tackling worklessness—for unpopularly, by choosing a very strict regime of just example, in the Shirebrook area in the coalfields— four priority sectors—has allowed people to get and apply that to a programme founded by the behind those sectors. What you will see with the European social fund across the whole of the East universities is that when they bid into the science and Midlands. That is another example of where we have research councils and when they bid into things like not got the funds ourselves but where we have HEFCE, they are able to actually focus around the worked together with partners to align funds and RES to back up their bids and therefore, by being make sure that we get the best possible impact out of able to focus on that, give successful bid documents public funds that we have collectively at our which in turn bring funding into the region. We then disposal. assemble that funding. So again, JeV talked about Chairman: I think Peter wants to pursue a point industrial activism. Well, if you look at BioCity, around this, and then we will turn to the budget, and BioCity is a really good example of industrial Bob and Judy will lead on that. activism, because what you have got is the regeneration agenda, the business support agenda, Q4 Sir Peter Soulsby: Thanks, Paddy. I want to the start-up agenda and you have got university follow that line of questioning about the LSC and to research and development money all coming in from take you to another key contributor to the well- external streams, coming together to make a really being of the regional economy—transport strong sectoral presence in that particular sector that infrastructure. I will perhaps ask about the single we have prioritised. Just a couple of words in terms integrated strategy a bit later. I want to ask about of skills on the business side and then I might hand your relationship now with the Department for over on the LSC capital programme. One area where Transport and the Highways Agency and the way in we have really worked closely with the LSC has been which you seek to align your priorities with theirs on their support to business. You will probably be and how much impact they can have on yours and aware that from April we have now got a joined-up, you on theirs. integrated service under the Business Link brand, Diana Gilhespy: Yes, shall I start and then Anthony, which brought the Train to Gain independent from his previous role, might like to chime in? This brokerage system and the Business Link morning I was at the opening of Corby railway independent brokerage together under one heading. station by the Secretary of State, with great support Two years ago we worked with the LSC in a far- from Phil Hope. That is a clear example of where we sighted way to predict that and we have had, for the have worked together with the railway interests— last two years, a very integrated service being run the operating company, Network Rail, the collectively by one broker. That is how we have been Department for Transport and our colleagues in able to influence their thinking to ensure that what was English Partnerships and now HCA, in business gets a very appropriate service that, order to deliver a mixed regeneration and transport actually, is not confusing to them. project. Corby, as you know, is in a growth area and Diana Gilhespy: Working with the LSC on the it is very important that in growing the number of capital programme, in the past what we have done is houses and jobs, we do not increase congestion on made sure that where we are putting our investment the roads. So it is really important that we have that in physical regeneration projects we are not crossing rail link. Similarly again, we are working on the over or undermining any work that the LSC are interchanges in Leicester, Derby and Nottingham in doing and, indeed, we have worked together to make order to ensure that we can have good regeneration sure that we can align our funding together so that benefits within those cities around the railway we can get a regeneration impact out of an stations as well as improve access by railway to our investment, alongside an investment that the LSC is city centres. Anthony, did you want to add anything making. One of the examples in Derby would be the to that? Roundhouse development, where a huge Anthony Payne: The first thing to say in relation to environmental and historical building has been the transport agenda is that we are there as an regenerated to the benefit of both skills development influencer as much as a doer. If you look at our Processed: 23-07-2009 23:50:27 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 8 East Midlands Regional Committee: Evidence
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne budgets and the budgets that relate to transport our priorities to them and also making sure that they infrastructure, our budgets are just a drop in the are consultees of the RES. We talked about it being ocean. In relative terms, what we can physically do the region’s RES; the whole ethos is to make sure for transport is limited. Our role is a strategic and that partners, such as the Highways Agency, are influencing one. One of the big pieces of work we engaged as well. Is there anything you want to add, undertook this year was to put together the regional Anthony, about that influencing? funding advice, working with the Government Anthony Payne: Going back to the connections to oYces and the regional assembly. That brought in Network Rail for a minute, in terms of influencing partners such as the Highways Agency to try to and deciding our priorities, our board agreed last identify the priority schemes for the region over the year that regeneration at major transport next 10 years and going forward. We have a really interchanges in the region was a priority for important role there as a strategic influencer and investment. We got that decision and agreement by trying to get partners round the table to identify the working through our board, but we made the key priorities. At the same time we have a role to decision in close co-operation, in the first instance, play in undertaking cutting-edge research. As JeV with Network Rail. We meet with Network Rail said in his presentation, we were the first and, as far strategic managers for the East Midlands on a six- as I am aware, still the only region outside London, monthly basis. We have regular contact meetings which has attempted to look at the economic with them, so that we can align our priorities impacts of congestion on the region and what it wherever possible. You are absolutely right, Peter, means to the regional economy. That work helps that our investment in Parkway was only £1 million inform some of the RFA submission and it will help of £25 million, but it made the quality of that oVer our future strategy work around evidence and so much better. The station there is of a higher quality; forth. That is one of the key roles we play from a we brought sustainable construction techniques into transport perspective. its design and have ended up with a much more JeV Moore: I would just add, regarding transport in sophisticated, much higher quality product. Once its widest possible sense, that, obviously, we work Parkway was in place, the other thing that we were very closely with the airport to try to mitigate the able to do, working with partners, was to ensure that impact of air transport but also to make sure that, a shuttle service was provided between Parkway with its specific characteristics as one of the UK’s station and the airport. That was something that all largest freight airports, taxation changes and partners felt was essential. We got commitment to Government policy are minimised in terms of the that from the majority of local authorities, and with employment opportunities there. a bit of funding from ourselves, we managed to make that happen as well. That was a spin-out from the Parkway investment. The other point to make on Q5 Sir Peter Soulsby: Thanks. I would like to take this is that, working with Network Rail, we have the example of the Parkway station. As I recall, emda identified the major priorities for regeneration at put £1 million into that, which is a small transport interchanges across the region. As Diana contribution towards the scheme. Clearly, that said, she was at the opening of Corby station this development is likely to have quite a significant morning. Corby was the largest town in Europe, as impact and is likely to bring a lot of positive benefits far as we know, not to have had a train station since to the region. I am trying to explore whether there 1966, so we think that Corby train station will be a are any mechanisms that enable you to influence the major boon to Corby and its growth aspirations. priorities that lead to such a development, because I Equally, we have now committed money to the would guess that your £1 million was not what Nottingham hub regeneration project and so has the actually brought it into being; it may have helped to city council. We are now working to make sure that give birth to it, but I do not think that it was part of Network Rail comes to the table with the £14 initiating it. Are there mechanisms to enable the million4 that it and DfT will bring to the party. As emda priorities to be reflected in those for the Peter well knows, we are working very closely with Department for Transport and its various agencies? Leicester. Peter chairs the station board at Leicester V Je Moore: Certainly, I will look to answer some of to try to make Leicester station development and the those detailed questions. You would be surprised associated development in the hub next to it come to how many people tell us that our £1 million would fruition. So we are working very closely with V be the di erence between something going ahead Network Rail in particular, and our board has and not going ahead. In fact, I would say that in signed up to the priorities that we put to it last year. probably 99% of our schemes the applicant says, Chairman: We pass the ball on to the budget. “And if I don’t get your money, it won’t go ahead.” That is something that we quite robustly test. An Q6 Mr Laxton: I will kick oV with a bit of a change. example of a transport scheme that would not have It is a very diverse region that we live in. What is your gone ahead without our funding is all the Skylink profile of spending of the budgets that you have? bus activity that we have undertaken with Derby, Your budgets are not huge, but are they geared to Nottingham and Leicester, in order to minimise the seasons of the year or the end of the year, or is it a bit impact of people travelling to the airport. The main of sort of play along and see how you go? Perhaps influencing mechanism would be our direct work you could give us a bit of a clue? with the Highways Agency. As a Chief Executive of a regional agency, I meet lots of other chief execs of 4 Correction by Witness: I meant to say £40 million and not regional agencies, and it will be about articulating £14 million. Processed: 23-07-2009 23:50:27 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 9
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne
Glenn Harris: I will answer that one. Basically, in smaller market towns or places such as my area, terms of expenditure, our funding comes in two which has a lot of manufacturing but on industrial categories—capital and revenue. The revenue estates. How do you ensure that money gets spent expenditure, generally speaking, at the start of any equally, or is that not your priority? How do you business plan year around April, is committed ensure that the money that goes via the sub-strategic almost fully for that year. That expenditure tends to partnerships is spent in a way that meets your overall be fairly even; almost on a month-by-month basis, priorities? you will see that expenditure go through. It is the Diana Gilhespy: There are several things there. It is capital expenditure, mainly on the large quite a large question, so I will look around the table regeneration schemes that we have been talking to see if I have missed out anything. We rely on the about, that tends to be more uneven. Although the sub-regional partnerships to know what is schemes themselves have been approved and important in their locality. As we have said, it is a contracted often many months and sometimes a year very diverse region. For example, at a regional level, previously, often the expenditure goes through in the we would not know whether a community facility in final quarter of the financial year. That is Somerlea Park or a skills centre in Alfreton is predominately because those schemes have many something that was a priority for the sub-region. We local authority partners that like to claim from us could not judge that at a regional level. Having said once a year and get all the figures and outputs sorted that, you are particularly talking about rural out, so a lot of that expenditure goes through in the projects and the rural side of things, we have a final three months of the year. diVerent mechanism for deciding priorities around rural expenditure. As you probably know, there is a Q7 Mr Laxton: Thanks for that. Last year, you had statutory requirement on RDAs to have regard for something like a £2 million undershoot towards the rural issues, and we take that very seriously. Within end of the year. What was the reason for that? I think the RES and through every single priority, there is a that it was the last financial year—2008. rural dimension. In other words, we have rurality Glenn Harris: I am not sure what that is, actually. written through our regional economic strategy. We Certainly, for the past five years, we have not had do not categorise rural as being a bit of spend over any underspend of our allocation. For example, we here; it is something that we take through the whole are just sorting out the final audited accounts for this of our RES. In practical terms, that means that we year, and we have spent within £110,000 of our rural-proof all our programmes, priorities and budget of £160 million. We have tended to use our policies, as well as every project. So every project allocation every year, so we have not had an that comes to us has to explain whether and how it underspend that I can recall. has taken into account the rural impacts of the JeV Moore: He said the last five years, because he has project. That is another way in which we ensure that been finance director for five years, and I was finance sub-regional funding—the one third of funding that director before him. Before, we would pretty much we give to sub-regional partnerships—deals with spend every year as well. A major diVerence that we rurality or the smaller projects. We try to do that have had over the past few years is that we used to across all our programmes. In addition, of course, be able to carry forward at the end of the year. You we have a particular fund from Europe—namely,the could perhaps be advocates for that in government. rural development programme for England. That is It makes a significant diVerence on the capital spend around £60 million over six years, which is about £10 side to organisations, and that end-year flexibility million a year, and is managed directly by us. Again, was taken away two years ago. If, out of the inquiry, that is another way in which we take into account we could get that end-year flexibility back, while we rural expenditure and needs. have not had the problems to which Bob is referring, JeV Moore: But as I said in my presentation, we are it would help us to not have them in the future. not about making sure that each of the 42 or 44 Mr Laxton: That is something that we could districts in the region gets one forty-second, as it perhaps, as you say, take away and talk to some were, of our total budget. Part of what we, our other people about. business board and the processes that we use are about is identifying the key strategic priorities that Q8 Judy Mallaber: If I can follow on from that, what will make a diVerence to the region. Inevitably, that proportion of your spend goes via the sub-strategic means that there will be peaks in some places and not partnerships? in others. But, as I hope my presentation conveyed, Diana Gilhespy: A third—approximately, £50 we are not dominated by one sort of urban million out of £150 million. conurbation; it does not all go into Nottingham, as it were. We have talked about the one third that goes Q9 Judy Mallaber: And is that your main to sub-regional partnerships, but in addition to that mechanism for making sure that money is we have perhaps £30 million of business support, £15 distributed reasonably fairly around the region, or, million of which is delivered through Business Link as your priority is economic development and and another £15 million of business support. That is regeneration, are you pushed towards big projects available throughout the region, so an SME in that might be city-based or a major project such as Mablethorpe, Heanor or Market Harborough will the one that you mentioned in the coalfields area? be able to tap into those services and benefit from How do you ensure that money also gets spent in them. Much of our stuV is available on demand in other areas? You mentioned rural areas, places with terms of business support on those programmes Processed: 23-07-2009 23:50:27 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 10 East Midlands Regional Committee: Evidence
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne throughout the region, but we also put a lot into are going to have an underspend. What do we do? innovation with universities, which are in specific Let’s just spend it on something to make sure that we localities. It is not about an even spread of spend, but don’t end up underspending, with that money in about ensuring that we have the right priorities to do eVect going back to the Treasury”? those beacon and flagship projects that I have JeV Moore: We do not get ourselves in that position, talked about. because of the direct monitoring I am talking about. I suspect what you are alluding to was when we took Q10 Judy Mallaber: How do you ensure that there is it back from a sub-regional partner that was not eVective budgetary control of spending in relation to going to spend it. We take, in their eyes, fairly the big projects that you decide upon regionally and draconian action, but rather than lose it to the region the projects that are devolved through the sub- we avoid that happening. It is true to say that we regional partnerships? What are the mechanisms for have never lost a pound to the region, going to the ensuring tight control, and what happens when the centre, in our 10 years. That is not easy, because if spending is either too high or too low as you get to you cannot carry forward and you cannot have year end? How do you cope with that? opening and closing balances, it is quite a piece of Glenn Harris: Every single project that we fund, fine-tuned choreography to do that. But we have not whether directly from the region or through one of lost any. What we do, though, is to have almost a the sub-regional partnerships, we independently bank of land acquisition projects that are required to monitor. We have a team that monitors every single take the region forward. There are always more of project independently of the project manager or those land acquisition projects than we can fund. If host. We have a risk-based system, so we do much we were faced with that situation at the last minute, more intensive monitoring visits and checks of the we may do a land acquisition, but what we also do, larger projects, which tend to be inherently more and we were instrumental in doing in my time as risky, with more money at stake, while the process is finance director, is create an internal market with the slightly less intensive for the smaller projects. That is other RDAs. So, if we are going to underspend— done independently of the applicant and the team and we have not, but let us use your example—by £2 that processes the appraisal. At the front end, every million and let us say, for the protection of the time a project comes forward, we look at it in innocent, the LDA is struggling because it needs relation to the Treasury’s Green Book appraisal another £2 million for the Olympic Park, we could process, and if we think it is then okay for us to fund lend them that on 31 March and get that back at 8 the project, we have a fairly intensive monitoring o’clock on 1 April the next day. So there is a arrangement once the project has been contracted mechanism in which we would have an internal and approved. At the back of that, we also reinforce funding market around that. But that is as the last the process with internal audits; our internal audit resort. We monitor our spend, we monitor the profile team, which we contract out to KPMG, also does of what we do and we have a reserve set of projects selected monitoring visits to some of the key, high- to ensure that we do not get into the position to risk projects that we think need closer attention. which you are referring. But it is tough. It is easy V Je Moore: If I can add to that—this is very words, but it is quite a tough job. operational and maybe a bit boring, but each week, as an executive team, we look at the key performance indicators for the region. They range across the key Q12 Judy Mallaber: This microphone situation is things that matter, such as the spend of sub-regional very frustrating. It does not make for an easy kind of partners and of our own projects, the delivery of our interchange of communications, does it? You outputs and outcomes, as well as what is in the mentioned one of the projects in my area, which was pipeline. Those things are in front of our executive put forward via the sub-strategic partnership. It was team every Tuesday morning, so that is what we look unbelievably frustrating and diYcult to get that oV at for the first 15 to 20 minutes. We will be going the ground, because it was getting funding between through them again tomorrow in relation to what we Coalfields Regeneration, yourselves and—what was have spent and done in the first few weeks of April. the third one? I cannot remember now. Each of the We do that each and every week, because we see it as three organisations would not move until that one hugely important. It protects the taxpayer’s money, had moved, and they would not move until you got but there is never enough money to do everything that lease signed, but you could not get that lease and so you need to make sure that, where you are signed until you got agreement for the funding there. getting underspends, you are addressing them and It can be unbelievably diYcult to get very, very good diverting the money to projects that will spend and projects oV the ground. What can you do, or are you will make a diVerence. doing, to enable that to become easier, particularly with projects where maybe you have not necessarily Q11 Mr Laxton: I made reference to the 2008 budget got the full resources of the county council behind and a £2 million underspend. Now that may very you putting the eVort into putting it forward, but well have been money coming back from one of your where it may be a good project which a local sub-strategic partnerships as an underspend. community group is behind and which has perfectly Bearing in mind, JeV, that you cannot carry that good methods of taking that forward, but where it is over, and you have made a clear point of that in the very diYcult to sort out the diVerent funding streams last couple of years, are you one of those when you have got to get match funding between organisations that ends up saying, “Oh my God, we diVerent areas? Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 11
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne
Diana Gilhespy: I think any regeneration project is live in the age of austerity and you will need to very diYcult, I will say that up front. I think that demonstrate that you are driving down your very often people underestimate how long administrative costs? Can you give us some regeneration projects take to bring together. I will examples of what you have been doing so far and just say that up front because in my experience what you intend to do in the future? people have a lot of really good ideas, really clear JeV Moore: Glenn can give you some of the detail we visions, but actually pulling together all the bits, have gone through, but I would say several things in particularly if you have got land and development terms of driving down our administrative costs. and premises involved in that, always takes a little When we took over Business Link there was a huge bit longer. However, I do think that we can always administrative cost and there were a certain number improve on that. One of the ways in which we can of front-line advisers. By turning five into one improve on that and which we are endeavouring to regionally managed Business Link service, we were do, with our sub-regional partnership partners, is to able to reduce the back-oYce costs from 30% to 23%, have clarity about a programme and the priorities of and still going south, and we were able to put 40% the projects that are coming forward for funding. In more advisers out there on the street, as it were. As other words, we do not get to the funding year before we have said in answer to other questions, they are we start discussing what the project is. Local out there in every part of the region. They are not out authorities are being given the responsibility for there in the City of Nottingham, the City of Leicester local area assessments in the current Bill that is going and the City of Derby exclusively, so that is one through at the moment. We are working with local example. Each year for probably the past five or six authorities to decide what the priorities are within years we have been required to come up with a those local area assessments. The next stage of that minimum 2.5% eYciency saving. Well, that is is to work with them and local communities on what something that we do. We have achieved our projects need to come forward in order to deliver on eYciency plan each and every year, but I can tell you those assessments. So the whole time I think it is that working for a chairman who used to be the about working with partners well ahead of the managing director of Toyota UK is quite a Y delivery of the project. But, as I say, it is di cult and challenging task. Toyota is one of the most, if not the there are no easy answers to making it easier. most, eYcient companies in the world, so when Glenn Harris: Just to add to that, three years ago we Governments set us £2.5 million, my Chairman says, centralised the way that we do all the appraisals. “What are you going to do to double that, JeV?” And Often a lot of time can get taken up in terms of we have hit his targets as well. So we drive out waste getting the idea that people have into something you all the time. We have done that through drastically can actually contract. We have a small team that reducing the use of consultants, through how we does that to a really high standard. The average we competitively tender for the services that are have taken to turn an appraisal round is 15 days. We provided to us, how we manage our asset base, and aim to try and improve that process and spend less the land that we have got. We have driven quite time so that we can get a real quality project and get significant costs out of that. To be quite frank, in the back to people quickly if there are problems with it. current scenario, given some of its political turmoil and the state of the public finances, we consider as Q13 Judy Mallaber: My question was not really an executive team what a 10%, 15%, 20%, 30% or about your own internal processes but the diYculty 50% cut would look like to the East Midlands of liaising with, in this case, the Lottery and Development Agency, obviously in terms of the Coalfields Regeneration Trust, when none of you Government’s overall finances and the need to will move until the others do, and half the time you support parts of the Government. In the autumn of do not seem to talk to each other to try to ease the last year, the RDAs gave up £300 million to help path, or if you do, it is not always transparent to fund the new housing initiatives such as HomeBuy people at a local level. It is a cause of considerable Direct, and the fact that we are losing about £25 frustration. million over three years drives us to perform some JeV Moore: We certainly talk to each other, but I significant eYciency savings. Do you want to add suspect one of the problems is that we all have a any more detail, Glenn? diVerent set of rules that eVectively says we are the Glenn Harris: I was going to confirm that our funder of last resort. If each body is the funder of last administration costs were just under 7%, which is the resort out of five partners, it needs someone to come lowest of any RDA in absolute terms. Three RDAs to the party first. That is often one of the diYculties. are smaller than us in terms of overall budgets, but If each one sees its funding as being the only final gap we have the lowest cost. As JeV said, our Chairman funding, that is where the problem comes, Judy. So is a big fan of the lean system so we have been we recognise the problem that you talk about. It is subjected to it regularly. Two examples of when we an issue. Everybody needs to get together to try to managed to squeeze out additional sums was when eradicate that as much as possible, which we try to JeV transferred our investment assets to Blueprint, do. the public-private property vehicle, to manage. It can manage them better than we can, given its Q14 Chairman: I think that we need to move on. expertise at a lower cost. We shifted that over. We Before we turn to John, we will talk about the talked earlier about the appraisal process. About Budget and the current climate. Can I just ask you two and a half to three years ago, the appraisals were about your administrative costs, because we now done in a sub-regional partnership. Some of them Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 12 East Midlands Regional Committee: Evidence
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne were done by us. We centralised that, which saved invitation to apply for grant funding, whereby we about £300,000. We spend about £500,000 less on commissioned work on waterways for instance. We consultants that we did four years ago. We go also saw the need to get more and better employment through all the headings and each time we re- floor space throughout the region, so we did an contract, we squeeze out as much as we can. invitation and commissioning exercise for employment floor space. That is doing a lot, particularly in the cathedral quarter in Derby. Two Q15 Mr Heppell: I notice that you moved £1.04 applicants have come through there to get funding, million of your admin budget into the programme, as it were. BioCity will have applied for extra so when I saw a £1.2 million reduction in admin over funding in that sense. So we have changed to three years, it seems not to have been that commission fewer, larger projects. I will look to challenging. A 50% figure might be a bit drastic. A Mike to give details on some of the things that we few people here might be looking for jobs, if that was have done on his side. I do not want Mike to think the case. Things were really getting tighter for you that, given that he has not had to answer too many well before the credit crunch. Let us be right about questions, he is one of our 50% planning scenario matters: you talked about a £20 million cut in the evictions. comprehensive spending review and RDA budget Michael Carr: Thank you for that, JeV. It is fair to overall. The Department for Environment, Food V say that in the four years I have been involved with and Rural A airs has withdrawn money to balance emda we have focused strongly on the support we its books and the Department for Communities and have been oVering for business. One thing I would Local Government has withdrawn a bit of money, so say, ahead of the economic change that took place in you have a tighter budget but an even greater the middle of last year, is that we have been working demand as a result of the credit crunch. emda and the extremely hard to become more eYcient in the way Government put together the report “The East we deliver. JeV mentioned some examples earlier in Midlands economy—A joint response to changing terms of business support. We are clearly supporting economic circumstances” in August 2008, significantly more businesses. Just to give you a feel, concerning when you changed some of your Business Link supported 82,000 businesses or people priorities and what you need to do. The Local wanting to start a business last year, compared to Government Association then published the report 67,000 the previous year, with the same resourcing. “From Recession to recovery: the local dimension”. How are we doing it? We are driving more and more It projected how things would happen diVerently in V support through online channels, telephone di erent regions, so that needed to be taken into channels and getting more front-line advisers into consideration. In April 2009, the Government play to help people in an intensive and assisted published the paper “Building Britain’s Future— manner. We have also been directing more money New Industry, New Jobs”. That set out how the V directly into businesses in the form of grant aid and country in di erent areas can beat the recession and grant support and that is one of the benefits of secure its economic future. All of those publications becoming more eYcient as well. Overall we have suggest to me that you must be having to re-think been focusing our attention on support. We clearly your priorities all the time in respect of what you have had to re-focus in the current climate, to answer need to be doing. What has been changed in your your question. For instance, the banks stopped budget that reflects the new economic lending around Christmas time and we recognised circumstances? V there was a need to react quickly, taking advantage Je Moore: Times are getting tight. What the Lord of working with our colleagues in the West Midlands giveth with one hand, the Lord taketh away with the to pick up a scheme they already had running. other. As for your bit, John, about the transfer to Utilising that, as it had FSA approval, we were able programme, in the early days when we made Y to put in place within a couple of months a £6 million e ciency savings, we could divert a certain transition loan fund which has started to make loans proportion of them to more activities and more available to businesses to support them through this programmes as opposed to just handing back cash to diYcult time. We expect £3 million to £4 million of the centre. That has changed drastically. As I have that to be pledged in the next four to five weeks. We said, we gave up the £20-odd million in August. have moved very quickly into redirecting money Things constantly get tighter. We monitor our where we can into direct support to businesses. That business on a close basis. We have looked at a whole V is just a flavour. There are many more examples I host of di erent scenarios as we move through each could give you. week, but what we have principally changed and what we anticipate changing more is one of the three main regeneration initiatives that we shall prioritise. Q16 Mr Heppell: That tells us some of it. My We have talked about those three and what they are understanding is that the transition loan fund was doing and how they are creating and safeguarding something you did after the August report. I was jobs. We have also changed over recent years. We trying to see if anything else came as a result of these used to take projects that came through the door. I other reports. For instance, could I look at a do not want that to sound as casual as it is but we budget—that is what I am thinking about—and see have been open to projects all through our 10 years. the actual changes on a budget sheet where money What we have done far more in the last two years, as has been shifted from one area to another as a result we have seen the declining funding scenario, is what of the changing circumstances? You can say business we call—are we not in love with acronyms?—the support and grant aid but that does not show me Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 13
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne anything in terms of what has really happened with JeV Moore: We are finding it more diYcult to the money. Would I be able to see those? Let me give prioritise, and we have to reject more schemes than an example. Initially you earmarked £4 million for we previously would have done. There is less money employment, learning and skills in 2009-10. Has that available. We still get good projects, but we are been changed? Is it still £4 million? Is it £6 million? finding ourselves having to reject some schemes for And what went down to balance the books? a variety of reasons, one of which is that we do not Glenn Harris: There is a change to the budgets that think that there is suYcient funding coming forward. you just talked about. The example of employment, There is a scheme in the National Forest that is being learning and skills indicated funding allocation for delayed. What very often happens is that people do 2009-10 was £4 million. It is now £3.7 million. So not say that it will no longer take place: it gets there has been a change. We put our funding against delayed. So there is a scheme in the National Forest the strategic priorities of the RES in some way,shape in terms of increasing and improving the tourist or form. Most of those have had changes from our attraction there, which has had to go by the bye original corporate plan which set out the three-year because certain funding partners have postponed the funding position. You will see that the areas that date when that funding may come. That is have been boosted, eVectively, are business support commercially confidential to the particular private and enterprise because that is where the main sector funder—and in one case, an individual emphasis is since last summer. funder—but that is being delayed because of that. JeV Moore: We will provide you with a detailed There will be other examples. Where I think we are written analysis of that as well, John, so that you can seeing most change is probably an actual lack of new see the changes that we have made. Another example projects coming forward with partner funding, so is that we had general sector support starting in the pipeline slows down, rather than those that come 1999. Since 2006-07, we have developed what to us. If you imagine that we are the funder of last we called iNets—innovation networks—which resort, notwithstanding Judy’s and my concern are designed to deliver into our four key about who is not the funder of last resort, most of sectors. There is one each for bio-Pharma and those that are already into us are ones where it was transport technologies—which is about things our diVerence that was going to make the margin. such as aerospace and automotive—sustainable But, certainly, in terms of schemes going forward, development and food and drink. Those four are the private sector element is proving to be quite getting the key investments that we are making. So diYcult. I am the chairman of Blueprint it is about doing fewer, bigger projects against those Partnership, and we have had to delay a significant sectors that we have. In terms of being able to give number of the schemes because the alternative you the budget papers, we will give the Committee, funding is not there. They run into probably six, through the Clerk, an analysis of the major changes seven, eight, nine or 10 schemes. We have made that we have made.5 I am not sure when your significant changes, and as chairmen of that board, evidence-taking period ends, but we are required by we have had to stop schemes. So we are doing the BERR to revise our whole corporate plan, in the digital media centre at the moment. We are not light of the last six months, by 31 May. So we will building out of the ground with any other scheme, so supply BERR with a new plan, and I think that fits we are not building Princes supermarket at the your time scale, Paddy, so we can give you that, moment. We are not building Green Street in the which will show you changes. We will give you some Meadows, which is a scheme that Blueprint has. We historical changes that we have made, but we will are not building another one, which is in your then give you that, which shows how we are reacting constituency, John—Albany Works, on Carlton to the changes that we have had. Hill, near the Co-op there. And with the digital media centre, how many phases can we get going? In terms of those development and regeneration Q17 Mr Heppell: One of the other things I think I Y schemes, they are definitely stopping. Blueprint must recognise is that it must be much more di cult delivers a lot of our direct regeneration schemes. A for you to appraise schemes now, because there is Y similar one, obviously, for which the funding is di culty with getting the funds in, so some that you hugely diYcult is Gedling Pit—we have got to build might have thought were quite viable a year or so a £35 million road; we have got to provide a country ago may not seem quite so viable now. Are there any park, a waste station and no end of other public existing schemes for which you already have a nod, facilities out of the supposed profit, but there is no if not full approval, that you think will not happen profit now, so we have to scale back. You spend a lot now as a result of the changes that you make? of the way finding your way around, so a lot of V Je Moore: What we want to test out there is schemes are delayed rather than cancelled. partners who say that they can still fill the gaps. There are inevitably some regeneration schemes that cannot raise the level of private sector funding that Q18 Mr Heppell: One final quick question—I have they previously said that they would. Do you have been noticing that the two Departments seem to any specific examples that you want to give, Diana? withdraw money from you. Nowadays, we always Diana Gilhespy: Sorry, I am just having the other ear talk about three-year budgets and so on, and it seems being whispered in, so I missed that. strange that Departments are allowed to do that— suddenly to realise that they are a bit tight on their 5 Ev 153 budgets, so emda has to carry the can. What are your Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 14 East Midlands Regional Committee: Evidence
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne thoughts? Should your budget be set in the same way problems that businesses are having, even if they are as those of Departments? You should not get trading perfectly well, because bank finance has changes if things go wrong with their budgets. frozen and because of the problems with credit JeV Moore: These are not my microphones, these are insurance. The business support oYcer in my local Hansard’s microphones, and I think therefore that I sub-strategic partnership has been going around would limit my comment to, “We find it frustrating.” some companies there that have such problems, and others in Derby. Do you have the powers that you Q19 Chairman: We shall turn to Judy and Bob in a need? How easy is it for you to talk to the banks and minute, but pursuing that—you ought to be in the try to give them a kick up the backside to do diplomatic service, JeV—suppose the Government something? Are you using your transition loan fund, came along and said, “The car industry is in a real and what happens when it dries up? Do companies mess. Toyota is in your area. We want you to put x and banks realise that there are Government amount of money into it.” It is not in your business programmes, and is it possible to tap into that? How plan at the moment, but you would have to do it, are you linking to Government Departments in wouldn’t you? doing that? Perhaps you could expand on some of JeV Moore: We would, and we would have to find a those matters, because we will all have businesses in way in which we would do it. That would inevitably our areas that desperately need that help and yet entail making diYcult choices and disappointing should be able to carry on trading perfectly people. That can lead to a lot of press and media bad satisfactorily. publicity. We are used to that and have had some of Michael Carr: Judy,I will lead on that, if that is okay. that in the not-too-distant past. It is inevitably There are lots of questions inherent in that. Can I frustrating for us that we find large sums of money start with the way that we have been trying to removed from our budget overnight. However, we organise the business support services to respond to acknowledge and identify that we are part of the business needs? I will then move on to the way we are taxpayer-funded businesses, and we have to bear our working with banks a little bit, as part of that. First share of supporting the new priorities that the and foremost, we felt that it was important that we Government have. I think we have been pretty engage fully with businesses on the challenges that robust about that at all times. The bigger the cut, the they had. The main vehicles we used to do that were shorter the notice, the harder it is to cope—as you things like the “survive and thrive” events that JeV say, it is not just cuts but new demands. New talked about, through which we opened a door to demands are being placed on us, particularly from businesses and gave them some very practical advice large-scale businesses, all the time and we shall have and guidance. We also then supported them fully to cope. Inevitably, that will mean prioritisation and through the Business Link service, and in doing so diYcult decisions being made. What we would say is we have refocused the work of the Business Link that we believe that we have the mechanisms that can adviser teams to predominantly look, when they go make those diYcult decisions—some of those that I in, at the financial health of businesses. Since we set talked about in the presentation were diYcult up alongside the Government under their “real help choices at the time. All we would ask is that we get for business” campaign, we have carried out more support from others in understanding why we have than 5,500 free health checks on businesses in the made those decisions. We are absolutely delighted to East Midlands over a three-month period. So we be here today—I cannot stress that enough—and to have been working extremely closely with be accountable. We recognise that we must be businesses, making them aware that the support is accountable for the use of public money. I there, and we have seen a significant inflow of personally, having worked in the public sector for 36 established businesses coming to talk to us. In many years now, have never worked for a more ways, this recession has brought Business Link to the accountable organisation. I know that there is a fore, and it has been seen to respond very strongly in political dynamic to the accountability of RDAs, the eyes of businesses, given the numbers that are but we are happy to be accountable, although we contacting it and the constant positive response that shall inevitably have to make tougher decisions, as we get from our independent surveys of the work the economic climate surrounding our own that it is doing. In terms of direct support, we have resources, and the increasing demands put on to us, moved forward. For those businesses that have gets colder. We then just seek support from those really been struggling with regard to their own who we explain the decisions to about the basis of financial position, we changed the way that we those decisions. We are open in that way. Yes, we oVered our business transformation grant. That would have to do it and it would mean cutting grant was made available to bring expertise through certain things. We are in a similar situation to Her the Business Link network into a business, paid for Majesty’s Government, in eVect. Do you salami- on a 50:50 basis. We felt that for businesses that were slice everything that you do, or do you stop whole struggling and wanted some form of accounting or programmes? That is a choice upon which there are recovery expert to come in, we could oVer the first a whole host of perspectives. three days of that support free of charge. More than 65 businesses have already taken advantage of that. Q20 Judy Mallaber: Can I ask you to expand a bit We have also tweaked our capital support grants to more on the support and help that you are giving to help businesses, particularly those that were being individual businesses aVected by the credit crunch? challenged in the third quarter of this year with JeV and Mike, you have both talked about the regards to resource eYciency and the cost of energy, Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 15
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne etc., by giving specific help to get them to invest in favourable trading position that has come from capital schemes that were better and more cost- having a slightly weaker pound at present, because eVective for them. We have moved quite a lot of the they cannot raise the finance or get the guarantees focus of our work to directly supporting businesses from their partner bank in European or Far East in that sense. Working with the banks, and the long- countries, or get support from their own bank. We term future development of that, has been very much have raised that with BERR, so it knows that it is an at the forefront of our work. We have developed on issue, but it would be good if we could further the ground some pretty good relationships with the endorse the fact that we need to get some export banks over the past three to four months, and that finance. has been based on two things. First, there is the work JeV Moore: We have seen a much more receptive that we have been doing through the regional climate from the banks since Christmas. I think, economic cabinet and Phil Hope’s work, in certainly in terms of ourselves as a regional agency, particular driving the banks at regional director level that the banks are very willing to co-operate with to come together and recognise some of the what we do and with what we want them to do. challenges. Secondly, we have been using our risk There will be a number of answers to the question of finance forum and have invited more of the regional whether that then translates into individual directors of those banks to come in to that, so that investment decisions in individual banks, but I do we can debate and discuss the issues. What is coming not think that any more can be done with the banks out of that is a clarification to the relationship for the time being. We think that we have done managers of banks as to exactly what support is enough schemes, and that they now need to be well- available, so that they are clearer about being able to publicised, operated and the banks need to continue direct their clients to business support. Similarly, the to drive them right throughout the banking sector. adviser teams are becoming much more aware of the Something like 26 lenders have signed up to the requirements of banks. They can help prepare the enterprise finance guarantee scheme. It is not about client for help from their bank by having them go in signing up more lenders, but about driving that with the right information. Over the past three scheme through and getting people to access it. The months, we have seen much closer working with the more we can do to market the services of Business banks, and pleasingly, the banks are now starting to Link in that respect, the better. oVer more money as loans. You will remember that, Michael Carr: I have just one thing to add, which is around Christmas time, it was very diYcult, and you that the banks are now saying that there is not will also remember in particular the Denby issue that suYcient traYc for them to be able to hit the targets we worked on closely together, which was a typical that they have agreed with the Government, so one situation of the banks freezing. I am pleased to say of our challenges is how we now drive that up. I that the banks are now starting to unlock a little bit; think that that is partly because businesses do not I am not saying that things are easy, but at least the believe that the banks are going to be able to support communication and support are there for us to them. Things are changing and we have to get actually help clients find bank lending if it is confidence back into our businesses, so that they can appropriate for them. approach the bank and will probably get a slightly more favourable response than they might have had three or four months ago, which was such a Q21 Judy Mallaber: That is very helpful. Is there damaging period when, in eVect, the banking anything else that would be of assistance to you in system froze. that work? You have already made one request for us to put something forward to the Government about your end-year funding. Is there anything where Q22 Mr Laxton: That is interesting, Mike, and is not those programmes could work better and where something that I had picked up—you learn there could be extra help? something new every day. JeV, you said in your JeV Moore: Mike will give some more detail, but I presentation that your Board—I will not use the think the more we can market Business Link at a word “dominated”—has a higher proportion of national level, the better. Business Link has had a people with business expertise than from other areas. very successful reception during the recession and Pretty much every year, or as every year has gone by, the downturn, and the experiences of the vast added responsibilities have been given to RDAs, majority of businesses that go there have been such as research development grants in 2005, positive. But I am surprised at how much we need to economic and social funding and rural development keep taking out the message, “Use Business Link as programmes in 2006, regional development funds your source of access and advice.” I do not know from the European Development Fund in 2007, whether Mike has anything specific to say. manufacturing advisory service and so on. The Michael Carr: First and foremost, we work very Business and Enterprise Select Committee closely with the team at BERR on those areas. We undertook an inquiry a short while ago. What is work with them on our own budget submission, and your response to the position that they took? I think JeV alluded to the fact that credit insurance is a big they said that if additional responsibilities, part of that, and you will have seen, through the particularly in the areas of planning and so on, were budget, that credit insurance changes. In terms of a handed over to RDAs then in eVect this could have wish list, export support, particularly around credit, the tendency to switch oV business people from is still lacking, which is preventing some of our engaging, or continuing to engage, in the way that businesses in the region from exploiting the they have in the past with RDAs. Do you think that Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 16 East Midlands Regional Committee: Evidence
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne that was a valid comment made by the Select years was that we delivered the strategic regional Committee? Do you see signs of that? Have you got economic strategy, yet the spatial strategy was concerns about additional responsibilities being delivered by another organisation at a diVerent time handed over to your organisation? scale to a diVerent evidence base. There is no JeV Moore: I remember that very well because I gave criticism of the assembly in that, but they did the evidence in chief to that particular question. They spatial strategy and we did the economic. One of the asked, what do you think one of your major key problems there was that we could have an weaknesses is? How I actually responded was that I economic strategy that says, let us say, ABC district said, in the eyes of business—and I mean business needs a factory or three factories. Yet the spatial out there generally and particularly the sort of strategy could say, well, in ABC district it will stay business representative organisations such as the for ever brownfield, or greenfield, or whatever and CBI, the EEF and the IOD—in their responses to the the two did not marry up. Part of the whole thrust Select Committee on Business and Enterprise they behind the sub-national review is to overcome that pointed out that we had too broad a remit. That is problem so that they are done at the same time, to the view of a number of business representative the same evidence base, by the same combined group organisations. So, in answer to that question, I said of people. That should overcome some of the fetters that that was seen as a weakness by some businesses. we have had to activity, particularly in Lincolnshire I felt that that was, in a way, a strength. The reason in our first 10 years. it was a strength was because we had been seen as Chairman: I think we must be telepathic, because successful deliverers from 1999 onwards. When the Peter Soulsby is going to pursue the issue of the sub- Government had a problem in this sort of economic national review. development sphere, they said who can we give it to? They gave it to the RDAs. It was in recognition of Q23 Sir Peter Soulsby: Thanks, Paddy. I mentioned our delivery strength that we ended up with such a this earlier on. Clearly, there has been a lot of broad remit of responsibilities. So like all good criticism about the fact that the spatial strategy and interview candidates I turned my weakness— the economic strategy have been separated. As you hopefully—into a strength, which is what I also put have said, JeV, the proposals are somewhat modified on the public record at that time. I think business is now. Is there not, even with the revised proposals, concerned about the breadth of our responsibilities. still a danger that the RDA will be deflected from its It has made the comment that it feels our remit has core task of delivering a regional strategy? Is there potentially been diluted. It is concerned that, if we not also a danger with the proposals that are now take on the full range of planning powers that was at emerging that we might actually have something one time envisaged under the sub-national review, or that is less transparent and less accountable than the now the Local Democracy, Economic Development division of responsibilities we have had until now? and Construction Bill going through, that we would JeV Moore: I look to colleagues if they want to be weakened even further. Clearly, the debate in contribute as well. I do not know if you want to Parliament has moved on. There are now diVerent contribute to this one, Anthony. There is a danger in proposals in terms of planning responsibilities where any change, Peter. People are concerned about they will be discharged jointly by the leaders board change and concerned about uncertainty. After a and ourselves. I think it is something that we need to fairly slow start we are working very well, we think, watch for. I still see us getting quality applicants to with the assembly to develop the proposals going be on our board, so I do not see any diminution in forward from April 2010. They are obviously, the enthusiasm of business representatives to give up inevitably, somewhat grey because the Act has still their valuable time to serve on our board because got to be passed, the Bill is going through Parliament they feel they are going to be hammered about and it has not even been through the Commons. In deciding on planning applications, or not doing fact, I think it gets its Third Reading in the Lords what they should want to be on. It is a concern that today and goes through to the Commons later on in we need to watch for. Certainly business the week and going forward. So there is always a representation, representative organisations, have danger in change. I think that we are aware of that raised it as a concern. We just need to make sure we danger. What we need to do is make sure we have deal with that task as the world changes, as the Bill geared up properly. Anthony works with the goes through and becomes an Act. We need to make assembly and he works with the Government oYce sure we are not deflected from those core purposes for the region to try and overcome precisely those and priorities. I recognise the concern. The one other diYculties. We need to develop the RES and the comment I would make is that I did say “dominated integrated regional strategy going forward. by business representation” in my presentation—I did not mean that. The majority are from business; Q24 Sir Peter Soulsby: I am interested in how you they certainly do not dominate it. We get a very are planning to recruit the necessary skills among robust contribution from our four local authority those who work for you and whether it will need representatives who are on the board, from our third some change in the balance of those on the board. sector representatives and the VC of a university, so JeV Moore: Anthony, you address the skills, and while they are in the majority eight or nine of the 15, what we are doing about filling the gaps. they do not dominate it. Certainly, this potential Anthony Payne: The first thing to say is that we have diminution of powers is of concern, but we always been working very closely with regional partners, argued that one of the key weaknesses of our first 10 local authorities, the Government oYce and the Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 17
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne assembly to put a change management plan in place which is 12 or 13 people, and the economic to help deliver SNR. That has been submitted now development board of the RDA, you have suYcient by the Government oYce through to central of the skills sets that you will need, but they will be Government and we are waiting for a response on refreshed over the period of time that we go forward. that. That, if you like, sets the framework for the Our biggest concern at the moment is perhaps—I change management. Obviously, we need to work suppose that I would make this point, wouldn’t I?— through the detail, but it goes through and addresses that regional assembly has a scrutiny function of the things like stakeholder engagement and how we are RDA. We, as we have said here today, are delighted going to get the right people around the right table to come out and be accountable and scrutinised. to actually develop a joint regional strategy. That What I do not want to do, though, is be accountable change management plan will be key to the work and scrutinised in duplicate, time and again. We going forward. It has had buy-in and support, both have written to the regional assembly, asking that it from the emda board now and from the local drop its scrutiny programme for 2009-10, because we authorities leaders board. That relationship between are now, as we have evidence this afternoon, being us and the local authorities leaders board, made up scrutinised by yourselves. So the concern is that we of the nine upper-tier local authorities, if you like, will spend a lot of time being scrutinised and not be and five districts now, is really maturing and doing the day job. That is our main concern at the positive. The second thing to say is that we have moment with the changeover, because that is not agreed how we will create a joint board between us happening in other parts of the country. to look at the single regional strategy. We will have to develop that and take it forward. There will be a Q25 Sir Peter Soulsby: Can I just follow that lot of learning for all of us, but we have agreed the question of scrutiny? It may be something we want principles behind that. Picking up on JeV’s last point to return to later. When, as you describe it, you are in relation to added responsibilities and complexity, going to be working in such close partnership with indeed, it will be a complicated process—there is no the leaders board—indeed, you will have a joint denying that—but there are key things that will body—and with the change in arrangements for the benefit and improve as a result. For example, one of regional assembly, is there not going to be a need for the key challenges that we always find within the new mechanisms for you to be accountable to people region is marrying up things like energy in the region rather than to us as parliamentarians? infrastructure and where development should go, Is there not going to be a deficit, a gap, if you are capacity and opportunity, and by working and working in such close partnership with them and bringing all this together, we stand a much better they are not going to be the ones to stand back and chance in the regional strategy to marry those things, hold you accountable? rather than having them in separate documents, not JeV Moore: This is one of the main issues that has necessarily always contradicting each other, but with been raised on the Bill. The problem is that the the opportunity and possibility to contradict each leaders board is eVectively scrutinising itself and other. Undoubtedly,it will be a complex process, and therefore there is a conflict of interest when it is undoubtedly, we will need the skill set internally. We operating jointly with us. That is something that is have got a spatial team internally, with spatial developing. I do not know whether Anthony has got planning skills. We have got a very strong research any more from the development of progress on the team, which we talked about earlier in relation to the Bill. It is something that everybody is looking at evidence base for the RES, and we will adapt and use because we need to be accountable to you as the that appropriately to make sure that we can use Regional Select Committee and we also need to those skills to take forward the single regional develop that in-region scrutiny function as well, but strategy. that has not yet been done. We also need to make JeV Moore: In terms of your question about the sure that they do not duplicate each other. The great board specifically, Peter, I do not see a need to danger is that we spend all our time attending change the skill mix of the board. That change scrutiny and nobody is doing the day job to be happens naturally, as we get rotation of the board— scrutinised. I am not making that point about today, each board member has a maximum of two three- but that is certainly a concern that our business year terms—and in the recruitment process, a board representatives express quite regularly. We balance is struck between particular expertise. Also, need to find a way that that conflict is overcome a joint board of ourselves and the leaders board will and I believe it is Parliament that is trying to address commission and ensure that the integrated regional that conflict through communities and local strategy gets done. That will have three local government policies. authority leaders on it, and it will have three emda Chairman: Coming to an end, three quick questions, board members and will commission the work from first from Judy. the existing assembly planning staV and from our economic staV. We have agreed with the Assembly— Q26 Judy Mallaber: The Equality Bill was published we have made major progress with David Parsons today and we have not really had any mention on there—that that joint board will always be chaired issues about that. I wondered what the make-up of by a local authority. Now, that joint board has to get the board was in terms of gender and race. I realise the integrated regional strategy signed oV by the you have a diYculty because you are not necessarily economic development agency and by the leaders nominating people but perhaps you could answer board. So I think that, in terms of the leaders board, that. 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Ev 18 East Midlands Regional Committee: Evidence
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne
JeV Moore: Recruitment to the board is done by schemes, that eVectively is a scheme that is not going BERR. We do not do that ourselves. We take no part ahead with our money. But we hope it goes ahead in it at all. I need to stress that for the record because with NHS money, because we can see the merits of that is often mistaken. People often think that I have the project for the NHS. some influence on who is on our board and I have no Chairman: We will go straight to the conclusion. influence at all. I find out after others who our new board members are. The recruitment is done by BERR who very much have an eye to political, Q28 Sir Peter Soulsby: It will be very quick. We have gender, ethnicity and geographic representation on had over two hours of questioning. We talked about our board. We started with 13 and rapidly had to go the challenge of the economic climate, but to 15 in 2000 because we had nobody from surprisingly, we have not heard anything at all from Northamptonshire and Lincolnshire. It is something you about climate change. It has been suggested that that is addressed all the time but it is BERR that emda has been pretty slow to respond to the looks at that. In terms of the Equality Bill, Harriet challenge of climate change in general, and the Stern spoke this morning about the need to take a strategic Report in particular. I wonder whether that is a view, that those authorities that are key throughout legitimate criticism. I think all that we have had from the country need to take a strategic view about you today is a picture of some wind turbines in equalities. The answer I would give you is the one passing, and nothing more substantial. V Diana gave you on rural-proofing—everything we Je Moore: It might have been a quick question, do, we rural-proof. Similarly, everything we do, we Peter, but it may be a long answer. At least three of equalities-proof, and that is what we will do in terms my colleagues will want to refute the comment that of our response to the Equality Bill. Are we making we are light, weak or windy on climate change. First, sure that the services and products that we have to I will go to Anthony to talk about some of our oVer reflect the needs of the whole diverse East strategic responses, then to Diana, and then Mike Midlands? will talk about some of the things to sum up what we are doing directly with businesses, so it may be a longer answer. Q27 Chairman: I have noticed a spat that has been Anthony Payne: In January this year, the regional going on in the local paper, the Nottingham Evening climate change action programme was launched. It Post, between you and one of our colleagues, Alan identifies a number of priorities for the region. We Simpson, who specifically asked me to raise the issue are playing our role there in leading around all the of the kitchen at QMC. It would be helpful if you economic resilience work to support that action could just put your side of the story on the table. plan, looking at resource eYciency, adaptation to JeV Moore: Fascinating, because I thought things in climate change and all those types of agendas. that case should be the other way round, because Stepping back slightly, as an RDA, we have looked Alan is actually my MP personally. Maybe the at our performance as an organisation. We have question should go the other way. There was a brought in things such as environmental project put forward by the combined City and QMC management systems to our own management. Year to build a new kitchen for those hospitals onsite to on year, we are reducing our own resource use— cut down on some of the cook-and-chill energy use, water use, paper use and all that—to transportation that was happening from elsewhere, show our responsibilities as an organisation. At the and try to push some of the procurement activity same time, as a regional body, we are supporting into the East Midlands. We thought that it was an research. We have done a number of pieces of excellent project—no doubt about that—something cutting-edge research, first, around the economic that we hope the National Health Service would impacts of climate change, which is due to report pursue. But as you will recall in my reference to the very shortly. That will bring out baseline many questions that you have asked today, information on the breakdown of CO2 emissions per particularly John and Bob as it were, we have sector across the region and on the type of activities decreasing budgets and increasing demand on those that could be undertaken to address some of the budgets, and so we have to make tough decisions. challenges. We are also working on a study, which We did not think that funding that kitchen, which Diana is very close to, looking at climate change could have been funded by the NHS, was the most impacts on the Lincolnshire coast and what that appropriate use of our money in this diYcult time. means for the development of the coast. I know that EVectively, finding money to do the £6 million Mike will come on to this as well, but one of the first transition loan fund and the money to help other things that we did as an RDA through the business major employers have been where our priorities lay. support service was look at a much more coherent We see it as a useful project and a good one for the resource eYciency business support package for NHS to do, but our Board Resources Group, our companies across the region. That was in direct investment committee of seven independent, non- response to the economic performance and executive board members, were unanimous in increased productivity of businesses, but against the deciding that they would not be able to fund that backdrop of all the issues that we are all very well project because it was not at the top of their priority aware of around the climate change agenda. We can list, given the declining budgets and increased give examples in written evidence, if you want, of the demands. We have to prioritise, and we cannot do type of support that we have given to companies to everything, and that was one of those that we improve their bottom line and reduce their resource decided not to do. If John asks me specifically about use. As a result of one project, we helped a joinery Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne company in Leicestershire put in a biomass you can get up to about £40,000—BTGs are limited installation for their energy use, using the waste from to about £10,000. We are just about to start a new their products to provide their energy. It has given campaign, following the success of a programme them huge financial savings over the year and a huge that we ran around a theme called “Survival of the saving in their CO2 as well. I think that we have been Fittest”, which was very much targeted at waste doing a lot to support business. It depends who you eYciency, with the help of the Carbon Trust and talk to but there are people who would say that we Envirowise. We are now starting a programme have done more than our fair share. To go back to simply called the “Improving Your Resource the first thing that we were talking about today—“A EYciency” programme. That is what we have been Flourishing Region”—the other thing that is really doing from a business point of view. JeV touched important to point out is that we undertook a very very lightly on beyond just the wind turbine—the strict sustainability assessment of that RES and fact that in Loughborough University we have been made sure that it itself addressed, as far as it could, doing a tremendous amount of work to build a low- the sustainability and the climate change agendas carbon research and development exploitation through many of the actions that that RES purports community. That is really one of the stand-out to support. For us, the third RES does that better university-based projects. There is good work going than any of our preceding RESs. That was a really on in other universities that we have supported, but important piece of work for us as well. Can I pass on there you have the ETI, the fuel cells development to Mike and Diana? that Rolls-Royce and others use quite substantially, Diana Gilhespy: Just a couple of things: as well as and Cenex—excuse the acronyms—which is another working with the Environment Agency on the automotive-based resource eYciency programme. Lincolnshire coast issue, we are also working with it Our new science park, phase 2 of Holywell, will be on flood risk in our cities and on projects such as the significantly low-carbon-based in its output. That V Avenue, which Je mentioned. On that we are not gives you a flavour of the approach. We take it very only doing the remediation but also working with seriously. It is hugely important in today’s agenda. the EA to put in a flood risk programme that will save6 about 8007 homes and businesses within Chesterfield. Again, it is about making sure that we Q29 Chairman: I am sorry that we have not had time marry up our funding with the Environment Agency to cover all the ground that we had hoped to. In to solve all of the issues that surround our towns and particular, we have not talked about the cities. Another thing is that for all of our funding, PricewaterhouseCoopers study, which came out either directly into construction projects or extremely well, or the ECOTEC study, but we have indirectly via our grants, we insist that the projects got them and shall read them. Thank you for all the meet the highest environmental standards. We information that you have given us today. It has support our businesses to meet those standards as been a really helpful, constructive dialogue. Maybe well. In other words, it is not a question of saying, I should take it forward a little bit. I think, JeV, you “You have to have those standards”, we also support have promised to let us have a look at the revised our supply chains in the construction sector to try to budget provided for BERR by 31 May—that would meet those standards. On the rural programme that fit in with our timetable and what we intend to do. I mentioned—the European programme—we are We have put out a call for evidence across the East very much focusing on energy and resource Midlands asking a variety of diVerent things, one of Y e ciency, in particular around biomass, other which is sustainability. I know you have your own energy usage projects and water use—capturing rain networks. It would be helpful if you could draw V water so that instead of letting it run o and the attention to people for evidence. We have met the problems that that causes, we use it. executive team today, but privately you have said Michael Carr: Last but not least, Peter. Anthony has that there would be an opportunity, if we wanted to, already talked a little about the business support to meet some of your non-executive directors. That programme and I would like to give a bit of structure might be helpful. Finally, we are going to take a on that. We have the majority mainstreamed couple—perhaps three—oral sessions around the through the Business Link service. All our advisers region and talk to stakeholders. But, ultimately, over the past two years have been going through what we would like to do is to have a similar session quite an intensive capacity building programme to to this towards the back end of June or the beginning make them more aware of the requirements of Y of July, giving you some feedback about what people business around resource e ciency. As I mentioned have been saying to us and giving you a chance to earlier, we back that up with the business comment. We have started on a path. You have got transformation grant, which we put some more us oV to a good start. I am really grateful. It is the money into in September last year to try to help to first evidence session that we have had. I found it make small capital investments in that area with really helpful and constructive. If we work together businesses. They can also use that same grant to in this kind of way, we can ensure that people who access expertise. Anthony was alluding to the live and work in the East Midlands aspire to that top business resource eYciency work that we have been 20 in Europe that we are all keen to get to. Thank doing. Waste work is a large grant scheme, in which you all very much. JeV, you had the first word, so you can have the last word, if you like. 6 Correction by Witness: I meant to say protect, not save. 7 Correction by Witness: I meant to say 155 homes and JeV Moore: It was a pleasure. 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Ev 20 East Midlands Regional Committee: Evidence
27 April 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne microphone chess, because I felt rather restricted— has been a pleasure for us. We have enjoyed it. I know others did—that we could not respond Thank you very much for giving us the time, immediately. Ergonomically, that was not at all particularly allowing us to present at the start. We helpful. Maybe we shall get more of a rapport. I feel look forward to seeing you again in a few months’ for those who have had to create it in this way, but it time and rounding oV. Thank you very much indeed. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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Friday 22 May 2009
Members present:
Paddy Tipping (Chairman) Judy Mallaber Mr Bob Laxton Sir Peter Soulsby
Witnesses: Adrian Axtell, Regional Secretary, Unite the Union, Lyndsey Bunn, Policy Manager, Federation of Small Businesses East Midlands, John Hardwick, Chair, Area Policy Unit, Federation of Small Businesses East Midlands, David JeVery, Skills and Development OYcer, Unite the Union and Stephen Woolfe, former Chair of East Midlands Chamber of Commerce, gave evidence.
Chairman: I am not sure whether I should welcome Chairman: Does anyone else wish to speak? you to County Hall, Leicestershire, given that we are Adrian Axtell: Yes, emda is doing reasonably well, all guests here. I have a couple of housekeeping but it is definitely seen from a trade union points: people on the panel do not need to play with perspective as business orientated. Through the the sound system, but our witnesses do, so will they recent economic crisis, in particular, the engagement press the button when speaking? from an employee’s perspective has been limited—to Sir Peter Soulsby: I wish to make a declaration of say the least. Many of the initiatives that have come interest. I am a member of Unite. out recently have been most definitely business-led, with little to no involvement, certainly from Unite’s perspective, in how they are developed and the Q30 Chairman: Perhaps for everyone’s benefit, will initiatives going forward. our witnesses briefly introduce themselves? John Hardwick: The main thrust as far as we are Stephen Woolfe: My name is Stephen Woolfe. I am concerned is that it engages with all types of the immediate past chair of the East Midlands business. Sometimes, we feel as if the emphasis is too Chambers of Commerce. In other areas of much on the larger businesses, which make up a involvement relevant to emda, I am also chair of the small minority. It tends to forget the 99.2% in the Heart of the National Forest Foundation and a small business sector. While we accept that it is trustee of the National Space Centre, which has business orientated, we have to define what we emda investment. classify as business. Lyndsey Bunn: Good morning. I am Lyndsey Bunn, Policy Manager for the Federation of Small Businesses in the East Midlands. Q32 Chairman: I was about to say “You lot”, but John Hardwick: I am John Hardwick. I am the Chair that is not very polite. All witnesses have some of the East Midlands Policy Unit of the Federation contact with emda. How much do you think people, of Small Businesses, and I still run my own business businesses and trade unions across the region know in the leisure and entertainment industry. about emda? Is it in touch with a wide group of Adrian Axtell: Hello, I am Adrian Axtell. I am the people? V Regional Secretary for the union Unite in the East David Je ery: It has fairly limited knowledge of the Midlands. role of regional development agencies. There tends David JeVery: Good morning, I am David JeVery,an to be a view of business that is fairly one- adviser on learning and skills for Unite the Union. I dimensional. The economic strategy, “A Flourishing head up a number of initiatives for the union on Region”, is a fairly sophisticated analysis of the V learning and skills as well as supporting members on region, emphasising the di erentiation of the region things like redundancy. and some of the challenges in the region. Those documents talk a lot about engaging business, as though business—almost a BBC version of Q31 Chairman: Thank you for coming. I thank business—is swashbuckling entrepreneurs. We are Clayton George for coming. He is a student at the part of business, and if you look at two of the main National School in Hucknall and the youngest themes in the economic strategy—raising member of the audience. I wish to ask a fairly general productivity and achieving quality—we are well question. What do you make of emda? How do you placed to assist in and to deliver that. It worries me think it is doing? greatly that we have diYculty in communicating Stephen Woolfe: There is always someone who has with emda. I do not think that there is an to start. I think that emda does a reasonable job. understanding of, one, the complexity of what From the business perspective, over the years emda business actually is, and two, what our role is. has helped to tie together a large number of loose Equally, they have a simplistic view of trade bits of string in the economy of the development unions—they probably see us as being with placards process within the East Midlands. On the whole, it saying that we want more money,or that we will fight has been good news. That does not mean to say that redundancies. We work strategically, and on a whole it is perfect. As in any organisation, there is always range of issues, and there ought to be that joined-up room for improvements. If you want a starting view of what our role is and what we can help to point, it has done well—B plus, if you like—and it deliver. I shall give you an example. We work with could do better. employers and talk to them regularly about things Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 22 East Midlands Regional Committee: Evidence
22 May 2009 Adrian Axtell, Lyndsey Bunn, John Hardwick, David Jeffery and Stephen Woolfe like productivity, but we do not seem to have that chamber, CBI, Institute of Directors and FSB conversation with emda. Yesterday I printed oV the activity will be only too well aware of emda, but in response to the economic climate—admittedly terms of general awareness, I would say it is mixed. August 2008—but again there is no mention in that Can I pick up on one other point, which was made document of trade unions or the role of trade unions. earlier? It was about emda being a business-led It is quite frustrating for us. We agree with their organisation. Certainly from the Chamber analysis of the problems, but I think that we are part perspective, we do not see it as a business-led of the solution. organisation. There are people who are business men and business women on the emda board, but they are Q33 Chairman: Would that be a generally shared there because of who they are in reality; they are not view across trade unions? seen as representatives of business. We just have that David JeVery: Yes—talk to colleagues from caution about emda being seen as a business-led unionlearn in the TUC. I will give you another organisation. We would like it to be a business-led example. I think there is a general lack of support for organisation, but it is not. union-wide initiatives. For example, we led a John Hardwick: There is certainly, in our perception, consortium of trade unions recently, working a distinct lack of representation from micro- through the TUC, to co-ordinate a response to business. I am going to hark on about that, because redundancies. Our industrial oYcers pick up at the end of the day that is where the majority of our redundancies, or people at risk of redundancy, or an evidence will come from, because the majority of our employer has said to an oYcer, “I think I’m going to membership is from that sector. have to make people redundant—help.” We wanted to have some consistency in the response across the Q35 Chairman: I will pass the questioning over to region, and it has been diYcult. Politicians will say, Peter in a moment, but just let me ask you this. If “Yes, that’s a great idea,” civil servants will say that emda did not exist, what would be the consequences? it is a great idea, individual members of staV of emda Would there be a black hole? Lyndsey? will say that it is a great idea, but how about actually Lyndsey Bunn: If emda did not exist, I guess that getting support? Essentially, it was for a modest there would be something else in its place, because amount of money—we were talking hundreds of obviously emda was derived from various other thousands of pounds, perhaps £250,000 over a two- agencies before, which were responsible for year period. That is to work across the region with economic development. I assume that, in terms of perhaps the main cost being around three members regionalism and localism, there would be something of staV. To us that was a straightforward, simple to take its place. Going back to the point that you thing, which would deliver a lot of benefits to made about what people in general know of emda,I employees—not just union members, but all agree with Stephen: it is very mixed out there. I think employees who were at risk of being made there is, to a certain extent, a fault with the RDAs in redundant. We could co-ordinate a response for general, in that they were originally created as these employers as well, so we can put people in touch with strategic bodies that were also grant givers. Those other people—like the Pan redeployment project, organisations that have been on the receiving end of for example, in the north of Nottingham. We are some of the money from emda will obviously be very doing some good work around construction and welcoming of emda’s policies and initiatives. Those engineering. We just hit this brick wall. In some many organisations that have not managed to get respects, it is like fortress emda. Often we are any funding from emda might have a completely frustrated. We want to work not just with emda but diVerent viewpoint. It is mixed. I think it would have with a lot of agencies, and we seem to get a brick-wall helped if there had been some clarity much earlier on response, even on the simple level of not replying to about the RDAs’ role in terms of either being phone calls, e-mails, communications—that sort of strategic or being grant giving. Obviously, the thing. changes that are coming out as a result of the sub- national review are looking to address that problem. Q34 Chairman: That is interesting. Do you think, across the business community, there is a real Q36 Chairman: Are you advocating that more awareness of emda? strategic role? Stephen Woolfe: You see the awareness at diVerent Lyndsey Bunn: I would advocate a role for economic levels. Clearly, the larger businesses in the East development within the regions that has benefit for Midlands are only too well aware of emda. If you businesses, which are the wealth creators in the look at the bulk of chamber members—there are regions. some larger chamber members; of course, across the East Midlands are some of the really big Q37 Sir Peter Soulsby: I want to pursue that point, companies—in general they are the dynamic small because when emda gave evidence to us, it said and medium-sized enterprises that form the something to the eVect that if, as may be the case, backbone of what the East Midlands is all about. Government priorities changed, that would entail it The awareness of emda is probably a bit variable making diYcult choices and disappointing people. I across some of those businesses. It very much want to pursue what is perhaps the tension between depends on whether the leaders of the businesses are its role as the giver of grants and the agent of involved in wider issues than just running their Government and the other role of being the business. 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22 May 2009 Adrian Axtell, Lyndsey Bunn, John Hardwick, David Jeffery and Stephen Woolfe how it is managing that tension at the moment and business or to grow your business, as any other perhaps what would be a desirable way of managing RDA. That is where something has gone wrong, it in future. Perhaps Stephen could start. because of all the diVerent schemes run by diVerent Stephen Woolfe: I shouldn’t sit on the end, should I? RDAs. Do not ask me to quote what the diVerences I think there is a tension between the two roles. If I are—we are just aware. As a national organisation, just forget my Chambers role for a second and put we get feedback from other regions. on my other hat, as Chair of the Heart of the David JeVery: That is quite an interesting point, National Forest Foundation and a trustee of the because I know when our colleagues in the West National Space Centre, those organisations have Midlands have dealt with the RDA there, their been the recipient of some grants from emda—either experience has been a lot diVerent to ours. We have through emda directly or, previously, through the to accept that the West Midlands is a diVerent region LSEP as well. The relationship that both those to the East Midlands. Of course it is. But culturally organisations have had with emda has been the approach has been diVerent. It has been much excellent. In terms of which element of emda’s plans more an open door as far as the trade unions are each hits, with the Heart of the National Forest concerned. In some RDAs, from what I can Foundation, you are looking at tourism and ascertain, there is not so much tension, because there environmental regeneration on a huge scale. It must is a link between the grants and the championing in be one of the largest environmental regeneration the region. It all seems to flow and to make sense. I sites in the whole of the East Midlands. In terms of think sometimes we see a disjoint between this idea the space centre, you are looking much more at an of championing in a region and not being prepared education-led programme and some tourism, which or willing to talk about some of the key people is very important. Certainly it seems to me, including within that region. It seems ad hoc. I am sure it is not from my knowledge of other organisations, that with ad hoc, but that is how it feels outside the RDA, regard to some of the major requirements for compared with the responses we see in the West investment in terms of grant giving through emda,it Midlands. has been fulfilling the needs very well indeed. The Adrian Axtell: Dave is absolutely right about that. It dialogue between organisations and emda seems to is not just a development agency issue; it runs right work very well indeed. What you also see through the way through the region. If you look at the those involvements is its focus on strategy and the economic cabinet that was set up, you will see that promotion of the East Midlands very much coming there was not a trade union seat on it originally. into its thinking. In that sense, I do not think there Through discussions, we finally got a TUC regional is a tension between what it is doing in terms of grant giving and strategy. In some respects I see a tension secretary on it. In comparison, in the West Midlands, between their role as a champion of the East there was not only a TUC representative, but the Midlands and their role as a Government regional Unite regional secretary. It was as if that was development agency. There must be a balance automatic, as if they needed to be involved between trying to gain the maximum investment immediately in those discussions if we are going to potential for the East Midlands and what the address these pressing problems within a region. Government are prepared to give and representing From a union perspective, that is clearly visible, the Government. I am not quite sure how you get because of the nature of the way the unions are set round that tension. There is an obvious tension up across the region. We are always, if you like, there. I would be interested to hear what the other comparing the east and the west. Although it is an people on the panel have to say about it. There is a entirely diVerent region, there appears to be a very real tension there. recognition that the trade unions need to be involved John Hardwick: DiVerent RDAs have had their own in these issues and form part of this or, at the very schemes. I think where it sometimes falls down is least, they need to be talked to. That is clearly the that there is no level playing field between diVerent diVerence. RDAs. We are all talking about championing our Chairman: Can we move on to Bob? Bob is going to own areas, but we have to realise that every other ask you about additional responsibilities. RDA is doing exactly the same thing and putting forward exactly the same thing about their area. Because the schemes are diVerent it is sometimes Q38Mr Laxton: I want to come back much later to diYcult for businesses, certainly those on the fringes the point that you made about what would happen if who are contemplating, “I might move there, it did not exist, but there have been some big, chunky because the deal’s better on the other side of the moves—they are not incremental—in terms of the river”, or whatever, to put it into very basic terms. powers and responsibilities of emda, particularly in Therefore, because there are no national schemes, the area of giving grants. There are further changes that presents a problem. If you are trying to say, as part of the regional leadership teams, with the “Come to the East Midlands because this is the demise of the regional assemblies and those sorts of area,” there is too much competition from other things. Do you think that that has in some way areas. What we would like to see is a more perhaps diverted it away from having a focus on standardised setting so that there was less of this business, commerce, industry and industrial championing as such per se. We would like to see all relations? Do you think that this adding on of the anomalies ironed out so that the East Midlands powers strengthens, weakens or diverts emda?Do was just as good a place to invest, to bring your you think it has lost focus in some way? Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 24 East Midlands Regional Committee: Evidence
22 May 2009 Adrian Axtell, Lyndsey Bunn, John Hardwick, David Jeffery and Stephen Woolfe
Stephen Woolfe: It is actually a very good point. If they will do it in a piecemeal, but not systematic, you look at the size of emda when it started however way—about their aspirations and how they engage many years ago, you will see that it was a much with the world of learning, training, development, or smaller organisation. It has been a bit like Topsy— whatever it is. It is always seen as engaging with the it has just grown. I think I would agree with you that employer, but that is the big frustration. We are the very,very strong focus it had in the early days has uniquely placed to articulate that employee point of been weakened. I am not necessarily saying that that view—not in every sector of the economy but, by is bad because the region is large and there is every God, we cover 24 sectors of the economy in Unite. good reason why you do not want a number of The trade union movement in the East Midlands diVerent regional agencies doing a series of diVerent covers every sector of the economy. There is an things—they could overlap and conflict with each appreciation that we have problems, but there is no other. But I think you are absolutely right that it has mechanism, from an employee perspective, to lost the strong focus that it had on its creation and engage with. If you talk to our members or in its very early days. I am not saying that that is bad, employees about emda, they would have no but I think it is true. appreciation of it. Lyndsey Bunn: I think at the moment there is Chairman: Let us move on a bit. John, you talked to obviously an emphasis on its engagement with local us right at the beginning about the very diYcult authorities. Obviously, in the light of the changes situation at the moment and we know that Judy that are happening, it is more and more important wants to pursue that. that the RDA liaises very, very closely with local authorities, whereas in the past it has not. It has Q39 Judy Mallaber: Could you say something in looked to the business sector. That is one particular general about how you feel emda has responded to area where the business community feels that we are the current economic climate? In relation to the being pushed away to a certain extent, and that our Unite response, I take what you are saying about the role is being diminished, despite the fact that we have lack of involvement of the unions, but I would be heard from Government that seats on the emda interested to know how that means that you feel that board and other RDA boards will remain business emda ought to relate and use the unions—both in focused. That is one area. What has not helped is the relation to individual business failures and the fact that you have had emda picking up areas of economy more generally. Maybe we could start oV work that should perhaps have been picked up by with the business end and how you think that emda other regional bodies such as, for example, skills has responded in general to the economic climate. development, which you would have thought should John Hardwick: We are very glad that emda made its have rested purely and simply with the Learning and reply in August. We had been flagging it up from our Skills Council. I think in that respect, it has caused own survey. The one thing that the FSB does on a confusion in terms of why emda is there and what it regular basis is that it surveys members—215,000 is there to address. To me, it should always be about members provide one hell of a stable reply, which is addressing market failure rather than picking up on broken down on a regional basis. We started to flag the schemes that the LSC or Jobcentre Plus may or up that there were significant problems from may not be able to fund. January 2008. We raised that through the East David JeVery: Just picking up on the point that our Midlands Business Forum and in direct meetings colleague made about the confusion between the with the regional Minister. That was reinforced by role of the LSC and the RDA, when the LSCs were our findings in April 2008 and it then culminated in first established—they were organised on a county quite heated discussions in July and August 2008 by county basis—at least there was an openness and when the responses had shown a gradual decline. A a dialogue with the trade union movement. It was lot of our resources—the replies and statistics that easy to go to the LSC with an initiative based around we had gained—were a significant part of emda’s a market failure, usually around skills or training response to the economic situation. We are glad that and development or that type of thing, and actually eventually they did listen to the results of our get some support and get something done. It might surveys, which had shown a decline. The response be a small pilot project, but it was about engaging was good—it was one of the first RDAs to make a with the whole of the business world, not just this response and we cannot fault it. Out of that came top-down perception of it. Our frustration is that we “Survive and Thrive” which was a sort of strapline lost that to some degree as emda’s role changed, or to help businesses through the situation which, by developed, however you want to describe it. The then, had worsened still. Our evidence was showing LSC seemed to take a similar route: because it is the decline in orders and in confidence throughout regionally based, we feel that there is a top-down the summer. We supported very heavily emda’s approach. There are some underlying assumptions moves to arrest the situation. We then gave feedback there: that employers are best placed to understand as to the role of “Survive and Thrive” and it was left the issues around training and development, to to the chambers of commerce to plug the gap. articulate the needs and aspirations of the work Representations from the FSB—from individual force and to understand the wider economic needs of members and as an organisation—went back to the region. We are not saying that employers do not emda and said, “Yes, you have pitched it, but now it understand any of those things, but they are not needs something else to follow on.” So they worked always best placed to understand them. Sometimes very closely with the chambers of commerce to our frustration is that no one asks employees—or develop the follow-on seminars more on the sales Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 25
22 May 2009 Adrian Axtell, Lyndsey Bunn, John Hardwick, David Jeffery and Stephen Woolfe and marketing side of things. Our biggest “gripe”— support there was top-class. If the same happened in that is the wrong word, but the word that will be Lincoln or Loughborough, we are not sure what recorded—is that we were coming up with evidence- could be delivered, hence this idea. It was really based statistics, but we felt that they were not being about practical help. All the advice and support is taken that seriously until eVectively six or eight out there—it is not that it is not there; it is just the months in. We felt that emda’s own statistics seemed co-ordination. We were prepared, as a union, to to be anything from 18 months to five years old. I supply support in the way of oYces and so on and so recall one meeting in particular with Phil Hope. We forth. It was a real, practical step. It was a central had brought our survey to an end three days early so point that an employee or employer could contact that we could have the statistics there—so they were co-ordinators who could tie in all the external three days old, which is fairly up-to-date by bodies. anybody’s standards—but they were not treated in the same way as we would have liked. We felt that it Q41Judy Mallaber: Do you want that to come via was really good evidence. As for further emda at a regional level, the sub-regional development, yes, we are glad that emda has taken a partnerships, which is where we are getting more positive role. We see all those responses as being support in my area, or through Business Link? Do positive; we just think that they have been a little you have a view on that? delayed. I wish that it had happened earlier. Adrian Axtell: Overriding, I would see where that came as being about the funding, to a certain degree. Q40Judy Mallaber: Is there practical help on the I thought emda would welcome—should we say?— ground, as well as the broad strategic discussions? and embrace that, to be perfectly frank with you. Stephen Woolfe: May I begin with the earlier point, How that developed from there was very much and then move on to that further question? From the embryonic, because the view was—including during Chamber point of view, I would certainly endorse discussions with Phil Hope in particular—that it was what John has said; however, I am not sure about a simple idea, and often the simple ideas are the best. how much the delays at emda reflected a lack of We can develop and build it from there and see what appreciation at—I am bound to say—central happens. However, we were trying to move away Government level about the recession that we were from what was in eVect a lottery in relation to entering. My take on that would be that certainly support following job losses. smaller and medium-sized businesses were probably David JeVery: Adrian is right. The quality of support only too well aware, through the course of last year, that people received was variable depending on that things were getting worse and worse, if not daily, where they were in the region when they lost their certainly weekly. On the other hand—I am putting jobs. Often, it depended on somebody from our on another hat as a senior partner in a law firm in organisation, usually somebody who dealt with Leicester—we had Yvette Cooper in the oYce in lifelong learning, in co-ordinating that response. May or June last year after Patricia Hewitt Our idea was to have a co-ordinated response, not organised for her to come to Leicester. Yvette just from UNITE but from all the unions across the Cooper’s take on the recession at that time was that region, and to get that funded by the regional things would get better and that within three months development agency. There are a couple of examples things would have turned around. I am not so sure, on page 13 of the document on the economic climate therefore, that we can blame emda particularly for that was published in August, such as the skills not perhaps appreciating the recession that we were pledge and encouraging employers to sign up to that walking into. Having said that, I don’t think that pledge. We have been doing that since the initiation anybody appreciated how bad it was going to be and of the skills pledge, through things such as learning how bad it is. In terms of what they are doing now, agreements. We incorporated the pledge into our I certainly feel that there is very great concern within learning agreements, so that first, employers were emda—you get this from talking to JeV Moore, aware of it, and secondly, they would sign up to it; Bryan Jackson and other senior people—to try to and thirdly, we then monitored what that actually help, wherever they can, within the East Midlands. meant in practical terms. That was one thing. There However, from the other side of it, I don’t think there is another example in that document, on page 15—I is much understanding of the help that is on oVer or will be brief. The final paragraph “Next Steps” states of how to access it. I think that the message is very that “emda will continue to use its strong links to lukewarm. individual businesses, developers and the CBI, IOD, Adrian Axtell: I think that that is absolutely right. chambers of commerce, FSB and EEF to provide in- Access is one of the main issues. It relates to the depth and timely intelligence and analysis to ensure practicalities of what we were trying to develop that Government” do this and that. actually before the economic crisis. In the East Chairman: Judy has another question. We need to Midlands, there is a lottery on redundancy support move on. depending on where the job losses occur. With Quebecor—for argument’s sake—in Q42 Judy Mallaber: You talked about the issue of Northamptonshire, in Phil Hope’s constituency, co-ordination; again, the unions are not involved. there was a lot of support on the ground. Quite apart from co-ordination, do emda and related Naturally—because the job losses occurred in that organisations and sub-partnerships, such as sector—the print and graphical, paper and media Business Link, have the tools to do the job? Is it that sectors are well-versed in these issues. The level of communication and co-ordination are not getting in Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 26 East Midlands Regional Committee: Evidence
22 May 2009 Adrian Axtell, Lyndsey Bunn, John Hardwick, David Jeffery and Stephen Woolfe quickly enough, or do they not have the Nottingham and Leicester. They feel excluded. We mechanisms? Is there anything else that they should are not talking only about Lincolnshire; we are be able to do? talking about Rutland and places south of John Hardwick: I think the business support Northamptonshire. People are in similar situations organisations play a very important part in making and have similar problems. People in Lincolnshire sure that our members are aware of what is available especially feel very turned oV by emda. That is not to them. For the majority of businesses, the first port my phrase, but it has been bandied about many of call is their accountant, the second is the FSB times. They feel as if they are left out, and that all the website—plug, plug—or our own legal help lines, to initiatives tend to be focused along the M1 corridor. which they are entitled to: let’s face it, that is why When I go out to meet members in those rural areas, members join. The third one is what we can get from they have a totally diVerent perspective on emda and Business Link and what it can oVer us. The good its role, and they say, “It does nothing for us.” We as thing is that Business Link has changed its emphasis an organisation try to flag up the fact that those to survival from growth. I am glad to say that the people are entitled to all the services, just as much as East Midlands Business Forum had a big part in anybody else. making that strategic, attitude change during the summer—it even got a couple of the leaflets reprinted to reflect that. The role of Business Link Q45 Judy Mallaber: Do they need diVerent services? has certainly changed—it had to change. It had to What are their particular challenges? become more diagnostic, taking down the diagnostic John Hardwick: One of the biggest challenges that model, and it had to become something of a they have is a simple matter. Those of us who live in signposting service. Making business people aware towns and cities expect broadband. In rural areas the of what they can access through Business Link still cable is a bit thin—it hasn’t got there yet, and speeds leaves a little bit to be desired. There has been a bit are variable to say the least. There are still areas of TV advertising, which is good. Any advertising is where broadband is more or less non-existent. good advertising, and makes people aware of what is available to them, but it is generally not perceived Everybody from the Government down is saying as the first port of call. that we should take advantage of new technologies, but that is diYcult if the companies and providers basically say that they will concentrate on the areas Q43 Chairman: We have about 20 minutes left and that give them the biggest return, and will get to we have a lot of ground to cover, so you all need other areas eventually. One of the big arguments is to be a bit sharper, if that is all right. Let me put about the availability of broadband, which is an in a very small question at this point. emda essential tool for doing business today,wherever it is. has had two studies done recently, one by It is about getting a decent speed broadband PricewaterhouseCoopers, and the other by EcoTech, throughout the entire country and especially in some which basically say that it does a good job. Has of the rural areas. Lincolnshire especially flags that anyone read those reports? issue up. Stephen Woolfe: A one-word answer: no. Stephen Woolfe: I am not sure that the debate is rural John Hardwick: I personally gave evidence to EcoTech back in February, but the answer to the versus city; there are a number of bands to it. I question is that I have not actually seen the report as certainly agree that Leicester, Nottingham and yet. I was part of the evidence, shall I say? Derby dominate, but there are some big Chairman: I can see that you are diligent—you have regeneration projects that emda is undertaking to read the report. I have actually got it sent to you. around the East Midlands. I can’t talk a lot about Can we talk a bit about the urban-rural work of Lincolnshire as, bluntly, I don’t know a lot about it, emda? Judy, you are going to take us through. even though it comes in the East Midlands generally. Chairman: Careful what you say. Stephen Woolfe: I note that Lincolnshire is not Q44 Judy Mallaber: On this panel, we have two big- represented among you, either. We can look at city people, and two of us who are—I do not know regeneration projects. For example, The Avenue is a if you would call yourself this—rural and semi-rural. huge regeneration project. I am not sure whether it One of the problems with the East Midlands and how you deal with it is the diversity that we have, is in one of your constituencies or not. from seriously rural through to seriously urban, and Judy Mallaber: Nearby. those of us who are locked somewhere in the middle. Stephen Woolfe: You wouldn’t say that was in a city, What unique challenges does that mean that we by any stretch of the imagination. I look at what is face? What are the particular problems in the rural happening in west Leicestershire—again, that is areas that often tend not to get so much attention? I National Forest-based and whatever—and there is am sure people will be straight in on this one. huge regeneration going on there at the site of the old John Hardwick: There are small business members Rawdon colliery, with significant involvement by based in rural areas. Those are not rural businesses, emda. I understand that those examples are but businesses based in rural areas. Let us make that replicated around a fair bit of the East Midlands. If clear—they are not all agriculturally based, and I we are looking at the purely agricultural economy, I don’t want to label them. The biggest perception would be amazed if there were that many farmers or among the majority of those people is that far too agricultural workers—agriculture is a huge much emphasis is put on the big three—Derby, employer in the area—who had even heard of emda. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 27
22 May 2009 Adrian Axtell, Lyndsey Bunn, John Hardwick, David Jeffery and Stephen Woolfe
It is as bad as that, I think. There is a divide, but I do Q47 Sir Peter Soulsby: How can we fill that gap? not think that it is simply the cities versus everything Lyndsey Bunn: I would say this, wouldn’t I? I think it else. There are a number of layers to it. could be done by a proper stakeholder organisation, Lyndsey Bunn: A key concern that we have at the which is being proposed to the regional assembly’s moment is the decline of market towns and the joint leaders board, whereby a group of hinterland communities surrounding the cities. That democratically elected personnel, as well as business is where we are not seeing the major support. Yes, representatives, businesses and other economic, there has been an awful lot of development in the social and environmental partners, can continue to former coalfields because of the amount of money ask questions of the RDA or any other Government- that was coming in from Europe to address those funded body in the region. That would be a way of issues. But it is very diVerent when you look at places ensuring that your work, for example, could be like Ollerton, which was quite near the colliery site— supported, so that you were not duplicating the the investment that emda has put in there has been scrutiny and accountability that was going on. fabulous for the community—and then at places like Stephen Woolfe: I just think there is a diVerence Kettering, which is a declining town, it isn’t really a between accountability and scrutiny. I am certain market town, where you see empty shop units. There that accountability would exist through the Select are issues about appropriate work space Committee, but I am not sure what happens after environments for businesses that are based in rural March 2010 when the scrutiny through the regional areas and their ability to conduct their business from assembly finishes. There seems to be a gap there that a location of their choice. It is cheaper for them to be needs to be filled. based in a less urban environment in terms of rental John Hardwick: The only thing I would say about costs and so on, but there is a lack of focus in terms that is our involvement—if it is another forum of the of developing appropriate work space units, starter great and the good, we are socially excluded. units and growing-on space within those core towns and communities outside the three cities. Chairman: Can we take stock with where we are? We Q48 Sir Peter Soulsby: Following what you have have got about a quarter of an hour left, and I want said about the accountability gap, there is also the to talk a bit about the changes in the regional prospect of the single regional strategy and the infrastructure and sustainability. I know that Bob responsibility for a spatial as well as an economic and myself have concluding questions, so would strategy. Do you see that as bringing new challenges you, Peter, talk about these governance changes? in terms of accountability? That would be helpful. Lyndsey Bunn: We would welcome the single integrated regional strategy. We think it is incredibly useful to have a single document that outlines Q46 Sir Peter Soulsby: Yes. The dissolution of the exactly what economic development is going to regional assemblies is imminent and there are going happen, when and where, and how it is going to to be some questions about the accountability of benefit communities and individual citizens, not just RDAs generally and, for us, emda. How do you see businesses. In terms of accountability, our concern is that? Will it leave a big gap? Is what we have waiting the level of stakeholder engagement that will be in the wings to fill that gap going to be adequate? going on outside the relationship between emda and Lyndsey Bunn: There is a significant accountability the local authorities. That is a crunch issue for this gap, in my view. emda will point to the fact that it is region at the moment in terms of how we ensure that audited by external and internal auditors and that it stakeholders are not just seen as people to consult on has to provide monitoring reports to the a finished article. We actually want to be there at the Government oYce, but there is a huge concern, from beginning, driving what the strategy contains. We my perspective, that no one actually goes back to also want to be involved in consulting on the draft check the figures that emda is reporting. emda is very finished article and then in agreeing a set of good at promoting what it does in terms of output, principles moving forward. achievement and core PSA target outputs in Sir Peter Soulsby: I want to hear more, because I saw particular, but we don’t tend to hear about the a lot of nods. V added-value stu . In terms of the role that regional John Hardwick: The only thing that I would add is assemblies have played, local councillors, business that members of the East Midlands Business Forum representatives, environmental partners, trade have a good reputation for working together. It is unions have been able to ask them searching not like diVerent business organisations coming questions about what they are doing outside together. That is not always the case, and it does not achieving those core PSA target outputs. With the happen in every part of the country, but we have a demise of the assembly, and with all due respect to good reputation for working together. We should the Regional Select Committees that have been make that work for the benefit of everybody. established— Chairman: Nobody else has respect! Lyndsey Bunn: I think there is going to be less Q49 Sir Peter Soulsby: I mentioned the single accountability under the future arrangements rather regional strategy. To what extent do you think that than more, and I feel that every public sector emda has the skills to take on this new responsibility organisation should be under the same degree of in-house? Do you know anything about any plans to scrutiny if they are spending taxpayers’ money. ensure that it fills any gaps in its skills? Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 28 East Midlands Regional Committee: Evidence
22 May 2009 Adrian Axtell, Lyndsey Bunn, John Hardwick, David Jeffery and Stephen Woolfe
Lyndsey Bunn: It will involve a change, particularly Lyndsey Bunn: I think emda can now be considered in terms of spatial experts who currently reside as one of the larger employers in the region, so if it within the regional assembly. You have planning and were to go there would be an awful lot of people transport experts and so on. Although emda has a made redundant, I guess. That would be a particular very skilled work force, it will have to consider what concern regarding where those individuals then go skills it has to undertake that work eVectively. on to seek further employment. As for emda’s role, Whether it feels that it has the skills at the moment particularly in providing that regional umbrella-type is for it to answer, I suppose. organisation for economic development, it has been David JeVery: There needs to be an appreciation of incredibly successful. There has been perhaps too big what it seriously means to lose your job or to be a remit for them to take on rather than just socially excluded and all those things. There are addressing market failure, or just trying to look at some good people in emda, and with individual economic growth and increasing economic growth members we have had some great support as far they and productivity in the region. They have perhaps could take that. However, we need some sort of been sidetracked, as have all the RDAs, by looking development in how they engage not only with trade into other issues that perhaps would fit most unions, but with community groups, because we are appropriately under other regional organisations. If stakeholders, too. However, it is sometimes more it were to go, perhaps it would just be replaced by a diYcult for people who are not accustomed to it to more streamlined version. I do not know whether articulate their needs and desires. Perhaps emda that is Government thinking. In the climate that we needs to think about how it engages with our have at the moment, there could be a general election broader communities. and then who knows what will happen to the regional scenery? So your guess is as good as mine in terms of whether it will go and what it will be Q50 Sir Peter Soulsby: Finally and very briefly, we replaced with. asked emda about its involvement in sustainable development and the broader agenda. It is very clear that it has been involved in some very innovative Q52 Mr Laxton: Sorry to interrupt, but I wanted projects, but—I hope that I am not being unfair—it your guess. My question was: if it went, would it be did not see itself as the lead in regional responses to disastrous? If you felt that it was partially, wholly or sustainable development issues. Do you think that critically disastrous, what would you want to that is the right perception of the way in which it is replace it? acting? If it is not in the lead, who ought to be? Chairman: We ask the questions. I am not oVering a Stephen Woolfe: There is an interesting relationship view. I have a view but I am not oVering one. between emda on the one hand and the county and Lyndsey Bunn: It would be disastrous in terms of the district authorities on the other. For example, north- number of employees that it has and the number of west Leicestershire—one of the ones that I know agencies that it funds. best in terms of sustainable development—has huge policies and strategies to try to turn it into one of the Q53 Mr Laxton: No, not the employers and the greener districts in the country. To the question, organisation. I am talking about the region. “Who will take the lead?”, the answer might be that Lyndsey Bunn: It would be a loss to the region—that some of the authorities have to do that, rather than is what I would say. Yes, I believe that there should emda. Over the past few years, there has been an be an organisation that is looking at economic interesting balance. To return to The Avenue, on development across the region, and developing sustainability, regeneration and whatever, I would economic growth and productivity and supporting have thought that the lead would certainly have been businesses to generate productivity and wealth. That taken by emda—not alone, but it has played a very is about as much as I would like to say, if that is okay significant part. However, with a changing political with you. I am not sure I have answered your climate across the East Midlands, much of the lead question. must come more locally than regionally. That is Mr Laxton: Well, if you believe your answer is where the emphasis could perhaps be better applied. deficient—that is your opinion. I don’t have an opinion—I just wanted to know your view, that’s all. Q51 Mr Laxton: About an hour ago, Paddy asked Stephen Woolfe: I’ve let you oV the hook now, what would happen if the RDA was to go. Lyndsey’s haven’t I? emda has done a lot of good for the East response was, “Well, it can be replaced by something Midlands. One of the really good things it has done else.” May I put that behind the eight ball? Before is to start making the East Midlands think of itself the RDA, we had the East Midlands Development as a region. The world is a big place. Leicestershire, Company and before that it was basically Whitehall Nottinghamshire, Derbyshire and Lincolnshire— and what is now the Government OYce for the East don’t forget Rutland—haven’t got a terribly large Midlands. GOEM was supposed to be a voice for the standing in the world. The East Midlands is small regions in Whitehall, but many people saw it as enough as a region. Some people say it should be the Whitehall in the East Midlands, in this case. Has Midlands we talk about. I think the East Midlands anything changed? If it were to go, how disastrous is a good region to come together. If emda were to would that be? And if you feel it is disastrous, what disappear, what would be one of the biggest would you replace it with? downsides? I think perhaps the loss of our ability as Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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22 May 2009 Adrian Axtell, Lyndsey Bunn, John Hardwick, David Jeffery and Stephen Woolfe a region to pursue a regional approach and strategy diVerentiation, as a colleague said earlier. We have would be a huge loss. What would come in its place? something as distinct as the East Midlands now. Hopefully, emda mark 2. If I take your analysis of That is good, and we can build on that. GOEM, which is Whitehall in the regions—I am not Mr Laxton: Paddy, I feel ever so guilty. Can I just say sure it is right, but that is certainly how GOEM has what my view is? I once had a conversation with been perceived—I think the region wants something someone who was a permanent secretary—a top- rather more strategic than that. It wants to be able notch civil servant in the Department for to feed through a body and feed down to London Environment, Food and Rural AVairs—who was in and make its impact that way. I have no doubt the business of handing out big gobfuls of money— whatever that we will need emda mark 2. billions here, there and everywhere. I was talking to Adrian Axtell: Overall, it does do a good job, for two him about Derby, and he said, “Derby, Derby, specific reasons. One is that the east, from my Derby. Oh, I know Derby. I went through it once on understanding, and certainly from a trade union the train.” I thought, “My God. This is an individual perspective, has always been the poor relation to the who has some influence in terms of where money, west. Coupled with the East Midlands it is very easy, influence and power to shape industry and the again from an industrial base, to be Derby and economy are located and directed.” I thought, Rolls-Royce-based, but it is a bigger and more “God, you must always follow the money. You have important and more diverse region than that. I think got to get a little bit closer to it, rather than having it would be a loss, to a degree. What would take a view as remote as that.” You know where I stand in terms of my enthusiasm for the regional agenda. I over? I think it needs an emda mark 2. Perhaps more hope that makes you feel better. direction should be given to the stakeholders that are Chairman: I think we had better get this permanent involved. As was said earlier about being involved at secretary to come and give evidence. Thank you all the start and right the way through the process, that very much for coming; it has been really helpful. I is from a broad perspective, or however you want to have an apology to make, as I have cut people oV at take it. I think it is all a bit in the auspices of being various points. It is clear that there is a lot more to open and so on, but perhaps it doesn’t necessarily be said about the matter. So when you are on the bus, attract people. We were classed as natural leading those of you who are sustainable—I got the players, from an industrial perspective in that impression that you are not very sustainable—or if environment, to hold that discussion and tackle you are going back in a car, and you think, “Gosh, I some of the issues that aVect the East Midlands. wish I could have told them that,” perhaps just three David JeVery: Just briefly, we said in the beginning or four key points that we haven’t had the chance to that we agreed with the analysis that emda did of the talk about with you, don’t hesitate to let us know region. It is sophisticated and highlights the what you think. Thank you all very much indeed.
Witnesses: Councillor Martin Hill, Leader of Lincolnshire County Council, Chair of Local Government East Midlands Improvement and EYciency Partnership, Councillor David Parsons, Leader of Leicestershire County Council, Chair of East Midlands Regional Assembly, Chair of the Shadow Local Government Leaders Board and Martin Traynor, Managing Director of Leicestershire Chamber of Commerce, Chair of the East Midlands Regional Assembly’s Regional Scrutiny Board, gave evidence.
Q54 Chairman: Welcome, David. Thanks for is a lot to cover, so we need to be fairly quick. Let me hosting our meeting today. The Select Committee cut straight to the chase. How do you think emda has been keen to get out and about in the region. We is doing? have been in Nottingham, we are here in David Parsons: If you want me to start, I will. In our Leicestershire today, and we are going to Tupton submission to you, Paddy, we have tried to be fair. fairly soon. We all know each other, but it would be We think that there are pluses and minuses. There helpful for the record it you would introduce are positives where emda has achieved, certainly in yourselves. The way to do that, I have been its help for business organisations. It is good on that. reminded, is to push the buttons when you speak. It can point to coalfields renovation. Everyone has Shall we start with you, Martin? probably been to The Avenue coking sites. It has Martin Traynor: Yes, I am Martin Traynor. I am an personally helped me an awful lot on the East ESEP member of the Regional Assembly and I chair Midlands China Business Bureau. We have long- the Regional Scrutiny Board. standing links with west China here in David Parsons: I am David Parsons. I am Chairman Leicestershire. Because we did not want to just visit of the East Midlands Regional Assembly and I am on a civic basis, we decided to try to develop trade also Leader of the County Council in Leicestershire. links and business links. emda took that over. It also Martin Hill: I am Martin Hill. I am Chairman of the ran with the India desk, and has developed the links Regional Improvement and EYciency Partnership well. I am happy with that. I have also been involved and also the Chairman of Local Government East in European funding. It has been incredibly Midlands. When I am not doing that, I am Leader competent on that. On the negative side, an update of Lincolnshire County Council. of the regional economic strategy at a time when the economy has changed significantly is something that Q55 Chairman: We will try to finish at 12.30. There emda really ought to have been on earlier. I don’t Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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22 May 2009 Councillor Martin Hill, Councillor David Parsons and Martin Traynor want to be unfair to emda, but there is a job of work democracy is having a bit of a rough ride at the to be done there, particularly as it serves on the moment, but there is that legitimacy where people Regional Economic Council with me, as it happens, can go forward. If someone has gone out on an and others to try to help in the current economic electoral mandate and the people have supported downturn. We need a coherent strategy on attracting that mandate, it gives you that powerful voice to say, and retaining foreign direct investment. We need to “This is what we think because we have tested it with do something about tourism here, which it needs to the public.” That is one of the issues where you need grasp with both hands and develop. But I wouldn’t that democratic element. There have been issues say it’s a mixed picture—by and large, it is certainly under the new structures. There is a bit of culture one of the better development agencies. It has been clash, because obviously emda has a more focused, very helpful. We have tried to help it as well, but narrower, “We’ll get the job done, let’s just get on there are areas that it could and should develop. with it” approach, whereas as we all know as people who have been elected it is much more clumsy and Q56 Chairman: Do you think that the organisation long-winded—but at least people hopefully feel that is well known in the region? Has it permeated down? everybody has had a say about how it should Let me test you a bit. For example, there has always happen. been a view that emda may not focus enough on Chairman: We will get on to that governance issue Lincolnshire. towards the end. David, do you want to say Martin Hill: Yes. I was going to mention that there something? has always been fear about the famous golden David Parsons: I think that emda is a voice for the triangle and that, if you aren’t within that area, you region. That is not to criticise emda; the way in which will lose out. I think that things have improved. I it has been set up is that it is not the voice for the have certainly challenged people in emda that there region. There are several voices: the leadership group are other areas. Again, as David has said, there were which is being set up is clearly one, which will liaise certain issues years ago when emda was first created with emda. The regional assembly has been one, and V when there was very much a focus on the it has been e ective in a number of areas. It has been V Nottingham, Leicester and Derby triangle. EVorts incredibly e ective in getting regional funding have been made and, although I am not totally allocation for local roads, for instance—roads into reassured, I am reassured that it is scrupulously fair Nottingham, and roads between Widmerpool and with how the money is allocated while at the same Newark and so on. That is clearly a voice of the time making sure that it is not just giving money region as well. You could say it is not the voice for away for the sake of it. Tourism is one area that it has the region because it lacks a sort of democratic improved. Relations are better. It is an area where element which should be there if it was to be the voice there is a view, certainly in Lincolnshire, that for the region, so you would want a structural possibly tourism does not receive the importance change, but in being a voice for the region I don’t that it should have within the region. On whether think that it has done too bad a job in the fields that emda is well known, it is well known obviously by it has got involved in. those who need to know it, but whether the general Chairman: Bob, you wanted to ask about public know of emda, I very much doubt. We have responsibilities? had SSP issues. Frankly, it was overcomplicated to V have all the di erent SSPs, which overlapped into Q58 Mr Laxton: Local authorities and local V di erent county boundaries. There was an issue government have always been absolutely, directly there. Those who need to know, know who they are, engaged with emda and well represented on the but I don’t think that anybody else does, board. Do you perhaps sometimes think that it is particularly. The issue with development agencies is maybe a little bit too business orientated? Also, do that they are allocating Government money, so the you think that because of the chunks of additional question that you could ask is, “Could anybody else powers—in grant-giving and various other areas— V do it, or could it be done di erently?”, because the that have been handed over to emda over the past 10 money is coming anyway. We’re not sure how much years, in part it has sort of diverted them and they money will come in future, but they are doing that. have lost some sort of focus? The key question I would ask is whether it could be David Parsons: A couple of comments on that—first, V done a di erent way. on it being too business oriented. I am not sure that they are and I think that they ought to look at the Q57 Chairman: Can we pursue that? How far do you structure of their board. One of the criticisms that I think that emda is a voice for the region, and that in have seen is that they say that they are business a sense you own it and you are part of it, and how far oriented but, actually, the people on their board—I is it, as you put it, the agent for the Government? have to be very careful with what I say here— Martin Hill: Eight of us—sorry, Martin, seven of Mr Laxton: I understand the sensitivity. us—are elected, so you have that focus. It is diYcult David Parsons: They could be even more to say that you are the voice of the region when, representative of local business than they are now. frankly, you are all appointed, although there are Obviously, as a democratic politician acting obviously people on the emda board who are also regionally, I am going to say that I think that their elected. I think that it is more diYcult to claim that proceedings would be improved enormously if they you are the voice of the region when you haven’t got took a huge account of what people like me and that democratic accountability. We know that Martin said. I think that that would give them more Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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22 May 2009 Councillor Martin Hill, Councillor David Parsons and Martin Traynor legitimacy. Actually, on the current board, getting think that they are good at holding the ring and that message across—this is a criticism of emda,I taking clear, targeted decisions about where think—has not always been easy. particular projects should go? Martin Traynor: Clearly there are certain activities that are better delivered at a regional level. What we Q59 Mr Laxton: How do you feel about that, have seen through the development of local area Martin? I’m not wanting to drive wedges in, but agreements and, certainly, the multi-area agreement from a business perspective? V now in Leicester and Leicestershire, is that there are Martin Traynor: I think there is a di erence between a lot of things that I believe could be delivered far people representing business and people with a more eVectively by local agencies. If you go back to business background. Quite clearly, people are the establishment of the SSPs, that is what they were selected for the emda board on their business set up to do—to be far more engaged at a local level, experience. That does not necessarily mean that they looking at the smaller economic development represent the wider business community. There is a V investments. Something like inward investment, one distinct di erence there. I would not contradict can argue whether that is a regional activity or a anything that David said. The bit about democratic national activity. I know that your colleagues on the accountability is an important one. Certainly going BERR Select Committee looked at the issue of forward, as SNR flushes out, that needs to be looked inward investment—Peter LuV’s team concluded at. Your points about when the RDAs were set up that the diYculty we sometimes have is that RDAs and the growth over the past 10 years— compete for the national market, which, again, Mr Laxton: Changed quite dramatically. comes back to your point about counties competing Martin Traynor: It has. As Peter will recall, when we for the same thing. My experience of working with were looking at housing the RDA—probably in China and India is that they are looking very much about ’99— at UK plc, whether East Midlands, West Midlands Sir Peter Soulsby: We remember it well. or whatever, and I do not think that that particularly Chairman: We do. interests them. That is where we have to get the Martin Traynor: We all have the scars from those balance between what we do at a local and multi- days. We were looking at a team of about 40 people, area agreement level—what we can do reasonably to but if you look at emda now it is well in excess of 200, co-ordinate—and what we should be doing but that is because over a period of time nationally. Government have given them additional Chairman: Let us move on—sorry. responsibilities. When the RDAs were first set up, it David Parsons: I was simply going to say that I don’t was very much about an economic development believe—call me naive if you like—that they have a organisation or agency that would be fleet of foot holding-the-ring role. I hope you don’t think I’m and able to make the right sort of interventions far boasting, but we have particularly sophisticated more quickly than local authorities at the time. The politicians, certainly in charge of what we call the argument was that local authorities were tied down nine Cs—the five counties and the four unitaries. We with standing orders, etc. The diYculty that we have have always helped the development agency in its found over the years—something that must go back role when it has had diYcult decisions to make; and to BERR, or the DTI as it was in its former life—is I have personally put my head on the chopping the interpretation of things like state aid rules. The block, not least in my own party, on a number of processes that emda has to undertake to make sure occasions to try to help the development agency and that it is compliant with state aid rules are making the regional institutions in their work. the whole process laborious. That then dispels the Chairman: That was really helpful. Peter wants to argument about being fleet of foot. This is not a move on to talk about relationships with local criticism of emda, it is the way the system has authorities. worked. You have a situation now in which the SSPs have an application form of something in the region of 65 pages—whether for £500 or £5 million, which Q61 Sir Peter Soulsby: You said earlier, David, that is of course ridiculous. The other diYculty that emda there was considerable room for improvement in the has is getting its projects through. You are looking at extent to which emda can be held to account by those a minimum of 20 weeks from an expression of who have democratic legitimacy in the region. I interest to the potential first payment. That is far too wonder whether you think that requires some sort of long. That is not of its making, that is the structural change, or whether only an attitudinal interpretation that BERR has put on it through state change is needed. aid rules. David Parsons: If I might say so, Peter, given the new arrangements I think you’ve hit the nail on the head. There is a sort of strategic accountability that now Q60 Mr Laxton: Do you think that they are eVective comes from parliamentary procedures, but what we at holding the ring? If they were not around, one of had before was the scrutiny of emda in detail, and in the views was that you would end up with, say, some detailed projects, which is something that we inward investment squabbles between you pair: “It will lose. It may be that Parliament wants to take should be in Leicestershire,” “No, it should be in over that role, and if so that is what will happen; but Lincolnshire,” “No, it should be in Derbyshire.” if it doesn’t, we will have lost a huge amount of Those are the sort of battles that used to go on and detailed scrutiny and the detailed recommendations maybe still go on—of course they still go on. Do you that could have been made to the development Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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22 May 2009 Councillor Martin Hill, Councillor David Parsons and Martin Traynor agency on how it could have done things better. I that is what they are being told—that they have to be believe that if one message goes out from these accountable to the Minister—they will be, because, meetings it should be that we need to deal with that frankly, they are being correct as they see it. particular problem. We have some ideas, obviously, and we would be happy to air them, but it is a Q64Chairman: I know that you two council leaders problem that needs addressing. are busy until 4 June— Martin Hill: Yes. Q62 Sir Peter Soulsby: In broad terms, what sort of David Parsons: You have been particularly helpful. model do you think might be appropriate? Chairman: Just on this more detailed scrutiny point, David Parsons: This is completely oV the cuV, but at will you write to us and just sketch out your thinking the moment you have some sort of executive on that? behaviour between the regional leadership forum David Parsons: I am certainly happy to do that. I will and the development agency. My own view is that get the Chief Executive of the Regional Assembly, you could use a successor to the regional assembly or who knows all about these things, to do it. the body that now represents local councils, which Chairman: Let us move on to talk about the regional will probably be called East Midland Councils; it economic strategy. Judy? would have a sort of scrutiny role, to look at how the executive arrangement is working. Q65 Judy Mallaber: You have already touched on this to some extent in the first contributions, but I would like you to expand on it a bit. You described Q63 Sir Peter Soulsby: Interesting. I see Martin yourself as consultees to the development of the nodding. Is that a view that you share? regional economic strategy, rather than joint Martin Traynor: Yes, I do. I have done scrutiny for authors, and in your evidence you sounded slightly about six years, and it has been an interesting peeved at that. What exactly was your input into the activity.We have been able to look at specific areas of development of the strategy? work that the development agency has undertaken. David Parsons: Our submission says that we were Our approach to scrutiny is about taking a very regarded as preferential consultees, rather than positive approach, and making positive people who were consulted because we needed to be recommendations. We have said when they have consulted. You could argue that there is an artificial done things well, and we have highlighted areas that boundary between the old regional economic could be done better. That role should go forward in strategy and the regional spatial strategy. We in the another form. I would also say that we have East Midlands were first, I think, in having an benefited from the ESEP members of the assembly. integrated regional strategy, which was one of the Our approach to scrutiny is this: as opposed to reasons why the Government went down this line in setting up a panel of members of the assembly, we the first place. Of course, they need not have done have asked one of our Regional Scrutiny Board that in the East Midlands, because we already had an members to chair the panel, and we brought in four integrated regional strategy. I am looking forward to or five people from outside who have expertise in the the future. I hope that I am not rambling too much, areas that are being investigated. As a result, some but the group of leaders and the development good reports have come out. They are not politically agency, as I understand the new arrangements, will biased; they say, “Right, these are the sort of have a joint responsibility in drawing up that activities that you should be undertaking in order to integrated regional strategy. That is welcome. I think move things forward.” It has been based on the that it is a move on. In answer to your question—I recommendations of people who know the subject. hope this is okay—I think that it bodes well for co- Martin Hill: Just coming on to accountability, it is operation between the two sets of institutions in the quite clear that emda is a creature of the future, whereas in the past we did not feel that we Government, and is appointed by Government. We were particularly well consulted as an equal player at are all devolutionists now, and even if we accept the the table, if you like. need for regional development agencies. However, we are being encouraged to devolve not only the Q66 Judy Mallaber: Do you have any reservations money but the responsibility. There is a clear about the economic strategy as it was drawn up? You expectation of ministerial accountability, back from have made a number of comments specifically about the Chief Executive of emda, and they rightly say, “It how it should have been updated now, about has been made quite clear to us that we”—the tourism, which I have lots of sympathy with, and Chairman and the Chief Executive—“are going to about foreign direct investment. I think those were be made accountable by the Minister for this the main points that you were making earlier, but in money.” broad terms were you happy with how that was set You don’t need to be a genius to work out where out and what is in it—the priorities? Also, having the real accountability is and where the answers will said you think it should be updated, how would you go. It isn’t a devolutionist structure; it is a command do that process? What do you think should be being control. So you can’t blame emda if they say, “Yes, done now to update that strategy? we listened to what was said by the sub-regional David Parsons: I am not an economist—some of areas and by councillors and business people, but those things are things that I would take advice on. frankly we have to keep the Minister happy.” That is The one you didn’t mention where we would also the fundamental problem. All the rest is just fluV.If have liked better performance was the relationship Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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22 May 2009 Councillor Martin Hill, Councillor David Parsons and Martin Traynor with the sub-regional partnerships, which was you have most eVectively. As we moved into the mentioned by Martin early on. I think I would take downturn, we needed to refocus that, and we needed some advice. In the regional assembly, we took an to align the strategy to make that happen. early opportunity in the economic downturn to say that these arrangements should be revisited. I am Q68 Judy Mallaber: It is hard to see what emda could told that that hasn’t been a particularly vigorous do about energy costs, which are one of the big issues process. I am getting individual representations from aVecting people, but which are the areas where it firms that in the economic downturn are trying to could be more helpful? In my area, the economic relocate in the East Midlands and that say that they development oYcer is linked to the sub-strategic are not finding things easy because of the lack of a partnership and is giving businesses specific help in robust approach from the development agency. relation to the banks and so on. In which areas could There are a number of detailed issues there on which emda and the other agencies concretely provide the I would ask my chief executive to advise, but taking most help at this stage? advice from the regional assembly, looking at the Martin Traynor: Clearly, it is through advice. It is economic downturn and seeing how this could through using the Business Link contract and change practice—perhaps Martin has detailed stuV through refocusing Business Link activity to provide to say on this—is the way in which I would see it that type of support. Coming back to energy, the going forward. issue is, again, about providing advice. Various Martin Traynor: The point we were making back in projects are being run with our universities, which July was that we were just starting to see the early have gone into businesses to help them look at signs of the recession biting. What we were trying to whether they can carry out production far more achieve was a shift of focus away from business economically through things such as lean processes. support to business survival, because the application There are lots of diVerent activities that the agency and the support of that is very diVerent. Companies could undertake to support small businesses. were starting to struggle with things like cash flow. Chairman: We have already talked a bit about the One of the diYculties a lot of small companies have sub-national review and the change of is that they have been set up since 1992 and have infrastructure. Will you delve into that a bit more? never lived or worked through a recession. Take it from me, when you are running a business through Q69 Sir Peter Soulsby: Yes. I wanted to ask you a recession, cash is king. A lot of companies are not about the single regional strategy,which you referred used to that, so we were trying to get to a stage where to earlier. Will emda be suYciently well geared up we said, “Look, these are the diYculties that we are and resourced to deal with the responsibilities that it having. We need to move from business support to will have? What arrangements will there be for business survival.” At the time, we were seeing bringing the relevant expertise together? extraordinarily high fuel costs for petrol, gas and David Parsons: I have not heard that emda is not well electric. We are now trying to move from a situation geared up to perform that role. I might be out of where that is referred to in the RES to one where it touch, and I might seek some advice on that. One becomes a priority. Clearly, things like energy will be place where you might say that resources are needed very expensive commodities going forward—the is the local authority leaders board so that it can days of cheap energy are over. Companies need to make a meaningful contribution to the process. My V V start looking at their processes and systems and at complete o -the-cu reaction is that emda is how they can bring their costs down. Again, that is probably reasonably resourced to do the job it is about moving the focus. I would not have wanted to being asked to do. More resources are probably see a massive rewrite of the RES, because we would needed to get a good and robust response from local authority leaders. probably still be doing it now. What we were looking Martin Hill: There is a particular issue with for was a light touch and more emphasis on the areas planning. emda obviously has no expertise in that, that I mentioned. In fairness to emda, it has moved and we understand that there was some interesting, in that direction, but I would have liked to kick V lively debate as the Bill went through—you probably things o earlier. know much more about that than we poor councillors do. An uneasy, strange creature has emerged. We have emda and the leaders board. From Q67 Judy Mallaber: So are you saying that it is more the assembly side, we are trying to put support in— to do with making sure that the mechanisms are I sit on the regional transport planning board—to appropriate and in the right place than with the help joint working. I do not think that emda overall strategy? particularly wants to take on a huge planning role. Martin Traynor: Yes and no is the answer to that There is expertise out there in the sub-regional areas. one. Clearly, you need the strategy to show which emda would not like the extra resource on planning, direction the agency is going in. From the strategy but then there is the ability to draw on the expertise. come the actions for the delivery agencies such as That comes to the clumsy arrangement whereby, if Business Link, so it is important that there is a policy the leaders board and the emda board agree, priority. The East Midlands economy is somewhere everything is hunky dory, but if they do not, there is around £90 billion a year, but emda’s resources are a strange arrangement, then it will go to the £180 million. In the scheme of things, that is petty Secretary of State, whom I presume will agree with cash. What you have to do is use the resources that his emda board. That compromise has come out of Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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22 May 2009 Councillor Martin Hill, Councillor David Parsons and Martin Traynor the system—frankly, we have lots of debates about people probably know better than a civil servant, all sorts of things. In my time on the assembly, there frankly, who is sitting in London or who is probably has been broad agreement about the way forward— thinking what the Minister might think. I would not you can argue about some of the detail—but if there shed a big tear for the demise of emda. We have got is a big diVerence, it does not look as if it would work things like the MAAs now. All the parties are talking too well. Hopefully, it will not get to that stage, but about not having these rigid structures. Certainly, in it is a bit of donkey. parts of the region, there is always this issue of the boundaries. In Lincolnshire, we are looking towards Q70 Sir Peter Soulsby: Do you think there is Peterborough or Grimsby or Derbyshire. There has Y suYcient clarity about what is likely to sit at emda, always been an iron wall that has been di cult. You sub-regional level and local authority levels? cannot overcome those issues. People would work Martin Hill: There isn’t clarity. Do you want things together. There are obviously some issues about set in stone or can you work through? In major routes and economic issues, but people would Lincolnshire, we are having useful discussions with work together in their best interests. But again, you emda. We are having a pretty good relationship at need to avoid people bidding to get the business in, the moment and working through some of these as happened before, to one part of the country or issues. We would argue that we would expect more another. There would need to be some loose to be devolved and with less strings and all the rest structure, but on an ad hoc basis and on particular of it, but we are working through the system. There issues. is a little bit of a rationalisation going on with the David Parsons: There is one thing that worries me. If SSPs, which is long overdue, and we are hoping that you get rid of bodies that are funded for the region that will work well. Even if you are not sure about and give us a sub-region or, in the case of my party, the system you will try and make it work. There is voluntary clustering arrangements, what happens to not clarity, but hopefully we will try and work the money? National politicians in my party have through and get the job done in the best interests. said to me, “Well, voluntarily cluster.” I don’t mind David Parsons: I am perfectly happy not to have doing that, but where—if you will forgive my clarity from national Government—it would give us language—is the bloody money going to come from? a lot more leeway. Given that we are reasonable As long as it isn’t seen as a money saving exercise per people in the East Midlands, if we can negotiate our se, I could go along with diVerent arrangements. own way of working, I would seriously prefer it. Martin Traynor: When the RDAs were set up it was absolutely the right thing to do because there was an argument for looking at how we could deliver things Q71 Chairman: I think that is right, but just on a regional basis. As we have seen now with the challenging Martin a little bit, do you think a SSPs and the creation of a multi-area agreement, situation will arise where emda and the leaders board there is a better understanding of how we can get will fall out? Is it not in everybody’s interest to clusters or groupings or whatever you call them. I resolve it locally or regionally? think the optimum size is probably about 1 million Martin Hill: Yes. There is the example of the regional people, which would be Leicester and Leicestershire transport allocation. It could have been a nightmare or Nottingham and Nottinghamshire. That is quite with all these competing road schemes but, an interesting economic unit. It is about the right size somehow, it was not. If somebody scrutinised it well, for regeneration at a smaller level. There is still some they would probably come up with all sorts of issues, form of regional activity but—it comes back to this and it was not ideal. There is a common interest, so earlier debate about foreign direct investment: are things would hopefully not get to that situation. It is you supposed to do it regionally or nationally?—we only when you get to into a situation that somebody need to get the balance right. Going forward, I think says, “Why did we get to here?” that there could be the co-operation in Leicester and Leicestershire issues on which there is disagreement, but we hope around economic development is leading the way. not. I am not foreseeing that, but it seems to be a That is the model we should probably be moving strange arrangement. towards. Chairman: Can we talk about the rural-urban nature Q72 Mr Laxton: I was going to use the word “view” of the East Midlands? but it is more like a commitment to sweep away the whole paraphernalia, to use that expression of RDAs. If that happened, would you shed a small Q73 Judy Mallaber: I always find this a bit diYcult tear of nostalgia or scream in frustration? In essence, because we keep being told that it is rural-urban, but if there is a great void, what would you wish to see as far as I am concerned, it is rural-urban and semi- replacing it, or would you be content to see decisions rural, which is much more complex. In broad terms, taken in Whitehall or a mix of Whitehall and GOEM do you favour emda’s approach of rural or whatever? What are your views? mainstreaming? Martin Hill: You could allocate the money that emda Martin Hill: What does it mean? We could have a gets through the sub-regional areas—frankly, we are great discussion about this, but what do we actually all devolutionists now, so we all believe that mean? I think you’ve got to scratch under the decisions should be made at the most local level. I surface. This is something that somebody puts on firmly believe and always have believed that you reports and tips their hat to. What has actually should get as near to the ground as you possibly can, happened? What does it mean and has it actually because the local managers and the local elected changed anything? I am a little cynical. I think that Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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22 May 2009 Councillor Martin Hill, Councillor David Parsons and Martin Traynor the intention is there, but I am at a bit of a loss. Can The county that I know—Herefordshire—has that somebody give me an example of when rural dynamic as well. We have supported emda in its mainstreaming—whatever that might be—has mainstreaming approach, but a number of details actually delivered something? remain that it could profitably investigate along the lines that I have said. Q74 Judy Mallaber: So you are not seeing any Martin Traynor: We need to look specifically at rural diVerence in how it operates? areas, because central Government and their Martin Hill: I don’t know what the term “rural agencies are urban-centric. That is down to critical mainstreaming” means, although I come from a mass: if you start using things such as the index of rural area. I shall be fair to emda though: it is making multiple deprivation and allocate funding on that a genuine attempt. It feels that it needs to ensure— basis, quite clearly the large cities will come up, and certainly has been over recent years—that it is because that is where most of the deprivation is providing support. It would say, “If you come up concentrated. However, what it does not do, of with the schemes, we will support them.” That is fair, course, is deal with the issues of deprivation in rural and we have tried to do that. It would claim that, in areas. Very often, there are quite wealthy district the past, schemes coming forward from rural areas areas so deprivation doesn’t show, but that doesn’t have not stacked up in comparison with those in mean that rural deprivation doesn’t exist. We must urban areas. I don’t know what “rural also recognise that it is easy to go into larger areas mainstreaming” means. I think that it is up to local and deliver contracts for business support or areas to come up with sensible schemes, the whatever, because there are a number of businesses infrastructure and frameworks so that businesses, around that area. It is easier to get to them when you including small businesses, can prosper. I think that have a large critical mass. As our report said, we “rural mainstreaming” is just a term to keep the rural need to do some more targeted work around rural peasants happy, frankly. areas. Over the past 18 years, in Leicester and Leicestershire, we have established the Leicestershire Q75 Judy Mallaber: I assumed that it just meant that Rural Partnership, which brings together many of there was not a specific rural stream, and that every the statutory agencies along with the county council. policy was meant to include the rural dimension We looked specifically at how we can help some of and analysis. the smaller businesses and rural communities. We Martin Hill: Within our council, we have this have established in Leicester and Leicestershire an mainstreaming. Somebody looked at it, and when economic development company that will quite they started digging—“What do you mean?”, “What rightly be looking at driving forward the overall economy. I wouldn’t really expect that board to are you actually changing?”—there was little Y evidence of anything changing. I am not getting at concentrate on the local post o ce in Sileby, but an emda; we are all doing it. However, are people agency such as the Leicestershire Rural Partnership actually changing what they are doing, or does it just should. There is a division there; somebody needs look good on paper? specifically to look after those rural areas.
Q76 Judy Mallaber: Do you think adequate Q77 Judy Mallaber: Would any of you argue for a resources are spent on rural priorities? You said that specific percentage of overall funding being spent on the argument back to you was that perhaps not rural areas? enough viable projects are coming through from David Parsons: No. rural areas. What is your take on the way in which Chairman: That is unanimous. resources are spent on rural priorities? David Parsons: That is not our line, and we must stay Martin Hill: I would hesitate to answer that. I would on message. not want to comment on whether I feel that there are enough resources. The other thing that we need to accept is that, in the future—certainly for the Q78 Sir Peter Soulsby: One of the five statutory foreseeable future—resources will be very limited functions of emda and the other RDAs is to promote because of the state of the national finances. I do not sustainable economic development. To what extent know whether there is enough. However, there has do you think that emda has focused on the certainly been an attempt to address it. But that is sustainable bit, rather than economic development? really all I would say on that. David Parsons: This is quite a tricky one. I have been David Parsons: Our publication, “Flourishing Rural doing some work on the Sustainable Communities Communities?”, might have helped emda.IfI Act 2007, and it is a tricky one. emda is not just remember rightly, the key thing in that was—well, looking at economic development; it is looking at first, we backed its mainstreaming approach. That is the sustainability of plans that it is putting forward. the regional assembly’s position. We suggested that I am suggesting my overall impression—this is it needed better evidence on what was happening in somebody who looks up sustainability in diVerent rural areas; and we specifically mentioned social dictionaries and finds a diVerent definition in every enterprises in the report. We also mentioned one. I think that sustainable economic development something that I would have thought is very is in the mind of the development agency and it is important in Lincolnshire and certainly is in doing its best to focus on that. One eco-friendly Leicestershire—migrant workers, their skills and project up in Nottinghamshire springs to mind. So it any resulting stresses on local rural communities. has a track record. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 36 East Midlands Regional Committee: Evidence
22 May 2009 Councillor Martin Hill, Councillor David Parsons and Martin Traynor
Q79 Sir Peter Soulsby: It was very clear when emda Q82 Chairman: You make some interesting points in gave evidence that it was pointing to some excellent paragraph 2.8 of the written evidence. It talks about projects that it has supported. Is there any evidence emda’s ability to influence things strategically, and that the challenge of climate change has been goes on to say that its influence is through reflected in any of its priorities or policies? contracting and commissioning. It goes further to Martin Hill: Yes, I would think so. say that it has actually been putting its foot into areas that perhaps it should not, such as skills or Q80 Sir Peter Soulsby: Such as? regional planning. The bit that caught my eye was, Martin Hill: Oh dear. Well, I certainly think that it “This has led to challenges to develop a genuinely is supporting the events centre on the show ground, Team East Midlands’ approach.” What do you which the county council also supported. That is a mean by that? There is some feeling there. sustainable new building for conferences and so on. David Parsons: Perhaps it has unilaterally extended Sustainability can be defined in all sorts of ways. Are its remit. That comment has been made to me. If it is we talking about economic sustainability? I would a unilateral extension of a remit, that is not helpful. argue that that should be the main focus. The more However, it may be the case that it is an extension of we start saying that this, that and the other should a remit where there has been some level of happen, the more we will probably fail. Economic consultation. This matter has been mentioned to me sustainability is not about trying to support those and is in our written evidence. We would like to have industries that will decline over years; it is about the seen emda—this is a criticism of it, I suppose— small businesses, the start-ups, and about putting an genuinely engaged in the areas that we have given to you in our report. infrastructure and framework in place so that Y businesses can flourish and thrive. That is where the Martin Traynor: One of the other di culties is the focus should be and I think that that is what it does. scale. If you look at emda’s budget of about £180 I cannot think of any examples of environmental million a year, there is an influence that emda gets sustainability oV the top of my head, but that is involved in the skills agenda. If you look across the certainly an issue. Flood defence is, of course, a big region, the LSC’s budget is just under £1 billion. issue in the eastern part of the region. Therefore, the LSC in itself is able to influence that agenda far more than emda can. You can see the sort of tension between the two. Quite clearly, you can’t Q81 Sir Peter Soulsby: But could it be argued that look at skills without economic development and pointing to some specific projects is diVerent from you can’t look at economic development without having something that is an integral part at the heart skills. That, I think, is the challenge going forward. of the strategic approach? David Parsons: Yes, I think you are right. I could think of specific projects—I was racking my brains Q83 Chairman: I just wondered, behind your and no doubt we could provide you with a list. The comment, whether there is a view that the problem in the economic downturn is that economic partnership is on emda’s terms rather than on terms sustainability might go out the window in favour of agreed across the region. jobs or the relocation of new industries. If I were David Parsons: It certainly has strong views about oVered a moderately sustainable new industry that things. Sometimes, it is not always easy for me to get provided 2,000 jobs in the economic downturn, I my views across to emda. I will say this of emda, wouldn’t be too awkward in asking about though: it will listen to me—there is never a question. environmental sustainability. I would probably be If I ask to be heard, I am heard. But I think you are more awkward if we had an economy that was dealing with the slight structural problem in how flourishing more. There are a number of projects and emda is constituted—that it doesn’t have to listen they are based on environmental sustainability. In and take things on board. Having said that, every my meetings of the regional economic cabinet, that time I, or the chief executive of the regional issue has not figured particularly highly so far in assembly, wanted to meet it to make points, it has relation to the projects that have come forward and been fully co-operative. the work we are doing, in which emda takes a big Martin Hill: I agree with that. There is a sort of—I role. However, it is like that everywhere at the don’t think arrogance is quite the right word—“We moment. know best” attitude. It will listen and take action, Martin Hill: I was a little bit surprised when I went but there is that element of “We know best and that’s to emda’s AGM last year. It claimed that 4,000 jobs it. We have a job and we’ll do it as we see fit.” had been saved in the region, but 2,000 of those were at a particular project in Lincolnshire at Siemens, Q84 Chairman: Thank you for coming and spending which we have managed to retain in the county. I am so much time with us. We play a party game in the not blaming emda, as the project could have gone to Tipping household, which is that you can have a another part of the region, but it was mostly the final comment. Is there anything that you haven’t county council which engineered and facilitated said that you want to say? We’ll start with you, that. Although emda had to be neutral because it Martin. could have relocated to somewhere else in the region, Martin Traynor: As this economic downturn is with I thought that it was a bit cheeky to claim to have us for the next 18 months or so, I would rather the saved those 2,000 jobs. Quite frankly, that would not agency concentrate on looking after the businesses have happened had the county council not done its in the area than worry about things such as sub- job. I would say that, but I can prove it. national reviews and moving various deck chairs Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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22 May 2009 Councillor Martin Hill, Councillor David Parsons and Martin Traynor around. We spend far too much time now worrying should go. You must keep the long-term view, but about structures and delivery. It is my belief that the also loosen up a bit from the centre to let people focus now should be on supporting businesses. make decisions on the ground. Otherwise, it won’t David Parsons: I think I just echo that. I am after work. output for a given area. It happens to be the East Chairman: You are talking to a body of people on Midlands at the moment. I suspect that in the future this side of the table who agree about loosening up. it might not be. We want to get the best output for But we won’t get into that discussion, or somebody the least administrative input. We have a way to go will read my comments, and my phone will ring. on that, and only time will tell where we go. Thank you very much for coming. It has really been Martin Hill: I want to say a similar thing. The helpful. If you could drop us a note about scrutiny, dilemma is that public money needs to be that would be helpful. If there is anything else that accountable, but it also needs to be more nimble of you want to include that you don’t think has been foot. There is a big issue about the length of said today, we will be very pleased to receive it. bureaucracy before things happen, and frankly, that Thank you very much indeed. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 38 East Midlands Regional Committee: Evidence
Monday 8 June 2009
Members present:
Paddy Tipping (Chairman) Judy Mallaber Mr Bob Laxton
Witnesses: Dr Roger Brooks, Deputy Director of Research Innovation Services, University of Nottingham, Professor John Coyne, Vice-Chancellor, University of Derby, Chair of East Midlands Universities Association, Jenny Kenning, Executive Director, East Midlands Universities Association and Professor Phill Dickens, Pro-Vice-Chancellor (Enterprise), Loughborough University, gave evidence.
Q85 Chairman: Welcome to Tupton village hall. The Professor Coyne: The major issue in the very short Committee was keen to get out of Westminster and term is how we can galvanise activities and work Whitehall and to go around the regions. We have together to ensure that the recession that we now been to the big cities and we were keen to come to face is as short as possible and that the economy more rural areas, so we are here. Thanks to our three emerges from it as strongly as possible. That is a very witnesses for coming. It would be helpful if you short-term variation on a broader theme. Our introduced yourselves briefly. We will start with principal engagements are around innovation, Professor Dickens. technology transfer, leveraging the exploitation of Professor Dickens: I am from Loughborough the scientific and engineering base into the new university, where I am Pro-Vice-Chancellor for technologies, and serving some of the priority enterprise. I have been in that position since 1 sectors. I imagine that some of the most manifest December 2008. Previously, I was mainly connected engagements are those where the work of the with running research centres at the university. I university touches priorities in the regional have worked at three diVerent universities in the east economic strategy most closely. midlands. Professor Coyne: My day job is as Vice-Chancellor Q88 Chairman: You have just mentioned the of the University of Derby, but I am currently also regional economic strategy. It is an interesting the Chair of the East Midlands Universities document. How far were the EMUA, as a body, and Association, which represents the 10 universities in individual organisations involved in drawing it up? the region. Professor Coyne: Quite extensively. As individual Dr Brooks: I am Roger Brooks. I am Deputy universities, we had an opportunity to provide Director of Research Innovation services at the expertise, opinions and our balance of priorities. As University of Nottingham. Prior to that, I managed the EMUA, we also formally engaged in the process the optical portfolio for Marconi worldwide. to ensure that the university body’s collective view was well represented. However, we found emda to be very proactive in seeking our advice, expertise and Q86 Chairman: Shall we start at the beginning? Tell support. us a bit about the relationship between the East Midlands Development Agency and the higher Q89 Chairman: Just tell us how the process worked. education sector. What is the relationship? What do Was there a draft paper? Did you submit ideas? you talk about? Professor Coyne: Both. There were many drafts. Professor Coyne: If I can place that in a little context, There were drafts that we liked better than others V the relationship with emda operates very e ectively and there were sections that we liked better than on two levels. There is a strong formal relationship others. Not surprisingly, perhaps, we were keen to between the EMUA and emda. We meet regularly to ensure that the weight of the university sector was exchange ideas and we informally consult each other fully represented, because we are not only active on issues fairly frequently. We also meet formally agents in the region’s economic fortunes, but active with a clear agenda, and each in turn takes recipients of the consequences of any strategy responsibility for setting that agenda so that we because we are a significant sector. Some 4% of the better understand the issues that the other faces. The region’s gross domestic product is in the university university sector is integral to the prosperity of the sector. We employ 60,000 people1 and we have £1.4 region, and we are deeply embedded in many of the billion of turnover. We are a net importer of young thought processes about the region’s future people into the region, although, regrettably, we are evolution. That is supported by eVective one-to-one also a net exporter of graduates, and we would like university-level relationships. Every university is to keep more of them in the region. We were keen in regularly and frequently in contact with emda on a our engagements to ensure that not only the weight needs-driven basis. Every university also has a of the sector was represented, but our expertise, regular periodic consultation, in which emda will which could help as a key driver in areas such as visit to discuss issues in general. environmental technologies and innovation.
1 Universities in the East Midlands employ approximately Q87 Chairman: What is on the agenda at the 26,000 staV, but directly and indirectly support the moment? employment of approximately an additional 30,000 people. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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8 June 2009 Dr Roger Brooks, Professor John Coyne, Jenny Kenning and Professor Phill Dickens
Q90 Chairman: In your evidence to us, you Q93 Judy Mallaber: You have been very positive up mentioned two pieces of work—the regional to now about the relationship between emda and the innovation strategy and the regional technology university sector. John, you specifically talked about framework. Just explain what those are. the good regular bilateral discussions. However, I Professor Coyne: The innovation strategy looks at noticed, particularly in the Nottingham university the way in which the future of the region’s economy evidence, some concerns about the processes for can progress more quickly and more substantively individual project appraisal. Would you like to by the application of innovative new ideas, products expand on that and your experience, and perhaps the and processes across the piece. Our engagement with others could also tell us how they feel on that? the strategy has been to ensure that the universities Dr Brooks: It impacts bids in terms of two areas. One have a higher impact as sources of potential is that very small bids, particularly as far as the RDF innovation, homes for potential innovation and funding is concerned, can, because of the time it V agents of change in other people’s innovations. Part takes to administer them, be less e ective. Therefore, of that has been through access to university there are certain bids—let us say sub-£50,000—that expertise and particularly things such as the energy would not normally go forward that would be seen technologies at Loughborough. If my colleagues to be quite important. Equally, there is a process from Northampton were represented today, they issue. When large bids come into emda, we do not get would talk about the work that they are doing on a definite no or a definite yes. We move then to the sustainable construction and waste management— next stage. With any university—I am sure that the new ideas in fairly established industries. The professor would support me in this—it is a case of technology framework operates in a not dissimilar engagement with the academics first, so you try to build a pipeline of engagement within the university, way. and bad news early is good news. We would rather have a definite no. We also think there has been a very strong—overly strong—application of state Q91 Chairman: Professor Dickens, do you want to aid. We are public bodies. Therefore, we are for the talk about how the innovation strategy impinges on good of the public as well, and we would like to see Loughborough? You are doing some work on things a little more relaxed and a little more latitude energy, are you not? to be shown as far as that is concerned. There are a Professor Dickens: Yes. emda has been tremendously lot of hoops to jump through, and some of them can helpful in that work. We have now developed a be quite oV-putting. cluster of activities in energy. For example, emda has been helpful in the development of the science and enterprise park that we are running, which will have Q94 Judy Mallaber: How does it work? Do you quite a large energy technologies institute. People come up with a project and then see whether you can such as Rolls-Royce Fuel Cell Systems are also fit it into some emda objectives, or do you look at there. emda has also engaged with other regional emda objectives and say, “We could meet the development agencies, and particularly Advantage regional objectives by doing this”? Which way round West Midlands. Working with the RDAs has been of does it work or is it a bit of both? What is the particular benefit, because universities tend to work process? Are you trying to shoehorn your pet quite a lot at national and international level, and it projects into those objectives? is useful to work across regions with regional Dr Brooks: It operates in various ways. If you look development agencies, as well as within regions. at emda’s innovation network strategy,it is very clear what is required. It needs to suit four of the sectors, and therefore projects need to be managed within Q92 Chairman: Dr Brooks, do you have some those areas. Equally, we would talk to academics to examples? get their ideas and move them forward. emda is quite Dr Brooks: Yes. emda’s innovation strategy is supportive in this. If we can bring a lot of industrial underpinned by the innovation networks, or iNets sponsorship—there is large biomass going in shortly, for short. Nottingham, because of its width and via the European regional development fund—that breadth—it comprises 40% of all higher education gets a positive viewpoint from emda for obvious institutions in terms of research income—has reasons, because of the outputs. It is two ways. We subscribed to all four networks so we see the iNet will clearly take the regional innovation strategy and strategy in its entirety. emda has shown some the regional economic strategy into account when foresight in putting its strategies together under one we look at the projects coming forward. innovation mechanism, because it allows HEIs to work together building on existing collaborations, Q95 Judy Mallaber: You comment that the and our work with Loughborough and Birmingham appraisal is ineYcient “by design”. What can be on energy is a case in point. So emda is quite done to make the process simpler and more eYcient? supportive in that way, in addition to funding to Dr Brooks: Speed, in terms of how quickly we could much larger, more strategic bids. Phill has talked know what is going on, would help tremendously. about innovation partners, and there is also biomass Again, a definite yes or a definite no at the start of generation as an additional example at Nottingham. the projects would also be quite useful. I guess those Chairman: You just mentioned funding, and that ones have the largest impact; I do not know what my leads on to Judy’s questions. colleagues would say to that. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 40 East Midlands Regional Committee: Evidence
8 June 2009 Dr Roger Brooks, Professor John Coyne, Jenny Kenning and Professor Phill Dickens
Q96 Judy Mallaber: Are all the universities facing a autonomous institutions with our own mission- similar problem with that, or does it relate more to driven agendas we will compete. There is a one type of programme than others? competitive streak in pursuit of excellence in all the Professor Coyne: Individual universities’ experience universities. By the same token, we have had great probably does vary, but generically, through successes, in part facilitated by emda and in part by EMUA, we have been made aware of some the hard work of colleagues within institutions, in frustration about the speed of evaluation in the trying to make sure that we come together where we ERDF in particular and possibly sometimes an can achieve added value and a higher impact. Then over-zealous application of the rules framework, you compete where it is appropriate. I think the which is not necessarily matched either in other energy technologies initiative that is housed at regions or in other states administering similar Loughborough is a good example. It is a very strong funds. Inevitably, there are some frustrations about collaboration between the universities of that. We must be honest: when universities have Nottingham, Loughborough and Birmingham. projects that they feel passionate about, we are emda was pivotal in securing that for our region. The Y sometimes a little impatient and it is a little di cult work there, however, has a plan that over the years to see why other people cannot share our enthusiasm will be more inclusive of all the universities in the for those projects. On occasion, you will have region, but only where the specific expertise can something that is wholly originated in a university bring something to the party. All of us realise that where support from emda is sought. What we have you only make progress if you can find the best, and tried to do, however, through the engagement then you can leverage that and get greater added process, both university to emda and organisation to value. If other universities have something to bring emda, is to try to get a much stronger framework of alignment, so that neither party wastes time and to the party, they will add value. frustration by us proposing projects that do not fit or emda having expectations on universities that they are not equipped to deliver. So we have worked very Q98 Chairman: Roger, you made a point earlier hard to get an alignment in relation to the regional about state aid. Were you saying that emda was not economic strategy. To be perfectly frank, emda is applying the rules properly or was over-rigorous? very firm in telling us that its task is investing in Dr Brooks: No, I think emda applied the rules projects that will deliver the regional economic exactly. There is a degree of over-rigour. strategy more fully, more quickly, or with the broadest benefit. So we have tried to say, “Well, what are your key priorities and what is it that you think Q99 Mr Laxton: When you have funding in place by the universities can do best?” We have then tried to emda, do you think it is more interested in the short- align and simplify our own internal processes. One term rather than the long-term benefits of a project? classic example is the higher education innovation Have you found that, or is it a mix of both? fund, where we agreed a framework with emda.If Dr Brooks: Nottingham currently has a portfolio universities chose to deploy their higher education funded by emda of about £15 million, which is fairly innovation fund, which they are perfectly free to do, substantial. A lot of the projects are three years in in matters that would more readily help emda deliver nature and therefore there is in some cases an the regional economic strategy, it would then expectation of pump-prime activity. We have a consider match funding in those projects so that GNSS/GPS-type technologies institute being set up there was at least a kind of predetermined alignment. at the moment and that will have sustainability But there are always frustrations if the process takes beyond that. There are other projects where emda a little longer than perhaps our enthusiasm would has eVectively taken existing initiatives. The like it to. Lachesis fund is one; Innovation Partnerships is another. emda backed that and that was driven by Q97 Judy Mallaber: You said “we”, but in this the universities, anyway, since 2001. That is a much process how far are you working collectively to put longer-term set of projects, which is working fine. In things forward, and how far is this about terms of Lachesis and Innovation Partnerships, competition between the universities trying to put in what started up as very small projects now includes new bids? a lot of the universities, so some short term, some Professor Coyne: It is always a healthy balance. long term. Universities are autonomous institutions. As institutions we are quite single-minded and mission- driven, and academics by their very nature are Q100 Mr Laxton: Have you any evidence that they independent in mind and spirit, so getting all of us are perhaps more interested in short-term results? pointing in the same direction at once is not always Professor Dickens: My experience is not that. I think easy. they have a mix. If anything, I would say it probably Chairman: Just like the Labour party. tends more towards the longer-term results. Professor Coyne: I sometimes think that when I Certainly most of the things that I can think of have became chair of the East Midlands Universities got an expected life after a number of years. There Association I had hair, but those who know me might be some immediate short-term benefits, but realise that that is not true. It is diYcult, but we work my feeling is that they tend to look more for longer hard at it. There is a very clear recognition that as term. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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8 June 2009 Dr Roger Brooks, Professor John Coyne, Jenny Kenning and Professor Phill Dickens
Q101 Mr Laxton: Have any of you had any investments from emda—£250,000 or £500,000— experience other than, for example, pulling the have been pivotal in kick-starting a chain of financial rug from underneath the project if it thinks activities that can then leverage additional funding that it is not progressing well or not getting rapid in and often lead to almost undreamed of output. enough results? aIn other areas emda has been prepared to put in Dr Brooks: In all contracts there is a clawback money, and match funding and in-kind contribution facility and we have yet to see it exercised at our from universities that take a long-term view. university. I am sure it is the case for others as well. Certainly, with the East Midlands Knowledge But I have no doubt that if the outputs are not met, Network, the notion that we try to make access to emda will quite rightly exercise that clawback. university expertise available to all business advisers Professor Coyne: There is a very clear focus and through one gateway with a recognisable common expectation on monitoring, delivery and outputs, platform has potentially significant long-term and all parties exercise their obligations under that. benefits. It was, relatively speaking, a modest Speaking across the piece, if there has been any investment from emda that unlocked the energy and frustration over the past six to nine months, it has investments elsewhere and brought that about. possibly been that, with the rapid onset of the Professor Dickens: There is also lots of follow-on recession, we might like to have seen a little more match funding that comes in. To give you an flexibility to deal with the short term. All universities example, we have an innovation centre on our were very active in making submissions to the campus that emda helped to establish. That houses Economic Challenge Investment Fund nationally. some of the spin-outs from the university. We had There was quite an imaginative package of measures one company there, for example, that has just got that we felt could have a bigger impact. In some £1.25 million from a venture capital company. That respects, we have certainly had colleagues represent is not a direct match funding from anything that the view that they would like to have seen emda be a emda has done, but if we had not had the innovation little more flexible in getting some short-term there and that spin-out, we would not have had that boosting, but by and large that balance between match funding from a London venture capital short term and long term has been reasonable and company. It spreads out quite a long way. acceptable. Indeed, the real returns to the two Professor Coyne: There is a good example down in principal arms that we have spoken of are at very Northampton—an extension from the sustainable best medium term, but most likely long term, in construction iNet area where there is money from order to get the kind of changes in the structure of emda, Daventry District Council and construction our economy that are driven by innovation, new employers, and some local money. They have about technologies and knowledge transfer. They are not 40-odd businesses that are incubating all around things that just get a quick win overnight. aspects of sustainable construction. As Phill says, Professor Dickens: The other thing to bear in mind sometimes it is diYcult to see the absolute, direct is that the business that universities are in tends to be mapping—£1 million that emda produced and £3 more longer term. If you think of the educational million from something else—but there is no doubt aspect, doing a degree takes three or four years and that the ability to kick-start a chain of events that then research projects—say with EPSRC, the leads to something that adds up to more than the Engineering and Physical Sciences Research sum of the parts is sometimes important. The note of Council—probably take three or sometimes five caution in all this is that we all know that it is years. So, there is more of a culture of long-term notoriously diYcult to pick winners. Sometimes you working anyway. I am pretty sure that emda have to have the courage of your convictions and recognises that, so it is happier to deal with give things time to develop. iNet is a bold move, but universities on a longer-term basis than it might be you cannot put an innovation network in for every with some other organisations. For some interest—you have to choose the ones where you organisations, two years is a long time, whereas for think you can have the biggest impact. You then a university it is not. That probably sets some of the need the courage to stick with that and follow it tone as well. through so that our alignment can come alongside it and the industry can buy in. You do not get an iNet return in months; you get it in several, perhaps Q102 Mr Laxton: Do you think that emda is good at many, years. maximising the impact of its funding? In your experience, how good is it at pulling in match funding as well? Q103 Judy Mallaber: This may not be an answerable Professor Coyne: Taking a general view again, with question, but what proportion of your research representations from EMUA, I think that the budgets involves you working directly with universities sector’s engagement with emda has companies and industry? I really have no sense of carried with it an expectation that match funding that. It may not be answerable, but I assume that the will go in from the university sector or its partners. figure varies between universities. We have been extremely successful in leveraging Professor Coyne: It varies enormously between additional funding behind the work that emda has universities and the proportion that emda, or public done. Indeed, our evidence produced a mini case money, represents in contributions to each study; Lachesis is another example. We have been university. For the University of Derby, commercial quite good at leveraging other funds. Sometimes, in income and engagement with employers on the grand scheme of things, relatively modest knowledge and innovation, as opposed to learning Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 42 East Midlands Regional Committee: Evidence
8 June 2009 Dr Roger Brooks, Professor John Coyne, Jenny Kenning and Professor Phill Dickens and programmes, are relatively modest, so times? You are suggesting that there was somehow contributions from bodies such as emda are a less flexibility in our region than in others. Have we significant driver. For a more research-intensive hadadiVerential ability to access funding? university with four times the turnover, such as Professor Coyne: Yes, we do not meet with Leicester, which is not represented here, the enormous regularity as regional associations, but proportion of the total turnover from the corporate Jenny, on behalf of EMUA, does meet quite sector would be much greater and the proportion of frequently with directors in other areas to exchanges public funding through agencies such as emda much ideas. It appears that they have been a little speedier smaller, but that is not to diminish its significance. If and more flexible in their interpretation than has we get this relationship right, the ability to trigger been the case in the East Midlands, but this is impact will be what matters, rather than pure sharing anecdotal information, rather than the fruits weight, and I am sure that at Nottingham the ratios of any analytical study. are also diVerent. Dr Brooks: That is a diYcult thing to calculate. If Q106 Judy Mallaber: Going back to the broader you look at this in the broadest sense, the University economic position, has that in any way aVected the of Nottingham which has a good record in industrial priorities of emda and its focus on the importance of collaboration has around 10% of its research higher-level skills? Has it aVected its way of portfolio of around £500m with UK industry ie operating in relation to the skills agenda? £50m. It is a broad figure as some industrial partners Professor Coyne: I am not sure that we have seen any may be involved even though they may not massive change. Indeed, the universities sector’s contribute cash to the research. This type of decision engagement in measures to address the economic will depend upon the innovation model they are downturn has not been helped by not having a seat following. at the table with the regional cabinet that was set up. It seems astonishing to us, as a group of universities, that a sector that represents £1.4 billion of direct Chairman: John, you talked to us earlier about the turnover and probably £2.5 billion of economic current economic climate, and I think that Judy impact per annum does not even have a voice when wants to pursue that with you. measures to tackle the economy are being discussed at regional level. We have made several Q104 Judy Mallaber: Yes, you enticed us by saying representations regarding that, but with little eVect that you had had some proposals about what might to date, so I am afraid that the mysteries of how the be done in the shorter term and that you felt that recession is being tackled will have to remain a they had not necessarily taken up some of your mystery to us. ideas. Can you expand a bit on what you think we should be doing about our current economic Q107 Judy Mallaber: Do you have access to the problems and what you think has been done and Regional Minister? should have been done? Professor Coyne: Not so far. We have not been able Professor Coyne: I was representing observations to find a space in his diary. Have we finally got a that some of my colleagues at other universities had date? fed in, and I might seek the support of the Chief Jenny Kenning: There has been no response.2 Executive of EMUA in thinking of some examples. Professor Coyne: He did oVer that we go down to When putting the ECIF bids together, some meet him in Parliament if he was too busy to meet in institutions would have liked to look to emda match the region. funding in part, and my understanding is that emda match-funded and supported ECIF a little less fully Q108 Judy Mallaber: In your evidence you said that in this region than was the case elsewhere. If I may, emda did recognise the importance of preserving I will ask Jenny about that. skills in the recession. In broad terms, how would Jenny Kenning: emda’s budgets were fairly you identify the major current skills gaps, and how committed this time, so it was not able to be flexible are relationships via the Learning and Skills in responding to any proposals and suggestions of Council, regional partners and emda, for example, match funding for this particular fund that the working out in managing to meet those skills gaps? universities were able to bid into the Higher Professor Coyne: Experience will diVer by Education Funding Council for. The only fund that institution, so if you will permit me, I will give a would have been available from emda was the generic response. As universities, we are of course European Regional Development Fund, but with concerned with higher-level skills. One of the pieces the processes that are in place in the East Midlands of work that we commissioned demonstrated that it was not possible to align that funding with any one of the first challenges we have is that many innovation challenge funds in time, so there was a employers do not know what higher-level skills are, little bit of inflexibility in the funds that were and are perhaps not as eVective as they could be in available at emda that did not seem so apparent in seeing how they can benefit their particular business. other regions That was a piece of work called “Known unknowns” that the then EMUA commissioned. We therefore
Q105 Judy Mallaber: Has it been easier for 2 Note by Witness: EMUA has now received an invitation universities in other regions to access funding from the Regional Minister to give a presentation at the through ERDF, because that has come up several Regional Economic Cabinet. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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8 June 2009 Dr Roger Brooks, Professor John Coyne, Jenny Kenning and Professor Phill Dickens have some work to do, which emda has been are strongly engaged locally and with the supportive of, in just winning hearts and minds. We community. If smaller boundaries would work for have experimented with a concept called higher-level anybody, they would work for the University of skills brokers, and EMUA is managing a project to Derby. None the less, we are firmly of the view that try to get people out into the field with companies to the economic footprint within which we work encourage them to look more to universities, and transcends the boundaries of Derbyshire. therefore keep more graduates in the region. There are certain things whose economic impact Another issue that many universities are engaged really must be seen at a regional level. My concern, with is developing their students’ entrepreneurial and the concern that has been shared by our group skills as part of their programme so that they might of universities, is that certain things need the bigger consider self-employment when they leave geography if they are to have an impact. We need to university, rather than filling a job in a conventional be able to lift eyes, to look at long-term issues and to sense. So, we encourage students to start their own avoid getting dragged into what might be very businesses, and many institutions will have micro-local economic issues. There is then an programmes—incubators—to support that. Indeed, operational issue. Responsibility for these issues has the University of Nottingham was entrepreneurial not been with local authorities, so it will naturally be university of the year last year, which was some time before they begin to acquire the ability recognition of its great work in getting all its students and expertise to have the impact that you would to consider their own entrepreneurial skills. There is wish for. Again, the timing is a little unfortunate. We a slight irony, in that if a student starts their own would have preferred a bigger geography. business, they are not deemed to have entered a graduate job, but that is just one of the world’s V Q111 Chairman: Roger, you have good relationships conundrums. Even though the emphasis might di er with the city of Nottingham. The university also has. between institutions, we are very actively engaged Dr Brooks: Yes. across the piece in trying to encourage the Chairman: Do you share those concerns? acquisition of higher-level skills, the appreciation of Dr Brooks: I would echo what John says completely. higher-level skills in the employment community, On the loss of the sub-regional partnerships, the and the development in all our students of skills that Greater Nottingham partnership will be going at the will enable them to be value-adding employees or end of the year. I sit on its board, along with some self-employees perhaps more readily than in the other colleagues, and we are seeing the strategic past. plans eVectively coming to a halt. If we are to put another organisation in place, what will it be? Who Q109 Chairman: John, just take us back to the point will need bringing up to speed with current you were making about the economic cabinet in the initiatives? Operationally, how do we carry those region. You told us fairly firmly that you were not things forward? That includes the reallocation of represented on that, and you then said that you had budgets. It is a highly fluid environment at a time had a number of goes. when industry has a lot of requirements, so I would Professor Coyne: Yes. echo what John says. Chairman: Who did you talk to? Professor Dickens: I agree with those comments Professor Coyne: We have communicated directly completely. To take the example of the Energy with the Minister. We are indirectly represented, in Technologies Institute, I do not think that that that the regional director of the Learning and Skills would have happened under the new system. Council is expected to take up the HE brief and he has been an active voice for us. But he himself has Q112 Chairman: Talking about the new system that made interventions to that end. We have made is coming into eVect, how will you feed in? Who will representations formally through the Government Y you talk to? Will you talk to emda or the leaders’ O ce, but thus far there has been no action, and the board? Where will the dialogue be? Minister’s diary has never permitted a meeting that Professor Dickens: At the moment I am feeling my Jenny and I have sought, simply to discuss the issue. way. We will carry on communicating with emda.I have to try to understand what the local situation is Q110 Chairman: The whole regional structure will and who the diVerent local players are. At the change in the future, with the assembly going. The moment, it is not clear to me who will be doing what. implication is that local authorities will take a There is a big concern about how this will pan out. greater role. What is your view on that? Professor Coyne: At EMUA level, we are continuing Professor Coyne: Huge, huge concern. The timing is to work strongly with emda and the professional perhaps a little unfortunate, but the crucial issue is oYcers. With them, and through them, we are also that the natural boundaries of economic geography trying to get a voice in the leaders’ forum. We fear do not always sit on administrative boundaries. that the work done by a broadly defined university There are things that you can do locally,but there are sector in the immediate past to become better other things where the footprint that you require and understood, better integrated and better able to add the economic impact that you can make go beyond value will have to start again with a set of local authority boundaries. Speaking as the vice- constituencies that perhaps understand less. We do chancellor of the University of Derby, we are a not deny the imperative of local democracy and the university of modest scale, and our physical presence electoral force of communities taking ownership of is entirely within Derbyshire. As an institution, we local matters, but the university geography tends to Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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8 June 2009 Dr Roger Brooks, Professor John Coyne, Jenny Kenning and Professor Phill Dickens be a little bit bigger and our impact tends to be a little Q115 Chairman: Can you give us an example? bit more long term. We need forums and access that Professor Dickens: We have one example at my enable us to have a voice and an influence, and let us university where a plan for a large centre for new harness our resources that contribute to what technology completely died, which was purely down benefits all of us: a regional economic strategy that to unfortunate timing. There is a concern, so we delivers a flourishing region where people actually want to see a long-term commitment as well. want to come to study, stay and work, and to build Professor Coyne: Our engagement with emda has businesses and prosperity. been strong and eVective, and has grown. We have Chairman: We are coming towards the end of this been welcomed in decision making and emda has session. Are there any final points that you would been receptive to our ideas. Inevitably, we all have like to make? Judy will say something while you frustrations about parts of the process but, think about your final pitch. collectively, I want to leave the message that we are well aligned with an organisation that we see doing a very eVective job, that harnesses and uses its Q113 Judy Mallaber: One of the three structural resources well, that presses all of us to leverage themes for the region and the regional economic advantage and that does not lose sight of the end strategy centres on achieving equality. Obviously, I game, which is the delivery of an economic strategy know Derby University best, and I know that you that improves the social and economic condition of have a strong commitment towards equality in the region. relation to your own intake, particularly in terms of Dr Brooks: I would echo John’s comments. The more socially disadvantaged students, not to University of Nottingham is very happy with emda. mention on other issues of equality such as race and We think it has vision and foresight. The iNet gender. Do you think that achieving equality is being strategy now seems to have been picked up by other looked at seriously by the regional economic regions too, which is a testimony to that. My whinge, strategy? Also, is the issue being taken up by your and this will not be a major surprise, is that if you are contacts in the regional development agency and looking to co-finance in the future and looking for other institutions? example cofinancing with a technology strategy Dr Brooks: I believe so. The consultation for the board, the application processes will need to be regional economic strategy and the regional speeded up and streamlined because it could V innovation strategy went to all of the universities e ectively stop co-financing from occurring. and they responded to it. We see emda continuing in Q116 Chairman: I have one final question. There that direction, so yes, that has been achieved. have been two reports on emda recently—one by Professor Coyne: I certainly think that the emphasis ECOTEC and one by PricewaterhouseCoopers, from the outset on our region being a flourishing which were very positive. Have you read those region that is comfortable in its skin and socially reports? inclusive is a laudable aim, and is better than narrow Professor Coyne: Yes, and we were canvassed for economic measures. We are all conscious of the need evidence. to be open and inclusive right across the piece in our policies and the way in which we engage with emda. Q117 Chairman: Do you think that they are valid reports? Professor Coyne: My recollection of the ECOTEC Q114 Chairman: Some final messages from all of report—he says thinking, “Why didn’t I read it you. What is the final paragraph that you would like yesterday knowing that I was coming here today”— to leave us with? is that it gave a balanced view. I like reports that Professor Dickens: My main concern at present, seem to describe the institutions that I think I am apart from the new structure, which is a big concern, dealing with and the report got that touch and feel is the pressure on emda or local authorities for short- right. term results. We are seeing that; money or funds have Chairman: Thank you all very much. That has been diverted within emda for a short-term response reinforced for me the value of the higher education during the recession. As a direct consequence, some sector in the region, which is something I had lost long-term plans have gone out the window. sight of. Thank you for coming. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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Witnesses: Sarah Fowler, Area Manager (East Area, Midlands Region), Environment Agency, Charlotte Gault, (The Wildlife Trusts), East Midlands Environment Link, Maddy Jago, Regional Director East Midlands, Natural England and Bettina Lange, (Campaign to Protect Rural England), East Midlands Environment Link, gave evidence.
Q118 Chairman: Welcome to you all. You have all Brundtland Commission, which provides probably sat in and seen the previous session. It would be the best-known definition of sustainability and also really helpful if you could all introduce yourselves provides a useful context for this session now. It is in turn. the definition that calls for development that meets Sarah Fowler: My name is Sarah Fowler. I am the “the needs of the present without compromising the Area Manager for the East Area for the ability of future generations to meet their own Environment Agency, Midlands Region. I lead all needs.” That definition will be familiar to all of us. I our operations in Derbyshire, Leicestershire and should also say that our evidence is very much within Nottinghamshire, and I work very closely with my the context of understanding where we are now, but colleague who covers operations in it is also concerned with where we want to get to. The Northamptonshire, Lincolnshire and Rutland. original definition of sustainability looks at three Charlotte Gault: I am Charlotte Gault. I am Head of pillars. To summarise the view about where we are Regional Conservation Policy for the Wildlife Trusts now, the RES, as it is constituted, really looks at in the East Midlands, and I am here on behalf of East trade-oVs between those three pillars. There is the Midlands Environment Link, which is a grouping of idea that, if you take a bit out of the environment, environmental non-governmental organisations. you can put a bit back somewhere else. I think that Bettina Lange: I am Bettina Lange. I am a Regional a fundamental rethink is needed to understand the Policy OYcer for the Campaign to Protect Rural environmental capacity of the region and what the England. I am also here to represent EMEL. constraints are within that capacity. I think that that Virtually since emda was set up, I have been trying is where we are in terms of wanting to clarify that, to to establish good relationships with it, with varying go forward with the new regional strategy. I can give results. However, we will come to that. you some examples, but that may come up later. Chairman: I am sure that we will. Maddy Jago: I am Maddy Jago. I am the Regional Q121 Chairman: Give us a couple of examples now. Director for Natural England in the East Midlands. Maddy Jago: We know that climate change is an issue. But in the East Midlands, out of all the Q119 Chairman: Maddy, you are fairly new in your regions, we have the greatest risk of flooding along post, is that right? the coast and river valleys. In the context of Maddy Jago: I am, yes. I hope that I do a good job Government policy and all the other things, what we today to represent Natural England’s views. have to do is to try to combat that. It is reasonable to expect our regional strategy to have a vision, in Q120 Chairman: Let us start with the sustainability terms of the requirements by which it is constituted, duty. Nowadays, there is a duty on regional to try to address that—to bring parts together to development agencies to take sustainability engage with that. That gives us a point of reference seriously as an issue. I have an impression that as to where we are. At the moment, we are in a perhaps people in the environmental movement do situation of looking at trade-oVs—development and not think that the agencies are fulfilling that duty. Is giving something back to the environment. Our that right? Bettina, perhaps you had better start on position is that the money in the bank is in deficit— this point. we are not situation of borrowing, but in a situation Bettina Lange: Yes, it is quite true that there is a duty where we have to try to repay the loan. for the RDAs to—I am unsure how best to put it— situate the regional economic strategies within a Q122 Chairman: Sarah, now that we have heard sustainable development context, including the about flooding, I guess you want to talk about it. UK’s sustainable development strategy and so on. Sarah Fowler: I must comment, yes. Just to begin, it However, that duty is compromised, not only by the is important to me that the onus is on every single way that emda has sometimes gone about fulfilling it one of us, every single public sector organisation, to but by certain impositions from central consider sustainability and take on that Government, in particular what the RDAs are duty. Reflecting on the earlier conversation you had actually being assessed on in relation to their with the institutions, the closing remarks about their performance. The key performance indicators are contribution were about social and economic well- not sustainable development indicators; rather, they being. I noted that they did not comment on are an increase in GVA and GDP, which are very environmental well-being. But I see them as essential conventional economic indicators. As far as we to help us promote a sustainable future using their understand it, those indicators are structurally technology, innovation and expertise. Looking incapable of reflecting whether or not the more broadly, the environment shines through in the environmental side and to some extent even the RES. The environment is part of the East Midlands social side of sustainable development is being brand—when you look back to when the RES was advanced or hindered. So that is the fundamental developed, it was part of that brand. There are some problem. good elements in there about economic success to Maddy Jago: I would like to take a step back from deliver quality of life, which is about a prosperous that position. When I was preparing for this session, and sustainable region and ensuring sustainability. I wanted to reflect on our understanding of There is also the index of sustainable economic well- sustainability at the present time. I went back to the being—all positive in the RES—and we want to Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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8 June 2009 Sarah Fowler, Charlotte Gault, Maddy Jago and Bettina Lange ensure that we work with those. But as Bettina said, remember was specifically about the evidence base— we need to see that in the context of the drivers that obviously we were concentrating on its emda is working with. Their licence to operate is environmental aspect. Again we made a specific oVer around GDP and economic values. How can we of help, because it seemed that emda were, quite work with them to help them see the broader understandably, not really equipped to deal with picture? Also, the East Midlands is the only region that side of the evidence base very well. So we were without a functional sustainable development not criticising them for that, but it was never taken champion. The RES has got SD in it, and it is in its up. We found later on, and in fact at one point the implementation and monitoring that we have to people at emda stated this, that they expected what work closely with emda to make sure that success is they called the voluntary sector—that is actually achieved. My view is that where there are strong what we call the social voluntary sector, or in other partners, working at a project level, and using words, One East Midlands or Engage, as it was consultants, then we deliver some very good work then—to provide input into the environmental with emda on sustainability. evidence base. They expected that sector to liaise Charlotte Gault: One point Maddy made was about with us to get the input. That is so indirect, and we environmental capacity as a key measure that we had made a direct oVer. We to this day do not need to understand—about what the region’s understand why emda wanted to go down that capacity to support development of whatever kind indirect route. Having said that—Charlotte may is. That gives us the opportunity to turn around how want to elaborate—as far as particular areas of the we look at development, in terms of real evidence base are concerned, emda has now moved a environmental limits, and also the potential to little more in the direction that we think would be enhance the region’s environmental capacity. I agree more constructive, particularly in relation to that we are in deficit on many aspects of the biodiversity. environment at the moment, so a degree of Charlotte Gault: We found with the evidence base as enhancement is needed to reach an acceptable level. developed for the current RES that there was no In some areas, there is potential for considerable understanding or awareness by emda that for the enhancement, which then improves quality of life. I environment in particular, perhaps in contrast to the agree that there is a lot that is good in the current socio-economic sectors, a lot of relevant information RES, and we certainly saw when that was developed is held outside the statutory sector. For example, that that was a major improvement on the previous information on wildlife biodiversity is held by local RES. However, we have some concerns about how wildlife trusts and individual expert volunteers who that can be delivered, especially in terms of go out and record a lot of those things in the integration across the three pillars of sustainable countryside. They might work with the local wildlife development and, so, the ability to achieve win-win- trust or the local biological record centre, which win outputs. The two points that I would make could then manage that information. However, not about that are that, in the RES implementation plan, all the information is held in one place through only delivery by statutory sectoral organisations is accessible and simple structures. We are aware of covered—the NGO sector was never asked to that and have always oVered to work with people provide information on its delivery and, although we V and help mobilise as much of that information as we have o ered to provide that to emda, it has not been can. There are structural deficiencies at the moment taken up. So there is a real question about how it is in terms of having an infrastructure in place that possible for people who might want to deliver in the would allow this to be mobilised easily, but we are region even to be aware that we might be doing keen to work on that and are doing so. Last time something relevant and could work with them or around, our experience was that a significant assist in them in some way. The other aspect is the quantity of information outside the statutory sector lack of active facilitation to enable cross-sectoral was simply not understood. Currently, we are and cross-theme delivery in how the RES is hearing about the development of an evidence base implemented. to support a single regional strategy in the future. I have been encouraged so far, and the emda has been Q123 Chairman: Will you take us on, Bettina and willing to speak to us about this, particularly in the Charlotte, on that? You have made the oVer to emda; context of the biodiversity factor. It has outlined a it was not taken up—will you describe the history timetable of production for the evidence base and a bit? has been open about the limitations of the Bettina Lange: The history is quite long actually.The information currently available. There was a oVer was made by EMEL member organisations— recognition of the paucity of environmental for example, in their various submissions to the information once the previous evidence base had drafts of the regional economic strategy—but also at been put together, and we have to move forward specially convened meetings, which emda did agree from there. It has been made clear to us that there to have with us. The meetings were either on the will be a consultation on a draft evidence-based index of sustainable economic well-being, where I document, to which we are encouraged to respond. was the person who specifically made an oVer, also We have an idea of the timetable, and at this stage, I making the point that there are people with some find that quite hopeful. intellectual capacity outside the universities—they Sarah Fowler: When you talk about the might even be working for environmental NGOs. environment, it is worth bearing in mind that this is That went nowhere. Another meeting that I a broad sector that covers a broad range of issues. I Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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8 June 2009 Sarah Fowler, Charlotte Gault, Maddy Jago and Bettina Lange think that Bettina and Charlotte commented strategy document. However, we need the resources correctly on the issues regarding biodiversity and and expertise to feed into that. I want to comment on environmental capacity. Charlotte stated that it is the evidence if I may. diYcult to collect evidence for those issues, because of their broad and disperse nature, and that is part Q127 Judy Mallaber: I have a last small point. I am of the problem. To give another perspective, our curious. How come a sustainability organisation has involvement in the RES was on the resource been set up in other regions but it did not happen in protection and management side, whether that the East Midlands? Do you know how it is set up in involved wider resource protection, water resource the other areas? management or water quality management. In those Sarah Fowler: I cannot necessarily comment on the cases, the information is more evident and available. history of the East Midlands. I have moved across There is one authoritative voice— ourselves—and from the Environment Agency in the Anglia region, we are heavily involved with emda in providing that so I know how the East of England operates. When evidence. That is an example of how it can work, and the RES was produced in the East Midlands, the emda is receptive to that. However, it is also about environment was seen as the brand of the East how we work with emda. Part of this is about Midlands, and a core thing that fed through it. It understanding the diverse nature of the environment was, probably therefore, not seen as necessary agenda and helping emda to understand that. There because it was just dealt with. As we move towards is certainty in some places, but not in others. the implementation of the regional economic strategy, the need for this senior level engagement Q124 Chairman: Sarah, you made a point earlier has become all the more important, but does need saying that there was no champion in the East developing further in the region. Bettina Lange: There are number of reasons for that. Midlands. Who should champion sustainability in V the East Midlands? Should it be emda or another One of the reasons is due to the di erences in the body? regional set up. In the West Midlands, for example, what was eVectively a sustainable development Sarah Fowler: It is interesting. We have worked round table was also the coalition that contained the closely with the Government OYce and with voluntary environmental sector. There was more partners to look at sustainability issues in other integration than there was in this region. Some years regions to see what happens there. It is stark that, in ago, back in 2000, there was a sustainability round the East Midlands, there is no champion body. For table, and a report that was done on it said so. It was example, there is Sustainability North East, a useful talking shop, but that is all it was. With that Sustainability South West and Sustainability West history, people in the region, partners perhaps who Midlands. My region cuts across to the West could have got things moving, were less keen. Midlands, and there is a strong body there working Another diVerence is that, in other regions, the on issues at a senior level across the regional RDAs were more supportive and part-funded it. partners, whether that is the Environment Agency, Y That has not been happening here. I just want to Natural England, the Government O ce or the comment on what Maddy has said. I do not think development agency. A part of what is lacking in the that our sector—the East Midlands Environment East Midlands is that senior voice provided by all Link—would be quite so happy simply to take the partners working together. I do not mind where that climate change steering group model, because that voice comes together, but we need to have a place involves exclusively statutory agencies. There is no where that senior level debate can happen with the voluntary sector involvement at all. We do not think emda board and with the Government OYce. That that that is a good model. It needs to be much more is critical. inclusive than that. The other thing is that it needs to have a dedicated secretariat, independent of any of the participating agencies. We would actually regard Q125 Chairman: Give us a prescription. How would Y you do it? What would you advocate? the Government O ce as independent in that respect. It needs funding and that is another reason Sarah Fowler: I want us to be able to have it did not happen in this region. When we started conversations at senior level about sustainability thinking about it seriously, there were constant issues with the emda board, the Government OYce messages from the Government that there would be for the East Midlands and, in the current set up, the no funding. Well, if you start from that position, you regional assembly. Those discussions should happen are not going to set something up that do not have on a regular basis at board level. funding for.
Q126 Chairman: Is that your view, Maddy? Q128 Chairman: Maddy. There was a point hanging Maddy Jago: I would support that. An example that in the air. does not cover the full breadth of the agenda but Maddy Jago: Yes, just on the evidence. I wanted to perhaps encourages us in the right direction is that of stress that Natural England is an evidence and the Environment Agency, which recently convened a specialist body providing specialist advice on the regional climate change partnership at that sort of natural environment. Our written submission was senior level. That is the sort of model needed for rather critical in tone. It drew on the experience of sustainability, and through the regional strategy we our founding bodies. You will appreciate that have the opportunity to provide the umbrella Natural England was set up in 2006. I did not want Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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8 June 2009 Sarah Fowler, Charlotte Gault, Maddy Jago and Bettina Lange to dwell on the negativity of that. I wanted to use it engage with us but then the corporate culture as a sense of where we want to get to. The guidance intervenes and it does not happen. We need to both for the RES and looking forward to the new achieve a change there. May I just use one example strategy makes it quite explicit that Natural England to illustrate how I see the diVerence? It concerns my would have a partnership role, rather than what we own organisation. About two years ago, CPRE have experienced as being more of a statutory commissioned research from the university of consultee. A partnership role means that we can use Northumbria on people’s experience of tranquillity. our specialist evidence approach very much to The research was qualitative by the nature of the provide the basis for the new strategy. We have not issue. Two diVerent groups of people gave had any engagement on that to date, so it is ringing researchers their experiences of what is most some alarm bells for us. It is very helpful to have the conducive and most detrimental to tranquillity. You opportunity to raise that now. Just a note on our would have expected to get widely diVerent views experience, we are just about to launch our state of but, strikingly, you did not. It was actually very the natural environment report for the region. That consistent indeed. Consistently, the top negative provides quite a good example of bringing thing was road traYc noise, and there were even stakeholders together to look at the key issues and really specific things, like people saying that broad- then to publish the evidence for the region. We hope leafed woodlands are more conducive to an that provides an example of where we can fit into the experience of tranquillity than pine forests. It was new integrated arrangements. quite interesting. I put those examples to emda oYcials to try to get them to see that there is merit Q129 Chairman: Just to take us forward, Charlotte, in qualitative evidence—that you cannot put things you made this point about the history, but on the into numbers immediately. emda, obviously and new strategy, you felt that things were changing and quite understandably, employs people who like that there was a more receptive atmosphere. Is that number-crunching. If they cannot do that, they are your and Maddy’s view? not quite sure what to do. I tried to get that across Charlotte Gault: It is my experience up to the present but I did not get anywhere. By contrast, when I moment. I could not make any predictions about mentioned the tranquillity research at the how it will continue. What is positive at the examination in public of the regional spatial moment—especially following discussion with a strategy, the inspector, by the following day, had V member of emda sta who is working on evidence looked at the CPRE website, and come back to me development—is that there is an understanding of with questions. the complexity of information in the environment sector and a willingness to work with us on that. Where that takes us will obviously be absolutely Q131 Mr Laxton: I want to raise the issue of the crucial. I think, as I have mentioned, that it is really annual reporting mechanism through which you can key that we move forward on developing the inform the economic strategy’s progress. Does it mechanisms for mobilising what is mostly local data happen at all in terms of feeding into the annual into regionally relevant information. We have a lot of very useful systems in place but they are not all reporting mechanism? perfect. We are working to make them a lot better. I Charlotte Gault: I can give you a simple answer from think we need to be able to work with the regional the NGO sector. It is simply not something that we bodies to make them better from both ends, so that are engaged with. they function to meet everybody’s needs. Whether or Sarah Fowler: In terms of the Environment Agency’s not that happens is yet to be seen, but we will do involvement, the environment chapter in the RES our best. talks about a number of indicators to measure progress. One of the key indicators is about river water quality, so we will feed information into that. Q130 Chairman: How can we make that happen? There is a wider debate to be had as to whether that What is the mechanism to make it happen using all should be the only indicator, or whether we should this information and pulling it together? look at wider indicators, but that is how we tend to Charlotte Gault: The key thing is joint working between emda, the regional observatory and key feed in. stakeholders. There is a basic element of capacity, of Maddy Jago: My understanding is that we would course. I was involved in some work looking at have been involved with an annual stakeholder mechanisms for mobilising biodiversity evidence. discussion, but went away with some frustration We worked up something of a proposal, but at the about a lack of ability to discuss in detail progress on time there was no obvious funding source and, environmental health. Stepping back from that and almost more importantly, nobody had the capacity picking up on Sarah’s point, when the RES was to develop a bid even if there had been an obvious being produced, we suggested and proposed that funding source. That opened a very useful discussion SSSI condition—site of special scientific interest— on, and gained recognition of the need for, basic should be a measurement included as an indicator, development. which did not get any further. I am afraid that there Bettina Lange: One quite fundamental issue is is a slight sense of frustration there, but again, I want emda’s corporate culture, which is often diVerent, in to emphasise that rather than dwelling on that, we my experience, from the way in which individual want to use it to help us move forward more members of emda staV act. They are quite willing to productively. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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8 June 2009 Sarah Fowler, Charlotte Gault, Maddy Jago and Bettina Lange
Bettina Lange: I have just one comment, which may community and family.The first version of the ISEW or may not relate—there may be a story in the fact was quite weak on environmental indicators; it just that I am not sure whether it relates. I have often included local pollution. They have worked it up a been asked to participate in what I would call little bit more, so we are approaching more reputation audits, usually carried out by consultants meaningful indicators. We would like to be involved on behalf of emda. Some of those conversations have in that work, but have not been so far. We would been quite long and some quite open; some had very really like to be involved, and there are ways of doing closed questions indeed. You were not able to that—they are not straightforward, but there are express what you really thought had gone well, and ways. We would like to see factors such as landscape so on. I thought that was a separate exercise done and so on included, because they actively contribute annually. It may have fed into the annual report, but to well-being; we know that. Also, in the long term, if it was— we would like to see that sort of framework, provided it is comprehensive enough, replace Q132 Mr Laxton: It was not made clear to you that conventional economic indicators, because that way that was the case. the economy serves people, rather than the other Bettina Lange: No. way around.
Q133 Chairman: May I just pick up on the SSSI Q135 Judy Mallaber: Bettina, you said that at one issue? That is a DEFRA target, is it not? Progress is point, you had been oVered direct involvement in being made, but the target is not being met. It would developing the index. I know that some of the other make sense to have such an indicator at regional organisations are not sure whether, as developed, it level, would it not? covers everything that we want. Would the others Maddy Jago: It would certainly seem to us to make like to comment on where the index has got to and sense. It would provide the linkage with PSA targets who is doing what to develop it? that is also expressed in the guidance as desirable, Bettina Lange: Natural England has been involved. and possibly help in matching some of the Maddy Jago: We agree that this is pioneering work, expectations in the national strategy for sustainable and it is to emda’s credit that it is taking the lead. I development. I do not have the answer why that was not included. It is certainly something to discuss for endorse the fact that this work is going on in the the future. region and that other RDAs are looking at it and Chairman: We have talked about the index of want to pick it up. Our own board has also looked sustainable economic welfare, and I know that Judy at it with great interest. So it is at that level of wants to pursue that a bit. trailblazing. The index is supposed to provide a composite indicator—a direction of travel—to give us a closer reference point in terms of sustainable Q134 Judy Mallaber: I would like to know what it is. V development than the traditional GVA I know in broad terms, but there seem to be di erent measurement, which is the requirement as things things in the diVerent evidence that we have had stand. emda itself agreed that the environmental from emda and in what you are all saying about what portion of the index was somewhat weak, and we are is good and what is not. Could somebody say what working with the agency to scope other they think? environmental factors that could be brought in. As Bettina Lange: I am not an economist, but my Bettina says, it is largely a measure of CO2 at the understanding—I looked at the various versions, because I was very interested in it—is that it is an moment, and we need to bring in some of the attempt to translate a wider range of human welfare positives that can underpin positive development in indicators into something that can then be measured the region. That is work in progress, and a contract and aggregated into an index, so that in the end you is out at the moment, which will come back shortly. can put a figure to it and measure whether a region, That will give us some idea of how we can go area or whatever is increasing well-being or not. The forward. index was first developed quite a long time ago—I Sarah Fowler: For information, the index currently think it was in 1974 or something like that—in the includes environmental factors such as local United States, but the history in this country is that environmental pollutants, loss of agricultural land the New Economics Foundation and certain and natural habitats, and the costs associated with academics took it upon themselves to develop a climate change, so it is quite narrow, and I endorse national one. Then emda had the excellent idea of the need to look at broadening the environmental asking them and Tim Jackson to develop a regional aspects. I also agree that it is trailblazing, and it is version, which we greatly welcomed at the time. We great that this is happening in the east midlands and said in our submission that emda did pioneering that people are looking to the east midlands as the work. It went around the country to the RDAs leader on this. The index has great potential value, trying to get buy-in, and it got quite a lot, although but my question is how far it is driving positive it did not extend to all the RDAs. It then said in its environmental change in terms of policy and response to the SNR consultation that that was the decision making. There is great potential to use it in way to go. The diVerence between conventional that way. I was very pleased that emda,inits economic indicators and the ISEW is that the ISEW response to the sub-national review consultation, is wider and takes social indicators into account, said that it wanted to use the index, instead of GVA, including factors such as the importance of to provide a wider measure. It is unfortunate that the Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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8 June 2009 Sarah Fowler, Charlotte Gault, Maddy Jago and Bettina Lange other RDAs did not do that. Its great value can be number of studies in that area and recently it funded in looking forward, and it can be used much more a project aimed at reducing CO2 in transport. emda broadly. has also been very supportive of initiatives to move more freight by rail, or even by water. I say “even by Q136 Judy Mallaber: Who has done the work on it water”, because normally the response to the up until now? Has it just been oYcers in emda? What suggestion that we should move more freight by input has there been from outside? water is, “Well, we did that in the 18th century and Bettina Lange: It has been a collaboration between that is no longer relevant”. However, emda was the New Economics Foundation and Tim Jackson at prepared to co-fund quite a comprehensive study Surrey university, who has been the key academic. into the potential for water freight. emda also bid Natural England is also doing work on it now. through Productivity TIF, or the transport innovation fund at the time, to get gauge Q137 Judy Mallaber: You are asking for more enhancements from Felixstowe, and it got money. environmental factors to be put into the index. How There is a lot of really good practice. The big hole, does that tie in with the fact that there seem to be or the elephant in the corner, is emda’s unqualified limited indicators in the RES at present? Will the two support for the expansion of activity—it does not match each other at any stage? You said that there necessarily support physical expansion—at East was only one indicator in the RES at the moment. Midlands Airport, because air travel is a significant and rising contributor to climate change. Of course, Paddy asked about SSIs. Is there any crossover at Y all? Would you like to see a crossover between the the airport also causes a lot of road tra c, with targets in the RES and the indicators going into people travelling to and from it. As far as passengers the index? are concerned, I think that more than 90% of them travel to the airport by car and the figure is similar Bettina Lange: There is very little crossover so far. V We would like to see a lot more, and this is a real for the sta who work there. Given how the opportunity for the new single regional strategy. If transport links work, it is unlikely, even with the best we had a sustainable development champion body, will in the world, that that situation will shift that is the kind of work that it might want to take on. substantially. However, you could argue that is the Chairman: We have got that message. part of emda’s activity that is simply implementing Government policy. Q138 Judy Mallaber: Basically, are you telling us to tell the Government to make this happen Q140 Mr Laxton: Does anyone else have any everywhere, or to take up the East Midlands Model? comments or observations on that issue? Bettina Lange: That would be even better. Sarah Fowler: My only comment would be that if we Chairman: That is a positive thing. Let us turn to had a truly working index of sustainable economic another diYcult area—aviation. There is a big development, we would test any new development or airport in the region. Bob, do you want to do this? programme against it to see if it met those requirements and targets. That would be the way Q139 Mr Laxton: Charlotte, your organisation said that we would like to work in the future. in its written evidence that there is: “a clear tension between emda’s welcome sustainable transport Q141 Mr Laxton: What about the support that emda initiatives and its unqualified support for an is giving businesses on resource eYciency? How do expansion of activity at East Midlands Airport and you think it is doing in that respect? its lobbying in favour of . . . expensive road Sarah Fowler: I am probably best placed to schemes” such as the dualling of the A46 and the comment on that, because resource eYciency is a key A453. What progress has emda made on sustainable objective of the Environment Agency, in terms of development since its creation? minimising waste and improving carbon and water Charlotte Gault: May I pass that question to Bettina, eYciency. The setting up of Business Link under the who is our expert in EMEL on transport issues? auspices of the RDAs has been very valuable. I know Bettina Lange: Is your question specifically about that the RDAs now have a remit to support Business transport-related issues or is it wider? Link and give advice on resource eYciency. I think Mr Laxton: No, transport-related issues. that the step forward would be for us to match our Bettina Lange: I would say that it is a very mixed resources, and there is a challenge for both us and picture, although there is, of course, an important emda to work together. We need to ensure that in any national factor in that picture, which emda cannot be contact we have with business and industry, whether held responsible for. The picture is mixed because, as a regulator or not, that we use the regulatory on the one hand, emda has moved on a lot in its standards as a type of jumping board for business; so thinking about transport and travel, particularly in that business sees our regulatory standard as the areas such as travel to work. There is evidence—this base line to jump from rather than the standard to is anecdotal evidence; if there are figures I have not aspire to. Then we want to work very closely with seen them, although I have not searched them out Business Link to encourage it to do more on resource either—that the travel plan that emda committed eYciency—almost to signpost that issue. Some itself to seems to be working, judging from how good work is happening with Business Link across emda staV get to places when we have joint meetings the resource eYciency agenda. There needs to be with them. emda wrote into the RES a commitment more work on the outcome, given the imperative out to manage travel demands. It has also funded a there, particularly on climate change, but also on the Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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8 June 2009 Sarah Fowler, Charlotte Gault, Maddy Jago and Bettina Lange whole imperative to reduce waste production in the arranged to which we are not invited. There is a little region. The answer is for us to work more closely concern. At the moment, there is a lot of willingness with emda. and keenness to engage throughout the whole Maddy Jago: May I take a lateral view? I want to breadth of the agenda. [Interruption.] raise the issue of ecosystem services, which is the other side of that argument. It looks at our water Q144 Chairman: That is JeV Moore inviting you to supply,our soil resources and so on. Where we would a meeting. Sarah, how do you link into emda? like to work more with emda, and perhaps receive Sarah Fowler: Our work with emda started oV more recognition of the contribution that we can strongly with the RES. We first got engaged with it jointly make, is in investing in land management for when that was being developed. It was a positive the region. By way of background, I just want to say engagement in terms of providing information, that Natural England will be investing £180 million sitting on the steering group and working closely in the regional economy between now and 2013. A with it. Like Maddy, I would be keen for the agency lot of that investment will be within our to move forward and to be seen as a key partner and environmental stewardship schemes. I want to give public authority with a strong evidence base, strong a specific example of how that investment can be knowledge and strong expertise to feed the really beneficial for the regional economy. Our peat information in, rather than being seen as a wider moorlands, which are extensive in parts of the stakeholder and a key consultee. I would want us to region—particularly on the west side, obviously— be involved in the forthcoming SNR in that way. have been damaged by many years of pollution, Now that the noises oV that I am hearing are that over-grazing and drainage problems. Some really that will happen and part of it depends on how we exciting projects are going ahead, involving us step up to that, as well as how emda invites us to working with water companies and the National do it. Trust, to restore the peatlands, so that they will V sequester carbon and do that job e ectively. Q145 Chairman: Am I right in thinking that all of Peatlands can do a really good job for the region. you believe that the focus of emda has been on They can help to make our water cleaner. They economic development rather than sustainable provide fantastic relaxation and access to nature, development? Perhaps things are changing a bit which is important for the health agenda. It is a case with emda. of trying to understand where we need to think more Bettina Lange: That would be pretty much my broadly about our investment and how our summary. Let us not forget that they cannot be ecosystem services link to our land management, in criticised for having that focus on economic particular. development, because they were set up as economic development agencies. They are now expected to Q142 Chairman: That applies to flooding too, does take on the much wider role that they have been it not? moving towards. Maddy Jago: Absolutely. Q146 Chairman: So there is a positive side. It is a Q143 Chairman: Maddy, you told us a little while diYcult, economic climate. The budget is reducing in ago that your evidence was fairly critical, and it is. I real terms. Are there anxieties that sustainability know that you have been through a period of might be pushed oV the table again? reorganisation, which has made things diYcult. Sarah Fowler: It is interesting your saying that about How does Natural England relate to emda? What is emda because, when I worked in the East of England the level of discussion? and looked across at what the East Midlands was Maddy Jago: Looking back at the experience of the doing, the East Midlands seemed a bit of a trail founding bodies, I shall summarise it by saying that blazer on environmental issues. Let us not forget the basis of the relationship seems to have been very those issues and look at how they were being much as a statutory consultee rather than in terms of developed when the RES was being developed. The partnership-working that is identified in the other regions are rapidly catching up. There is the guidance. That makes quite a distinction between potential for them to overtake unless we work very consultation, which is where you come in rather late closely with emda to keep the East Midlands at the in the process and oVer views, and perhaps feel forefront. The index of sustainable wellbeing is a slightly frustrated that you cannot make small, prime example of where the East Midlands still can fundamental changes and have a more upfront be at the forefront and trailblazing on these issues. partnership engagement, which looks across the The key thing for me is having a more open-door whole evidence policy, strategic direction and the culture, to open up decision making and the issue of investment and alignment of working. It seems that leadership on environmental issues at senior level. that is where we were. As for where we are now, we Chairman: That is helpful. Bettina mentioned have not had an engagement to date for the change corporate culture earlier on and I know that Judy transition plan. That is of slight concern because the wants to pursue this. guidance is very specific now and says that partnership needs to include the statutory bodies in Q147 Judy Mallaber: There is a bit of a mixed very early stages. The plans suggest that there will be message. They started well compared with other one-to-one discussions with the statutory agencies. places. They still have not done enough but now they As I understand it, a stakeholder meeting has been are doing quite well. Bettina, you said that the Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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8 June 2009 Sarah Fowler, Charlotte Gault, Maddy Jago and Bettina Lange corporate culture intervenes. Individual oYcers can implementation, targets and indicators might be be supportive, but the corporate culture gets in the developed. The diVerence in culture between that way. Would that be helped if the requirement on the and emda, which has treated us largely as consultees, background of board members was changed? Have is enormous. One of the things that I would really you looked at that at all? Do you need to have an want to see is a clear structure for stakeholder expertise in environment and sustainability directly engagement, including the third sector. How that on the board or should they be able to take that on will be taken forward in the new arrangements is not board anyway, given the back-up and papers that clear at the moment, which is a continuing concern. they receive from their oYcers? In a way, we are perhaps relieved that the change Bettina Lange: We have argued consistently, as have management plan, as it is at the moment, has a stated our national organisations, that there should be a expectation that stakeholders will express how we requirement to have environmental expertise on the wish to engage in future. That puts us in a better emda board, which currently there is not. It shows. position than having to react to a bad or limited proposal, because we can start afresh and make a Q148 Judy Mallaber: So you think it is not a natural clear statement about what we think we can bring part of the emda board’s thinking? and what would work. However, it is not clear how Bettina Lange: No, it is not at all. I have to be honest or whether that will be taken on board. here. She does not have it any more, but there were Bettina Lange: May I add to that to bring it up to some really fundamental things that the person who date? There is an ESEP group of the regional had the environment portfolio just did not assembly—the Environmental, Social and understand. I had several conversations with her, Economic Partners—which includes business, the including some that were oV the record. To give you social voluntary sector and ourselves, so basically one example, there is a diVerence between the issue everyone who is not a politician. In response to the of energy use and the issue of CO2 emissions. That change management plan, we are working on a is standard among people who know anything about proposal for a dedicated standing stakeholder environmental issues. Yes, I believe that we need partnership board, as I think we have called it. I am particular representation there. glad that emda is here to hear this. We gather that emda proposes that there should be only a task and finish group to be called into being by the RDA and Q149 Judy Mallaber: I cannot come to this point local authority leaders’ boards, as and when they see without mentioning Martin Doughty, who was on fit, to look at the new regional strategy. The ESEP emda when it was first set up. group wants a standing stakeholder board with Bettina Lange: Absolutely. which the two new regional agencies—the RDA Judy Mallaber: He was an advocate and champion. board and the leaders board—can engage on a What do you think a new sustainable development continuing basis. Our understanding is that it is and infrastructure director will bring? Is one being emda that does not want that to happen. The local planned? What do you think that will bring to emda? authorities, who are the politicians, are reasonably Will that resolve the issue, or do you still need people happy with it. more specifically linked into the board? Sarah Fowler: For me it is about how we use the Sarah Fowler: They are sitting in this room at the positive changes, for example the appointment of a moment. I think it is a very positive step forward that sustainable development and infrastructure director emda has recognised the need for that senior at emda, as a catalyst for further improvements leadership on sustainability issues. That is why the within emda, such as the greater use of the index of noises oV are very positive. It is about how we social and economic well-being, and for more engage and work with that. programme-level discussions on sustainability Bettina Lange: I would still say that board within emda. However, it is also about how we, as representation is important. partners, step up to that and work with it, as I have said before. It is also about how the new governance Q150 Judy Mallaber: So what is your feeling about arrangements for the SNR work, so emda does not the future—are things going in the right direction? just look at the local authorities as the experts and Are you reasonably optimistic, or is there still a lot the leaders in this field, but recognises that there are more to be done before they get their act together? public sector organisations in the East Midlands Bettina Lange: Does anyone else want to comment? that can act as experts and authoritative voices on I think I have probably said enough. the environment and work very closely with them. I Charlotte Gault: I agree on the need for board-level include Natural England in that. representation or changes to the remit of some of the Chairman: And bodies such as the Wildlife Trust and roles. The thing we have not really touched on yet is the RSPB. V the di erence between the way in which emda and Sarah Fowler: Yes. the regional assembly work with stakeholders. That is the key to the future. We have had a completely diVerent organisational culture and experience of Q151 Chairman: The Local Democracy, Economic working with EMRA. I have been in post since 2005, Development and Construction Bill is going through so I cannot comment on anything before that, but the Commons at the moment. There has been a lot EMRA already had very strong systems set up for of debate about that Bill and the power of working with stakeholders, engaging them at an sustainability. Do you think that that will make a early stage and talking to them about how diVerence on the ground in the East Midlands? Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 53
8 June 2009 Sarah Fowler, Charlotte Gault, Maddy Jago and Bettina Lange
Bettina Lange: What will make a diVerence? has made a diVerence. There has also been a Chairman: The powers of sustainability—the duty diVerence on the ground in that emda has funded on regional development agencies to take some really worthwhile projects, one of which sustainability into account. finished, I think, two years ago, and looked into the Bettina Lange: My key question would be what viability of rural post oYces just when that was would happen to them if they do not. The answer is needed. This was in one of the sub-regional strategic not clear to me. partnerships, the Welland SSP. Also, the person it appointed to lead the project was very dynamic and Q152 Chairman: There are no sanctions. It is a bit not afraid to tell people running rural post oYces, like the climate change targets. What happens if you “If you run it like that, you are not running it like a do not meet them? Nothing. Who is going to be business and it will never work, so you need to make executed? Nobody. changes.” The drawback, which is why I say that it Bettina Lange: If it does not make a diVerence, why is a mixed picture, is that that involved three years’ take it through Parliament? There are three strong funding, which was not renewed. We at CPRE took issues: defining what sustainable economic growth a great interest in that particular project and felt that means, so we all have clarity; informing the single the funding went just at the point that the project regional strategy by using the environmental was beginning to make a diVerence. evidence base that we have all talked about today; Maddy Jago: I have just a couple of observations. As and ensuring that we really scrutinise at a regional you are probably aware, emda, along with Natural level the environmental, not just economic, England and the Forestry Commission, jointly outcomes. delivered the rural development programme for England. That fairly recent change in fact links up to Q153 Chairman: We are moving towards the end the timing of the establishment of Natural England. now. We have talked about the skills within emda.A We feel that that has given emda a wider new director has been imposed. Are you confident consciousness or brief within rural business, which is that the skills set within emda can handle these very positive, and there are some very good examples issues? We talk about them, but they are pretty tough of good joined-up working across that European issues, are they not? funding programme. We have made the observation Bettina Lange: I have to say that I am not very in the past—I picked this up briefly in my reference confident at this stage. If you think about it, it is to the ecosystem services—that the regional quite natural that people who come from a economic strategy probably needs more emphasis on particular culture are likely to recruit more people land management and understanding of the from a similar culture. contribution that it makes to the economy and the social side of our agenda. I also second the fact that we have seen some very positive investment from Q154 Chairman: What would we need to do? emda into areas and facilities that benefit both rural Bettina Lange: I think that a clearer steer from populations and visitors. For example, it has central Government would be quite important. The invested in the Attenborough Nature Centre and the steer should include saying to emda that it should Gibraltar Point Centre, so that is a picture of some become more open about who it engages with and at very positive things and the need for a greater what stage. That in itself could gradually lead to a emphasis on land management. change in culture because, as the outcome of that engagement, emda might say, “It might be a good idea to have someone who is actually plugged into Q156 Chairman: Let us finish with a final message people with countryside skills.” That could create from you all. What do you want us to take away some employment locally. from this session? What is the punch line? Sarah Fowler: For me, there is great potential for the Q155 Chairman: I have been in the region for a long East Midlands to be a low-carbon region that is time—perhaps too long—but one of the things that more resilient to the impacts of climate change. I people say to me is that emda focuses on the urban want emda to play a core role with partners to focus environment of the three big cities, rather than rural on green and sustainability issues, to help the communities. I have heard CPRE say that, Bettina. economy recover more quickly, be more diverse and Is there reality in that? more resource eYcient, and to help us have a low- Bettina Lange: No, we would not say that. Again, I carbon, sustainable future for the region. am afraid that we would say that it is a mixed Chairman: That was a Blue Peter one—you prepared picture. Had you asked me that question five years it beforehand. It was excellent. ago, I would have agreed that emda largely focuses Charlotte Gault: I would like to see a recognition on urban development and that it does not have the that the environment, and therefore the people with the relevant background or skills to deal enhancement of the environment, can support and with rural matters, but over the past few years, it has even drive socio-economic development and assembled a rural team. This is an example of a regeneration. It needs recognition through the index change in culture, because emda actively recruited of sustainable economic well-being; at the moment, people who had previously been involved with the the environment is seen only as a nice thing that can rural community councils, the Countryside Agency be damaged by our activity, not as a thing that can and so on. In other words, it recruited from areas generate positive activity. To achieve that, we need a with the skills set, the contacts and so on. That really policy or conceptual change on the understanding of Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 54 East Midlands Regional Committee: Evidence
8 June 2009 Sarah Fowler, Charlotte Gault, Maddy Jago and Bettina Lange what the environment is and can do. We also need to great tool—to bring that together and harness it. We embed that in evidence, through investment in have talked a lot about the processes and environment evidence and the infrastructure for mechanisms, but it must be based on sound evidence that. I think that we are so close, yet so far, to having and a vision that is about not sharing out and losing much better environment evidence available to the environment, but opportunities and capacity. regionally than we do at present. It is about sharing programmes and more eVective Bettina Lange: My overall final message is that we partner working, particularly between Government really need to replace economic growth, as agencies, to ensure that we are working connectedly conventionally understood as the main aim of what and well together. We also need to bear in mind you do in the economy, with overall sustainable local authorities, which are a big player in this new development. In practice, that is likely to mean a picture and have a big role to play. We need eVective reduction in some areas, such as resource use and measures and indicators—we have talked about the CO2 emissions, but an increase in other areas, such opportunities that we have with this new regional as renewable energy generation and local food index. We can capitalise on that and take it forward. production. Chairman: This has been a very stimulating session. Maddy Jago: I have not prepared this earlier, and I Thank you all, and thanks to the management of am the last one on. Tupton village hall for putting up with us—some of Chairman: It is like being on “Question Time”. the staV had to facilitate it. We have a bit more Maddy Jago: I will not say that I agree with evidence to take from the Regional Minister and everything that everybody else has said, although I from GOEM itself, and we will see emda again. We largely do. The way forward has to be sustainable hope to publish our report by the end of July, and development. We feel that the single regional once it has been published, we will be keen to get strategy provides us with a great opportunity—a some feedback. Thank you very much indeed. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 55
Monday 29 June 2009
Members present:
Mr Bob Laxton (in the Chair) Sir Peter Soulsby Judy Mallaber
Witnesses: Phil Hope MP, Regional Minister for the East Midlands, Tom Levitt MP, Parliamentary Assistant to the Regional Minister for the East Midlands and Jonathan Lindley, Regional Director, Government OYce for the East Midlands, gave evidence.
Q157 Chairman: Good evening. Thank you for partners to up their game and to challenge those being here. May I apologise on behalf of the partners, both as individual organisations in their Chairman of the East Midlands Select Committee, own right to perform better in terms of the Paddy Tipping, who is not very well at the moment? challenges ahead, but also to work better together Hopefully he will make a speedy recovery. We will and to challenge each other about the partnership keep him up to date with proceedings. It might be working. On the Regional Economic Cabinet we helpful—not for our benefit because we know have private sector organisations and the business everybody apart from Jonathan—if you could community represented, public sector organisations briefly introduce yourselves for the benefit of the represented, such as the learning and skills council, public. for example, and the trade union movement Phil Hope: First, may I associate myself with your represented through the regional TUC. The cabinet remarks and wish Paddy a speedy recovery? I hope has developed over time, so we have now invited the that he will continue, from his hospital bed or Homes and Communities Agency to join because wherever, to take an interest in these proceedings. I the issues around jobs, homes, the construction am Phil Hope, Member of Parliament for Corby and industry and all that seemed to be key. In future East Northamptonshire and Minister for the East meetings we are inviting the East Midlands Midlands. I will make a few opening remarks after university organisations to come and present to us my colleagues have introduced themselves. the contribution that they make to this partnership Tom Levitt: I am Tom Levitt, Member of Parliament to ensure that we have a strong and vibrant economy for High Peak and Parliamentary Assistant to Phil with jobs and growth in the region, both getting in his capacity as Regional Minister, which basically through the downturn, but more importantly means I deputise for him every now and again when perhaps, being ready to manage the upturn when it necessary. I also attend the Regional Economic comes. When I first began, I identified five major Cabinet. priorities for action, which included not only jobs Jonathan Lindley: I am Jonathan Lindley. I am the and skills, but social exclusion for those people Y Government O ce regional director for the East furthest away from the labour market in particular. Midlands. We wanted to make sure that we were reaching out, ensuring that organisations were responding to the Q158 Chairman: Good to meet you. Minister, would needs of people—those with disabilities, for you like to do a bit of preamble and general instance, those with mental health problems, and position setting? oVenders—who would normally find it diYcult to Phil Hope: First, let me talk about my role. As get a job at the best of times and finding out what Regional Minister I see myself as being a voice for more could we do to ensure that those people were the region in Whitehall, listening to the concerns of engaged with. We set up two sounding boards, one people and organisations and making sure that the around PSA 16, which is those particular groups, Whitehall machinery responds positively and and giving them a job and a home, but also a housing directly to the concerns that are specific to the East sounding board. I have been delighted; with all the Midlands. Secondly, I provide leadership within the busy things that we have to do, it has been great East Midlands, hence the creation of the Regional having Tom available. He deputised for me in Economic Cabinet, which is a specific vehicle for us chairing those two sounding boards recently. Lastly, to take through partnership working through the by way of my opening remarks, it is about economic downturn and in other ways I provide partnership working. It can be an overused word, leadership to organisations right across the region. Chair, as you will know, but it involves people Thirdly, I represent Government interests in the getting together, looking at what they can do and region to talk about and to convey the key issues and how they can work better together to make their policies that the Government are putting forward. service more seamless—whether it is to the business So there are three major roles that I play and I do so community in terms of financial practical support, with the support of Tom, who is my assistant and or whether it is to individuals and the work that they deputises for me. I particularly want to mention the do. That is crucial. We want to ensure that we punch Regional Economic Cabinet because this was an our weight as a region in the East Midlands. I do not important development that I put into place like to be too competitive with the other regions, but knowing that in these exceptional economic the more we can beat the West Midlands the better— circumstances we needed to pull together all the but I shouldn’t say that, should I? I think that we Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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29 June 2009 Phil Hope MP, Tom Levitt MP and Jonathan Lindley have moved a long way. We have local authorities in sounding boards and, of course, involving Tom at the Regional Economic Cabinet. There has been a every opportunity to deputise for me when I cannot lot of change going on, both political but also be there. We get a much more high-level presence in structural, to ensure that we have the right structure the region. in place in the region to ensure real leadership among local authorities in this shared agenda on improving Q161 Chairman: Do you think that your view in any public services and ensuring that we have way impinges on the role—perhaps this is a question sustainable jobs and growth for the future. I shall for you, Jonathan—traditionally undertaken by leave it there by way of introduction. GOEM in the East Midlands? Do you feel that you are both perhaps covering the same territory at any Q159 Chairman: Thank you. That was useful and particular stage? helpful. I have a couple of questions. You are a very Phil Hope: I will say one thing, and then Jonathan busy Minister at the Department of Health. What is can come in. Veryclearly,the priorities that I have set the mix of time that you spend in terms of your have been those that the region has told me should ministerial responsibilities vis-a`-vis the time that you be my priorities—the ones that I outlined. The are able to spend purely on undertaking the activities economic circumstances have clearly made them a associated with your role as Regional Minister? priority— Phil Hope: It will vary from time to time, depending on the pressures that emerge at any one time, but I Q162 Chairman: Sorry, did you say that you set have roughly spend about a fifth of my time as a Regional set the priorities, or the region has set the priorities? Minister—I am sorry, it is about one quarter to Phil Hope: I have taken guidance from the three-quarters; it is in that range. That is physical Government OYce and from other organisations time, if I can call it that. In fact, today I was in that I have talked to. I asked them what they think Derbyshire. I was in your constituency at Derby my priorities should be. I then made my own University; and Judy, I was in your constituency decision about what I thought those decisions earlier with the company that makes composite should be, as the Regional Minister. Of course, manufacturing. I hope you knew about that. GOEM covers a whole lot of territory doing the Judy Mallaber: No, I didn’t know. I am shocked. work of government in the regions that goes on Phil Hope: You should have known. I did wonder. outside of my priorities, and quite rightly so, because That is why I mention it now, because you should I am trying to focus my attention on what I believe have known. I shall check with my oYcials whether to be those regional priorities. Jonathan might want you had been told. I shall come back to you later on to say a bit more about that. that. I was in Derby today looking at examples of Jonathan Lindley: As the Minister says, our organisations working together to provide jobs and priorities go across the 12 Departments that sponsor mobility for the future. I tend to spend about that us. They range from Communities and Local proportion of time in the region—all around the Government through to Culture, Media and region, and visiting all parts of the region—and we Sport—the two extremes of the size of Department. hold the Regional Economic Cabinet in diVerent We support the Regional Minister in delivering parts of the region to ensure that they have a chance against his priorities; they are the regional priorities. to be heard and to see what is happening. It is Something like skills is of huge importance for the roughly that sort of ratio. future of the region, and it would be very diYcult for us not to be trying to do things to improve the skills Q160 Chairman: Do you think that that is enough base of the region. I see that there is a huge time? If you had a personal choice, would you prefer opportunity for us to do in our day-job business to to have the facility of spending more time there? I support your priorities and the regional priorities. understand that Tom deputises for you, but notwithstanding the role of your deputy, do you Q163 Judy Mallaber: I am utterly shocked, as you think that it is enough time in a physical sense? can understand, that you have been in my Phil Hope: It is a minor question about whether constituency today. Was it today? there should be full-time Regional Ministers. Isn’t Phil Hope: It was this morning. that behind what you are saying? Judy Mallaber: I didn’t even know about it. Chairman: Yes. Phil Hope: I am shocked as well. Phil Hope: The Government and the Prime Minister have decided that this is the way that we want to Q164 Judy Mallaber: I am completely shocked. But introduce the ability to have someone to take an for me, it also raises the question as to when you are overview of the region, stand back from the silos of deciding where you want to go and visit. Why is it diVerent organisations, and look at the connectivity, just a question of you maybe telling us afterwards? particularly at this time, on the issue of jobs, skills Would you not think that there was some role—both and growth in the region. It is a valuable role for me for GOEM and for you as a Minister—to consult to hear the diVerent concerns in diVerent parts of the your colleagues on where it would be best to go? I region and from diVerent organisations about the don’t know whether, whatever company you visited support that they are getting—or not getting—and today—if it was a composites one, I have some going back to Whitehall to make that clear. We are idea—that was just because they invited you. It providing regional leadership by creating the might not necessarily be the best company for you to Regional Economic Cabinet and having the go and visit. I might have other views on what that Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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29 June 2009 Phil Hope MP, Tom Levitt MP and Jonathan Lindley would be. I would have thought that, given the Leicester in his role as Regional Minister. So far I relationship, it is slightly diVerent from other areas. have been unsuccessful. Returning to emda’s role in Do you think that there should be a relationship with the region and following up on the question you the local MPs to talk about what would be useful asked, Chairman, the East Midlands Regional areas to go and visit—and from GOEM as well? Assembly described emda as an agent of Phil Hope: Yes, and the procedure is that every MP Government, and I think that Councillor Martin that I visit, either as a Regional Minister or as a Hill put it very starkly when he said, “It isn’t a Health Minister, is told beforehand. devolutionist structure: it is a command control.” He saw emda very much as an arm of Government. Do Q165 Judy Mallaber: What about consulting them you think he has a point? beforehand? Phil Hope: I think that there are two aspects to what Phil Hope: I will just explain what the procedure is, we see emda doing. One is making sure that it which is that that should have happened. I do not eVectively supports the economic strategy for the know why that hasn’t happened, but it is standard region as a development agency. In that regard, it procedure that MPs of any party or persuasion are will be absolutely vital that it uses the money the informed in advance whenever a Minister visits. Government allocate it to invest according to the Secondly, it would be helpful to consult Members, regional economic strategy, which it is doing well at particularly as Regional Minister, about where they the moment. We are of course developing the new thought it might be good for me to see—either where integrated regional strategy over the coming problems might exist or where success and months. So it is absolutely vital that emda responds opportunities exist. It would be very useful for me to to and delivers that which is important and relevant do that. We have mechanisms—both formal and to the region and that it represents the region and informal, and this would possibly be one of the ensures that the resources given to it by Government formal mechanisms—for sounding out where do that job. It is an independent organisation and an opportunities are for emphasising key priorities that arm’s-length body, so of course it would also have we are trying to pursue. In this case, it was a the job of not only doing what is there for the region, company that I think is at the cutting edge of but feeding up into Government and, indeed, talking producing technology, which is not only providing to Government about the needs of the region and jobs today, but which has the potential for many how Government policy nationally might best reflect more jobs in the future. It was a good opportunity to and meet the region’s needs and interests. I guess emphasise the importance of investing in companies that every regional development agency is doing a of that kind, as it was in Derby University. I similar thing, and it is up to the Ministers to whom apologise if that has not happened on this occasion, those regional bodies are accountable to ensure that but it is a standard part of Government procedure, there is a coherent policy across the piece nationally which is to inform as well as consult. that allows for national policy to be reflected Chairman: Tom, you wanted to come in. diVerently in diVerent regions, because diVerent Tom Levitt: I just wanted to comment that, as regions have diVerent needs, so I do not regard it as Jonathan has said, there are 12 Departments being a command-and-control structure at all. I represented through GOEM. It is not really the job think that there needs to be clear accountability and of the Regional Ministers to second-guess the transparency, because it is spending a great deal of activities of other Ministers in other Departments. public money in the region, but the actual decisions In many cases, if a local Member has a local issue, and priorities must be led from and within the the departmental Minister concerned should really region. I think that that is what you see in the be the first port of call. The events that I attend tend regional economic strategy. not to be individual constituency visits. They are cross-cutting events, such as conferences, or visits to something like the Business Link headquarters— Q167 Sir Peter Soulsby: But is there not an inherent something which is of regional, rather than local, tension between its role as the agent of the significance. That tends to guide Phil’s way of Government in managing Government funds and choosing which visits are the most important, from spending very large sums of money and its role in our point of view. promoting the region’s economic interests with a Chairman: Okay. Our inquiry that we are degree of independence? undertaking, as part of the process that we are going Phil Hope: The purpose of emda is to take through, is looking at emda. Thanks for the scene Government money and ensure that it is spent setting, but perhaps I ought to steer the discussion properly and eVectively on the regional economic towards the direction of emda, so on to Peter. priorities. That is its raison d’eˆtre. It is not about someone in Whitehall saying, “We’re going to spend Q166 Sir Peter Soulsby: I will come to that, except something in the region on this” and emda going and to say that the line of questioning does raise some doing that. I do not see it as that kind of relationship. questions that you may wish to ask in a Regional Indeed, there is its eVectiveness to consider, as every Grand Committee, if we get it, about how we can £1 of emda’s spend generates between £4.50 and £9 ensure that our Regional Minister is eVective in of investment in the region. It has had a huge impact being our voice in Whitehall and how we can assist in that way, which is very eVective and very eYcient. him in that role. I know that on previous occasions, Businesses I talk to—you will be speaking to them I wanted to get him to visit my constituency in yourself—tell me that they think emda does a good Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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29 June 2009 Phil Hope MP, Tom Levitt MP and Jonathan Lindley job. They are pleased with the service they get and SheYeld. They are able to take a helicopter view of see it as an agency that is responsive to their that, to understand its complexities and to respond particular needs in the region. to the individual needs of sub-regional priorities by covering a range of opportunities—supporting Q168 Sir Peter Soulsby: I will perhaps return to the businesses through Business Link, through question of budget in a few minutes, but before investment in key industries and sectors and passing on from that point, I want to ask Mr Lindley understanding what those are, and through about the relationship between GOEM and emda. promoting the skills agenda in particular. They have To what extent are they similarly subservient to you got that combination right and I think they do it in your role? well. Jonathan Lindley: They are not subservient to me in my role at all. We have diVerent roles that Q170 Judy Mallaber: As you have mentioned the complement each other and we work very closely rural issue, I shall take that up now. I was struck together, but I do not have any formal line when I read the evidence that you only talked about management role in relation to emda. I do play a part urban and rural. Most areas, such as mine, are in the eVective Government management of it, as I actually semi-rural; they have towns with rural am consulted by the sponsoring Department, the areas. That is an important divide. You have talked Department for Business, Innovation and Skills, about the divide of resources and have gone into about its performance and have a role in the rural priorities. Do you take that into account as appraisal of the chief executive by discussing that showing a greater diversity than simply big city with the chairman. I have a role, I hope, as an and rural? informed observer, but I have no formal part in the Phil Hope: Well, Chair, to answer the question I shall direct line management chain. We work to take market towns as an example. These are not complement each other’s activities, which are villages; they are hubs for economic regeneration slightly diVerent. and economic activity within a rural area. There has Chairman: Over the last 10 years, RDAs have been a whole strand of work that emda have been undergone an evolving process, and I think that Judy involved with to ensure that resources are applied to wanted to refer to that. these market towns. I think of Welland Valley in my own area as a good example of where they have Q169 Judy Mallaber: RDAs keep taking on more worked with local partners to understand the functions, so they are now administering regional complexities of an area. Working through those they have built sub-regional partnerships to ensure that development grants and ERDF. They have V responsibility for parts of the rural development the nuances and the complexities of di erent areas— programme and play a part in manufacturing whether they are rural, semi-rural, market towns, advisory services. We can obviously see those all as suburban or urban—can be embraced within their one role, in terms of economic development, but do strategy. I think that is what they have attempted to you think that they are trying to do so much that it do. I dare say that individual Members may desire more resources in their area; that is understandable. is hard for them to really keep a strong business Y focus and a strong commitment to their basic core Deciding where priorities lie is a di cult series of functions on economic development and judgments to make. I think we are getting the regeneration? Are they getting so caught up in a priorities right, and I think we can see that by virtue number of other administrative functions that it is of the outcome that they have achieved in quite hard for them to do that, particularly with a supporting, across the piece, the fully rural village budget that will be falling, rather than increasing? communities and the market towns, the edges of the Phil Hope: I do not get that impression from them. urban centres and the urban centres themselves. Their performance has been outstanding in the way that they have taken the resource they have had, the Q171 Judy Mallaber: Do you support emda’s policy way they have worked in partnership with other of mainstreaming rural work? Or do you think there organisations and the way they have undertaken a is a danger—I say this with Members for two of the very thorough-going economic analysis of the needs three big cities here—that that can give too much of the region and then responded by developing an emphasis too easily to the three big cities? economic strategy that responds directly to those Phil Hope: I don’t want to get into a debate between needs. The fact is that the region is very diverse, with Members, but there is a diVerence between the cities, rural areas and so on; they have had to take sustainable development agenda and the rural that into account. I know that although 30% of the agenda. emda is doing a good job in understanding population is rural, 38% of the spend is going into the need to support rural development, including the rural areas because they see the centrality and the complexities and uniquenesses of that. It is working vitality of the rural agenda as well as the urban with the farming community and the environmental agenda for the region’s economic development. organisations. If we were to take the case of Turning to the range of tasks and activities that emda sustainable development—in other words, an have to undertake, I think that if they were not environmental approach to everything that is going undertaking the range that they currently do, they on—that needs to be mainstreamed. We need to would be criticised for failing to take into account understand that a sustainable future for our region the diversity and complexity of a region that spreads involves, frankly, what we do in cities as well as in from Northamptonshire right up to the edge of rural areas. I can think of excellent work that is being Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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29 June 2009 Phil Hope MP, Tom Levitt MP and Jonathan Lindley done in sustainable development from when I visited Q175 Chairman: Which do you think should have Loughborough university, which is developing the priority? Which does have the priority—the skill hydrogen cell technology for electric cars. We need or the representative role? If you have a divergence, that kind of forward thinking about where the future you could have someone who is— lies for our economy and we must make sure that the Phil Hope: As I say, the structure of the board means East Midlands is in a good place by investing in that that you have diVerent sectors represented so that it kind of innovative technology so that when the is making good decisions in the round, knowing that upturn comes and the motor industry starts to people are speaking with the insights from their recover, we will be ahead of the game in those sorts particular sectors, whether it is business, trade union of technologies and able to take advantage of those or local government community. Those individuals companies. I am trying to answer your question. I have arrived there because they have applied to fill think that it needs to have a rural strategy, but it also that vacancy in that sector. There is then a proper needs to mainstream sustainable development—if I process of selection, recruitment and so on. People can put it that way—as part of what it does across are interviewed. Those decisions are then made by Ministers in the Department for Business, the region for all organisations. If I may, I will call V that the green agenda. Innovation and Skills. Along the way, I will o er my comment on the two or three people who have been shortlisted for that job. It is for the individual Minister then to make the decision. It is a Q172 Chairman: Can I start to address with you the combination of representing the sector’s insights issue of the board? What is your specific role with because they come from that sector, but being the regard to emda? What role do you want to take in best person for the job because these jobs are often appointments to the board, as Regional Minister? competed for by individuals within a particular Phil Hope: Board members are appointed not by sector. That gives the best of both worlds: the sector Regional Ministers, but by Ministers in the is represented and the best person for the job with the Department for Business, Innovation and Skills. I right skills and so on is represented. am consulted, but the decision is made by the Chairman: Jonathan, you wanted to come in. relevant Minister in that Department. Jonathan Lindley: Yes, if I may, Chairman. Once appointed, part of the induction process of a new development agency board member in the East Q173 Chairman: What weight do you think is given Midlands involves a discussion between the chair, to your opinions? the chief executive and the newly appointed member Phil Hope: I would like to think that people listen to about what their broader interests are to draw out my views, but it is not my decision. Those decisions where they can best make a contribution on the are made by the Minister at the Department for broader regional stage. So, for example, one of the Business, Innovation and Skills. In practice, when local authority members is the board’s specialist on names are suggested to that Minister, they are put in rural aVairs. front of me and my comments and views are sought. Chairman: Okay. A decision is always made on the basis of the selection criteria and on merit. I look at the Q176 Sir Peter Soulsby: May I ask how board recommendations and give my comments on which members are appointed? The appointment by a people I think are best for the job on the basis of the Minister from BIS, as it now is, predates the information before me. They all go through to the establishment of Regional Ministers and the Minister in the Department for Business, broadening of the role of development agencies. Do Innovation and Skills to make the decision. you not think that there is a case now for that to be reviewed and for the Regional Ministers to take a lead role in the appointment, rather than a Q174 Chairman: I ask because we have had some secondary role? witness evidence in which people have raised their Phil Hope: I don’t think I do think that. I’ve not been concerns regarding the make-up of the board. They asked that question as starkly before, but I think it feel that they are chosen for their individual skills is right that this is an economic development and what they bring to the table, rather than as agency—a regional development agency; it spends representatives of organisations. There are concerns money allocated to it via the business— about that. Do you think those concerns are valid? Phil Hope: It’s both/and, isn’t it? The board Q177 Sir Peter Soulsby: Yes, it will have the spatial comprises people who represent specific sectors, strategy and a lot of things that go beyond the BIS such as local government, businesses, trade unions remit. and so on. Within that, people are selected on merit Phil Hope: Indeed, but essentially that’s its core task. so that the board is made up of all the key players as There are future structural changes going on to do well as having the best people for the job. As we all with the integrated regional strategy and the new know, the job of those people on the board is to be leaders’ board and the way that emda and the new there operating in the best interests of the board, and leaders’ board will work together around some of the not necessarily batting for their particular sector. broader combinations of economic and spatial They bring the sectors’ perspectives and insights into strategies combining. But it seems right to me that, the contributions that they make. as a primarily economic development function, it is Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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29 June 2009 Phil Hope MP, Tom Levitt MP and Jonathan Lindley the Department for Business, Innovation and Skills organisations with that agenda. There are diVerent that has responsibility and accountability and, ways of doing it. They have suggested one way, therefore, ultimately has the job of appointing the which is to have a person appointed with that brief. members of the board after a competitive process. I think there are other ways of doing it and on Thursday we’ll look at a variety of mechanisms for Q178 Sir Peter Soulsby: Do you not think that if consulting widely. I have to say that, a bit like the Regional Ministers are indeed to be seen as the third sector, the environmental sector is a loose and region’s voice in Whitehall, a role as crucial as this baggy monster of a whole variety of people with a ought to be given to them if they are to be taken whole variety of agendas and issues all of which they seriously? would regard as being the priority. I think the key is Phil Hope: You could argue it the other way. Again, how that sector, as it were, organises itself and how I’ve not thought about these questions too deeply. organisations like emda—and indeed the new The very fact that I don’t appoint these people leaders’ forum—actually work in collaboration and makes our relationship stronger, because I can speak consult and engage with that sector, given its and work with them as partners without them feeling complexities and its diversity. directly accountable to me. We do have a good partnership working relationship. Bryan Jackson, Q180 Chairman: Okay. We were told that other the chair of the East Midlands Development regional development agencies have that sort of Agency, is my deputy chair of the regional economic expertise embedded within a member of their specific cabinet. The regional economic cabinet is jointly boards. Basically, if it’s good enough, or deemed served by JeV Moore and Jonathan Lindley. That is appropriate enough for other RDAs, why is—I’m a good partnership and working relationship. not saying emda is an exception, but perhaps it is an Although I can see the direction that the question exception. If that is the case, is that something that might take, at the moment I am comfortable with the ought to be looked at? working relationships and the accountabilities as Phil Hope: Again, this is a matter for emda, rather they stand. than me, to say who it should have on its board, but you make— Q179 Chairman: Okay. A moment ago you made Chairman: Yes, but we are taking evidence oV you. reference to sustainability. We took some evidence We’re interested in your view. We will have the from a wider group of organisations—the opportunity to talk formally again, and informally Environment Agency, Natural England, etc.—and to emda, about this issue and perhaps other issues. they made the point, strongly in my view, and pretty So I am interested—I think we are interested—in eVectively, that within the make-up of the board what your take is on it. there actually should be a requirement to have a Phil Hope: My take is that it is very important that member with specific environmental expertise. There emda has a very open, transparent and purposeful isn’t one. There may be a decision taken by yourself, engagement with the sector. The sector is diverse and Mr Lindley,or by other people—perhaps it would be covers a whole range of issues in terms of the way it someone who has that brief—but there is not goes about developing its strategy. I also think it somebody on the board who comes to it with specific needs to make sure that sustainability and environmental expertise and, because of the sustainable development is a mainstream, sustainability issue, don’t you think it’s about time embedded-across-the-piece part of everything that that that was looked at seriously as an additional they can see that they are doing—in the same way as function and role on emda’s board? you might be rural-proofing future strategies—so Phil Hope: There are many ways that you can making sure that sustainable development is address this issue of how we make sure that integrated throughout. I don’t have a particular view sustainability is embedded throughout all the work as to whether a particular person is appointed to of emda and, indeed, all the organisations that represent that sector’s interest. I can see advantages. operate at regional level that are trying to influence I can also see disadvantages. If there was good the jobs and growth debate for the region. I think practice, perhaps people could examine that and just there’s quite an important function for emda in see what works and what doesn’t. The outcome is terms of consulting with those agencies, and there what really matters and what matters is an eVective are many of them operating at national, regional and engagement as we develop the regional strategy for local level who would want to have a say in the the future, and that it is mainstreamed and regional strategy and the regional economic strategy, embedded throughout what that strategy contains. as was, and will now want to have a say in the future Chairman: Tom, you wanted to come in. Perhaps development of an integrated regional strategy you have a view. combining the spatial and the economic. This week, Tom Levitt: I just wanted to put it in the context of on Thursday, emda is hosting a meeting not to talk the fact that the East Midlands was the first region about the content of the regional strategy, but about to publish a sustainability strategy. We published it the process of consultation and engagement—not earlier this year, when Hilary Benn came to Long least with the agencies that you have named, and Eaton to launch it. It’s not just about sustainability many others, who want to engage with this issue. in environmental terms; it is also about the issue of The same challenge is true of the leaders’ board that adaptation to climate change. That process has been created, so that we ensure that the local originally grew out of the Nottingham partnership authorities, similarly, consult and engage with those of local authorities coming together to mainstream Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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29 June 2009 Phil Hope MP, Tom Levitt MP and Jonathan Lindley sustainability into the way they operate. It absolutely right that they have a real, strong developed into this regional paper, the first regional opportunity to have their point of view heard, their strategy of its type to be published, with every local evidence submitted, that proper evaluation and then authority in the region—and emda—all signed up to conclusions reached based on evidence about what’s it. So there isn’t a problem getting the issue of best for the region. That, I think, is where we want sustainability up high on the agenda and it is one of to arrive at. Phil’s priorities. Chairman: Can we move on to have a look at the issue of the regional economic strategy? Q181 Chairman: You say that there isn’t a problem, but we’ve got specific evidence from organisations Q183 Judy Mallaber: The question that arises from that they see it as a problem. I’d say it no stronger what we have just been saying goes on into the than that. economic strategy. One criticism that we had when Phil Hope: I understand that point, Chair, and I just we had the business sector and the trade unions with wanted to say that maybe, historically, there have us at the same time is that although you have trade been concerns that the environmental lobby haven’t unionists on the board, the union representatives felt heard in the past. That is why the thinking about there certainly thought that it wasn’t just a case of the future of the regional strategy for the future, in consultation. They have a huge amount of which the first discussion is going to be about the intelligence about what is happening in business and process and making sure that those organisations where problems are arising in individual businesses feel they do have a voice in the development of the that they often have before it comes to the attention strategy, is so important. That is what the debate is of GOEM or emda. Is that something that you have going to be about this week, as we take the discussed with them—how they can take that kind of integrated strategy for the future forward. intelligence into account in terms of us dealing with Chairman: Okay, well, we’ll watch this space. the credit crunch and the economic diYculties that we have at present? Q182 Judy Mallaber: I put it to you that maybe the Phil Hope: There are two things. First, as Regional reason that emda was a bit in advance on Minister, I meet with the trade unions—both the environmental things was that, by accident, it regional TUC and individual unions—on particular originally had one of our leading environmentalists, concerns, and I think that that’s extraordinarily Martin Doughty,on the board. Maybe we would not helpful to me. As well as having a regional TUC have developed the index of sustainable economic representative, as it were, on the regional economic well-being, and this work, if we hadn’t had an expert cabinet, we take opportunities to think about and in that area on the board. I’ll just leave that with you respond to particular issues as and when they arise. as a thought. You were talking about consultation. I The rapid response service, for example, when a am interested in your view on how well you think particular company experiences large numbers of emda does in consulting and reaching out and redundancies, has been an absolutely critical part of talking to people—this broader network that you’re the partnership working between the trade union talking about—other than those who are formally movement, the business concern—Jobcentre Plus, on its board. That raised another specific issue I for example—and, indeed, the Learning and Skills wanted to raise with you. Council so that when something like that Phil Hope: I know that there have been criticisms of unfortunately happens, a service is put in place. Of emda’s consultation. I think it has listened to those course, a particular company can choose not to criticisms and, in thinking about the future, is access that service, and I know that there have been thinking about ways of engaging with a very diverse diYculties with that in some cases, but broadly sector. emda, like the leaders’ forum, for example, speaking, most businesses welcome the extra service, has a real challenge ahead in terms of the wide response and support they get when they’re going variety of organisations that will have an interest in through that diYcult process of having to lose a the future of the new integrated regional strategy. number of jobs, and therefore the individual support When you think of the planning issues and so on, that is given to individuals on retraining, there is a huge number of organisations, whether it redeployment and so on to help that business, and is from the environmental lobby—those people who indeed to get as far upstream of that decision as are opposed to environmental change—or those possible, so that the business might make diVerent people who support it: businesses and so on. The choices in terms of its business decisions, which question is not, “Is there a one-size-fits-all solution might mean that fewer redundancies are required to this?” which I don’t think there is. The question is, when those things happen. So I think they have put can emda develop processes of consultation and in place a good package and a good partnership engagement in the future in which the various views working when those events happen. Indeed, the on a whole range of issues can be heard properly, an trade unions—with their tendrils, as it were, Y overview taken and then di cult decisions made sensitively picking up these issues and feeding into about the right way forward for the future? That, I that—have been an important part of the process. think, is the critical part of where we need to go from now on. I do hope that their forum, where they are discussing specifically what those processes might Q184 Judy Mallaber: In the broader picture, what look like—because these people will never input did you have into the development of the necessarily all agree with each other, but I think it’s regional economic strategy? Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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29 June 2009 Phil Hope MP, Tom Levitt MP and Jonathan Lindley
Phil Hope: Me personally? strategy. If we have concerns that stakeholder Judy Mallaber: Yes, as a Minister. involvement from the environmental lobby or Phil Hope: Well, Regional Ministers didn’t exist sector, for example, which you raised, has not been when the first regional economic strategies were properly taken into account, we would advise the produced, so I didn’t have any input at all other than Secretary of State not to sign it oV. I do not believe as a local MP with my own views. In terms of the that we will get to that position because we are development of the new integrated regime strategy, working very well with all the stakeholders to ensure I’m concerned to ensure that there’s as that we will get satisfactory arrangements. comprehensive a process as possible that really does take into account the views of all the stakeholders in Q186 Judy Mallaber: I am slightly puzzled by what the region and a proper debate on the way forward. is happening with sub-strategic partnerships and The original regional economic strategy was well- why we keep turning structures upside-down. We written and well-researched and had the flexibilities will come back to some of that on accountability. in it to respond to the changing circumstances, so May I pick that up here, because I have had a great when the economic downturn arrived, it was not in a deal of help with some of my local businesses from bad place as a regional economic strategy, but those one of the people employed by the sub-strategic were its priorities for the future in the first place. But, partnership to work with businesses. We have got of course, since then, I think emda have been very advice and got Ministers involved in getting the good at responding to those particular concerns: for banks oV the backs of some of our local companies. example, Business Link turning away from helping I am not clear what is happening to sub-strategic businesses to think about how to deal with problems partnerships and how it ties in to the new structures. of growth to providing services to help individuals Could you explain? and businesses cope with shrinking demand and deal Jonathan Lindley: They’re evolving. The sub- with turnover and how they managed their finances, regional partnerships are currently given money by cash flow and so on. The thrive and survive the development agency and we believe that will workshops that emda sponsored have now been continue to happen. It has happened now taken up nationally,I understand. So something that throughout the region. It did not happen originally emda developed as a regional response has been seen because there were some questions about how as an example of good practice. The original strongly they were performing. They are now regional economic strategy was well founded and happening across the region and the intention is for was the right way forward. There has been a that to continue, as I understand it. However, the response here and now to the current economic Bill has not yet become enacted, so anything could pressures to respond to that and to develop and still happen between now and enactment. amend some of the priorities within that in the way that the organisation has worked. Now, of course, Q187 Judy Mallaber: So we’re not expecting when we need a new integrated strategy for the future that that Bill comes through for it to lead to substantial takes into account what has been going on in the changes, because we are talking about putting economy and gets us ready for the upturn and the authorities on economic prosperity boards. Is that new industries—low-carbon technology and so on. just going to be the current sub-strategic Our region is a good place, in terms of the research partnerships on their current boards but just for the base and companies we have, to respond very statutory function? How would that work? positively to that new economic landscape we are Jonathan Lindley: That is still for the region to entering into. determine. There isn’t an expectation that they will simply stop being called sub-regional partnerships Q185 Judy Mallaber: What is the role of the and start being called economic prosperity boards. Government oYce in influencing development of the They will have to be fit for their new purpose. strategy and the issues that Phil has been talking However, some of them could be the same. There is about in terms of economic circumstances? not the assumption that they will either be the same V Jonathan Lindley: Our role in the current economic or be di erent. strategy was, first of all, to make sure that one was being developed and to make a judgment on behalf Q188 Judy Mallaber: Is there some indication that of Government as to whether the evidence that it was they have not been working well or that they have considering was full and proper. If you like, it was a been working well? sort of managerial oversight of the process, to ensure Jonathan Lindley: No, I think it is an indication that that it was happening and would generate a the world is a changing place and that the new substantial strategy that was challengeable, arrangements that integrate the strategic planning, representative and would help the region to develop both spatially and economically, will require a going forward. Our role as we move into the new slightly diVerent approach and so may require integrated strategy is again to make sure that the slightly diVerent people sub-regionally. process happens—and that is not without diYculty sometimes. We will also make sure, on behalf of Q189 Judy Mallaber: Phil, you have highlighted a Government, that the right stakeholder consultation question about skills and learning, which obviously and involvement is taking place, so that it isn’t is an absolutely critical factor. This is another one simply the leaders’ board, the emda board or the where there are interesting structural issues. joint board strategy—that it is the region’s economic Originally, DIUS was not one of the sponsorship Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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Departments of Government oYces. Now I assume responsive to businesses here and now, but it is also it is integrated because it is in BIS. Whether that has about thinking about the future, what that future come in accidentally or on purpose, I am not clear. might look like and therefore where skills We also have the LSC operating separately, yet emda development might need to focus itself, and not just clearly has an important function in relation to at the lower skill levels—level 1, level 2 and level 3. It ensuring that we develop our skills. How do you see is also about engaging with the university sector for those diverse organisations having to deal with this foundation degrees, higher-level skills and higher- area working together? How does it aVect our ability level apprenticeships. There are a number of players to focus on improving skills when we have not had that need to work together. That is the important DIUS involved originally and we have the LSC point about how emda operates with the other working separately? bodies to ensure that those things are integrated. Phil Hope: I speak as a former skills Minister and I Jonathan Lindley: I just wanted to add that you will recognise the complexities of the skills architecture of course know that one of the members of the emda and the wiring, both in terms of the flow of funding board is vice-chancellor of one of the region’s and in terms of determining how you identify which universities, so he does represent that sector. skills are relevant for the future and how you ensure you raise skill levels across the board in the region. Q190 Judy Mallaber: You will know that we met the We have the problem of being, relatively speaking, a university sector. You have probably seen the low-skill region. There is absolutely no question evidence, so you will have seen that they highlighted about it: all the partners—public sector employers, the fact that they employ 63,000 people in the region private sector employers and the third sector—have and they have a budget of £1.3 billion. They are on to work together in terms of their work forces to the regional economic board. Is there any reason upskill the work force for the future, tapping into the why you have not met them, given their importance? resources that are available through the Learning Phil Hope: I will have met them on a number of and Skills Council, but also being guided by some of occasions previously. Indeed, I met them only this the economic priorities and the sector priorities that morning at Derby University with John Coyne. We the regional economic strategy and the new had a meeting of the regional economic cabinet last integrated regional strategy will identify. Getting November—that long ago—when we were that mix right is complicated at national, regional discussing what the right way forward was. We and local levels. It requires that those partners with invited, at the end of the meeting of the cabinet, a responsibility for various parts of the skills system wider group of stakeholders. Quite a few of the work together so that if an ordinary business, let us university representatives came to that seminar to say, wants to be able to upskill its work force, it talk about the specific contribution that the should be able just to tap into a very simple, university sector makes, as well as all the other straightforward system of getting the resource it organisations—the private sector, FE, schools and needs and maybe putting some resource of its own in so on—to creating a successful, strong region. as well, recognising the benefits, to raise the skills of Indeed, for the next-but-one regional economic its work force. Part of that will involve an analysis of cabinet, we have invited the university sector to its training needs as a company. Of course, there are make a presentation about the contribution that training needs in one setting and then the economic they feel they can make and that they need to situation changes and it has to re-equip or think continue to make. I am particularly interested in the through new products that it has to make that will relationship between the higher education sector and require new skills. The combination—it is the business community, because I think we have complicated—is about trying to put together the some excellent examples of those partnerships, when right mix of support and help for a business so that universities oVer incubation settings for small it can just get the resource and help it needs and the businesses to start up, for example. I met one at analysis it needs of what it is as a business. That may Derby this morning. Some people had come back to start oV presenting itself as a training needs analysis skill-up and do career changes, in this case around and end up as a capital funding problem. A business photography and that area of media and creativity, needs to be able to walk through a single doorway— and the university actually helped them to set up a which is what Business Link is all about—to ensure small business. They were saying to me that they had that it gets access to the right resources for it as a just qualified this year and they were now just business, for its future and its development. Behind launching their business on to the great and good, as that doorway, the Learning and Skills Council, the it were. That is a good example of the creativity and East Midlands Development Agency and the the new ways of thinking that universities are using. national bodies—you have sector skills councils and Career development is no longer the milk round, they set their priorities as well—need to work with 21-year-olds leaving university with their together. It is not easy just to draw a new diagram, degree and getting into jobs. Those days are long because things have grown up for a purpose—to gone. Universities need to be out in their deliver to individuals and to businesses the kind of communities, working with businesses, the third support they need. Things such as Train to Gain, for sector and voluntary organisations, providing example, are a critical part of the new infrastructure, opportunities to think about how they are embedded but so is emda, with its analysis of the broad sectors within their local areas. I was at Derby, so I can that we wanted to see develop in the future. This is speak about that from fresh knowledge. It is about not trying to double-guess. It is about being particularly rooted in the Derby and Derbyshire Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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29 June 2009 Phil Hope MP, Tom Levitt MP and Jonathan Lindley community in terms of how it operates. That isn’t recall. Do you think that it is acceptable to have true of all the universities, but I do think it is an short-term raids on budgets of RDAs, and emda in important part of a success strategy for universities particular? in future. Phil Hope: I suppose the important thing was the Government needing to respond to something that they weren’t expecting, which was the downturn in Q191Chairman: Can I just reinforce two points, the housing market, and the need to ensure that we because I think you are absolutely correct—I can tell could put into the region resources to support and you from direct experience—about the taskforce role promote the housing industry, and aVordable that you referred to a little while ago? After 9/11, housing in particular. These were diYcult decisions, Rolls-Royce had a step change in engine orders and I think, that the Government had to make at the 4,500 people went. Everything swung into action time, but they were taken in response to the need to absolutely brilliantly, including emda and Jobcentre reallocate resources into, in this case, the housing Plus. I was very much engaged on a day-to-day basis sector because of—we all know what happened last with doing some of the work for some of the year—the banks and so on, and the credit crunch, taskforces and some of the work that was which meant that it was a real challenge for the undertaken in some of the working parties. It housing and construction sector as a result of those worked absolutely brilliantly well. It was excellent. changes. A decision was made to reallocate Notwithstanding that, just to stress the point that resources, not to take them away from the region, Judy made, we received evidence from the trade but certainly to reallocate them within the region to unions from the manufacturing and engineering diVerent purposes and diVerent priorities, given the sector that they feel that they are big organisations immediacy of the concerns at the time about what in terms of the economic strategy for the whole of the would happen if we hadn’t reallocated the resources East Midlands, but that they are frozen out of the in that way. process. As Judy was saying, they have a lot of expertise and knowledge to bring to the table, and they have antennae so they can tell what is Q193 Sir Peter Soulsby: Don’t you think it rather happening in the manufacturing sector maybe undermines the credibility of the commitment to the months and months before it triggers oV, but they work of RDAs in general, and emda in particular, if believe that it is not being tapped into by emda, the they are seen as a source for short-term funding in a economic board or anyone. They understandably situation like that, rather than looking elsewhere feel a little aggrieved about that. You may wish to for funding? comment on that or think about it. Phil Hope: First of all, I don’t think it would be fair Phil Hope: My response would be this: I have to caricature what happened as being just dipping worked closely with most of the major trade into somebody else’s budget to solve a problem. unions—I am thinking of Unite, but I don’t know There was a genuine need to look at where resources whether that is the one you are thinking of— were being allocated at that time for that purpose. Chairman: Yes. That was a one-oV event. It was, as we all know Phil Hope:—in terms of their insights and throughout the country, something that came at us contributions and the things that they see going on. as a result of an economic storm from abroad that Rather than picking one particular trade union, wasn’t anticipated—I think we know that—and because that in itself can carry diYculties as we there needed to be a swift response at that time. It know, I have a representative from the East wasadiYcult decision—I am not saying that these Midlands regional TUC on the economic cabinet— are easy decisions—but you make a balanced at the moment, that post is vacant because of some judgement about what’s the appropriate thing to do. job changes that have been going on inside the This was felt to be the appropriate thing to do. That regional TUC, but we will have a permanent person was an important part of deciding to intervene in the there in future. Working through the regional TUC housing market in that way—stepping in and not has been the primary mechanism. I thought it stepping aside from the consequences for the appropriate to work with all the trade unions across construction industry, for the housing industry, and the region, not just those in manufacturing, but for individuals and their homes and families. So it those with many other concerns and issues about was an appropriate thing to do. Moreover, emda, particular sectors. I suppose my response is working showing its flexibility and its ability to manage its through the normal trade union, TUC structure. budgets well, has managed to take those changes. It Chairman: I thought it was appropriate to lay is now planning for a budget for the future, which we down before you how strongly they felt. know is set to reduce by 5% over three years, in order to ensure that it works within its budgets, finding Can we move on to the issue of budgets and Y emda’s budget? e ciency and savings, and allocating resources appropriately to manage its budgets well. They are still very large budgets. The Government are still Q192 Sir Peter Soulsby: As I understand it, emda has completely committed to regional development got the expectation of a somewhat reduced budget agencies. I think that if regional development over the next couple of years, which of course it has agencies hadn’t existed, we would have been into a planned for—it is diYcult, but it can plan for it. But far deeper problem of unemployment and recession last year, it had quite a raid on its budget, as did in the regions, not specifically in the East Midlands. other RDAs, for the homebuy direct scheme, as I I think any proposals about cutting and abolishing Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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29 June 2009 Phil Hope MP, Tom Levitt MP and Jonathan Lindley regional development agencies’ spend in the regions organisations valuing that. No doubt you will make in the way that others have suggested would be your own representations to the Treasury on those cataclysmic in terms of the regional economy in the grounds as well. The bigger story is less about that East Midlands. end-of-year flexibility. The more important thing is being able to respond quickly when we brought Q194 Sir Peter Soulsby: I understand the point you spending forward from later years. We should make made, but I think you’d accept what emda said to us, sure that we make the best use of that resource here which was that the bigger the cuts and the shorter the and now to support people through the downturn. notice, the harder it is to cope. Clearly it is something Sir Peter Soulsby: Which is indeed very positive, but to be avoided, is it not? it is not a case for not restoring end-of-year Phil Hope: I think it is something that every flexibility. Mr Lindley is trying to get in. organisation hopes does not have to happen to them. Jonathan Lindley: I was just going to make a point. These were exceptional circumstances at the time It is a very topical issue because, of course, part of and exceptional decisions had to be made. It was the bringing forward of capital expenditure as part diYcult, but I was pleased with the way that emda of the fiscal stimulus package was the £174 million— responded so well to an immediate challenge of that or £170-something million—from the Department kind. I understand the point that it would not be the for Transport for the A46 dual carriageway. I believe ideal way of doing things, but these were exceptional that the first turf was dug for that yesterday, so it is circumstances that required an exceptional response, actually stimulating right now in the East Midlands and I think, with hindsight, we can look back and with a huge sum of money. say that it was the right thing to do. The wrong thing to do would have been to ignore the impact on the Q196 Sir Peter Soulsby: But it is the case that the construction sector, the housing sector and people’s lack of end-of-year flexibility can be really quite homes, and just let everyone cope with a random perverse in the results that it leads to, is it not, Mr series of changes. That would have been Lindley? unacceptable. I know it was the view of another Jonathan Lindley: That’s a matter for Treasury party that is not present today, but it is not the view oYcials, of course, rather than for me. I have to of this Government. manage an annual budget like anyone else. Sir Peter Soulsby: Of course, there’s no point in pressing that with you. Q195 Sir Peter Soulsby: Can I take you to an aspect of emda’s budgeting that it may be possible to have more control over? That is the flexibility that it has Q197 Chairman: We have more than touched on the at the end of the year to take budgets from one year recent local economic climate. In terms of that, who to another—end-year flexibility. That, as I took the lead in ensuring that businesses throughout understand it, was taken away from emda and, I the East Midlands were made aware of the financial assume, from other RDAs a couple of years ago. Is support that was available? Who took on board that there any positive case to be made for that except role—GOEM, emda or you, Minister? that, I assume, it is what the Treasury demands? Phil Hope: I think that we all played a part in making Phil Hope: I don’t want to enter into too much of the sure that businesses did know. The first thing to do Treasury’s territory, because you normally get your was to make sure that the services that businesses wrists slapped if you do that as a Minister. needed in terms of getting through a downturn were Sir Peter Soulsby: I am trying to make a positive case there and that they were responsive and changed to for it. suit their needs. For example, Business Link through Phil Hope: What has been interesting is that we have emda did a magnificent job in responding to the V been doing, I suppose, the reverse, which is bringing di erent circumstances in which businesses now find V some spend forward. Spend allocated for future themselves. So, there were di erent forms of advice. years has been brought forward in order to There was a lot of outreach work that emda maintain—indeed, increase—public spending at a organised—not least the thrive and survive time when the recession is at its deepest. That has workshops that went on in late autumn and around V been a deliberate policy, particularly in relation to that time. That made a big di erence. As I said capital spend. The region has definitely benefited earlier, that has been a model that I know other from that decision, not least in relation to, for regions are now using. The rapid response service example, the Department for Transport and the road that I mentioned earlier was something, again, that infrastructure in the East Midlands. We have was co-ordinated through the partnerships between benefited from bringing forward the road spend. I emda. hope that decisions by recently elected local authorities don’t undermine some of those decisions, Q198 Chairman: That’s been around a long while. I because if we don’t have support for the tram am talking about under the current economic system, for example, that undermines the case for climate. Additional money has been made available. the road building for Nottingham that we have Who is responsible for it and how eVectively was brought forward. There are some really important that information pushed out to businesses? structural, long-term developments in the region Phil Hope: A major thing that we did was that we that we need to pay attention to. I think that that is were the first regions to launch the real help now right. I understand your point about end-of-year services and the new advice that was available for flexibilities—where we started—and about businesses and, indeed, families throughout the East Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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29 June 2009 Phil Hope MP, Tom Levitt MP and Jonathan Lindley
Midlands. I was delighted to be with the Prime working together. As a regional economic cabinet, Minister when that launch happened—it happened we spend our time challenging each other about to be in Corby in my constituency. We then did a what we are doing to respond to the needs of major programme. We’ve published our own individuals, families and businesses in the region document as a regional economic cabinet, which has going through the downturn, to see where there can been widely circulated. That spelled out the various be areas where we can join up and do joint projects forms of help and advice that are now available. and activities. To make it very clear, examples of That has been proven to be very successful, because problems that are happening the region are fed back all the diVerent partners have signed up to it, and it through into Whitehall, so that the voice of the shows the linkages between people. My idea would region is heard very loud and clear to influence be that wherever you are—wherever you enter into decision making back at the ranch, as it were. I think the system as an individual, a trade union, or a that that is eVective. business wondering where the help is—you get steered towards the sort of service that you might need to suit your individual circumstances. Q201 Chairman: There is a formal mechanism, is there, for feeding back into Whitehall? Phil Hope: Yes, I am a member of something called Q199 Chairman: Are you pleased with the job that the Council of Regional Ministers. We have an emda did? opportunity at those meetings to talk about Phil Hope: I think emda did a very good job in particular issues that are arising in our region and to responding flexibly and swiftly to the new economic feed those into the centre, where they require a environment in which many businesses were finding response that might be from the centre—that can themselves. happen—or it might be that it gets filtered down through those organisations, and they then respond Q200 Chairman: Can I put you behind the eight ball accordingly. One of the ideas of Regional Ministers and ask you what has been achieved that could not was to unblock, as it were, any logjams that might have happened without your undertaking the role as exist in the system, where one Department is not Regional Minister—either you personally or as talking to another, one agency is not talking to Regional Minister? another or where there is a contradiction. I had that Phil Hope: Let me give an example of finances in the example today, just talking to how we roll out the region. emda runs something called the regional risk graduate traineeship, where organisations were finance forum, where it brings together some of the talking to me—this is from the universities today— key providers of finance in the region and talks about, “Here we are. We want to set up these about the needs that those organisations have, the internships for graduates, but we need to make sure support they get and the work they are doing getting that there is a consistent approach among jobcentres lending out into the region. I was getting frustrated, and HMRC to the way that the tax and the benefit because I was hearing from businesses before system delivers to those graduates who are going to Christmas that those regional banks were not giving do internships this summer.” That is a very good, out the money that the Government had made practical example of the added value that I believe I available to them in the work that we did before am bringing to the development of the region and its Christmas to provide funds for banks to give to economy. businesses. In addition to the work that emda was doing—quite rightly—through its structures and the finance forum to ensure that those lending Q202 Judy Mallaber: How do you know that you are organisations, the banks and so on, knew what was making an impact? I had a company that I was available, I held my own meeting with those banks dealing with last week that was completely outraged. and made it fairly clear in no uncertain terms what They are building houses. They have all the security I, as a Regional Minister, expect their performance they need, and the bank just pulled the loan out of to be. We had a full and frank discussion, between them and demanded the money back. It is basically myself and representatives of those banks. I was blackmailing them to get more money out of them. given assurances then, that if there had been any The bank—it is a respectable bank—clearly had not delay in moving money out into the business responded to what you are saying, and I dealt with community, in terms of responding more positively that through going to the local person who deals to its requests for aVordable loans, for overdrafts with local economic partnership, who links into that wouldn’t be called in and for all those kinds of emda. Similarly, I had a major company—this was things that were a problem for businesses, that there right at the beginning—that phoned me up to say would be a real commitment to achieve change. I that they were just about to go into receivership. I think there was a complimentary role between emda, dealt with that by going through Government providing the professional work, working with—in Departments centrally. Again, that was a problem this case, I am using just one example—the banking with the banks, pulling money out of them. So how community and the political role, if I can call it that, do you know if you are having any impact? Why has that I played in seeking to put pressure on those it not occurred to me in either of those examples to organisations to deliver the resources that the come to you, as the Minister, when I have gone Government provided. I think that that is where the through other mechanisms? Maybe that is my regional economic cabinet has been quite important, failing. Would you be able to help me if I did have a which has been to add leadership to the partners problem? Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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29 June 2009 Phil Hope MP, Tom Levitt MP and Jonathan Lindley
Phil Hope: First, I welcome MPs throughout the Conservative authorities as well as businesses—is, region, if they have examples of that kind, where the “Yes, we value the opportunity to come together. We sort of work that we are doing that is a real help can see the diVerence that it makes in terms of people now—the policies, the programmes, the funding— knowing more about the help that is on oVer.” My Chairman: I might have one for you tomorrow. role to promote Government messages, programmes Phil Hope: Fine. We’ll do that. and policies is having a huge impact. I spend a lot of Chairman: I’ll test the process. my time talking to the local media in Derbyshire, Phil Hope: So we feed them through to see if we can Leicestershire, Nottinghamshire, Lincolnshire, unblock the blockages. We can challenge the Northamptonshire—television and radio stations institutions, if they are failing to do what we expect throughout the region—in order that the messages, them to do—in this case, the banks providing loans programmes and action that we are taking is known or aVordable overdrafts and so on. That is part of about. Then, if people are having diYculties, they my function. There is an organisation set up to do will come back to me and say, “That is not working that. emda is there, and I would expect questions to in my area. What can we do here?” It is that regional be taken to it. But there comes a time, particularly leadership and bringing people together, holding now, when we just need to—this is the challenge people to account, challenging regional function. When things aren’t working right, or when organisations to step up to the plate, particularly things are to do with something that is not within the now, when the pressures are hardest, that is region but somewhere in Whitehall—there is some important. I think of the two sounding boards that lack of connectivity—I, as a Regional Minister, want we created, one on social exclusion and one on to know about them. I can then take them to the aVordable housing. I chose two particular areas that system. I can speak to Lord Mandelson. He tells us I personally thought were big priorities for the he wants to know about individual examples of that region, outside of jobs and growth. They have had a kind. We can sort out the individual example, if it big impact. Those people are working together, and can be sorted out, but also, if it is a symptom of some new arrangements are being devised. The policy that other wider problem of lack of joint working— we just published on Valuing Employment Now, whatever it might be—we can sort out the wider which is a Government policy on employing people underlying problem that created the problem in the with learning disabilities, has been informed by first place, so it is both. That is how I see my role as practical steps, relationships, learning and people a Regional Minister. talking about obstacles. In that case, information at Tom Levitt: I think we’d like to hear about examples regional level fed into Government policy. I think of things that work, because they are equally valid. that we can be proud of what we have achieved in the We have had cases where an issue such as you region in terms of providing a focus, and bringing described has come to the attention of senior people together regional partners around themes and issues in a bank, and they have sorted it out, because that that might not otherwise be addressed in such a should not have happened, even within the bank. sharp and pointed way, given the particular But because we managed to draw it to their circumstances of the economic downturn that we are attention, it got sorted. Equally, we have banks going through at the moment. complaining that people are not coming to them in Chairman: You have a point that you wanted to suYcient numbers to ask for the money that is raise, Peter, about the Council of Regional available. Ministers.
Q203 Judy Mallaber: On those two examples—there Q204 Sir Peter Soulsby: When asked about the are others—for one I went straight to Peter mechanisms in Whitehall for a voice to be heard, you Mandelson’s oYce. He was in fact in India, but it told us about the Council of Regional Ministers. As went to the top. On the other, I went to someone I understand it, that was only established in October local. That goes back to Bob’s question about the last year, and it is not a permanent structure. I function of the Regional Minister. I have gone above wonder what else there is that enables you to make and below you, as it were, in pursuing solutions. sure that what you are seeing out there, what you are Chairman: Don’t worry,I’ll do the test tomorrow. I’ll being told out there, is actually fed back into the try emda first. If that doesn’t work, I’ll be on to you. structure. Phil Hope: I want to emphasise the three roles that I Phil Hope: There is also—unhelpfully named—the play. One is to be out in the region, listening, hearing Regional Economic Council, which is a national what the problems are—the kind you describe—and, body on which every Regional Minister sits, along where appropriate, steering them to wherever they with the Treasury. I think it is co-chaired by the need to be solved, in particular back in Whitehall. Chancellor and the Secretary of State for Business, Secondly, on the point about regional leadership, Innovation and Skills. you asked earlier how I know whether I have had Jonathan Lindley: The Regional Economic Council. any impact. What diVerence am I making as a Phil Hope: Yes, the Regional Economic Council, to Regional Minister? The way that I answer that which we are invited. So there is also this broader question is by asking those people with whom I am body bringing together Ministers from diVerent working whether we are adding value to what they Government Departments, Regional Ministers and do. The response I get from the members of my external organisations to which we can make our regional economic cabinet, which includes members views known and to which, informally, outside the of the opposition, by the way—leaders of meetings themselves, we can feed in the experience of Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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29 June 2009 Phil Hope MP, Tom Levitt MP and Jonathan Lindley what is happening in the region. As well, there is the spatial plans, so that we can merge together issues Council of Regional Ministers, where Regional around housing and planning with issues around Ministers alone sit and talk in very practical terms jobs and employment. I think that it is a crucial part about the day-to-day operation of what is going on of the region’s future for years to come. This is an in regions. We learn from each other. I mentioned the absolutely central part of the way forward. It needs Survive and Thrive workshops run by emda, which to build on the very best of our knowledge and are now being talked about, and other regions are experience of the past, the regional economic doing them because we talked about them and strategy that we had and, indeed, the spatial strategy shared good practice across the regions. that we had—it needs to combine the two together. Jonathan Lindley: There are three bits of national So, we have an integrated strategy, which has government architecture. There is the Council of embedded within it all the issues around sustainable Regional Ministers, which is as its name describes. development, which meets the needs of a very There is the Regional Economic Council, which is diverse region in all its shapes and sizes, with its Regional Ministers, other Ministers and diVerent sectors, and which has ownership and a representatives from outside Government. There is kind of commitment of all the partners to pursue it. the National Economic Council as well, which is That is why the process of how we go about eVectively a subset of the Cabinet. producing that regional strategy is so important.
Q205 Sir Peter Soulsby: One good way of seeing how Q210 Chairman: But it is going to suck into emda a much importance is given to these bodies is to have whole bundle of work and activity. Do you think a feel for how much time is given to their meetings that there is a danger of it losing some focus on and how frequently they meet. Are you able to give economic strategic and local economic issues? us a breakdown of that? Phil Hope: We are pursuing an integrated strategy Phil Hope: The Council of Regional Ministers is because only pursuing economic issues in isolation meeting very regularly right now because of the from the spatial issues carries within it the risk that importance that we are placing upon this. We are the two do not gel together. That is the reason why talking about monthly meetings of the Council of we need to integrate the two strategies. I know that Regional Ministers. You have to be able to do it is not easy given that they operate on slightly enough between meetings to make the meetings diVerent timelines and diVerent legislative rules and valuable, so there is a huge amount of work that goes regulations are in place. The history of how one has on in between the Council of Regional Ministers developed and how the other one has developed, and meetings as well—sharing information about the how to merge them together is a challenge, but that development of the economy in the diVerent regions is what the Government have decided to do and, and the diVerent actions that people are taking, and rightly so. They want to ensure that an economic there may be issues where regions abut one another strategy really does integrate with a spatial strategy and you need to do joint action and so on between for the region as a whole. Without that, there would regions. That is a very core part of the system that we be a risk that the strategy would not provide us with operate within. The National Economic Council—I the best way forward, particularly given the must get the names right—meets from once a changing nature of the global economy, the impact fortnight to twice a week. of climate change, an ageing population and a major demographic change. We need to bring all that Q206 Sir Peter Soulsby: And the Regional together to ensure that people have homes, jobs and Economic Council? places to live in, which they like and want to stay Phil Hope: That is quarterly as well. living in, and to which we can attract people in the future. Q207 Sir Peter Soulsby: A typical meeting—how Chairman: Okay. Are there any other questions that long for each of them? you would like to ask, Judy? Phil Hope: For the Council of Regional Ministers, normally an hour to an hour and a half, depending. Q211 Judy Mallaber: I have a question on accountability. There are some reasons for the Q208 Sir Peter Soulsby: Similarly for the other two? changes, but some things we just seem to throw up Phil Hope: No, with those other ones, because they in the air, but they fall down again. They seem to be are big meetings, they take longer—they are on a working, and I am not sure why we then change quarterly basis. It is sort of two to three hours’ time them. With the loss of regional assemblies, how will for those. stakeholders in the region be able to scrutinise the work of emda and have the role that they have had Q209 Chairman: We are starting to move towards up to now with broader local government, third the close of taking evidence from you, you will be sector, etc.? pleased to know. We have picked up some of the Phil Hope: This is really important. There will be a other issues about sustainability but, in terms of the joint board between the newly created leaders’ single regional strategy, how do you think this will forum and emda to oversee the development of the have an eVect on the region? regional strategy. That is absolutely vital. Given the Phil Hope: The integrated regional strategy is the size of that task and the range and variety of most crucial part of the region’s development as a organisations, it needs to be a well-thought-through region, because it will integrate economic plans with plan for engagement so that everyone can see how, Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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29 June 2009 Phil Hope MP, Tom Levitt MP and Jonathan Lindley when and where they will have their opportunity to day. I regret that and hope that when the measure look at and influence the plan as it develops for the comes back, there will be a cross-party consensus future. I do not think that there is a straightforward about the importance of having an East Midlands or simple way of doing that because we are trying to Regional Grand Committee. do something that is quite challenging, which is to Chairman: Or the numbers will be better. achieve an integrated strategy. That does not mean Phil Hope: That is for you, and not for me, to say. I that we should not do it. It means that we need to be hope that we will have the full options for regional innovative. We need to be using many diVerent ways accountability. of engaging the stakeholders to ensure that various Tom Levitt: I think we were unlucky in that it just views and opinions will be out there. Achieving happened to be the East Midlands vote that did not consensus is where we want to land, and we have a get through the other night. I don’t think it was lot of arguing to do before we arrive there. something specifically aimed at the East Midlands. Judy Mallaber: I understand that a date was Q212 Judy Mallaber: But some of this is suggested, but that there was no consultation on it. involvement, and some of it is about scrutiny from a broader group of people and those who are making Q214 Sir Peter Soulsby: Can I return briefly to the the decisions. That was the point of the regional sustainability issue that we were talking about assemblies, but also in your evidence you said that earlier? While we have been talking, I have looked at there would still be scrutiny by individual what the Environment Agency said to us about the authorities—I am not quite sure what that means— East Midlands compared with other regions. It and regional scrutiny by Regional Select noted that “it is stark that, in the East Midlands, Committees and Regional Grand Committees. I there is no champion body. For example, there is missed the Thursday vote because I was paired with Sustainability North East, Sustainability South a Lib Dem Opposition Member. We do not have a West and Sustainability West Midlands”. It goes on Regional Grand Committee, so what will happen to to state that “we need to have a place where that our scrutiny? We have lost the assembly in terms of senior level debate can happen with the emda board the broader range of organisations, which would be and with the Government OYce. That is critical.” a wider group than just the leaders’ board, or That is fairly clear from the Environment Agency whatever it is called, and regional scrutiny from the and it sounds quite a powerful case. If other regions parliamentary viewpoint. can have that focus, there is surely a powerful case Phil Hope: I have two or three things to say, the first for the East Midlands to have it as well. of which is about scrutiny by individual local Phil Hope: Yes. There has been quite a debate in the authorities. Local authorities now have quite good, region about precisely that point. There were a tough powers to scrutinise both themselves and number of surveys last year of some of the regional other organisations in their area. They can focus on, decision-making bodies and a wider cohort of for example, health and local authorities. The role of stakeholders, including East Midlands Environment local authorities to scrutinise activities is now a Link, which was consulted about various options in commonplace part of the system. the paper about how we might take the issue forward. The findings were that any inclination Q213 Judy Mallaber: But emda cannot visit every towards establishing an independent champion local authority. body had changed in a significant majority of Phil Hope: No, sorry, I was trying to interpret what participants who now preferred to mainstream I mean by scrutiny by individual authorities of what sustainable development through existing and is happening in their area, particularly as we move emerging regional structures in support of the new into economic development and economic well- regional strategy. I think that the lack of support for being as a rising purpose and a priority for local a champion, such as that in the routes that you have government. As for Select Committees, we are here. just described for other regions, was because You are doing your job very eYciently,I might say,in participants were worried about resource issues and putting us under scrutiny. We are obviously looking actually concerned that, rather than making it more forward to the report and your recommendations for of a priority, we would end up sidelining, rather than the future, which will be very helpful and healthy. mainstreaming, the issue. I know that there could be Holding regional bodies to account by the work that arguments either side of that. you do may not have a regional democratic structure of its own but, in terms of the Grand Committee, I Q215 Sir Peter Soulsby: But are there not arguments expect that there will be another proposal. It will that when you mainstream or—as you described it provide you with an opportunity, when you are not earlier—embed things, you in fact end up ignoring paired with whichever Liberal Democrat you were them? paired with, to exercise your vote to create a Grand Phil Hope: Yes, well, two of you on the Committee Committee. It was wrong of the Conservatives and have been leaders of councils and others have been the Liberals to vote against the Grand Committee. leading players in this. You will know the They have taken out of the picture, albeit briefly, an importance the bulk of your spend. If the bulk of important part of the democratic structure that we your spend is just a little bit of icing over the top— want to see operate at regional level to allow every let us call it sustainable development here—that is MP in the region to have an opportunity to quiz me fine. But it is much better to take the bulk of your as Regional Minister and to debate key issues of the spend and see if you can rebake that cake, so that it Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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29 June 2009 Phil Hope MP, Tom Levitt MP and Jonathan Lindley reflects sustainable development and you get more support for sustainable development being a product. The question is, is that as visible as the layer mainstream, embedded part of our regional strategy on top of the cake? Maybe it is not quite as visible, for the future. but it is much more profound and impactful to see Jonathan Lindley: Two quick points. First, just to sustainable development throughout. make you are aware, if you were not already, that the Environment Agency’s regional boundaries are not quite the same as ours, so there are actually two Q216 Sir Peter Soulsby: The fear is that that is not Environment Agency regions that we have to happening. involve. Secondly, one of those regions—the one Phil Hope: Well, I would challenge that it is not that covers the bulk of the region for which I am happening in the East Midlands. Tom earlier gave an responsible—has a strategic programme board, example of why we launched the first ever although I cannot quite remember the precise name adaptation strategy in the East Midlands. I think of it, which the regional director has just created and there is a large and important agenda for sustainable which he has invited me to sit on. If there are any development that has the support of emda and local issues relating to strategic planning or concerns from government. It certainly has Government support. their perspective, or indeed things that I want to bring to their attention, I shall be able to bring those to the Regional Minister’s attention as necessary. Q217 Sir Peter Soulsby: Except that you could argue Chairman: All I can say is that all this discussion that if that is actually happening, the Environment about cake has suddenly reminded me that, at this Agency would probably know about it, and they late hour, it has been nine hours since any food were the ones who gave us the evidence. passed my lips. If you have two quick questions, it Phil Hope: Yes, I suppose that we could look at the might be appropriate for us to take them, and then specifics that individual organisations talk about. I perhaps we can wind up the proceedings. think there may have been some criticism in the Judy Mallaber: We put Bob in the Chair because he past—two or three years ago—when there had been promised to have it over in an hour. a feeling that they had not been suYciently consulted. But now, as we take the integrated Q218 Chairman: Nothing else? Is there anything that regional strategy forward and consider the you would like to briefly add to your evidence? importance of mainstreaming sustainable Phil Hope: Only to thank you for your interest and development as well as the importance of a process investigations. We look forward to seeing the results. for doing that, which will be debated this week, I Chairman: We will make sure that it is a good, hard- hope to see much more engagement and much more hitting report—we hope. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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Tuesday 7 July 2009
Members present:
Mr Bob Laxton (in the Chair) Sir Peter Soulsby Judy Mallaber
Witnesses: Michael Carr, Executive Director of Business Services, Diana Gilhespy, Executive Director of Regeneration, Glenn Harris, Executive Director of Corporate Services, JeV Moore, Chief Executive and Anthony Payne, Executive Director of Strategy and Communications, emda, gave evidence.
Q219 Chairman: Good morning, one and all. Business Link is the heart of that network. As JeV Thanks for coming in to see us again. Sorry about said, 80,000 individuals and businesses made contact the few moments’ delay, but that’s all sorted now. It with Business Link this year. That is a significant has been a while since we last took evidence from increase on the previous year, when it was only you, in Notts County Council’s chamber. Since then 60,000. It reflects the amount of eVort that we have we have had a bit of a leg around in taking evidence put into streamlining the service, making it simple from other organisations. We have done a bit in and easy to access, and providing more advisers on North Derbyshire, where I got myself surprisingly, the ground and more support in the form of grants irretrievably lost, but I got there eventually. That’s and loans. Businesses are taking it up in ever fine. Thank you for coming in to give evidence again. increasing numbers. We really want to pick up some of the issues that have arisen as a result of the other evidence that we Q220 Chairman: The larger businesses and took and of some of the comments—good, bad, organisations are well engaged. There is no doubt etc.—that we have received about the role of emda. about that. I think the comment came generally I shall kick oV straight away. Some witnesses have Y from the Federation of Small Businesses; very small commented that your role as emda is not su ciently micro-businesses were saying that there was a mixed understood in the region, particularly among small view as to how well organisations knew emda and and medium enterprises. Because of that, we would what your role was. I think it was primarily from like to know whether you perceive it as an issue and that sector that we ended up with that—not heavy also what you are doing to try to improve your criticism, but just an observational comment. profile across the East Midlands. JeV Moore: There are two points there, Bob. We V Je Moore: You can always do more, Bob. There is were aware of that evidence from the FSB and are no doubt about that, so we are not complacent about quite surprised and frustrated by it, because it has our profile, but in terms of small and medium-sized never mentioned that to us direct at all. In all our enterprises, which I think was the thrust of the dealings with the FSB, we have dealt extensively question, we engage with all their business with Cath Lee, who is the former regional policy representative organisations: the FSB, the IOD, the manager of the FSB. Mike met her on a quarterly Engineering Employers Federation, the CBI and, in basis—that issue has not been raised at all. In terms particular, the East Midlands Business Forum, of engagement, that issue has not been raised with us which is the representative body for all business before at all, so we are quite disappointed that it groups in the East Midlands. But more pertinently emerged out of the blue, as far as we are concerned. than that, we deal with tens of thousands of That is quite frustrating to us. I was addressing in my businesses each and every year. We deliver services answer more the issue of whether every single direct to those businesses through Business Link, business in the East Midlands, whether it be large or directly ourselves or through other partners. Of the small, knows exactly the role of emda. That was the 67,000 businesses that Business Link dealt with last point about my comment, “You can always do year, well over 70%—something in the order of more,” but if it is about engagement with the FSB 50,000 businesses—were SMEs. Mike might want to and SMEs, I think we have done as much as we expand on the detail, but we feel we engage with possibly can within the resource constraints that we them a great deal. Obviously, you can always do have. There is clearly a whole array of stakeholders more if you have limitless resource to do more. We within an economy as diverse and complex as the think we are doing as much as we possibly can within East Midlands that want, eVectively, 100% of our the constraints that we have in how we spend our attention. That is quite reasonable if you are a single- budget. I do not know whether Mike wants to add issue organisation that impacts on emda. You may to that. want 100% of our focus. We make no apology for the Michael Carr: Just a few things. Clearly, one of the fact that we have to make diYcult decisions against things that we have been doing over the last three to a disparate background of stakeholders, so we have four years is simplify the oVer to businesses, and to balance priorities. We cannot be everything to therefore I would suggest that most businesses now everyone, nor have we always set out to do that, but have a good understanding of where to go to get we do feel we have engaged significantly with the business support and the nature of the support that FSB. You may want to talk about our role with it is available to them. There is no doubt about it: nationally, Mike. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 72 East Midlands Regional Committee: Evidence
7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne
Michael Carr: There are just a couple of things to have dealt with them directly through our board and add on that. First and foremost, as JeV has said, we have engaged with them. We have been in do meet with the FSB regularly, and we also share conversation with them for some considerable time with it, through the regional economic cabinet, the about various projects that they want to bring day-to-day intelligence that we collect through forward, but which have not yet been turned into Business Link. We have 184 front-facing individuals formal applications for funds. under the Business Link brand. They are touching with businesses all the time, and therefore the intelligence that we are gathering, particularly Q222 Judy Mallaber: On that specific point, the during the recession, is particularly eVective in strongest argument made—this may be something steering the programmes that we drive. One of the you will want to talk through with them—was that, while you will obviously have a lot of links with a lot roles I play on behalf of all the RDAs is interesting. V I sit on the Business Link strategy group, which of di erent businesses around the region, and you includes all the seniors of the national representative may have those links from having a trade unionist on bodies. Stephen Alambritis sits on that. He is the the board, very often the first intelligence that you senior co-ordinator on that group, and his view is will get, and that we as MPs will get, of a problem in that Business Link is, for the first time, targeted at a company or a workplace comes from a local union and serving small and micro-businesses. It is link. I think there was a feeling that the links with the interesting that there is a contrasting view between unions did not spread wide enough into the region, what we are getting regionally and what we are and that they were formalistic with one person on a seeing nationally in that situation. board. Have you looked at, considered or discussed JeV Moore: Stephen is the national FSB with them how you can bring that broader representative. intelligence in from what is a useful network as far as you are identifying what is happening in the region? JeV Moore: I understand the point and it is Q221 Chairman: Okay. On engagement with emda, something that we will take away and consider. again, I think that there was a view, which came over Clearly, through our engagement with businesses, very clearly to us, that with larger companies and local authorities, the Government oYce and the organisations across the region your engagement third sector, particularly when businesses are having was excellent. But we picked up comments in a diYculties, we can glean that intelligence from a couple of areas. One was the engineering and whole host of sources. Union reps will write to us manufacturing trade unions specifically, which felt direct and say, “Company X is having diYculty that they were perhaps frozen out of things a little in because of the recession. What are emda and the terms of their engagement with emda. Also, we other partners going to do about it?” We have a picked up comments from the environment agencies, multitude of examples of that. We do not say, “Okay, when we took evidence from them. They certainly we can’t deal with that; it has to come through our felt that, unlike with other the RDAs, there was not union board member.” We will engage with whoever a representative on the board representing the gives us the intelligence about where we need to environment sector. I know that there is, of course, intervene. We will look at how we can do that better. a representative from the TUC on the board, but One of our concerns, as I have said, relates to the certainly the unions in the manufacturing sector FSB and to Natural England’s concerns. Those within the East Midlands still felt that they were a concerns were not raised with us direct, so they have little bit out of the loop, if you like. come out of the blue to us. We think that one major JeV Moore: Turning to the union point first, from concern going forward is, as you know, the changing 2002 Nev Jackson, the TUC regional chairman, was nature of what we are going to do going from an on our board. Neville was replaced at the end of his economic strategy to an integrated regional strategy, six-year term by Elizabeth Donnelly, who I believe is and the greater engagement that we will have in on the national executive of Unite. As union terms of spatial issues. We feel that there is a degree representatives, they have been given a full hearing of concern about how stakeholders will be engaged and play a full part on our board, as much as any going forward, and that is manifesting itself in a bit other board member does. They come as of the evidence that you are getting. We have positive representatives for the region, but they clearly also proposals for that, which we may come to later, but represent their constituency very eVectively. Unite I know that Diana wants to comment on the union has not raised those concerns with us, but I believe point. that it is Unite that has raised them. I think that Diana Gilhespy: It was actually on the Environment through Neville the TUC has had a great deal of Agency point really. I would say that there are three input into our board and the things that we do, and regions of the Environment Agency that cover the Elizabeth Donnelly has certainly been on our board East Midlands, as it were, so it is very diYcult to get for some time now and has had an eVective input. We a single point of contact. But we have contact with believe that we do engage with the unions in that each of those three regions, particularly in relation to respect. Similarly, the TUC is part of the regional the remediation of the Avenue coking works, where economic cabinet and receives all the intelligence we have been able to combine our investment with that we give to the cabinet on the recession, which is their investment to have a plan for reducing the flood when it has been particularly in focus, but also the risk going through Chesterfield. That is a long-term long-term stuV that we put to the cabinet about new piece of work that we have been involved in. There industry and new jobs. So, in terms of the unions, we is very good co-operation and they understand the Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 73
7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne issues around the potential contamination of the We had a task-and-finish group of those partners; we River Rother. We jointly work together to sort out do not do it all ourselves. We have addressed that in the flood risk issues in Chesterfield. The other area more detail in our subsequent written evidence, but where we are doing a lot of work with them is around we will look to learn what we can from the new the whole issue of coastal flooding in Lincolnshire. conversations that we have had as a result of this That combines a huge number of issues and scrutiny process to make what we already think is problems to do with climate change and the flood working well better for the future. risk to very vulnerable coastal communities. If we do Chairman: Thanks, JeV. Can we move on to not plan properly, we could have sea water coming evidence base? across some of England’s most valuable agricultural land, so we are working with them, the Government OYce, Natural England and EMRA—the East Q223 Sir Peter Soulsby: Since evidence was mentioned, can I take this opportunity to put on the Midlands regional assembly. I am going to miss record again that I am a member of Unite? That somebody out—when you do a list, you always miss really ought to be pre-recorded. On the evidence somebody out—but we also work with the local base, we had some criticism, particular from the authorities. Although you are saying that we do not Federation of Small Businesses. They suggested to have a specific person on the emda board, we engage us that emda’s research duplicated information that very much with the Environment Agency over issues was already available out there and as a result it was that jointly aVect us and the economy of the East perhaps a wasteful eVort and not as timely as it Midlands. might have been. How do you respond to that? Michael Carr: Can I just say something on the union JeV Moore: Anthony will respond to the specific side? I do not want you to go away thinking that we point about our research capability and where we get do not have good working relationships with the our research from because we get it from a variety of unions, because we do. You will be aware, sources. Mike will deal with any specific points that particularly in the recent economic climate, that we need to talk about on the FSB’s research. there has been a large number of potential job losses, Anthony Payne: The key point to make here is that particularly in large employers. There is a very we look at information that comes from the likes of strong network within the East Midlands where the FSB, but within the round. We get information people such as the Learning and Skills Council, V coming through to our research team from a variety Jobcentre Plus and ourselves form, in e ect, what of sources. Business networks are one of those, you would call a hotspots group to address things. through East Midlands Business Forum and its Unions very much play a role in that and have been constituent bodies. Information also comes directly working closely alongside us in dealing with some of from businesses themselves, through our work with the issues—particularly the redeployment of skilled Business Links and the systems that we have set up people into similar industries, so that we maintain with those—Mike might want to pick up on those— those skills. I did not want you to feel that, despite and through direct working with key partners like maybe not having the structure that you have Jobcentre Plus. The key point, Peter, is that we suggested, there were not good relationships, maximise information from a variety of sources because on the ground I believe that they are linked rather than relying on just one. Certainly, in terms of into the network that I have just described. working with the FSB through the East Midlands V Je Moore: Clearly we have dealt in many ways with Business Forum, we take on board the information the TUC as the co-ordinator of unions in that that it provides. But it is only one part of a gamut of respect. I know that these have been long answers, information that we then utilise for our benefit and Bob, but if I can just touch briefly on the engagement assess and analyse to help shape our work, whether with, let us call it, the environmental sector, in terms it be strategic or in terms of delivery. of the RES evidence base. We think that we have JeV Moore: So we will also use our connections with addressed that point in our subsequent written the Bank of England. The regional agent for the evidence to you. As an example, in developing the Bank of England is very close to us, so we will use the RES evidence base we dealt with a number of connections with him in terms of banking. We use regional stakeholder organisations—the British our business contacts directly with the businesses Geographical Survey, the Environment Agency, that we deal with, both large and small—by far, most English Nature, English Heritage and the of our contacts are with small ones. We will also deal Countryside Agency—who were all engaged in with TUC reps that are on the regional economic assisting with the development of the environmental cabinet. Roger McKenzie, TUC Midlands Regional chapter of the RES evidence base. They were Secretary was on there, but he has now been replaced formally part of that process. We find it frustrating as he has moved on. They feed intelligence in about that we are alleged not to have engaged with them. business dynamics. We take all of that—it is not Similarly, we have worked with environmental about having one source—and we then have our partners such as the East Midlands Environment own, very strong internal research team. We do not Link and the Campaign to Protection of Rural rely on consultants to produce the final outcomes for England, and with the statutory consultees, such as us. Mike, is there anything else that you want to say English Heritage, English Nature and the about FSB research? Environment Agency through a task-and-finish Michael Carr: We touched on a couple of bits earlier, group to do the strategic environmental assessment Peter, in the sense that over the past six to nine of the RES itself, which is a statutory requirement. months we have been using our adviser teams, who Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 74 East Midlands Regional Committee: Evidence
7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne are meeting many hundreds and thousands of do that, but it is entitled to attend our board—the businesses a week, to give us direct feedback. So in regional director attends our board. We work closely terms of the appropriateness and, dare I say it, the with the regional leadership team at the Government ability to bring information out that is current, I OYce on a host of issues, including all those that you think we are as best placed as we have ever been. We have addressed. When businesses are in trouble, we feed that in, as I say, to many bodies, including the work together on how we can deal with what may be regional economic cabinet. I think the interesting large-scale redundancies. When there are thing for me is the working that we do with the opportunities for inward investment to come in and employer or business representative bodies, because there are planning issues, we deal with the not only do we have our formal quarterly meeting Government OYce planning people. I therefore with East Midlands Business Forum, I also hold a think that GOEM is a very valuable partner. It has quarterly bilateral meeting. This is known as the “no some formal, specific roles in terms of the reporting surprises” meeting. It is the one where we actually of my objectives, as it were, and recommendations have a chat about what is happening nationally in on my pay levels—not the rest of my executive each of our agencies and how that reflects regionally. team—and clearly it works with the chairman on his The FSB is part of that. That is part of the objectives and reporting on the performance of his mechanism where the contact has been so strong in objectives to the Secretary of State. past times and we will work alongside the intelligence that, from time to time, is driven by member surveys and things like that by these Q226 Sir Peter Soulsby: That brings us to an issue organisations. We had one just last week in terms of that we pursued last time with you, and also with a publication from the EEF around its positioning other witnesses, about the perceived tension between on manufacturing, and we put a supportive emda’s role as an agent of Government, managing positioning piece alongside that. Government funds, or public funds, and its role promoting the region’s economic interest. Which of those two roles, in the end, takes priority? Q224 Sir Peter Soulsby: Can I just interrupt for a JeV Moore: They both take priority, Peter. You moment? The evidence from the FSB was actually wouldn’t expect me to answer in— pretty scathing about your research. You have described yourselves as working very closely with them. If you work as closely as that, how come the Q227 Sir Peter Soulsby: I didn’t. What I want to FSB don’t appreciate the value of what you are know is how you manage that tension. doing? JeV Moore: Creatively. We manage it through a JeV Moore: We could not understand the position, board of 15 non-execs who come with the advice and because we previously worked with the previous knowledge from their experience in business, in regional policy manager of the FSB, Cath Lee, who higher education, the trade unions and across a never raised these concerns with us. Now, there is a whole panoply of areas. That is where the non-exec new co-ordinator of the FSB who had not been there directors help greatly.We do it through a mix of skills long, who gave the evidence to you. We do not at the executive team level and right across the understand that. We believe our research is extensive agency. We are very conscious—more so now than and does have the breadth that it needs to have and ever but I don’t think we needed reminding of it—of the depth that it needs to have. We do not disrespect the need to make the most of each taxpayer’s pound the FSB’s research. We use it where we feel it is we get. The taxpayer does not make a choice to give appropriate to use. us that cash, as they do when they buy a product. It Michael Carr: And will continue, Peter, to work is given to us on their behalf to use wisely. We see the closely with it. Interestingly, they didn’t attend the sensible use of taxpayers’ money as a key pillar of last bilateral meeting a couple of weeks ago. what we do, alongside that key pillar of being an advocate for the economic interests of the East Midlands, and the East Midlands eVectively within Q225 Sir Peter Soulsby: Can I just take you to UK plc, and UK plc within Europe and so on. We another theme that we have pursued in evidence? see both as equally important. Through our This is one that we raised, actually, with the Minister appraisal processes, which you may want to look at and with the head of GOEM, the Government Y in detail with Glenn, we manage what you call O ce, and it was really to do with your relationship tension—I think it is just the twin priorities—of with GOEM and the extent to which they try to looking after the economic interests of the East influence the policies of emda and the nature of the Midlands against the resource constraints that we relationship you have with them. How would you have, and making the most of each taxpayer’s pound characterise that relationship? that we get. JeV Moore: It is a very important partner and on occasion, when it needs to be, it would be a critical friend. We account in a whole host of directions. We Q228 Sir Peter Soulsby: Is it not true that it is account directly to BIS, and through the Minister possible to see emda, and indeed other regional and the Secretary of State to Parliament, but we also development agencies, as having such a wide range report on a host of stuV to GOEM and it is of diVerent responsibilities and so many diVerent responsible for, I suppose, overseeing the fact that levels of accountability that there is a danger of a we are delivering on the economic part of the lack of focus and a lack of any real accountability to Government’s agenda. It does not instruct us how to anybody? Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 75
7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne
JeV Moore: I will address the accountability East Midlands, but it is yet to agree its date. There question separately,because I do not think that is the are Grand Committees for every other region, but case. I listened to issues about accountability we have been unable to get a date for the East yesterday. I have worked in the public sector all my Midlands one. With the multiple accountabilities, life and I have never been more accountable than I as I said before, I feel more accountable than I ever am now. In terms of the breadth of the agenda, as have in my working life. That includes 20-odd years you will recall, we had a BERR Select Committee in public finance dealing with issues such as the inquiry, as it was then, into RDAs last year, for community charge, council tax and the rates before which I and Bryan Jackson—our chairman—and that. the chairman of the West Midlands gave evidence in Michael Carr: May I just add one point? This chief back in October. The question of the breadth of breadth issue is quite important because, while it was our agenda was put to us and I will answer as I did portrayed as a challenging thing, one thing that we then. Our agenda has got extremely broad and some are able to do with that breadth is join things up. see that as a potential weakness. It has become so That means that we can gain economies of scale and broad, I believe, because we have been successful. multi-influencing on particular areas. Where we see We have been seen since 1999 as successful deliverers things not work so well, it is often when they are run on the Government’s agenda. We believe that, as the in national silos, as I would describe them. At Government have had specific problems—foot and regional level, we have seen a lot of evidence of the mouth, the floods in 2007, 9/11 and the impact that business support agenda linking into things like the had on the aerospace industry, particularly in Derby rural agenda. You start to join things together, such and the East Midlands—Government have looked as regeneration being linked with innovation. They to us for solutions, as they have done with issues with come together to form some very successful projects, the Rural Payments Agency, RDPE and ERDF. We but that is because we have that breadth and the have been successful in providing eYcient, eVective ability to bring things together into a single focus. delivery of those services for Government, and that has continued to broaden our remit. It is a very Q229 Judy Mallaber: I will specifically follow that legitimate comment that our agenda has got up. We have mostly dealt with it, but are you saying extremely broad and could therefore challenge the that the breadth that you have does not in any way focus we have. That is an issue for us to address but diminish your ability to carry out your core I think it has happened simply because we have been functions? That is one of the items that is put to us. seen as successful deliverers. In terms of Also, are you more of a delivery agent now, rather accountability, as I said earlier, I am—we are— than a strategic body? Would you like to comment directly accountable to our sponsor Department for on that? Business, Innovation and Skills, through Pat V McFadden in the House of Commons and through Je Moore: Two things: it is a thing on which we the Secretary of State, Lord Mandelson, to the have to have constant vigilance, so that it does not Cabinet and the House of Lords. We are accountable take us away from our core role. We do not believe in that way. We are similarly publicly accountable, in that we have fallen into that trap yet. We believe that that our accounts and annual report are laid before we would have heard from a whole ream of people if Parliament—that is about to happen for this year. we had taken away from our core service. We have definitely grown our delivery function since 1999. We hold an annual public meeting which 400 to 500 Y people attend, where we account for our The increase in our sta ng complement, which has performance and take a very strong question-and- probably doubled in our case since 1999—it has answer session from the public. There are similar grown much more elsewhere—has been because of routes of accountability through Select Committees. the delivery functions that we take on, such as We have spoken at the House Modernisation delivery of the ERDF programme and the RDPE. Committee, we are faced with a PAC inquiry into We became a statutory consultee on planning matters in the mid-2000s, which also required a RDAs, we have done the BIS Select Committee, so delivery role. We have definitely increased our we are directly accountable to Parliament in a host delivery functions, so that is a change. We have not of ways. Within the region, we are accountable to the lost that overriding strategic role, which is to develop Regional Assembly through its regional scrutiny the RES, to get partners behind it and all push the function which has worked well in the East economic development wheel for the East Midlands Midlands. We work closely with the Regional in the same direction, but we have had more delivery Assembly on that. We have a concern at the moment functions. To return to the accountability point, they about the possibility of duplicating scrutiny, which are all audited in spades by the National Audit we talked about at our last evidence session. As I OYce, so we are accountable through formal audit said, my own performance and that of the chair are channels as well. accountable to the Government OYce. To be frank, we have filled the pages of the local press with our accountability for the businesses services we are Q230 Judy Mallaber: You might not be able to do delivering. We are very openly accountable. There this, but can you give us any idea of a division of the are a lot of accountabilities, Peter, but we are time of the RDA between strategy and delivery, and definitely accountable rather than unaccountable. of the proportion of your time that is spent on the We are waiting to find out whether we also are accountability function that you speak of? It may be having, as we anticipate, a Grand Committee for the hard to break it down. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
Ev 76 East Midlands Regional Committee: Evidence
7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne
Chairman: Probably too much, by the sounds of it. of the Government OYce and to the chairman: JeV Moore: It is quite diYcult to do. We have grown “When you are recruiting to the board, I think that, in resource to deliver the delivery function, so we possibly,all other things being equal, we should have have always retained a strategy, research and this set of skills.” So, at times for instance, we have intelligence directorate that has continued at about had considerable property skills on the board, with the same numbers as we have continued to deliver people from the property sector. At times we have that development of strategy, research and the not had those skills. If I feel that that is detrimental technical base, as it were. We have grown quite to us, I shall make a comment, but then it is down to significantly on the delivery side. This will be a the recruitment process and the appointment process guess—and I would not want to be held to it—but I by the Minister to make sure that that is balanced. would say that we are probably 40:60 strategy to delivery. It might now be more like 30:70 than Q232 Judy Mallaber: But would you find it helpful previously. There is a mix across the piece because in to have, specifically, representatives of diVerent order to deliver, we need high-quality research and interests? You clearly do with, say, the TUC rep, strategy. What is happening—I have made this point because it will choose who comes on, but that is not before—is that we are spending far more time true of the other sectors. answering scrutiny now than we ever did before, and JeV Moore: One of the first things that we say to all Freedom of Information Act inquiries. Whereas our board members, when they come for their previously it was something that we would have induction and they come with the chairman, is that done as part of our daily routine, we are now using they come as representatives of the East Midlands. I two to three people to deal with just that microscopic think that the key test is whether they are able to scrutiny through the press and FOI. They are bring the three strands of activity that they need to working full-time on that. Preparing for this bring to the board. First is the corporate governance Committee, the Select Committee on Business, accountability check, because obviously we are Innovation and Skills and the Public Accounts accountable to them as non-execs. Are they able to Committee that is going to happen in December is fulfil a corporate governance role? Many of them taking far more time than it did in our early years. are, from their experience. Are they able to be That is not to complain—it is just to say that it is ambassadors for the agency and, principally, for the having an impact on us. region and the economy of the region? Thirdly, do Michael Carr: On strategy, I do not think that you they have specific experience from their previous can do delivery without strategy in our role. I shall employment history, or previous life as it were, that pull down one area that you might think is primarily can add value to what we do across the broad range delivery, which is business support. Linking out of of things that we do? I think that we are fairly good the RES, we do have a regional business support at picking up people who can act across that range strategy. It was first published in 2005 and refreshed of areas. in 2008 through to 2011; integrated within that were the simplification principles linking up to what the Government were asking us to do. More Q233 Judy Mallaber: The specific area, although importantly, it was not emda’s business support you spoke about how you bring in and feel that you strategy, it was the region’s, because there are have worked with environmental organisations, in significant other partners that want to play in the which there has been comment has been on whether business support work, most notably the local there should be a specific requirement to have authorities. Just last week, we had a whole day put environmental expertise on the board. When you aside to talk about how, under the new sub-regional started oV as emda, you had that, but by accident— arrangements, the local authorities were going to with Martin Doughty being on the board. That engage with emda in putting a joined-up, simplified seems to have probably influenced the emphasis platform of business support together. That is pure placed on that within the board’s work. Is it right strategy work. That is painting a picture, then that that expertise should be there for rather more of talking to partners on how we deliver it. It was a a reason than by accident, a result of someone particularly successful day. getting on through another channel, rather than having environmental expertise there as something that should be looked for in its own right? Q231 Judy Mallaber: Moving on to the questions JeV Moore: I was on the board with Martin and I that have been raised with us and that we have have been on the board since 1999—not on the discussed with you as well I think, about the make- board but an executive director for the board. I don’t up of the board members and the question of them think there has been any change whatsoever in our being chosen for their individual skills rather for a attention to the environmental agenda. Martin was representative function, do you think that that is a key advocate for that, as he was for Derbyshire, something that there should be concern about? but he was also a key advocate for the East Midlands JeV Moore: It is not really for me to comment. The and the East Midlands agenda and the East process of appointing the board is dealt with by the Midlands economy. In the first iteration of the board Department. The Department seeks to get the right under the previous chairman, Derek Mapp, and mix of skills. We feel that it is important that we get particularly in the first round of handing out the right mix of skills. If at any time I as chief portfolios, he gave all of the board members executive feel that the board is weak in a particular portfolios that were not of their past. I cannot area, I will make a comment to the regional director remember what Martin’s was, but it would not have Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
East Midlands Regional Committee: Evidence Ev 77
7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne been environment because he gave Graham Glenn Harris: The problem arises if you have a large Chapman, the leader of Nottingham City Council, capital scheme that will probably spend several the rural portfolio. Pat Morgan Webb, who was the million pounds perhaps every two or three years. head of a further education college, was not given Quite often those are the schemes that are subject to the skills portfolio. That was given to Len Jackson delay or slippage. We can have in any one year an from Northern Foods. Martin was not given that amount of money—let us say £5 million—set aside, particular role. I think we have had as much committed against that scheme. If the scheme is then emphasis on that sector as we ever had. If the delayed, we can’t spend the money on it in the environmental sector, to call it that, believes it following year. If we could have end-year flexibility, should have a formal representative on the board, we could simply roll the money that was due for the that is an issue for Ministers, my chairman and the scheme this year into next year and spend it. Without Government OYce to resolve. I do not think we have end-year flexibility, the problem is twofold: first, you lost out because of it but if it is something that is need to use the funds that cannot be spent on that replicated across the country as a vulnerability then project in the year, so you have to have additional maybe it is something that needs to be addressed, but projects that can come forward to spend the money everybody is always trying to address these issues in the right way; secondly, because the project has within a maximum of 15 board members, so the slipped but is still contracted and something you breadth, depth and diversity of our geography, our would like to do, you then have to find money out of various communities, and our various sectors are the following year’s programme, which itself already quite hard to replicate across a 15-person board. has commitments from previous years. You Originally it was a 13-person board. eVectively have two problems: one, how you use the Chairman: Okay, budgets. funds this year; and, secondly, finding the money again for the scheme next year. That is the main Q234 Sir Peter Soulsby: Before that, can I put a issue. question about appointments to the board? I know it is obviously not down to you, but your remit now goes far beyond that of BIS. The appointments to Q238 Sir Peter Soulsby: I am sure that that is the board, as I understand it, are still done by BIS something that you avoid, but is it not the case that Ministers. Don’t you think that is a bit of an that inflexibility at the end of the year is something anomaly now? that has at least the potential to distort priorities? JeV Moore: I think it is a matter for Ministers to Glenn Harris: It potentially could. We think we have decide when they are appointing who they discuss managed to avoid that. the appointments with. What I do know is that they JeV Moore: We have a mantra in respect of that, are provided with choice by the interview panel, so Peter, that, despite that pressure, our top priority is options are put to Ministers. not to waste a penny of taxpayers’ cash on doing a less than optimal scheme because of the push to that. Y Q235Sir Peter Soulsby: But it is BIS Ministers who That is easy to say but di cult to do, but it is do it. something that we do. JeV Moore: It is Pat McFadden. Q239 Sir Peter Soulsby: Can you just remind us Q236 Sir Peter Soulsby: We now have what we are about the flexibility that you have within the year told are very important roles in Regional Ministers. from the so-called single programme, and to what Don’t you think it is something of an anomaly that extent you are able to use that creatively? a Regional Minister does not have a lead role in Glenn Harris: The single programme, which is our making the appointment? prime source but not our only source of income, is JeV Moore: The Regional Minister now does have a split into two sorts—capital and revenue—and we significant role as far as I am aware. I believe that the have reasonable flexibility to allocate funds to Regional Minister does get consulted by Pat whatever the strategic priority in programmes is McFadden on that particular aspect. beneath that. Some of them are somewhat nationally Sir Peter Soulsby: I asked him this question and I prescribed. For instance, we are required to provide wanted to make sure that I had understood it a Business Link service. How that is contracted and correctly because it is an issue that the Government delivered is up to the region, but we certainly have may need to address. some flexibility about how we use the funds in the Chairman: Budgets. year. Q237 Sir Peter Soulsby: I shall come on, as you suggest Chairman, to budget issues. In your first Q240 Sir Peter Soulsby: Okay. In your earlier evidence session you talked to us about the evidence, we talked about what happens when you withdrawal of end-year flexibility. That is the ability are expected to make reductions in spending within to carry spend over from one year to the next. It is the year. Could you just remind us of the diYculties something that we raised with the Minister and the that that leads to? As I recall, you told us that a Government OYce in their evidence session. Could significant portion of your revenue spend was you illustrate to us the sort of problems that that committed up front, and that if you have to make raises and why it is something that we may wish to reductions, it can be quite catastrophic. Can you just address when we come to report? remind us of that? Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne
Glenn Harris: The revenue budget is mainly paying Chairman: Okay. We are moving on to corporate for people on the ground delivering front-line planning and the current economic situation. services. Business support would be a good example. You tend to spend fairly evenly across the year, and at the beginning of the year you pretty much know Q242 Judy Mallaber: You rely heavily on a range of exactly what you are going to spend and where you partners to deliver your corporate planning V objectives, as part of your whole way of working. are going to spend it. If you then su er a reduction V in year, you very quickly have to work out where you What e ect is the credit crunch having on your partners, and what impact has that had on you and can adjust and make savings. We very quickly have your ability to deliver your objectives? to have dialogue with all our projects, programmes JeV Moore: By far the biggest, obvious area where and partners to see where we can pull back some the credit crunch is impacting on us is the amount of expenditure, slow some things down, perhaps defer private sector resource there is to fund regeneration things to a later year, if possible. We take a judgment schemes. As I was talking in response to Peter’s on where we can make reductions and have the least comments about the impact of budget reductions, impact on the services that we provide. You have to the impact of the credit crunch is on those who do that across a range of projects. It is seldom just provide partner funding. We will not be the sole one that you can have a dialogue with. V Y funder for lots of our schemes. There will be a Je Moore: You get di culty with reductions in cocktail of funds from elsewhere in the public sector budgets, as you will know only too well from your and specifically from the private sector, particularly Y own experience, as it were. A particular di culty is on the major property regeneration schemes in our that most of our capital projects, which take up urban areas. There is little direct private sector easily 50% of our resources, are major, complex finance available in the current circumstances for projects. Building the first new veterinary school for regeneration work—I am talking about those who decades is a big project involving a number of are working on our schemes. The RES and the partners. There is also the avenue coking works that corporate plan are about other activity in the region we have talked about, working with Laing to deliver regeneration, to deliver renewal. As the O’Rourke to clean up the former Steetley colliery private sector cash dries up, you see lots of schemes across two district council boundaries and two stopping or not being taken forward. That is county boundaries, and providing, first, a concrete certainly the biggest impact that we have. We then manufacturing plant and then a skills academy. have to look at how we can maintain activity that we Those are complex, long-term projects involving feel is absolutely crucial as much as possible, and issues with state aid, partner funding contributions work with other partners, particularly the Homes and all sorts of planning issues as well. Most of our and Communities Agency, to see how we can projects are of that order and are long-term projects. develop projects together. You can be so far down the line with lots of Diana Gilhespy: Most of the RDPE money is expectation from partners, and lots of moral disbursed through private sector projects. We are obligations, and then you lose money and have to allowed to fund up to 50% of those projects. A lot of cut schemes. It has a political, economic and moral them are around renewable energy and minimising impact. It is huge, and it can have serious waste. Obviously, one of our concerns is that we are reputational consequences for someone who has getting less projects coming through to do that very worked in excess of a year on a major project. important type of work in terms of making companies more eYcient, simply because they haven’t got the match funding. Our response to that Q241 Sir Peter Soulsby: Finally on budgets, much is to increase the number of people who are going out has been made recently about the potential savings and talking to companies. We have had the Survive from cutting out regional bodies, including, of and Thrive Events in terms of helping Business Link course, emda. Can you just remind us of the to help people to negotiate loans from banks. There proportion of your spend that is on administrative are a number of ways in which we are trying to costs, and the extent to which you have reduced that support our rural-based businesses, so that they are in recent years? able to access those grants and make themselves Glenn Harris: If you look at 2008-09, you will see more competitive. that our percentage expenditure on pay costs was JeV Moore: Clearly, the biggest impact in terms of just under 7% of the total—6.82%—which was one what you would read and hear in the media all the of the lowest of comparable RDAs. In terms of time is about businesses being able to access credit eYciency savings, since 2005, we have saved over £2 from their banks. Obviously, we have worked million like-for-like on administration, using that extremely closely with the banks to understand their year as the baseline. We have exceeded our issues, and then make sure they understand the administration eYciency targets that we have had set various responses that have happened at a national each and every year. In the current three-year cycle, level. Most of the responses are national-level like all the RDAs, we had a ceiling imposed on our responses: the enterprise finance guarantee scheme, administration costs and we need to generate the working capital guarantee scheme. There are a eYciencies each year to stay within it. We have host of initiatives that have been done nationally. managed to do that. Just to confirm, our salary costs There is an export credit guarantee extension and the were £11.9 million for the last year and we had a total trade credit insurance loosening that has been programme expenditure of £175 million. happening. So businesses tell us that they are finding Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne trade credit diYcult—or bank lending. We have each one of those. We won’t give them that title. done a number of things. We have made the banks That account manager may be the person on the aware of all the products available nationally and ground in the sub-regional partnership—DDEP. It regionally: our own regional transition loan fund has may be a specific financial adviser from Business £6 million in it. We have done that by Link. There are two key specific financial advisers in communicating with the banks. We have a regional EMB: Barry Egan is one of them who has visited lots risk finance forum where we tell all the leading banks of individual companies on this issue. It may even be of the issues available. But we have also been asked, an issue where I or the chairman are raising these and have done, so far, to brief well over 100 business matters with the Secretary of State, even, for them to relationship managers from RBOS10—each one be raised with senior executives in the bank. It’s that sits in a branch in the East Midlands—about about matching horses for courses, really. those products that are available and about the services delivered by Business Link. I can’t go into Q244 Judy Mallaber: So do all these agencies and the full depth of everything that we told them, ways of doing things come under emda’s umbrella, because time would not allow. We have done a one way or the other? similar thing with Lloyds, and we are available to JeV Moore: One way or another, we tend to get most work with all banks to do that. That’s about a of the intelligence that comes forward, but there may sharing of information. It’s about a gathering of be an example: within Amber Valley, let’s say, a intelligence and influencing Government in what particular small business is having particular trouble they need to do to respond to the credit crunch. That with its bank, and it’s perhaps the same bank as the is a major part of our work, which is that strategic local authority has. They may go direct to the local research-type work, as well as delivering. authority, and the local authority has some influence on the bank. It’s down to the individual business V Q243 Judy Mallaber: Can you clarify that for me a where it portrays its problem, but they are e ectively bit more, on individual businesses? The companies harvested by emda, its sub-regional partnerships and that I have been dealing with still haven’t known its Business Link advisers. what is or isn’t available. We have had several where the banks have pulled the plug for rather dubious or Q245 Judy Mallaber: That also raises a question incomprehensible reasons. I have dealt with that via within the current economic situation about what a person who works through the Derby and are the mechanisms and how close are they for Derbyshire Economic Partnership, rather than yourselves, the Government OYce and the Regional directly through Business Link, but I believe there’s Minister to work together? As you’ve said in some of going to be yet further changes in the structure. So the examples that you have seen at closest quarters, when you say “we” are doing this, how does that we start oV going right to the top of BIS, as it was work? Who is in charge of dealing with that kind of then, so your relationships have to be close with business support, particularly in relation to picking Departments, because they often have the people up the schemes that are available and the diYculties, who can put the screws on the banks. How do those which are the ones that come forward most to me, of links work between yourselves, the Government dealing with the banks? OYce, the Department and the Regional Minister? Michael Carr: Absolutely. First and foremost, the JeV Moore: They work in a formal sense through the person in DDEP who you’ve been dealing with is, I regional economic cabinet. The problems of an think, a guy called GeoV Stone. GeoV is actually individual business are not often discussed in the part of the emda investment and development team. regional economic cabinet, but at the margins of that We fund his position. We placed him in the sub- meeting, you might get people who raise the concern regional partner, because we felt he was appropriate of a particular business. At the margins of many to work alongside the local authorities in terms of meetings, the concerns of particular businesses will the work that we were doing there at sub-regional be raised. We will talk about it principally to the level. GeoV’s role is actually increasingly being Regional Minister and people within BIS if we feel aligned with Business Link. His role is to look after that we need access to national-level banking the foreign-owned and large company interests for executives. If we feel that we can deal with it at the agency. Actually, with the changing sub-regional regional or local level, we will speak to whoever is structure, we have just placed the contract to appropriate at that level. We work closely with the manage people like GeoV with East Midlands Government OYce on this, but we will not tell them Business, who just happen to run the Business Link about every case that we are working on. It is not service, so there is a joining-up of that service to necessary. ensure that there’s no discontinuity. In many cases, they are now becoming an extension of the Business Q246 Judy Mallaber: And was it yourselves who Link service, but covering foreign-owned and large took the lead in trying to inform businesses about companies only. what is available? JeV Moore: Information as to people having JeV Moore: Absolutely. We took the lead. The banks diYculty with their banks or their lending will come are part of what we have had since 1999—a regional to us from a variety of sources, Judy. We will risk finance forum. That first manifested itself under eVectively appoint an account manager to deal with our lead in order to bring about the regional venture capital fund. 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7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne of venture capital and representatives of local which is jointly chaired by the Chancellor and the authorities who were invited as well. As the recession Secretary of State for BIS. That contains has bitten and the credit crunch has taken hold, that representatives from all regions and is also about same group has been responsible for informing us as influencing Government policy and responses to the intermediaries about the position of the banks and recession, so he plays a very active role in that. He telling us about the position of businesses, so that we is also an extremely excellent advocate for the East can feed intelligence into the Government. Through Midlands—very involved and concerned about that route, we have proposed that perhaps we should what is happening with the East Midlands have seminars and information exchanges about economy—so we have a regular dialogue with him, what products are available and what the both formal and informal, and we can pick up a Government’s response is. That has helped us phone to Phil at anytime and he will help us with immensely on the ground. We have led that either Government or individual businesses. throughout. Similarly, he picks up the phone to us about Michael Carr: May I just add a little bit to that? The individual businesses as well, so I think that he is part of BIS responsible for things like Business Link pretty responsive in that respect. and the access to finance products is called the enterprise directorate. As RDAs, we have formal quarterly meetings with the enterprise directorate. Q248 Judy Mallaber: What has been achieved that We had one last week, and on a day-to-day basis, we couldn’t have happened without a regional can deal with the senior reporting oYcer for that Minister? Or what things would not have happened Department, passing information to and fro. For or would have gone awry without the Minister to instance, the triage system that was set up by BIS to ease the route as you’ve described? V allow MPs to put into place constituent business Je Moore: The biggest advance, from my queries, was designed in conjunction with the RDA. perspective, would be the advocacy for the East It used to allow those things to be passed out for the Midlands within Whitehall and the Government. RDAs to pick up and disseminate out to their There will be specific examples of where Phil has individual partners, if they were not already aware of been part of a concert party of people involved; there them. Work alongside the development, within the is a recent soon-to-be-announced major investment freeing up of credit guarantee that came out within in the region— Northamptonshire—that Phil will the budget, for instance, would have been jointly have played a part in, but I feel that by far the biggest designed with ourselves. All the national products— impact is that the East Midlands now definitely has the Enterprise Finance Guarantee Scheme, for a strong voice within Whitehall and will not be seen instance—were designed so that they would be as a Cinderella region. Similarly, the regional delivered through the Business Link. There would be Minister does call us to account for delivering on people trained and ready to support those products what we are doing for him. when they were oVered through the banks. We work extremely closely with national Government in the Q249 Chairman: Okay. The RES highlights the design and delivery of those programmes and on the importance of higher education. It is a big player in ground, linking up, as JeV said, with the partners the East Midlands; something close to 2.2% of GDP. that are required to deliver them. Can you quickly run through how you support higher education in the region and, particularly in Q247 Judy Mallaber: Within that, you do not the current economic climate, are you keeping a real mention the Regional Minister. How has the focus on the importance of higher level skills? I existence of a Regional Minister helped the region in assume you are, but can you just run through what relation to what is happening with the economy at you are specifically doing with your team, JeV? the moment? It seems to have got slightly left out of JeV Moore: We stay very close to our universities. the people who you say you have linked into. Higher level skills are what UK plc needs more of to JeV Moore: There are a number of formal routes deliver on the economic challenges of the 21st through which the Regional Minister will deal with century. The East Midlands, as we characterised it in us and then deal upwards to Government. The our earlier evidence to you, is generally regarded as Regional Minister chairs the regional economic a low skills, low pay, low unemployment economy. If cabinet, which garners intelligence on what is we’re to compete successfully in the 21st century we happening within the region and calls to account need to address that, and further and higher those agencies that are there to respond—Jobcentre education are major players in assisting us in that Plus, the Learning and Skills Council, ourselves and direction. Since our inception we have been in the the Government OYce are all party to that. It is fortunate position of being a net importer of similarly joined by the TUC, East Midlands undergraduates but an exporter of graduates as a Business Forum, the CBI, the Institute of Directors region to elsewhere in the country. We work on a and so on. The Regional Minister chairs that and number of levels to both retain those graduates in plays an active part in gathering intelligence and the region and make sure that we work with our corralling that group into responses that are universities and further education colleges to deliver necessary at our regional level, or those responses the skills that are needed for the future. The that he needs to push national Government for. He innovation agenda is a major one where we deal with is extremely active in that respect. The Regional universities, which Mike will touch on. 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7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne the general skills agenda as well. Perhaps you would our universities and we think that compares very like to start, Diana, with how we interface with favourably with our proportion of the overall RDA higher education in that respect? pot. So we are not aware of it. Diana Gilhespy: Indeed. I think that in the regional evidence we talked about the ESP partnership—the Q251 Chairman: Can I quote? “The implementation employment, skills and productivity partnership. of the ERDF competitiveness programme by emda That is one of the ways, and there are other ways in in this region is bureaucratic and diYcult”. Unlike which we engage with universities, in which we their experiences, they believe it for other regions but involve universities on skills in particular. With our they just experienced diYculties in applying for further education colleges and local authorities we match funding—for recession-related initiatives. are very concerned about the issue around JeV Moore: We’d need to understand that a bit more, progression and, as JeV has said, the retention of but I think it is a fact. ERDF funding is graduates within the East Midlands. Progression is bureaucratic. one of the issues that we are working on with them. I think that the other issue is around specifically Q252 Chairman: I know that. They were just making what sort of skills and higher level skills we need the point that they felt it was perhaps over- within the East Midlands. Here I point to the work bureaucratic in the East Midlands compared with that we are doing on science, technology,engineering other regions. Just a comment. Whether it’s fair and mathematics to work with schools and comment or not, I am sure you will want to take it businesses to encourage young people to think about away and look into it. and progress in those subjects to universities. We are JeV Moore: We will look into it. We are aware that engaging with universities to help young people to under the previous programme, the 2001 to 2006 see the advantages of studying science, technology, programme, there are a number of concerns about engineering and mathematics. That particular the delivery of the programme—none of them in the programme is £9 million. The thing that we do not East Midlands. We believe that is because we have have is funding to fund higher level skills themselves. had the right processes in place that have stopped We are genuinely acting as a catalyst, which is a part any diYculty with the European Commission and of our strap line, in order to ensure that, when potential clawback and penalties, so I would want to working with businesses, they are aware of see where the example is, that it is less bureaucratic. opportunities for their own staV to upskill, and with I would want to check that that will not lead me into schools and young people in terms of the a problem further down the line at the end of the opportunities that are available to them if they do 2007 to 2013 programme when money is actually upskill, particularly within those areas that we are being clawed back, because that is a problem in three most reliant on in the East Midlands, which are the of the nine English regions at the moment. science and mathematics disciplines. Q253Chairman: Okay. What about Learning and Skills Councils in the region? Will you elaborate on what your relationship is like with them? Q250 Chairman: You referred to funding. We had V Y Je Moore: Yes, the Learning and Skills Council, the evidence about some of the di culties that have chief executive of which is Tom Crompton, is part of been experienced in getting funding for the region the employment skills and productivity partnership. compared with other regions. ERDF, for example, is It is a major funder. Its budget is probably four to an area that has been raised with us. Why is this? five times the level of our budget, so it has a major Why is that sector having problems with ERDF, if I influence on the delivery of skills in the region. As take that as an example, compared with other Diana mentioned, it is a major partner in terms of regions, other RDAs? how we get progression from what it does to what Diana Gilhespy: Sorry, which sector? higher education does, and of how we ensure that we Chairman: We were told that they were having get the degree of synergy so that we deliver the skills diYculty in obtaining funding in the region, and they that businesses need in the 21st century. used as an example the ERDF, and made the point Relationships with Tom and with his predecessors that other universities in other regions were not are excellent. They work very closely with us. There experiencing some of the diYculties. are lots of projects that they work directly on that JeV Moore: I don’t think that’s the case, Bob. The Mike and Diana could tell you about. Our evidence that I have seen and read is that we apply relationships with them are excellent. the rules too stringently. I think in the current climate I would treat that as a compliment rather Q254 Chairman: I am sure that you agree with Lord than as a criticism. Adhering to the rules under Mandelson’s comments about the need for which our funding has been given is quite crucial as industrial activism, but what do they mean to you, far as I am concerned, and I think we have made and what are you doing to put them into action? multi-million pound investments in our universities. JeV Moore: This could take a long time. There is a lot of rhetoric about: “You can get £100 Chairman: Hopefully not. million into x university.” I would say we have made JeV Moore: So we will paraphrase and shorten. We approaching £30 million-worth11 of investments in believe, and have always believed, that what we have done from the start is industrial activism. I gave you 11 Correction by witness: I meant to say £50 million-worth. the example of BioCity, which is about regenerating Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne a derelict building, providing access to funding and about, we worked with the university of Nottingham venture capital, providing business support services on the development of the first new veterinary school to grow the bio-pharma businesses that are a key in the UK for a number of decades. We worked with sector in the East Midlands and world economy for Nottingham Trent university on animal and the 21st century.That is industrial activism in action. veterinary nursing, because animal health is a We are working with the Department to draw up a growing, developing sector for the world economy, framework that gets greater collaboration across the and we have specialisms in that area. What niche we country, that delivers a framework for what will have in that marketplace going forward is what industrial activism needs. It is a major issue that we industrial activism is about, first at UK plc level and are dealing with all the time, and it involves that then at East Midlands level. As you will know only balance of need and opportunity when you need to too well, we have a heritage of coal, coal power and turn communities around and provide industrial mines. What opportunity does that provide us in opportunities for them, working on those growing industrial activism for clean coal and carbon capture sectors, particularly in the East Midlands, aerospace and storage, as we address the challenge of the low- and bio-pharma. How do we make them grow and carbon economy of the 21st century? What research flourish in the 21st century? It will be about skills, do we need to do? What programmes do we need to working on innovation, having the right sites and the put in place? That is industrial activism on the right clustering policy—to use an old term. It is ground. about being the catalyst to make those areas thrive Chairman: Good stuV. Thanks. and survive. Mike is a key part of the national network, putting that all together. Michael Carr: To be fair, Bob, things are still Q255 Sir Peter Soulsby: Briefly, I would like to emerging on this front. A huge amount of work is return to the criticisms of emda that we heard from going on to draw together the framework, which will the university of Nottingham. I shall pick out three underpin the changes in the way the Government things that they said. First, they criticised project Y and ourselves, as an agency for Government, invest appraisal, which they described as ine cient “by in the future. JeV has already pointed out that in design”. I think they implied that it was over- many cases, we have been very good at joining up complex and unnecessarily bureaucratic, which was quite disparate strands of policy and making them a point made earlier. They also criticised the work on the ground. The big win around the “New apparent unwillingness of emda to give a clear no at Industry, New Jobs” White Paper is to start seeing an early stage when a project is not suitable. It said some of that joining up happening at a national that it prefers to give conditional yeses. level. To some extent, that is outside our control. [Interruption.] Perhaps you can’t win on this. None Obviously, the changes in the new Government the less, the criticism was made. It might be that structure, bringing together business support and those two points are not entirely incompatible. The innovation skills, provide a bigger opportunity to do third criticism was that perhaps emda has paid that. Interestingly, if you look at our range of inadequate attention to long-term results, and that business support, innovation and skills, they come after a couple of years of a project, having gotten it under our productivity theme, so you might argue under your belt, emda loses interest. Do you think that we are a couple of years ahead of the game in that there is any fairness in any of those criticisms? terms of that one. From our side, it will involve some JeV Moore: Glenn will deal with the appraisal one, degree of national prioritisation and direction from and I shall deal with the other two. central Government that we have perhaps not seen Glenn Harris: In terms of project appraisal, which we before. It will have some impact on the RDA family, touched on before, we apply the rules that we need which will be looking to join together in some of to apply. That is the issue of the Treasury Green their thinking. They will be looking beyond their Book. So we cannot apologise for that, and we want regional boundaries at how they can join with other to get that right. I would say, though, that last year regions and come together to form a delivery we appraised 500 projects. By that I mean getting an platform to support national Government. There application in a fit form that we can look at and will be some changes in the way in which some appraise. The average time taken to appraise was 15 regions will have to start addressing some of the days. Some 90% of those were done inside 15 days. national challenges, but some of that is still in the The longest appraisal in terms of having an melting pot as we see how Government develop with application completed—when we have a full us the actual national framework that we described application—was 27 days. That was the longest we earlier. had last year. Now, I think quite often people give JeV Moore: Specific examples would be our criticism because they have an idea, and they will development with our colleagues in Advantage West come and talk to us very early on—and it is an idea. Midlands and in the manufacturing technology Then there is a long developmental stage involving centre along with three universities and the Welding many people and many diVerent components. But Institute, which would be about state of the art that is a long way before getting to the appraisal works on joining techniques for the aerospace stage. That gestation period can take some time, and industry. That is what industrial activism is about. It we work with them and show them what they need is high-level research and innovation that is then to do. We talk around state aid and the kind of things applied to employment opportunities in those that we are looking for to align the RES and the industries. Similarly, before industrial activism came outputs. But in terms of the actual appraisal itself, Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne we can demonstrate that in the way we process- authority.” It is not inadequate attention to results. manage it. We use eVectively a form of the total We are very performance managed, results focused production system to manage our appraisal process and customer orientated. from front to back. It is up on the screen in the oYce Chairman: The single regional strategy. Judy. and you can see, at any one stage, where a project is. Like I said, the average is 15 days. We think that compares pretty well with anyone doing a similar Q257 Judy Mallaber: We talked earlier about you process. having been given more responsibilities over the JeV Moore: It isn’t about appraisal. The criticism is years and what that has done to whether you can addressed as one of appraisal, but it is about projects maintain your emphasis on core strategy and being worked up that are often hugely complex. strategic involvement. You are now going to become What you will find is that in most projects, the responsible for a huge amount more after the Sub- original idea becomes something completely National Review, what with transport planning and diVerent by the time it gets to the appraisal level, and housing matters. The same question: how are you then that goes through in 15 days. But it is working going to make sure you still have your emphasis on up major projects. We do not think it is a criticism economic development and how such things work so that you do not just get so caught up with all the that is legitimate, Peter, in that respect. Refusal to V say no—that is fascinating because since Bryan and di erent responsibilities that you lose focus on everything? I took over in 2005, we have always been accused of V being starkly clear in saying no too quickly. I believe Je Moore: Anthony is going to focus on that. that we should say no as soon as it is a no and not Anthony Payne: You are absolutely right: the single lead people up the garden path unnecessarily. regional strategy will be a more all-encompassing Certainly in Nottingham university’s case, we have document, which brings with it both advantages and said no to a number of things that they have come maybe some disadvantages around complexity. We forward for. The first one was that they wanted £5 firmly believe that having the opportunity to better million towards the veterinary school and we said no align the economic strategy with the spatial strategy, on the first day. It is a criticism that I am not aware which is in essence what a single strategy will of. As you say, Peter, perhaps we can’t win in that eventually come to, is a positive. Having said that, respect, but we will try to get the balance right. within our region, the alignment is already good Inadequate attention to results, etc. I find that between the existing regional economic strategy and fascinating and quite disturbing, and I see the Vice- the regional spatial strategy. We will work closely Chancellor of Nottingham University quite though to ensure that going forward we make that frequently. As we reported to you last time, we were alignment even better and that we end up with a co- the first RDA in the country to commission a full ordinated and well thought through regional impact evaluation of everything that we do. We have strategy. How are we going to do that? We have the been very diligent in working out the impact on the change management plan in place, which was East Midlands economy of our activity. That is the submitted from GOEM to central Government, £9 to £15 that I referred you to last time. We have which basically outlines the way we are going to take analysed right across our project portfolio, so I think the work forward. As a region, we are working very that is not a fair criticism either. closely with our regional partners, in particular the local authority leaders’ board, which is in shadow form at the moment and will come into existence Q256 Sir Peter Soulsby: To be fair to the university next year. We have a clear work programme through of Nottingham, they were talking about RDAs more that change management plan to prepare for 2010 generally than about emda. They said that, “the and onwards. We are also working closely with operating and reporting conditions placed on RDAs GOEM, the assembly and stakeholders to ensure often led to a focus on the short-term ‘outputs’ at the that we can put that in place. I just want to make one expense of long-term benefits. Typically an RDA’s last point to bring you up to speed. Last week, we interests in a project cease after 2-3 years.” I suppose had our first event with stakeholders, to work with the question is, does your interest cease after two to them on stakeholder engagement, to ensure that the three years? single regional strategy process is as robust as it can JeV Moore: No, it does not cease after two to three be and to ensure that we will work with stakeholders years. We could keep you here until 4 o’clock with a to make it a good process. That is the technical and list of projects that are 10 to 15-year projects. Avenue procedural side. Then, in terms of dealing with it Coking Works is an example and there are various from a strategic basis and a content basis, there will others with universities. I would say that one of the undoubtedly be challenges to ensure that we can things we are about is doing beacon, pilot, cover all the agendas within it. There is a risk that innovative projects and demonstrating that they you have such a wide strategy that it says all things work. We then tell the rest of the public sector and to all people and not a lot to others. The challenge other sectors to mainstream that example. We for us going forward is working with partners to definitely do proof-of-concept work for two to three identify what the absolute priorities are for that years to prove that things work and that they have regional strategy. I am confident that the joint an economic impact, but then we say, “Our working arrangements we have with the emda investment will stop. You will take it on because it is strategy team and the East Midlands Regional good for your business, your sector and your local Assembly team, which currently works on regional Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne spatial strategy, will ensure that we work as a virtual does the stakeholder community want?” That is team to come up with as good a strategy as we can, what happened on 2 July, but Anthony can tell you building on all our experience to date. who was there. Anthony Payne: The event was well attended. There were nearly 80 stakeholders there from a range of Q258 Judy Mallaber: What have you identified as organisations across the East Midlands, from the Y the areas that will be particularly di cult—that you economic sector, the environmental sector and the will need to watch out for? Have you identified areas social sector. There were organisations such as Social where you think that you might fall down if you Enterprise East Midlands and EMEL, the don’t get it right? environmental organisation, through to business Anthony Payne: I don’t think I can answer that as organisations, like the IOD and the CBI. A whole yet. I don’t think that we have got to that level of range of organisations were there. I think we threw detail in our workings. What I can say, though, is the invite open wide through all the networks that we that if you look at the RES as it currently is and you traditionally engage with and through which the look at the regional spatial strategy as it currently is, EMRA traditionally engages with. The event itself there is a high degree of alignment already between will result in a short report towards the end of this those two strategies. When they, in eVect, become month. We are then going to have processes and co-joined from April 2010, we are jointly of the view some other engagement with a variety of the that they are not contradictory in their nature. It will partners who attended last week’s event, and the then be the responsibility of the two teams to make intention is to go back to them with scenarios for sure we take forward a very comprehensive process discussion at an October event, with a conclusion to develop that strategy in as co-ordinated a way as and finalisation of stakeholder arrangements by the possible. The key challenge is the complexity of it end of this calendar year, at the very latest. That will and the vastness of the potential agenda that will be in place in advance of April 2010, when the new need to be reflected, but we will need to work arrangements need to be in place. through that and it is too early at this stage to say JeV Moore: The FSB was there. what issues may come out as real big challenges. JeV Moore: A public challenge, Judy, will definitely Q260 Judy Mallaber: Obviously, a number of those be a misinterpretation of what the Act may say and bodies might be region-wide, but in that event and in what our powers may be. People are concerned that others do you find that some parts—some we will become responsible for giving planning counties—are very much under-represented and permission for extensions. We will not become there’s an over-emphasis from other areas? responsible for giving planning permission for JeV Moore: We try to encourage representation from extensions, but as you know from your own all geographic areas, which was why the board, experience as MPs that is a high-profile issue with years ago, went from 13 to 15—because of constituents and it is something that is exercising the under-representation on the board from people of the East Midlands at the moment. Will this Northamptonshire and Lincolnshire. When we hold economic development organisation be deciding events, we try to take them round the region and we planning permissions? Clearly we won’t, but I think try to encourage as many people to attend as that education and information process will be one possible. We use electronic methods to overcome of our key challenges should the Act go through and travel diYculties, if they are there. We will try and should the guidance give us the responsibilities that overcome any of those diYculties, Judy, and if we we anticipate it will. feel that we’ve had low attendance from, let’s say, stakeholders in Northamptonshire or Lincolnshire, we will then take special measures to ensure that they Q259 Judy Mallaber: You have obviously started have been included and their views have been talking about how you relate to partners within this addressed. Anthony talked about 80 stakeholders process and you said you had initial meetings with there. As far as I see it, I have 4.3 million stakeholders. Who were the stakeholders and what stakeholders—each and every single person who arrangements have you made for their future lives in the East Midlands. We have 350,000 business involvement, because there isn’t any formal stakeholders; we have 40-plus local authority mechanism for involving people? stakeholders; we have an enormous amount of social JeV Moore: Anthony will come on to the detail, but enterprises—all sorts of stakeholders. It is a massive one of the things that we have been very keen to do is number and a massive task. Balancing their to make sure all stakeholders are represented, heard, disparate views is diYcult, but it is what we try to do listened to, consulted and part of that process, in an within our resource capability, and we have started appropriate way, and we have been conscious of the it oV for the integrated regional strategy. There is no evidence that the Committee has been given during template. It is not predetermined. part of that. What we are also very aware of is that a number of existing individual stakeholders have Q261 Judy Mallaber: Moving on slightly, the raised concerns about wanting to refresh original recommendations in the Sub-National stakeholder representation. A number of what you Review proposed that you delegate an increasing would call major stakeholders have said we need amount of your funding to partners, including local diVerent stakeholder arrangements, so we have been authorities. I know you’ve emphasised to us very very keen to go back to square one and say, “What explicitly that you don’t seek to spread your funding Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne equally across all points of the region, but in terms Q263 Chairman: JeV, you were talking a moment of delegating an increasing amount of function, will ago about your relationship with your stakeholders. you try and make sure that’s shared around? Will We are perhaps back to accountability, and you are you just prioritise, and it will all go to certain areas? almost over-accountable in some respects. East What criteria will you use to deal with competing Midlands Regional Assembly made the comment claims for funding? that they felt that there was “potential for East JeV Moore: We feel we’re leaders in the devolution Midlands Councils . . . to play a leading role in” of funding to our sub-regions. We created our seven regional scrutiny. How would that work? I am sub-regional partnerships, and we’ve given over a conscious that you are probably over-scrutinised as third of our money consistently—some £200 million a body. has been delegated to the sub-regions for them to JeV Moore: At the moment, I feel scrutinised into decide what to spend and where. We will continue to the ground—we do an immense amount of reporting have a policy of devolution of funds to sub-regions. accountability. Until now, we have worked with the It’s now going through the principal upper-tier regional scrutiny board of the regional assembly. We authorities—the counties and the unitaries—to would make a plea that whatever new scrutiny reflect the mood music of SNR. We’re doing it arrangements come forward, can they not be directly through those local authorities. That money duplicated and can they be eYcient and eVective, so will still go. Clearly, we face significant decline in our that we can concentrate on getting on with the day own resources over 2010-11. It is not possible for me job rather than spending a disproportionate amount to say at this stage that there will be an increasing of time accounting for what we are doing at a variety rate of devolution of those resources to the sub- of levels? We do not deny the need to be accountable. regions. We welcome that, and we welcome scrutiny, but we want to avoid duplicate scrutiny. Whatever proposal comes forward, we want it to be lean and fit for Q262 Judy Mallaber: How do you decide which sub- purpose. You may not need anything other than the regions get what, because you said before you don’t scrutiny that you currently have and that the Grand divide things up equally, or presumably according to Committee and Parliament will have. Another population? specific plea is that whatever scrutiny is developed JeV Moore: We’re talking at two levels. First, we and embodied at regional level, we want it to have take the overall pot, which is about £150 million to very strict conflict-of-interest protocols. That is £170 million and that has been divided roughly into absolutely necessary, because in the past we have two thirds regional funding and one third sub- been looked at by those who have a number of hats, regional funding. Lots of the two thirds regional and we want conflict-of-interest rules to be clear. funding is also delivered sub-regionally, because Business Link, which runs to many millions, and Q264 Chairman: If emda, the local authority leader’s business support are delivered on streets to board, cannot agree, for example, on a single businesses in localities. Some is then used for what integrated strategy, how confident would you be that we would call regionally important schemes: BioCity Ministers could resolve the matter, if they were given would have been a regionally important scheme. In the task of holding the ring? terms of where we spend all our regional money, we JeV Moore: I do not want to comment on the will work out what is required from new industry, political environment, but we are fairly confident new jobs and the regeneration framework, which is that we have worked well with the local authority V e ectively decided by Government policy. In terms leader’s board. A major success is the move to three of giving to the sub-regions and how that money is and three on the local authority leader’s board— shared between them, it is decided by a mini-formula three RDA reps and three local authority leaders. of the formula that the Department uses to allocate That has been a major achievement, and it could our funds. We have a complex formula that shares have been quite diYcult. The new leadership board the £2 billion pot around the RDA group. That has is being formed because of the change in the county complex elements, some based on need and some on elections, so there is a bit of a movable feast going on opportunity, including employment, innovation, there. It is about to meet fairly soon, and we will skills, business base, population, core costs, have the nominees on to that joint board. We are deprivation and so on. We apply that at sub-regional confident that we could resolve such matters at level to take the third that we give to our sub-regions regional level and not need to go to the regional between them. Lincolnshire gets its formula-based Minister for the solution. That has been our past element, and Derbyshire gets its formula-based history and our past experience. We have worked element, and they then deliver those in the localities extremely well with the assembly. David Parsons is a that they feel are appropriate and on the schemes big supporter of the RDA. He clearly leads the local that they feel are appropriate within the overall authority leaders. I feel that we can reach agreement. parameters of what the regional economic strategy It is a much more complex and diYcult task, given says. That is the key contractual requirement that we the spatial elements added to the economic elements have on those unitary and upper-tier authorities. I and the point that the planning dynamic is a vibrant think we have covered how we allocate our regional focus of public interest, but we believe that we can funds in our previous stuV, but we can go over that get there. Anthony’s work with Stuart Young and again. Diana, do you want to touch on any of that? others at the assembly has been exemplary so far. We Diana Gilhespy: No. imagine that we will get to agreement. Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne
Chairman: Thank you, JeV. We have already covered think that the converse is true. If we have a specific quite a good chunk of sustainable development in body that almost sits in its corner saying that SD is the comments that we have picked up about what really important, it could actually become even more was perceived to be an element of lack of director marginalised. So the risk is that it becomes just a representation. talking shop for a particular group.
Q265 Sir Peter Soulsby: What I have to say is Q267 Sir Peter Soulsby: Which leads on to the something that we have explored a little with others. question whether it is better to look at an index of We have heard from a number of sources, sustainable economic welfare as a way in which to particularly the Environment Agency. I note the measure what is being delivered in the region as point about there being two or three diVerent against GVA or GDP. I think that you have elements to the Environment Agency with particular views on that. responsibility for the East Midlands, but there is lack JeV Moore: We do. We have an index of sustainable of a champion body for sustainability in the region economic well-being, and we were the leaders in similar to Sustainability North East and developing that as a measure of progress for the Sustainability West Midlands. It is something that region. As we have said, we had GVA and GDP has come back on a number of occasions as a theme. measures before, but it was little consolation to the Is it not the case that there is a lack of leadership in East Midlands if the economy was growing the region? Whether it falls to emda or elsewhere, massively.People were getting better oV, but they did that leadership ought to be provided from not feel better oV because they were frightened about somewhere. crime and their environment was polluted or JeV Moore: Anthony will pick this one up. whatever. We were leaders with the New Economics Anthony Payne: Sustainable development champion Foundation and Surrey university in developing the bodies came out of DEFRA in about 2006, as you index of sustainable economic well-being. That is an know. At that time, we had a sustainable index about which we have put evidence in, and we development promotion group within the region co- are leading on. It is key. Another point on ordinated through the East Midlands regional sustainability—I know you want to come back, assembly. With SNR, we took the view with our Peter—is you raise questions such as, “Are we regional partners, the Government OYce for the bureaucratic on ERDF and does it take a long time East Midlands, EMRA and that body that we would to do appraisals?” One of the key elements of our do a review to look at what we thought was best for appraisal process is a sustainability check. That all the region. Following that review, which we adds to what we are doing in order to make sure that completed just over a year ago, all regional partners we have addressed the issues. As we do an appraisal, that had been interviewed concluded that we needed it is also an appraisal on a sustainability basis. to embed sustainable development within Sub- National Review frameworks going forward and strategies rather than a specific SD body. That was Q268 Sir Peter Soulsby: I am sure I know the answer the conclusion that came out of an independent to this from the evidence you have already given, but piece of research. I was looking at that bit of research can I just check? You talked about the sustainable yesterday, because I thought that the matter might index of the sustainable economic welfare. You be raised today. I found that 72 of the key would, I think, welcome its adoption across regions, protagonists around the sustainability agenda were rather than just the East Midlands. interviewed. It was a very extensive piece of research JeV Moore: It is not for me to tell other regions what and the whole conclusion that came out of it was the they wish to do, but that work was indeed ground- need to embed rather than to have a separate body. breaking and it has been taken on by a number of JeV Moore: Specifically we are saying that the politicians as a key element of how to develop. Other sustainable development organisations within the regions have started to address it, look at it and show region have actively said that they do not want one an interest in it. Even though it is a year or so old, it body putting forward as the sustainable is relatively new and is the developing measurement development champion, and we respect that index, because you learn more about how you can consultation. develop the measurements of crime, the impact of Chairman: Okay. crime, the benefits of volunteering, the impact of accidents and things like that. It can be a very big measure, and we are very positive about it. Making Q266 Sir Peter Soulsby: I once put to the Minister sure that we can measure it and that it has got all the that embedding it, mainstreaming it or integrating it right elements to it is a key challenge going forward. can actually just mean ignoring it. Is that not a Chairman: Judy, you covered some of the semi- danger? rural stuV. Anthony Payne: There is a risk of that, but I think that the history within our region and the history of the regional economic strategy and the regional Q269 Judy Mallaber: There is another issue before spatial strategy is that we have not ignored it. It is that on sustainability. We have a statutory duty to embedded throughout the RES. There are key promote equality, and we will have to monitor elements of sustainability sprinkled throughout, and equalities and diversity impacts, but I have not really key to the strategic priorities within the RES. The seen that addressed in the evidence or by our same is true of the regional spatial strategy. I actually witnesses. Can you tell us something about that and Processed: 23-07-2009 23:50:28 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG1
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7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne whether you have any formal structures in place to done on that. But actually what we have seen is a ensure that you deal with issues around equality and growing trend in terms of penetration into areas like impacts on people? black and ethnic minority businesses and gender- Anthony Payne: Two points on that. First, as JeV has based businesses, in terms of women’s businesses. So just alluded to, in terms of the sustainability we are actually already seeing a quite significant appraisal, all projects also go through an equalities swing in the impact of our programmes in these impact assessment. Secondly, we are going out to areas. consultation over the summer—we will be taking that through to our board—for our integrated Q272 Judy Mallaber: Going on to the issue that Bob equalities scheme by the end of September to early was trying to get me on to about rural and semi-rural October. That will be going out to consultation areas, very often people talk rural or the urban following our July board. divide and leave out semi-rural. What measures do you take to make sure the appropriate support is Q270 Judy Mallaber: When you go out to provided to areas that are semi-rural, because very consultation, how does that get out to people and often the divide is just, “It’s a village,” or “It’s a city,” who does it get to? Part of the whole point of this is and there is nothing in between? that there will be many places that your consultation Diana Gilhespy: If I can just pick up on the business does not reach, which might be precisely the places support side of things, we now have over 40 oYces, that are aVected by what you do or don’t do. which are staVed by business advisers. So there is a Anthony Payne: We try to reach all the parts that all sort of physical presence. That has been also assisted consultations try to reach. We will work with all our by our investment programmes through to our stakeholders in organisations such as EMRA, regional partners and regional innovation centres, GOEM and so on, as well as the other stakeholders particularly across the coalfields, but there is now a who came to the recent stakeholder event, those who programme across Lincolnshire, whereby we have a are on our database and so on. We will try to make hub in Lincoln but then outreach centres across the it go as wide and far as possible. county. Obviously, as well, we have specially trained JeV Moore: Including the local representative of the advisers in land-based businesses, but also all commission for human rights. business advisers have some awareness of the Anthony Payne: The new EHCR, as it is now known. diYculties and the issues faced by rurally located We will make sure that the consultation is as wide businesses. We have also, largely through our sub- and as appropriate as it possibly can be. We will then regional partners, a very active engagement with rely on other partners to send it further on, so that it market towns, enabling them to refresh their oVer to has a cascade eVect. We are sure that it will reach all businesses, retailers and tourist visitors. So we have the parts it needs to reach. that physical development, but also support for JeV Moore: This is an example of some of the other development such as business improvement projects. Anthony has talked about the statutory districts within our smaller market towns. So there is requirements and how we do an equalities impact a cocktail of ways in which we can support rural assessment of projects. A number of our projects are areas. specifically targeted at areas where we think that advantage exists. In some of our communities, it is Y Q273 Judy Mallaber: Many market towns are quite di cult to access finance from the traditional declining in using shops. They get sucked out by financial sector, so we have a product called East Tescos, I should imagine, and other supermarkets. Midlands enterprise loans that is specifically Does emda have any strategy for dealing with that, targeted at disadvantaged groups. or ability to counter that development? Michael Carr: One thing to add to that, Judy: on JeV Moore: That will be part of our ordinary every business support product that we have, we recession response strategy, in a way. What we require the partner to monitor the customer base specifically had with market towns, right at the very that they are dealing with from a diversity point of beginning of the agency, was a sort of analysis of view where we can get it—not everybody chooses to what keeps a market town sustainable. What size of share those details. We have a comprehensive review market town needs a cinema, bank, library and so of our diversity of outreach in terms of our business on? So we did an analysis of that, and then our support programmes. That has been a major step projects and programmes were about delivering forward that we have taken under the guidance of those as far as we possibly could into market towns the agency’s broader diversity policy that allows us that were deficient in them, or getting partners to do to monitor exactly where our business support that. Similarly, the issue you’re raising, though, products are hitting. really Judy,is about the fact that you’ve got recession and you’re having shop closures urban, suburban, Q271 Judy Mallaber: How does your analysis of rural, hamlet-wide. economic impact and possible programmes take Judy Mallaber: It is not just recession; it is also account of gender issues, as well as diVerent longer-term development of big supermarkets. communities—racial diversity and so on? JeV Moore: It is. We have other programmes and Michael Carr: There will be a requirement within projects. First, I would say that the business support every contract that we place to monitor the diversity and business support advice available throughout of impact. Based on the performance, we will ask for the region is available to anyone and everyone. changes, if necessary, to ensure that further work is Secondly, there are schemes like the Pub is the Hub, Processed: 23-07-2009 23:50:28 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG1
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7 July 2009 Michael Carr, Diana Gilhespy, Glenn Harris, Jeff Moore and Anthony Payne which is very heavily sponsored by His Royal more you can now do through the web. We have Highness Prince Charles. We have done more than moved from infrastructural support, which was in any other region in respect of declining villages, the first part of what we did, often through sub- losing shops, losing various other aspects—not regional partners. Now, we are much more into e- necessarily to out of town retail, but maybe out adoption and e-development work. of town retail 10 miles down the road to a Tesco. JeV Moore: That’s where we would work with things There are lots of pubs throughout Lincolnshire, like the Regional Minister—that’s that strategic/ Derbyshire and Northamptonshire. The pub is delivery divide. The strategic bit is: have we got the struggling, but it can be turned into the post oYce, right level of broadband infrastructure and shop, or advice or maybe cre`che mechanism, coverage? Strategically, if we haven’t, we will lobby working with the Princes’ Trust charities. That is the Government, work with BT and other providers, sort of programme that we intervene in. and get Phil Hope to work on our behalf to make Michael Carr: Last year, we supported over 20,000 sure the East Midlands is wired up. We will not pay businesses and individuals in rural areas through the or deliver in that wiring up. But when it is wired up, Business Link service. So it is a substantial amount we will deliver e-adoption policies and products, of the work that they do. because you can take the horse to water, but you’ve got to find a way of making it drink to make our Q274 Judy Mallaber: The other specific issue that businesses competitive with broadband. has been commented on is how one of the biggest Chairman: Thanks indeed, JeV and your team. It’s challenges facing businesses in rural areas is about been a long session, but we have picked up, as you’ll access to broadband. What is your involvement in all have gathered, a lot of queries, comments and that? Have you helped to meet that challenge? praise. Don’t think of us too harshly, if you think Michael Carr: Clearly, one of the issues that we were that we have just plucked out the areas of criticism. first faced with 10 years ago was that there was a very We wanted to drill down to some of those and get patchy internet access. A number of projects, your responses. That has been immensely useful. We including some sub-regional work that we did in have pretty well concluded our programme of places like Lincolnshire, significantly increased the evidence taking so far as emda is concerned. We’ve opportunities for people to have access to got some work to do now to produce the report. We broadband. Actually, a relatively small proportion will get the report out before the parliamentary of people now do not have access to broadband. recess. I think it will require a lot of work and activity Some would say that it’s not quick enough, but they to do that, but bravo. We are going to work fairly do have access to it. Our policy has changed more hard at that. Thank you very much for the time that now to e-adoption and e-development—basically you have given us. You’ve had two long sessions— trying to get people to use those facilities more. A one at Notts County Council and one here today, remarkable number of businesses still don’t use and that’s been immensely useful. We are very computers, IT infrastructure or the web. appreciative of your time and imposing on you yet Particularly, those that do are often very basic users, another layer of scrutiny, but that’s the way of the and I am sure you are aware, Judy, that there’s a lot world. Thank you. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [SO] PPSysB Job: 431230 Unit: PAG2
East Midlands Regional Committee: Evidence Ev 89 Written evidence
Memorandum from Catapult (EM 01) Catapult Venture Managers Limited is a small venture capital house based in Leicester with another oYce based in Birmingham. We manage the £30 million East Midlands Regional Venture Capital Fund which was the first of the Regional Venture Capital Funds (RVCF) and was launched in January 2002. We also manage a £30 million Enterprise Capital Fund (ECF), again managed out of Leicester. We would make the following observations with regard to East Midlands Development Agency (emda): — emda and JeV Moore in particular were instrumental in helping to launch the first RVCF in the UK. emda understood the need for locally based venture capital funds to help create innovative businesses capable of generating wealth for the UK. — emda’s support also helped Catapult secure an ECF. Indeed Catapult are the only RVCF manager who has gone on to also manage an ECF. emdas support in this success should not be under- estimated. — Since then we have had regular communication with emda who have always been commercial and supportive. JeV Moore chairs the Investment Advisory Committee for the RVCF and also the ECF that we manage on behalf of our investors. — From our experience we feel that emda have a good grasp of the commercial issues that are important for sustainable business success and have added greatly to a cohesive joined up Regional Economic Strategy. — emda also act as a facilitator in getting together diVerent business groups and are seen as neutral supportive territory. Some business groups would not have come together in productive dialogue to make things happen if emda were not in existence. They are well respected by the business community and can therefore take this important role.
Memorandum from Mercia Marina (EM 02) Mercia Marina is the largest new build inland marina in Europe. Opened in September 2008, following a major development costing over £6.5 million, the aim is to create a major leisure destination in South Derbyshire. We benefited from a £500,000 grant from the emda Waterways programme, as well as their invaluable advice and guidance. 1. To date, Phase 1 of the development is complete, comprising a 585 berth marina, Tea Room, Workshop, Convenience Store, Facilities Blocks, Boat Brokerage, Hire Boats and Amenity Lake. 2. The planned Phase 2 will add an 8,000sq ft gastropub, 4,000 sq ft chandlery, eighteen holiday lodges, additional retail space and perhaps a Mercia Kingdom Heritage Centre. The latter has the support of English Heritage and Natural England. The idea arose as important archaeological finds were made during the excavations of the Marina dating back to the Early-Middle Neolithic age. The Marina itself is two miles from Repton, which was home to a Viking encampment and later the Saxon capital of the Mercian Kingdom. 3. Mercia Marina has been designed to make the most of the natural contours of the lake it has replaced. Islands and promontories have been added to enhance the natural contours thus creating a very attractive “green and blue” space which forms the springboard for future development. The emphasis on sustainability is also shown through the use of natural materials for the buildings on site, the creation of a separate amenity lake, the coir-based reed beds planted and re-use on site of excavated material. 4. To date, 23 full time jobs have been created in the Marina and Phase 2 is expected to add another 30 jobs. 5. The funding provided by emda allowed the development to be of a higher standard and greater size. By enhancing the physical environment, the former directly supports the viability of the gastropub, moorings, tea rooms and holiday lodges. The funding also allowed more berths to be created which enhances the sustainability of the core business as well as the associated newly-created businesses already trading and in turn the planned expansion to reinforce the location as a leisure destination. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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Memorandum from the Federation of Small Businesses (FSB)—East Midlands (EM 03) Summary of Evidence — emda’s activities on the Information, Diagnostic and Brokerage (IDB) Model and Business Support Simplification Programme have been excellent, but its work on key clusters has been questionable. — The revised accountability arrangements resulting from the Sub-National Review of Economic Development and Regeneration (SNR) are inadequate, and a mechanism needs to be put in place for businesses and stakeholders to continue to question publicly funded bodies. — Whilst the business community has played a strong role in developing and delivering the Regional Economic Strategy (RES), the engagement of sole traders and micro businesses could be strengthened. — Although significant data and intelligence was produced to underpin the RES, emda has not annually assessed how the data has changed, making it diYcult to ascertain the impact that the RES and its priority actions are having. — The vast majority of FSB members have reported continuously decreasing business confidence, decreased turnover, increased overheads and tighter cashflow, for the last 15 months. — emda’s response to the economic crisis has been positive, and the re-focus of business support services on business survival has been welcomed. — emda has been reliant on the data provided by business representatives during the recession, and needs to collect, analyse, and disseminate more timely and accurate data. — There should be a statutory responsibility for local authorities to consult with businesses on the development and delivery of the single Integrated Regional Strategy. — emda’s funding is largely focussed on the three cities with insuYcient investment in the region’s towns and surrounding areas to support rurally based businesses and communities.
1. Introduction to the Federation of Small Businesses 1.1 The Federation of Small Businesses is the UK’s leading non-party political lobbying group for UK small businesses. It exists to promote and protect the interests of all who own or manage their own business. With over 215,000 members, the FSB is the largest organisation representing small and medium sized businesses in the UK. The FSB has approximately 16,000 members within the East Midlands region.
2. Role,Responsibilities and Accountability of emda 2.1 emda’s role in the region has consisted of strategic economic development coupled with delivery, and this has sometimes caused confusion. In the past emda was regarded as a principal source of funding. Although they have tried to change this perception, there is still some uncertainty about its precise role and responsibilities. Clearly,the role and functions of the Regional Development Agencies will change as a result of the Sub-National Review of Economic Development and Regeneration, with delivery being devolved to local authorities and their partners. We feel that the implementation of SNR should be used as an opportunity to clearly communicate the future role and responsibilities of emda, local authorities, businesses and stakeholders in regional and local economic development. 2.2 The FSB in the East Midlands welcomed the introduction of a regional approach to business support through the Information, Diagnostic and Brokerage Model. The FSB also supported the Business Support Simplification Programme. We believe that emda’s work on business support has been excellent, but we want an assurance that the extension of economic development duties to local authorities will continue this ethos, rather than lead to a re-proliferation of business support services at a sub-regional and local level. 2.3 One area of emda’s work on business support which we believe has been questionable, is the focus on key clusters and industrial sectors. In some cases, the clusters have been “artificial” and have not matched supply chains. We also feel that some important sectors to the East Midlands economy, such as the logistics industry which surrounds much of the M1 corridor in the region, have been excluded on the basis of their limited rate of growth and perceived contribution to the Gross Value Added (GVA) Rate. 2.4 The scrutiny powers aVorded to the Regional Assembly provided a significant opportunity for businesses to question emda about its policies and activities. The FSB sat on several scrutiny panels allowing us to feed-in the experiences of small businesses, and influence change where it was needed. We are concerned that the scrutiny role of businesses will disappear with the demise of the Regional Assemblies. We do not believe that the revised accountability arrangements arising from the SNR are adequate. It is absolutely correct that all publicly funded bodies should be accountable for spending money derived from taxes. Whilst the Regional Select Committees will be able to hold any public body in the region to account, they are not a replacement for the in-depth regional scrutiny that has been undertaken by panels of local politicians, businesses and other partners. There needs to be another mechanism by which businesses can question the policy and activities of any publicly funded body in the region, to strengthen accountability. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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3. Process for Developing the Regional Economic Strategy and Stakeholder Engagement 3.1 The FSB in the East Midlands has always had a good relationship with emda, particularly with the Business Services Directorate. emda has encouraged our views and we have found them to be receptive to our comments about small businesses. The FSB is part of the East Midlands Business Forum and apart from lobbying emda as an individual organisation, we have also worked collaboratively with the Chambers of Commerce and the Institute of Directors, to assist the development of the RES. 3.2 We believe that emda has always been committed to the notion of being business-led. We especially welcomed the opportunity presented to the private sector in chairing the Sub-regional Strategic Partnership Boards in the region. Businesses have occupied several seats on the Boards, and have helped steer sub- regional economic development. Whilst the business community has been able to play a strong role in the development and delivery of the Regional Economic Strategy, we do feel that engagement with businesses could be strengthened, particularly in regards to entrepreneurs and micro businesses. In the past, emda has often engaged with larger companies rather than small and micro-sized firms, and although they have relied on input from business representative organisations such as the FSB, it would be preferable for them to seek more active consultation with small businesses.
4. Effectiveness of the RES in Delivering Targets 4.1 In terms of performance against the core output targets, emda has usually exceeded the targets specified in the RES and Corporate Plan. Some targets have been exceeded by a considerable margin. For example, emda confirmed in its 2007–08 Annual Report that the target for businesses engaged with the UK knowledge base had been exceeded by 34%. emda also doubled its target for working adults gaining a full Level 2 qualification. 4.2 The continuous over-achievement of targets could suggest that either the targets have been deliberately set low in order for them to be easily attained, or that emda has focussed its support on delivering activities that meet the core output targets (“low-hanging fruit”), rather than on activities which would tackle the region’s most diYcult issues and deliver strategic added value. 4.3 In 2006, emda produced a comprehensive and comprehensible RES based on detailed intelligence, and it is easy to see how the strategic priorities and priority actions in the RES were determined. It is disappointing that whilst significant data and intelligence was produced to underpin the RES, there has been no assessment since of how this data has changed year on year. This means that the data and intelligence underpinning the delivery of the RES is static and historic, whereas an annual assessment of the data could have usefully shown statistical trends, and the progress made towards sustainable economic growth. It is therefore diYcult to ascertain the impact that the RES and its priority actions are having on the East Midlands rates of Gross Domestic Product (GDP), business starts and innovation. The achievement and promotion of the output targets achieved is all well and good, but progress made towards a broad set of baseline indicators would be more timely, meaningful and illustrative of how emda’s activities are having a positive economic, social and environmental impact.
5. Effect of Economic Recession on East Midlands Businesses and emdas Response 5.1 FSB members in the East Midlands have reported decreased business confidence each quarter over the last 15 months. In January 2008, we had a strong indication that the economy was in serious decline when 42% of our members reported a drop in business confidence. Six months later, this rate increased to 58%, and it has remained constant. 33% of the respondents to our quarterly survey in January 2009 rated the decline in their confidence as “substantial” since October 2008. The continuous decline in business confidence is coupled with decreased turnover for the majority of small businesses over the same period of time. In January 2009, 51% of our members reported a drop in sales and turnover, of which a staggering 31% reported significant falls of over 3%. Our most recent survey data for April 2009 shows only a slight improvement, with 48% of our members still reporting a decrease in trade. 5.2 The majority of small businesses have experienced increases in their overheads and tighter cashflow during the recession, and many have introduced cost-saving measures to ease the pressure. Our data shows us that three times as many businesses have reduced staYng numbers than have recruited, increasing numbers of businesses have reduced staV training, and the number of small businesses making capital investments in their business is now at its lowest rate for several years. The quarterly survey data also shows us that the majority of our members have absorbed the increased costs and resisted passing it on to their customers. Just 31% of small firms have increased their prices, whilst 21% have cut their prices to sustain turnover and to stimulate consumer demand. 5.3 Whilst the vast majority of FSB members have struggled during the recession, a minority of our members have fared reasonably well. In the East Midlands, a quarter of small businesses reported an improvement in turnover in January 2009, whilst 16% of small businesses stated that their profitability had improved. It is important to note that the minority of businesses that are faring well, are those involved in highly specialised manufacturing and knowledge industries. Although survey data for April 2009 indicates that 21% of our members have experienced an increase in trade in the last three months, in normal economic conditions this rate would be substantially higher. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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5.4 A primary concern for the FSB is the diYculty that our members are experiencing in accessing new finance and negotiating existing working capital facilities. This issue has been exacerbated by higher costs of borrowing for around a quarter of our members, despite the Bank of England’s reductions in the base rate. We are regularly canvassing our members about their experiences in obtaining credit and financial support from banks and other lenders, to track how quickly the issue is being resolved, and the extent to which Government intervention is filtering down to the customer. It has also been recently highlighted through our membership, that insurance companies are restricting credit insurance, causing diYculty for businesses buying stock on credit. 5.5 Another key concern for the FSB is public sector procurement and how easily small firms can collaborate and win public sector contracts. For those FSB members who have been successful in winning public sector contracts, it is disappointing that the majority of them have had to wait significantly longer than ten days for payment. The quick payment of invoices is crucial to small businesses, not only in times of economic recession but also in periods of economic growth, to ease pressures on cashflow and provide much-needed liquidity. 5.6 During the last 18 months we have continually lobbied emda, the Government OYce for the East Midlands, MPs and the Regional Minister on the plight of small businesses, and the action needed to support them through the recession. To this end we are pleased with emda’s positive response to the economic crisis, and the range of measures they have introduced to support businesses in the East Midlands, particularly those aimed at micro-sized firms. Due to the lengthy and bureaucratic processes that the RDAs operate on funding approval and decision-making, they do not tend to act swiftly. We therefore applaud emda’s relatively quick response to the economic downturn. Clearly, the RDAs have never before operated in a period of economic decline, and the RES from each region has always been pre-occupied with high- growth businesses. We have therefore welcomed emda’s re-focus of its business support services on business survival, the series of “Survive and Thrive” events, and training packages which advise company owners and managers on how to manage their business through economic recession. 5.7 One particular tool which could have helped emda however, is more timely and accurate data on which to base decisions. emda’s statistics are significantly out of date, and decisions are being based on data that is at best eighteen months old and at worst five years old. The FSB gathers data from member organisations every few months, so the data we use is current. During the recession we have found that emda has been reliant on the data gathered by business representative organisations. As a business-led body with a considerable budget, the collection, analysis and dissemination of up-to-date economic data should be better. 5.8 As a national organisation, we are aware that each RDA is responding to the economic recession in diVerent ways, with their own initiatives and grant programmes. This means that businesses across the English regions have had access to diVerent types and levels of support depending on where the business is based and the RDA’s funding flexibility, rather than a set of grants and programmes that are universally available. This has therefore created inequality of support. 5.9 It is not always apparent where the RDAs are sharing and disseminating good ideas and good practice within the RDA network. It would be particularly beneficial to know about the outcome of RDA projects or initiatives trialled in other regions which could be replicated in the East Midlands to avoid any “re- invention of the wheel”. Similarly, it would also be good for emda to more widely promote the impact that they have had in responding to the economic recession, to provide more positive media coverage.
6. Proposals in the Local Democracy,Economic Development and Construction Bill 6.1 The SNR stated that the RDA Boards would continue to be business-led, and the FSB supported this view. It is therefore disappointing that the Local Democracy, Economic Development and Construction Bill has failed to re-aYrm the role of businesses and business representative organisations in steering economic development. 6.2 We recognise the need for a wide spread of skills on the emda Board but we feel that it is vital that under the new proposals there is appropriate equilibrium between the private sector and local authorities. We feel particularly strongly that the business seats on the emda Board under the new arrangements, should also include entrepreneurs and small businesses. This would ensure that the Board is representative of the 99.2% of small business that make-up the East Midlands. 6.3 Although the Bill “expects” local authorities to undertake consultation, it will not be a statutory duty and we believe that it should be. Similarly, the single Integrated Regional Strategy will be developed, approved and monitored jointly by emda and the local authorities. The role of businesses and other stakeholders under the proposals appears to be strictly limited, whereby only a select number of stakeholders from the emda Board will be able to influence the content and delivery activity of the strategy through the Joint Board. 6.4 The SNR was about economic growth. As businesses are the agents creating that growth, it should be mandatory that they are actively involved in planning the delivery of economic development. The role of businesses under the new arrangements must be much more than a consultee, otherwise there is a strong possibility that businesses will become disillusioned and disengage. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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6.5 Whilst the establishment of area-based Economic Prosperity Boards proposed in the Bill may be seen as an avenue for business to influence local economic development, they are likely to duplicate the work of other existing Board structures, such as the thematic groups within the City Region Development Partnerships. They are therefore not a solution to the issue of insuYcient stakeholder engagement. emda should consider alternative formal mechanisms for engaging businesses and other stakeholders in all stages of the single Integrated Regional Strategy—planning, development, consultation, delivery and monitoring. It is only through the active and ongoing engagement of wider economic, social and environmental partners, that sustainable economic growth will be realised.
7. Differences in Urban and Rural Support 7.1 The East Midlands is the third most rural region in England, and the FSB has lobbied on a wide range of issues aVecting small businesses in rural areas. It is important to recognise that our members who are based in rural areas are not necessarily operating in traditional rural sectors such as agriculture. Their need for support is often similar to that of an urban based business. The cost of work premises is an issue for all businesses, but whilst it is cheaper for businesses to be based in less urban areas, the availability of suitable business premises outside of the region’s cities and principal towns is severely limited. Connectivity to broadband services is also an issue for businesses in rural areas, with diVering levels of speed depending on the distance between the business and the telephone exchange. 7.2 Lincolnshire, Rutland and South Northamptonshire often feel that they are on the periphery of public investment, with emda’s funding being largely focussed on the three core cities of Derby, Nottingham and Leicester. The FSB is concerned that there is insuYcient investment in the East Midlands towns and surrounding areas to support rurally based businesses and communities.
Memorandum from East Midlands Regional Assembly (EM 04) Introduction and Executive Summary 1.1 Since EMRA’s formation in 1998 we have worked with East Midlands Regional Development Agency (emda) to support their development of the Regional Economic Strategy (RES) and, using the powers provided by the 1998 RDA Act, held them to account for their performance through regional scrutiny. Alongside examining reports from emda and questioning them about key aspects of their performance, EMRA’s Regional Scrutiny Board has undertaken eleven in depth scrutiny reviews into thematic areas of emda activity,including innovation, business support, energy,skills, tourism, foreign direct investment, support for rural areas, local area regeneration, strategic sub regional partnership and business formation and survival. Our scrutiny is robust but always constructive and has been underpinned by the East Midlands Scrutiny Protocol, agreed between EMRA, emda and GO-EM (Government OYce for the East Midlands) in January 2006. Our experience of undertaking regional scrutiny and the key findings from our reviews underpin this submission. 1.2 The key points of our submission are: — Regional co-ordination has resulted in better integration of the development and delivery of economic policy in the East Midlands. — emda has steadily improved its eVectiveness and met the targets in its contract with Government. This has been supported by robust regional scrutiny. — emda has been particularly strong in managing the delivery of services and support to businesses. There remains scope to further improve emda’s partnership management to eVectively co-ordinate resources and activities around the delivery of the RES. — emda’s future role, relationships and accountability require further clarification. — emda would benefit from stronger local democratic ownership and more representative input from the business and wider stakeholder community to the emda board.
2. The Role, Responsibilities and Accountability of emda 2.1 emda’s roles and responsibilities have developed over time. It has degrees of responsibility for strategy development, partnership management, funding and delivery in a number of areas of economic policy. It acts as an agent of government in managing government funds to achieve the targets in its Corporate Plan. These targets are drawn from the Government’s Tasking Framework with the level of the targets agreed between emda and Government. emda also acts as an agent for the region in promoting the region’s economic interest. There is an inherent tension between these roles, especially where government policy and the interests of the region may diverge. This tension is an inherent and logical consequence of any regional policy. Government should be more tolerant of diverse approaches in the regions. However, in order to inform and justify more distinctive regional policies, there is a need for stronger local democratic “ownership” of RDAs. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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2.2 Whilst emda would benefit from the greater credibility and legitimacy in leadership that greater local democratic ownership would bring, emda has benefited from the flexibility of single pot funding and using influence to bring strategic coherence between diverse economic development functions such as skills, business support, regeneration and foreign direct investment. This flexibility and strategic coherence is a strength of the current approach and it will be important that it is built on under any new arrangements. 2.3 Through our scrutiny reviews we have identified a number of strengths in emda’s performance including: — emda is a much improved organisation with a strong delivery focus. — emda has pursued an integrated approach across an expanding remit of economic policy issues. — emda has taken significant steps to reform how Business Support is delivered and managed at the regional level, resulting in a better service. — emda has a very good track record on delivering Corporate Plan output targets. — emda has supported activity and approaches at the regional level that are new in the East Midlands, such as regional approaches innovation and energy. — emda have reacted well to one-oV crises such as Foot and Mouth and flooding. 2.4 Through our scrutiny reviews we have made a number of recommendations to emda to take action to improve the region’s economic performance. Since the Scrutiny Protocol was published in January 2006, emda have responded to scrutiny reviews in a consistent format through an Action Plan detailing the actions they will take and later reports on implementation and impact. However, emda are not under any statutory obligation to implement the Assemblies recommendations. Through detailed analysis, constructive recommendations and an agreed response mechanism for emda, EMRA has strengthened emda’s accountability and supported their improved performance. The recommendations made by the reviews are detailed in Appendix A. The key issues identified in Scrutiny Review are detailed below followed by a reference to which of the recommendations in Appendix A they are drawn from. They key issues include;
Setting the strategic direction — (Recommendations I1, I2, I3, BS1, E1, E2, R1, R2, S1, T1, SD3, FDI1,FDI2, FDI9, SSP3, BBR1-8) 2.5 Reviews have identified the consistent importance of ensuring that economic development activity in the region is underpinned by robust and well informed strategies. In particular emda correctly describe their role as a “catalyst for change”, recognising that their resources alone will not achieve the objectives of the Regional Economic Strategy. A key element in encouraging key partners to align their resources and strategies to achieve the objectives of the RES is for them to share a common strategic vision and a shared understanding of the key issues for the region. In some areas stakeholders have reported collaborative working on research whereas in others it is seen that emda have “presented” research to support a negotiating/lobbying position rather than being fully engaged in its collaborative development.
Partnership management — Strategic Partnership working (Recommendations E3, S3, S5, LA1, LA4, R5, SD11) — Delivery Partnership working (Recommendations BS2, E4, S2a, LA2, LA3, LA6, T5, SD8, FDI10, SSP10, SSP13, BBR20, BBR21, SSP9 — Business Input/Customer Focus (Recommendations BS4, S2b, S4, FDI6, S3c) 2.7 As detailed above, harnessing the resources and expertise of partners such as local authorities and businesses to deliver the RES is important and EMRA have made a number of recommendations that reflect this. The Sub-National Review (SNR) puts less emphasis on the RDAs’ delivery of outputs and a stronger emphasis on making strategic decisions and working in partnership. emda will need to strengthen their partnership working, especially with Local Authorities. Scrutiny Reviews have made a number of recommendations to improve partnership working on strategy and delivery with regional and sub-regional organisations. 2.8 emda’s eVectiveness at strategic influencing has been less than the influence achieved through contracting and commissioning. Whilst, in some areas, emda have worked in partnership with local authorities and other organisations, there are perceptions that emda has sought to extend its remit over areas of policy, such as skills, business support, European funding and regional planning that have been or are led by other organisations. This has led to challenges to develop a genuinely “Team East Midlands” approach to represent the region’s best interests. 2.9 As a “catalyst for change”, during its early years emda sought to change the way economic development was planned and delivered in the region, which some pre-existing organisations found challenging. In particular, Strategic Sub-Regional Partnerships (SSPs) were set up that fell across the boundaries of all upper tier local authorities in the region. The geographic basis and operating model of SSPs was justified by emda as a business-like and economic focused approach, although this was not universally recognised as the case by local authorities. This early intervention hindered the development of eVective Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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partnership working between emda and local authorities. Following EMRA’s scrutiny review, SSPs— Delivering their Potential in 2005, emda has further developed its approach and taken a number of actions to help improve delivery and relationships with local authorities. 2.10 As the accountable body for “single pot” spend emda sought to retain an element of prescription over how any devolved funds are spent, which posed challenges to bodies funded by a variety of sources. EMRA’s Tourism review found that emda favoured a “principal—agent” relationship with local Destination Management Partnerships rather than a more dynamic partnership approach. emda have, however, since taken a number of steps to improve relationships with Destination Management Partnerships. 2.11 The implementation of the Sub-National Review has necessitated a greater level of collaboration and dialogue with local authorities and a refashioning of sub-regional delivery structures and relationships. In this process emda has demonstrated learning from the SSP experience. 2.12 There remains concern from business and other stakeholders over how their sectors engage with and are represented on the emda board. For example, the “business” members of emda’s board are selected on the basis of their individual business experience rather than being seen by businesses to represent their interests.
Marketing and Communication — (I6, BS3, S6, SSP11) 2.13 A number of reviews have pointed to the need for better marketing and communication for two principal reasons. Firstly,due to emda’s complex role they have been occasionally criticised for issues beyond their control or the value of their activity is not understood. However, more importantly, where the service that emda provide has been seen to be good and eVective, such as in business support, it is important to increase market penetration. 2.14 A wider point is that it is essential for businesses to have confidence in emda, particularly SMEs. Getting to know the customer base and engaging them in regional policy, rather than exhaustively surveying them, can be diYcult. emda has experienced continuing diYculty in persuading a private sector representative to become the Chair of the Employment, Skills and Productivity Partnership. Developing business engagement is crucial to emda’s credibility as a “business led” organisation.
Review, Learning and Flexibility — Review (I5a, I7, S6, LA7, FDI8. SSP 12 — Flexibility (I1c, I1d, R3, R4, LA5, SSP2, SSP6, SSP8, BS6a &d 2.15 A theme running through a number of reviews is ensuring that emda retain the capacity to learn and improve from a variety of sources, not just the large evaluation studies that are commissioned. Whilst getting the strategic context is important, operationally there is value in the flexibility to adapt as a result of experience, circumstances and the needs and experiences of customers, especially in a fast moving economic environment. As part of this, ensuring that appropriate monitoring procedures are in place to assess and demonstrate the eVectiveness of activities in achieving the objectives of the Regional Economic Strategy is important. The Region has been characterised as having greater internal diversity than diVerence from the other English regions. Some economic issues, such unemployment, or patterns of economic activity and skills have a particular local or sub-regional focus. It will be important that single pot, “single agreement” devolution of funds allows scope for significant local issues to be addressed that may form the basis for economic and social improvement without directly contributing to a “tasking framework” output.
Delivery — Supporting Delivery and Performance Management—through Action Plans, Delivery Capacity, Setting Targets, learning from other regions and Training) (BS5, BS6b&c, E6, E7, FDI3, I4, I5a&c, T2, T4, T6, SD1,2, 4,6,7.9.10.12, FDI 5 &7, SSP 1,4& 7, BBR 9,10, 11, 12, 13,15,16, 18, 19 &22) — Defining emda’s Delivery Role (S2e, I2b, I4b, E5b, SSP5 — Resourcing (I4c, BS5a, FDI4, E5, T3, BBR14 — Speed of grant approval/decision-making (I5b, — Leading by example.(SD5, S2d, E8 2.16 EMRA’s reviews have made a number of practical recommendations about improving delivery as well as strategy, management and communication. These have covered a diversity of issues as reflects emda’s wide agenda. A key theme has been ensuring that extent of emda’s delivery role and how it interfaces with the role of others is defined and understood. Other issues include the need retain robust grant approval procedures whilst aiming to speed up decisions to ensure that decisive and timely investments are made in the economy. Given the need to intervene quickly in the current fast changing economy, BERR should examine how emda can be enabled to approve interventions more quickly. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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Accountability 2.17 Regional Assemblies have held RDAs eVectively to account for their performance in the regions through Regional Scrutiny, within the framework of the relatively weak statutory powers provided by the RDA Act.
2.18 The SNR proposals, including the establishing of Regional Select Committees and the ending of government funding for Regional Assembly scrutiny will lead to significant changes to the accountability of RDAs. The East Midlands Regional Select Committee will bring the strategic perspective and knowledge of East Midlands Parliamentarians to provide high profile accountability, at a strategic level, to all regional organisations, including emda. However, the loss of a dedicated, experienced, constructive and ongoing regional scrutiny body comprised of local authorities and regional stakeholders that takes an in-depth look at key aspects of the RDAs performance will lead to a significant void in accountability to support the ongoing learning and development of emda. Whilst the SNR gives local authorities key roles collectively as co-developers of the Single Regional Strategy and locally as part deliverers of the strategy, provisions for overseeing the RDAs role in facilitating the delivery of the strategy are less clear.
2.19 A particular strength of Regional Scrutiny has been the dedicated involvement of stakeholder representatives, from business, academic, trades union, voluntary, environmental and other sectors, who have brought considerable insight and expertise to the Assembly’s work. Working on Scrutiny Panels and the Regional Scrutiny Board, they have been invaluable in analysing evidence and shaping practical, deliverable, focused and constructive recommendations, on a thematic basis, that are suYciently detailed to have genuine traction but strategic enough to address the key issues. The recommendations detailed in Appendix A reflect this and illustrate the diVerence in role played by EMRA scrutiny and that played by the East Midlands Regional Select Committee.
2.20 During the current year, EMRA has a Business Plan, agreed with Government, to deliver regional scrutiny whilst paying due regard to the work of the Regional Select Committee. There is a clear distinction between the roles of EMRA Scrutiny and the Regional Select Committee in terms of depth and continuity of relationship. Both have important and complementary roles to play. This was recognised by the Business, Enterprise and Regulatory Reform Select Committee’s recent report on RDAs.
2.21 It would be a mistake to suggest that because emda are undertaking activity to address the economic recession that less accountability is required, even in the short term. EMRA’s scrutiny has never been about stifling initiative, promoting risk aversion or even preventing mistakes being made. In banking, we have seen that if people act without informed accountability, it leads not only to mistakes being made, but mistakes becoming entrenched and not learned from. In terms of scrutiny we have no problem with mistakes being made if they’re made using best judgment, recognised, learnt from and practice improves. If you make mistakes and you don’t learn, you repeat them, embedding what goes wrong.
3. The process by which the RES was drawn up and the level of involvement of regional stakeholders 3.1 A large amount of evidence was gathered in support of the RES, together with a widespread public awareness raising campaign. Whilst EMRA are co-signatories to the RES, our role was as enhanced consultee to the process rather than joint author.
3.2 Whilst a wide range of work was commissioned as part of the RES evidence base, not all has been reflected or drawn on in policy.How strategic options were developed on the back of evidence and prioritised was not always clear.
3.3 Going forward, continuing to gather a wealth of evidence will be important to inform the development of the Single Regional Strategy and drawing on the experience of developing the RES will be valuable. The Single Regional Strategy will require a greater degree of collaboration on the commissioning and design of the evidence gathering and more collaborative analysis and decision-making about the meaning and policy implications of the evidence gathered.
3.4 It should be recognised that whilst a single strategy has an inherent logic, the Examination in Public Panel for the draft Regional Spatial Strategy (RSS) found no conflict between RES and RSS policy. Indeed, initial scoping work indicates that Government will be able to designate the existing RES and RSS as the first Single Regional Strategy.
4. The eVectiveness of the RES for the East Midlands in delivering against its targets 4.1 emda has an excellent track record in hitting its Corporate Plan targets, and this is its organisational focus. Wider regional targets have more “owners” and are subject to greater macro-economic influence and are consequently harder to achieve. This raises questions about whether emda is more suited to being a strategic or delivery organisation or an organisation that procures the delivery of outputs from others. At the moment it has a combination of these roles but appears to have increasingly moved from strategy to delivery. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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5. The eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors and the impact on local employment, and how well emda is meeting needs in the challenging economic climate 5.1 In keeping with the overall record of eVective management of regional business support, emda have revised their delivery of services to businesses to reflect current economic conditions. The economic strategy that was developed in times of growth remains in place. However EMRA, has called for it to be looked at again. On 18 July 2008, EMRA passed a motion that called on emda to “undertake an urgent review of elements of the Regional Economic Strategy in order to take account of the new economic challenges facing our region”. A particular challenge for emda will be how it deals with increasing worklessness alongside a focus on productivity.
6. The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of emda 6.1 Regional organisations including EMRA, emda, GO-EM and the shadow East Midlands Local Authorities’ Leaders Board are pursuing a pragmatic approach to managing the transition through the implementation of the SNR. The process will not be straightforward and there are diVerent organisational cultures to reconcile. However, regional organisations are working through the arising issues in a co- ordinated way.
7. The role of other Government agencies such as the Government OYce for the East Midlands, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES 7.1 See earlier comments on “partnership management”.
8. The way emda’s resources are divided between rural and urban parts of the East Midlands, and whether the division is appropriate 8.1 EMRA’s report Flourishing Rural Communities examined emda’s rural performance in depth. The report backed emda’s “mainstreaming” approach covering both urban and rural areas. However, it suggests that better evidence would help emda and partners design policies that work equally well in rural and urban areas and that remote rural areas may need special help. It recommends that emda and partners should look at how the region’s Rural Action Plan is delivered and the role that Local Area Agreements can play. It advocates enhanced support for Social Enterprises delivering local services and better use of the skills of migrant workers. 8.2 Whilst emda have taken a number of actions to address some of the report’s recommendations, Government policy has been evolving and ensuring that rural issues are appropriately addressed by regional agencies remains a continuing challenge, one that is recognised by emda and one that will continue to be a focus for EMRA’s Regional Scrutiny Board.
9. How well emda is performing on sustainability 9.1 emda have undertaken a range of proactive activity to support sustainable development and sustainable economic development, including engaging in the development of a Regional Energy Strategy. However, emda do not consider themselves to be the lead organisation in the region on Sustainable Development. 9.2 EMRA supports a single regional strategy based upon sustainable development, which is defined in Planning Policy Statement 1 as the core principle underpinning planning. RDAs single main objective is economic growth. How emda and local authorities can work together in the production of the Single Regional Strategy will be a key test of the new arrangements.
Memorandum from the Royal Institute of British Architects East Midlands (EM 05) Introduction The Royal Institute of British Architects (RIBA) is one of the most influential architectural institutions in the world, and has been promoting architecture and architects since being awarded its Royal Charter in 1837. The 40,000-strong professional institute is committed to serving the public interest through good design. It also represents 85% of registered architects in the UK through its regional structure as well as a significant number of international members. Our mission statement is simple—to advance architecture by demonstrating benefit to society and promoting excellence in the profession. The RIBA East Midlands team is based in oYces in Lincoln and operates across the region to promote, encourage and raise awareness of good design in architecture as well as supporting high standards of architectural practice. RIBA East Midlands has 894 chartered members plus a further 675 student members. The executive team work with a Council made up of regional chartered members. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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RIBA East Midlands Work as Stakeholder with emda RIBA East Midlands interact with emda through several diVerent forums and welcomes partnership opportunities. A selection of RIBA members are active on committees and boards of regional organisations working in the fields of built environment planning and design and the construction industry. The RIBA value working with emda in the support of architecture and architects for the economic benefit of the region and would welcome closer working with relevant departments where engagement is not currently established. SMEs The majority of architectural practices in the region are SME’s. The emda interest in supporting the construction and built environment professionals during the current recessionary times is welcomed. This is evidenced in events by EMCBE and, in particular, the interest in dissemination and development of the Career Chain project. Details of other specific support or training is unclear and support for recent graduates, both seeking employment and work experience, is one notable exception. Outlined below are the key areas of engagement between RIBA East Midlands and emda:
Sustainability emda are supporting the development of RIBA East Midlands Low Carbon Awards through a research grant to identify recommendations for these new regional Awards for architecture. This is extremely useful for the region and the advance of architecture in the region because these new Awards will applaud, demonstrate, educate and stimulate initiative and positive action in the design and delivery of new buildings of design excellence in response to the aVects of global warming and climate change. The existing Environmental Initiative Award (see below, also supported by emda) has gone some way to raising awareness of the importance of incorporating a commitment to sustainability from the concept/briefing stages of any development project. In view of the urgency of addressing climate change the timely emda support for the proposed new RIBA EM Low Carbon Awards , enables the RIBA to establish a considered framework within which to identify and applaud new low carbon buildings (and developments designed ) for low energy consumption, both embodied and whole life time.
Design Excellence The RIBA East Midlands Awards celebrate annually the best new contemporary architecture within East Midlands. emda have supported the RIBA EM Awards for four years through the Environental Initiative Award. Within the context of excellence in design, this Award recognises architectural design initiative in the areas of sustainability and low carbon. emda’s support is helping to encourage and embed low carbon design considerations within all new development and raise awareness with those who procure new buildings.
Blueprint Development Company emda supports Blueprint a regeneration development company that aspires to delivering high architectural quality in its building projects, most of which enjoy funding through emda. This commitment to architecture of quality is to be applauded. This is evidenced in that one recently completed building, Highfields Automotive Engineering Workshops, has been shortlisted for a 2009 RIBA Award for architecture (our national platform).
Regional Design Review Panel Operated by OPUN The RIBA strongly supports design review as a way of ensuring high quality design through peer review through a design review panel. This important work raising standards of design in the built environment is supported by emda. A high proportion of the panel members are RIBA chartered architects. The work of the design review panel is contributing to improved standards of development within the region, which, when these projects are delivered, will bring added economic and social benefit. The panel frequently reviews key development schemes making recommendations in a supportive manner and is seen by RIBA to be eVective, valuable and well managed.
CIC—Construction Industry Council East Midlands Through the EMCBE the RDA supports the Construction Industry Council in East Midlands. This is a valuable and active forum which bring together the Professional Institutes for the built environment and other key regional bodies ( total 15 ) enabling them to speak with one voice. The RIBA are active with the CIC and the associated Employers Panel. emda regularly participate with topical presentations to the CIC Executive. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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Urban Practitioner Group The RIBA are part of the UPG, managed by REM (Regeneration East Midlands) who are funded by emda. The recommendations outlined in Capturing the Urban OVer in the East Midlands are welcomed. The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of emda: The Local Democracy, Economic Development and Construction Bill places a new duty on RDAs when developing the regional strategy must exercise this with the objective of contributing to the achievement of sustainable development and in doing so have regard to the desirability of achieving good design. The RIBA is very supportive of this change. We cannot achieve sustainable development without good design. We believe this will enable the East Midlands RDA to demand only the best design and challenge bad design. Too much of new development in the UK falls short in terms of design quality and sustainability. Design should be properly entrenched into the planning process in order to improve the quality of the built environment.
Memorandum from the Royal Institute of British Architects (RICS) (EM 06) About RICS RICS is the largest organisation for professionals in property, land, construction and related environmental issues worldwide. We promote best practice, regulation and consumer protection to business and the public. With 140 000 members, RICS is the leading source of property related knowledge, providing independent, impartial advice to governments and global institutions. RICS East Midlands has approximately 5,000 members working across a range of sectors in the region who are uniquely well placed to oVer genuine expertise as the leading property professional body, required by its Royal Charter to place the public interest at the core of all its activities. Key points: — emda will need to acquire new skills and expertise to undertake the new operational and political roles proposed in the Local Democracy, Economic Development and Construction Bill. — Changes to regional governance announced in the Bill provide the perfect opportunity for emda to develop a new approach to stakeholder engagement. — The negative impact of the current economic situation underlines the need to maximise the professional expertise and regional intelligence that stakeholders such as RICS are well-placed and willing to oVer. — There is a mismatch between emda’s economic objectives and measures of success and the overarching statutory sustainable development duty that exists in spatial planning, as measured through Sustainability Appraisals. — emda’s structure and accountability to central government precludes accountability to the region. Individual board member appointments by government cannot fill this gap in eVective partnership working. — emda board participation could benefit from wider input by regional MPs and stakeholders to speak for their constituencies and wider organisations in the region. — Government OYce East Midlands, emda and the emerging East Midlands Leaders’ Board should now consider how best to develop a coordinated approach to regional engagement with professional bodies, key sectors and communities to garner available expertise and insight to inform their discussions and decisions.
Role,Responsibilities and Accountability of emda Process by which the RES was Drawn Up and the Level of Involvement of Regional Stakeholders Changes to Regional Policy Proposed in the Local Democracy,Economic Development and Construction Bill and the Potential Effect on the Work of emda 1.1 emda’s role 1.1.1 emda’s role has been to deliver economic growth and regeneration in the region in line with the RES. In doing so emda has worked with other organisations in a range of schemes and initiatives that have produced some high quality outcomes. Aspects of the eVectiveness of emda’s work have been evaluated in detail by the regional assembly through several scrutiny exercises carried out since 2004. 1.1.2 The intention of the Review of Sub-National Economic Development and Regeneration (SNR) is that emda is to play a more strategic role and delegate funding and delivery to local authorities and new subregional partnerships. emda will work in partnership with local authorities to develop a Single Regional Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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Strategy to replace the former separate spatial and economic strategies. This will require organisational change within emda and the acquisition of skills in spatial planning so that it can integrate economic priorities with spatial planning in this new strategy.
1.2 emda’s responsibility 1.2.1 The organisation has an economic focus and emda’s performance measures reflect this. That emda now has a new function in producing an integrated strategy for the region highlights one area where clarity is needed. Under pre-SNR arrangements the regional assembly had an overarching sustainable development duty. This measured how regional policy delivered balanced sustainable solutions across social, environmental and economic criteria, within the integrated Sustainability Appraisal and Strategic Environmental Assessment (SA/SEA), in compliance with statutory requirements. 1.2.2 Post-SNR arrangements are likely to mean that a national set of sustainability criteria will be implemented and that these will be developed by the Sustainable Development Commission. 1.2.3 Logically therefore emda’s responsibility and measures of success need to be aligned with the new task of developing the Regional Strategy in delivering sustainable development. This document is intended to deliver balanced sustainable development as the regional tier of planning, but emda’s priorities and performance indicators fit within purely economic criteria. It is therefore anomalous for the statutory requirement for spatial planning policies to be assessed against balanced sustainability criteria, when the new focus and measures of success will be solely economic ones. emda’s economic role and performance indicators may therefore require revision to include the inclusion of a duty to deliver balanced sustainable development, together with a change in performance indicators to measure performance on that basis. 1.2.4 An alternative approach would be to remove social and environmental criteria from the Sustainability Appraisal to focus on economic success rather than balanced sustainable development, but the SEA must remain in place under European requirements. This approach would require a rejection of sustainable development objectives that shape land use planning, with profound consequences for the management of protected landscapes, the built environment, carbon emission reduction and the implementation of the Sustainable Communities Plan. A solely economic focus would be unlikely to deliver sustainable development.
1.3 emda’s accountability 1.3.1 emda’s existing accountability to the Department for Business, Innovation and Skills1 is clear, with funding primarily from that source. emda’s board members do not therefore represent regional constituencies but are recruited on a periodic basis as individuals with specific sector-related competencies and experience. They are appointed through a process directed by BERR. The accountability of board members therefore is to emda and through it to BERR. Board members are not appointed as stakeholders with accountability to regional constituencies of interest. They undoubtedly have valuable skills and insight in their sectors, but do not necessarily have arrangements to reach into the diversity of their sectors to provide this wider expertise for emda. Individuals serving as board members therefore do so on a personal basis with a sole accountability to emda, which delivers central government economic priorities in the region, and not to the organisations or sectors with which they are connected. While emda works with partners in the region, its accountabilities do not lie in the East Midlands. The evolution of the East Midlands Regional Assembly into a purely local authority body means that it will be less easy for the voices of key stakeholders from the economic, environmental, social and third sectors to be heard and to contribute to policy decisions at regional level. It is particularly unfortunate that the loss of this resource has coincided with the need for real time regional intelligence during the economic downturn. However, the longer term loss is highly significant, particularly as there are now no arrangements for scrutiny of emda from within the region. The introduction of structured arrangements to ensure that the diversity of the region’s businesses and communities is understood would be a very positive step forward. 1.3.3 The ways in which emda works are to continue in the post-SNR era, with the following potential weaknesses: Participation RICS would welcome a system that provided an accessible overview of the organisation and the work planned within its departments, together with points of contact so that organisations wishing to make a contribution can do so. A more strategic approach and better communications would address this and provide a better sense of purpose. RICS would be delighted to contribute its expertise in the built environment and in regeneration to shape regional policy, particularly in the current market conditions where it can provide a useful information resource for example through its market surveys, the most relevant of which are disaggregated to the regional level. The organisation also has expertise throughout rural and environmental sectors. There is no mechanism for it currently to do so.
1 Formerly Department for Business, Enterprise and Regulatory Reform (BERR). Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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RICS understands that regional stakeholder representation may be delivered through two individual, observer seats on a joint Leaders’ Board/emda board. This means that much that is of value will not be heard in the constrained representation oVered, and there is a risk that organisations with genuine and valuable connections to sectors across the region will review whether it is worthwhile for them to continue to engage at all. Some stakeholders formerly worked with local authorities under assembly arrangements as the non-elected statutory component of the Regional Planning Body, but this opportunity to contribute has now been removed. RICS and others regret the loss of accountability and insight to the region that results from this. The emerging regional governance structure provides regional agencies with the opportunity to have a fundamental rethink regarding stakeholder engagement. The model followed by the East of England region, in which an inclusive East of England Business Group is partly funded by the RDA, together with member subscriptions, is a good one. We would urge the East Midlands, in particular emda, to consider nurturing such a group in order to avoid losing the buy-in of such valuable professional organisations as RICS, which until now have been excluded from stakeholder representation on the assembly. It seems anomalous that emda board level discussions do not include regional MPs or the Regional Minister as observers who could provide balance and breadth to the debate. Members of local government are represented on the board but MPs also represent the views of constituents across the region. The eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors and the impact on local employment, and how well emda is meeting needs in the challenging economic climate.
2.1 The economic situation has had a profound eVect on businesses in the region, with a marked downturn in property and construction sectors. RICS Housing Market Surveys have documented on a monthly basis the significant decline in property prices in the region and the loss of consumer confidence measured by new buyer enquiries, although this is starting to pick up. In the current market, a lack of mortgage finance and economic conditions are restricting the ability of many to consider the option of entering the market. Optimism that sales will improve further in the East Midlands market over the next three months fell back into negative territory in February.
2.2 The RICS construction market survey (Q4 2008) showed that workloads in the East Midlands declined for the third consecutive quarter. The net balance fell to the lowest level in the survey’s history (Q2 1994). Private housing workloads remained the weakest category in the last quarter of 2008.
2.2 The combined eVect of these factors means that in this region the sales to stock ratio has fallen sharply since mid-2006, an established trend that has produced significant supply constraints for some time. In order for the market to recover there will need to be a substantial improvement in the availability of property for sale, ideally both from renewed market confidence by homeowners that they can achieve realistic prices, and from the supply of open market new build and aVordable housing. The significance of the lack of new starts during 2008 is that this will further constrain supply in 2009 and 2010.
2.3 In the East Midlands first time buyers are still unable to enter the market and the potential for renewed house price increases resulting from supply constraint means that, even if mortgage finance becomes available in future, housing for them could become even more unaVordable. RICS would welcome opportunities to share its research and understanding of the local property markets in the region, as well as in the range of areas in which it has professional expertise.
2.4 RICS East Midlands would welcome communication from emda on how it is responding to the downturn, in terms of extra support for businesses. This invaluable information could be passed on to its membership.
The role of other Government agencies such as the Government OYce for the East Midlands, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES.
3.1 It is important that Government OYce develops a transparent and structured model of engagement with business, communities and other stakeholders for the diversity of the region to inform its work. Greater opportunities to improve stakeholder engagement on a broader and more consistent basis would be good.
3.2 Possibly a shared approach with emda to regional engagement would provide a good model. In the current economic climate Government OYce is well placed to act as a conduit of regional intelligence. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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Memorandum from East Midlands Development Agency (EM 07) The East Midlands Development Agency (emda) welcomes the opportunity to contribute to this Inquiry into emda and the Regional Economic Strategy (RES). This submission builds on our recent attendance at the first session of the East Midlands Regional Select Committee to be held in the region (on 27 April 2009). emda is subject to a wide range of accountability structures with which we have eVectively engaged to demonstrate and enhance our role and performance. emda places the voice of business at the heart of public decision making on economic planning in order to maximise private sector engagement, investment and leverage. emda provides specialist economic development and regeneration know how—delivered through an eVective mix of public and private sector expertise. emda has consistently achieved its goals—against a backdrop of ongoing eYciency savings. emda has generated £9–15 of economic output (or GVA) for the regional economy for every £1 it invests. emda has strong stakeholder buy-in for the aims, ambitions, priorities and actions within the RES. Our latest analysis shows improvement against the majority of RES targets, suggesting significant success in delivering shared objectives. Our close engagement with the business community ensures that emda can respond rapidly, and oVer support specifically tailored to the changing needs of the region’s businesses. emda’s regeneration programme focuses on building the infrastructure to aid our long-term recovery and future growth. Although Defra funding accounts for only 3% of emda’s Single Pot, almost 38% of emda’s outputs help support rural communities and businesses. Sustainable Development is fully cascaded from the RES down through emda’s Corporate Plan and project development and appraisal systems. emda is one of eight Regional Development Agencies established under the RDA Act in 1998 and formally launched on 1 April 1999. The London Development Agency was established two years later in July 2001. emda’s budget for 2009–10 is £157 million. emda is able to bring a very real business-focused approach to our operation and investments, which are directed by our private sector Chair and our Board (made up of representatives from the business, local government, higher education and third sectors).
1. The role, responsibilities and accountability of emda emda is subject to a wide range of accountability structures with which we have eVectively engaged to demonstrate and enhance our role and performance. emda delivers a comprehensive range of programmes for the Government, developed in conjunction with business, and in an eYcient and eVective manner. emda has consistently achieved its goals—against a backdrop of ongoing eYciency savings and with a comparatively modest budget. emda has had a significant impact on the regional economy and has generated £9–15 of economic output (or GVA) for the regional economy for every £1 it spends.
Overview of emda’s role and responsibilities 1.1 emda has a key role in providing strategic economic leadership through the development and championing of the Regional Economic Strategy (RES). This long term strategy is based on comprehensive evidence and identifies the challenges and opportunities ahead. 1.2 The RES commands significant levels of support from (public and private sector) partners in the region—this has led to a high degree of coherence between the RES and a range of regional and local implementation/delivery plans. Regional partners (including Local Authorities and groups of Local Authorities) prioritise activity and align resources behind agreed, regional priorities, thereby increasing impact. 1.3 The current Regional Economic Strategy (RES) has the vision that: “by 2020, the East Midlands will be a Flourishing Region—with growing and innovative businesses, skilled people in good quality jobs, participating in healthy, inclusive communities and living in thriving and attractive places.” 1.4 This vision of a Flourishing Region is supported by the three Structural Themes or crosscutting principles of: Raising Productivity, Ensuring Sustainability and Achieving Equality. Within the three Themes, the RES identifies 10 Strategic Priorities, each setting out a number of Priority Actions which are required to improve the region’s performance. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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Raising Productivity Ensuring Sustainability Achieving Equality — Employment, learning and skills — Transport and logistics — Cohesion communities — Enterprise and business support — Energy and resources — Economic renewal — Innovation — Environmental protection — Economic inclusion — Land and development
1.5 emda’s budget of £157 million for 2009–10 is comparatively modest in comparison to other public spending in the region (estimated to be £24 billion), and indeed the size of the regional economy (£77.9 billion). emda’s investment priorities are set out in our three-year Corporate Plan—which is drawn up in accordance with guidance issued by the Department for Business, Enterprise and Regulatory Reform (BERR) and are consulted upon with regional stakeholders. The relationship between the RES and emda’s Corporate Plan is set out below.
RES vision emda Corporate Plan Mission
3 Structural Themes 3 Cross Cutting Principles
Corporate Objectives
10 Strategic Priorities 10 Strategic Priorities
Priority Actions Priority Actions addressed by emda
Priority Actions addressed by partners RES Implementation Plan
1.6 In line with our statutory responsibilities we have utilised our funding, resources and know how to: — Deliver business support services, and promote enterprise activity and business growth/ competitiveness; — Foster innovation and scientific advance; — Attract inward investment and promote the region as a tourist destination; — Support employment, learning and skills needs; — Deliver regeneration activities and physical infrastructure (including 27 sites in the National Coalfield Programme); — Promote environmental sustainability and climate change adaptation measures; — Develop local strategic capacity to lead economic development; — Influence wider infrastructure support (including transport); and — Respond to economic shocks. 1.7 emda’s performance has been measured against a framework, primarily based on operational outputs set by Government, which has evolved over time. We have delivered our targets year on year and since 1999–2000 emda has: — Created or safeguarded 81,231 jobs; — Created or supported 95,645 businesses;2 — Assisted 117,130 people with their skills development needs;3 and — Remediated 1,579 hectares of brownfield land. 1.8 It is important to note that these achievements were delivered against the backdrop of eYciency measures required by all RDAs in terms of their administration budgets. In 2007–08, the final year of the three year eYciency programme based around the Gershon Review, emda exceeded the target of £9.4 million, and achieved £14.8 million savings across the year.
2 11,639 businesses created and 84,006 businesses supported—to note that the output achievements for business creation are from 2002–03 onwards and from 2005–06 for businesses supported. 3 Output achievements for assisting people with their skills development are from 2002–03 onwards. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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emda’s Impact 1.9 In 2005, emda commissioned an independent evaluation of the agency’s spend and activities. This was an extensive evaluation of the agency’s impact since its establishment in 1999 and was undertaken by Ecotec Research and Consulting. This is a ground-breaking piece of work and one that few other public sector bodies have been subject to before. The Ecotec study into emda’s impact was gold standard in terms of breadth and depth of coverage and was able to look at issues in more detail than the national RDA evaluation commissioned by BERR. Headline findings show that emda has: — Had a significant impact on the regional economy; — Generated economic benefits that substantially outweigh its overall costs; — Generated £9–15 of economic output (or GVA) for the regional economy for every £1 it spends; and — Produced more than £1 billion in economic benefits per year. The evaluation also endorsed our organisational approach: — 90% of emda’s projects were judged to be eVective or very eVective in meeting their objectives; — 94% of all projects assessed were judged as delivering good or reasonable value for money; — Most projects would not have gone ahead without emda support; and — Significant financial leverage has been generated by emda—Ecotec suggest a potential leverage for all project expenditure to be approximately £1.5 billion. 1.10 From a strategic perspective, our unique role in bringing together partners and stakeholders to tackle complex economic challenges has been highlighted as a real strength. These findings are a positive endorsement of our work, demonstrating that emda has been investing wisely in business support, regeneration and skills activities to bring about substantial benefits for our regional economy.
Accountability 1.11 emda is accountable to Ministers and Parliament through the Secretary of State for Department for Business, Innovation and Skills4 and, as with all RDAs, our annual performance report and accounts are laid before Parliament, after being audited by the National Audit OYce. We also appear before Parliamentary Select Committees and regularly answer Parliamentary Questions. 1.12 At the regional level, we are held to account by our Board and by regional partners and this happens in a variety of ways; through consultation exercises, attendance at partner meetings and our Annual Public Meeting, where the average attendance is between 300 and 400 stakeholders (including a significant proportion of businesses and business representatives). 1.13 We are currently subject to scrutiny by the East Midlands Regional Assembly (until April 2010). This process is conducted by the Regional Scrutiny Board and emda’s performance is assessed against a series of thematic reviews on an ongoing basis. This process is governed by a clear protocol and supported by quarterly hearings. We are also now subject to parliamentary scrutiny through the new Regional Select Committee, and the soon to be established Grand Committee. 1.14 We are also subject to assessment by the National Audit OYce (NAO) through an Independent Performance Assessment (IPA). In 2007, the NAO awarded emda 22 points from a possible 24 (the highest rated RDA)—and judged us to be performing strongly. This reflected a particularly strong assessment of emda’s achievements to date.
2. The process by which the RES was drawn up and level of involvement of regional stakeholders In consulting on the current RES, A Flourishing Region, emda was the only RDA to have actively involved the people of the region in the RES development process—where we reached 90% of East Midlands residents. emda undertook the most extensive public consultation process ever undertaken in the region— 100 events, reaching around 1,400 regional stakeholders. Partner ownership was reinforced by the formation of a RES Reference Group, which met regularly to discuss key policy content and agree the development process. 2.1 Although the RES is developed and championed by emda, it is owned by the region. To ensure regional partner ownership, the RES development process has always been underpinned by an extensive programme of consultation and engagement. The development of the current RES, A Flourishing Region, was underpinned by a working group of key delivery partners—the RES Reference Group. This group comprised regional leaders from the public, private and third sectors and met regularly to discuss policy content and agree the RES development process.
4 Formerly the Department for Business, Enterprise and Regulatory Reform (BERR). Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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2.2 To build wider stakeholder ownership we carried out the most extensive public consultation process ever undertaken in the region. This was conducted in three distinct phases: I. May 2005—“20 Questions for 2020”—this sought to identify key priorities for the region, to assist in the development of the RES Consultation Document. II. September 2005—“Creating a Flourishing Region Together”—this was a 12 week consultation on a RES Consultation Document and Draft Evidence Base. The Consultation Document provided a broad outline of challenges facing the region, drawn from the Evidence Base. It also proposed a new vision for the region, underpinned by 10 strategic priorities and a range of priority actions which would form the basis of the RES. III. January 2006—“A Flourishing Region”—a further 12 week formal consultation, which gave stakeholders an opportunity to comment on a draft version of the RES. This version expanded on the broad concepts outlined in the Consultation Document and allocated the priority actions to a range of regional partners. 2.3 Throughout this period, emda attended over 100 events, reaching around 1,400 regional stakeholders and partners. The success of our proactive consultation campaign resulted in 495 substantive written contributions from a wide range of regional partners, stakeholders and residents from across the East Midlands. 2.4 We believe we were the only RDA to have actively involved the people of the region in the RES development process. The launch of the first formal consultation document in September 2005 was accompanied by an advertising campaign—200 poster sites on billboards and buses. The campaign ran for two weeks at the beginning of September and reached 90% of residents in the region. We also held Have Your Say Roadshows in 11 public venues across the region, including city centres and tourist attractions. These activities were supported by the development of a dedicated website which received over 20,000 visits between May 2005 and July 2006. Website visits to the dedicated RES review website increased by 66% during the advertising campaign. 2.5 All of this means that the RES is a product of debate and consensus around the key challenges and opportunities for the region and engendered significant support for, and ownership of, the RES. 2.6 To ensure that partners would put resources behind their words of support for the RES, we devised a RES Implementation Plan. This maps the activities of the region’s key delivery partners, against each of the 59 Priority Actions of the RES. In the first version (published in January 2007) a total of 102 organisations in the region provided detailed written responses to the Implementation Plan. This indicated a total of £1.68 billion investment which is aligned to RES priorities.
3. The eVectiveness of the RES for the East Midlands in delivering against its targets The RES provides an eVective framework to influence partners to deliver agreed priorities. Our latest analysis shows improvement against the majority of targets, suggesting significant success in delivering RES objectives. 3.1 An important function of the RES is to influence and shape the investment behaviours of regional partners to ensure that agreed priorities are delivered in a co-ordinated way. It also has an important role to play in articulating the needs of the East Midlands to Central Governmenty achieving alignment of the priorities and investment plans of partners we are able to deliver strategic added value and economies of scale. 3.2 To monitor the Strategy’s success we have devised the RES Performance Management Framework. This includes a range of measures and indicators which together provide an overall framework for monitoring our progress towards sustained and sustainable economic growth in the East Midlands. The following diagram shows the key elements of the Framework.
Figure 1 RES PERFORMANCE FRAMEWORK
Economic Wellbeing Productivity Employment Rate Strategic Priorities Indicators of Success Programmes, Projects and Activities Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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3.3 A key element of the framework is a range of “outcome” indicators. These directly measure the performance of the region in delivering RES objectives, and are organised by the RES’s 10 Strategic Priorities. Performance against these targets has been very positive, especially in relation to the employment and skills targets. Our latest assessment shows improvement against the majority of the Strategic Priority indicators—suggesting significant success in delivering RES objectives. A summary of the region’s performance against these targets is provided at Annex A.5 3.4 Whilst we are pleased with progress to date we are aware that the impact of the current economic downturn is yet to fully appear in the statistical evidence. This is largely as a result of time-lags in the production of oYcial statistics. We are also aware that the outcome of this may make it diYcult to achieve some of the targets set within the Strategy, especially around business and employment growth. 3.5 emda was the only RDA to set a measurable target in the first RES—to become a top 20 region in Europe by 2010—this concept both galvanised and energised partners. For the current RES, and to gauge progress towards the wider vision of A Flourishing Region we have developed, in conjunction with the New Economics Foundation, the groundbreaking “Regional Index of Sustainable Economic Wellbeing” (R- ISEW). Built around core traditional economic measures of success (such as GVA) the ISEW incorporates other measures which reflect the complex, sometimes positive and sometimes negative relationships between economic, social and environmental development. This includes factors such as the value of voluntary work, the costs of environmental degradation, and the costs of crime. It enables the region to measure its aspirations to ensure that economic growth and increased productivity are shared for the benefit of all, that disparities within the region are being addressed and that our ambitions for increasingly cohesive, inclusive and participative communities are being fulfilled. 3.6 Recent analysis has shown very positive performance against the Regional Index of Sustainable Economic Wellbeing. Since 2004 ISEW per capita in the East Midlands has risen above that of the English average. In 2004 we were 2% below the English average—in 2006 it had risen to 7% above the English average. The East Midlands has also closed the gap with the leading region, the South West. In 2006 the gap with the South West stood at only 10% per capita, down from 32% per capita in 1994 (being the first year that data is available for the ISEW).
4. The eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors and the impact on local employment, and how well emda is meeting needs in the challenging economic climate Our close engagement with the business community allows emda to respond rapidly, and oVer support specifically tailored to the changing needs of the region’s businesses. emda’s business sector intelligence also enables us to inform Central Government of the pressing needs of business so that funding can be made available to react quickly to changing economic circumstances. emda’s regeneration programme focuses on building the infrastructure to aid our long-term recovery and future growth. 4.1 The financial and economic downturn has aVected all businesses in the East Midlands region, particularly in the manufacturing and construction sectors, but with knock on eVects on retail and service sectors, as consumer expenditure in the region remains flat. Major job losses have been experienced in the region leading to increased unemployment. This has led to an increase in interest in business start-up activity. 4.2 emda has a key role in bringing together regional partners to respond to the challenges posed by the current economic climate. In our recent RDA Chair of Chairs role, we were central to Government thinking, acting as an “ideas factory”, designing innovative suggestions for improvements in the interventions required to assist businesses. A significant outcome of this enhanced role for RDAs saw, for the first time, the Pre-Budget Report 2008 contain a specific chapter devoted to the work of the RDAs. 4.3 The changes that emda has made over the last three years in terms of business support delivery have proven to be vital. We have made significant and wide-ranging changes—rationalising provision, simplifying the oVer to business and driving eYciencies that have reduced back oYce costs (from 30% to 23%) and increased the number of front line business advisers by 40%. 4.4 emda understands the importance of direct support to viable businesses though the current downturn and many interventions continue to be delivered to meet their challenging needs. The increase in front line advisers has enabled the Business Link service to ensure a swift deployment of Business Link Health Checks announced in October 2008. The diagnostic tools have been updated to support advisers in the identification of specific issues aVecting businesses. A new Business Turnaround enhancement was introduced to the Business Transformation Grant scheme in December 2008 enabling a business in diYculties to access specific aid to recruit a private sector Turnaround Specialist. 4.5 Access to finance is a key concern for emerging and growing businesses. From 2002, emda has progressively developed an “escalator of funds” comprising grants, loans and venture capital—to complement the private sector and to help regional businesses to start up and grow. Since 2002, £131 million of new finance has been made available to East Midlands businesses as a result of emda’s business investment
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activities, including £61 million directly from emda. This in turn has levered—or is forecast to lever— £475 million of additional investment and has supported 1,500 companies. The current downturn has exacerbated these needs and has required emda to refocus and enhance elements of the funding escalator. 4.6 In response to the decline in the availability of credit to businesses, emda has integrated new funding mechanisms into the escalator. One such example is the Transition Loan Fund (established in February 2009)—emda has, to date, committed £6m to the Fund, which makes loans of up to £250,000 to businesses that have been aVected by the reduction in the availability of bank finance. In addition, emda is seeking to support micro businesses in some of the region’s more disadvantaged areas through EnterpriseLoans East Midlands. This £5 million loan fund provides loans of up to £20,000 to viable small businesses that traditionally struggle to raise bank finance. 4.7 We are also delivering a package of events across the region providing free advice to businesses and enabling them to engage and express the issues facing them. We ran a series of “Survive and Thrive” events across the region in December 2008. These events provided master classes for businesses and were extremely well attended by 2,000 business people. We have invested in further support for businesses through the “Route to Market” programme, consisting of five days of workshop-based support in a number of specialist areas. Running alongside this, a series of workshops aimed at raising awareness of the benefits of resource eYciency. The “Survival of the Fittest” events started in January and will reach approximately 300–500 businesses. 4.8 In addition to the support directed at the business community as outlined above, emda has also worked with key partners across the region, including the Homes and Communities Agency and Government OYce for the East Midlands (GOEM), to identify a number of planned key regeneration schemes whose delivery can be brought forward to commence within the next twelve months. Focus has been given to schemes that will have major regeneration impact and will create and safeguard jobs, through bringing forward mixed-use developments in support of sustainable communities. Those schemes identified by emda include: — The redevelopment of Derby’s Cathedral Quarter; — Development of a new Business Quarter for Leicester adjacent to the city’s railway station; and — The re-development of Nottingham Railway station to create a new transport hub supporting regeneration of the surrounding area. 4.9 The short-term aim is to maximise economic impact, during a period where conditions remain depressed in the property and construction sector. The long-term aim of emda’s regeneration programme is to build the infrastructure required to aid our long-term recovery and future growth. 4.10 emda also works eVectively across local boundaries to react to economic shocks and, as a result, has developed with partners the Career Chain—Pan Regional Redeployment Project. This is a matching service for construction professionals facing redundancy. Using £1.58 million of emda funding, this project originally focused on the aerospace engineering sector and in December 2008 emda expanded the scheme to include the construction sector with an additional £400,000 worth of funding. 4.11 Evidence suggests that businesses are diverting limited budgets away from employee training and therefore from January 2009, SMEs have been able to access focused training programmes through the Train to Gain Programme, in subjects demanded by businesses including business improvement, team working and sales and marketing. Since April 2009, emda has been responsible for delivering the independent brokerage service to Train to Gain, under the Business Link brand.
5. The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of emda emda fully supports the move towards an integrated Regional Strategy and is working closely with the Local Authorities and the Regional Assembly to facilitate its development. It is imperative that the LDEDC Bill protects and enhances the benefits of the business-led RDA model in order for emda to deliver eVective economic growth. 5.1 emda welcomes the opportunity to play a full and proactive role in the implementation of the SNR as articulated in the Local Democracy, Economic Development and Construction Bill (LDEDC). We are fully supportive of the move towards an integrated Regional Strategy has historically, the separate timescales, overlapping processes and diVerent evidence bases of the RES and Regional Spatial Strategy (RSS) made it challenging to fully integrate economic and spatial policies. 5.2 Recent progress has been made in relation to the structures required to develop an integrated Regional Strategy. emda alongside the Shadow Local Authority Leaders’ Board (LALB) have worked closely to develop the regional Change Management Plan (CMP) that sets out the top level governance structures for SNR implementation, along with key principles in terms of groups and structures to support the Joint Strategy Board and wider stakeholder engagement. The CMP was submitted to GOEM in March 2009 and we are currently awaiting Central Government feedback. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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5.3 Although we welcome the policy direction articulated in the LDEDC Bill we remain concerned that the ongoing partial review of the RSS will impact on the region’s ability to develop a timely integrated Regional Strategy from April 2010. 5.4 Another important aspect of the LDEDC Bill is the future requirement on regional partners to undertake joint investment planning. This is very much welcomed and is vital in order to ensure that funding is aligned in support of regionally agreed priorities. It will therefore be crucial for emda, Local Authorities, Homes and Communities Agency, Highways Agency, Network Rail, Environment Agency and others to work even more closely together moving forward. 5.5 emda has a very strong track record of working successfully at the sub-regional level through Local Area Agreements, Local Authorities, Urban Regeneration Companies and emerging Economic Development Companies. In 2001, emda agreed to fund seven Sub-regional Strategic Partnerships (SSPs) to bring together businesses, the public sector, and the third sector to tackle the distinct needs of their local areas. Between 2003–04 and 2008–09 emda has allocated £255 million of Single Programme funds to the SSPs. In line with the spirit of the Sub-National Review, the emda Board agreed, in September 2007, to contract sub-regional activity directly with the nine Unitary and County authorities (9Cs) from 2009–10. In most parts of the region, this approach became operational on 1 April 2009 and this year sees approximately a third of our budget allocated in this way. 5.6 Going forward, emda believes that it is imperative that the LDEDC Bill protects and enhances the benefits of the business-led RDA model when addressing sustainable economic growth. Business leadership of RDAs, clear decision making based on our capacity and expertise in key areas, and our financial flexibility have been critical factors in the progress we have made to date, in developing regional economies as well as responding eVectively to the economic downturn—we must continue to capitalise on this strength.
6. The role of other Government agencies such as the Government OYce for the East Midlands, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES emda has strong stakeholder buy-in for the aims, ambitions, priorities and actions within the RES.
emda has a good reputation for eVective partnership working.
emda has been instrumental at engaging with organisations and bringing them together where there has been clear need to remove barriers and encourage joint working.
6.1 As noted previously, emda’s 2009–10 budget of £157 million is comparatively modest relative to other public spending in the region and the size of our region’s economy. To have a measurable impact on our economy it is vital that we draw together partner support behind agreed strategic and delivery priorities.
6.2 Regional stakeholders, partners, and the general public have been involved in key stages of the RES development, from identification of key themes and strategic priorities to testing of the priority actions. This has allowed for strong stakeholder buy-in for the aims, ambitions, priorities and actions within the RES and for emda to truly develop a strategy for the region.
6.3 emda has a good reputation for eVective partnership working. We have a strong relationship with GOEM and emda was instrumental, in partnership with GOEM, in facilitating the establishment of the Regional Co-ordination Forum Steering Group (RCFSG) in the East Midlands. The RCFSG, included key public sector funding organisations (Public Health, Learning and Skills Council, Job Centre Plus, Local Government, Regional Assembly) and aimed to provide an eVective performance management framework for the delivery, reporting and monitoring of the RES. The group was in operation from 2006 to 2008 and has been superseded by a couple of new regional-level groupings. Firstly, the Regional Economic Cabinet, which is chaired by the Minister for the East Midlands, Phil Hope MP, and meets on a regular basis in order to ensure that all parties in the region are doing as much as possible to support the region’s economy in the economic downturn. Secondly, an SNR Implementation Group (comprising emda, GOEM, Local Authorities and the Regional Assembly), which is driving forward the implementation of the SNR. 6.4 emda has used both public sector and private sector partnerships to initiate development in the region. An example of this approach is Blueprint, which is an innovative public-private partnership formed by emda, English Partnerships and Igloo Regeneration Fund in 2005. This vehicle was the first of its kind in the UK and has delivered a number of schemes in areas of market failure—where the private sector alone is unwilling to invest. Recent schemes include Nottingham Science Park and the Digital Media Centre in Leicester. To date, Blueprint has levered in £31 million private sector investment to support its programme of physical infrastructure development and has won numerous awards. 6.5 emda has also been instrumental in bringing organisations together where there has been clear need to remove barriers and encourage eVective partnership working. For example, we facilitate collaboration between the region’s universities, to enable the region to oVer a desirable knowledge base to attract students Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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and businesses. A good example of this approach is BioCity, where we brought together the University of Nottingham and Nottingham Trent University and removed the barriers to progress this important initiative (with funding, guidance and strategic support). BioCity provides incubation and grow on space for SMEs in the bio-pharmaceutical and life science sector. To date, 57 knowledge intensive businesses have been created and it has levered in £27 million private sector investment. This scheme is extremely successful and has attracted national and international recognition.
7. The way emda’s resources are divided between rural and urban parts of the East Midlands, and whether the division is appropriate emda seeks to continue to embed the consistent adoption of the “think rural” approach across all directorates and teams and at all levels through mainstreaming activities. Although Defra funding accounts for only 3% of emda’s Single Pot, almost 38% of emda’s outputs help support rural communities and businesses. 7.1 Firstly, it is important to reinforce the issues set out in section 1—the challenges and opportunities (and therefore the priorities) for the region are set out in the RES and it is this document that guides emda’s Corporate Plan and our investment approach. We do not seek to spread our funding equally across all parts of the region, but seek to prioritise activities that will deliver greatest impact (through a focus on the region’s key sectors, for example) or tackle specific geographical needs and challenges. 7.2 The East Midlands is, however, England’s third most rural region, with over 30% of our population living in rural areas—almost 10 percentage points higher than the English average. We are fully committed to our obligation to consider the needs of rural communities and businesses. In 2003 emda signed up to the East Midlands Rural Charter (at our instigation) as a demonstration of our strong commitment to “thinking rural”. 7.3 In 2005–06 emda’s Board took the decision to mainstream delivery of rural priorities, in response to national Defra Guidance and support from rural partners. By mainstreaming our rural activities, all Single Pot investments are considered in relation to their impact on rural communities and businesses. Mainstreaming makes it impossible to disaggregate our investment by rural or urban classification however, we do monitor the impact of our outputs to ensure that we deliver interventions to the benefit of the whole region. The disaggregated outputs are calculated by projects being assigned to specific districts as their “area of impact”. 7.4 emda’s Rural Team works across the organisation in the development of our policies, programmes and projects in order to ensure that rural issues are appropriately considered at the early stages of project and policy development. This is a key part of our “rural proofing” responsibility, which also extends to the policies and plans of other agencies delivering in related areas or on behalf of emda. 7.5 Our approach to mainstreaming has seen a positive growth in our support for rural areas. In 2005–06 over 36% of emda’s outputs supported communities and businesses in rural areas. This has increased to almost 38% in 2007–08. This should also be viewed in the context of Defra’s contribution to emda’s budget, which is approximately £4.7 million, around 3% of the total. 7.6 In addition to our direct investment, we are also responsible for delivering the socio-economic elements of the Rural Development Programme for England (RDPE), amounting to approximately £60 million of EU and Defra funding, between 2007–13. The funding will support activity aimed at improving competitiveness, collaboration and diversification in the agricultural and land-based business sectors and their associated supply chains, as well as enhancing opportunity and quality of life in rural areas. Skills development, resource eYciency, innovation and renewable energy will be features of the programme. We will also share best practice and learning with the emerging Coastal Areas Network led by South East England Development Agency (SEEDA). 7.7 emda also seeks to influence the work of other partners and stakeholders in the region as a core partner of EMRAF (East Midlands Rural AVairs Forum). One of emda’s Board Members (who takes a lead on rural issues) currently also serves as EMRAF’s Vice Chair. emda is charged with leading and reporting back on the implementation of three of the seven priorities within the East Midlands Rural Action Plan, which was developed under the auspices of EMRAF. Examples of work in support of Rural Action Plan priorities include: — Ensuring that the summer 2007 flood relief grant scheme for small businesses was fully extended to rural areas, including to land-based businesses; — Supplementing the regional business support service to fully encompass land-based business sectors. This will support the delivery of RDPE (Rural Development Programme for England 2007–13) and help develop the capacity of Business Link to engage fully with land-based sectors; — Ensuring that Business Link delivery is fully engaged with the Post OYce Network Change Programme to help mitigate the impacts and assist business adaptation; and — Developing a rural evidence base document to underpin development of the Rural Action Plan. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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7.8 In addition, emda funding is used to support a wide range of projects focused on rural issues, including Live and Work Rural, which is a partnership with the Peak District National Park Authority and helps businesses and communities to maximise the opportunities of the Peak District’s natural environment. emda is providing £520,000 over three years to this project. Funding of £1.7 million has also been provided to the Retford Enterprise Campus project, which will create 1,550 sq metres of new oYce space and workspace for incubation and early growth businesses. A focus will be given to creative industries, rural diversification and target sectors such as food and drink.
8. How well emda is performing on sustainability Contributing to sustainable development is one of emda’s five statutory functions and is fully cascaded from the RES down through our Corporate Plan and project development and appraisal systems. To maximise our organisational contribution to delivering sustainable development emda has developed an Environmental Management System (EMS). Any organisation seeking funding from emda must also demonstrate how they will deliver sustainable development. 8.1 Contributing to sustainable development is one of emda’s five statutory functions as embodied in the RDA Act and reflected in the collective mission of RDAs: “to transform England’s regions through sustainable economic development”. We work within the context of the UK Government’s definition of sustainable development which is concerned with: “meeting the needs of the present without compromising the ability of future generations to meet their own needs”. On a day to day basis we bring this concept to life by seeking to support developments which balance economic, social and environmental considerations leading to a flourishing East Midlands characterised by sustainable economic wellbeing. 8.2 The UK Sustainable Development Strategy (Defra, 2005) establishes the context in which sustainable development is delivered in the East Midlands. Its principles are fully embedded within the current RES and further articulated in our measurement of the RES vision using the Regional Index of Sustainable Economic Wellbeing (R-ISEW). Furthermore, five of the 10 Strategic Priorities demonstrate how our regional economic ambition embeds national sustainability priorities. The RES was also subjected to a detailed Sustainability/Strategic Environmental Assessment and an Equality Impact Assessment to ensure that the RES reflects the needs of all equality groups and contributes to equality of opportunity for all. 8.3 The national Sustainable Development (SD) principles cascade from the RES down through our Corporate Plan and project development and appraisal systems. To maximise our contribution to delivering SD, emda has developed an Environmental Management System (EMS). This seeks to reduce our environmental impact whilst improving our corporate eYciency. It includes a number of environmental improvement targets to be achieved by 2010–11: — 5% reduction in the carbon emissions arising from our oYces; — 20% reduction in business miles; and — 10% reduction in waste from our oYce activities. 8.4 Any organisation seeking funding from emda must also demonstrate how they will deliver SD. A number of requirements have been put in place to ensure projects maximise their contribution to SD. All projects must: — Demonstrate how they have a positive impact on the opportunities available to diVerent equalities groups; — Comply with existing environmental legislation and demonstrate how they will have a positive impact on the environment or, where an impact might be negative, how this will be mitigated; — Contribute to emda’s Energy White Paper obligations to reduce carbon emissions; and — Meet our expectations in relation to sustainable design and management (as set out in emda’s Sustainable Physical Development Guide). 8.5 As well as discharging our SD responsibilities in developing the RES, emda has developed a number of additional subsidiary strategies and action plans which deliver against SD—key examples include emda’s Economic Inclusion Development Plan, the Business Support and Regional Innovation Strategies and our Statutory Equality Schemes focused on race, gender and disability equality. We have also worked with regional partners in the development of other regional strategies, policies and action plans to ensure that economic and SD principles are fully embedded. Key examples include: Regional Energy Strategy Regional Waste Strategy Regional Spatial Strategy Regional Environment Strategy Climate Change Programme for Action Rural Action Plan Regional Skills Frameworks/Action Plans Regional Biodiversity Strategy Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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Exemplar Sustainable Development Projects 8.6 Since our establishment we have invested in numerous exemplar projects delivering the sustainable development agenda. Examples include: — Development of a new sustainable eco-visitor centre at the Attenborough Nature Reserve, providing new facilities to support the financial sustainability of the nature reserve; — Genesis Social Enterprise Centre in Alfreton, a mixed development of managed work space, educational and community facilities designed to enhance local service delivery and create new economic opportunities for local people; — Supplier Diversity East Midlands, an innovative business support programme working with large multi-national household brands (including PepsiCo, ExxonMobil, Eversheds, KPMG, and IBM) to open up their supply chains to the region’s black and minority ethnic business community; and — National Energy Technologies Institute hosted at Holywell Park, Loughborough University, a partnership between Government and the private sector to invest up to £1 billion in the development and deployment of new energy technologies to support the UK’s emergence as a world leading low carbon economy.
Conclusion emda’s business leadership and insight is crucial—we are on the economic frontline and our priorities and investments are informed by business views and needs. Through our economic leadership we provide a rapid response (often within hours or days) and help businesses and their supply chains refocus and survive. We can be brave and take tough decisions and risks—all with the aim of getting a bigger bang for our buck. Issues do not stop and start at administrative boundaries—we can remove barriers and instigate eVective partnership working. And we can bring our capacity and expertise to the table in terms of large, complex projects. We undertake unique, ground-breaking activities—whether that’s in our research programme, our regeneration activities or our support to business. Our impact is significant—generating between £9 and £15 of economic output (or GVA) for the region’s economy for every £1 we invest.
Annex A PROGRESS AGAINST RES TARGETS
Key Indicators Measure Target (by 2009) Baseline Update Employment, Percentage of To increase the EM 25.0% (2003) EM 28.5% (2007) Learning & Skills economically active proportion of UK 28.6% (2003) UK 32.4% (2007) qualified to Level 4 or economically active higher adults qualified to a Level 4 or above to 30% Employment in To increase the K1 K1 K1 high knowledge proportion of EM: 24.5% EM: 38.9%; intensive sectors and employment in UK 32.1% UK: 41.2% K4 low knowledge K1 sectors to within (2003 revised) (2006) intensive sectors 4 percentage points of the UK average; and K4 K4 to reduce the share of EM: 38.4%; EM: 22.6% employment in UK: 30.9% UK 21.7% K4 sectors to level (2003 revised) (2006) with the UK average Enterprise & Business registration Increase the rate of EM: 36 EM: 37 Business Support rate (per VAT registrations to UK: 38 UK: 42 10,000 population) 40 per (2004, revised) (2007) 10,000 population head and be at least level with the UK average Proportion of Maintain a three year EM: 70.7% EM: 72.2% businesses surviving survival rate above the UK: 69.7% UK: 71.3% three years UK average and be at (2001, revised) (2002) least 71% Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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Key Indicators Measure Target (by 2009) Baseline Update Innovation Gross Domestic To increase gross EM: 2.1% EM: 1.9% Expenditure on R&D expenditure on R&D UK: 1.9% UK: 1.8% to 2.5% of GVA (2002, revised) (2005) % of business turnover To increase the EM: 4% EM: 5% attributable to new & proportion of business UK: 9% UK: 11% improved products turnover attributable (1998-2000) (2002-2004) to new and improved products to 6% Transport & % of workforce To increase the EM: 20.5% EM: 22.3% Logistics travelling to work by proportion of the East UK: 28% UK: 28.9% public transport, Midlands workforce (2004) (2006) walking or cycling travelling to work by public transport, walking or cycling to 23% Environmental Proportion of river To maintain the Biological Biological Protection distance classified as current proportion of quality: 61% quality: 66% “good” chemical and East Midlands river “good” biological length (% of total km) Chemical quality: Chemical quality: quality of “good” chemical 55% 63% and “good” biological (2004) (2006) quality Land & Average annual To maintain an annual East Midlands: East Midlands: Development growth over a five year average growth rate 1.7% 1.1% period in employment over a five year period England: 1.5% England: 0.4% floorspace of 1.5% in (1999-2004, (2002–07) employment revised) floorspace Cohesive Participation in formal Increase the East Midlands: East Midlands: Communities voluntary activities in proportion of the East 44% 47% the last 12 months Midlands population South West: 51% South East: 48% engaged in formal (2003) (2005) volunteering to within 3 percentage points of the leading region Economic Economic activity rate Maintain rural rates Urban: 77.6% Urban: 80.7% Renewal (% working age) in above 80% and Rural: 81.1% Rural: 81.4% urban and rural areas increase urban activity (2004) (2007) rates to 78% Economic Proportion of the To halve the gap East Midlands: East Midlands: Inclusion population of working between the East 13.4% 12.9% age claiming key Midlands and the South East: 9.7% South East 9.6% benefits South East from (May 2004, (Nov 2007) 3.6 percentage points revised) to 1.8 percentage points Economic activity Increase economic 71.7% 73.5% rates in the bottom activity rates in the (2004, revised) (2007) decile of East bottom decile of Midlands LADs/UAs LADs/UAs to 75%
Memorandum from Lincolnshire Enterprise (EM 08) Summary: — Lincolnshire Enterprise is an independent, business led partnership comprising the private sector; local authorities; public bodies; and voluntary and community groups across Lincolnshire. It is a key vehicle through which Lincolnshire County Council engages and consults with all sectors to champion economic development and regeneration in the county. Lincolnshire Enterprises also advises Lincolnshire County Council on the economic regeneration of Lincolnshire, particularly in connection with the investment of government’s Single Program funding in the county. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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Lincolnshire Enterprise would like to submit evidence in respect of the way emda’s resources are divided between rural and urban parts of the East Midlands and whether the division is appropriate. — We believe that in producing the 2006 Regional Economic Strategy, emda took account of the diverse nature of the East Midlands region. — We welcomed emda’s decision not to continue with separate Rural and Urban strands when the 2006 RES was published, and support the principle of “rural proofing” to ensure that policies and interventions meet the needs of the region’s rural communities. — However, regionally funded activities (particularly Business Support) continue to be developed and delivered as “generic” activities which are sometimes “rural proofed” rather than designed with the needs of rural communities in mind. — We believe there opportunities to increase the level of funding delegated to sub regional level—this will ensure that activities are developed to meet the specific needs of rural and urban communities—and we also believe that the allocation of funding between sub regions can be improved to ensure the specific needs of rural communities are met.
Division of emda funding between urban and rural areas 1. The East Midlands is predominately a rural region, with a number of principal urban centres, and the RES6 notes that it is England’s third most rural region with 29.5% of the population living in rural areas (compared with England’s average of 19.4%). Despite this, the RES describes the main urban areas (Nottingham, Leicester, Derby and Northampton) as being central to driving the region’s economy, although only 26.6% of the region’s population lives in large urban areas.7 The RES notes the large number of market towns in the region (23.7% of the region’s population lives in market towns), and the interdependence between the region’s urban and rural areas. 2. The East Midlands is also diverse, and there are significant variations in the degree of rurality between the sub regions formed when emda created Sub-Regional Partnerships (SSPs). At one extreme Greater Nottingham is only 9.7% rural, whereas at the other extreme Welland area (Rutland and surrounding Districts) is 58% rural. Lincolnshire is 50.4% rural (other sub regions are in a range of x20%–30%) 3. The key economic development issues and policy interventions delivered by emda—to create and support businesses; to safeguard and create jobs; to improve skills in the workplace; and for physical regeneration—are shared by rural and urban communities and it is therefore important to ensure that these interventions are equally available to both urban and rural areas. 4. The East Midlands Assembly rural scrutiny report on emda8 highlights the importance of ensuring that the needs of rural communities are met by mainstreaming rural activity as part of wider interventions, but at the same time notes that additional consideration needs to be given to ensure that there is equality of access to services, and that additional costs are incurred in providing rural services: the report highlights the increased costs of providing workspace infrastructure. 5. The abandoning in the 2006 Flourishing Region RES of the separate Rural and Urban strands in the 2003 Destination 2010 RES was therefore welcomed as it provided the opportunity to develop policy and interventions to meet the needs of all the regions businesses and communities irrespective of whether they have an urban or rural base. 6. The intent to ensure that all activities were “rural proofed” was also welcomed as a means to ensure that the specific needs of rural communities—particularly the challenge of providing accessible services— were built into interventions. 7. The Sub-National Review encourages funding decisions to be made close as possible to the point of delivery, so emda’s continuing policy of delegating funding to sub-regional partners (the SSPs until April 2009, and since then the upper tier local authorities), is welcomed, as among other objectives, it enables sub regional partners to ensure that rural and urban communities alike are well served by interventions. We would encourage greater delegation of funding to sub-regional level to increase the ability to meet local needs and propose that emda only retains activities at regional level where there are economy of scale or policy imperatives: Business Support would be one such example. 8. In practice, there remain diVerences between urban and rural communities in their ability to access the services currently provided at regional level by emda. This is well illustrated by referring to Business Support. Anecdotal evidence from rural businesses in Lincolnshire suggests that access to business support via Business Link remains sub-optimal: a recent example was provided by the “Survive and Thrive” events held around the region to help businesses during the recession. Only one event was planned, in Lincoln, which at best reached 20% of the County’s population (based on the City’s estimated daytime population—13% of Lincolnshire’s residents live in Lincoln). By contrast, some 75% of Nottinghamshire’s population lives within easy reach of Nottingham.9 (To address the issue, it was necessary for Lincolnshire Enterprise to
6 A Flourishing Region: the 2006 Regional Economic Strategy for the East Midlands 7 Data on rurality is taken from 2001 National Statistics Census data using government’s definition of Rural. 8 Flourishing Rural Communities? [Published November 2007] 9 Figures sourced from National Statistics Census 2001 profiles Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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sponsor and fund additional events in Lincolnshire). We would encourage emda to look at ways in which local partners can influence regionally delivered programmes to ensure they are appropriate for all parts of the region. 9. emda retains a small team charged with championing the “rural proofing” of policy and interventions as well as delivering specific interventions targeted at rural areas. Whilst we have concerns over the eVectiveness of “rural proofing” in some cases, the rural team has been helpful in assisting Lincolnshire Enterprise and other partners in accessing RDPE and other funds—for example in supporting a “Sea Change” programme bid for the Chapel St Leonards Boathouse, participating in workshop activity to develop Lincolnshire’s market towns and involvement in mapping out a future for coastal communities in the Mablethorpe area.
Is the division of funding appropriate? 10. In 2008–09 emda allocated 28% of its programme funding for sub-regional spend, using a formula which took account of population and deprivation measures in the sub-region, but which did not account for rurality.10 11. We believe that, given the added costs of addressing deprivation in rural areas as well as the incremental costs of delivering programmes to drive GDP in rural areas, future sub regional allocation methodology should take account of the proportion of the population living in rural areas. 12. However we were pleased with the way in which emda allocated the 2007–13 ERDF Priority Axis 2 funding in the East Midlands, which provided a good level of support to deprived communities in rural areas, such as East Lindsey. 13. The remainder of the Single Programme funding was allocated to regional programmes including a 30% allocation to business support and innovation which are delivered through region wide activity which currently is largely uniform in nature and takes little account of sub-regional variations, including the degree of rurality. Although we accept the benefits for much of this activity to remain regionally delivered, we have already indicated that it would benefit from greater local input to increase its salience to rural communities. 14. We believe that there is also a strong argument for a higher proportion of the balance of emda’s spend (the major portion of which is invested in land and property) to be determined at sub-regional level, again to ensure that the diVering needs of urban and rural communities are met.
Memorandum from Nottingham County Cricket Club (EM 09) 1. The Purpose of this Submission is to: — Apprise Committee of outstanding partnership work involving emda and Local Authorities in conjunction with the Private Sector to deliver the aims of the Regional Economic Strategy (RES). — Identify the Trent Bridge Ground Redevelopment project as an example of such partnership working. — Highlight aspects of the RES impacted by the aforementioned project, namely: — Cohesive Communities. — Enterprise and Business Support. — Ensuring sustainability (achieving lasting success).
2. An Outline of the Project — In 2006 Nottinghamshire County Cricket Club drew up plans to redevelop Trent Bridge as part of an £8.2 million project. — To retain Test Match status successful delivery of the project was essential and a funding package was drawn up led by emda with a grant of £2.5 million and supported by Nottingham City Council, Nottinghamshire County Council and RushcliVe Borough Council (loans on preferential terms at £1.23 million each). The Club contributed £2 million from its own resources. — The project included: — Demolition of the old West Wing and Parr stands and replacement with a brand new stand. — Installation of permanent floodlights. — Installation of a new permanent replay screen as part of a new oYce administration block. — Increase in the ground capacity to over 17,000 (from 15,358).
10 On a per head of population basis, there is a weak correlation showing slightly lower levels of sub-regional investment as the degree of rurality in the sub region increases [based on 2007–08 funding to SSPs]. Whilst the correlation is not marked, it underlines the need to consider rural needs proactively to ensure that rural communities are not disadvantaged by default. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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— The redevelopment materially enhanced the future of International cricket at Trent Bridge and, without it, there would in all likelihood have been no Test Cricket beyond 2009 given the very dilapidated state of the West Wing and Parr stands.
3. How the Project has Delivered Aims of the Regional Economic Strategy (RES) (a) Enterprise and Business Support—ICC World Twenty20 — The project was required, principally, to maintain and enhance the significant impact that Major matches at Trent Bridge have on the local economy. — This has been demonstrated already in that the Club has won the right to stage the ICC World Twenty20 in June 2009. — The East Midland is the only region outside London to be hosting the tournament and it is very clear that without the redevelopment there would have been no chance of this global event coming to the East Midlands. — The benefits to the region will be significant. An estimated worldwide TV audience of 500 million will watch Semi-Finals Day at Trent Bridge on 18 June and work is underway to capture the significant economic impact of the tournament. Nine days of extra International cricket will be staged at Trent Bridge between 1 June and 18 June and briefings have started for local businesses to ensure that they capitalise on the incremental opportunities aVorded by the tournament. — Quite aside from ICC World Twenty20, the economic benefit to the region of Major matches at Trent Bridge is estimated on a conservative basis in excess of £20 million over the course of the next ten years. — With specific regard to the project, the vast majority of contracts were locally procured delivering significant benefits to local businesses. The main contractor was Clegg Construction and another local company, Abacus Lighting, developed and erected the floodlights. On the back of the success of the Trent Bridge project, Abacus have subsequently won contracts to install permanent floodlights at Lord’s and The Oval.
(b) Sustainable Development — As well as providing an infrastructure legacy at Trent Bridge to preserve International Match status, the project will provide legacies in two other key areas. — Firstly, the venue will continue to act as the hub to facilitate participation in Sport and Community development (see below). — Secondly, as a result of the redevelopment, Trent Bridge has been accredited as a 2012 pre-Olympic Games Training Camp venue and the Club is in discussion with Archery GB to host International archery events in 2010 and 2011.
(c) Cohesive Communities — Using Trent Bridge as the hub to facilitate the playing and watching of sport by people of all ages and backgrounds across the region, the Club makes a significant contribution to promoting social capital, collaborating to encourage participation and developing cohesive communities. — The important point here is that such a contribution is enhanced materially by Trent Bridge’s International status. — As a direct result of emda investment, the Club has enhanced its contribution to local communities in several areas, including: — Involvement in an exciting “Say Yes” campaign targeting hard to reach and disadvantaged youngsters in the City of Nottingham. The venue was used as the hub for this wide-ranging programme. — A Positive Futures programme which has been set up in partnership with RushcliVe Borough Council over a three-year period in Cotgrave. As with “Say Yes” the youngsters targeted are “at risk” and the programme is considered to be groundbreaking for a Cricket Club. — The setting up of two Playing4Success Study Support Centres in partnership with Nottinghamshire County Council.
4. Partnership Excellence — In many respects the most rewarding aspect of the whole project has been the partnership working which developed during the project and which has been taken forward to further achieve the aims and objectives of the RES in such an innovative way. — A funding partnership involving the Club and four Public Sector partners had not been attempted locally on this scale and the speed with which it was agreed said much for the boldness of Politicians, OYcers and Non-Executive Directors. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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— Yet, the funding element was just the start of a deep partnership which has developed. — As part of our agreements with the Local Authorities, the Club committed to a series of Community Milestones over a five-year period. As part of the agreement with emda the Club also agreed to increase the number of staV in our Cricket Development department. The aforementioned projects (Say Yes, Positive Futures and Playing4Success) are being managed in addition to day-to-day Community activities. — Additionally, emda are also involved in a pioneering Sport4Nottingham initiative being led by the Club and involving other Professional sporting clubs locally, including Nottingham Forest, Nottingham Rugby and the National Ice Centre. The reporting line is into Local Strategic Partnership One Nottingham (previously chaired by Graham Allen MP) and aims to deliver increased participation in sport for disadvantaged youngsters and a 10-year major sporting event strategy for the City and County. — Furthermore, with specific regard to ICC World Twenty20 and through more innovative partnership work, emda and Local Authorities have come together under the leadership of the Club to leave a lasting legacy in several key areas, namely linking the tournament to educational attainment, increasing participation, linking in with other cultural events and encouraging tourists to the region. Three separate workstreams have been formed and Tracey Croft from emda has been very actively involved. — The benefits of ICC World Twenty20 would have been significant in any event, but the partnership approach will mean that they will be maximised.
5. Partnership Recognition — Awards within business are not the panacea but the partnership between emda, Local Authorities and the Club has been recognised in two high profile award ceremonies. — Last month at the Local Government Chronicle (LGC) Award ceremony in London, our partnership won the award for “outstanding public/private sector partnership work.” — Additionally, the same group of partners has been nominated as a finalist in the MJ Local Government Achievement Awards, the ceremony for which takes place on 25 June.
6. Summary/Way Forward — What commenced as a group of Public/Private Sector partners coming together to finance the ground redevelopment at Trent Bridge, has developed into a groundbreaking partnership which is not only contributing meaningfully to the RES but is also working in ways we had not imagined. — Had emda not provided grant funding for the project the other partners would not have assisted and the ICC World Twenty20 would not possibly have come to Trent Bridge. — As with every strong partnership, the ripple eVect is being felt far and wide. emda deserve real credit for this and, having developed this partnership and achieved proactive third party recognition we will all ensure it goes from strength-to-strength in the future.
Memorandum from BPR Medical Ltd (EM 10) 1. Background BPR Medical Ltd is a business specialising in the design and manufacture of medical devices, in particular products that control the delivery of medical gases for therapeutic use in acute hospital and homecare applications. The company has a current turnover of circa £2 million and employs 34 people, split evenly between high precision manufacturing and professional roles such as design, engineering, sales, management and administration. The company has growth potential and expects to exceed £20 million turnover and 80! employees within the next five years following a series of investments in new product development and a global distribution network.
2. Summary BPR Medical is a company with the potential to be a global leader in its field and is working hard to achieve this through superior product design and innovation. The leadership at emda clearly recognised this potential in the business early and has provided support at a number of diVerent levels over a sustained period. This has enabled the business to take bold decisions on taking on new product development projects that might otherwise have been delayed or indeed indefinitely postponed if a more conservative approach had been adopted. As a result the company has doubled its turnover, but more importantly it has created the foundations for a move from a small to a medium enterprise. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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In particular, the evidence provided below is based upon the following support mechanisms provided or funded by emda: — Research & Development Grants (£158k). — SFi Capital Grant for Expansion (£70k). — Funding of the Medilink East Midlands trade association and i-Net. There are two other important points that BPR would like to submit. Firstly, emda has provided some clarity to a business support sector that, from a company perspective, was very muddled and seemed constantly in flux. Regional Development Agencies are clearly here to stay and that provides business with one of the important ingredients for success—stability. Secondly, the quality of the management and staV and emda is very high and certainly at or above the standard business expects of itself. This makes meetings and discussions very productive, eVectively because one is dealing with a peer that can actually contribute to the project. Obvious, perhaps, but it has not always been the case when one looks back to pre-emda times. emda’s continued support is one of the elements that provides BPR Medical with the confidence to press on with bold initiatives to grow the business.
3. Evidence of Support Research & Development Grant (£158,702—Jan 07) emda provided a grant of 40% towards the research and development of a new generation of oxygen cylinder valves. This project was successfully completed in January 2009 and BPR is currently in the final stages of negotiations for a long term supply agreement with the world’s largest medical gas manufacturer, Linde AG, potentially worth £30 million over the next five years. Working with emda staV to complete the application was relatively straightforward and follow up has been thorough. Clearly, when large sums such as this are being distributed, it is understood that an audit trail needs to be in place and reasonable scrutiny needs to be applied, but this was achieved without being unnecessarily bureaucratic or intrusive. This grant is also referred to as a Smart award and emda has worked very hard to raise the profile of this award and therefore the credibility of those companies that have received it. emda run regular Smart Club meeting, which is an excellent opportunity to network with other likeminded individuals whose outlook is similarly directed towards innovation.
Selected Finance for Investment Grant (£70k—Dec 2004) emda provided a grant of £70,000 towards £430,000 of capital expenditure expended by the business on putting in the manufacturing tooling for new product designs developed by the business. These new products have doubled the size of the business from a turnover of circa £1 million in FY06 to £2 million in FY09 and planned to exceed £4 million by FY10. Once again, the process was relatively straightforward, although we did engage an advisor from Business Link to assist with the compilation and presentation of the forecasted accounts and expenditure.
Medilink (i-Net) Medilink is a very influential trade association that has clearly been able to provide a much more comprehensive service to its members as a result of the continuing support provided by emda. BPR takes the view that Medilink’s strength will always be in its understanding of the abilities, capabilities and expertise of its member companies/organisations and find ways to make connections that lead to commercial success. The i-Net is a welcome extension and expansion of this, one that has already led to a number of strategically important meetings and discussions for BPR Medical alone. Medilink and the i-Net concept are of real strategic importance and will create the conditions for greater collaboration between the NHS, universities and business. Historically, collaborating with the NHS or local Universities has been very diYcult, just understanding how to connect with the right person or department can be a major project in and of itself. However, a number of web sites are now available to assist with this and there is a clear pathway now for both the NHS through the Innovation Hub and into universities throughout the region. BPR now has active projects working in the background following links into university departments as a result of improved visibility and although this may or may not lead to a profitable product, it certainly sets a precedent for future collaboration. BPR Medical was proud to receive the 2009 Medilink Innovation Award and regularly attends networking events. BPR also participated in the medical device strategic review plan for the region. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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Memorandum from the Peak District National Park Authority (EM 11) Context 1. The East Midlands is a highly rural region and it also has a very diverse range of rural issues to face. The Peak District is a particular rural area that faces the following particular circumstances: — It is an economically under-performing area with upland farming and other primary industries that have been of historically low productivity. — The main economic activity is production, with many small manufacturing and food processing businesses. — Farming is primarily livestock rearing and high quality breeding stock is provided to the lowlands for finishing. — Tourism is characterised by small businesses and there is much scope to further develop this. — Market towns are important service centres. — Much of the Peak District falls within the Peak District National Park, the only such designation in the region and as such reflecting an exceptional quality environment. 2. The economy of the National Park can be summarised as follows: — 38,000 residents live in the National Park with a slight growth since 2001. — 14,000 people are employed, 18% in production and 15.4% in hospitality. — Skills levels are higher than regional averages, with an older workforce. — There are 2,800 businesses, with many (75%) employing less than five people. — A very entrepreneurial character, 45 new firms/10,000 population being established compared to 35/10,000 elsewhere in the East Midlands. — The area has experienced low levels of growth 1996–2006 as this rural area has a low productivity. 3. A study recently completed by emda gives a very good evidence base on which future policies can be based. It surveyed 300 businesses and found: — 58% of businesses felt the landscape has a positive impact. — 89% of catering and 69% retail businesses positive. — 64% of businesses directly or indirectly depend on environment. — 40% of businesses seriously aVected if landscape deteriorates. — 48% said no negative impacts from locating in the National Park. — 33% report planning or infrastructure development is a constraint. — Contribution to GVA of £298 million in the East Midlands on a turnover of £900 million. — Visitor spend in the East Midlands as a result of the National Park (NP) is £224 million, of which £115 million outside NP. — 1,120 (40%) of businesses lead to £408 million to regional turnover and £155 million to regional GVA, supporting 7,000 jobs.
Current Impacts of the Recession 4. Claimant unemployment within the Peak District has traditionally been below the national average. At the end of 2008 it was at 1% compared to 3% in England. However, over the last year the rate at which claimant unemployment has increased has been higher within the National Park (by 67%) than England (43%). Within the National Park there are pockets of unemployment with Tideswell Ward showing the highest level in 2008 (2%) and also showing the largest percentage change since 2007 (233%). Other Wards that have seen a high percentage change during 2008 include Hathersage and Eyam (160%), Bradwell (125%), Hartington and Taddington (100%) and Lathkill and Bradford (100%). If the current trend continues (and given the state of the economy this is not impossible) then unemployment in Tideswell Ward could be around 6.7% by December 2009, higher than the national average of around 4.9%. Other Wards will be close to it, particularly Hathersage and Eyam (3.4%) and Hartington and Taddington (3.2%). Furthermore, given the 140 redundancies at the cheese factory in Hartington it is likely that the figure for Hartington and Taddington ward will be higher. These are likely to become rural unemployment hotspots. 5. The latest unemployment figures for February 2009 for Derbyshire indicate a 15.1% increase in Jobseekers Allowance claimants compared to January 2009 (from 14,646 to 16,863). The same figure for Derby City indicates a 16.6% increase in Job Seekers Allowance claimants (from 5,995 to 6,988). The county figures represent an increase of 101.6% year on year. This is the eighth successive month in which the annual change in the numbers of people out of work has shown an increase. Unemployment rates are now (February 2009) 4.7% in Derby City, 3.6% in Derbyshire, compared to 3.8% in the East Midlands and 3.9% in the United Kingdom. Unemployment has increased in all locations when you compare February 2008 data with February 2009 data. High Peak, Derbyshire Dales and StaVordshire Moorlands all have a lower number of Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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claimants in February 2008 compared to the East Midlands and England. However, the change in claimants between February 2008 and 2009 is higher in the High Peak and StaVordshire Moorland areas compared to the East Midlands and England, suggesting that the recession is having a greater impact in those areas. 6. DiVerent sectors have compared diVerently in the recession: — The manufacturing sector has been hit hard as elsewhere in the country, although some business have continued to invest and prosper (such as DSF at Newhaven) whilst others such as Long Clawson’s Stilton’s factory at Hartington has closed (with the loss of 140 jobs and other businesses have reported redundancies. — The hospitality sector has fared well and has considerable prospects for developing further. — Farming had a diYcult start to 2008 with high fuel and grain prices, but 2009 has eased with lower fuel and feed prices, good prices at Bakewell Market and favourable subsidy regimes. — Retail has suVered reduced consumer spend, but the rate of diYculty is less than in comparable parts of the region, perhaps reflecting the strong retail businesses linked to day visitors.
The Role of the East Midlands Development Agency 7. Emda has played a vital role in developing the Peak District economy, analysing its strengths and working in partnership. In particular, it has: — Supported the Derby and Derbyshire Economic Partnership’s Rural Action Zone which has provided an evidence base for action, provided a strong partnership for action and also provided the basis of other initiatives — Secured £2.1 million LEADER funding from the EU supporting sustainable community development. — Supported key economic infrastructure and projects through direct grants. — Supported the Live and Work Rural Programme with a grant in excess of £500,000 directly focused on providing support to micro-businesses in the Peak District with a strong environmental theme. — Provided a strong evidence base in a study The Contribution of the Peak District National Park to the Economy of the East Midlands. — Provided consistent financial support and leadership to the Peak District and Derbyshire Destination Management Partnership which has brought a credible approach to tourism development in the sub-region. — Recognised the distinctive weaknesses and opportunities of the Peak District with specific reference in the Regional Economic Strategy. Actions have followed up key parts of this programme. 8. Overall, the Peak District National Park Authority has found Emda objective and evidence based, quick to learn and willing to make its contribution. It recognises the distinctive nature of the Peak District and its contribution to the regional economy. For the future, we would hope that: — New sub-regional arrangements with roles and budgets delegated to Derbyshire County Council will build on the success of the Rural Action Zone and continue to provide high quality strategic leadership on the rural economy. — Arrangements for tourism continue to develop around a sustainable model of Peak District tourism which is managed to reflect a strong emphasis on staying visitors, diversity and sustainability. — Strong partnership arrangements can develop with the Homes and Communities Agency such that a strong combined strategic investment plan for the Peak District Sub Region can be developed. — The National Park Authority will be able to play its full and proper role as a Planning Authority on the new Regional arrangements to implement the Sub-National Review and the development of the Integrated Regional Strategy. —SuYcient resources are found to make further significant investments into the public realm fitting for a high quality National Park environment and visitor experience.
Memorandum from British Waterways (EM 12) I am pleased to comment on the excellent working relationship between British Waterways and East Midlands Development Agency over a period of more than 10 years. The Agency have always recognised the value of waterway regeneration and development, and in recent years the agency has oVered valuable support to waterside businesses and community groups. Through partnerships such as Nottingham Waterside Limited, a public private partnership aiming to regenerate Nottingham’s waterside area, Emda has proved to be an eVective, supportive and focused partner. Emda is Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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keen to support a wide range of opportunities and the launch of the £5 million Waterway Regeneration Fund provided financial support to SMEs, investors and communiy groups for a range of waterway related development projects, focusing on opportunity, innovation and long term sustainability. The projects we have worked on together include regeneration schemes, canal restorations, routes to work and leisure, green infrastructure for environmental and biodiversity improvements and feasibility studies to demonstrate the benefits and opportunities which waterside schemes may oVer. emda displayed great innovation by working in partnership with neighbouring Advantage West Midlands and the British Marina Federation to form the first inland waterways trade body, The Midlands Marine Alliance. This body has been successful in raising the profile of manufacturing and tourism related SMEs within the region. emda was eager to ensure the unrealised potential of these relatively unknown, often historic trades was recognised and supported, and to assist these businesses in international trade. A focus on developing trade skills has also been evident. We have developed a good and open working relationship with the agency and its staV. It provides a regional perspective which is not readily available from other agencies and which is particularly important to British Waterways. We regard emda as a key partner and expect to continue a close working relationalship with them.
Memorandum from Groundwork Greater Nottingham (EM 13) Groundwork Greater Nottingham is a registered charity and company limited by guarantee. It is one of six locally owned Groundwork Trusts operating across the East Midlands. It is a relatively small organisation in the scheme of things, but nevertheless has been able to engage with emda, including at the Director level. This evidence is intended to provide some examples of that engagement. Comments are provided in response to some of your bullets as they appear in your press release calling for evidence, dated 2 April 2009. — the role of other Government agencies such as the Government OYce for the East Midlands, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES. It is interesting to note that your own question omits the third sector despite the clear drive towards eVective engagement of it in delivering sustainable regeneration. Emda engaged with the Groundwork Trusts in the East Midlands when drafting the delivery plan for the RES so much so that the potential contribution of this element of the third sector is clearly delineated within those plans. Emda has subsequently financially supported indirectly (through sub-regional partnerships) and directly, activity undertaken by the Trusts in support of the objectives of the RES. In the case of Groundwork Greater Nottingham, the single largest financial support relates to the refurbishment of what is reputed to be the largest and oldest allotment gardens in the world. We asked for £1 million to support the delivery of an employment training programme aimed at delivering a restored and safeguarded allotment complex. It is to emda’s credit that they saw the potential and took seriously a proposal from what are relatively small players (A joint initiative involving five third sector/social enterprise organisations). They were happy to be persuaded to accept innovation in procurement and provide support throughout the project delivery process. They were also amenable to change of accountable body as the project grew and cash-flow became an issue for us. Ultimately the confidence of emda helped encourage Europe and Heritage Lottery Fund (and others) to support what has evolved into a £4 million plus project delivering jobs training for local folk while safeguarding part of the heritage of the City of Nottingham. Emda has been equally supportive of our smaller scale activities. My impression is of an organisation made up of highly skilled individuals, clearly busy but accessible. I believe that they are committed to partnership working but I have in the past (though not for a while) been frustrated by what appeared to be a reliance/blind faith in a limited number of delivery partners. Things have improved significantly over recent years. — the way emda’s resources are divided between rural and urban parts of the East Midlands, and whether the division is appropriate, and The East Midlands is a complex region and any distribution of resources will inevitably create tensions. What is important I feel is that emda have developed a clear strategy/policy framework in their consideration of urban, rural and coalfield issues and done so through an open engagement process. If resource allocation is consistent with those frameworks and the priorities that they have identified then I remain satisfied. The issue is when activity/proposals developed in partnership within the region(and in the context of agreed regional frameworks) are destroyed or delayed when Government makes a unilateral decision to refocus the resources previously allocated to Regional Development Agencies. In my memory this has happened at least twice: the latest suggestion will Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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be that it will happen again as funds are directed at supporting Toyota. Clearly we live in exceptional times at the moment but it reaYrms the vulnerability of emda and regional plans to central “mandate”. — how well emda is performing on sustainability. emda is clearly exhibiting a desire to deliver both economic and environmental sustainability. The former is diYcult, but progress is demonstrably being achieved. The latter is probably more problematic since it calls for behavioural change across the wider world. I think that the diYculty is that in a framework that demands immediate results it is sometimes diYcult for emda to support directly activity which delivers more long term impacts. Emda has however been proactive in seeking to provide resource which can allow collective thought to be given to the issue. In that context, for example, we have been the recipients of funding through the Business Resource and EYciency Programme to produce a business(social enterprise) model for reducing construction waste across the industry. Our work formed part of a wider portfolio of thinking around many aspects of Business Resource EYciency which answered many important questions. The luxury of research and development time, the combination of expertise from a range of disciplines and backgrounds would not have happened without emda and its BREW programme. Through the Greater Nottingham Partnership (the SSP) emda supported two key elements of the Environmental Business Support programme provided by this organization. This focused upon the retail sector and also upon small businesses: sectors that normally fall through the gratings when it comes to matters of sustainability. These grant funded elements delivered real support to the businesses engaged and sat alongside a more commercial ebs oVer that we had available. Changes to a referral process for business advice did not reflect the environmental sustainability agenda, and also reduced/removed the potential for accessing grant funding to continue this provision. A number of providers were impacted by the changes and like us nolonger provide environmental services to businesses. I don’t believe that this was a planned consequence but one that came from a desire to enhance provision of advice related to economic performance of businesses rather than a more holistic business portfolio. emda have been a strong supporter of activity intended to improve public realm. They recognised the value of good environments as part of the holistic regeneration agenda and the role that it plays with regard to quality of life, air quality etc. They’ve financially supported a range of projects in which this Trust has been involved including for example an initiative seeking to exploit the latent recreational, tourism and economic potential of the River Trent as it passes through Nottingham. If I have one slight criticism it is that they have themselves been “hog-tied” by the requirement to demonstrate economic impact for every “environmental” project. My assertion is that each project does generate positive economic impact but it is sometimes diYcult to evidence the precise outcomes. I have today (29.04.09) been involved in meeting with emda to look at the potential for collectively evolving a retrofit project improving the energy eYciency of existing homes linked to employment training and community development associated with eVecting behavioural change across the wider community. The tone of the meeting was very positive with emda providing significant useful advice. I believe this demonstrates a commitment to looking at innovative solutions to multi layered problems and a willingness to act as a conduit to bring disparate organizations together to seek to deliver positive change. Zbig Szulc Executive Director
Memorandum from East Midlands Environment Link (EM 14) Summary emda has made considerable progress with regard to sustainable development since its creation but there are particular areas as well as structural features of emda’s corporate culture which need to be addressed if more substantive progress is to be made. Some of these are the eVects of central government requirements. Aspects conducive to sustainable development include: — development and piloting of ISEW and work on resource productivity; — willingness to fund sustainable transport initiatives; — exploration of the economic benefits of ecosystem services; and — internal embedding of SD to some extent eg changes in grant application assessment criteria. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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Aspects creating barriers to sustainable development include: — a corporate culture which is not suYciently inclusive or respectful of stakeholders and has not so far embedded sustainable development at all, and importantly at senior, levels of the organisation; — unqualified support for the expansion of aviation in spite of the harm this causes to the domestic tourism industry and the doubtful nature of other claimed economic benefits; sadly this it is Government policy to expand aviation and for damaging road schemes; — tension between emda’s SD initiatives and ISEW, and the unqualified growth targets and GVA performance measurement imposed on emda by central government; and — reluctance to share work in progress and consequently weak engagement with stakeholders. 1. East Midlands Environment Link (EMEL) welcomes the opportunity to give evidence to this inquiry and looks forward to explaining the points below further at an oral evidence session, which Paddy Tipping MP has indicated the Committee will call us to attend. 2. EMEL is the voice of the non-governmental environment sector at the regional level in the East Midlands. We have nine member organisations covering the full spectrum of environmental interests : BTCV, Campaign to protect Rural England, Council for British Archaeology, Friends of the Earth, The National Trust, Royal Society for the Protection of Birds, East Midlands Transport Activists’ Roundtable (EMTAR), The Wildlife Trusts, The Woodland Trust. Our member organisations have a combined membership of over half a million in the East Midlands, owning and protecting thousands of hectares of land and providing millions of visitors with access to our historic and natural environment. A summary of member statistics is available. 3. We work in association with a number of government agencies to ensure our experience and knowledge informs the regional decision making process. Our aims are to ensure that environmental conservation and sustainable development are integral components of the strategic planning and development of the region, and to contribute to the processes where these fundamental principles are incorporated into the work of the Regional Assembly, Regional Development Agency, Government OYce and other key policy making bodies. 4. EMEL and EMEL member organisations have over the last ten years made representations to emda, in written submissions and at meetings with oYcials from emda, on subjects including rural communities, rural accessibility, transport Regional Funding Allocations, biodiversity, climate change, measuring economic and social wellbeing, and green infrastructure . 5. emda has made considerable progress with regard to sustainable development since its creation but there are particular areas as well as structural features of emda’s corporate culture which need to be addressed if more substantive progress is to be made. Some of these are the eVects of central government requirements or government policy. 6. We have been impressed by the Index of Sustainable Economic Wellbeing, which emda commissioned from the New Economics Foundation and academics, and by emda’s willingness to promote this with other RDAs and with central government. We also welcome the fact that emda proposed in their response to the SNR consultation that GVA-only measurement of the RDAs’ economic performance be replaced by the ISEW. It is in this context disappointing that RDAs in other regions chose not to endorse this proposal and that central government decided to carry the traditional way of measuring success forward. As we understand it, the problem with GVA(as also with GDP) is that it does not allow a mechanism to distinguish between increases achieved in environmentally sustainable ways and those achieved in environmentally damaging ways. 7. emda have over the last few years consistently supported rail freight and more recently water freight. The support has included (successfully) bidding for Productivity TIF funding for rail freight enhancements and funding a study into water-borne freight in the East Midlands. 8. emda have acted on the need to reduce travel by car. They have, for example, recently set funding aside (over £150,000 ) for studies into low-carbon transport including behaviour change strategies. The RES includes a commitment to reducing the need to travel and lower the proportion of commuting by car. emda has a travel plan which, if anecdotal evidence of emda staV travelling to external meetings is correct, has been successful in reducing car-based commuting and business travel at emda. 9. The RES contains a welcome commitment to increasing resource productivity, and emda have acted on this by setting up an advice service for businesses on resource eYciency. However, emda’s initiative if successful will lower the per unit resource and energy use, not the total. In spite of representations from our sector over a number of years emda have not been prepared to commit themselves to the overall reduction in resource and energy use which is environmentally necessary. Coupled with the commitment to growth (see below, paragraph 10, this means that emda are still committed to an unsustainable rise in resource use. 10. There is a clear tension between emda’s SD initiatives and the continued commitment to economic growth almost for its own sake, between emda’s wellbeing focus and GDP/GVA performance indicators— a tension between aspects of emda’s work and central government requirements, the latter shared by parts Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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of emda. Our sector would want the unqualified commitment to economic growth to be replaced by a commitment to sustainable development, which is likely to mean growth in some areas eg renewable energy technology and a reduction in other areas eg overall energy use. 11. There is also a clear tension between emda’s welcome sustainable transport initiatives and its unqualified support for an expansion of activity at East Midlands Airport and its lobbying in favour of major, expensive road schemes (A46 and A453 dualling). The former is sadly government policy but conflicts with the government’s climate change legislation and resultant CO2 reduction targets. The economic value of aviation is also questionable : answers to Parliamentary Questions have shown, for example, that East Midlands Airport results in a net economic deficit for the region. Concerning the latter, significant road infrastructure is known to lead to increases in road traYc and therefore increases in CO2 emissions, and the work on the A46 currently underway shows how destructive this infrastructure can be for landscape and other environmental resources. These resources in many cases cannot be replaced in an at all reasonable timescale, for example the mature trees being removed as part of the A46 work would take many decades to grow to maturity again. 12. emda’s corporate culture creates barriers to sustainable development too. The SD ethos does not (yet) appear to have become an integral part of the corporate culture and board members with SD responsibility have not had the necessary expertise or seen the bigger SD picture. Perhaps for that reason, SD initiatives sometimes have not had board level support. This may have contributed to the delay in reaching agreement with emda about its contribution to the East Midlands climate change action plan. The central government requirement that the majority of RDA board members have to come from a business background does not help in this regard, especially given that there is no requirement for any board members to have expertise in environmental sustainability. 13. While emda emphasise their “partnership” approach to developing the RES, they have not in our experience been as inclusive as they could have been in developing their policies and in who they regard as partners. In particular, emda tend to see environmental NGOs not as partners, merely as consultees, who are asked for their views at a relatively late stage of policy and project development. We hope that the introduction to this submission indicates that our sector has worthwhile expertise to oVer and should therefore be involved at earlier stages of policy and project formation. It also seems to us that emda do not always appreciate the distinctiveness of our sector. While we work with the social voluntary sector through One East Midlands, we have distinctive priorities; and EMEL members are regionally organised and have been involved in regional policy work for 10 years now. We are therefore natural partners for a regional organisation like emda. 14. Our sector has also been involved in project design and delivery, expert assessments for example of biodiversity, tranquility or landscape character, and land management. It is therefore disappointing that emda has chosen not to accept our oVer of help with their environmental evidence base, the basis for their work on the new regional strategy. Conversely, some of the business advice and other support emda can oVer would also be helpful to our sector, but although when asked emda acknowledge this, they have not so far oVered this kind of help to the environmental voluntary sector (which is after all not immune to the eVects of the economic recession.
Memorandum from the Government OYce for the East Midlands (EM 15) The Government OYce for the East Midlands is pleased, on behalf of Government, to have the opportunity to present evidence in response to the East Midlands Regional Select Committee’s Inquiry into the East Midlands Development Agency (emda) and the Regional Economic Strategy.
Summary — The East Midlands Development Agency (emda) has played a key role as part of the Government’s response in the East Midlands to the economic downturn and in planning for a sustainable recovery. — The Government OYce for the East Midlands works on behalf of Government to support and challenge emda in the delivery of its role. — emda and the East Midlands Regional Economic Strategy (RES)—A Flourishing Region—have played a key role in delivering the Regional Economic Productivity Public Service Agreement (PSA 7)11 and supporting the delivery of a range of other PSAs. — emda was the first RDA to conduct a full impact assessment of its work since its inception in 1999. The report by Ecotec showed a return on investment of between £5 and £15 on every £1 invested. The recent national evaluation of the RDA’s by PWC (Price Waterhouse Cooper) highlights a value added of £4.50 per every £1 spent across the network.
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— The Sub-National Review (SNR) will strengthen emda’s role, along with the role of the Local Authorities through the Leaders’ Board, in developing and delivering, in partnership, a Single Strategy for the East Midlands to ensure sustainable economic growth and recovery for the future.
1. The role, responsibilities and accountability of emda 1.1 emda was established under the Regional Development Agencies Act 1998, which sets out the statutory purpose of RDAs.12 1.2 emda’s mission is to: “Use our influence and investment to deliver a measurable improvement in the sustainable economic performance of the East Midlands”.13 emda aims to catalyse and co-ordinate regional economic development, growth and regeneration, enabling the region to improve its relative competitiveness and reduce the imbalance that exists within and between regions. 1.3 Since its creation, emda’s responsibilities have increased to include the administration of regional development grants (2002), research and development grants (2005), Business Link (2005), the economic and social funding elements of the Rural Development Programme (2007), European Development Funds (2007) and the Manufacturing Advisory Service (2008), as well as additional responsibilities for tourism and the Olympics. This reflects Government’s confidence that RDAs deliver in the English Regions. 1.4 emda’s corporate plan provides full details of how it will allocate its budgets to deliver the objectives in the RES, and how this activity will contribute to the targets that the RDAs have developed with Government. emda’s budget for 2008–09 was £166.6 million. emda has met or exceeded all its annual targets in the past three years (figures are given at Appendix one).14 1.5 At the national level, emda has led RDA engagement in national policy development in a number of policy and delivery areas including manufacturing, European policy work and the transfer of the ERDF programmes from the GOs to the RDAs, international trade and investment and construction. In the region, GOEM and emda worked eVectively to ensure the timely and eYcient transfer of the East Midlands ERDF programme resulting in a successful call for projects and allocations of some £79 million in 2008.15 In its lead role on manufacturing, emda manages the Manufacturing Advisory Service (MAS) network on behalf of BERR and has improved the return on investment from marketing since taking on this role. 1.6 emda is currently the lead RDA for the Department for Business, Enterprise and Regulatory Reform agenda (BERR).16 emda has recently concluded its period as lead RDA for the network (“Chair of Chairs”). In this capacity, emda worked hard to raise the profile of the RDAs’ contribution to economic development in the regions and to raise the profile of the East Midlands. Its work led, for the first time, to a specific chapter in the Pre-Budget Report that highlighted the contributions made by RDAs.17 1.7 emda is accountable nationally to Parliament through the Secretary of State for Business. Regionally, the organisation is accountable to its Board and to partners and the public through a range of consultation and partnership events, including its annual public meeting which regularly attracts 300–400 attendees. Current proposals will place RDAs under a Duty to Involve local communities where appropriate in the design and delivery of their programmes.18 emda is currently scrutinised at the regional level by the East Midlands Regional Assembly’s Scrutiny Board which meets four times a year. Regional Assemblies will cease in their current form by April 2010. Local Authorities will retain individual powers of scrutiny, but it is envisaged that regional scrutiny will be replaced by the work of the Regional Select Committees and the creation of Regional Grand Committees. 1.8 The role of RDAs continues to change. To ensure continued focus on addressing the regional impacts of the economic downturn and as a result of the recent national evaluation of RDAs, Government has asked RDAs to prioritise: — assistance to business as an immediate priority; — stimulating economic recovery and growth for the medium-term; and — restructuring and developing each region’s strengths, supporting its growth and competitiveness in the future for the longer-term.
12 http://www.opsi.gov.uk/acts/acts1998/ukpga 19980045 en 1. Five statutory purposes set out are: — To further economic development and regeneration — To promote business eYciency, investment and competitiveness — To promote employment — To enhance development and application of skills relevant to employment — To contribute to sustainable development 13 emda Corporate Plan 2008–2011 14 Ev 15 CLG remains the managing authority for the ERDF programme and therefore retains overall accountability. 16 Now Department for Business, Innovation and Skills (BIS). 17 Meeting the Economic Challenges in every region, HMT November 2008 18 The proposals are in section 23 of the Local Democracy, Economic Development and Construction Bill currently before Parliament. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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2. The process by which the RES was drawn up and the level of involvement of regional stakeholders 2.1 RDAs are tasked with producing Regional Economic Strategies (RES) which are reviewed every three years to ensure they remain relevant to the changing needs of each region’s economy. The current RES covering the period 2006–20, A Flourishing Region, was published in July 2006 following a comprehensive evidence gathering and consultation process over a period of 18 months. 2.2 Development of the RES was the product of a significant consultation exercise, which saw emda organise over 100 consultation events, reaching around 1,400 regional stakeholders and partners. emda was the first RDA to invite members of the public to join the consultation through an advertising campaign (“Have Your Say”) on billboards and public transport. This was supported by a dedicated website which received over 20,000 hits. emda held roadshows in 11 public venues across the region, including city centres and tourist attractions. They received 495 written contributions from a wide range of regional stakeholders, as well as close involvement throughout from GOEM.19 To ensure regional ownership the RES development process was underpinned by a working group of key delivery partners who met regularly to discuss key policy content and agree the development process.20 The 2007 National Audit OYce report cited the positive views of partners on the engagement process and wide buy-in to the evidence base.21 2.3 The RES is underpinned by a robust evidence base, with contributions from a range of regional partners.22 The evidence-base was assessed and peer-reviewed by a team of researchers and independent academics to ensure it provided an accurate portrait of the region. Government Departments and GOEM were also involved in this process. The evidence base is available for regional partners to develop their own strategies and contributions towards RES delivery.
3. The eVectiveness of the RES for the East Midlands in delivering against its targets 3.1 Whilst the RES contains a performance management framework, it is not a delivery document for emda. The targets set out in the RES are projected economic data for the region, based on forecasts made before the recession. It is for emda to inform the Committee on the impact of the RES in delivering its targets. This response sets that information within the wider context of Government policy on these issues. 3.2 The key mechanisms for delivering the RES are: — emda’s Corporate Plan 2008–11. The Plan sets out the high level targets and activities that emda is expected to deliver and are consistent with RES objectives. The 2007 National Audit OYce report found that emda was performing strongly in terms of its delivering its contributions to achieving ambitions identified in the RES and appendix 1 shows the targets achieved during the last three years. — The contributions of other stakeholders are captured by the RES Implementation Plan.23 This was developed as a mechanism to improve the focus and coordination of RES Delivery and sets out how 86 diVerent public, private and voluntary sector organisations in the East Midlands are using their resources to deliver the 59 priority actions identified in the RES. — Sub Regional Investment Plans (SRIPs) of the Sub-Regional Strategic Partnerships (SSPs). From 2009–2010 the SSPs are largely being replaced by local authority-led programme and delivery structures in line with the ambitions of the Sub-National Review (see section 6 below).
4. The eVect of the financial and economic situation on businesses in the region, including the eVect on diVerent sectors and the impact on local employment, and how well emda is meeting needs in the challenging economic climate 4.1 The structural changes that the East Midlands has experienced over recent years, resulting in a more diverse business base, mean that the region should be in a better position to withstand the recession than it has been during previous economic downturns. However, despite this diversification, the impacts of the present situation are now being felt beyond sectors such as finance and property where the initial impacts occurred. Significant job losses are now occurring in manufacturing and regions like the East Midlands with above average employment in this sector are now being hard hit. Workforces across the private and public sector are being slimmed down and working patterns are changing in line with shrinking workloads and budgets.
19 The respondents included Business and Industry (32.3%), Local Authorities (16.5%), Voluntary Sector (9.8%), Individuals (15.9%) and Public Bodies (25.6%) 20 East Midlands Development Agency (Board), East Midlands Business Forum, Culture East Midlands, Learning & Skills Council, East Midlands Universities Association, Environment Agency, East Midlands Environment Link, East Midlands Regional Assembly, EM Regional LGA, Government OYce East Midlands, Department of Health, Trades Union Congress, Voice East Midlands, Engage East Midlands, Minority Enterprises East Midlands, Social Enterprise East Midlands, Innovation East Midlands 21 National Audit OYce—Independent Performance Assessment of the East Midlands Development Agency 2007 http:// www.nao.gov.uk 22 www.emintelligence.com/index.php?option%com content&task%view&id%22&Itemid%138 23 www.emda.org.uk/resimplementationplan/default.asp Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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4.2 The monthly Labour Force Survey (LFS) data for March 2009 indicates that the latest quarterly employment rate (75.9%) is beginning to decrease, but the rate in the latest period is not significantly diVerent from a year ago (75.6%). The Jobseekers Allowance (JSA) claimant count was 105,200 in March 2009, up 5,200 on the month and up 52,400 on the year.24 There are proportionately strong flows onto JSA from the up to 24 year’s old age category. 4.3 The impact of the worldwide recession has been discussed extensively at the Regional Economic Cabinet (REC),25 chaired by Phil Hope MP, the Minister for the East Midlands. The Cabinet brings regional partners, including emda, together to tackle the impact of the downturn and prepare the region for recovery. The Chair of emda is the Deputy Chair of the Cabinet, its Chief Executive is also a member and emda supports the REC with regular updates on the economic conditions in the region. 4.4 Working with GOEM and departments including CLG and BIS, emda has prioritised and focussed its activity to support businesses in the region and to bring forward regeneration and capital schemes where possible. In particular, it has: — delivered an intensive “Survive and Thrive” campaign across each of the major conurbations in the region to engage with businesses face-to-face and oVer practical advice. Over 2,000 individuals and businesses attended these successful events and we understand that they gave overwhelmingly positive feedback; — launched in August 2008 a £1 million Resource EYciency Grant to aid businesses to make their resource use more eYcient and thereby reduce costs. This grant oVers capital support of 50% up to a maximum of £10,000 to help businesses to introduce new methods and techniques to reduce their energy, waste and water costs; — delivered a series of events to raise the profile of resource eYciency in the region. The programme focused on linking cost savings and the improvement of business processes through the sustainable use of natural resources and minimisation of waste; and — worked with GOEM and English Partnerships to identify key regenerations schemes that can be brought forward to maximise economic impact, including the redevelopment of Derby’s Cathedral Quarter, the development of a new Business Quarter in Leicester and the re-development of Nottingham Railway station. 4.5 Government is taking decisive action for small and medium businesses with the launch of a package of support to address their cash flow, credit and capital needs under the Real Help for Business Now banner (see Appendix two).26 Other financial measures will also help enable banks to continue or resume lending to viable small and medium business during the current economic downturn. RDAs have a key role in ensuring that the right support is available for businesses wherever they are. emda will also support Building Britain’s Future—New Industry, New Jobs, which was launched on 20 April in Loughborough, to ensure that business in the region can come through stronger, taking advantage of the upturn.27 4.6 Business Link is the Government’s key means to deliver support direct to business. In the East Midlands, 91% of customers are very satisfied or satisfied with the service received. Since October 2008, this service has included free personalised “Health Checks” to identify problems early and survive the current financial climate, using qualified experts to help draw up business action plans. The latest figures show that 5,113 businesses have benefited from health checks in the East Midlands. 4.7 As part of the Government’s Solutions for Business initiative, the Train to Gain skills brokerage service has come together with Business Link from 1 April 2009 to provide comprehensive information, diagnostic and brokerage service, making Business Link the main route to all government support for business. Within the East Midlands, the provider for Business Link was already managing Train to Gain, making the region well placed to deliver this new integrated service.
5. The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of emda 5.1 In order to maximise the impact of economic recovery and growth in the regions the Government announced the outcome of its Review of Sub-National Economic Development and Regeneration28 which included proposals to bring together economic and spatial planning in the regions and place a joint duty on the RDAs and the newly created Local Government Leaders’ Boards to take forward the creation of new single strategies for the English Regions. These strategies will provide regions with an ability to better align activity across thematic areas and more eVectively prioritise the expenditure of public and private sector investment. 5.2 These proposals are set out in the Bill (see appendix 3 for more details).29 Policy documents giving further detail on local economic assessments, regional strategies, sub-regional co-operation and the duty to promote democracy, petitions and the Duty to Involve were published in January.30
24 These are the seasonally adjusted figures 25 www.gos.gov.uk/goem/657145/regioaleconomiccabinet/?a%42496 26 Ev 27 http://www.berr.gov.uk/files/file51023.pdf 28 http://www.berr.gov.uk/files/file45468.pdf 29 Ev 30 See http://www.communities.gov.uk/citiesandregions/thesubnationalreview/takingforwardsnr/ Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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5.3 We judge that emda has already developed positive and constructive working relationships with local authorities, the Regional Assembly and GOEM on matters of housing, planning and transport as they relate to economic development. It participated at each stage of the preparation of the draft Regional Spatial Strategy (Regional Plan), including the Examination in Public. It has reached agreement with the shadow Local Authority Leaders’ Board on arrangements for a joint Board to oversee the development and delivery of the new single strategy.
5.4 In terms of new sub-regional delivery arrangements, emda is already part of the steering group that developed the Leicester/Leicestershire MAA and is now working with the partnership on the delivery of this agreement. However, it has provided more limited support for the development of sub-regional working around the SheYeld City Region, which includes parts of the East Midlands.
6. The role of other Government agencies such as the Government OYce for the East Midlands, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES 6.1 The process of developing both the RES and the RES Implementation Plan has facilitated partner commitments to joint working towards the coordinated delivery of regional economic priorities.
6.2 As the representative of twelve central government Departments31 in the region, the Government OYce for the East Midlands (GOEM) promotes the integration of Government policies and programmes at a regional and local level in a way that makes sense for local places. GOEM supports and challenges the development and delivery of regional strategies and priorities, helps influence policy development among sponsor departments, and works in partnership with local organisations in communities throughout the region. This includes negotiating Multi and Local Area Agreements (MAAs and LAAs).
6.3 GOEM works in partnership with emda and other regional stakeholders on a wide range of initiatives that support the aims of the RES. These include a regional procurement partnership, the simplification of business support products, building a culture for enterprise in the region, integrating employment and skills, securing regional benefits from the OIympics and the regional Employment, Skills and Productivity Partnership.32
6.4 GOEM has also worked closely with emda to ensure priorities contained in the region’s nine Local Area Agreements are consistent with the RES. This has been tested by analysis conducted by GOEM on behalf of BERR and HMT.
6.5 emda has worked closely with Jobcentre Plus, the Learning and Skills Council (LSC) and other private sector partners as part of the Large Scale Redundancy Support Group and the Midlands Engineering Industries Redeployment Group in responding to redundancies in the region.
6.6 The Homes and Communities Agency,which was established on 1 December 2008, is already working closely with emda. The two agencies have recently worked together on the prioritisation of regeneration activity within the region, identifying critical schemes which require additional support.
6.7 Projects that demonstrate emda’s robust approach to working with regional partners and the private sector include:
— Blueprint, Avenue Coking Works, and the Sherwood Energy Village with English Partnerships;
— BioCity with the two Nottingham universities;
— Boston Masterplan with Boston Borough Council;
— Chairing the Regional Risk Finance Forum, which brings together banks, investors and the public sector to align activities to ensure that the contributions made by the Finance and Finance Risk sectors are maximised for the benefit of the regional economy.
6.8 Independent evaluations have commented that emda provides strong regional leadership and attribute much of the success in emda’s delivery to its eVective partnership working arrangements.33
31 Cabinet OYce; Department for Business, Enterprise & Regulatory Reform; Department for Children, Schools and Families; Department for Culture, Media and Sport; Department of Energy and Climate Change; Department for Environment, Food and Rural AVairs; Department for Work and Pensions; Department for Transport; Department of Health; Home OYce; Ministry of Justice: Department for Innovation, Universities and Skills 32 The esp Executive Group membership is drawn from emda, GOEM, LSC, Job Centre Plus, East Midlands Universities Association, Association of Colleges, Alliance of Sector Skills Councils, Leicester City Council and Derbyshire County Council. 33 National Audit OYce—Independent Performance Assessment of the East Midlands Development Agency 2007 http:// www.nao.gov.uk Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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7. The way emda’s resources are divided between rural and urban parts of the East Midlands, and whether the division is appropriate 7.1 The Government does not prescribe how emda should divide its resources between urban and rural areas in the region, but expects that account is taken of the needs and interests of all parts of the community in developing and delivering policies and deciding on spending priorities. This mainstreaming approach means that the Government expects emda to understand the nature of the rural as well as the urban economies in the region and to take appropriate and equitable steps to support both. 7.2 emda is working with partners on the Regional Rural Action Plan, and with GOEM is supporting the Regional Rural AVairs Forum refreshing the Plan to reflect pressures on the economy 7.3 The Department for Environment, Food and Rural AVairs (DEFRA) is devolving around £60 million of Rural Development Programme for England funding to emda over the period to 2013 to deliver the social and economic objectives of the Programme and make a real contribution to delivery of RES objectives in rural areas.
8. How well emda is performing on sustainability 8.1 The Government expects emda to contribute to sustainable development across its statutory, corporate, regional influencing and grant-making and investment functions to promote a strong, healthy and just society, and ensure we live within environmental limits. 8.2 emda’s statutory obligations in this area include: carbon reporting;34 having regard to conserving biodiversity;35 the duty to promote equality;36 and the forthcoming requirement to monitor and manage eVectively equalities and diversity impacts.37 emda also has a devolved responsibility for the design and management of the European Regional Development Fund Operational Programmes and for reporting on the ERDF OP cross-cutting theme of environmental sustainability. 8.3 In terms of policy compliance, BIS guidance to RDAs on Regional Economic Strategies (2005) requires RES development and implementation to be based on the sustainable development principles set out in the 2005 UK Sustainable Development Strategy, and to be tested through application of a full sustainability appraisal. 8.4 Under the BIS Sponsorship Framework, emda has to demonstrate how sustainability principles have been applied in supporting delivery of the REP PSA. emda is also subject to BIS Guidance on Appraisal, Delivery and Evaluation which requires sustainable development to be considered in programme and project design. 8.5 In delivering against the four UK priorities for sustainable development, emda has: — Developed the (Regional) Index of Sustainable Economic Wellbeing (R-ISEW) in conjunction with the New Economics Foundation, to help combine social and environmental factors with traditional economic metrics;38 — Prioritised economic inclusion and social enterprise through projects such as the Genesis Social Enterprise Centre and Sherwood Energy Village; — Commissioned a wide range of studies on the economic impacts of climate change to inform the evidence base for the new single integrated regional strategy.
34 Energy White Paper 2007: Meeting the Energy Challenge 35 Section 40 of the Natural Environment and Rural Communities Act (2006) states that “every public authority must, in exercising its functions, have regard, so far as is consistent with the proper exercise of those functions, to the purpose of conserving biodiversity” 36 Equality Act 2006 37 Equality Bill 2009 38 New Economics Foundation and the University of Surrey “Interim report on the feasibility of constructing a regional Measure of Domestic Progress (MDP) for emda”, August 2005 Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
East Midlands Regional Committee: Evidence Ev 129 2007–08 2006–07 2005–06 APPENDIX 1 OUTPUT TARGETS emda 1 Job creation: The number of2 jobs Employment created support: or The safeguarded number of3 people Business assisted creation: to The get numbersurviving a of 12 job new months, businesses and created businesses and attracted4 to Business the support: region The numberperformance of businesses assisted to improve4a their The number of businessescollaborations within with the the region UK engaged knowledgeprojects) in base new (HE/business collaboration 5 6,149 Regeneration: Public and privateinvestment 11,236 regeneration levered 25,296 infrastructure (£m) 3,600–6,000 17,000–25,000 7,826–10,350 2,594Percentage of which is private5a Hectares 1,703–2,554 of brownfield land remediated6 Skills: The number ofresult 21,022 5,786 people of assisted RDA 9,803 in programmes their skills6a development The as number 6,666–9,600 3,375–5,625 a of 656 adultsstrategy 7,391–9,775 2,382 gaining that basic count skills towards as the part Skills6b of PSA The the Target number 1,661–2,431 Skills of for 166 adultsachieving Life in at the least workforce a 261–435 who full are Level supported 2 7,869 4,260 in qualification or 8,193 21,981 65.8–109.7 equivalent 13,333–19,200 2,684–4,026 1,388–2,313 5,184–7,014 2,208 1,683 1,621–2,431 487 17,710 135 12,500–18,000 337–561 252–440 2,419 64–107 105 14,562 674–1,123 8,000–12,000 474 400 59% 102–171 329–548 1,508 88 58%–82% 248–414 62.6–104.4 547–1,095 117 650 81% 100–167 701 58%–82% 321–534 641–1,069 107 89% 98–163 58%–82% Output Name Achieved Target range Achieved Target range Achieved Target range Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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APPENDIX TWO EXAMPLES OF REAL HELP NOW SUPPORT39 Enterprise Finance Guarantee Scheme (EFG) Government is providing £1 billion of guarantees to support up to £1.3 billion of bank lending to smaller firms (annual turnover of up to £25 million, looking for loans of up to £1 million for a period of up to 10 years). As of 8 April, the EFG scheme has nearly £250 million of eligible applications from over 2,150 firms that have been granted, are being processed or assessed.
Working Capital Scheme Government will provide banks with up to £10 billion of guarantees covering 50% of the risk. This secures up to £20 billion of working capital credit lines for companies, and frees up capital which the banks must use for new lending.
Capital for Enterprise Scheme A new £75 million fund (£50 million of Government funding with £25 million from Banks). Professional fund managers will provide equity investment which can be used to pay oV existing debt to free up capital for day to day cash flow and for investment for the future for viable companies. Over 250 businesses have registered their interest.
Business Payment Support Service This oVers viable businesses in temporary financial diYculty a streamlined service for arranging to pay their HMRC tax bill to an aVordable timetable. In the East Midlands over 10,200 agreements to spread the payment of tax have been reached, worth £177 million. The Chancellor of the Exchequer announced in Budget 2009 that this service would, from 22 April, be extended to take into account whether a business is likely to make a loss for the current year when deciding how much time HMRC can give a business to pay its Income Tax or Corporation Tax on profits from a previous year. Businesses can take advantage of this enhanced service if: — they are genuinely unable to pay immediately or enter into a reasonable time to pay arrangement; — the tax they owe is Corporation Tax or Income Tax on the previous year’s profits; and — they are likely to make a trading loss in the current year.
Real Help for Skills It is vital that businesses continue to invest in skills, to survive the recession and prepare for the upturn. To support this, the Government has rescued and expanded apprenticeships; there will be over 250,000 starts nationally in 2009–10. It has increased the training support available to people who are unemployed: £100 million for 40,000 extra places on employability programmes for those who are unemployed or under notice of redundancy; and £83 million for 75,000 high quality training places for those claiming JSA for over six months to help them quickly back into sustainable employment. There is also continuing support through Train to Gain with £925 million invested for 2009–10 and new support just for small and medium sized enterprises (SMEs).
Help with Managing Businesses The “Top Ten Tips” campaign oVers practical help to businesses to their cut bills by quite simple changes in the way they use resources like energy and water, and how they handle waste. This complements “Improving Your Resource EYciency”, one of the new suite of products launched under “Solutions for Business”, which provides businesses with a range of specialist support and advice available nationally, and regionally and accessed though Business Link.
APPENDIX THREE KEY POLICY CHANGES RESULTING FROM THE REVIEW OF SUB-NATIONAL ECONOMIC DEVELOPMENT AND REGENERATION (SNR) The Government published the SNR in July 2007, setting out a framework to allow central and local government, and their partners, to work together to support the private sector to increase prosperity in all parts of England. There was a good response to the consultation on the Government’s proposals, held between March and June 2008. Over 500 responses were received, which, on the whole, supported the principles and reforms contained in the SNR.
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The response to consultation, published in November 2008, explained that the Government had decided: — To legislate to create a duty on county councils and unitary authorities across England to carry out an economic assessment of their area, underpinned by statutory guidance; — To legislate to allow for the creation of statutory sub-regional authorities for economic development—economic prosperity boards—that will be voluntary in nature, and to legislate for a similar underpinning of duties on partner agencies in Multi Area Agreements (MAAs) as Local Area Agreements (LAAs) ;40 — To refine its plans for producing the regional strategy and ensuring appropriate regional governance arrangements; the Government will, in each region, give the RDA and a board of local authority leaders joint responsibility for the regional strategy, including its drafting, implementation planning, sign-oV and monitoring; and — To legislate to create duties on county councils and unitary authorities to promote democracy and to operate a petitions scheme, and to create a duty on certain public authorities to secure involvement in the exercise of their functions. These measures are now being taken forward within the Local Democracy, Economic Development and Construction Bill.
Memorandum from the University of Nottingham (EM 16) 1. This response represents the submission from the University of Nottingham to the East Midlands Regional Select Committee of the House of Commons for its first inquiry on the East Midlands Development Agency (emda) and the Regional Economic Strategy (RES). 2. The University of Nottingham (UoN) is the leading and largest HEI in the East Midlands on a number of metrics. Various independent assessments place UoN in the Top 10 of UK HEIs and in the top 1% of all Universities worldwide. Within the East Midlands, UoN is the leading research-led University and on a number of measures it is the largest in the region. Research income to UoN represents in excess of 40% of the total for all HEIs in the East Midlands. 3. As a research-led university, Nottingham has a long history of working with industry and oVers many opportunities for collaboration. Blue-chip companies that maintain ongoing research relationships with the University include Rolls Royce, E.ON, The Boots Company, GlaxoSmithKline, The Ford Motor Company and AstraZeneca. Our business relationships also extend to local SMEs with whom we engage in various ways, often as a result of initial contacts through our programme of business-focused events. 4. Although an institution with an international presence and outlook, we are committed to the region and its economic performance. This is evidenced through activities and developments such as: — The development of the University of Nottingham Innovation Park. — Our partnership role in developing and delivering BioCity, an internationally recognised facility that provides accommodation and support to high potential bioscience, pharmaceutical, med tech and healthcare companies. — The Nottingham Science City initiative, involving City and County Councils, emda and other partners. — Our involvement in four regional “innovation networks” or iNets—a key part of emda’s Regional Innovation Strategy. 5. Currently the University has a £15 million portfolio of live projects, funded by emda or ERDF (which is now managed by emda in the East Midlands). Activities, which generally have a strong “innovation” focus include: — Business engagement and knowledge transfer around centres of technical expertise and application. — Technology development, proof of concept and commercialisation. — Skills development, enterprise and placement activities. — Capital build developments, including the University of Nottingham Innovation Park. 6. We have regular meetings of senior University and emda staV (VC and PVC level staV, with emda’s Chief Executive/Directors), this supported by a number of operational contacts across both organisations. 7. This response addresses a number of the areas of interest identified by the Committee.
40 An MAA which would provide for local authorities and partners to be placed under a duty both to co-operate in developing the MAA and to also have regard to the targets within the MAA that relate to their functions. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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The role, responsibilities and accountability of emda 8. We broadly support the role that emda plays in the region. The funding provided via the RDA makes a unique and beneficial contribution to the University in supporting: innovation, business engagement, knowledge transfer, the development of infrastructure related to regional economic development. These are key priorities for Government and Europe (Lisbon agenda). 9. Whilst our relationship and experience of partnership working with emda is positive overall, there remain issues around the project appraisal processes. Timelines from initial submissions to project start are often long and unpredictable. Processes do not seem to be able to provide either a robust “no” at early stages of the appraisal process nor a “conditional yes” to substantive strategic projects. Certain funding schemes are, by design, highly ineYcient in terms of the relative cost to administer the scheme and are diYcult to access. This can lead to projects that are small but considered to be significant not being presented to emda for appraisal.
The process by which the RES was drawn up and the level of involvement of regional stakeholders 10. The University was strongly engaged in the RES consultation in 2005, an engagement led at PVC level. Our involvement included formal written responses, one-to-one meetings and wider involvement of academics. Similar approaches have been taken to subsequent consultations, for example on the Regional Innovation Strategy (2006) and Business Birth Rate Strategy (2006).
The eVectiveness of the RES for the East Midlands in delivering against its targets 11. The RES presents a useful framework for priority identification and one that informs the development of new projects or activity against identified regional needs. 12. Within the East Midlands emda’s prioritisation of “business investment and risk finance” has helped to establish a successful and coherent “escalator” of funding for businesses (eg via risk finance funds), individuals and Universities (via proof of concept or seed investment for spin-outs). It is notable that emda have built on success where it already existed, for example: — The Lachesis Fund—a University seed investment fund—first established under the DTI “University Challenge” scheme in 2001. — The Nottingham-led Innovation Fellowships programme—first established in 2000 under the HEFCE HEROBC41 initiative and continued through emda and HEIF42 support.
The eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors and the impact on local employment, and how well emda is meeting needs in the challenging economic climate 13. The present economic situation, which is proving painful for many businesses, is also expected by a number of commentators to substantially ease as we progress through 2010–11 and return to growth. The RDAs response to this situation should not be to the detriment of long term investment in skills, capacity and infrastructure needed to sustain and grow the knowledge economy. The University, like many other HEIs, is not well placed to respond suddenly to business needs as a result of sudden failures in the supply of money or collapses in product sales. We are eVective in supporting businesses to grow and become more competitive, skilled and resource eYcient through planned R&D, access to skilled people and the development of their employees. 14. Even during times of economic growth, the operating and reporting conditions placed on RDAs often led to a focus on the short-term “outputs” at the expense of long-term benefits. Typically an RDA’s interests in a project cease after two to three years.
The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of emda 15. We do have concerns that proposed changes to sub-regional responsibilities for economic development will disadvantage the Nottingham region. To date the Greater Nottingham Partnership (GNP), one of the sub-regional strategic partnerships established in the East Midlands region, has provided a coherent economic development focus on the “Greater Nottingham” area—an area governed politically by the Nottingham City and Nottingham County Councils. 16. The University has Board level representation on GNP. However from 2010 it will no longer exist. 17. With sub-regional economic development responsibilities moving to the City/County Councils, we do have concerns about the fragmentation and weakening in the economic and social development of the Nottingham conurbation. The benchmark is set by other city-regions such as SheYeld, Manchester, Munich.
41 The Higher Education Reach-out to Business and the Community programme: a precursor to HEIF, provided funding to HEIs in support of activities that increased their capability to respond to the needs of business. 42 The Higher Education Innovation Fund (HEIF) is designed to support and develop a broad range of knowledge exchange activities which result in economic and social benefit to the UK. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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The role of other Government agencies such as the Government OYce for the East Midlands, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES 18. Whilst there is growing desire to see RDA investments work in conjunction with, for example, those of the Technology Strategy Board, the application and appraisal processes present significant barriers to eVective co-financing.
Memorandum from Natural England (EM 17) Executive Summary — Natural England is a national body with strong regional presence delivering positive outcomes for the natural environment. — Natural England’s biggest responsibility is to administer and distribute funds associated with the government’s sustainable, environmental farming schemes and to provide environmental farming advice. This money (European and UK government in origin through the Rural Development Programme for England—RDPE) is paid to farm businesses and contributes significantly to the regional rural economy. In the East Midlands this involves the disbursement of £180 million, in the period 2007–2013. In 2009–10 Natural England expects to spend £46 million of RDPE funding in the region. — Natural England provided core funding of £388,000 in the financial year 2008–09 to The Wolds AONB and within the Peak District National Park area. This has helped to lever in multi-million pound partnership projects which are involving local people in integrating work in the environmental, economic and social sectors in order to conserve and enhance the natural beauty of our finest landscapes. — Natural England works with a wide range of partners—including the Regional Development Agencies—and has a duty to co-operate and engage with local authorities. We welcome the proposals within the Local Democracy Economic Development and Construction Bill which will further emphasise this duty of co-operation. — A healthy natural environment is an important economic asset. It provides us with many important goods and services (ecosystem services) that are critical for our health and wellbeing—for example, clean water, protection from flooding, carbon storage, recreation opportunities, etc. If invested in and protected, they will also provide the foundation on which future economic growth and greater prosperity can be built.
1. Introduction 1.1 Natural England is a statutory body created in 2006 under the Natural Environment and Rural Communities Act by bringing together English Nature and parts of the Rural Development Service and the Countryside Agency. Natural England has been charged with the responsibility to ensure that England’s unique natural environment, including its flora, fauna, land and seascapes, geology and soils are protected and improved. 1.2 Natural England’s purpose is to ensure that the natural environment is conserved, enhanced and managed for the benefit of present and future generations, thereby contributing to sustainable development. 1.3 Our evidence relates to emda and their engagement with Natural England and the wider regional natural environment stakeholders, principally in developing the Regional Economic Strategy (RES) during 2005–06 and in the immediate post publication period.
2. The process by which the RES was drawn up and the level of involvement of regional stakeholders 2.1 emda principally used Natural England (and our founding bodies) as formal consultees to the RES, advisers in the Strategic Environmental Assessment and as potential providers of data to inform the evidence base. 2.2 The current RES (2006) was developed and published prior to the formation of Natural England; however all three founding bodies, English Nature (EN), Rural Development Service (RDS) and the Countryside Agency (CA) were members of a stakeholder working group called by emda and focussed on providing an environmental evidence base and completing a Strategic Environmental Assessment (SEA). There was no wider formal stakeholder engagement to consider how the natural environment might play a role contributing to the possible aims and actions of the RES, except as they might be aVected by the SEA assessment process. 2.3 More specifically: — Neither the Countryside Agency nor English Nature as statutory advisers to government were invited to discuss the relationship between the natural environment and the regional economy except as part of the formal consultation process on the draft RES. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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— The process by which the regional actions were prioritised using the RES Intervention Framework and whether this might be applicable to regional priorities for the natural environment were not discussed with the Agencies. — Background technical papers were commissioned and published to support the RES, but were diYcult to obtain from the website. There was no prior consultation or discussion with stakeholders regarding their content or conclusions. In contrast, East Midlands Regional Assembly (EMRA), commissioned technical papers for the Regional Spatial Strategy (RSS). Stakeholders were invited to discuss the findings and so improve their understanding of the issues prior to the draft RSS publication, which helped the consultation process. 2.4 These issues made it diYcult to understand or challenge emda’s underlying assumptions about the relationship between the natural environment, the RES, and find the appropriate time or opportunity to engage emda on these matters. 2.5 In drawing up the RES, emda had little regard for the importance of a healthy natural environment, beyond resource constraints. Two reports, commissioned by emda working with the statutory agencies, NGOs and EMRA describing the environmental economy of the East Midlands, were published in 2002 and 2005. They did not however see them as a basis for investing in the environment, or use them in preparing the RES. Natural England is however, now working with emda to explore the market values for the environment in providing ecosystem services eg, good quality water and flood defences. 2.6 EN and CA welcomed elements in the RES’s Chapter 6 on Environmental Protection which recognised the need to conserve natural resources and protect and enhance the natural environment, but it was not clear how Priority 6—actions for environmental infrastructure and Green Infrastructure—related to EMRA’s policies within the Integrated Regional Strategy (IRS), RSS and its ongoing work to implement them. 2.7 EMRA have a long record of, and processes for, engaging environmental stakeholders to help develop regional policy, objectives, monitoring, reporting, and action plans for their IRS, Environment Strategy and the statutory RSS. In contrast, and despite a real willingness among environmental stakeholders, emda were rarely fully engaged with wider stakeholders and so failed to make best use of the available opportunities, expertise or potential to inform their own work. 2.8 In our experience, emda is unwilling to use subjective or untested evidence in its policy development— we believe they could be more flexible. The environmental evidence base can be limited and fragmented and we believe their approach, by default, discriminates against environmental objectives. EVective policies based on sound principles rather than hard evidence are achievable. For example, in the Milton Keynes and South Midlands Growth Area, EMRA’s environmental stakeholders developed the first ever policy ensuring a commitment to delivering Green Infrastructure. This policy was based on the principles of delivering sustainable communities and sustainable development.
3. The eVectiveness of the RES for the East Midlands in delivering against its targets 3.1 It is diYcult to comment on the eVectiveness of the RES or even the environmental priority actions. There is only one indicator for environmental protection (river quality as a very limited, proxy measure for environmental infrastructure). Other priority actions in the Environmental Protection chapter have no indicators. Welcome as some of the priority actions were to us, it was never clear how the success of eg, 6b priority actions “improving damaged environments” or “protecting and enhancing Green Infrastructure” (Action 6b) would be measured. 3.2 emda’s view was that the RES was the Region’s rather than emda’s, and although key partners were identified for the delivery of key actions: — emda did not seek to lead any process or work with partners named in the delivery plan, or stakeholders, to systematically monitor and report on progress of the RES. — An annual emda stakeholder event did not seek to measure or discuss the environmental performance of the RES in detail. — In contrast to the Regional Assembly’s Regional Spatial Strategy, there appeared to be no annual reporting mechanism operating through stakeholder engagement that could help develop appropriate indicators and report progress on actions. — Natural England has not been approached by emda since the publication of the RES for any information we might hold which might inform the RES’s progress. 3.3 Creating a natural environment evidence base to support the RES and provide a baseline for future monitoring was diYcult partly due to an incomplete and under resourced network of County Local Record Centres. Natural England has been working to address this issue since its foundation. The need to improve the evidence base was identified in the RES’s SEA process. To help address these issues, Natural England, working with partners including EMRA, emda and the Regional Biodiversity Partnership, sought to develop a project to create a regional information hub to improve the availability of natural environment Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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information. Unfortunately this project was unable to attract suitable funding streams, although Regional Observatories supported by their RDAs have developed such resources in other regions (eg West Midlands and South West). 3.4 Natural England welcomed the move to develop the Regional Index of Sustainable Economic Wellbeing (RISEW) as a measure of regional performance, as it included environmental components within the measure. However this still only values the environment in an economic context and as a limited range of negative costs, in contrast to the social measures which include costs and benefits. To help develop the potential for RISEW to be a more rounded measure we have worked with emda to develop this index further and commenced a joint scoping study in 2009. We look forward to continue working with emda to further develop the RISEW as a measure of regional economic progress for the new Regional Strategy. 3.5 However such approaches will not capture the intrinsic values of the natural environment and how it aVects the quality of peoples’ lives. These values need to be developed as part of the approach to delivering sustainable economic development expected by government though the mechanism of the new Single Regional Strategies. 3.6 Natural England would welcome future opportunities to work more closely with emda and advise them on such matters in preparing the new Regional Strategy.
4. The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of emda 4.1 The changes proposed in the Bill, and the Business, Enterprise and Regulatory Reform (BERR)/ Communities and Local Government (CLG) guidance on preparing Regional Strategies (Local Democracy, Economic Development, and Construction Bill policy document on Regional Strategies, January 2009) have implications for the remit of emda. emda have focussed on their role in strategic economic delivery. The proposed changes mean that emda, working with the Leaders Board, will have a responsibility to ensure that the new Regional Strategy delivers sustainable economic growth which contributes to sustainable development. 4.2 Natural England notes that the government’s intention is that sustainability will play a key role in shaping the new regional strategies. Natural England welcomes the recent changes to the Bill in the House of Lords which will give greater prominence to sustainable development in the revision of regional strategies.43 4.3 Natural England notes that government’s intention is that sustainability will play a key role in shaping the new regional strategies. During Report Stage (Day Two) of the Local Democracy, Economic Development and Construction Bill in the House of Lords, in setting out the role for RDAs and Leaders Boards, Baroness Andrews commented that: “…regions work towards stronger regional economies based on skills, jobs, investment, innovation and enterprise—there was no intention that it should mean an overriding imperative for growth at all costs”. Baroness Andrews further stated: “there are several further safeguards to ensure that sustainability plays a key role in shaping the new regional strategies”. This is very welcome. 4.4 Natural England would like to see the process for agreeing Regional Strategies to be informed by the best possible environmental advice and knowledge. With their respective fields of expertise, the Government’s environmental advisors Natural England and the Environment Agency should therefore have a statutory role from the outset. We therefore welcomed the comments by Baroness Andrews during Report Stage (Day Two) that: “the process for preparing regional strategies also requires full community involvement, including from statutory consultees such as Natural England and the Environment Agency, which will use their scrutiny and expertise to ensure that the strategy takes full account of all sustainability considerations.” 4.5 The BERR/CLG guidance on Regional Strategy preparation (paragraphs 3.2,3.19) lays out more explicitly that stakeholder engagement is a fundamental feature of preparing and delivering the strategy,and that RDAs and Leaders Boards must engage stakeholders, and work closely with statutory agencies from an early stage in preparation of the strategy. Engagement will be expected to be wide-ranging, meaningful and contribute to building consensus around the regional strategy (paragraph 4.23). 4.6 The changes proposed by the Bill will therefore require emda to work in close partnership with the statutory agencies, and other environmental stakeholders, to develop policy. This goes well beyond emda’s past approach of engagement based on evidence gathering, statutory processes and formal consultation (see answer 2 above). Furthermore, the aspiration of the Bill and accompanying guidance is that economic and spatial policy needs to be integrated in the regional strategy and that the implementation plan for the region ensures (social, economic and environmental) outcomes are integrated, rather than compartmentalised between diVerent strategies.
43 Lords Third Reading Stage—Local Democracy, Economic Development and Construction Bill—29 April 2009. Amendment 54, tabled by Baroness Andrews, which transposed Clause 80 (Sustainable Development) to after Clause 69 (Responsible regional authorities) was agreed. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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Regional Change Transition Plan 4.7 Natural England has seen the proposed Change Transition Plan, and notes the proposal to discuss the role of those agencies with investment or statutory functions, with them directly,and outside of proposals for wider stakeholder engagement. Whilst we would welcome this discussion we wish to be clear that whilst Natural England has a statutory role in advising on statutory processes such as SEA or Habitats Regulation Assessments, we also have a wider expert role as an advisor on the natural environment, relating to biodiversity, landscape, land management, physical activity and access to the natural environment, climate change adaption, and as a deliverer of significant investment to the region through our Environmental Stewardship schemes (see paragraph 1.3 above) 4.8 Natural England understands that the work to develop the evidence base for the New Regional Strategy has already begun. Natural England has not been formally consulted about the scope and timetable for this work, as it might relate to the natural environment evidence base. We look forward to such a consultation and welcome the opportunity to work with emda in future. 4.9 We would welcome the opportunity to be engaged in the manner described by Baroness Andrews and the Government Guidance, across the breadth of our interests and together with the other statutory agencies. Natural England would also advocate that wider environmental stakeholders in the region should be positively engaged in the process.
5. The role of other Government agencies such as the Government OYce for the East Midlands, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES 5.1 Natural England has found it diYcult to engage directly with emda to help deliver the RES, given the breadth of our interests, the tight economic focus and fluid, yet highly compartmentalised structures of emda, and a very limited staV resource with sustainable development responsibilities. Since the publication of the RES, and increasingly over the past year we have worked with emda on a range of projects, often as members of wider Regional Assembly project groups. Such work often related to elements of RES actions, although not explicitly, eg the East Midlands Green Infrastructure Network, the Environment data and evidence group, The Regional Climate Change Action Plan steering group. However there has not been similar working led by emda and directed to deliver the RES’s aims. (see answer 2 above). 5.2 We have also worked closely with emda in relation to investment in rural areas (see section 8 below).
6. The way emda’s resources are divided between rural and urban parts of the East Midlands, and whether the division is appropriate 6.1 emda, Natural England, and the Forestry Commission jointly deliver the Rural Development Programme (England) (RDPE). Between 2007—13 emda will disperse £48 million pounds across the region for larger projects to improve competitiveness, collaboration and diversification in land based businesses, and a further £12 million pounds to support Local Action Groups to deliver small scale projects which enhance opportunities in seven rural areas of the region. 6.2 emda has demonstrated an excellent approach to enable a wide range of businesses to access RDPE funding: simplifying processes, and improving accessibility to funding wherever possible. They have also worked collaboratively with Natural England and Forestry Commission to maximise integration across the entire programme, and have developed forums to engage wider stakeholders in monitoring delivery and advising on issues arising. This is seen as best practice by all other RDAs.
7. How well emda is performing on sustainability 7.1 It is Natural England’s view that while many of the actions in the RES are generically supportive of sustainability, the RES’s approach to economic development only has “regard for the social and environmental consequences of economic growth” (RES Annex D). True sustainable development actively seeks explicit win-win-win outcomes for social, economic and environmental interests, which is more than the avoidance or minimising of negative outcomes. Although the RES was subjected to SEA to avoid policy conflicts, it does not specifically look for new, creative policy solutions to deliver multiple benefits. 7.2 emda has not been formally subjected to scrutiny by the EMRA on its sustainability since 2005, so it is not clear how well emda’s subsequent business plan, processes and delivery incorporate or contribute towards sustainable development. However emda’s strict focus on its economic development role, its reluctance to own the RES on behalf of the region or explicitly champion the RES’s role to deliver sustainable economic development, was disappointing. Progress in developing its actions for protecting the environment has generally been as part of other regional processes eg, the regional Climate Change Action Plan, and emda’s Green Infrastructure network. 7.3 We are currently working with emda on two projects: the RISEW scoping study (see above) and a project to investigate the potential for carbon markets in environmental services (PES), which could contribute to developing sustainability approaches in the new regional plan. Both of these projects may expand our collective understanding of how the region’s environment sector might contribute to the economy and be incorporated in the Regional Strategy. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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7.4 In 2007 Natural England and the Regional Biodiversity Partnership worked closely with emda, developing guidance to help them discharge their Biodiversity duty as a public body,arising from the Section 40 of the Natural Environment and Rural Communities Act (2006). We are unaware of how this has been implemented or assessed and we have not been approached for further advice. 7.5 Given emda’s role in the production of the new Regional Strategy, and government’s guidance on its purpose, we look forward to emda being a champion for and exemplar of sustainable development in the Region.
Memorandum from the University of Northampton (EM 18) The University of Northampton wishes to write in support of emda. emda work hard to deliver its role of delivering sustainable economic development. It has significantly improved its strategic approach to the universities in the region through enhanced 1:1 consultation with universities on a regular basis, through collaboration with the East Midlands Universities Association (EMUA) and through open and transparent development of the RES and other strategies—such as the Regional Innovation Strategy (RIS). We believe the RES and the RIS in particular are relevant to the East Midlands. The priorities are clear and well evidenced. here was widespread consultation and a general sense that concerns were listened to. The RDA has to be complimented on devolving substantial sums to sub-regional partnerships equating to some 35% of budget. In Northamptonshire, the Northamptonshire Enterprise Ltd (NEL) oVers a coherent economic development body integrated with tourism, inward investment, observatory and regeneration. This is an example of “best practice”. In particular, the sub regional approach of emda means they have full cognisance of the Government’s MKSM growth agenda which provides so much opportunity in the south of the emda region. The RES seems to be eVective regionally according to evidence such as the ECOTEC evaluation of March 2009, and at county level through the NEL annual reports. The eVect of the economic downturn has been felt in the region. emda have responded rapidly with short term measures such as events and guidance. The universities have worked with emda to produce a guide to university services to help companies find their way out of recession. emda have worked closely with EMUA to ensure web-based and other forms of communication are in place to encourage university-business interaction. The University of Northampton is the only university in the county of Northamptonshire. Given the rural nature of much of our local catchment we believe that emda have enabled a fair distribution of resources across the rural-urban continuum. On the sustainability agenda this university is happy to confirm the progress led by emda. Through the Regional Innovation Strategy emda tendered for an innovative network (iNet) on the “environment” as one of four such networks. The University of Northampton led a consortium of the region’s universities, businesses and other bodies including the Building Research Establishment, to bid for—and win—the contract. Subsequently the University has worked very closely with emda to attract match funding from the West Northants Development Corporation, Daventry District Council and Northamptonshire County Council to create a unique Centre for Sustainable Construction. This £10 million facility will house 55 start-up companies working on new products to reduce waste, water and energy in the built environment. The Centre will provide an auditorium to seat 300 for events and conferences. The university intends to be an anchor tenant in this exciting initiative that is already attracting international attention.
Memorandum from Mr Stuart Marland (EM 19) I was pleased to see that you are examining the role played by emda in the business life and investment in our area. Over the years of meeting the staV I came to the conclusion that it was far from a sharp organisation but served itself very well. Very often all the correct jargon was used but it never got to reality which is a pity for the region, though their oYces were palatial! A little too much self serving. I think this region suVers from a loss of identity and pride when one compares with Lancs, Yorkshire, Northumberland, Scotland etc as the people are proud of their areas but Nottinghamshire has little heart and its organisations like emda that should be a great deal more active and vocal and not a talking shop for consultants and we really can’t continue in this vein; it needs to be a lot more proactive. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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I hope my thoughts aren’t too harsh but it’s not going to be given on a plate in the next few years.
Memorandum from The National Forest Company (EM 20) The National Forest Company would like to present the following comments as evidence to the enquiry. However, firstly by way of background summary of The National Forest and the NFC, for further information, please see our website www.nationalforest.org
What is The National Forest The National Forest is a forest in the making. — It is an inspiring example for the country, in the face of climate change and other environmental pressures. — It is a place of enjoyment and learning for its residents and visitors. — It is a place of contrasts, where people find quiet relaxation and active leisure. — It is a working forest providing new and sustainable livelihoods. The National Forest enriches the lives of its people and the landscape and wildlife of this part of England. The idea of a new multi-purpose forest for the nation was first mooted in the Countryside Commission’s 1987 policy document Forestry in the Countryside. The aim would be to demonstrate in lowland Britain that a large scale, attractive Forest could be created, blending commercial forestry with ecological, landscape and public benefit. Economic regeneration would come from the restoration of mining sites but in the long term many other benefits would also be achieved. The future of agriculture would be supported through opportunities for rural diversification. From one of the country’s least wooded regions, the ambitious goal for The National Forest is to increase woodland cover to about a third of all the land within its boundary. This is now well under way with woodland cover having increased from around 6% in 1991 to nearly 18% in 2008. This has made large swathes of countryside more accessible for local people and visitors with 90% of woodland sites open to all, to be explored and enjoyed. Increasing numbers of people are relishing this new public access in ever-changing surroundings and finding a host of attractions and activities to enjoy— all to the benefit of the local economy.
What is the National Forest Company (NFC) The National Forest Company was established in April 1995 and is responsible, through partnership working, for the delivery of the Government-approved National Forest Strategy. The Company is limited by guarantee and its founder members were the then Secretary of State for the Environment and the Minister for Agriculture, Fisheries and Food. The Company receives funding to assist in the delivery of the National Forest Strategy from its sponsor department, the Department for Environment, Food and Rural AVairs (Defra). Our mission statement is that, The National Forest Company: — Attracts and uses resources for ambitious, sensitive and imaginative Forest creation. — Provides the setting for new businesses, recreation, tourism and an improved quality of life. — Enhances wildlife and biodiversity. The National Forest Company works through working partnerships with landowners, businesses, public, private and voluntary organisations and local communities to fulfill the shared vision for the Forest. It promotes the widest possible participation in and enjoyment of the Forest. As the Forest matures, the Company promotes at international, national and local levels the experience and knowledge emerging from this inspiring and ambitious project.
Evidence and Comment (using your headings) — the role, responsibilities and accountability of emda. The NFC has always found emda staV and board members to be accessible and has been impressed with the breadth and depth of the consultation exercises it has undertaken. Inevitably, however, there will be occasions when a regional level body can see a little remote from local “on the ground” issues. This reflects the comprise involved in regional strategic activity rather than any shortcomings on behalf of emda itself. Indeed, the establishment of the sub regional partnerships and the emerging Multi Area Agreement based programmes has helped to give a county based structure to emda work. — the process by which the RES was drawn up and the level of involvement of regional stakeholders. No comment. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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— the eVectiveness of the RES for the East Midlands in delivering against its targets. The experience of the NFC is that there has been suYcient flexibility in the RES to enable investment in land, visitor and tourism based projects to be funded which have benefitted local communities and contributed to regional reclamation, employment and business development targets. — the eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors and the impact on local employment, and how well emda is meeting needs in the challenging economic climate. In the National Forest, emda has recognised the benefits to the regeneration of former mining communities of linking to the Forest vision and building a high quality tourism and visitor infrastructure as part of a diversified economy. — the changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on emda. No comment. — the role of other Government agencies such as the Government OYce for the East Midlands, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES. Region cross organisation working seems to have been good, exemplified by the Integrated Regional Strategy but I am not able to comment on what challenges this held for the Regional Assembly and emda. In Forestry, emda contributed well with others to the preparation of Space 4 Trees, (the Regional Forestry Framework). Arrangements between GOEM, emda, Forestry Commission and Natural England on the Rural Development Plan seem to be working well. — the way emda’s resources are divided between rural and urban parts of the East Midlands, and whether the division is appropriate. Within the Forest, emda has recognised the need for a focus on coalfield regeneration and the development of the visitor economy in what is a rural area. With the sub regional partnerships (LSEP and DDEP) and East Midlands Tourism, emda has contributed substantial funding (over £12 million) to the following projects: SRB programmes in Swadlincote and Coalville Rural Coalfield programme Heart of The National Forest (including Conkers visitor centre) Rosliston Forestry Centre, including timber lodges National Forest Youth Hostel Land acquisition and site development to develop and extend greenspace as part of the early Green Infrastructure programme The Woodland Economy Business programme (WEBS) The development of gateways to the Forest using new high quality signage and other visitor infrastructure. — how well emda is performing on sustainability. The projects supported by emda have helped to develop the National Forest as a showcase for sustainable development and design. Conkers, the Youth Hostel and Rosliston have all been successful in regional and national awards in sustainable development categories.
Memorandum from the Waterways Trust on behalf of the River Soar and Grand Union Canal Strategy Steering Group (EM 21) 1.1 Introduction This note outlines the role that the East Midlands Development Agency (emda) have played in funding and supporting the development of a strategy to realise the economic potential of the River Soar corridor in Leicestershire. This strategy has been developed to provide a framework for levering funding, and focusing and co-ordinating policy, investment and action to develop this economic and environmental asset. Development of the Strategy has been undertaken under contract by ARUP.The work was commissioned in May 2008 by The Waterways Trust with funding from emda. The programme has been project-managed by British Waterways. A steering group chaired by The Waterways Trust has overseen the work. Members of the steering group represent Leicestershire County Council, Leicester City Council, Charnwood Borough Council, Oadby and Wigston Borough Council, Blaby District Council, Leicestershire Promotions, Leicester Regeneration Company, Inland Waterways Association, Environment Agency and British Waterways. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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1.2 emda’s Role in the Development of the Strategy emda provided the funding and support for the development of the Strategy. They have worked through British Waterways and The Waterways Trust to bring together a range of stakeholders to oversee the development of the strategy for the River Soar, and to build a cross-boundary, cross-sector partnership to take forward its delivery. This strategy has identified priority actions for future investment and aligns with the objectives for the region’s waterways set out in the East Midlands Regional Spatial Strategy (RSS) and the Regional Economic Strategy. The rationale for emda acting as the catalyst for the development of the River Soar strategy, has been to address wider objectives within its remit of improving the quality of place to make the region a more attractive place to live, work, visit and invest in. By improving this vital source of green infrastructure in the region, for both urban and rural areas, it is hoped that economic competitiveness can be boosted. Through the Regional Economic Strategy, and groundbreaking research, emda have identified the significant economic value of waterways. This value stems from the role of Waterways as a tourism and leisure asset, as a focus for physical development and regeneration, and their wider contribution to quality of place (which is increasingly recognised as an important component of the economic competitiveness of places). These quality of place issues are pertinent in urban areas, as identified through the emda research on “Capturing the Urban OVer”. The city of Leicester forms an important part of the River Soar corridor, and improvements in quality of place are an important component of emda’s and Leicester City Council’s strategy and investment to attract and retain more people (especially families) to live in the city,and to attract business investment.
1.3 The Corporate Plan:Land and Development emda’s Corporate Plan identifies investment across the corporate objective themes for the spending period 2008–09 to 2010–11. One of these six themes is land and development. Investment in land and development is based on wider regeneration and economic development investment to support the quality of place agenda and the need to create a business environment that attracts inward investment into the region. emda’s investment in land and development continue to be focused around thematic programmes, one of which is focused on regeneration of waterway corridors. emda works with partners to target and co-ordinate its investment with that from others to support regeneration across the region. Relevant means of achieving this in relation to this strategy for the Waterway includes: — bringing brownfield land back into beneficial use, creating developments which realise economic, social and environmental benefits; — providing continued support to physical regeneration in the region’s main cities and towns to create business and employment opportunities, and work with others to improve the attractiveness of urban areas as places to live and work—including for skilled and creative people—addressing issues of social exclusion and migration from cities to more rural areas; and — emda will continue to invest in projects that help strengthen the economy of rural areas. The economic and property market downturn, as well as constraints on emda’s capital funding will aVect delivery of physical regeneration. Investment will be focused on maintaining momentum with regeneration where possible, and preparing schemes for the up-turn through refocusing investment in site assembly and infrastructure as opposed to scheme delivery.
1.4 emda’s Role in the Funding of the Project Within this project emda’s funding has been used to bring together a partnership to address the diverse range of issues entailed within this project. This partnership has been beneficial as it addresses the problem of the Waterway being in several local authority areas, multiple ownership, and with a wide range of other stakeholders with key roles (such as the Environment Agency, Leicestershire Promotions (the tourism partnership) and the Leicester and Leicestershire Economic Development Company. The strategy will provide a coherent framework for policy, funding and action for these organisations to take forward, policy, funding and action that would otherwise be fragmented with the impact dissipated. This project can be seen to align with emda’s position on the funding of projects, based on the agengy’s “framework for intervention” set out in the RES and Corporate Plan. emda’s funding, whilst not insignificant, is modest in the context of the whole regional economy. emda seeks to have a positive impact disproportionate to the scale of its powers and resources for direct intervention. This means focusing on maximising leverage of private investment and working with and through others to align economic development investment with investment from other sources. In creating a strategy for the improvement of the Waterway, it was therefore of vital importance to ensure they engaged with a range of stakeholders and partners, including the various local authorities, businesses and local residents. This stance is similarly supported in the Agency’s central role in delivering the Priority Programmes identified in the Regional Economic Strategy (RES). Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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The priority programmes and investments are delivered by joint working between emda, local authorities and partners through Single Programme and ERDF funding and cover the following areas. emda are moving towards establishing arrangements with Local Authorities in developing local investment plans, which will clearly align the RES, RSS, Local Area Agreements (LAAs), the Leicester and Leicestershire Multi Area Agreement (MAA), and Local Development Frameworks, and local Community Strategies. The partners that form the River Soar steering group are currently developing proposals to access Growth Point funding, which is part of the Homes and Communities Agency (HCA) budget. emda’s strong partnership with the HCA, and the strong alignment of strategic priorities between the two organisation is very positive.
1.5 Conclusions — emda’s investment in and support for the River Soar strategy has been based on a clear rationale stemming from a strong fit with evidence and strategic policy developed by emda, including the RES, and close alignment with policies in the RSS, of the HCA, and local authorities. — emda have genuinely acted as a catalyst for change and action, using limited funding to achieve maximum leverage by bringing partners together to help deliver through better targeting and co- ordination of funding and action across a wide range of policy areas, organisations and diVerent administrative boundaries. — Alongside the action emda are taking to help business in the recession, emda’s support and investment in the River Soar project demonstrates their focus on long-term issues, such as quality of place, that underpin economic competitiveness and the attractiveness of cities and places as locations to live, work, visit and invest in.
Memorandum from Sport England East Midlands (EM 22) 1. Executive Summary 1.1 Sport England exists to create sporting opportunities in every community. Our goals are driven by a national strategy (2008–11) with the overarching aim to build the foundations of sporting success through the creation of a world class community sport system in England; making the most of the unparalleled opportunities presented by the London 2012 Olympic and Paralympic Games. We have three outcomes; to increase the number of people taking part in sport; to sustain participants in sport and tackle drop-oV from sport and, finally, enabling participants to excel focusing on developing and accelerating talent. 1.2 Sport England has benefited from a progressive and strategic relationship with emda over an extended period of time. We have clear and diVerent roles but we have developed a range of interventions and policies in exploring where sport can make a significant contribution to the regions economy. This paper identifies collaboration in terms of: — policy development; — sport focussed projects — supporting the international reputation of sport in the East Midlands and — profile, advocacy and support for sport. 1.3 The areas of collaboration are significant, meaningful and have derived real benefits for both organisations and our respective communities. This memorandum outlines these areas and which we feel are worthy of the Select Committee’s attention. 1.4 Based on research commissioned by emda we know: — sport contributes to 46,775 FTE jobs in the region; and — sport contributes 2.28% GVA to the region.
2. Introduction 2.1 Sport England is a non-departmental public body creating opportunities for people of all ages and abilities to play sport in every community. The Department of Culture, Media and Sport is Sport England’s sponsoring body on whose behalf we distribute both Lottery and Exchequer funds to promote greater participation in sport. Within the region Sport England has distributed £39.5 million Lottery funds between 2004–08 (against total projects costs of £109.4 million) and a further £17.4 million in Exchequer resources. 2.2 Sport England began working with emda from its earliest days as a regional agency in 1999. This collaboration has taken a number of diVerent forms over the intervening period. We have distinct roles and responsibilities as agencies but we have developed a range of interventions and policies in exploring “the common ground” where sport can make a significant contribution to the regions economy. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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3. Collaboration in Policy Development 3.1 Policy collaboration in development of the second Regional Economic Strategy 2003–10 (“Destination 2010”) took place at the same time as Sport England developed our own regional plan for sport (Change 4 Sport 2004–08). In terms of the RES; the document highlighted the contribution of tourism and culture (including sport) as one of a number of key strands and we were fully involved in the consultation process which led to the development of the strategy. The strategy identified two key activity areas relating directly to sport. They were: — Establish a sports cluster to maximise the internationally significant developments at Loughborough University, and — Examine the eYcacy of sport in developing community regeneration and sustainable communities. 3.2 In both key activity areas progress has been substantive. Loughborough Sport Park is now on site and due to be completed in 2009. This £8 million project is part financed by both emda and Sport England along with other partners including Leicestershire County Council and Loughborough University itself. It will bring together a number of National Governing Bodies (NGB) to “hot house” ideas and grow sporting capacity as well as maintain the international reputation the University has in terms of sports science. It will have two objectives: — modernising NGB’s by increasing eYciency and eVectiveness through shared services, greater investment in innovation, information technology and sharing of expertise; and — growth of modern, knowledge based organisations with high levels of graduate recruitment and retention, as part of a sports cluster development. 3.4 In terms of the eYcacy of sport in developing community regeneration and sustainable communities. Sport England and emda developed a pilot project to examine the contribution of sport to the development of social enterprises. This was underpinned by a baseline study, commissioned by emda, which identified 80 social enterprises generating a total income of £6 million. Social Enterprise East Midlands hosted a jointly funded three-year post for Sport England and emda which stimulated the creation and development of sports clubs and a support mechanism for clubs to access Social Enterprise Development Fund. 3.5 The third RES a flourishing region, completed in 2006, had fewer immediate areas for collaborative working. This in part reflected an organisation focusing its objectives following a period of initial set-up and scoping its role and responsibilities. Nonetheless as an organisation emda continued to work in a collaborative way, having an open view about where we could exploit areas of joint interest. The RES does include priority activities (under Strategic Priority 2—Enterprise and Business Support, 2h: “Supporting SMEs to harness business opportunities such as public procurement”) “Maximising the benefits of the London 2012 Olympic and Paralympic Games”. 3.6 Both agencies can demonstrate considerable leadership and calculated management and sharing of risk in jointly funding an Olympic and Paralympic Games—2012 Co-ordinator. This oYcer has stimulated considerable activity regionally and nationally with the comprehensive network of County Sports Partnerships (now County Sport and Physical Activity Partnerships) taking a lead to stimulate sub-regional activity. emda chairs the East Midlands management group working with the Nations and Regions Group of London 2012. 3.7 Sport as an Economic Driver—emda have been at the forefront of building a robust picture of the contribution of sport to the economy commissioning work around both the “economic impact of sport” and “the sub-regional impact of sports tourism”. 3.8 Economic Impact of Sport—emda contracted Knight, Kavanagh and Page and York Consulting to establish a robust picture of the contribution of sport to the regional economy (reporting in 2005). This demonstrated the significance of sport and sports-related businesses, industries and employment are very significant to the economy of the East Midlands. Sport: — accounts for 46,775 jobs or 2.4% of the overall number in the East Midlands; and — Accounts for 2.28% of the East Midlands regional economy contributing around £1.421 million to the gross value added (GVA). 3.9 Sport Tourism—emda also contracted PAWA Consulting to develop a deeper understanding of the reach and scope of sports related tourism. The report looked at the impact of a range of sporting events (eg 2004 Nottingham Tennis Open, 2004 Burghley Horse trials and 2005 Nottingham Cup Synchronised Skating). The process of contracting this piece of work stimulated a range of activity and higher/stronger profile with East Midlands Tourism as well as a range of sub-regional partners (Sub-Regional Strategic Economic Partnerships and Destination Management Partnerships).
4. Collaboration in Sport Focused Projects 4.1 Sport England and emda have worked collaboratively in a number of areas on specific projects based on complementary areas of our respective policy framework. As demonstrated above of particular note are the following: — Loughborough Sports Park. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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— Development of sports based social enterprises. — Maximising the benefits of the 2012 Olympic and Paralympic Games.
5. Supporting International Standing of Sport in the East Midlands 5.1 emda have taken a proactive stance in investing in iconic sporting facilities (ie Trent Bridge, home to Nottinghamshire County Cricket Club) to ensure the stadia comply with international requirements. On the basis of an investment of £2.5 million by emda, towards total project costs of £8.2 million, international cricket has been guaranteed beyond 2009. The upgrade of facilities was a key determinant in the cricket clubs success in winning the right to stage the International Cricket Committee World Twenty20 tournament in June 2009. The East Midlands region is the only region outside London to be hosting the tournament bringing a global audience to the East Midlands. An estimated 500 million will watch semi-finals day at Trent Bridge on 18 June and a conservative estimate is that major matches at Trent Bridge will bring in excess of over £20 million in support of the regional economy over the course of the next 10 years. 5.2 emda has also supported a number of events including the Tour of Britain and Football Association Women’s Cup Final (2007, 2008 and 2009)
6. Profile,Advocacy and Support for Sport 6.1 Emda have taken a pro-active approach to establishing their role and continuing to play an active role as ambassadors for the region and beyond. The Chief Executive of emda was a long-time member of the Regional Sports Board. The emda Board has a nominated “sport” champion. Moreover capacity to deliver on the specific areas relating to sport is provided through their sports policy oYcer.
Memorandum from Mr Ken Grundy (EM 23) I am a Chartered Surveyor and have operated my own development company in Nottingham since 1979. My companies have regenerated many old industrial buildings in the city and turned them into oYces, shops and residential accommodation. In 1989 I joined a public/private sector alliance which formed Lace Market Development Co. This company enabled and assisted the development of the then run down Lace Market area of the city. Today it is a vibrant commercial and residential area in the heart of Nottingham. I am pleased to say that Government funds played a significant part in this regeneration. Since 1999 I have been the vice-chairman of Nottingham Regeneration Ltd (NRL) a public/private sector company that has become the physical regeneration vehicle of Nottingham City Council. Whilst my focus is property I am aware of the extent of emda’s financial assistance to trading companies and the benefits that this has brought to the area, not only the creation of new jobs but also the help they have given to companies to sustain existing jobs. Many projects that have been presented by NRL, and those that have been individually promoted by others, would not have come to fruition without the understanding of the locally based emda. I firmly believe that emda’s excellent team represents good value for money in the East Midlands area and in my opinion their financial investments have been well placed. Myself and many in the Nottingham property fraternity wish to see emda continuing its role in our area.
Memorandum from Mr David Larmour (EM 24) I was heartened to read on the BBC website that at last someone is going to give some oversight to emda. I am not sure if your committee wants to hear from the people who pay for all of this but I will take a chance that you as a group are suYciently open minded to receive inputs from people other than employees of emda. I have had several dealings with it over the last eight years and I find its staV capricious and ill focussed. Policies arrive and disappear without any regard to work that may be “in process”. There are stories behind these comments but unless your Committee wants more detail my main cause of writing is to invite you to examine the distribution of money throughout out the region. The Board of emda has traditionally had poor or no representation from Northamptonshire. When I asked an oYcer from emda why this was his rather evasive reply suggested that there was no one up to it! I realise that emda does not purport to be a democratic body (more than any other quango) but for us in Northamptonshire to have confidence in its function it would be reasonable to have a local person charged with the task of ensuring that Northamptonshire does not lose out and that it receives a fair and reasonable share of the available development cash. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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The BBC website reports that £200 million was spent by emda last year. How much of that was spent in the Northamptonshire? What was it spent on? I am aware that NEL (emda’s cipher in the County) was allocated approx. £3 million last year. At least NEL is approachable and it is possible to establish where that money went. Additionally I am interested in the balance between economically and socially orientated projects. In summary, it is my experience that emda is not accountable by any stretch of the imagination, that its staV are capricious in their decisions and that they appear to have a bias against Northamptonshire (or at the very least a bias in favour of Nottinghamshire and Derbyshire). I welcome your investigation of emda and it modus operandi, and I look forward to reading your conclusions in due course.
Memorandum from Mr R D Cotterill (EM 25) Instrumental in the formation of Eckington Development Company (EDO) in 2000. This is a community project formed to regenerate an area of higher than national average unemployment. My remit was town centre economic regeneration. This has been mostly addressed by the construction of two managed business centres, oVering high quality rented oYce accommodation of various sizes, together with space available to the local community. To achieve this outcome, I developed business plans, and entered into negotiations with the European Regional Development Fund (ERDF), East Midlands Development Agency (emda), the Sub-regional Strategic Partnership (SSP), North East Derbyshire District Council (NEDDC), the Coalfields Regeneration Trust (CRT), Barclays Bank, The Adventure Capital Fund (ACE) and Eckington Parish Council (EPC). The first phase was to generate income to convert a vacated bank into a “hotdesk” business centre. Capital achieved for this was £128,000 (ERDF, NEDDC). The project was successful, and phase two, a three storey extension to the original centre was started. Capital achieved £800,000 (emda, SSP, CRT & NEDDC). New building completed November 2005, fully tenanted within one month of opening. The third phase began in January 2008. Capital achieved £874,000 emda, SSP,NEDDC, CRT, ACF). This is a new build on the site of a derelict council building. Two stories, high quality oYce accommodation and community space. Building occupied October 2008, already 60% occupied. When this project started in 2000, we had 14 boarded up shops in Eckington, we now have one, and that is boarded up whilst being refurbished. In 2000 you could accommodate a football match in NEDDC car park, now you need be there for 8:30 am to get a parking space. Of course this regeneration cannot be attributed solely to the work of EDC, but as no other agency appears to be active in the town centre, we must be able to take some credit for the work done here. Also achieved £20,000 from NEDDC and EPC to install CCIV coverage of the town centre, and £52,000 (CRT) to fund a new project called S21 Live, to use music to engage with local children, oVer music lessons and build a recording studio. This has proved to be highly successful and is now oVering lessons to over 200 children per week, holding a talent showcase every two months, and recently recorded a DVD of the local “over 60’s” club singing Christmas carols together with our youth cohort. Coupled with this success is a marked decrease in anti-social behaviour and vandalism within the town centre. We don’t “lock them up”, we invite them in, and this seems to be having the desired eVect. A further grant is being sought from CRT to continue and expand this project, with support now from many professional musicians, including Roger Daltrey (The Who).
Memorandum from Loughborough University (EM 26) Summary — Loughborough University considers that emda has performed an important and valuable role in the development of the economy in the East Midlands. — The University welcomes the opportunity the RES gives to address the economic and infrastructure planning on a regional basis, working across the artificial and historical boundaries of local authorities. — Both emda and the RES are important in enabling a wider strategic view to be taken, an essential requirement in economic development. The University is situated at the heart of the three major cities of the East Midlands and relates to businesses across the entire region. — The University welcomes the new opportunities for collaboration that new arrangements for local economic development will bring, and hopes that the benefits of a strategic regional approach will be not just protected but enhanced under the new scheme. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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— The University has good working relationships with other regional bodies such as GOEM, and believes that the increasing responsibilities of local authorities will make partnership working in economic development policy more important than ever. — The University, as an internationally recognised research-intensive institution, is committed to also playing a full part in the regional economy, and to deploying its considerable expertise and capacity to support the well being of those who live and work in the region.
Submission 1. It is our view that emda has produced a good economic strategy for the region. emda is clear about its role in the delivery of that strategy. 2. emda has established a number of actions to ensure the strategy is achieved. One example of these are the i-NETS. 3. The changes in role and responsibilities of emda as a result of the Sub-National Review are just being implemented and so it is not yet clear how the division of responsibilities with other bodies, in particular with Local Authorities, will operate in practice. However, it will be important that the enhancements oVered by the new arrangements do not come at the expense of a genuinely strategic and regional view. 4. We are not aware of any problems of accountability with emda. 5. We were impressed by the considerable opportunity for stakeholders to take part in developing the RES. This engagement occurred at a number of diVerent levels. 6. In terms of the current economic situation, many companies in the region are experiencing a downturn in business and are making employees redundant. emda has responded swiftly to the situation, reallocating resources to provide immediate support (for example through the companies loan scheme). 7. This is a necessary response to immediate circumstances, but it is essential that there is a return to investment in support of long term strategic goals is essential as soon as possible. 8. Changes to regional policy will inevitably change the role and focus of emda along with other RDA’s. We expect this to be embraced as an opportunity both by emda and those bodies with new statutory responsibilities for economic development. We welcome the increased local oversight and direction that the new arrangements will bring, although it is essential that this is not at the expense of the ability to take a regional, strategic view. 9. In the area of sustainability, emda has played a key leadership role in the region. It has recognised the strength of both the academic research base in this field and also the number and range of businesses active in the field. It’s support for the successful submission to host the £1 billion Energy Technologies Institute was exemplary, in particular the willingness to work closely with AWM (Advantage West Midlands) on a cross-regional basis. 10. Indeed the development of the low-carbon energy cluster at Loughborough, and highlighted during the recent visit of the Prime Minister and Secretary of State for Business, are a clear example of the great benefits of the sustained and strategic intervention that emda has deployed in areas of special opportunity.
Memorandum from Dynex Semiconductor Ltd (EM 27) Executive Summary 1. This submission is prepared by a medium sized manufacturing business, Dynex Semiconductor Ltd Lincoln, UK and provides evidence of its experiences with the East Midlands Development Agency over the past year. 2. It highlights the experiences with a Business support programme, High Growth East Midlands (HGEM). It shows that prior to engagement on the programme the business did not have a very strong impression of emda, but that during the programme the engagement with emda became strong and successful. The success is ascribed to emda’s use of a sector knowledgeable account manager and their selection of a professional coach. This contrasts with prior patchy and unfocussed connections to emda via local agencies. HGEM led to other useful business connections with both emda and other bodies. The outcome was positive for the business. 3. It is recommended that the use of sector specific account management be applied as a priority over agents that are determined by geography.Also it is suggested that businesses should be targeted with selected support packages by emda. Further adoption of HGEM and similar support packages is encouraged Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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Introduction to Dynex Semiconductor Ltd 4. Dynex is a long established Lincoln, UK based designer and manufacturer of semiconductor components for power electronic systems. Originally part of GEC-Marconi, the company was bought out by a Canadian businessman in January 2000 and became a public listed business on the Toronto venture stock exchange. The business has grown substantially in recent years from a period of contraction and retrenchment in the period 2000–05. The business employs 265 people and had a turnover of around £18.5 million in 2008 up from £10.3 million in 2005, and exports around 80% of output. 5. Dynex joined the East Midlands High Growth Programme (HGEM) in May 2008. This programme is the East Midlands Development Agency’s flagship business support programme supporting businesses up to £20 million turnover and with demonstrated growth potential 6. In October 2008 75% of the common shares of Dynex’s Canadian holding company,Dynex Power Inc., was acquired by CSR Times Electric (China) “TEG”: the leading rolling stock electrical system provider and integrator for the railway industry in China. TEG is engaged in developing, manufacturing and selling railway power electronic equipment and other electrical components including power semiconductor devices. 7. This submission is based on Dynex’s experiences during the period since May 2008 when it engaged with the HGEM programme. It has been prepared by Dynex management.
High Growth East Midlands Programme 8. Prior to joining HGEM Dynex had experienced only occasional engagement with emda both directly and via Lincoln local agencies such as Business Link and Lincolnshire Enterprise. In general the business was not knowledgeable about local regional business support, and connections with the regional agencies had been patchy and unfocussed. At that time we did not have a strong impression of local business support, mostly delivered by local Lincoln agents, nor have any clear established direct connections with emda. 9. We were alerted to HGEM by a cold shot E-Mail and we decided to apply to join, although we were initially unsure if it was appropriate to Dynex. We are now aware that had we not applied then we would have missed what became an important connection with emda, and picking out the E-Mail from our very busy inboxes was quite by luck. If there is any substantial criticism of the programme it was that Dynex was not alerted to the programme directly, for example by the Lincoln or Lincolnshire based agencies that knew of Dynex’s business and its interest in growth at that time. 10. The initial contact with HGEM was through PERA an East Midlands based technology-based consulting and training group. Our first contact was very successful, leading to a strategic review of the business and proactive assistance in applying for and being engaged by HGEM. It was the strength of that first contact, who had engineering business knowledge, that gave us our first favourable impression and encouraged Dynex to proceed to commit time and resource to the programme. 11. An account manager at PERA was assigned to Dynex for the programme, The support oVered by the account manager was a key highlight of the programme. Throughout the account manager also worked diligently with Dynex to achieve greater engagement with emda. In our opinion this is a model that could be followed in other business support areas. 12. The programme assigned a professional coach. Great care was given by emda to the selection of the coach and the identification of the key areas where support would enhance Dynex’s growth potential. The work with the coach was the most important and successful part of the programme and has led Dynex to devote more time to developing its staV and getting more from its organisation. 13. Other activities within the HGEM programme were less eVective for Dynex. Training at Nottingham University Business School, training at Pera Middle Aston and networking events were useful and high quality,and would clearly be highly beneficial to other businesses, but did not achieve the same strong output at Dynex as that of the one to one coaching.
Other Benefits 14. Owing to the commitment by the account manager and the HGEM management at emda other connections resulted. 15. The East Midlands China Business Bureau were engaged who have since assisted with Dynex’s relationship with CSR Times Electric. 16. Assistance and support with Chinese visits to the region were provided by both emda, and through their agencies, the City and the County Council. This proved invaluable in building relationships with Dynex’s new owners and investors from China. 17. emda introduced the China Britain Business Council, and they are now providing business training to give staV a better understanding of how to work with our Chinese Parent Company and new Chinese Customers Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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Outcomes 18. The HGEM programme has improved Dynex’s focus on strategic growth and helped to establish a growth and innovation culture, it has encouraged management to develop its staV more eVectively to make better use of natural skills and talents, it has better prepared Dynex to embrace the opportunity brought by its link to China, and it has brought Dynex closer to emda so that future support can be more eVective.
Recommendations 19. The HGEM programme acted as a focal point for Dynex to engage with emda. This one-stop-shop or account manager approach has given greater clarity to the relationship between Dynex and emda. Adoption of account management across a broader range of programmes is recommended including the use of a sector knowledgeable account manager. 20. Location of the contact can be anywhere within the region as E-Mail and telephone communication deals with day to day matters with only occasional need for face to face discussion. Less emphasis should be placed on using geographically local agents to engage on support programmes and greater emphasis placed on quality and sector relevance. 21. Programme engagement to be more proactive and target businesses. For example the HGEM programme could have found Dynex and matched us to the programme: we were already known to emda via its agents as an eligible business. 22. Continue to build and develop the HGEM programme and apply its model to other support initiatives.
Memorandum from the East Midlands Universities Association (EMUA) (EM 28) Executive Summary 1. — EMUA believes that emda plays a valuable role in driving the Regional Economic Strategy (RES). Of particular value to the Higher Education (HE) sector is the role that emda has played in supporting universities to exploit their expertise, and to develop innovative activity with business in support of common objectives. — The process by which the RES was drawn up should be considered as best practice, in terms of engagement and consultation as well as development and use of informed baseline data and evidence. Stakeholders, including the Universities, were fully involved and were able to make comment on and help shape the Strategy. — The current RES is appropriate; the Regional Innovation strategy (RIS) and Regional Technology Framework (RTF) are relevant mechanisms, for the delivery of the RES and universities are both encouraged and supported to play their part. — Against £73.6 million invested by emda between 2003–07, Higher Education Institutions in the region levered more than £201.5 million in matched funds. — The impact of the Sub-National Review may limit the role of universities as delivery partners, and the significant funds they can raise against regional investment. — emda’s response to the economic downturn has been appropriate and rapid. However, a number of factors limit emda’s ability to deliver including funding constraints and changes to subregional structures.
Introduction 2. The East Midlands Universities Association (EMUA) represents the ten Higher Education Institutions of the East Midlands (De Montfort, Derby,Lincoln, Leicester, Loughborough, Northampton, Nottingham, Nottingham Trent Universities; The Open University in the East Midlands, and Bishop Grosseteste University College Lincoln). This response was formed by consultation with members, and agreed by the EMUA Steering Group, (comprised of the Vice Chancellors and Principals of member institutions). 3. In the East Midlands, the 10 HEIs have formed excellent relationships with the Regional Development Agency, and actively participate in economic policy development and delivery both individually, and collectively (facilitated through EMUA), at a regional level. EMUA, and its member institutions work closely with emda in the development and delivery of the Regional Economic Strategy. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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Evidence The role, responsibilities and accountability of emda 4. Regional Development Agencies exist to raise national and regional economic performance by working to promote regional regeneration, investment, skills, training, employment, eYciency and competitiveness. We believe that this is a valuable role, and that the work of emda has had a positive impact on the region. 5. The Agency has applied its innovation and skills agendas in a vigorous way to promote regeneration, regional competitiveness, and inward investment. A feature of this has been a strong collaboration and joint investment with universities in the region, which we have welcomed. Of particular value to the HE sector has been the role that emda has played in supporting universities to exploit their knowledge and to reach out to business through investment in a number of projects and initiatives. 6. We have no concerns over the accountability of emda.
The process by which the RES was drawn up and the level of involvement of regional stakeholders 7. emda undertook wide and full consultation with regional stakeholders in the process of developing the RES, and supporting documentation including the evidence base and related strategies. Expert contributions were sought to develop the evidence base, including from the HE sector, followed by multiple dissemination events, meetings and invitations to stakeholders to make written submissions.
8. We particularly welcomed emda’s encouragement for universities and EMUA to engage fully with the process. As a result, the role that the HE sector can play in driving the regional economy is clearly recognised and built in to the RES. Our universities are positioned as economic drivers within the Strategy and the associated innovation agenda; focused around priorities mutually agreed both directly and through the Innovation Council.
9. We have already had several discussions with emda about how we can contribute to the next RES, through the regular and well-established channels of communication between the RDA and the region’s HEIs. The willingness and openness of emda to engage with us in the next phase of strategy development is commendable.
The eVectiveness of the RES for the East Midlands in delivering against its targets 10. The New RDA Tasking Framework required each RDA to show in its Corporate Plan for 2005–08, how, in support of its statutory role and responsibilities, it would address the priorities identified in the Regional Economic Strategy for its region and contribute to the delivery of the Government’s PSA Targets on Regional Economic Performance, Sustainable Development and Productivity/Rural Productivity. In its Corporate Plan, emda provides full details of how it will allocate its budget to deliver progress in meeting the objectives set by the Regional Economic Strategy, and how this activity will contribute to the targets that the RDAs have been set. The clarity and focus of these priorities is helpful in enabling HEIs to shape their strategies and their contribution.
11. We believe that the current RES is appropriate, and are content with how resources were allocated in emda’s Corporate Plan to achieve objectives and Government targets (which emda have demonstrated that they are meeting). It is however a concern that the agency is still required to meet targets/KPIs that were predicated on a growing economy, which is impacting on the activity they are able to undertake. The system needs to flex more quickly, in real time, to new challenges. We also feel that the university sector should have a role to play in that adjustment process.
12. We see the Regional Innovation strategy (RIS) and Regional Technology Framework (RTF) as relevant mechanisms, for the delivery of the RES. There was intensive and welcome consultation with HE over these mechanisms. The RTF is notably flexible. Due to their recent introduction, it remains too early to say whether the implementation vehicles for the RIS (the iNets) will cater for all sources of innovation opportunities and needs across the region. However, the regional universities have been instrumental in setting up the networks and play and active role in their activity.
13. EMUA is very pleased with the level of intervention and engagement with emda. EMUA, and separately its HEIs have regular and structured communication with emda, which has resulted in a shared understanding of each other’s roles and priorities. We feel that emda has sought to proactively develop its experience and knowledge of the HE sector and this has helped greatly in identifying joint funding opportunities supporting the RES.
14. By working with the HE sector, emda has been able to maximise the impact of their funding, through leverage of matched funding. Against £73.6 million invested by emda between 2003–07, Higher Education Institutions in the region levered more than £201.5 million matched funds. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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The eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors and the impact on local employment, and how well emda is meeting needs in the challenging economic climate 15. EMUA agrees that emda’s focus on key sectors, innovation and high value-adding businesses remains appropriate, despite the recession, since these businesses are not only strategically important to the region, but are also the best positioned to respond to the upturn when this comes. However, emda’s capacity to respond to the recession has been impacted by budgetary cuts. 16. The recession is manifesting itself diVerently in both timescale and magnitude in the diVerent parts of the region. This means that some interventions would be best delivered at the subregional level; the transition outcome of the SNR and the considerable variation in the competency/capacity of the local authorities to deliver strategically important economic development activity, complicates the picture for implementation. Whilst the geography covered by emda is challenging/they cover it well. We have some concern that too much fragmentation may reduce impact. 17. emda has recognised the strategic imperative of preserving skills and jobs where possible, and the need to protect sound businesses that have been impacted by the contraction of credit. Their prompt actions regarding the development of the Transition Loan Fund, the initiation of Enterprise Loans East Midlands (June 2008) and the flexing of a number of existing programmes to meet business needs in the current climate (eg Business Transformation Grant, environmental sustainability support etc) is commendable. emda has initiated a series of “Survive and Thrive” business support events to SMEs around the region providing advice to businesses and showcasing the support packages that are available. This activity is supported by a dedicated web repository of “Survive & Thrive” information. 18. However, the implementation of the ERDF competitiveness programme by emda in this region is bureaucratic and diYcult. Universities here, unlike in some other regions, have been unable to apply for ERDF match funding for recession-related initiatives such as the HEFCE ECIF Challenge fund, because the short timescales cannot be achieved in the ERDF scheme. 19. EMUA welcomes emda’s support for our EMKN initiative (East Midlands Knowledge Network) and their provision of dedicated higher level skills advisers through the Beyond Brokerage project. Both activities are designed to assist businesses to locate the right partners in regional HE whether that be for innovation and knowledge transfer or for skills development, issues that are critical to business resilience during and beyond the recession. 20. Emda stands alone amongst EMUA’s esp regional partners in recognising the vital importance of higher level skills to the region’s economy during and after the recession. Their support for graduate recruitment in the region’s SMEs and in raising the profile of innovation, and access to finance for innovative businesses, through initiatives such as the University Challenge Fund (Lachesis), Hot Prospects, regional capital investment funds (such as the early growth fund), is both welcome and appropriate in the current climate.
The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of emda 21. The ability for the RDA’s to deliver and manage some services on a regional level, through working with key stakeholders (including universities) will remain vital to supporting the regions’ economic growth. In the East Midlands, the universities have continued to build on their relationship with emda, leveraging substantial funds to deliver key strands of the Regional Economic Strategy. If devolution of funds to Local Authorities shifts the focus and type of investments to very local priorities confined to small administrative areas, this may limit the role of universities as delivery partners, and the significant funds they can raise against regional investment. The economic footprint of universities does not always map easily onto the administrative boundaries of local authorities. The geography covered by emda is a more appropriate scale for many activities. 22. The case study below is just one example of how RDA investment to university-led projects delivers benefits at a regional level. Although this project clearly benefits local areas (eg by establishing new businesses) the spread of impact across the region, and the nature of the collaboration between eight Universities characterises this as the type of project that should continue to be funded by the RDA, rather than many Local Authorities. There have been other significant initiatives that demonstrate the breadth and depth of impact, such as the extension of Veterinary training at Nottingham which benefits the wider region. Investments by emda’s Derbyshire Strategic Partnership at the University of Derby strengthens its ability to generate national support and investment for employer engagement.
Case Study:Higher Education Innovation Fellowships The East Midlands has operated Regional & Innovation Fellowships programme since 2000, which is a regional collaboration between eight of the Universities in the region. Through small, flexible grants to academics, the programme facilitates the commercialisation of ideas, products and processes, thereby increasing the flow of new technology from Universities to business. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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The programme is recognised nationally as an example of best practice in partnerships between RDA’s and Universities. £1.8 million has been invested in the programme to date (33% of this from emda), with a further £1.2 million committed from emda from 2008–11. From 231 awards made by 2007, the following economic development outcomes have been achieved: — 15 spin-outs. — 8 licence deals. — 17 patents. — 25 new products/processes. — £6 million Venture capital investment. — £12.5 million sales capital projected for 2009 23. The changes to policy will require emda to manage a far more complex and potentially contentious strategy development process for a Single Regional Strategy than the one that applies to the RES. We are concerned that the new strategy development process appears to be far more opaque than current arrangements, and lacking in clarity as to which points in the strategy development process will aVord economic, social and environmental partners the opportunity to engage in and influence the strategy development process. It is important that the process ensures the eVective engagement of stakeholders in the way that emda have done so well in the past, when developing the RES.
Memorandum from the Environment Agency (EM 29) Summary The Environment Agency welcomes the opportunity to respond to the East Midlands Regional Select Committee’s first inquiry on the East Midlands Development Agency (emda) and the delivery of the Regional Economic Strategy (RES). The Environment Agency is a key partner in the delivery of sustainable development. We have worked with emda over a number of years on individual projects, strategies and plans which have contributed positively to the development of the region, whilst protecting and enhancing the environment. The changes to regional governance proposed by the Local Democracy Economic Development and Construction Bill provide a new opportunity to put sustainable development at the heart of regional planning, decision-making and subsequent delivery. Our key points are as follows: — The eVective engagement of partners in preparing and agreeing the new Regional Strategy will be crucial to its delivery and eVectiveness. This will require specific mechanisms for engagement. — With an expanded remit, emda will need to increase its capacity, skills and resources. For example to ensure expertise in spatial planning, within the context of sustainable development. — It is vital that emda uses the expertise, skills and data of regional partners in its work to deliver a sustainable region and a low carbon economy, more resilient to the impacts of climate change.
1. Introduction 1.1 The Environment Agency is the leading public organisation for protecting and improving the environment in England and Wales. We work across all levels of government, with staV at national, regional and local level. We welcome the opportunity to respond to this inquiry on the East Midlands Development Agency (emda) and the Regional Economic Strategy (RES). 1.2 Our response is informed by our work at a regional level and our involvement as a partner or statutory consultee in the preparation of the Regional Economic Strategy, Regional Spatial Strategy, and Strategic Environmental Assessments. It is also informed by our work with partners to embed sustainable development within regional and local strategies and plans. Our comments are grouped under the main areas addressed by the inquiry.
2. The Changes to Regional Policy Proposed in the Local Democracy,Economic Development and Construction Bill and the Potential Effect on the Work of emda 2. 1 The changes to regional governance proposed by the Local Democracy Economic Development and Construction Bill provide an opportunity to ensure that sustainable development is placed at the heart of regional planning, decision-making and subsequent delivery. The reforms should facilitate a much needed shift to sustainable economic development, that takes environmental issues fully into account ultimately leading to a more resource eYcient and lower carbon economy. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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2.3 Alongside the Regional Leaders Board of local authorities, emda will lead the development of a new Regional Strategy, which will for the first time integrate regional planning and the economic strategy. The Strategy will play an important role in setting national policies within the regional context, identifying critical infrastructure needs and measures to protect the environment. 2.4 emda’s role, and that of all RDAs, will include facilitating and helping to unlock funds for flood defence schemes, allowing resilient development to take place which would not otherwise be possible. To develop and implement the Regional Strategy emda will need to work closely with regional partners and facilitate a framework for evidence gathering and policy making. 2.5 Regional Development Agencies (RDAs) must have the necessary capacity, skills and resources to discharge their new responsibilities fully. Expertise and champions for spatial planning, within the context of sustainable development, must be established at a Board and technical level. RDAs must also have access to expertise on key environmental issues including climate change. This should include working closely with partners with specific knowledge, skills and data such as the Environment Agency. 2.6 The Environment Agency has been working with the environment sector in the Region to develop the structures needed to facilitate partners’ involvement in the development of the new Regional Strategy. We are also working with the Government OYce and regional partners to commission a report to look at embedding sustainable development into the new Regional Strategy. We will work closely with emda and other partners to consider and implement the recommendations of this report.
3. The Role of Other Government Agencies such as the Government Office for the East Midlands, and of Partnerships between Government Agebncies,Local Government and the Private Sector, in Delivering the Aims of the Regional Economic Strategy (RES) 3.1 The Environment Agency believes that it is the responsibility of all partners in the region, not just emda, to input into the RES and to deliver the actions which fall within the partners’ remit. 3.2 We worked closely with emda and others in developing sections of the evidence base which underpins the current RES. We were also involved in helping to develop the implementation plan for the RES and have incorporated appropriate actions into our business plans and strategies, which are currently being delivered.
4. How Well emda is Performing on Sustainability 4.1 Embedding the three pillars of sustainable development right across the work of any RDA is a challenge. This challenge has increased as a result of the changes begun by the Sub-National Review. The fragmentation of regional structures has left the East Midlands as the only region without a functioning sustainable development champion body. emda’s performance on sustainability should be seen within this context. 4.2 It has sometimes been diYcult for emda to demonstrate that their work gives due attention to environmental sustainability. However, the Environment Agency is optimistic about the future leadership of sustainable development in the region. emda’s recent creation of a new Sustainable Development and Infrastructure Director post, should provide a real focus for sustainable development in the organisation and the region as a whole. This will be particularly important as the region delivers its change management plan. 4.3 The Environment Agency believes that the changes to regional policy and structures are an opportunity to ensure that sustainable development is placed at the heart of the work of emda and other regional bodies. There is an important role for emda, alongside the Leaders Board, to show leadership on sustainable development and to facilitate the supporting structures and partnership working. 4.4 The response to the economic downturn and measures to promote an economic stimulus should also be consistent with the principles of sustainability. To ensure the economy of the region is best placed to come out of a recession in a stronger and healthy position, it is crucial that new technologies are embraced and opportunities for businesses to change and diversify identified. 4.5 There is a real opportunity for the region, in partnership with emda, to focus on emerging “green” and sustainable technologies. Many of these technologies can utilise transferable skills from more traditional manufacturing industries that may currently be in decline. If this opportunity is embraced, the regional economy is likely to recover more quickly, be more diverse, more resource eYcient, lower carbon and more sustainable in the longer term. This type of economic change can only become a reality if emda works in partnership with businesses and other partners. 4.6 Supporting businesses, especially SMEs, by delivering eVective and appropriate advice will also be key to economic recovery. All businesses can benefit from becoming more resource eYcient. This will help with their sustainability, but can also add to their bottom line and viability during diYcult economic conditions. The Environment Agency is well placed to play a part in providing appropriate business advice in partnership with emda and other bodies in the region Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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4.7 Providing leadership on climate change is a shared responsibility. Regional bodies such as emda, the Government OYce and the Environment Agency have a significant role, as do local authorities. The Environment Agency is currently facilitating a meeting between regional bodies to ensure that there is robust leadership and governance around East Midlands’ Climate Change Programme of Action to ensure strong ongoing progress on the ground. 4.8 We welcome emda’s involvement in the Lincolnshire Coastal Study which will determine how development is taken forward on the Lincolnshire Coast.
5. Conclusion 5.1 We look forward to a closer working relationship with emda as its role develops. We believe it is the responsibility of all regional bodies and partners to work positively with emda and the regional Leaders Board to help prepare a sustainable Regional Strategy. 5.2 It is vital that mechanisms are developed to enable eVective involvement of a wide range of partners in the work of emda. Partners should be able to contribute their skills, experience and data, working with emda to ensure a successful transition to a sustainable Regional Strategy and subsequent delivery.
Memorandum from Quadralene Ltd (EM 30) I would like to submit evidence to your first inquiry on the East Midlands Development Agency (emda) and the Regional Economic Strategy (RES). I write as the Managing Director (for four years) of an SME in Derby, manufacturing high quality detergents and disinfectants but with a background of 20 years in FTSE 100 and Euro 500 companies latterly at UK Board level. My evidence is an account of a journey which commenced with Business Link and has concluded (thus far) with the securing of a Grant for Research and Development for the development of a “second generation” (our company has already developed the first) non-chlorine, sporicidal disinfectant/detergent to significantly improve the NHS problem with Hospital Acquired Infection. The emda services we have significant experience of are: Business Link, UKTI, Export Market Research Scheme, emda High Growth Programme, i-Nets, Medilink and GR&D. We have received support in the form of matched funding, advice, networking and the R&D grant. During the last three years, our turnover has increased by a consistent 15% year on year (continuing this year), exports have grown from 2% to 8% within 18 months, and our strategy of exiting from commodity products to niche markets has meant that over £0.5 million of sales have been generated from the healthcare sector for infection control product—a sector we had no presence in three years ago. Our growth trend is good and is being sustained. We recognise that emda has assisted us in our progress and we have benefited greatly from the support we have received. Had we not determinedly followed this strategy (into a sector which is a cornerstone of the RES) there is no doubt we would have not been able to continue trading, with the loss of 34 jobs. With the exception of the GR&D, the sums of money we have received have not been large but they have been extremely helpful and have encouraged activity when we might have been more reluctant to spend. Some of the support packages have been easier to secure than others but all have had a tangible selection process behind them. Some have been downright diYcult to secure (quite rightly, given that this is public money!). Without exception, the delivery agents (people) we have dealt with have had a passion for seeing EM business and the region flourish. There has been an undoubted ongoing clarification, driven from the top, on roles, responsibilities and the need to understand product oVerings from emda business support providers over the last three years. I am a great advocate of “key client managers” so I am very happy about this—as an MD, my preference would be to have contact with one person who can describe and facilitate the full range of support oVering to my company—again, there has been good progress in simplification and streamlining of the support process and there seems to be commitment to progress further in this area, which is good to see. The RDA Application processes can be long-winded at times but I am reluctant to make this a significant complaint because were the process not thorough, I would be even more worried that undeserving companies were being invested in. There is increasingly concise and helpful electronic communication emanating from diVerent emda department—another good indicator that emda knows what it is about, that it is aligned around the mission and understands how to get to those it seeks to serve. There have been good initiatives launched quickly and eVectively in response to the global recession, which diVerent members of our team have attended and gained helpful advice. SME’s generate significant employment revenue and innovation for the UK economy, it therefore seems self evident that the Government would be well advised to continue to support companies that have great growth potential especially during a recession. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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Sorting the “wheat from the chaV” and being assured that resource and money are being well deployed is essential. In order to maintain rigorous and wise stewardship I would recommend that the Government ensures that the RDA’s continue to receive support and investment and are equipped with the best qualified and resourced people possible going forward. This is the only way to ensure that public money is well utilised. I believe emda is a worthy recipient. Finally,providing the delivery vehicle functions well (which I believe it does, and is continuing to get better at its task) and the client is worthy of support, then the logic of continuing to help companies in the way that emda do is irrefutable. Everyone benefits. At a time when there is great scrutiny on less well deserving causes for the use of public money, I think that emda would be high on my list of continuing priority. Andrew D Corley Managing Director Quadralene Ltd
Supplementary memorandum from East Midlands Development Agency (EM 31) emda Budgets At the close of our Regional Select Committee hearing on 27 April, you asked if I could supply you with more detailed information on changes to emda’s budgets since the approval of our three year Corporate Plan in July of last year. As you know, we have been asked by the Secretary of State to provide some narrative on what the changes to our Corporate Plans have been, both financially and in terms of our focus. I enclose a working draft of our financial position which sets out the detail for how our investment strategy changed during 2008–09, and sets out the plans for the remaining two years—2009–10 and 2010–11. The figures show that our biggest challenge is to accommodate the significant funding reduction that takes place in 2010–11, when we will receive £26 million less than anticipated at the outset of the Corporate Plan. The majority of this reduction is to capital expenditure and so clearly those projects at risk are inevitably the large scale regeneration projects that we fund, often in conjunction with both public and private sector partners. To date, we have managed this process through talking with partners directly and looking at how we can profile expenditure in such a way as to maximise the available budgets to ensure projects go ahead. Our timeline for finalising the programme for 2010–11 is through our Board by the end of July 2009, and hence at this stage we cannot confirm the outcome of that process, as detailed discussions and reviews are ongoing.
emda CORPORATE PLAN 2008–11 UPDATE Overview The Comprehensive Spending Review (CSR07) included a 5% real reduction in RDA funding over the three years of the 2008–11 Corporate Plan. The table below sets out the total funding for emda at the time the Corporate Plan was approved (July 2008).
2008–09 2009–10 2010–11 Revenue Capital Total Revenue Capital Total Revenue Capital Total Total Funds £,000 £,000 £,000 £,000 £,000 £,000 £,000 £,000 £,000 Single Programme 82,971 76,738 159,709 82,799 74,869 157,668 80,926 73,046 153,972 Allocation Estimated receipts 2,000 7,000 9,000 2,000 5,000 7,000 2,000 5,000 7,000 Funding 84,971 83,738 168,709 84,799 79,869 164,668 82,926 78,046 160,972 Non-Cash Cost (5,031) (5,031) (5,031) (5,031) (5,031) (5,031) Administration Costs (17,315) (400) (17,715) (17,068) (400) (17,468) (17,068) (400) (17,468) Programme funds 62,625 83,338 145,963 62,700 79,469 142,169 60,827 77,646 138,473
Since that date, there have been a number of changes to both funding and expenditure, which are explained below:
Single Programme Allocation In September 2008, a £400 million capital reduction to RDA budgets was announced to fund the Government’s Homebuy Direct scheme. The impact for emda has been to reduce available capital funding in 2009–10 and 2010–11 by £1,777k and £19,551k respectively. In the Pre-Budget Report in November 2008, a further reduction of capital expenditure in 2009–10 of £700k, along with reductions to current expenditure of £1,799k in both 2009–0 and 2010–11 was confirmed. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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In April 2009, the RDAs took over responsibility for the Train to Gain brokerage service previously administered by the LSC; this resulted in a further £1,152k current funding being provided in both 2009–10 and 2010–11.
Receipts The Corporate Plan included estimated receipts that emda would make from previous investments, including the disposal of assets held for redevelopment. The downturn in the economy has been very severe in the commercial property development and construction industry, with land values falling by as much as 20% during 2008–09. This has impacted upon emda, with receipts £3.5 million lower than originally expected in 2008–09, and expectations have been revised for the remaining two years of the Corporate Plan.
Non Cash Costs The budget for non cash costs includes depreciation, cost of capital and any movement against provisions. The budget cannot be used to fund any cash transactions, and there has been no change since the Corporate Plan figures were set.
Administration This includes the costs of all staV directly employed by the Agency, together with the non pay running costs. emda has been one of the leanest RDAs, (in terms of staV employed) and during CSR07 each RDA had a three year fixed administration settlement that we need to stay within. The calculation of administration costs was based around total RDA income, which in the case of emda includes ERDF, RDPE and the Coalfields programme, and not just single pot which is covered within this Corporate Plan. There have been a number of changes confirmed by BERR to each RDA’s administration budget which for emda include: ERDF administration funding of £503k per annum, RDPE administration allowance of £489k per annum, and also a transfer of £200k from programme to administration to cover the cost of managing the Train 2 Gain brokerage service that transferred to RDAs on 1 April 2009. The result of all the changes highlighted above is a revised Corporate Plan funding position, set out in the table below:
2008–09 2009–10 2010–11 Revenue Capital Total Revenue Capital Total Revenue Capital Total Total Funds £,000 £,000 £,000 £,000 £,000 £,000 £,000 £,000 £,000 Single Programme 82,971 76,738 159,709 83,135 74,192 157,327 81,298 53,495 134,793 Allocation Estimated receipts 2,000 7,000 9,000 1,000 3,400 4,400 1,000 3,000 4,000 Funding 84,971 83,738 168,709 84,135 77,592 161,727 82,298 56,495 138,793 Non-Cash Cost (5,031) (5,031) (5,031) (5,031) (5,031) (5,031) Administration Costs (17,315) (400) (17,715) (18,287) (400) (18,687) (18,287) (400) (18,687) Programme funds 62,625 83,338 145,963 60,817 77,192 138,009 58,980 56,095 115,075
A third of the programme funding is delivered through sub regional partnership arrangements. For 2009–10 onwards, this has moved to a contract between emda and seven of the nine Unitary and County Local Authorities, with Derbyshire County Council and Nottingham City Council expected to reach a similar agreement to commence 1 April 2011. The investment strategy for the 2008–11 Corporate Plan was largely informed by a two stage consultation process with key stakeholders and partners during the summer of 2007, followed by a final review in the first quarter of 2008. The consultation specifically sought partners’ views on the most appropriate priorities for direct emda investment, and those that should be funded by other organisations in the region. The results of this exercise were overlaid with existing commitments and programmes, and resulted in five areas being highlighted as the major focus for investment: — Enterprise & Business Support. — Employment, Learning & Skills. — Innovation. — Energy & Resources—specifically addressing the Energy White paper and Low Carbon issues. — Land & Development—major regeneration schemes for the region. The investment plan for the three year Corporate Plan was accordingly structured around these areas. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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In addition to the funding changes highlighted, there has been a review and reprioritisation of activity to reflect the economic downturn, and the need to focus more on short term recovery, whilst still maintaining the major regeneration activity supported and required by the region. The following details how this changed plans during 2008–09 and the focus placed on 2009–10 and 2010–11; this should be viewed alongside the table at Annex 1.44
2008–09 Overview The overall level of funding deployed was £1.8 million less than originally envisaged in the Corporate Plan due to a “swap” in year with London Development Agency (LDA) relating to sub-regional partnership projects that were delayed and would not be able to spend in 2008–09. The money was returned to emda on 1 April 2009 and made available to sub-regional projects in 2009–10.
Key Changes Business Support shows an increase of £8.6 million compared to the Corporate Plan. This is primarily linked to the need to refocus activity and provide additional funding to businesses in the face of the economic downturn. £6 million of this relates to the Transition Loan Fund (TLF) established in January 2009, a further £1 million was added to the Business Transformation Grant scheme (BTG) in August 2008 to provide small capital grants for companies, with the balance of additional expenditure being spent on Grants for Business Investment (formerly SFIE) and expansion to the Regional Business Support Information System. Innovation spent £4.7 million less than originally planned; £4.5 million related to the National Rail Centre which has been cancelled as the scheme could not attract any private sector investors to take forward the project and did not enjoy any financial support from the rail sector. Alternative proposals are being considered. Land & Development spent £2 million more than planned, with a transfer of £2 million from sub regional partnerships to support major schemes, contracted and managed at the regional level. Central amongst these was the Roundhouse in Derby and expenditure at Steetley was also accelerated during the year.
Overview of 2009–10 and 2010–11 The overall level of funding available for 2009–10 and 2010–11 has changed in relation to the original allocations set out in the Corporate Plan (particularly in 2010–11), referred to at the beginning of this update. emda has also taken the opportunity to pull forward £3 million of capital expenditure from 201?–11 into 2009–10 as part of the “Fiscal Stimulus” package focusing on key regeneration schemes that could be accelerated for delivery in 2009–10. Maintaining the previous commitment to one-third of programme activity delivered via the Local Authorities, through sub regional partnerships, the revised funding available for the remaining two years of the Corporate Plan is shown in the table below:
2009–10 2010–11 Current Capital Total Current Capital Total
Available Programme Funding 60,817 80,192 141,009 58,980 53,095 112,075
Sub Regional Funding 12,605 34,609 47,214 13,959 24,486 38,445
Regional Funding 48,212 45,583 93,795 45,021 28,609 73,630
With legal and contractual commitments at over 85% of available funding at the beginning of the year, the scope for wholesale change to the programme is quite limited; however, all projects have been reviewed against the ECOTEC evaluation framework and we are confident in the contribution that they will make to the regional economy. A revised business plan for 2009–10 was signed oV by the emda Board in January 2009, and we have commenced work to revise the investment programme for 2010–11, which is heavily impacted by budget reductions of 20%. In addition to this, we are looking to create headroom to accommodate support to large companies in the region, that would previously have benefited from central funding over and above that allocated to the RDA; these are now included in our indicative allocations. We are also working closely with Local Authority partners to focus the investment programme that they deliver with the sub regional funding on behalf of emda. Whilst the sub region determines its own priorities, and determines what is required, this is appraised and approved by emda before final contracts are let. Clearly, in the current climate we are keen to ensure that sub regional investments have the maximum impact in terms of supporting the recovery of the economy, boosting jobs and equipping people with the necessary skills.
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2009–10 Budget Changes and Planned Activity For 2009–10, the high level funding allocations against each Strategic Priority are not significantly diVerent to the original business plan approval which only took place in January 2009 and therefore already reflects the refocusing that has been ongoing since the summer of 2008.
Key Changes The ongoing economic downturn (and requirements for focused support to businesses and investment in regeneration and infrastructure) continues to influence the investment priorities for 2009–10. With the majority of emda programmes contracted for between two and three years, and sometimes longer for large capital schemes, the majority of funding is already committed. For 2009–10, the Agency had commitments of 85% against its total allocation, with further programmes and projects in advanced state of development, taking this to over 100%. There has, therefore, been a refocusing of investments within each Strategic Priority to ensure that we can continue to meet business expectations and provide a much needed publicly funded stimulus to the economy.
2010–11 As set out previously, the overall level of available funding for 2010–11 is significantly less than originally envisaged in the Corporate Plan; this is primarily due to the budget cuts in relation to CLG’s Homebuy Direct scheme (announced in the autumn of 2008). The main reductions are linked to capital expenditure and therefore present a major challenge for a number of large regeneration projects that have already received approval. All existing commitments are under review to identify those projects where opportunity exists to scale back or defer expenditure. We are also using the findings from our evaluation study (and associated lessons learnt exercise) to assess the impact of diVerent types of projects and interventions to support our investment prioritisation moving forward. This will help to ensure that emda’s funding is focused on those activities that will deliver the greatest economic impact. As the reduction is nearly all of a capital expenditure nature, the areas aVected will primarily be Land & Development (supporting large regeneration schemes across the Region), Innovation and Business Support (grant aid to businesses). Dialogue is underway with key funding partners to look at the joint investment priorities before finalising 2010–11 spending plans with the emda Board in July 2009.
Memorandum from East Midlands Biodiversity Partnership (EM 32) To oVer a brief summary of our engagement with Emda, they are a member of East Midlands Biodiversity Partnership and are particularly involved with our work on biodiversity data and evidence, which will help inform the developing regional evidence base. In the past we have met with Emda staV to discuss biodiversity issues and worked with them specifically on their “Mainstreaming Sustainable Development” project, through which we were able to ensure that the “biodiversity duty”, enacted through the Natural Environment and Rural Communities Act 2006, was taken account of in their grant application forms and assessment criteria. Emda provided a speaker for our 2008 conference on Climate Change Adaptation and Biodiversity Conservation, on Impacts of Climate change on the Regional Economy, The report of that conference is available on our website: www.embiodiversity.org.uk.
Memorandum from Engineering Employers Forum (EEF) (EM 33) Summary EEF in the East Midlands has a good relationship with east midlands development agency (emda). emda leads for all RDAs on relations with EEF and their Chair, Dr Bryan Jackson, is in regular communication with EEF’s CEO Gilbert Toppin. Recent appointments within EEF have further strengthened links, in particular the appointment of a regional external aVairs advisor. EEF at the regional level engages with emda via the East Midlands Business Forum (EMBF) as well as direct contact. One of EEF’s continuing areas of concern relates to the way manufacturing is represented in the current Regional Economic Strategy (RES). EEF would wish to see more explicit reference to the importance manufacturing in the forthcoming Single Regional Strategy (SRS); reflecting the significant contribution manufacturing makes to the region’s economy. Overall EEF believe that emda has performed well in delivering general business support services in particular to SMEs. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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About EEF 1. EEF, the manufacturers’ organisation is a trusted partner of thousands of employers around Britain. We work on behalf of over 6,000 companies, in manufacturing, engineering, technology and beyond. In total these companies employ close to one million people. Within the East Midlands we provide practical support to 376 business sites.
EEF’s Overview on the Role of emda 2. Over the last 10 years emda has seen a widening of its original portfolio as described in the RDA Act (1998). emda is sometimes criticised and challenged by organisations on the periphery of economic development for its apparent lack of support and engagement with their agendas eg the Strategic Health Authority. In light of a tightening of RDA budgets and the current economic conditions, EEF would encourage emda to continue to focus its investment on those activities that directly impact on economic growth and we acknowledge that emda has reallocated investment to enable more resources to be allocated to front-line business support. 3. emda is required to have a business-led board. While there are business people on the emda Board we would welcome greater understanding of their credentials to speak on behalf of the wider East Midlands business community. EEF understands that the Board appointment process is managed via the Government OYce for the East Midlands (GOEM) and would encourage GOEM to take account of this in the next round of Board appointments. 4. EEF supports the “joined up Government” approach, as described in New Industry New Jobs, and would like to see this echoed at the regional level. We believe that to do so would enable emda to focus more of its resources on core economic development activity and ensure others eg the LSC, allocate significant resources to support the skills needs of employers and the workforce. 5. emda needs to focus more on strategic leadership and less on managing project and programme delivery. EEF understands that the majority of emda’s funding comes via the Department for Communities and Local Government; perhaps explaining the significant investment into regeneration projects. This is compounded by the fact that RDA budgets are largely capital based which drives them towards investing in land and buildings rather than revenue –based support for business. EEF would encourage BERR to take a greater lead with emda both in terms of investment and direction. 6. The East Midlands has always lacked a regional identity. The main conurbations are located along the M1 corridor which means that the rural fringes of the region often align to the urban areas in other regions; eg a business in rural North Nottinghamshire is likely to have closer links to the industrial base in South Yorkshire. emda has been reasonably successful in building an East Midlands identity, however regional boundaries are meaningless to business and can create problems; eg where a competitor is able to access support simply because they are located in diVerent region or locality within a region. 7. EEF hope that the Business Support Simplification Programme will reduce many of these disparities however we remain concerned about the restricted access to ERDF Priority Axis 2 which means only businesses in particular parts of the East Midlands can access funding. Businesses continue to struggle to comprehend the various eligibility criteria and restrictions and are frustrated by what some regard as an unequal and unfair advantage given to some businesses because of their size, sector or location. 8. emda identifies four priority sectors in the RES; transport equipment, food and drink, healthcare and construction. Many other regions share similar priority sectors and there may be an argument for more nationally led programmes. While emda has worked with other RDAs on major projects eg with AWM, SEEDA and EEDA in the development of Motorsport Valley EEF would support further cross-RDA collaboration.
Impact of Financial and Economic Situation on Business in the Region 9. The current economic climate in the East Midlands echoes that experienced in other regions with manufacturers experiencing significant reductions in orders leading to redundancies, reductions in investments in capital equipment and training, and on-going restrictions on cash flows. The most recent survey showed that manufacturing output in the East Midlands continued to decline in the second quarter of 2009, and a balance of companies are expecting both outputs and orders to retract further over the coming months. 10. As a provider of business services, EEF East Midlands has seen a significant increase in demand from our members to assist with organisational restructuring. Over the last quarter of 2008 there was a marked increase in number of queries received by EEF East Midlands relating to restructuring advice (at its height we received a 50% increase in call volume with 75% of calls being restructure related). That has now subsided however tribunal activity has increased markedly since the start of the year. Compared with the same time last year we have seen an additional 40–50% increase in tribunal numbers with redundancy related dismissals contributing toward those numbers. 11. In October 2008 emda established a regional economic cabinet. Chaired by the regional minister its remit is to take action to support business during the economic downturn. EEF remains concerned that it is public sector heavy with representation from LSC, Job Centre Plus and others. We feel that the Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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manufacturing voice is under-represented. As manufacturing accounts for 23% of the region’s economic output EEF would welcome the opportunity to play a greater role in supporting this work by providing timely information of the challenges, priorities and needs of East Midlands’ manufacturers.
The Performance of emda 12. In the independent performance assessment of the RDAs completed in 2007 emda scored the highest marks (jointly with ONE North East) and this is consistent with our view. 13. The Manufacturing Advisory Service (MAS) in the East Midlands has proved particularly successful and according to figures just released by emda, MAS EM assisted a record number of manufacturing businesses over the last 12 months. MAS supported over 500 businesses last year and estimates that it helped businesses to create or secure 484 jobs, save about £11 million and increase profits by £8.5 million. emda has recently renewed its contract with PERA to continue to deliver this service. EEF would encourage greater promotion of MAS services directly to businesses as anecdotal evidence indicates that some manufacturers are still unaware of the service. 14. For EEF the challenge remains emda’s ability to deliver support to business at the right place, at the right time and in the right form. emda delivers most of its support via Business Link. The range of support services oVered are a mix of national programmes and regionally specific support. Despite eVorts to re- launch the Business Link brand it is still regarded with a degree of suspicion by some businesses and this can cloud their perception of the quality and range of support available. Many of our members are large businesses and while Business Link is a first port-of-call for all business support larger companies are in fact ineligible for much of the support available. More needs to be done by emda to increase awareness of support for larger businesses; many of which are supplied by the region’s SME base. 15. emda has demonstrated its capacity to respond quickly and eVectively to crisis; most notably their response to foot and mouth, the floods and most recently to the economic down turn which saw it redirect resources away from lower priorities to boost support for the region’s business community. This capacity to respond rapidly is vital to supporting businesses. 16. It is encouraging that emda has shown a commitment to businesses in rural areas; including the regeneration of the former coalfields; now home to a new generation of businesses. 17. In addition EEF is pleased with emda’s continuing support for improvements to regional infra- structure including the development of the new Parkway Station near East Midlands Airport, the opening of Corby Station and the planned upgrade of the Felixstowe to Nuneaton rail link; all of which will improve transport links, freight movement and journey times. As a region that exports a high level of its manufactured goods reliable transport links are vital. 18. EEF would welcome greater opportunity to support emda’s planning and decision making process where it impacts on manufacturing. We have an extensive range of intelligence, experience and direct access to manufacturing businesses many of whom would relish the opportunity to support future regional economic development plans. Unlike other regions where there is significant direct engagement with EEF on programme development in the East Midlands emda relies on the East Midlands Business Forum (EMBF) as its main route to business consultation. EEF are members of EMBF however because EMBF represents all business EEF believes that manufacturing specific issues are often lost in the submission of more generic responses. EEF has made concerted eVorts to build closer links with emda at Board, Executive and programme management level and we look forward to consolidating these relationships further.
Regional Economic Strategies 19. emda has promoted the fact that its consultation process for the last RES A Flourishing Region was the most expansive of its kind ever undertaken. EEF and other business organisations were consulted in a number of ways. With the next iteration we would welcome an earlier opportunity to contribute to its development. EEF is not advocating being involved in the final drafting but we can provide access to a strong base of manufacturing businesses that would welcome more opportunity to have their input. 20. The RES identifies “Priority Actions” and allocates regional partners, including EEF (via EMBF) to lead on their delivery. We are not aware however of any formal process for ensuring delivery against these Actions. In the West Midlands a group exists to work with the RDA to progress these and we would encourage emda to consider a similar approach in the East Midlands.
Changes to Regional Policy following the Sub-national Review 21. EEF welcomes the bringing together of the Spatial Strategy and Economic Strategy into one Single Regional Strategy (SRS) as we believe this will bring greater clarity and connectivity between spatial and economic priorities. We do have concerns regarding the indicative timescales for the production of the SRS and would urge all parties involved to ensure this is not overly bureaucratic and burdensome. 22. emda’s position within the region provides “critical mass” in terms of setting regional economic priorities. Whitehall is too remote to understand regional needs and the local authorities are too fragmented. EEF is concerned that with the implementation of SNR and the devolution of economic decisions to the local authority level there is a risk we will see fragmentation, duplication and parochialism. emda’s role to Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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date has been to orchestrate investment decisions across the region and reduce these risks therefore EEF sees a continuing role for a regional body to ensure that while those making decisions that impact on manufacturing might act locally they are reminded of the need to think regionally and even globally. 23. With the failure of the Regional Government agenda there was a clear need to address the question of local accountability for, and scrutiny of, the economic strategies. We recognise that the new arrangements agreed in the Local Democracy, Economic Development and Construction Bill, with RDAs and newly formed Local Authority Leaders’ Forums taking joint responsibility for a SRS, address this issue. 24. However, we are concerned that a SRS could become subject to costly delay either because of disagreements between RDAs and the Leaders’ Boards, or indeed division within the Boards themselves. There is a safeguard to avoid this, through the ability of Ministers to force the process, but we have doubts about how eVective this will be. 25. The test will lie in the emda’s and the local authorities’ capacity to agree the Strategy that has the support of the business community without protracted consultation and “examination in public” procedures. This is especially important at a time of such economic uncertainty and businesses will be looking to emda and the Local Authority Leaders’ Forum to show leadership and direction. 26. emda has been challenged over its capacity to manage its additional spatial and planning responsibilities, and the same challenge might be placed at the local authorities’ feet with regard to their capacity to deliver the economic development agenda. We are also concerned about the capacity of the local authorities to undertake the required Economic Assessments and would be pleased to provide intelligence and data pertaining to manufacturing in support of this work.
27. Stakeholders have a critical role in informing the SRS process. Where previous arrangements of stakeholder engagement have worked well, they should be maintained as far as possible and used as examples of best practice elsewhere.
Emda’s and Sustainability 28. The RES describes the ambition for the East Midlands to be “A Flourishing Region;—with growing businesses, skilled people in good quality jobs, participating in healthy, inclusive communities and living in thriving and attractive places”. One of the structural themes of the RES is “Ensuring Sustainability” which describes a commitment to, among other things, sustainable productivity and economic wellbeing.
29. emda has demonstrated a commitment to sustainability not only through the delivery of business support services to encourage businesses to reduce waste and improve eYciency, but also in its approach to physical developments eg a requirement for all new buildings to meet BREEAM standards and the on-going redevelopment of one of the most toxic sites in Europe; the former Avenue Coking Works. We feel that emda continues to demonstrate a commitment to the sustainability agenda.
30. emda and Advantage West Midlands worked with three Midlands based universities to secure the head oYces of the Energy Technologies Institute at Loughborough; a body that oversees up to £1 billion of public/private investment into energy innovation. This also places the East Midlands in the spotlight and we would encourage emda to take a greater lead than it has perhaps done so far in this agenda. The region is home to several manufacturing businesses that operate within the power generation sector including nuclear, wind and bio-fuel. We would encourage emda to give greater consideration to the level of support available to these businesses especially given continuing soaring energy prices and concerns over security of supply. EEF would also encourage emda to invest more in tackling energy issues, taking a more active role the planning of future energy supplies. We look forward to the SRS giving clarity to this area.
Supplementary memorandum from Government OYce East Midlands (EM 34) Budget 2009 Update The background to this year’s Budget is unprecedented: the financial crisis has caused a steep and synchronised global downturn, while business confidence has fallen to historically low levels. This year’s Budget includes more government support for business, which complements the major steps already taken to restore the flow of credit in the economy.
This includes a £750 million strategic investment fund to support advanced industrial projects of strategic importance consistent with BERR and DIUS’ strategic vision for securing Britain’s competitive future, outlined in the Building Britain’s Future: New Industry, New Jobs45 paper published on Monday 20 April.
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Budget Measures for Business The 2008 Pre-Budget Report announced a temporary, one-year extension of trading loss carry-back for businesses from one to three years, for losses up to £50,000. To support more businesses through the downturn, this temporary extension will now apply for two years from 24 November for companies, and for the 2008–09 and 2009–10 tax years for unincorporated businesses. These changes are expected to give around 140,000 loss-making businesses greater tax repayments to support their cashflow. HMRC’s new Business Payment Support Service oVers help to businesses facing temporary financial diYculties over a timetable they can aVord. The service has already helped more than 100,000 businesses. From 22 April 2009, it is being expanded to allow businesses that expect to make losses to oVset these against tax bills due on profits from the previous year, and which they are unable to pay. Recognising the constraints that reductions in the level of credit insurance can create on cashflow and working capital, the Government has announced a “top-up” trade credit insurance facility. This short term measure responds to the needs of businesses⁄with up to £5 billion of targeted support to cushion against the financial impact of a reduction in credit insurance cover. It will provide greater breathing space for businesses to respond eVectively to increased risks in their supply chain and will be open to businesses of all sizes and in all sectors trading in the UK. Eligible businesses that have had their credit limit reduced will be able to purchase top-up cover via their existing credit insurance provider, who will administer the scheme on Government’s behalf. The scheme will be implemented from 1 May. To further support trade and short-term cashflow, the Export Credit Guarantee Department (ECGD) will consult shortly on a new facility to provide Government support for short-term trade finance, sharing with banks in confirming letters of credit. The facility would give exporters greater certainty of payment when selling goods in diYcult markets. Before the summer, the Government will also review further areas where ECGD could provide support for exporters, to help them deal with the consequences of instability in financial markets. To give a boost to the car industry during the current downturn, the Government has announced a vehicle scrappage scheme. A discount of £2,000 will be oVered to consumers buying a new vehicle ten years or older, which they have owned for more than twelve months. The Government will set aside £300 million for this scheme, with funding matched by manufacturers participating in the scheme. The Government will work with industry to introduce the scheme next month.
Securing Britain’s Future Over the last decade, the UK has built up key strengths that provide a platform for growth as the UK emerges from the recession. The Government’s strategic vision Building Britain’s Future: New Industry, New Jobs, published on Monday 20 April, identifies how government action can support the UK’s economic renewal and future growth. Budget 2009 announces a package of measures that support this strategy: To ensure the UK is in a stronger position to take advantage of opportunities as the global economy returns to growth, the Government will establish a £750 million Strategic Investment Fund to support advanced industrial projects of strategic importance. £250 million of this fund will be earmarked for low- carbon investments, a further £50 million for the Technology Strategy Board and £10 million for UK Trade and Investment. To encourage investment, the Government will introduce a first-year capital allowance of 40% for one year, with eVect from this month. Firms investing over £50,000 in qualifying plant and machinery in 2009–10 will benefit from a higher rate of tax relief on investment. The 95% of firms that currently invest up to £50,000 each year will continue to benefit from the Annual Investment Allowance that enables business to oVset their capital expenditure against taxable profits. Working with representatives across the business community, the Government will examine the balance of taxation of innovative activity including intellectual property. The Government will assess the evidence, consider further with industry, and set out its assessment and proposed approach before the 2009 Pre- Budget Report. The 2008 Pre-Budget Report announced reforms to the taxation of foreign profits, representing a move towards a more territorial system of taxing foreign subsidiaries. The Budget announces the introduction from 1 July of an exemption from tax for foreign dividends received by all companies. This will be supported by a limited restriction to the interest deduction rules, which have been refined following discussions with business. It will be introduced for accounting periods starting on or after 1 January 2010.
Further supplementary evidence from East Midlands Development Agency (EM 35) 1. Introduction 1.1 This document seeks to provide further evidence to address some of the points made by third parties in their written and verbal evidence to the Committee. This paper covers a number of issues, including: regional strategy and evidence base development; engagement with trade unions; spatial resource allocation; provision of support to small and micro-businesses and emda’s policy on airport expansion. It therefore forms an addendum to emda’s original written submission to the Committee on 1 May 2009. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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2. Regional Strategy Development 2.1 A number of respondents raised concerns in relation to emda’s strategy development processes (in terms of appropriate engagement), and a need to revise the RES in the face of the economic downturn. This section seeks to address some of the points made by third parties. 2.2 Evidence given by a number of respondents appears to suggest that emda and the Local Authority Leaders’ Board have forged ahead with plans for the development of a new Regional Strategy (RS) for the East Midlands, without involving stakeholders and partners. There are also wider concerns about government policy in relation to future strategy development, specifically relating to perceived limitations on engagement. These issues appear to have influenced some respondents’ views on emda’s ability to engage stakeholders appropriately in strategy development processes. 2.3 As stated in both our written and verbal evidence, emda has a strong track record of undertaking inclusive strategy development. For example, we worked very closely with a wide variety of regional stakeholders in the development of each of the three Regional Economic Strategies. This was identified as a real strength by the National Audit OYce in their 2007 Independent Performance Assessment of emda which stated that, “emda undertook a wide and inclusive consultation for its RES. The majority of stakeholders and stakeholders we spoke to felt they had played a role in the development of the RES and their suggestions had been acted upon”.46 2.4 For clarity, emda has not commenced with drawing together a new Regional Strategy. We await the outcome of the Local Democracy, Economic Development and Construction (LDEDC) Bill’s accession through Parliament and for further guidance from Government, which will follow the Bill, before we commence any preparatory work with the Local Authority Leaders’ Board. 2.5 The approach we intend to adopt for the new Regional Strategy will place stakeholders at the heart of our strategic development processes. In line with the Government’s requirements, the region (emda, EMRA and Local Authorities) submitted a Change Management Plan (CMP) at the end of March 2009, which sets out the principles and ways of working that will deliver SNR implementation in the East Midlands. The CMP indicates that the next six to 12 months will see emda, the Regional Assembly and the Local Authority Leaders’ Board engaging in a number of crucial activities to prepare the way for the first Regional Strategy (RS). The first core activity is an open consultation with stakeholders/partners which aims to identify arrangements for stakeholder engagement in the development of the RS. An event is taking place on 2 July 2009 to begin to shape arrangements for the development of the RS. This re-emphasises that stakeholder engagement is at the centre of our plans to develop and implement a new Regional Strategy for the East Midlands. 2.6 A further related concern (raised by the Regional Assembly) was that the RES should be subject to review to ensure it takes account of the current challenges faced by businesses as a result of the economic downturn. There are two key reasons why we have not felt this is in the best interests of the region. Firstly, the RES is a long-term strategy, which seeks to address and negate long-term barriers to our economic competitiveness. As a result, the broad themes and priorities of the RES remain valid. Secondly, instead of undertaking a time consuming review of a long-term strategy, emda has proactively put in place a range of measures to help support businesses through the economic downturn, whilst undertaking initiatives and investments that will prepare the region for recovery and future growth. This approach was endorsed by Government and the Regional Minister and we remain convinced that this was the most appropriate course of action.
3. Engagement on Evidence Base Development 3.1 A small number of respondents questioned emda’s capacity and approach to Evidence Base development, including emda’s technical capability, our ability to engage partners in the development process, and the accuracy/timeliness of our data and intelligence in relation to the economic downturn. 3.2 emda has built considerable internal capacity to ensure that we are able to undertake appropriate evidence-based policy development, and thus fully satisfy the requirements outlined in Government RES guidance. emda employs a core team of highly specialist and technically competent analysts, rather than outsourcing this core responsibility to private sector consultants. This team was tasked with both developing the extensive RES Evidence Base and identifying appropriate policies to address the challenges and opportunities identified through this analysis. This approach has ensured close linkages between the Evidence Base and RES policy.To ensure that the Evidence Base was technically robust, emda also employed the services of a peer-review panel that consisted of a range of independent academic experts who provided ongoing feedback on the appropriateness of emda’s approach. 3.3 emda actively engaged with partners in drawing together the Evidence Base as we were keen to ensure that it was a source that was owned and trusted by the region, thus ensuring we could develop a credible strategy which garnered strong partnership support. As noted above, whilst much of the analysis was undertaken in-house, emda did outsource input from a number of appropriate regional stakeholder organisations. For example, the East Midlands Public Health Observatory contributed demographic analysis, whilst the British Geographical Survey (based in Keyworth), Environment Agency, English
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Nature, English Heritage and the Countryside Agency assisted with the development of the environmental chapter of the RES Evidence Base (The East Midlands in 2006). It should also be noted that to support the RES, the Evidence Base focused on factors influenced by the economic sphere; as a result we had to make a number of diYcult decisions in relation to the inclusion of data which had a marginal influence on the economic agenda. 3.4 emda also utilised a number of partnership groups to obtain early and ongoing engagement in the Evidence Base development, thus ensuring a highly inclusive process. A separate Task and Finish Group was formed to provide contributions and to act as a sounding board. This group included representation from a wide range of partners and stakeholders including; BERR, CLG, East Midlands Regional Assembly, GOEM, Intelligence East Midlands, Learning & Skills Council, Nottingham City Council, and Lincolnshire County Council. We also worked closely with environmental partners (such as East Midlands Environmental Link, CPRE etc) and Statutory Consultees (English Heritage, English Nature, Environment Agency) through a further Task and Finish group to assess the environmental impact of, and contribute to, the SEA and Sustainability Appraisal of the RES 2006. Beyond the group’s core responsibilities they were also given regular opportunities to provide ongoing comments on the validity of the Evidence Base. 3.5 In its evidence session, the FSB stated that emda has a tendency to use statistical evidence which is outdated, and that this has therefore been a barrier in terms of our ability to fully understand the extent and impact of the economic downturn. Whilst it is true that emda uses data from a range of oYcial sources (for example the OYce for National Statistics), and we fully accept that this is often subject to time lags, these sources represent only one aspect of the intelligence which informs emda’s strategic approach. 3.6 Our statistical evidence is always supplemented with survey data and intelligence gathered through business networks—such as the East Midlands Business Forum (Chambers, IoD, CBI, EFF, FSB etc), from key partners (eg JobCentre Plus, Government OYce), through close engagement with members of the Regional Economic Cabinet, the Bank of England’s Regional Agents, and directly from the many businesses and private sector contacts we deal with on a day-to-day basis. We also engage directly with a wide range of businesses in our delivery of the Business Link service. The outcome of Business Link interactions are recorded on a database (RBSIS), which is then used to inform resource allocation and programme design to ensure that we are meeting the changing needs of business. 3.7 The FSB’s written submission suggested that emda does not make annual assessments of the data and intelligence which underpins the RES, and as a consequence are unable to ascertain regional progress towards delivering RES priorities. Whilst the Evidence Base is published relatively infrequently and represents a snapshot for a given time period, we do regularly monitor regional performance. 3.8 As highlighted in our written submission, emda measures and monitors regional performance through the RES Performance Management Framework at least annually. This analysis is presented to the emda Board. In addition to this, emda undertakes regular analysis of data and intelligence to inform our strategic decision making, for example, we regularly submit analysis to the East Midlands Regional Economic Cabinet to inform the region’s response to the economic downturn. Nationally, we provide analysis to the Department for Business, Innovation and Skills (BIS) to feed into discussions of the Regional Economic Council.
4. Sub-Regional Distribution of Funding 4.1 This section intends to address some of the concerns that third parties have raised to the Committee in respect of a perceived focus of emda investments in specific localities, namely the ‘Three Cities’ (3Cs), along with an assumed lack of investments aimed at supporting the development of appropriate work space units in declining Market Towns. 4.2 As outlined in both our written and verbal evidence, emda does not seek to spread our funding equally across all parts of the region and this was reiterated by JeV Moore in our evidence session on 27 April 2009, “we are not about making sure that each of the 42 or 44 districts in the region gets one forty-second, as it were, of our total budget”.47 Instead, emda endeavours to prioritise activities that will deliver the greatest impact or tackle specific geographic needs and challenges within the region. emda has always recognised the dynamic nature of the region and specifically, that over 30% of the region’s population reside in rural localities. As such, emda is committed to its obligation to fully meet the needs of rural communities and businesses. 4.3 To achieve our vision of the East Midlands becoming a “Flourishing Region” by 2020, it is essential that all investments fit within agreed strategic priorities and are targeted appropriately across a range of spatial areas. This commitment is recognised by our partners, as quoted by the Leader of Lincolnshire County Council, Martin Hill;48 “I am reassured that it is scrupulously fair with how the money is allocated while at the same time making sure that it is not just giving money away for the sake of it”.
47 As quoted by JeV Moore, Chief Executive, emda, 27 April 2009 at Nottinghamshire County Council. 48 Martin Hill, quote taken from transcript of evidence session held 22 May 2009, Leicestershire County Council. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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4.4 As outlined in our original written evidence, by mainstreaming delivery of rural activities, we now consider the needs of rural communities and businesses in the context of all our Single Programme investments, which makes it impossible to disaggregate our investments by rural and urban classification. In addition, emda’s Rural Team works across the organisation in the development of our policies, programmes and projects, to ensure rural issues are appropriately considered at the early stages of programme and project development. emda is also responsible for delivering the socio-economic elements of the Rural Development Programme for England (RDPE) which amounts to approximately £60 million of EU and DEFRA funding, between 2007–13. The funding is aimed at improving competitiveness, collaboration and diversification in the agricultural and land-based business sectors and their associated supply chains, as well as enhancing opportunity and quality of life in rural areas. 4.5 In addition to ensuring that the correct mechanisms are in place to ensure that our policies, programmes and projects are inclusive of rural communities and businesses, emda has a track record of working successfully at the sub-regional level. Between 2003–04 and 2008–09, emda has allocated £225 million Single Programme funding to the Sub-Regional Strategic Partnerships to ensure that decisions on local investments are made at the correct spatial level. Going forward, and in line with the spirit of the Sub- National Review, emda has recently contracted sub-regional activity to the nine Unitary and County Authorities, which will see approximately a third of our budget being allocated in this way. This ensures that specific needs of local areas continue to be considered and addressed on an ongoing basis. 4.6 In response to the specific issue about the lack of appropriate work space units in declining Market Towns; an example where emda has proactively supported the demand for higher quality employment land within rural localities is the development of Cransley Park, the former Cohen’s Yard Brownfield site in Kettering. This development will generate 32,000 sqm of new commercial floor space and has the potential to create a further 900 jobs for the county which will support the Northamptonshire Growth Agenda. This project is the result of a collaboration between Northamptonshire Enterprise Limited, Northamptonshire County Council and Cransley Developments, and is using £2.4 million secured through the Government’s Growth Area Fund and emda’s Single Programme. This project supports the sub-regional demand for higher quality employment land and will contribute significantly towards the objective of employment-led growth to stimulate the Northamptonshire economy.
5. Engagement with Trade Unions 5.1 With regards to our engagement with Trade Unions, and specifically, Unite the Union, emda has not received a formal request for funding directly from Unite to deliver a regional response to large scale redundancies (as stated in their verbal evidence). However, we have been involved in discussions with both Unite and TUC regional representatives, on an ongoing basis, to discuss joint working in response to the issue of redundancy support. 5.2 A number of mechanisms are already in place to respond to large scale redundancies and we have been keen to ensure that Unite and the TUC are closely engaged in these. For example, the Large Business Support Group, chaired by Jobcentre Plus, and hosted by emda, seeks to achieve a coordinated approach to delivering this agenda. The TUC are members of this group. In addition, emda funds the Career Chain Project, which focuses on providing redundancy and redeployment support to engineers. Unite are active members of the Project Steering Group. 5.3 emda has also worked with Unite and the TUC to advise on what funding is available to them from a range of regional funding mechanisms and how that funding can be best accessed. To date, the TUC has successfully bid for £20,000 from the LSC in order to host training workshops for the UnionLearn representatives, to support their work during the recession. emda has also been working closely with the TUC to assist them in building a proposal for £50,000 of funding from emda and will incorporate additional funding from other partners, including the Unions themselves so that they can take forward their proposal for a cross-union redundancy response.
6. Business Support to SMEs 6.1 In their verbal evidence, the FSB stated that most of our business support activities are targeted at larger businesses as opposed to sole traders, partnerships and micro-businesses. 6.2 emda recognises that the economic downturn has aVected all businesses in the East Midlands and is committed to bringing together regional partners to respond to the challenges posed by the current economic climate. emda understands the importance of direct support to viable businesses—particular to sole traders, partnerships, start-up and micro-businesses—and is committed to tailoring and targeting interventions in order to meet the specific needs of all types of businesses. 6.3 The primary channel for awareness raising and marketing of emda’s business support products is through Business Link, which undertakes targeted marketing campaigns to ensure that businesses of all sizes are aware of the publicly funded support available to them. During 2008–09 over 67,000 businesses used the Business Link service in the East Midlands; 70% of which had 10 or fewer employees. In addition, Business Link helped over 14,000 individuals who were thinking about or wanting to start a business and over 3,000 business start-ups, the majority of which are sole traders or employ fewer than four people. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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6.4 In addition to using the Business Link service, many of these businesses went on to access one or more of the support products available to small and micro- businesses. For example, since its launch in August 2007, 58% of the businesses accessing the Business Transformation Grant employed fewer than 10 people. These businesses have been awarded grants totalling just over £2 million. In addition, emda is seeking to support micro-businesses in some of the region’s more disadvantaged areas through EnterpriseLoans East Midlands (ELEM). This fund is only available to SMEs and focuses on sole traders and partnerships, start- up businesses and micro-businesses by providing loans of up to £20,000 to viable businesses that struggle to raise bank finance. In the first nine months, ELEM awarded loans totalling just over £500,000 to 39 start-up and micro-businesses. Through Connect InvoRed, 603 SMEs, mostly start-up and micro-businesses, have received support from the regional investment readiness programme which has resulted in 61 SMEs over the last two and a half years raising £51 million worth of investments. 6.5 Along with direct financial support, emda has delivered a package of events across the region providing free advice to businesses and enabling them to express the issues facing them. In addition, the “Route to Market” programme consists of five days of workshop-based support in a number if specialist areas and 53 (60%) of the 89 businesses engaged are micro-businesses. The “Mentoring for All” programme provides up to 10 mentoring sessions to regional businesses and of the 699 clients engaged on the programme between April 2007 and March 2009, 507 (72%) were micro-businesses. 6.6 emda has actively engaged with the business community on an ongoing basis and since 2004, through the East Midlands Business Forum. This is a collective group, which includes representatives from a range of business forums (IOD, CBI, FSB, and Chambers) and provides an opportunity for emda to gain direct input from all types of businesses on our strategic development. This has also helped inform emda’s business support oVer, thus ensuring that we meet the concerns and needs of all businesses in the region.
7. Aviation Policy and Support for East Midlands Airport 7.1 In verbal evidence given on behalf of East Midlands Environment Link, Bettina Lange (Campaign to protect Rural England) expressed concern over emda’s “unqualified support for the expansion of activity . . . at East Midlands Airport”. 7.2 emda does not accept that we have provided “unqualified” support for the expansion of East Midlands Airport (EMA). Policy on aviation growth is set nationally by the Air Transport White Paper, and that shapes and determines the trajectory of aviation in the UK. The region has sought to apply the principle laid out in the last White Paper on aviation which supports aviation growth, but argues that we need a balanced approach, which recognises the importance of air travel while also mitigating and addressing the environmental issues. The White Paper supports the projected expansion of passenger and freight traYcat East Midlands Airport but is subject to strict controls on night noise. Therefore, this sets the context for regional land-use (in the RSS) and other policies or strategies, such as the RES. 7.3 emda has consistently argued that environmental issues (including issues such as the management of night flight impacts) are most eVectively dealt with through the Airport Master-planning process which brings together an open and transparent forum for all the key stakeholders that have an interest in the future of aviation in the region. 7.4 emda has been consistent in its strategic approach to EMA. In the first Master-planning exercise (2006) we argued that EMA makes an important contribution to the delivery and realisation of the RES objectives and aspirations both by direct employment and economic activity, and through its catalytic role on the wider regional economy. It serves as a key international port for the region and the UK as a whole. The express freight role has been shown to provide services to regional and national businesses which help them compete in international markets, to use modern “just in time” management, and to manage their supply chains in a sophisticated and eYcient way. EMA’s express freight specialism relates well to regional ambitions to encourage high-growth, high-value sectors, and the express freight sector is shown to be a significant employer in the region. 7.5 However, we recognise there are tensions and trade-oVs between a growing aviation sector, and other objectives. In our Masterplan response in 2006 we supported the inclusion of aviation in the Emissions Trading Scheme, and suggested that the Masterplan reflect the impact and implications of that in planning for the longer term. 7.6 We have also made the case through the Master-planning process that the airport should seek to follow, or indeed set, best practice in its operational standards encouraging the use of alternative technologies such as electric or low emission ground vehicles and exploring ways to reduce emissions from taxiing and manoeuvring aircraft. There is good evidence to suggest that EMA is setting an example in this regard through its application of renewable energy initiatives and enhancing operational techniques to improve eYciency. A good example of this in practice is that compared to 2000, EMA volumes of freight have grown by over 44% (to 2005–06) but we understand that this has been carried on 6% less aircraft movements due to a policy of seeking higher eYciency by increasing tonnes per movement, rather than increasing the number of flights. 7.7 emda has also worked with EMA and partners to help improve public transport access to the airport for employees and passengers. The Skylink bus service was something emda helped pilot, and this is now commercially successful. In addition, East Midlands Parkway station has created a new gateway to the Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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region in the heart of the Three Cities area, improving access between EMA, the region, and the wider rail network. emda invested £895,000 to improve the environmental credentials and design of the station itself, which opened in January 2009. Anecdotally (via East Midlands Trains), we understand the station is already providing increased public transport flows by passengers to EMA. J P Moore emda June 2009
Supplementary memorandum from the Federation of Small Businesses—East Midlands (EM 36)
1. Introduction 1.1 The following paragraphs are presented as supplementary evidence to the evidence that the FSB East Midlands has already provided. As requested we have referenced the question that was asked in the Oral Evidence Session we attended on 22 May 2009.
2. emda’s Collection and Use of Data (Q39) 2.1 The FSB appreciates that the East Midlands is a large and diverse region and that the data and statistics that emda has to gather and interpret is immense. emda has a very broad remit and it is obliged to collect data on a broad range of topics such as the labour market, land use, capital investment, environmental changes and many more. However, whilst the FSB understands the enormity of this task, we feel that emda should utilise the expertise and knowledge of its partners more on data collection and analysis.
2.2 The FSB and other business support organisations across the East Midlands undertake surveys and research with our members on a quarterly basis. The data we are collecting is therefore current and reliable and emda has always been appreciative of the data we have provided. Similarly, there are a range of other social, economic and environmental bodies in the East Midlands who also gather and analyse data within their own sectors on a regular basis.
2.3 Despite the raft of up-to-date statistics that already exists amongst partners in the East Midlands however, emda has spent considerable time, eVort and resource on undertaking large and lengthy research projects to gather evidence and data. This has meant that data has been unnecessarily duplicated at additional expense, and by the time the research projects have concluded the data gathered is out-of-date and its reliability and usefulness has diminished. The economic recession has demonstrated the importance of speedy responses to assist and support businesses and communities. It is fundamental that the right strategies are implemented at the right time to cope with economic shocks, and it is therefore crucial that the data used to inform any strategy is current and accurate. By relying on outdated statistics which are between 18 months and five years old, emda has been “on the back foot”. The fact that emda managed to implement the “Survive and Thrive” events fairly swiftly is commendable. However, had emda utilised the up-to-date statistics of its partners, it could have begun to plan its response when businesses in the East Midlands began to both consistently report a decline in business confidence and an increase in trade diYculties 18 months ago.
3. emdas Continuance (Q51) 3.1 The FSB has always had a strong and positive relationship with emda, and we will continue to support emda in its future activities. We are however concerned that national Government policy under the Sub- national Review may result in a weakening of the RDAs relationships with businesses. Businesses are at the very heart of the economy and whilst we welcome emdas assurance that they will continue to engage with businesses, we strongly believe that the basis of this engagement should be a statutory responsibility.
3.2 The FSB agrees that there is greater benefit for businesses if economic development activities are delivered at a local level, as this is the level that can respond most appropriately to the needs of local businesses. However, the FSB also believes that it is right that there is an organisation that performs a strategic overseeing role of economic development in the region. The strategy must drive delivery but delivery must also inform the strategy, and it is less confusing if these functions are undertaken by separate bodies. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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Supplementary memorandum from East Midlands Regional Assembly (EMRA) (EM 37) “Plugging the Regional Accountability Gap”—A Further Note on Regional Scrutiny and Accountability as Requested by the East Midlands Select Committee on 22 May 200949 1. The Regional Accountability Gap 1.1 Publicly funded regional bodies, with executive powers, require strong public accountability through their elected representatives. 1.2 The new East Midlands Select Committee has the potential to provide high profile, strategic accountability for our regional organisations. However, the loss of a dedicated regional scrutiny body, comprising of Local Authority members and regional stakeholders, takes away the opportunity for an in- depth examination into the key aspects of these regional agencies work in the East Midlands. This lack of in-depth scrutiny into their performance will lead to a significant accountability gap, which is a recognised by the BERR Select Committee.50 1.3 In November 2009, HM Government stated that Regional Select Committees and Grand Committees would be able to carry out all the necessary scrutiny of the new regional governance arrangements, as well as regional strategy development and implementation, however this would be “subject to the views of the Committees themselves”.51 1.4 Subject to the agreement of our Local Authorities, and suYcient resources being made available, there is the potential for East Midlands Councils (the body established to represent Local Government in the East Midlands), to play a leading role in plugging this accountability gap. This would require: (a) A formal agreement from Local Authorities to establish an appropriate mechanism. East Midlands Councils are yet to formally agree their structures and functions, including any potential scrutiny role. (b) Clarification of powers Joint Local Authority regional scrutiny committees are permissible under Clause 31 of the Draft Local Democracy Economic Development and Construction Bill. It is worth noting that powers do currently exist under the Power of Wellbeing.52 How or whether an RDA or other regional bodies would be expected to respond to a joint committee would need to be addressed in regulations and guidance. New powers would need to be at least as strong as those currently available to Assemblies under the Regional Development Agencies Act (1998). (c) Funding It is not yet clear whether HM Government would expect joint regional scrutiny committees to be established or whether funding of these committees would be through the grant settlement to joint Local Authority structures. None of the above factors are yet in place.
2. How Future Regional Scrutiny might work 2.1 A viable model should be based on:
Learning from Regional Assembly Scrutiny 2.2 Regional Assemblies and Local Authorities have a wealth of experience to inform the development of any new arrangements. A recently commissioned independent review of the scrutiny work of EMRA, concluded that our regional scrutiny activity had provided a valuable service to the region, operating in what was described as a diYcult environment. The report highlighted many elements of good practice, including the constructive approach taken by oYcers and members through the “no surprises” and “critical friend” principles, the blend of councillors and stakeholders, and the value of the Regional Scrutiny Protocol. The attached report also identifies a number of “critical success factors”.
49 These proposals are not currently part of the regional governance structure and have not been formally discussed with or endorsed by Local Authority partners. 50 Paragraph 119, p36, Regional development agencies and the Local Democracy, Economic Development and Construction Bill, House of Commons Business and Enterprise Committee. March 2009. 51 Paragraph 2.48, p20, Government response to Prosperous Places: Taking forward the Review of Sub-National Economic Development and Regeneration, November 2008. 52 Section 2 of the Local Government Act 2000 allows principal Local Authorities in England and Wales to do anything they consider likely to promote the economic, social and environmental well-being of their area unless explicitly prohibited elsewhere in legislation. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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Function, Powers and Focus of Regional Scrutiny 2.3 The key function of any form of Regional Scrutiny should be to ensure that publicly funded regional organisations (not just emda) are held account for their decisions. This must be done through our democratically elected representatives, underpinned by clarity from HM Government on the powers to eVectively carry out this important role. 2.4 Whether regional scrutiny focuses solely on the work of the Regional Development Agency or looks at the executive actions of other regional organisations, such as the Strategic Health Authority, would be for each region to decide. In the East Midlands, the Strategic Health Authority has actively sought regional scrutiny from Local Authorities as they see a real benefit from such activity. 2.5 Local Authority led regional scrutiny could potentially minimise the burden on regional bodies of responding to multiple scrutiny reviews from individual councils; and the burden on individual local councils of scrutinising complex regional issues and organisations, with larger operational geographies.
Democratically led by Local Government 2.6 Local Government members can provide the democratic accountability that regional scrutiny needs. To deliver an eVective scrutiny function, local authorities will need to establish a joint committee to manage the process.
Executive/Non-Executive Split 2.7 The scrutiny of emda and/or other publicly funded regional organisations should not be undertaken by elected members or stakeholders with an executive role in that organisation
Engagement of stakeholders 2.8 If “ownership” of scrutiny is to rest with a regional partnership of Local Authorities, full consideration should be given to the involvement of stakeholders, who often have expertise in the areas under examination. The blend of local government members and relevant stakeholders on the current Regional Scrutiny Board has provided a rich mix of democratic accountability, skills, experience and expertise.
Relationship with Parliamentary Scrutiny 2.9 Parliamentary and Regional Assembly scrutiny play complementary roles. To avoid duplication, it will be important to build on the current liaison between Parliamentary Regional Select Committees and any joint Local Authority scrutiny committees.
A Regional Scrutiny “Governing Document” or “Protocol” 2.10 A “Governing Document” or “Protocol”, developed and agreed within the Region, that clarifies the principles, purpose and operation of regional scrutiny, its relationship with Parliamentary scrutiny and how organisations should respond to it, would ensure that it is eYcient, eVective, co-ordinated, proportionate and understood.
Memorandum submitted by Mr David Gale, CEO, SITFO—Strategic IT Framework Organisation (EM 38) The Financial Burden caused by the Lack of Clear National Strategies Relating to the Delivery of Public Sector IT in the East Midlands I have been engaged at a senior level as both customer and supplier in both public and private sector IT for the past twenty years. I am the originator of TADAG (tadag.com), the Strategic IT Framework (sitfo.org), and the architecture for CSIS (Customer Services Information System), and have worked with senior Microsoft Corp (Redmond) personnel and IBM on strategic product development and associated marketing. I was the principal customer speaker at Microsoft’s product launch of BizTalk 2006 at the Stock Exchange, and have participated in speaker roles at numerous major European conferences. I have been the guest of both the Scottish and Welsh Assemblies, and have consulted with European governments, up to and including ministerial level. I have hosted and delivered a major seminar for the Chinese government attended by Xin Renzhou and all 21 of China’s regional CIOs. I am currently engaged with the EU, via the cabinet of Viviane Reding, in trying to identify a mechanism for the EU’s adoption of the Strategic IT Framework as a long-term, Europe-wide enabler of service transformation. By contrast, I have had a particularly poor relationship with the English government, and the Cabinet OYce in particular. I am seen as an individual that seeks to call-in the money-wasting antics of window-dressing Whitehall IT tacticians and their lucrative arrangements with major UK suppliers of public sector IT that should and do know better. Processed: 24-07-2009 00:00:40 Page Layout: COENEW [E] PPSysB Job: 431230 Unit: PAG2
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There is a complete lack of cohesion with English public sector IT that perpetuates “point solutions” in the vacuum that is long-term vision. Delivery mechanisms are a complex, interwoven mire of accountancy and bean-counting, where the mitigation of risk to the cv’s of involved parties and the need to show an almost instantaneous return, outweigh the need for the long-term strategic investment that could deliver substantial savings and improvements in public services. The national malaise is too large a subject area for me to give details in this brief email but I submit the following as examples that link directly to emda and the Derby and Derbyshire Economic Partnership (DDEP) for your consideration: DDEP broadband hot-spot project—funding for “consultants” to deliver broadband to areas of Derbyshire without broadband. The consultants looked to wi-fi small market towns like Chesterfield, Glossop, Matlock and Bakewell, all of which already have broadband. Rather than give the £100,000 back to emda they gave the money to a Derby City Council project to wi-fi Derby’s Cathedral quarter with a tactical, window-dressing solution. This despite there being an unfunded long-term strategy to deliver wi-fi as a public utility within the city, using substantially diVerent technology. The consultants did try to get wi-fi into Peak Forest by going to tender but received no bids. The consultants seem to be keeping a low profile. Lightspeed is a 21st century Derby project to deliver public access fibre run by another DDEP- funded consultant. This project has been running for two years and, so far, not a single metre of fibre has been laid. The opportunity to lay fibre inexpensively, when refurbishing roadside kerbs which could have had precast conduit, has been ignored because of the level of joined-upness required. Derby City Council has had the opportunity to make savings in excess of £10M by seeing through its early deployment of a strategic IT framework. This world-leading development successfully demonstrated (video case studies available) a sustainable, cost eVective, transformation enabling IT framework but has been abandoned as a handful of oYcers seek to window-dress their cv.s with short-term, tactical solutions. Politicians are ill-equipped to deliver the requisite governance to prevent this substantial waste of public money, instead focussing on smoothing potentially troubled waters by ignoring the issue completely. The Quad—Derby: emda contributed £3.5 million to Derby’s Quad project, with £1.2 million coming from DDEP. This was despite my advice to Derby City Council that the basic premise of the Quad was unsustainable. Alterative proposals for a world-leading, showcase building demonstrated a sustainable building and business model, funded by cooperation with major global partners from the private sector. These plans were ignored by the project board and alternative consultative advice was found by the city council that concurred with the project board’s plans. The over-riding rationale for continued investment by Derby City Council was that the money had to be spent within a particular time-frame. Friargate Studios—Derby: DDEP invested over £1 million. This predates the Quad but essentially follows the same pattern. I gave unpopular, consultative advice that both the design and the business model were unsustainable. Alternative plans were ignored. “Money had to be spent”. Alternative, “friendly consultancy” was sought and delivered. The tax payer picks up an ever-increasing burden: “DDEP funding has helped develop the Creative Industries Network (CIN) website. Grant funding has also facilitated the appointment of a full-time Network Co-ordinator to oversee its growth and develop working relationships with the City and County Creative Industries Development OYcers. The funding has also ensured more companies in the area are making the most of ICT, and are made aware of funding opportunities. This support has meant the CIN will become involved in the Friar Gate Studios project, which is part-funded by DDEP, with support through European Regional Development Funds, Derby City partnership and Derby City Council”. The modern technology consultancy oVered to companies in the area appears to be little more than a pre-ordained shopping catalogue from favoured suppliers. On both of the above building projects, I raised significant concerns over the ability of the incumbent architects to understand how technology could be used to deliver buildings that could also act as a catalyst for sustainable building technology across the region. I lined up both CISCO and Microsoft (Corp, not UK) who demonstrated both the technical capability and the willingness to get involved. This route was ignored with an evident bias towards established supplier relationships. emda has already been approached with a view to “renegotiating the agreement around Friargate Studios”. The above are just a few examples of how budgetary pressures to spend within a window, reluctance to step outside of senior managers’ comfort zones, and a desire to maintain commercial relationships with unsuitable suppliers and consultants, demonstrate the symptoms of a lack of overall vision. We no longer live in a world where technology can be considered along with the pot plants when designing a new building, Processed: 24-07-2009 00:00:40 Page Layout: COENEW [O] PPSysB Job: 431230 Unit: PAG2
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or a transformed service. Suppliers know that there is a better way but are happy to milk the gravy-train for as long as they are allowed. I have some shocking examples from major suppliers of public sector IT, as part of one of my presentations. Those empowered with delivering the requisite governance are ill-equipped to do anything other than follow the established line of least resistance, relying on marketing and PR to window-dress questionable returns on substantial public investment. In my international experience, the role of technology and technologists is best understood by the Chinese who have a central government cabinet stuVed with scientists and engineers who don’t have to answer to newspaper proprietors or points-scoring politicians. Regional CIOs would be a good start for England but long-term change can only come when politicians bite the bullet and start to talk about 10–20 year strategies driven by cross-party consensus and a shared, coherent vision. David Gale
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