House of Commons South East Regional Committee
South East England Development Agency and the Regional Economic Strategy
First Report of Session 2008-09
Volume II Oral and written evidence
Ordered by The House of Commons to be printed 14 September 2009 pursuant to Standing Order 137
HC 516-II
Published on 23 September 2009 by authority of the House of Commons London: The Stationery Office Limited £0.00
The South East Regional Committee
The South East Regional Committee is appointed by the House of Commons to examine regional strategies and the work of regional bodies.
Current membership Dr Stephen Ladyman MP (Labour, South Thanet) (Chairman) Ms Celia Barlow MP (Labour, Hove) David Lepper MP (Labour, Brighton, Pavilion) Gwyn Prosser MP (Labour, Dover) Mr Andrew Smith MP (Labour, Oxford East)
Powers The committee is one of the regional committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. 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/se.cfm.
Committee staff The current staff of the Committee are Sîan Woodward (Clerk), Duma Langton (Inquiry Manager), Leena Mathew (NAO Adviser), Emma Sawyer (Senior Committee Assistant) and Ian Blair (Committee Assistant).
Contacts All correspondence should be addressed to the Clerk of the South East Regional Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 3274; the Committee’s email address is [email protected]
Witnesses
Monday 11 May 2009 Page
Pam Alexander, Jim Brathwaite and Paul Lovejoy, South East England Development Agency Ev 1
Colin Byrne, Sheila Carroll and Jane Vaughan, Government Office for the South East Ev 12
Monday 29 June 2009
Ross McNally, South East Chamber of Commerce Ev 18
Simon Hubbard and Councillor Peter Pragnell, Hastings Borough Council and Graham Marley, Ten Sixty Six Enteprise Ev 23
Harvey Bradshaw, Environment Agency and David Edwards, Homes and Communities Agency Ev 28
Monday 6 July 2009
Jonathan Shaw MP, Regional Minister for the South East, Pam Alexander, South East England Development Agency and Colin Byrne, Government Office for the Ev 33 South East
List of written evidence
Page
1 Association of South East Colleges Ev 45 2 Council for the Protection of Rural England Ev 46 3 Environment Agency Ev 50 4 HM Government Ev 52 5 Hastings Borough Council Ev 59 6 Homes and Communities Agency Ev 63 7 Kent Police Ev 65 8 Learning and Skills Council (South East) Ev 67 9 Natural England Ev 69 10 Oxford City Council Ev 71 11 Regional Action and Involvement South East Ev 72 12 Royal Institution of Chartered Surveyors (South) Ev 76 13 South East England Development Agency Ev 80 14 Southern & Eastern Regional Trades Union Congress Ev 103 15 Councillor Alec Samuels Ev 105
16 Federation of Small Businesses (South East) Ev 106 17 Engineering Employers Federation Ev 110 18 South East Chambers of Commerce Ev 112 19 Ten Sixty Six Enterprise Ev 112 20 South East Diamonds for Investment & Growth Partnership Ev 115
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South East Regional Committee: Evidence Ev 1 Oral evidence
Taken before the South East Regional Committee on Monday 11 May 2009
Members present: Dr Stephen Ladyman (Chairman)
Ms Celia Barlow Gwyn Prosser David Lepper Mr Andrew Smith
Witnesses: Pam Alexander, Chief Executive, Jim Brathwaite, Chairman and Paul Lovejoy, Executive Director of Strategy and Communications, South East England Development Agency, gave evidence.
Chairman: Welcome to the first public evidence- may moan on the sidelines. Those of a diVerent taking session of the South East Regional Select political persuasion can still be very pleased. I am Committee. Welcome to our guests. Would you like happy with that. to start oV by introducing yourselves? Pam Alexander: One of the things we have seen Jim Brathwaite: I am the Chairman of the South through our work with the Regional Assembly East England Development Agency (SEEDA). which unites us all is our understanding that the Pam Alexander: I am the Chief Executive of South East is both the engine of the UK economy SEEDA. and a hugely diverse region and that we have Paul Lovejoy: I am the Executive Director of something to bring by working together will those of Strategy and Communications at SEEDA. all persuasions in all sectors. I would agree absolutely with what the Chairman said. Clearly Q1 Chairman: It is good to see you all. Thank you sometimes we disappoint those of all complexions as for coming. Thank you for submitting evidence to well. For us the main thing is to get across our focus us. Do you want to start oV by making a statement and ensure that we are working to enable partners as or would you rather just go into questions? well as to support them. Jim Brathwaite: We are happy to go into questions. The only thing I would say is that I am really Q3 Chairman: We will come back to the sub-national delighted to be sitting here in front of some of our review and how you are going to engage with people local MPs. It has been one part of the architecture a little later on. Maybe that just leads us into the where we needed more accountability. It would be question of just how you see your key better if there were more from other parties. As we responsibilities. We know what it says on the brief know, that is not to be. SEEDA is here to serve. and on paper, but what is the role of SEEDA in the South East region? How do you see it might diVer in Q2 Chairman: You will not get any argument from this region from in other regions? us. Maybe that is a place for me to start. I will come Jim Brathwaite: We are the largest region, with over to your responsibilities in the region in just a 8 million people, and we have a very diverse moment. In the evidence we have received there have economy. As Pam has just said, we are the leading clearly been mixed feelings. Some authorities said economy in the UK, the real locomotive. Sometimes that SEEDA is dreadful, they do not like it at all and that is challenged by London because of the City,but they do not want to have anything to do with it. you can see that when the City has a downturn we Others have said that it is a wonderful organisation. still have to keep going. We provide 400,000 people There seems to be a party political split there. How who go into London every day, a very important are you trying to overcome that split? Do you find part of their work force, but our job is to get the that some councils will not have anything to do with economy of the South East. We help with the you and others are only too happy to see you, or are planning; what we are trying to do is to work with even the ones that are publicly antagonistic business organisations to improve their privately helpful? performance, to work with central government to let Jim Brathwaite: I think you have really summed it them know what the South East needs, and to work up. We have 74 diVerent councils in the South East. with our local councils to deliver on the economy. That makes us quite special as a region. We have That is even more important now that local councils district councils, unitary councils and we have are being tasked with making their local economies county councils. We try to be a bridge between our grow. councils and central Government in the things which Pam Alexander: If I may add to that, I would draw the whole country is trying to achieve in terms of the out two diVerences between us and some of the other growth of the economy. We have spent a long time regions. First, we have a very,very,very small budget working with hostile councils who did not want in the context of a very, very large economy. anything to do with regional architecture. But here Therefore, it is really important that we do not just in Kent, for instance, we have been able to work with see ourselves as a bank to support projects, but that councils of all diVerent shapes and sizes to achieve actually we are about working to create partnerships the end. If you look at the results we have been able that draw mainstream funding and, through such to achieve, they are pretty pleased even though they things as the regional funding advice and the money Processed: 09-09-2009 16:50:52 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG1
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11 May 2009 SEEDA that we draw in from Europe, actually leverage more trick, particularly if you do not have all the tools that public sector and private funds into the work that we are needed. As a comparison, Kent, East Sussex and do. Secondly, because we have such high economic the Isle of Wight have together got around 2.4 activity rates in the South East we are not simply million people, which is about the same size as the looking to create jobs, we are looking to create high- whole north-east region. We have £200 million on value jobs and to increase the skills of people, average to spend on 8 million people, but I would particularly in those parts of the region that are suggest that the North East has a lot more to spend under-performing in comparison with the average. on its 2.4 million people. In a sense, we are a microcosm of the whole of the UK in that there is as much diversity between the richest and most deprived parts of the South East, as Q6 Chairman: We will come to some questions about there is between the greater South East and the north budget in a moment, but are you consciously trying of the country. to focus your existing budget on areas of deprivation, and have you done any analysis of how your investment pattern merges with the deprivation Q4 Chairman: So would you say that the South East pattern in the South East? is unique, or are there things that you can learn with Pam Alexander: I think it is quite hard to do that other Regional Development Agencies? Do you because, as Jim has already said, a lot of the have discussions with other Regional Development deprivation is actually dotted around areas that Agencies about best practice? appear to have great prosperity. Parts of Oxford and Jim Brathwaite: Yes, we do. One the strengths of the urban south Hampshire, for example, are diamonds RDA movement is that we have always had a very that contain great diversity within them. I think that close working relationship with other regions and we the diVerent regional economic strategies that we look to co-operate, we look to have best practice. In have had over the past 10 years have had diVerent fact, I will not speak for chief executives, but I know approaches to the issue. We started oV with a very that one of the topics that is always on the agenda at clear identification of priority regeneration areas chairs’ meetings is best practice. Each region at each across the South East, and much of our physical meeting has an opportunity to present to the other regeneration investment has been directed at the eight exactly what they have done which is worth coastal areas and some of those particular pockets of looking at and worth copying. We have had some deprivation in our cities. As we have taken the very good co-operation between ourselves and the second and the third RES further forward, we have north-west, for instance, on energy policy; and with focused increasingly on how we make our Yorkshire and the north-east on science. So we do mainstream programmes. Business support, for try to work together. London, ourselves and the example, reaches out to hard-to-reach groups to eastern region are very strong; the greater South East create enterprises in deprived areas and look at ways works very closely together. of using our skills to upskill the work force who already have jobs there, so that there is an opportunity to increase average incomes and bring Q5 Chairman: You have painted this picture—as I higher-income jobs into those areas. One of the imagine we all have around this table—of the South biggest lessons that we focused on—of which East as the economic powerhouse and a key part of Hastings is a good example—is the importance of the UK economy, but equally it has areas of severe treating skills as the first route to better jobs before deprivation, as we can see here in Aylesham, which is trying to bring in better businesses, so that local hardly a wealthy community—not far from my own people can actually achieve those jobs. During the constituency, large parts of Thanet, Hastings and five years that we have been working in Hastings, the Brighton. What are the challenges in dealing with average incomes have risen from 69% of the regional those sorts of issues? In your evidence, as well, you average to 74%. Although the index of deprivation have suggested that the polarisation is becoming still shows that there are still very serious problems greater and not smaller. there, that is the sort of trend that we hope to see. Jim Brathwaite: One of the things that I am most proud of is the growth that we are beginning to see in deprived areas in the South East. You have them Q7 Chairman: I presume that you do not do that sort in Oxford, sitting right where Andrew lives in of work in isolation, so who are your key partners, Blackbird Leys. Also, we think of Surrey as being and how do you identify the partners that you need leafy and wealthy, but I have visited some estates to work with? Are they third sector partners or there that have got the same deprivation problems. council partners? How do you pull all those strings Unfortunately, when you are poor in the South East together to get that sort of project moving? in relation to the rest of the economy,it is a lot worse. Pam Alexander: We always look first to the local I am from the North West and have visited areas of authority, because we would not go to an area the North East and you do see a vast contrast. without having a collaboration of willing partners in SEEDA has tried to focus on that, and one of the the local authorities. We then look to be business- tenets during the first five or six years of our driven, because that is the nature of our own ability existence has been to try to raise the economic game to bring to an area links to the private sector and, of those poorer areas to at least the average of the working with the community, the voluntary sector. South East. SEEDA’S board felt that that was the We always try to put that together. One of the key most important thing for us to do, but it is a diYcult characteristics of our approach to regeneration has Processed: 09-09-2009 16:50:52 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG1
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11 May 2009 SEEDA been to try to look across to a comprehensive Q10 Chairman: Could you do us a little note about approach. In the early days, it was very much about the eVorts that you have made in terms of science? building physical infrastructure, but it is now very You said that you are the lead agency in the country much more about working with all of the public, on science. I would be interested to read a little more private and voluntary sector partners who can about what you have done in that respect. increase an area’s well-being. Jim Brathwaite: Delighted. Pam Alexander: We can cover both angles. We lead for the Department for Innovation, Universities and Q8 Chairman: You said you would only work with Skills now, and, clearly, there are priorities set by willing partners, which brings me back to the Government that we are linking into for the RDAs. councils that just don’t like you on political grounds. Of course, we also have our own Science, Are they short-changing their citizens because you Engineering and Technology Advisory Council, cannot work with them? SESETAC, for the South East, which advises us on Jim Brathwaite: I don’t think so. I think that when how best to focus our work. we were first on the ground, over 10 years ago, there Chairman: On these general issues, does anybody was a great deal of suspicion from everybody about else want to come in before we move on to questions why we needed a regional development agency. As a of budget? businessman in Sussex, I had been very engaged with the TEC movement, and I remember thinking, Q11 David Lepper: In the early days of the RDAs “Why do we need yet another grouping?”. There was there was a criticism that they would only focus on suspicion and everybody suVered from that. urban areas and rural areas would miss out. Is that a However, SEEDA has made itself very useful. criticism that you still hear and what would you say Although it did not have a large budget, when it had about that early criticism in terms of SEEDA’s money it could spend it without fear of work? contradiction, and it was very good on its promises Jim Brathwaite: Yes, I think that there was this idea and made itself useful. Pulling together an economic that business people don’t understand rural areas. strategy for the region was one of the first things that On every committee that I have served on, before it did. People started to look at that and to see how and since I became Chairman, there has always been ambitious we could really get. I think that because of somebody from the rural side and we have always that we made ourselves useful to councils both had big discussions. In fact, the RDAs fought tooth hostile and friendly. If the Board looked at what it and nail to make rural things a main part of what has done over the past 10 years, you would hear they did. I remember Lord Haskins producing a quite a debate going on around the table—“We have report that eventually gave the economic spent half our budget in the east of the region, in the performance for the regions in their rural states to Kent area and the Sussex area, why is that?” It is the RDAs. It was a great celebration at the time. We because they were the deprived areas of the region, used to hear a lot of complaints about rural policy but then we see how we have balanced that by from the Government. I do not think that you hear investing in science and innovation to the west of the those complaints now, given the economic side of region, where they do not need as much direct help things. Farming goes up and down. If you are in from the Agency, but do need help for businesses to livestock farming at the moment, you are up. This find new markets or bring on new products. That is time last year, the cereal farmers were in good voice. what we have tried to do. In our region, however, farming is very, very small, compared to the business that goes on in the rural areas. We have more than 100,000 businesses that are in rural areas. That is the way we live. Our Q9 Chairman: To what extent do you look at housing is very much the same. It is part of that national priorities when you are trying to decide mainstream activity. So I don’t think we have short- regional priorities? changed rural life at all. I think that we have done Jim Brathwaite: I always say that we are a bit like very well by it and we continue to do so. Janus, we have to look in both directions—up to Pam Alexander: It might be worth mentioning that Government and down to the region. For a long there are several substantial programmes that have time we led the RDAs on science and innovation, focused specifically on rural areas, for example the and we still do. What was very apparent was that the market towns initiative. We also work with Europe Government were very keen to increase the amount on its rural development programme. Of course, of economic development that we got out of our even in terms of our sector consortia, which are the science budget and to look at how we were spending seven groups that cover 25% of the businesses in the on things. There was a national policy that had to be South East and are focused on driving new products translated into the regions. In the South East, we and new markets through our most high-growth have tried to make sure that research and sectors, we are working very closely with the land- development were not just something that we did but based sector, to see how we can support it in terms was a business that could produce the GVA—the of diversifying rural economies. Alongside some of growth—that we were looking for. We have tried to our physical programmes for investing in rural do those types of things and to work with the buildings, that has enabled quite a large impact to be Government to translate policies into local made in small ways that trickle out into the activities. surrounding economies. Processed: 09-09-2009 16:50:52 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG1
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Q12 Mr Smith: In terms of the overall impact and your agency, they say, “We didn’t quite meet the the overall diVerence that SEEDA can make, partly criteria,” or: “All I was oVered was a training because our region is so diVuse and so large, with a course,” or: “There was no actual real support to fill very big economy, and you are a relatively small the gap that I have.” Usually, the gap includes some body, SEEDA may seem somewhat remote and measure of funding. What is your response to that? perhaps marginal to many people’s everyday Jim Brathwaite: The problem with businesses is that concerns. To our constituents, if they were here and you cannot please them all the time. Sometimes, the able to ask you in the round what diVerence you act of saying, “You need to do a bit more homework have made, how would you sum up the diVerence on this business idea before you get investment” that you have made to the region? doesn’t go down too well. We have tried to improve Jim Brathwaite: In Oxford, for instance, we have the performance of Business Links. They have been been very much concerned with the skills levels in under the direct control of the RDAs for a couple of some of our more deprived areas, such as Blackbird years now. Although the budgets have not gone up, Leys. We had very early investment just in reading the performance of the Business Links certainly has. and writing. One of the first surveys that SEEDA did We are trying to see more businesses than ever on the skills of the region showed that some of our before. When we do our surveys, both nationally basic skills were not there. That was not something and locally, of how Business Links are perceived, we that was being addressed very well by the get responses in the high 80s, percentage-wise. The Government at the time. Those skills have improved average is in the 90s. That is much better than Marks since then. SEEDA invested a lot of money to do & Spencer gets and other national organisations that. Why was that? It was because we could see the would be delighted with it, but I am always jobs that were going to be needed in the Oxfordshire disappointed when I hear that we have not pleased area. BMW had come to us to talk about the everybody. As a businessman, I feel that we should expansion of the Mini and about what they were be doing better, but we are not always able to meet going to invest; the local people had to rise to that. the needs of companies. We try to review that and Those were some of the things that we have done. We work as hard with the FSB and local chambers. In have the same situation here in the coalfields, where fact, a local chamber will be opening up in Dover we are looking not only at skills but at business soon. I will go along personally and talk to local opportunities, including new places where people businesses to ensure that we are trying to meet their can set up their own business. One of the business needs. You are not always able to meet those needs, parks that we have developed just outside but we try our best. Canterbury is full now, and you would never have guessed that there would even be a demand for something like that. However, it is there. Q14 Ms Barlow: You mentioned Business Links. Pam Alexander: If we are looking at it more There have been criticisms in Brighton and Hove of generally, we would say that, whether you are a Business Links taking a lead in ways that are business, an individual, a local authority or a group, virtually competing with other local business. What we are here to help you to improve your criteria do you use for Business Links? Do you work performance, in terms of economic growth, and to only with people who come and ask for your help? do it in a way that gives due respect to quality of life Jim Brathwaite: I have not heard that criticism in and all of the things that make us value living in the Sussex—I know a little bit about the architecture in South East. So we would point to the number of jobs Sussex, as you would expect. The core chamber that have been created as a result of our down there is also the contractor for the Business programmes, the skills that have been improved and Link. It has always been very integrated in Sussex. the employment that is being created through Whether it competes with other business physical regeneration projects, which have changed organisations is always up for grabs—they are the infrastructure of places to enable them to businesses in their own right. SEEDA has to be very perform better. All of those projects add to careful that it contracts the right people to deliver opportunity and capacity; we believe we have added the Business Link service and that they deliver good to those things. The impact evaluation report, which value for money. I believe that Sussex, so far, has was recently published, suggests that you can been one of the better-performing Business Links, translate all of that activity in the last five years into but we are always interested to hear what people about an additional £2.6 billion to the economy. have to say. We have recently had some However, I think that that sum is quite remote from conversations that we can do better at to ensure that individual people. It is actually the story in terms of other business organisations are supported, but I go new businesses, new jobs and new skills that is really back to what I said to Gwyn. It is sometimes hard to relevant to individuals in the South East. please business. You are sitting in Government at the moment so you know what it is like: even when you are doing the right things, businesses can often find Q13 Gwyn Prosser: On the issue of supporting new a reason to complain. business, you do most of the work through Business Pam Alexander: If I may add, it might be relevant Links and so on. The anecdotal evidence that other that the task of Business Links has changed MPs and I get in meeting business people who are substantially through the new business support venturing into a new area or starting up a new simplification programme. They are now focused on business is that so many times when they have had being a signposting service of information and their first interviews or meetings with Business Link, diagnostics. They then broker those into the Processed: 09-09-2009 16:50:52 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG1
South East Regional Committee: Evidence Ev 5
11 May 2009 SEEDA companies that will provide the services. Over the would like to see the money. I remember that, when last few years, since 2005, they have extended their I became Chairman, I used to walk around to reach to about a fifth of the businesses in the region meetings with Ministers and civil servants with two and more than doubled their intensive assist to those boxes of foolscap paper, which were the briefings businesses. Your particular question was how they that we got on how the money should be spent. I reach businesses. At the moment, there is a strong remember that I gave it to Mark Gibson, who was campaign to try to get businesses to go to their the Director General in charge of RDAs and Business Links, particularly to get the free health managing our relationship with Government—he is checks which will enable them to take a view of what retired now. I gave them to him, and when he picked other support they then need to go further. We are them up, I think he got the point. It then got a lot very pleased, actually, that a campaign that they ran simpler and we got a single pot. The money goes into increased the people coming to them by 70% over it, but then the RDAs are allowed to take on the that period. They have already given over 8,000 targets and to spend the money where we feel that we health checks since October. We believe this is could make it work. absolutely fundamental to helping businesses to Pam Alexander: There is a two-way process too, survive the current diYculties. If they can then be because, increasingly now, with the single pot, our brokered on to those who can provide them with the contract with Departments is that we will help to services, whether it is for creating business plans or support them to achieve their PSA targets. That knowing where to go for finance, it is very means that we have the opportunity to feed into important. We have never worried very much about those policies about how we feel that the PSA targets SEEDA getting credit for the work that we do need to be developed in order to support us. For through other organisations, whether Business Link example, our region has one of the highest research or Finance South East. One thing that we have and development in the country. If we want to probably realised is that that regional architecture support that and if we want the country’s investment needs to be more transparent so that people know in R and D to increase, we need to do it in ways that where to go for what. Finance South East is a very work for our businesses. One of the areas where we important part of that picture, because it now has a have gained most in flexibility recently—in theory at funding escalator of £20 million that can enable least, although we still have to test the practice—is businesses to access finance at any stage of skills, where we really need to be able to invest in development. That is a particular signpost that we higher-level skills, not just in level 2 and below. We are very keen to encourage Business Link to give. were very pleased to get the Train to Gain flexibilities Jim Brathwaite: It reminds me of another point on that enable us to give level 2 performers who already reaching out to people. In Brighton, for instance, the have a level 2 the opportunity to change their focus Business Link set up a desk in the Western Road and retrain. We need even more flexibility to invest shopping centre to ask people to have their free in higher-level skills, but we have been able to feed recruitment diagnostic check. It took people several into that policy and identify how the PSAs need to visits to believe that the service was free. When they be changed, if they are to deliver for the country’s eventually realised, it worked. We have completed broader objectives. many thousands of those in the Brighton area and they have been well received. Q16 Ms Barlow: The overall budget—the single Chairman: Since you are giving away things for free, pot—is decreasing over 2007-10. Do you have plans I will ask Celia to ask you some questions about to compensate for this lack of funding? the budget. Pam Alexander: May I explain first why it is decreasing and then what we are doing about it? Q15 Ms Barlow: That leads in quite nicely. On the There are four relevant points regarding the cuts that overall budget, you are funded by several we are facing. First, all RDAs faced cumulative 5% Departments, and the money goes into one large per annum cuts in the last comprehensive spending pot. Does this mean that you can be completely round, so our corporate plan starts with reductions flexible about how you use your money, or does each on our previous levels of spend. We have had money Department give you specific requirements so that taken from our budgets to fund some of the you have got to spend money on what we are giving Government’s investment in the needs of the it to you for? recession, in terms of housing and business support. Jim Brathwaite: That is a knotty question. I think We have lost about £27.5 million to those that in the original idea of RDAs, there was no extra programmes. We have a very substantial shortfall in budget, so the budget had to come from our capital receipts, and—frankly—planning Departments. Each Department was asked to forward we are not anticipating planning receipts contribute and the ones which did so were largely the over the next two years. Hopefully, we can perform OYce of the Deputy Prime Minister, which is now better than that, but in terms of prudence, we take CLG, and DTI, which is now BERR. Business and the view that we should assume that we shall not. So community budgets came in and some of the other that is £17 million of our corporate plan budget, and spending Departments gave some budget, but it was then another £8 million that we were hoping that we very diYcult, because civil servants like to give you would get anyway. lots and lots of reasons how they want the money spent and delivered, but they didn’t take account of Q17 Chairman: Just for the sake of the recording, what we were seeing in the regions and how we you said £27.5 billion? Processed: 09-09-2009 16:50:52 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG1
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Pam Alexander: Million. I would love it, Chairman, substantial funds from Europe. Those are the sorts if it were billions, but sadly it is not. We have lost of criteria that we would be applying as we consider about £52 million oV the corporate plan budget; and the priorities. We will look at investing in the upturn at the moment we are working out how we should and in keeping businesses going, and ensuring that address that. In the past six months, we have also we can improve their productivity to see them refocused our budget very substantially to ensure through the recession and that our programmes have that we really are putting the necessary focus on transformational impact. helping businesses struggling through the recession. In particular, we are investing in coming out of the Q19 Ms Barlow: In 2007–08, your other funding recession ready for the upturn. That has required came from the DCLG. The previous year it came much refocusing of our business support budgets from a variety of sources. Is this funding and some very substantial cuts across the board in unpredictable? the budget. We are very clear that we will not renege Pam Alexander: From Departments? on legal commitments to our partners, but we are Ms Barlow: Yes, and how unpredictable is the having to face serious disappointment in some funding? You say that you work on a three-year projects and programmes that, in all good faith, we plan. have been discussing for quite some time. The board Pam Alexander: The single pot is allocated through has been discussing that over the past few months. It the comprehensive spending review, so, like most will take a revised corporate plan to the Department other Government agencies, we get the three-year at the end of this month. programme. I think that it would be true to say that Jim Brathwaite: Sometimes you can see where the BERR Select Committee commented that our councils might be disappointed with us; we have had funding has been targeted by various Departments. to make some really tough decisions. I feel very bad Perhaps that is because we are less their children about Southampton, for instance, which has a major than some of their other direct agencies. We have impact on some of the things that it would like to do quite regularly faced cuts in our budget that have and that we encouraged it to do. However, we been diYcult to predict. We hope very much that it cannot meet the ongoing commitment, because we is recognised generally—I believe that Chairs in their do not have the budget. There will also be things that meetings with Ministers feel it is—that we have faced we used to do—involving small amounts of money too many cuts and it is important that we are able to that were within our gift and area teams that would focus our budgets on the tasks in hand. We do not find little projects to do—that we can do no longer. have to negotiate which part comes from which We must focus very much on major strategic input, Department; that is done centrally. The diYculty is where we can have the biggest bang for our buck. that each individual Department, as it makes its own That aVects people’s view of SEEDA. I hope that it diYcult decisions in the current circumstances, may is the right thing for us to do, but it does have an look to that as marginal spending. impact. Jim Brathwaite: I think that for a long time, RDA budgets, once they became this single part-time deal, Q18 Ms Barlow: Can you say a little more about the were ring-fenced. In the last couple of years, we have decreasing commitment—£115 million last year managed our budgets very well. We have never to £33 million next year? You mentioned overspent—even between ourselves—and we have Southampton. What is the decrease made up of? put the money where it is needed. We have seen some What were the expectations of the people you people who can manage. We are business led so, planned to support? Why does that not meet up with whatever the budget is, we have managed to make it your corporate plan, and how will you manage the work. That meant that when these cuts came along, disappointments or meet the expectations? they were painful but we tried to redress what we Pam Alexander: I didn’t quite recognise those were doing to meet the budget. It is not always the figures, so perhaps we could clarify them with you right thing to do in my opinion. When the later. We had a three-year plan, and we planned Committee is considering other things that go on in ahead. With the sort of long-term investment that the region, as it will do from time to time, it can look SEEDA has always tried to make, we have been at the impact of what we do and what we could have heavily committed to projects. The extent to which done if we had the money, particularly in the South other projects can be brought forward will be East; that is very important. reduced substantially by cuts if we do not intend to Chairman: We have a series of questions now about cut into commitments already made. We are looking the current economic situation. at projects that have not yet been committed but which we may have been working on for some time. Q20 Mr Smith: You have anticipated one or two of Our focus is on ensuring that we invest in bringing these points in talking about your budget, but in the businesses through this recession and in a successful round, how would you say the recession has aVected upturn. That may mean that some of the more the South East compared with other regions? community-based projects are no longer able to be a Paul Lovejoy: Perhaps I could make a few priority. As the Chairman has just said, we are also observations. First, there is no doubt that we have very focused on those programmes that will have a seen the most serious reversal in economic transformational impact. In other words, we want to conditions in the 10 year history of this organisation. get as much bang as we possibly can for our buck. To a degree, a number of commentators last autumn That includes those projects that can leverage in were predicting that this recession would have a Processed: 09-09-2009 16:50:52 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG1
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11 May 2009 SEEDA distinctive shape, in that we would see an upside- Jim Brathwaite: Just recently, we held a conference down pattern, with the impact most directly felt in in the QEII Centre in Westminster to talk about how the South East. If you looked at those sectors that to cope with housing. Getting housing back even to were immediately and most directly impacted— what we hoped it would be is going to be a major financial services and travel, for instance—you problem, never mind keeping it as it is at the could see where that view comes from. As things moment. You imagine that housing in the South have panned out, it is plain that the South East is not East is a bellwether of how people feel about the experiencing disproportionately the impact of the economy, but it is also an activity in itself—8% of the downturn, although that is not to say that there are economy is to do with construction. We have made not very serious impacts in particular sectors and sure that business leaders and councils were there— localities. We think the explanation for that lies anyone who can help to bring that part of the partly in the degree to which businesses in the South economy back to fruition and plan for the future, East have been competing eVectively in whether on skills, land or doing deals. The question international markets and partly in the degree to how we do that is important. which they tend to be in the higher value and more Pam Alexander: More generally, there are at least resilient end of the value chain. Right now, we do not three examples I could give you of diVerent ways in see a disproportionately great impact on the South which we are trying to ensure we are hearing what East. The latest forecasts that we draw on, which businesses are telling us and reporting it to assume a 3.5% reduction in GVA in the UK as a Government and across to local authorities and our whole this calendar year, translate into a reduction partner agencies that are supporting businesses. in the South East of about 3%. That is very serious, First, we have a regional intelligence report, which but it is not as disproportionate as some said it Paul co-ordinates each month, for the Government. would be six months or so ago. It is important to That looks at all the statistics coming out and also remember that, in that context, we are still seeing a draws on all our business forums, whether the very significant resilience in large parts of the economic partnerships or member organisations business base in the South East and a persistently such as the CBI and the FSB. We get a monthly high employment rate. There is no doubt that the report on what their members are saying and pass conditions have turned very markedly for the worse that through, upwards and sideways, and also across in the past six to nine months, but in that context, to the agencies we are working with, such as very large parts of the South East are continuing to Jobcentre Plus, so that we know where to put it. perform strongly. Jim Brathwaite: Anecdotally, as I go around the region, I am beginning to see that people are fed up Q22 Mr Smith: What is the most surprising thing of the recession in the South East and the talk is that coming out of that? we need to improve. I was in Milton Keynes two Pam Alexander: For me the most surprising thing in weeks ago where we had the South East Economic the first few months was the huge number of women Delivery Council, which is chaired by our Regional falling out of the employment rate. It looked as Minister, Jonathan Shaw, and me. We were just though the huge increase in female employment was taking a sounding from local businesses. They were the first to be hit, but that has now levelled oV and it saying that the recession was not as bad as you get has not been shown in the statistics for the last few to hear from the press and they were looking at new months. Another very surprising thing was that ways of making things happen. As I go around the Milton Keynes was a hot spot of unemployment, region, I am beginning to hear more of that talk, through the redundancies we were told about by which has got to be good news for the South East Jobcentre Plus, and we had not spotted that because and national economies, but it does not mean that they were all below the radar of the 20-plus you are not going to lose your job if you are in employees businesses that report in to the construction, house building or some banking Government. Putting together a load of diVerent organisations. We feel very disappointed about that. statistics gives us a much better understanding of People in places such as Tunbridge Wells are what is going on. We have also set up some forums experiencing unemployment for the first time, and that we had not needed in the past. For example, Jim diVerent types of people are going to their Jobcentres has been meeting one to one with the leaders of each to ask for help. That is diYcult. The Jobcentres of the banks, who, we were rather surprised, would themselves have come under pressure. A lot more not come into a room together to talk to us. We people are asking for things. You do not usually see understood fairly quickly that that was because they that in the South East. I reported that to Jonathan are of course competitors who do not want to tell Shaw wearing his Department for Work and each other about their businesses. But I think that Pensions hat. We are seeing not only more since the small business finance forum was set up, recruitment on the front line, but also more help for which Peter Mandelson chairs and I sit on for the those people who are facing up to it, because they women’s enterprise taskforce, the banks have been need to be trained to cope, which is a diVerent much more willing to work with us. We are now situation for the South East. setting up a South East finance forum, which will bring the regional managers of the banks together as Q21 Mr Smith: How are you engaging with business regularly as we need to talk about the diYculties leaders across the variety of sectors aVected, businesses are having. I think that the member particularly when it comes to discussing the organisations that have been part of the forum with recession and what can be done? the Regional Minister, to which Jim referred, the Processed: 09-09-2009 16:50:52 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG1
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11 May 2009 SEEDA
South East Economic Delivery Council, have found questions about the alternative scenarios, and the it very helpful to be able to hear what is going on in consequences that may flow from that, that this that way. We had Peter Ibbetson from the Royal region and its economy now faces. Bank of Scotland talking at the last meeting, and I Jim Brathwaite: I have to say that I am a bit of a think that there was a real understanding of mutual cheerleader for this economy, as you know, and we diYculties, which probably had not existed before. have a global regions programme where we go and There is no doubt that we have been working in ways look at other regions around the world, which are that have been quite diVerent from some of the equivalent to the South East. If I am looking at things we have had to do in the past, as well as from Kanagawa in Japan, or the greater Washington area the things Jim referred to, such as helping Jobcentre in the States, or Shanghai, and some of the growth Plus to see how to help people who have never patterns, even in established economies, we thought crossed their doors before. we were pretty good if we could get to 3% growth. I have to say that greater Washington grows at 7% per annum. I do not know what their figure is for the Q23 Mr Smith: Do you see the recession causing a downturn, but you can bet that it will be a lot more fundamental need to revise the Regional Economic ambitious than ours. Strategy, the 10-year strategy going forward to 2016, or is the recession an interlude after which we will get Q24 Mr Smith: Do you think people in the South back on track? East really want to grow that fast? Pam Alexander: We have talked about that—Paul Jim Brathwaite: I always say that people in the South might want to add something here—because it is East want to be rich but not ugly. They want to keep perfectly clear that we are not going to achieve the their green and pleasant land, and it is surprising targets by 2016. For example, it is pretty unlikely that we have a third of the whole country’s area of that we will meet the targets for GVA per capita outstanding natural beauty, soon to be a national growth, even on the most optimistic forecasts for the park in some parts. We like our villages and we like next few years. We have had two RES partner the money. That is why people are here. It is finding conferences since the summer, and at both our ways in which we can do that in a sustainable way that is important. I think that is important for all the partners across the region said the last thing we need people in the South East. to be doing is spending our time reviewing targets, because we are very clear that the RES sets us all in the right direction. It has been very important to us Q25 Mr Smith: I always take the view that we are a that the RES targets are owned not just by SEEDA, rich and smart enough part of the world. We ought but by all the partners who will bring their to be able to have green growth, which has a positive mainstream activities to making it work. We all appeal. Notwithstanding revisions, do you think believe that global competitiveness and productively that our land-use planning policies remain a growth, which is shared across all the people in the constraint on achieving those high levels of growth? Jim Brathwaite: I think to a certain extent they do. region, and a real attention to quality of life, in terms It is not because we do not want to use the land. of both community and environmental outcomes, Often it is the time that it takes for us to make a are absolutely what we need to be focused on. We decision about use of land, so it is not that we want may miss some of the specific targets, but we will to encroach. We are always accused of being the miss them even further if we do not keep going in built-up South East, but we are not at all. Less than that direction. 30% of the land has ever been built on and we do not Paul Lovejoy: There is certainly no doubt that the want to increase that, even with more housing. We economic context within which we are now working want housing in the right place for the jobs that are is very diVerent indeed to the one in which the being created so that communities can benefit from economic strategy was reviewed in 2005-06, but I that. But everybody wants it green and pleasant, think that the clear and settled view of our partners, whether you are in the garden of England here in and of ourselves, is that the central challenges named Kent or in Oxfordshire. It does not really matter. in that strategy have been able to compete What matters is that when we make a decision we get successfully in an integrated global economy. Those on and make it happen. challenges are: focusing on a type and pattern of Pam Alexander: On the green growth point, I think growth that focuses on improving productivity; it relates back to the RES targets. We believe in our innovation and spreading the benefits of that as RES very clearly that sustainability is an widely as possible in the region; and ensuring that opportunity for jobs, exports and innovation. That that is an economic trajectory that not only adheres is at the heart of what we now believe is the way out to but actually takes real advantage of the principles of this recession. The low-carbon strategy is of sustainable development. They remain absolutely something that we were putting in the RES three the right ones to carry forward. In terms of where we years ago. We believe it is absolutely right to keep it go next, we are clearly of the view that when the task central to what we are trying to do. comes to start reviewing that regional strategy, this time through the mechanism of an integrated Q26 Mr Smith: Thank you. We can wrap up this regional strategy, we will need to start from a base section of questions. I have asked about the that does not simply project forward historical Regional Economic Strategy. In terms of your own trends in a straight line but asks some really tough corporate plan, are you reordering priorities and Processed: 09-09-2009 16:50:52 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG1
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11 May 2009 SEEDA making changes in the light of the recession? How end of our value for money; we got returns, but they have you responded to Lord Mandelson’s statement were not as great as some of the areas in which we about sharply focusing measures on steps to help the helped businesses directly. We have to be very careful region through the recession? that we don’t stop doing things like this, whether it Pam Alexander: Sorry to have anticipated that is this or another agency that the Government task question a little. We believe that the focus on key with regeneration, because I think that in 10 years sectors to bring us out of this is very important. In time, areas such as the Kent coalfield will be reshaping SEEDA and its budgets, we are looking at transformed and doing diVerent things. We have how we identify not the winners but how we enable already begun to see that in Chatham where we have the potential winners of the future to have the been involved for over 10 years. Chatham has a infrastructure that will enable them to grow, expand university and has new types of jobs coming in, but and innovate.That means looking at low-carbon as it takes some time to do that sort of regeneration a very important sector for the future, at broadband work. If we spent all our money just on helping infrastructure, which is something that Jim has businesses directly, we would get a very good return, always been passionate about and which is but don’t let’s stop doing everything. absolutely crucial to driving our information and Pam Alexander: The top level message, which we are communications technology and some of our very pleased with, is that we have delivered £5.60 for creative and digital industries, and at such things as every pound we have spent in terms of value added assisted living and the biosciences. Those are all to the region. sectors in which our strategic advisory panel, Jim Brathwaite: That is the average, is it? SESETAC, which I mentioned earlier, has identified Pam Alexander: That is the average across the five- the region’s strengths in our universities and research year spend from 2002 to 2007 that was looked at. As businesses to make sure that we are driving those I said earlier, the consultants developed a global companies into the future. On the corporate methodology for measuring value that looked at the plan, the other end of it, of course, is our business net jobs we had created and turned that, through an support programmes, which apply not only to income assumption, into a GVA impact for the Business Link, but also to the ways in which we region of £2.64 billion. We felt that that was a good develop innovation and growth teams, which are demonstration of value, but, as Jim says, it needs to focused on the 2,000 most fast-growing businesses in be carefully looked under. One of the interesting the region, and the way in which we lead and develop findings, for example, was that only a fifth of the jobs supply chains and skills bases around them in a way have so far been created from our investment, which that drives that growth. We are very aware that if this emphasises for me the long-term nature of what we region does not grow faster than 3.5% per annum, are trying to do to change economies, which is not there is no chance of the UK growing at that average just about producing new jobs in one year but about rate. We believe that the collaborations that Jim producing year-on-year improvements and long- talked about at the beginning, whether they are term benefits for the region. We were pleased to see across the greater South East or are with universities that almost all of the work that was analysed—a in diVerent parts of the UK, as with our aerospace general 80% of our investment and 25 programmes programmes, are absolutely crucial to getting that were looked at—demonstrated substantial net upturn to look like the V shape we want it to be, benefit. Additional benefits would not have been rather than a U or L shape. impacted without us on jobs, on businesses assisted, Chairman: Do you have some questions, David, on new businesses created and on people getting new about targets and eVectiveness? skills. I am sure you have already got all of those figures and we can pull them out for you if they Q27 David Lepper: Certainly. I want to focus on the would be useful. But there were some lessons in PricewaterhouseCoopers report, which focused not there. There were some interesting lessons about only on your achievements, but on RDA methodology. For example, we targeted many of our achievements in general against their objectives. Will skills programmes on people who were already in you briefly summarise the report’s findings in work. That meant that we were looking for benefits relation to SEEDA? Do you think those findings not in terms of numbers of jobs but in terms of paint an accurate picture of SEEDA’s work, and do improved skills and increased productivity into the they reveal any areas in which you feel you could be future, and that does take time to come through, as more eVective? What will you say in your report to Jim suggested. Also, our physical regeneration Lord Mandelson on PricewaterhouseCoopers’ programmes have tended to be comprehensive review of SEEDA? regeneration; looking at the creation of jobs and new Jim Brathwaite: I will let Pam and Paul deal with the economic value over long periods of time. Therefore, detail of the report. For me, it was quite interesting there were some lessons for us. They very much drive and a great exercise for the RDAs to go through. I the focus of what I was describing earlier, looking at think that, in terms of evaluation of what we do—I specific sectors and areas where we can get maximum am speaking in general about Government impact for our programmes. They look at partners investment in various areas—it is always good to see with whom we can work, where we can drive their what we are getting for our money. When I look at programmes to deliver those things, whether it is the areas such as this, where we have spent some money, diamonds where we are looking at areas of growth I think that it is too early to see the real benefits that that will impact on whole economic sub-regions, or will come along. Regeneration was seen at the lower whether it is innovation and growth teams who will Processed: 09-09-2009 16:50:52 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG1
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11 May 2009 SEEDA be looking at high-value businesses and trying to of our engagement that has been of most value, and drive that impact down through the value chain. added strategic value, to our relationships. For Those lessons produced some very interesting ways example, we brought together partners—as we did in of looking at how the output, which we have always Hastings and Bexhill—who had not worked measured and been asked to measure, actually needs together before but who, working round a table, to be translated into outcomes in terms of value. have created a real impact for their locality. That is something that we certainly want to pursue. Jim Brathwaite: Against three diVerent political There was a lesson for all of us in the importance of parties as well. consistency and coherence in how we evaluate diVerent programmes. We tended to look at them Q30 David Lepper: So are you saying that it is one by one and see whether we were getting what we diYcult to sustain what one report is asking you to wanted out of them, rather than trying to add them do while conforming to what the other report is all together and looking at overall impacts. That will asking you to do? certainly drive our approach to appraisals and Jim Brathwaite: Yes. I hope this Committee in its evaluations in the future to make sure that we are report will be able to search out evidence to see making that broad link to GVAand how we can look where the region could be helped in forward policy at additionality, which was something that we had because this Committee can influence how not measured in the past. Government think of RDAs in the future. Chairman: We are going to keep you for another 10 Q28 David Lepper: One of the findings of the minutes, I am afraid, before we wind up this part of National Audit OYce independent performance the session. We have questions about some more assessment was on staV numbers at SEEDA. I think practical matters. Gwyn. the comment was that the ratio of staV numbers to budget is high compared to other RDAs. I am Q31 Gwyn Prosser: Jim, in your opening remarks, assuming that that is accurate. you mentioned how pleased you were to come before Jim Brathwaite: It is. the Committee and what a good idea it was to set up David Lepper: What do you have to say about that? these new Regional Committees. We will be inviting Jim Brathwaite: We have had a high staV number you to come before the Committee again in July because we have spent most of our time influencing after the publication of the corporate plan. That will other people to do things in the region. We have not be a useful exchange of views, especially regarding had budgets that a region of this size would some of the disappointments you describe. I am a command and therefore would spend. So what we great supporter of RDAs and SEEDA in particular, tended to do, certainly in the early days of setting up but what do you say to critics who look at the SEEDA, was to get out there and get our people amount of money that comes in? They might have talking to other partners in the region to get them to studied the PricewaterhouseCoopers’ report, the do things. We are reducing those numbers because strategies and annual reports, but they look at the that is required of us under Treasury guidelines. I do amount of money coming and at the outputs. You not know what impact that is going to have on our have mentioned already that a great deal— achievements over the last 10 years. We will have something like a half of all the investment—has gone fewer troops in the field. We will not be around as into the east of the region. I know from other much in some of the areas where we have been. We meetings that a great proportion of that has come will not be in some of the villages and other places into east Kent, indeed into the east Kent coalfields. where you have seen SEEDA—whether people One reason we invited you to the Committee’s knew it was SEEDA or not—having an impact inaugural meeting here is that this splendid hall was through our area teams. We will be very focused on a dilapidated burnt-out shell some years ago. It was doing strategic things that we have agreed with typical of the deprivation after the closure of the partners are the areas we are going to get involved coalfields in villages such as Aylesham and with. We will see. elsewhere. You know all those stories. What do you say to those who say that you have failed in specific Q29 David Lepper: So could that impact on the projects? The Chairman might like to mention eVectiveness of some of SEEDA’s investment? Foulmead before our time is up, but in respect of Jim Brathwaite: I think it might; I am not saying that Snowdown—a stone’s throw from where we sit— it will, but I think it might. I think the influence after a lot of investment, studies and meetings, what SEEDA has had on capacity within the region is not could have been a good project which local people always appreciated. Sometimes the capacity is not were beginning to support was withdrawn. We know there. Even in a region of this size, some councils do that something has come in its place. The outcomes not have an economics department, for instance. We from the new project in Aylesham village should have often played that role for them and now that come close to matching the originals, but can you their PSA is very much focused on the economy— understand the disappointment in communities never mind their PSA, just their very well-being is when that happens? focused on the economy—we do not necessarily Jim Brathwaite: I do understand it greatly, and it is have the people to do that. disappointing when you cannot go through with Pam Alexander: I think it has been very hard to things. There are many programmes of this type measure that. The PWC report was measuring the across the region that both local people and we think impact of our spend; we argue that it is the impact are good ideas. The Brighton Centre is one we would Processed: 09-09-2009 16:50:52 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG1
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11 May 2009 SEEDA have loved to have put money into—a real live Pam Alexander: I think that what we have done in project. We get second-guessed even about where we the east Kent coalfield has been perhaps some of the spend our money. We have to meet value for money most diYcult regeneration work. That is not just targets. We have to make sure that any money that ourselves. Having private owners for two out of the we spend is there. We also need willing partners to do four coalfields is pretty unusual in the whole the things at the time we have the money to spend. National Coalfields Programme. If we try to do Snowdown is one of those projects. I hope people are really diYcult things we will always have not disappointed with the overall impact we have disappointments and failures. If you’re running a had in east Kent because we have tried hard. This business and you never have any failures, then you place is a great example of what we have done. It is haven’t tried hard enough. That doesn’t make it any the first time that I have been in it, though I have the less disappointing. I was very pleased with the opened another community hall not far from here, PWC evaluation of our coalfields programme. It just the other side of Canterbury—again part of the suggested that we had achieved excellent value for coalfields. It is a fantastic place and we have done money, but, more important, real impact for local other things. Not all the miners lived as close to the people in terms of jobs and new businesses, and that pithead as this one. They lived in places like substantial GVA was generated too. That was much Margate, which have had to be looked after. We have higher than I would have expected, so we should be done lots of things to help east Kent. There is a lot pleased about that and about the 2,700 jobs that it is more to be done. We are not always able to do every seriously anticipating will be produced. When there project when we cannot get it to add up and we are too many things against you, not just the value cannot get the partners to come in and support us. for money but the diYculty of doing it, at some point Yes, SEEDA takes the blame and we have big you just have to accept that you need to try another enough shoulders to do that. route if you are going to get the outcomes that you seek in a time that is deliverable. We were keen to see some deliverables. We are very pleased that, with the Q32 Gwyn Prosser: We all know that regeneration Homes and Communities Agency’s commitment, we on the coast will always be harder because of will be able to bring forward employment sites and catchment areas and other reasons, so is there not new jobs to a reasonable time scale, which simply room in terms of policy—it is not your policy but was not looking possible. Some things are central Government’s policy—to vary value for disappointing, but nevertheless we have some good money according to the diYculty of the area, outcomes. deprivation and need? Jim Brathwaite: That is right. I mentioned at the top of the interviews that we have the North East right Q34 Gwyn Prosser: Lastly from me, are there any here in this part of the South East. Yet when you other areas—we have touched on one already—of consider the moneys that we have had, the building Government policy on funding of RDAs which would support the diYcult areas that Pam has just that my colleagues occupy and how those slag heaps described? What message can we take back in our were reconditioned, it is fantastic. It would have report? We all want more funding, yes, and we have made two or three Snowdowns, but we do not have talked about the diVerent value for money ratio. the budget to do that. The Committee may want to Anything else? look at what gets spent where, but we also have to Pam Alexander: There is no doubt that we, and all have that value for money and we have to have the RDAs, would like to have more flexibility and partners locally to support these things. If all of greater delegation to make our own judgments those three things are not there, we cannot go ahead. about value for money benchmarks. We have to comply with those benchmarks, and that is Q33 Gwyn Prosser: You have a partnership in this absolutely right, because we have to justify it when area—I speak as a Labour Member of Parliament— we are doing something that is particularly in Dover District Council. It is Conservative- expensive. There is another example that Jim has controlled, but I support much, if not all, of its already alluded to. We feel that having to go to the regeneration plans. Have you found the council to centre for spending over £10 million constrains us be a willing and participating partner? from helping the region in the way it wants to be Jim Brathwaite: It is one of our best partners in the helped. We would like to see greater flexibility. We region—it wasn’t always. Our first confrontation think that part of the deal that we thought was being with it was over Dover town centre. We thought its done when the IPA was doing its report was that the plans to go forward were crap. [Interruption.] Pam RDAs that are performing particularly well—and will get me for that afterwards. We said it to them at we are performing strongly—should be given greater the time. flexibilities, but we have not yet seen what those are. Chairman: Left something to be desired. Jim Brathwaite: Yes, thank you. We worked with Q35 Chairman: One final question for you, and may them to look at that. Now you look at the plans for we have a succinct answer if you don’t mind, because Dover’s future and you see some of the ambitions we are running out of time. SEERA has gone, and that are there, and it’s fantastic. We have worked we have new arrangements for oversight: the very well with that council. I think we will continue SEEDA. There are some criticisms from some to work well with it. stakeholders—the CBI and the TUC—that their Processed: 09-09-2009 16:50:52 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG1
Ev 12 South East Regional Committee: Evidence
11 May 2009 SEEDA voice in the region has been ignored in the sub- continue to take our own soundings, particularly national review. How do you see SEEDA in the new when you are talking about the business community, world over the next year or so? because it is our lifeblood. We are here to serve, and Jim Brathwaite: SEEDA has fought very hard for we want to ensure that they get what they need in the people who were members of SEERA—all the terms of land use planning in their localities, because bodies—to have their voices heard. It was the local that leads to better innovation and productivity. councils that had a diVerent view of that, which they Also, working with councils to deliver what they have always had. I do not understand why need in terms of their economic push is something participation in decision making in government that SEEDA is looking forward to doing under the should not be something that is encouraged, but it is new sub-national review. I don’t see us taking six something that SEEDA has always seen as years to come up with a plan, which I don’t think has important. been reported on yet. Pam Alexander: It was published last week. Jim Brathwaite: It was published last week—thank Q36 Chairman: Is it something that SEEDA can do goodness for that. I think it is a call to action. What for itself as far as possible? we want to do is to ensure that the same way we treat Jim Brathwaite: We do, and we have fought very the rest, we treat strategic planning altogether. hard for at least two members of the new working Chairman: I thank the three of you for coming. If we committees to be from that stakeholder group. It have any more questions, we may write to you to should have been more, in my opinion, but two was ask. Thank you for your time today. I am going to what we were able to get the council leaders to agree adjourn for five minutes for a comfort break. Then to. I think we have done a good job there. We will we will start the final evidence session of the day.
Witnesses: Colin Byrne, Regional Director, Sheila Carroll, Regional Governance and Partnerships Team Leader and Jane Vaughan, Economic Support Manager, Government OYce for the South East, gave evidence.
Chairman: Welcome. Colin, would you like to Department for Transport and other Departments introduce your team? that sit on the PSA board to help them to understand Colin Byrne: I am Regional Director of the the delivery of their policy in a regional and local Government OYce for the South East. Jane context. In relation to each of the individual Vaughan has been working on the impact of the Departments that we work for, they all have diVerent economic recession, and has been supporting methods of delivery and diVerent delivery chains. We Jonathan Shaw in that regard. Sheila Carroll has have a part to play in those delivery chains. In been working on the BERR agenda within our respect of planning, for instance, we advise the Government OYce, particularly on the relationships Secretary of State on things such as call-in policy; with SEEDA. that is, whether to call in a major development for planning purposes. We advise local authorities on Q37 Chairman: Do you want to make a statement or the introduction of their new-style local plans, called just answer questions? local development frameworks. As was mentioned Colin Byrne: If you find it helpful, I could tell you in the previous evidence session, we have produced about the Government OYce and what we do. the final version of the South East plan, which is the Chairman: That was going to be the first question. planning policy at a regional level. With the Colin Byrne: The Government OYce for the South Department of Children, Schools and Families—I East is one of nine regional oYces. We work as a keep forgetting if that is the right title, because the network, pretty much like the RDAs do. We have titles change so quickly—we work very closely with about 200 people, and will be going down to 160 it on safeguarding issues where local authorities have over the course of the year. That is from a historic been judged as inadequate in their safeguarding position of about 340 people. We have three main duties, such as in Hackney or in the Baby P case. roles in life. First, to strengthen national policies Within the South East, we have four local authorities within Whitehall by bringing a local perspective to that are judged to be inadequate and we work with those national policies. Secondly, to help integrate the intervention unit of the Department to try to regional strategies and, thirdly, to drive local bring those local authorities back on track. We also delivery. I will give you a few examples of the sorts work with the Home OYce, for instance, on crime of work that we do in relation to those aims. We reduction programmes—on its knife crime initiative, work in the region for 12 diVerent Government for which we have a number of pilots in this region; Departments, so we have a wide span of on the recent burglary initiatives, and more generally responsibilities. In relation to strengthening national on reducing local crime. So we act as this interface policies, my fellow regional directors and I sit on really between central Whitehall and the localities or PSA boards in Whitehall. I sit on the PSA board that regions. It is all summed up, I suppose, in the sort of covers housing, delivery and planning. We have a catchphrase that we are central government in the direct interface with the Department for regions and we are the regions within central Communities and Local Government, the government. Processed: 09-09-2009 16:50:52 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG1
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Q38 Mr Smith: Can I ask how you provide support others. We use it to brief Jonathan Shaw for the for the Regional Government Minister? How does meetings of Regional Ministers, which happen that work? roughly once a month. He will feed that in through Colin Byrne: We have set up within the oYce a small those meetings and meetings of the Council of team, which we have sort of modelled on Whitehall Regional Ministers and, ultimately, the National terms, and we call it the regional parliamentary and Economic Council. We have quite good data inflows private oYce. There, we provide Jonathan Shaw into Whitehall. From time to time, Departments will with briefings on the meetings that he wants to go to ask us to specifically go out and find them a bit of and speeches. We advise him on the interventions information in relation to a particular topic. that he makes across the region, saying what will work where and that sort of thing. So we have a very small team that co-ordinates that work across our Q41 Mr Smith: Could you give an example or two of oYce, providing him with that direct support. things that you think have materially changed as a consequence of your feeding back information and advice from the local areas? Q39 Mr Smith: Is it working well? Colin Byrne: I will give two very recent examples. First, there was the sub-national review and the Colin Byrne: It is, actually, I think. I hope that Government’s final policy. You may recall that, Jonathan would say that, too. initially, the proposal was that the single regional Mr Smith: I will ask him. I am sure he will say so. strategy would be produced by RDAs with input Colin Byrne: The introduction of Regional Ministers from local authorities. It was quite clear in the South has been a real bonus, from my perspective in East that the local authorities felt very disfranchised, particular, because it gives the region a political “in” mainly because they, as democratically accountable to Whitehall. As regional director, I can talk to the planning authorities, viewed that an element had bureaucrats in Whitehall and I probably have as been lost in the new arrangements. We explained much diYculty talking to them as you do, in terms that to the CLG and BERR oYcials and Jonathan of their willingness to interact and work with us. So, explained it to Ministers. We made some suggestions having that ability to go in at a political level has as to how they might span their two objectives of been a huge advantage to us in the Government having a single strategy which was much faster in its oYce, but I think it has also been a huge advantage production than the spatial strategy while, at the both to our regional partners and to local authorities same time, with Hazel Blears’ whole community and so forth. I think that people of all political empowerment agenda, maintaining local persuasions in the region would say that the Minister authorities’ role in that important level of planning. has been really helpful. We made a number of suggestions which I like to think are reflected in the final policy. The second example is something that we picked up from Jim. Q40 Mr Smith: I did specifically ask that question at We have taken the South East Economic Delivery my last meeting with Oxfordshire County Council, Council, which Jim and Jonathan chair, to places in and the council was complimentary. I was also going the region. Some of the feedback from that was that to ask about feeding information from the region businesses were having real diYculty in relation to back into central government, and making sure that credit insurance and, indeed, the Budget has done what needs to count counts there. How do you do something to try to alleviate that. I do not say “cause that and how well does it work? and eVect”, but it is interesting that the messages Colin Byrne: We do it in a number of diVerent ways. get through. Most Departments will have a group of people from the Government oYces that they call upon for help, first, in devising new policy and, secondly, in the Q42 Chairman: Can I ask one other question? The delivery of that policy. So, if I take the example of Regional Ministers at the moment have got other CLG, which is my parent Department, I chair a jobs. Would you like them to be Regional Ministers meeting of people from the Government OYces, only? Would that make things more diYcult? along with people from CLG. In those meetings, we Colin Byrne: That is an interesting question. As a have talked about what sort of interventions CLG civil servant, one is always slightly reluctant to say should make in the housing market as a result of the that Ministers should have more time, but Jonathan recession, and what the mortgage rescue scheme puts a large amount of time into his job as Regional should look like and how it can work in practice. Minister. I don’t know what the split is, but he That will be replicated across the 12 Departments. certainly spends 50% of his week on Regional Some take it more seriously than others, but Minister stuV. I think there is probably an advantage generally, there will be that type of input into in him or any Regional Minister having two Government. In the context of the recession, our ministerial jobs. Part of the importance of the role is SEEDA colleagues mentioned that they provide an understanding how the Whitehall machine cranks intelligence report once a month into the centre, and being able to work it. For instance, if Regional which we do. We supplement it with what might be Ministers are viewed as junior roles, we miss out on called more local flavour information that we pick the experience of Regional Ministers being able to up from our contacts with local authorities and crank the Whitehall machine. Processed: 09-09-2009 16:50:52 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG1
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11 May 2009 Government Office for the South East
Q43 Mr Smith: As you mentioned, you represent 12 how would you choose who goes on them? Give us central Government Departments in the region. Is a flavour of who represents local authorities, trade the Department for Innovation, Universities and unions and business people, for example. Skills one of them? Colin Byrne: This is the regional economic strategy Colin Byrne: No. steering group? It is actually a creature of SEEDA, which I guess selected the people on it, rather than us. However, we sit on it, and I know that there are Q44 Mr Smith: Bearing in mind its responsibilities trade union representatives and diVerent levels of for skills and further education, do you think that it local authority representatives—county, unitary and ought to be? district—along with some of the other major Colin Byrne: Yes, very much so. We have made that players, representatives, major employer point to the Department. We cannot do any of our organisations and people such as the Learning and work without an understanding and knowledge of Skills Council. the skills agenda. Essentially, we do that, but it does not pay us to do it. Each Department has to Sheila Carroll: If it is helpful, I can tell you a little contribute to our running costs, but the DIUS does more about the membership, as I have one of the lists not, and that is a bone of contention with us. in front of me. It includes the chairman of the leaders However, we continue to engage with it and to ask it board, representatives from the CBI, culture, the for a contribution. You are right though: we cannot voluntary and community sector, other business do our job without its agenda being central. organisations, the Sustainable Futures Group and Mr Smith: That is something that we can consider other government agencies, such as Jobcentre Plus as well. and the Environment Agency.
Q45 David Lepper: During its lifetime, what has Q47 Gwyn Prosser: And the trade union been the relationship between the Learning and movement—who represents that? Skills Council regional oYce and the Government Sheila Carroll: Megan Dobney of the SERTUC. OYce? Colin Byrne: And I guess Phil Wood, who sits on the Colin Byrne: This is my second term in a SEEDA board, will also be there.1 Government OYce. When I first joined— Chairman: You must have been a bad boy in a Q48 Gwyn Prosser: In your written submission, you previous life. mentioned the South Hampshire MAA—under the Colin Byrne: I love this job actually. I don’t think auspices of MUSH, is it? This is all completely there’s a better job in central Government. When I foreign to me, but there you are. Could you tell us first joined, acting for the then Department for what role GOSE has in multi-agency work? Education and Skills, we set up the LSC. On behalf Colin Byrne: We are essentially the broker between of the DFES, as it got going, we changed the appointments of panels and sat on all the sub- groups of local authorities that want a multi-area regional learning and skills councils—as they were agreement and the central Departments, which will for a time. Then we tended to withdraw from that be granting what used to be called the freedoms and body, especially when it moved to a regional version flexibilities to be encompassed in the MAA. There of the Learning and Skills Council. When I returned, are two examples in the South East. One is the it was a slight shock to me to see that the whole Partnership for Urban South Hampshire, which process, some five years on, was being wound up. We they call PUSH as opposed to MUSH, partly do not have a direct role in the wind-up, whereas we because it is slightly more complimentary. We sat did with training and enterprise councils, but we do down with the partners, when they were thinking of have a role in trying to broker some of the doing an MAA, and briefed them as to the sorts of replacement arrangements—alongside the regional things that central Departments might consider or director for LSCs—particularly the sub-regional might be more flexible on. We helped them go away groupings of local authorities that will take over and work up the proposal. We then brokered the some of the functions of the LSC. meeting with the central Whitehall Departments and, on the individual elements, we would broker with a particular Department. On transport, there Q46 Gwyn Prosser: Colin, you said how useful it is was an issue around the Highways Agency and how to have the new ministerial structure in place; the the motorway—the M27 down there—is managed. Regional Minister is very useful to us as well. In fact, We brokered that between the PUSH people and the since 1997, all five of us have campaigned to put in Highways Agency and Department for Transport, place a Regional Minister, not just in this area, but and tried to get some form of agreement between the everywhere. It has been a long time coming. It is very two sides. Finally, we recommended to Hazel Blears useful to us because it gives us a focus. You will whether to sign it oV or not, on behalf of the know, through your own connections, that the Government. We do the individual bits, then we try important Dover summit is taking place next month, and draw it together so that it has some sort of which you have been very helpful in brokering. It coherence. will take forward and project some of our ambitious regeneration plans that Jim mentioned earlier. 1 Megan Dobney is the SERTUC representative. Phil Wood, However, I must ask about the RES steering group. although a member of the SEEDA Board, does not in Can you tell us a bit more about them? In particular, addition sit on the RES Steering Group. Processed: 09-09-2009 16:50:52 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG1
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Q49 Ms Barlow: If the sub-national review calls on board-type approach. Indeed, PUSH is an MAA, local authorities—that is, the county councils and and is also a Diamond for Growth. It is not unitary authorities—to do any economic assessment duplicating; it is using its Diamonds for Growth in their area, do you think that they are up to initiative to drive its MAA. So it may be that because doing that? they have this initiative, which is sort of home-grown Colin Byrne: I think most of them will be up to doing within our region, it does not see going for the it. Whether they will be up to doing it in a consistent economic prosperity boards as necessarily adding a way, in a way that SEEDA can make sense of and try great deal. But all these things take time to generate to draw together into the regional economic strategy, a bit of momentum. is slightly more questionable. I know that SEEDA is working with Oxfordshire to do it on a pilot basis, so that that learning can be spread among the other Q53 Ms Barlow: What is your role in formulating local authorities that have to do it. Hopefully, we and supporting agreements such as MAAs? shall get a good bit of learning spread across and a Colin Byrne: With MAAs, it is very much about reasonably consistent product. As for the focus on trying to facilitate and advise and then make the economic development, most local authorities are marriage between the central and the local, which we much more engaged than perhaps they were some do with LAAs as well. That is very much our role years back. Some local authorities have always had in LAAs. economic development at their heart, but for others—just because of budget pressures and other things that they were tasked with—their eye went oV Q54 David Lepper: To clarify, where there are the ball, so to speak. The general climate, not just MAAs, or if economic prosperity boards were to be because of the recession, but other things, has drawn set up, are the Government devolving to those them back into it. The weakness is really at district boards decision-making authority regarding level—many districts are of small capacity to do this spending money? sort of thing. Colin Byrne: Part of the MAA process is to devolve more local flexibility away from the centralised Q50 Ms Barlow: It also creates statutory sub- decisions, so that agencies such as Jobcentre Plus can regional authorities for economic development—the work with the local authorities to do things that are economic prosperity boards. What will be their role slightly diVerent or outwith the normal rules, to and how will that compare with multi-area reflect the local circumstances. So the idea is that you agreements (MAA) and local area agreements can gain that flexibility by entering into that sort of (LAA), for example? agreement, and I expect that economic prosperity Colin Byrne: I don’t think we have any further plans boards would be the same—that you would be able to go for that particular option in the South East. to shape programmes diVerently to the national There is a range of things that Government have prescription. been oVering, starting with city regions, which Manchester and Liverpool took up. Our local authorities have not taken up the idea of the Q55 Gwyn Prosser: Earlier on, with SEEDA, we had economic prosperity boards, but I think that the a discussion about value for money, and the criteria boards will be very similar to MAAs. Local and how strict it was. Are you allowed to express a authorities working together will see that they have view on whether the policy would be better directed common issues, such as the level of skills that they to allow flexibility in terms of value for money, have in their communities, or places of high according to the location and the diYculties? worklessness will see that they have common issues, Colin Byrne: In so far as I am allowed to express a and by working together they can do more than by view as a civil servant, I think that the Government trying to tackle those issues individually. Some will fully accept the idea that the more things can be go down the MAA route and some will possibly go tailored to local circumstances the more they will be down the economic prosperity board route, but I eVective and therefore represent better value for think that there will definitely be quite a lot of money. DiVerent Departments buy into that general similarity between the two. prescription to diVering degrees, and I think you will all be familiar with the fact that certain Departments Q51 Chairman: You say that none of our local can be extremely prescriptive and others less so. councils have taken up the opportunity. Generally, I think that the policy is to try to do it at Sheila Carroll: Not yet. as low a level as possible. Colin Byrne: There is a second MAA in north Kent that is being worked on, but I don’t think any of them have taken on— Q56 David Lepper: Leading on from that, does that have possible future implications not just for Q52 Chairman: Do you think we are missing SEEDA but for RDAs generally? something by not having those sorts of things? Colin Byrne: I think that the whole idea with the Colin Byrne: There are a number of other initiatives SNR was to ensure that the RDAs acted at the most of course, and the Diamonds for Growth initiative strategic level and that in working with local that SEEDA has been pushing has elements that are authorities they can jointly plan programmes, where not dissimilar to the MAA economic prosperity much more of the decision making is at a local level, Processed: 09-09-2009 16:50:52 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG1
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11 May 2009 Government Office for the South East so they will set a framework. Of course, the at the end of the day, there is an awful lot of accountable oYcer has a responsibility to ensure coherence between what local authorities and that money is spent properly, but the decision central Government want—I think that Andrew making within that framework could be on a whole Smith mentioned that. If you look at LAAs, the big other level. surprise for many people was that Government could agree 35 targets or priorities with local authorities, and that was done right across the Q57 David Lepper: Could I ask just one thing about country. There was no big falling-out over what are part of our region? We are soon going to have a new supposed to be the biggest priorities for local strategic—I suppose—authority in the region, for authorities. I do not recognise that there is big the South Downs National Park. What thought has tension in delivery either in the South East or more been given at GOSE to how the South Downs broadly. When you get down to the practicalities, authority will be integrated and become a most local authorities— stakeholder along with the other agencies that are already working? Colin Byrne: The South Downs National Park Q59 Chairman: What you are saying to me is that authority, when it is set up, will be represented on the most local authorities are saying one thing and South East England Partnership Board—the body doing another. of local authorities driven together to be the Colin Byrne: I would not want to accuse any planning authority, along with the RDA2—as part politician of doing that. I think that the reality is that of what is planned. It is already envisaged that they the South East is very much a can-do region, and will form part of that future group and therefore be that local authorities play their part in it. Whilst the able to influence regional strategic issues. In the politics is up here, the practicality is that people same way that we now have a relationship with the New Forest National Park, we will, undoubtedly, work together. have a relationship with the South Downs National Park, but it will be complex. It will probably be the Q60 Chairman: Anybody else? Then I shall continue most complex national park in England because it to use the Chairman’s prerogative for a moment. covers, I think, 13 local authorities and there are You mentioned that some authorities don’t have the particular issues over the planning role where the wherewithal or the skills to do economic national park straddles some local authorities. The assessments, and that instruction on economic bottom half of east Hampshire is in the PUSH sub- assessment has been to county councils and unitary region, the middle bit is in the national park and the authorities. So, do all the county councils and top bit is in northern Hampshire looking north, but unitary authorities in our region have the skills set to the local authority has to deal with the three diVerent do the economic assessment for the whole of their elements and that is going to be diYcult for it. council areas, even those where the district councils do not have those skills? In other words, are we Q58 Chairman: Can I come back to the issue of the going to find any gaps left at the end of this process? potential of MAAs? We have had representations Colin Byrne: I don’t think I know the answer to that, from a number of local authorities that basically boil in reality, and I don’t think we will know for a little down to, “We don’t like SEEDA because SEEDA is time—until we get into the process. Once the Bill is doing things that we think that we should be allowed passed, central Government is going to bring out to do, so we ain’t playing.” Since you have said that some further guidance about how to do an economic they are going to allow the devolution of decision- assessment. When we have had the results of the making powers, not only from Whitehall, but from partnership working between SEEDA and other organisations again, wouldn’t that be a Oxfordshire, we will be in a better place to see constructive avenue that local authorities could use whether there are gaps. There is a mechanism for to regain some of the decision making that they filling those gaps through what is known as the think has been taken away from them? RIEP. I was trying to remember what RIEP stood Colin Byrne: I have to say that I don’t recognise the for, but I shall tell you what it does rather than its general picture in the South East of local authorities name. The DCLG has put money into the not playing ball with SEEDA, or indeed with us. I improvement and eYciency of local authorities— think that Jim alluded to how diYcult it is working about £25 million in the South East—which is run by in the South East because of its political complexion. an organisation called the RIEP, which is essentially I would not want to overplay that diYculty because, local authorities working with some partners. Where there is a need for local authorities in general, or 2 The South East England Partnership Board—SEEPB—is individually, to improve a particular type of service, only designated as the Regional Planning Body as an interim the RIEP can step in and do some funding to bring arrangement until the Local Democracy, Economic Development & Construction Bill is enacted. Once the Bill about that improvement. Certainly, if the result or is enacted, the arrangements will change and only one the analysis was, “There are some gaps here in the National Park will be on the Leaders Board—the body from region,” then we would look to work with the RIEP which SEEPB’s local authority representatives will be to try to fill those gaps. drawn. The two NPs will need to decide which of them it will be. SEEPB will commission and sign oV the Regional Sheila Carroll: RIEP is the Regional Improvement Strategy. and EYciency Partnership. Processed: 09-09-2009 16:50:52 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG1
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Q61 Chairman: Let me ask one final question. Some Colin Byrne: Indeed. The Kent person on the areas of the South East have European objective 2 performance management committee is very funding. What is GOSE’s role in administering vociferous about the needs of Kent. The old European funding for economic purposes? programme that ran up to 2006, we had a much more Colin Byrne: Our role diVerentiates between whether direct role on, and we are currently in the closure it is old programme or new programme. Let me deal phase of that programme, which means that for all with the new programme, because that is the one the projects an evaluation has to be carried out and that I know the most about. The new ERDF they have to be audited, and we have to write a competitiveness programme is run by SEEDA, but I closure programme by September for submission to chair the performance management committee, the European Commission. We have to demonstrate which decided its operational programme and which to it that the money spent fitted the criteria in the oversees the funding of that programme. In programme, so that is what we are currently European terms, it is a small amount, in our engaged on. region—£26 million over six years—so it is small in Chairman: Anybody else? No. Thank you very comparison to other regions. much. You don’t know this yet, but we are going to invite you back for a further evidence session later in this inquiry, after we have gathered more evidence Q62 Chairman: But a big chunk of it gets spent on from some other people, so we will see you again, I my constituency. think. Thank you. Processed: 09-09-2009 16:52:07 Page Layout: COENEW [SE] PPSysB Job: 434938 Unit: PAG2
Ev 18 South East Regional Committee: Evidence
Monday 29 June 2009
Members present: Dr Stephen Ladyman (Chairman)
Ms Celia Barlow Mr Andrew Smith David Lepper
Witness: Ross McNally, Chief Executive, South East Chamber of Commerce, gave evidence.
Q63 Chairman: Welcome to the South East Regional and allow localised bodies to put forward economic Select Committee. Thank you for attending. Would development programmes that they think respond to you like to introduce yourself? local need. You could get a degree more innovation Ross McNally: I am Ross McNally, Chief Executive out of that, but it is a very fine argument. The best of South East Chamber of Commerce. I represent solution is to have an RDA that can bring these the accredited British Chambers of Commerce in the together eVectively on a regional basis, for all the South East region. We have about 11,000 business benefit and value you can get from that, and also be members and relationships with about 20,000 locally responsive. further businesses. Q67 Chairman: Where should the money sit in that Q64 Chairman: Do you want to make a statement, case? The argument is that the regional development or would you like to go straight into questions? agency is duplicating services that could be provided Ross McNally: I provided a document, which at a local level if local councils had been given the hopefully has been helpful. I would be happy to money. If you then have a project that is too big for answer questions on it. one council to deliver, how do you square the circle if the money is not sitting in the region? Q65 Chairman: Okay, thank you very much. Let us Ross McNally: I think that an RDA that is really start oV with how commerce generally sees the responsive would share agendas with local regional development agency. Do we need a regional authorities eVectively, providing some strategic development agency, and what are the strengths and framework that gives a better joined-up weaknesses of such agencies in general and, in understanding to the economic development particular, of the one that we have? activities in each local authority area. No doubt the Ross McNally: Chambers of commerce have to RDA says that that entirely accords with its represent a business view, rather than their own view, philosophy, but the “how” question has to be but, strangely, chambers of commerce have a answered. It sometimes falls down and fails there. relationship with the RDA perhaps more than the Agenda sharing and leveraging activities on a local businesses do directly. Certainly when one brings basis—so that the total is greater than the sum of its together those viewpoints, there is general support parts—is the role of the RDA. The RDA has to for the concept of a regional development agency. recognise that its skill set as a project manager is There is, below that, discussion about what that probably not well suited to the new role of agenda looks like, how it performs and what its key sharing and working with local authorities. There is responsibilities are. In essence, as is described in the an argument about who takes the lead and where the paper, the RDA that the business community wants money is held fit for purpose. Sometimes it will be is one that fully engages with the business locally, because it is led locally, and sometimes it will community. As a chamber of commerce, we be a large regional economic development strategy represent businesses, so it is our position to put and it is best for it to be placed there. At that stage, forward that argument on their behalf. There is no through the management, you then say, “How do doubt that the RDA sets about engaging the you actually lead it?” My concern with the RDAs in business voice and the business community in all the past has been that they are so project- that it does, but with the new structures under the management oriented that they think in that way sub-national review, there is a need to address these and therefore want to own the agenda to such an afresh and to start to build, at local, sub-regional extent that they are selling it to their partners rather and regional level, improved ways in which business than it coming from the ground up and evolving is engaged by the RDA, so that it is truly business- naturally from what is needed within local led. communities. To a certain degree, we believe in local structures feeding the debate and identifying the Q66 Chairman: If we did not have a regional need. development agency, would we have to invent one? Ross McNally: You would need some degree of Q68 Chairman: Is that a comment about SEEDA order around economic development opportunities, specifically, or a general comment about all regional and perhaps it would sit with the Government oYce development agencies? rather than the RDA. That could make it less Ross McNally: It is more apparent in the South East representative and business-led, which might because we do not have not a clearly definable weaken it. However, on the other hand, it could region, but a series of marketplaces and sub-regions. make it more innovative and enterprising. Another If the truth be told, we might not even have that body might just see it from a financial point of view culturally and in other ways, such as economically. Processed: 09-09-2009 16:52:07 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG2
South East Regional Committee: Evidence Ev 19
29 June 2009 South East Chamber of Commerce
You can look at some of the larger urban areas. Ross McNally: Five. There is an argument in the West Midlands or the North East that there is such a fine piece of paper between local and regional issues that they coincide, Q73 Chairman: Do you think it is reasonably cost- and it works very well. In the South East, things have eVective? to be far more bottom up because of the nature of the Ross McNally: SEEDA is very cost-eVective geography. compared with other regions. My role is to speak up for the South East of England and I will do so. There is a compound growth argument in all of this. Again, Q69 Chairman: Let me just replay that to you to I mentioned in the paper that there should be an make sure I have understood what you are saying. argument to put more money into the South East You are saying that in the South East, because we do region because the whole impact through compound not have a clearly defined region and because growth for better returns on investment will provide SEEDA’s skill set tends to be around project the overall economy with more funding for more management, it has tended to come up with its own intervention programmes in other regions. While we vision of what we need. It then goes out to try and are taking a lot of the tax take from the South East convince business and councils locally that it has the and giving very small amounts to the RDA and right vision, rather than listening locally to business other bodies, we are disadvantaging ourselves in and councils and building a vision out of what they terms of returns on investment. A business person are told. would ask where the best compound growth is Ross McNally: It is hyperbole. That is true, but it is because ultimately the margins made on that not completely true. Clearly, through the structures compound growth could be reinvested in other areas it has put in place, it can claim that it has received the that might have social need but could create a better voice coming up through the system. The problem enterprise opportunity. with this is that many of the structures are organs of Chairman: Mr Lepper has some questions about their own design. One then starts to ask whether the improving regional economic strategies. alternative voice is being heard loudly enough. I think that there should be a rich landscape of engagement taking place with confidence. A RDA Q74 David Lepper: Before I ask about the drawing should be a confident, energetic and innovative up of the regional economic strategy,I was interested organisation that can engage with diVerent in your comments about the South East region as it representative voices and leverage engagement on exists as a geographical and commercial entity. We their behalf in such a way as to create real enterprise are stuck with what we have got, but does the in areas that have not been thought about. If an chamber of commerce have a view on what would be RDA is not innovative, who is going to be? The word a more coherent South East region than the one that “development” is in the title. we have at the moment? Is it so amorphous that there would be huge disparities within it wherever Q70 Chairman: How do we measure the eVectiveness the borders were drawn? of the RDA? How should we measure it? Ross McNally: London sits in the middle of the Ross McNally: Impact should be the key South East of England and it has traditionally—less measurement, but what is impact? Impact comes in so, maybe, moving forward—always had a major diVerent ways. It comes in economic development impact on growth and the reasons for the South East terms, such as pure economic statistical growth. It being shaped as it is. You have this doughnut can also be culture change: a feeling from the approach, with the home counties and the impact community that the brand value of the RDA has and relationship with London. The counties outside added something to that community and that the that immediate circle—the 65-mile circle—start to RDA is not just a logo on a large poster in the centre have a slightly diVerent economic relationship with of town. The community should know that its it. You could have argued that London and outer borough council’s economic development staV are rings was an approach. How that would ever work, working hand in hand with the RDA and getting I don’t know. I would just accept what we have. more bang for their bucks as a result. I am a great SEEDA has broken things down by various areas of believer that if you ask people and businesses what opportunity, with Diamonds for Growth and other they feel about the RDA and they feel positive, there programmes. That confuses you if you want to look has been a positive impact. at things regionally, but if you just deal with them sub-regionally, it is less confusing, because you just Q71 Chairman: Do businesses feel positive about deal with the sub-regional programme that is there. the RDA? So SEEDA is not entirely wrong in the way that it Ross McNally: There is probably a great deal of has done things, but it has to acknowledge that there ignorance about the role and impact of the RDA. We is a forceful argument for why it has to engage a lot could probably help to improve that, but that will better locally, rather than regionally. happen only when we are fully engaged. Q75 David Lepper: That leads in a way to what I was Q72 Chairman: Give us your measure of going to ask about the way in which regional eVectiveness—if 10 is completely eVective and zero economic strategy was drawn up. You have talked completely ineVective. Where is SEEDA sitting on about engagement several times when answering our that spectrum at the moment? questions. Does the chamber have any general Processed: 09-09-2009 16:52:07 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG2
Ev 20 South East Regional Committee: Evidence
29 June 2009 South East Chamber of Commerce comments about how the strategy was drawn up and they all have diVerent interpretations of it. When I the process? Was there enough engagement with talk to local authorities, I always end up talking to other bodies and agencies in the region? them about planning—it is not my choice but it Ross McNally: There was consultation, but not inevitably occurs. When I talk to RDAs about engagement, and that is a matter of how I define the economic development, they always talk about diVerence between the two. Consultation is when intervention programmes, but that is not the people say, “This is what we’re likely to do,” and economy. When you talk to businesses about then you can throw darts at it or not. Engagement is economic development, they talk only about trade. when people say, “What do you need? What would Trade is actually the thing that pays all the taxes. you do in your circumstances?” Then you find that Every bit of tax that goes through the system comes there is a pattern of similarity in certain other sub- through a trade transaction one way or another, so regions and you bring things together to maximise therefore I think that if you have got smaller the eVect. Again, I am a networking person—that is budgets, you’ve got to be impactful at the most what I do for a living—so I could bring 10 chambers focused area, where you can have the greatest of commerce and their sub-regions together and find impact. I think they are right to make the decision to commonality, and an RDA has to do a similar job. be far more business-led. It is the only solution, but There was good consultation, but not good I would like them to make it totally business-led and engagement. actually respond to business need so it is informed by the business plans. Almost, you are asking the Q76 David Lepper: That is an interesting distinction; businesses, through the various processes, what are thank you for that comment. In its comments to us, their ambitions and targets, and what they want to the Engineering Employers Federation talked about achieve in their ambitions, which countries they the process being “over consultative”, and you have want to trade in, where they think the opportunity is. echoed that in a way in your comments about That is the real decision that is being made by every engagement. The Federation also said that the small business person in the region. Things grow out strategy: “took too long to be agreed resulting in an of that. That needs new forms of engagement, then outdated strategy” by the time it was published in you leverage activities around and behind that 2006. Would the chamber echo that? growth ambition. I know that that will not be Ross McNally: It seems to be a never-ending process. uniformly supported, because it doesn’t address No sooner have you finished one and put it to bed some of the other aspects of sustainability and other than you are starting the early stages of the next, and issues, and the social need. I know all those things so it goes on. This is the way Government bodies need to be addressed, but they should be responsive work, but it is not the way businesses work. to real economic development opportunities. For Businesses take some key strategic decisions and example, we are working very closely with schools, perspectives, but they are big, and people know that universities and colleges in enterprise education, they are moving in that general direction. Then you because we know that that creates the next will have medium term, which would be a bit more generation of enterprising people. There is a social detailed, and then the annual, which would be the aspect there, but it is a very sensible, business-like very great detail. SEEDA would say it is doing that, and commercial response. It should always keep but I have sat in an awful lot of meetings where we fairly close to that in its decision making. were discussing far too much detail for a strategic objective. That is possibly why the EEF and other Q78 Ms Barlow: It would be interesting to hear from members of the South East Business Forum felt Hastings in the light of those comments. Do you frustrated by the process. That is no massive think that SEEDA is doing enough at the moment to criticism of SEEDA; it is just that it is perhaps given help the area through the recession? Do you think too wide a brief. A renewed approach and being the concentration and intervention programmes, more business-led might narrow its focus and make and the social and infrastructure aspects of those things a bit easier for it. interventional programmes, mean that SEEDA is David Lepper: Thank you. not doing enough for businesses? What benefits are your members seeing in what it is doing? Q77 Ms Barlow: Earlier you mentioned that SEEDA Ross McNally: There has been a good Government is good value for money compared with other response in terms of identifying the need and coming regions, but you also said that you would like to see a forward with plans and proposals. Inevitably—I am compound growth in eVectiveness in terms of social not naive—I knew when those proposals came need, for example. SEEDA has got the smallest through that there would be a very long time lag budget of any RDA. In terms of compound growth before they actually hit the market and made a in recession, you would expect demand for its diVerence. It is sort of political sod’s law services and its budget to increase. Given also that sometimes—excuse the phrase—that the need might the SNR gives the RDA more responsibilities, have changed by the time the impact comes through. including spatial planning, what should SEEDA be Actually, from centrally, there was a good bit of top- concentrating its small budget on right now? down thinking. SEEDA, as an RDA, has grabbed Ross McNally: I think an RDA with a small budget hold of that and used and promoted it well. It could should be all about economic growth. It should be have promoted it a lot more strongly, but that is just about trade. If you start talking to diVerent bodies me looking for perfection. It has added in, within its about economic development, you will realise that very limited and restrictive budgets, through some Processed: 09-09-2009 16:52:07 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG2
South East Regional Committee: Evidence Ev 21
29 June 2009 South East Chamber of Commerce amendments and adjustments to the programmes are even voting seats, so the opportunity to directly that it directly contracts and manages, aspects that it influence and have a vote at the table has gone. We feels the region needed that are maybe not common will live with that, but what we would like is a across the whole of the country. It was responsive. I protocol, a template if you like, agreed and would just mention again the engagement in the formulated at regional level, whereby local consultation issue. When it made these decisions and authorities, county councils and the region somehow saw these opportunities it did not pick up the phone engage the voice of business, and other stakeholders to bodies such as members of the South East as well, in that protocol. We would like a template business forum and say, “How can we work that everybody could sign up to and say, “Yup, we together?” That does not mean, “How can you know what it’s doing, and we know why it’s there”. spread the message?”; it means, “How can we work together?” It tended to be, “Would you issue this to your members?”, and that is not what I would like Q82 Chairman: Since the Leaders’ Board has come to see. I would like to see that we were informing the into existence, has anybody contacted you to discuss decisions that it was making in the first place. I am setting that up? sure that for the future it is up to us to make sure that Ross McNally: The only place where that was we get out there and leverage that relationship with discussed was in our South East Business Forum. It SEEDA. was discussed with representatives from both SEEDA and the Leaders’ Board. It therefore could be a work in progress, but I do not know. Q79 Ms Barlow: Do you think that that sort of top- down approach has hampered SEEDA’s relationships with businesses themselves? Q83 Chairman: So the situation now is that Ross McNally: Yes. previously there was a formal mechanism for consulting business, the trade unions and the third Q80 Chairman: We no longer have a Regional sector but there is no longer a mechanism in place, Assembly. We have a Leaders’ Board overseeing the and, as far as you are aware, there is no completed role of SEEDA. Is that an improvement or not? piece of work to put the mechanism in place. Ross McNally: The jury is out on whether it will be Ross McNally: Yes, not as far as I am aware, but that an improvement. We as stakeholders had quite an may be ignorance. influential voice in the Regional Assembly. We were Chairman: If you are not aware, how could there be not over-happy with the Regional Assembly, but a mechanism? that is probably because culturally we were not Ross McNally: Exactly. Perception is all. entirely used to working within those kinds of political environments. We would try to act not Q84 Chairman: So what needs to be done in practice politically but pragmatically, and other bodies in the to put that in place? same forum were obviously, by their very nature and Ross McNally: The great joy of having all the local by necessity, political organisations, so there is a authorities meeting in this representative grouping is cultural issue between the two, but I think that we that there is suddenly the ability to say, “Let’s have did a pretty good job in the circumstances. We some consistency right across the region, and in welcome the sub-national review. It has certain exchange, here is a greater accountability and impacts as a consequence, so you cannot have both responsibility for economic development. We will arguments. We recognise that sub-regionality in the give you a business engagement on the other side of region is very significant and important, so we are that table.” We need to agree a template, and for it happy that the changes are taking place, but we just to be agreed that it will be implemented at local level. want to feel that there is greater representation of the I am not going to determine what that looks like, as business voice. How one achieves that is a matter for that has to be negotiated from both sides of the table. debate, because I do not think that having some Bodies like the chambers of commerce and the regional arc that is going to make any real diVerence Federation of Small Businesses, and all our other is the answer. The answer is a protocol for real regional business bodies, would be very happy to get business engagement at every level, so that the voice engaged with such a shape and structure. of business is heard in the same context as the voice of the voting public. Q85 Chairman: But prior to the sub-national review, Q81 Chairman: When we had the Assembly, there the chamber, the trade union movement and the was a protocol for stakeholder consultation and a third sector actually worked quite hard to make it method by which business, the trade unions and the clear that you needed the mechanisms by which you third sector were involved in discussions. It was put were being consulted to be replicated under the new to us at the time of the sub-national review that that arrangements. From what you are telling me, protocol and those forums had disappeared. Since although there was something in the sub-national the leaders’ group has come into eVect, has that review saying that there should be a mechanism for protocol been reconstituted? Is there now a consulting, actually there was no replication of that. mechanism through which business is consulted? That mechanism has just disappeared. Ross McNally: The only mechanism that I am aware Ross McNally: Yes, that would be my interpretation. of is a couple of seats on the main strategy board. Who is accountable for that? There is a political That is in the EEF report. I do not think that they reason why that may have happened, but perhaps Processed: 09-09-2009 16:52:07 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG2
Ev 22 South East Regional Committee: Evidence
29 June 2009 South East Chamber of Commerce the RDAs should have been more interested in of my constituency and one on the outside—very ensuring that that engagement continued because it good serviced business parks have been created by had real economic development value. SEEDA. Both of them are completely empty. Chairman: But equally, the Leaders’ Board ought to Ross McNally: Is this the Betteshanger? have insisted on that. Ross McNally: Of course. Q90 Chairman: Betteshanger is one of them and the other one is the so-called EuroKent Business Park, Q86 David Lepper: Are you aware from colleagues in which are fabulous. Hopefully, one day they will be other parts of the country and other regions about teeming centres of industry, but at the moment they whether the kind of structure that we have just been are growing potatoes, by and large. talking about has actually been put in place in other Ross McNally: I did ask, because I was interested in regions following the setting up of Leaders’ Boards the regeneration areas. I happen to live and work and so on? from Hastings old town, so I have some sense of this, Ross McNally: The only thing I know—I have not but I’m not working in those areas. I got an e-mail analysed and studied this, so I cannot say that it is from Peter Hobbs, the Chief Executive of the absolute knowledge—but anecdotally, I know from Channel Chamber of Commerce, and he commented other chambers of commerce that at the time the entirely on the two parks that you’ve mentioned. He changes were made, the local authorities started to said that they look great but there are no businesses engage businesses, particularly chambers of in them, which is a bit disturbing. His conclusion commerce, very strongly in creating bodies that were was that it was a tragic waste of money—SEEDA genuinely engaging the business opinion. I know had not sought support from the Chamber or any that because contracts started to be put in place. other support organisations to resolve these Literally, funding was put in place to engage the problems. That’s what he said, which tends to lead business voice so that it could start to inform you to the view that if you start to engage the decision making. That was a bit of an urban business engagers, our view is that you might start to response, which makes sense. get greater success. Rather than doing things in parallel, they have to be threaded through. Q87 Chairman: We have received submissions saying that the RDAs should be more strategic rather than Q91 Chairman: Just looking at that as an example, delivery bodies. Is that your view? how could it have been done diVerently? My guess is Ross McNally: Yes. I think it is. Again, we could that in both places the local chamber would say that debate what we mean by that, but I would say that they knew these business parks were being built and strategy is really what it is about, provided that they they never stood up and said, “Stop. This is a waste recognise that they are not just sitting there with a of money.” They perceived them to be a good thing. nice piece of paper describing some strategy,but they To be fair, 10 years from now, looking back, they can then go out and work. We have new skill sets to might turn out to revolutionise the business leverage the relationship and make that strategy landscape in those areas. We are looking forward have meaning on the ground. That is where the and perhaps being a little over-critical, but how principal change needs to take place. would engagement with the chambers and the big business sectors have changed the outcome? Q88 Chairman: Can you give me any examples of Ross McNally: First, I don’t think they would have where that strategic role is working well or badly? stood up and said, “Don’t do this,” because that’s Ross McNally: It works best where regeneration not necessarily something that the business takes place. There are examples where regeneration community would have wanted to have heard, or in areas naturally look for a strategic direction from the the long run would have been the wise thing to do. RDA, a partnership engagement with the local Inherently, if you’re going to do anything from an authority, and an engagement with the local RDA, there is risk, and we welcome that risk. The community because there is a recognised need. more you try to avoid the risk, the less you’re going Therefore, if large sums of inward investment from to do and then you’re no longer an RDA. You have the RDAs come into those communities, it is quite to accept that some things are going to work and important that they are engaging. So you would see some are not. Like any business development that a bit of best practice around the regeneration areas. any business would do, the RDA should to an extent I would just say that a lot more of that kind of be taking those risks. What we are saying, however, approach should actually be taking place elsewhere, is that long before problems were identified, but not entirely, because there is perhaps a little bit businesses would have been engaged around those. too much of: “We’ve come into the regeneration area Maybe more businesses would have been persuaded and we know best, because it was failing as an that this was a business opportunity for them to economy before we got here.” That kind of attitude grow and to be placed there. Maybe the kinds of is a problem, but that’s something that you accept if units that were put on there would have been you’re going to get the benefit of the inward diVerent. Maybe the streaming of when they came investment. on might have been slightly diVerent. There would have been the subtle distinctions as to how it rolled Q89 Chairman: In my own area in east Kent there out and how it worked, and maybe where there’s an has been recognition of the need to regenerate that interest in inward investment, the parks would have area. In my own constituency,two—one in the centre been fit for purpose for some inward investment Processed: 09-09-2009 16:52:07 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG2
South East Regional Committee: Evidence Ev 23
29 June 2009 South East Chamber of Commerce opportunities. It’s all about joining everything up, reinvent their entrepreneurial spirit from within. and the RDA joins its bits up, but is it joining up the That kind of engagement is absolutely necessary, real economy out there? It’s very diYcult to do, and no one solution will make it happen. It is about especially on what is literally a tiny budget for a having as many activities and engagements as we massive economy, but you should therefore get in can, and things happen out of that. there, share agendas and be talking round the table. I have experienced this for many years, where Q93 Chairman: Which brings me to my final something is said by somebody in the context of a question. You say there is a danger of SEEDA meeting that actually transfers a problem into an becoming “SEEDA-lite”. Exactly what do you mean opportunity and suddenly it becomes a success. We by that, and is it a good thing or a bad thing? all know that happens in life but you have to get Ross McNally: It is a bad thing. It would take the yourself out there, in the real economy, to make existing framework and structures and—in response that happen. to Government saying that funding is tightening—it Chairman: In this particular case, on one of those would shrink them down, maybe taking out one or business parks, or adjacent to it, they have created two key areas, rather than completely reinventing an innovation centre for small businesses—in an the way it thinks. It should consider, if it had been incubator. That is full. That is great. given a proportionately smaller budget 10 or 15 Ross McNally: Are they moving out and growing? years ago when it was first mooted, what it would have looked like. Again, that is diYcult to do. Q92 Chairman: Exactly. The business parks then Businesses are being asked to do it—that is the need to be filled by going out to places such as India reinvention of a business for the new economic and China—the wider world—and attracting conditions. SEEDA must also reinvent its business inward investors to build their factories. What is it model for new economic conditions. If your role is that SEEDA needs to be doing? economic development and you have less money, the Ross McNally: SEEDA’s strategic position would be best thing to do is to utilise that money to leverage to create a world-class SME community for a world- all the other activities that are happening out there class region. Inward investment wants to come in to to get more bangs from those bucks. It is more of a a community that has fantastic supply chains—the wholesale model than a direct retail model. It is skills are all in the area, rather than just being about utilising the others to achieve the economic brought in by the inward investment itself—so how development. we engage businesses is vital. We need to engage Chairman: Thank you very much for your evidence. them to make them more enterprising and more Mr Smith: My apologies for missing the bulk of your willing to reinvent themselves at diVerent stages of evidence, and for arriving late, Chairman. their life cycle. We look at businesses and see Chairman: We will have a five-minute adjournment entrepreneurs who, after years 7 and 8, have to before we take evidence from Hastings.
Witnesses: Simon Hubbard, Corporate Director Regeneration and Planning, Hastings Borough Council, Graham Marley,Chief Executive, Ten Sixty Six Enterprise and Councillor Peter Pragnell, Leader of Hastings Borough Council, gave evidence.
Q94 Chairman: Welcome to you all, and thank you Peter Pragnell: How long have you got? A lot has for taking an interest in our work and for coming to changed, and SEEDA has played its part in that. I give evidence to us. Would you like to introduce have only been leader for the past three years, but yourselves? SEEDA’s part started two or three years prior to Peter Pragnell: Good morning. I am Councillor that under the previous administration. SEEDA has Peter Pragnell, Leader of Hastings Borough played a big part in what has been happening, Council. particularly with infrastructure work—the visible Simon Hubbard: I am Simon Hubbard, Director of things, such as the new buildings, the innovation Regeneration and Planning with Hastings Borough centres and the media centre. The actual Council. regeneration company was set up under the auspices Graham Marley: I am Graham Marley, Chief of SEEDA, but Hastings Borough Council, the Executive of Ten Sixty Six Enterprise. county council, Rother District Council, English Chairman: While you are answering questions, you Partnerships and various other organisations are all will hear me saying your name from time to time, but part of it. That is a sort of overall view. Simon can that is for the people who are taking a note. give you a huge amount of detail about it. Simon Hubbard: I think that a lot of things in Hastings are now moving in the right direction, but Q95 David Lepper: Welcome to my constituency. there clearly is a long way for us to go, and we have Hastings has been quite a focus for SEEDA’s some concerns for the future. At the moment, our attention over the years. I address this to all of you: submission lists some very significant things that what has changed for the better in Hastings over the have happened. The university college is being years of SEEDA’s intervention? established, and we have a new arts and technology Processed: 09-09-2009 16:52:07 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG2
Ev 24 South East Regional Committee: Evidence
29 June 2009 Hastings Borough Council and Ten Sixty Six Enterprise college. There are very significant links between academic agenda. By its very nature, the council did those academic institutions and support facilities for not have those skills. It also brought in capital business. Two things have worked for us in Hastings. project management on a larger scale than the local First, the partnership that was set up around the partners had. It also brought a sense of purpose, as Hastings and Bexhill Task Force has meant that was demonstrated with the planned link road partners have come forward with other action, so around the town, which we hope will now be action has not been taken simply by SEEDA. The delivered and which would deliver a lot of other partners—for instance, the county council in opportunities to the town. It also brought together a looking at educational performance and academy range of players in the partnership that enabled the issues, and the borough council with issues relating continuous process of lobbying and following up to the Jerwood Gallery and the cultural agenda— that goes with such a scheme. It strengthened work have had opportunities to start to bring together in all those structures. those areas that work. The other thing is the decision that was taken at the beginning of the work to concentrate—not exclusively, but substantially—on Q97 David Lepper: So it is bringing together partners the regeneration of the town centre and the location and the ability to invest money directly, and perhaps of resources and action in the town centre. If you indirectly, in the area. Has it given Hastings a visit Hastings, you can see the physical change, stronger voice in national decision making, which we strongly believe is shortly to be followed by particularly where funding is concerned? economic change, which is already taking place Peter Pragnell: I think that we have got a stronger there. Without wishing to eulogise, because, as our voice. Quite a bit of that goes to the fact that we have submission says, we have concerns, we think that worked quite closely with a lot of partners, not just SEEDA has engaged in these processes with local SEEDA. We worked more closely with Rother partners extremely well. District Council and the county council, and we Peter Pragnell: Can I add that at the very beginning of the process, it played a very key part in bringing have quite good relations with our MPs of every all the strategic partners together. It played that role political hue. We have a partnership down the A21. at the beginning, and has played a full part since. That is not specifically to do with regeneration—it is Graham Marley: I would agree with everything that to do with transport communications—but it has Peter Pragnell and Simon Hubbard have said. From contributed to us learning to be much better at a business perspective, what SEEDA has brought to working with partners in the private sector, public the party in recent years is the unlocking of sector and third sector. commercial floor space—Hastings suVered a severe Simon Hubbard: SEEDA’s approach has really lack of that for a fairly significant period of time strengthened where we are in terms of the because it was not commercially viable to build infrastructure that we talked about and those sorts commercial property developments—particularly of links. The regional approach oVers slightly less in new floor space in the town centre, and the that sense in the inclusion agenda. Like in many innovation centre to the north of the town. That has other coastal areas in the region, the disadvantages been a really important factor. The media centres in Hastings are long-standing. The recent Centre for and innovation centres are fairly full, which is very Cities report revealed the high structural levels of positive and shows that there is demand in Hastings. youth unemployment that exist in the town. Those The next level is to bring some bigger businesses into problems are not easily addressed by that kind of the town centre to create new employment and to investment. The bringing together of regional take Hastings forward significantly. The other point resources around that capital and investment is very I would like to make is that some of this was strong, but this approach has been less strong in beginning to happen anyway. Through a single addressing built-in disadvantage and exclusion. regeneration budget, which it received in devolved funding, the borough council was already planning to make improvements in Hastings. The advent of Q98 David Lepper: Could you give us an estimate of Sea Space acted as a catalyst to make further things how much public money has been invested in happen. We should make the point that the borough Hastings by SEEDA and other partners since the council was progressing well on trying to turn taskforce was set up seven years ago. Hastings around. Simon Hubbard: It is very hard. If you would welcome it, I would be perfectly happy to go away Q96 Chairman: Taking up that point, is it your and tally it up on a piece of paper for you. collective view that those developments might not David Lepper: That would be helpful. have progressed as far as they have done without Simon Hubbard: I will list a few. In terms of public SEEDA? From what all three of you have said, I sector investment, at least £38 million is going assume that that is your view, regardless of what the through the taskforce budgets, but the multiplier borough council had already been doing and might around that has been very large. The new college is have gone on to do, and whatever a regeneration worth around £90 million. I do not know what the agency might have been able to do. university college is valued at but it would be similar. Simon Hubbard: Yes, I think that is true. I think that The figures are high but significant parts of that the taskforce that was set up brought in expertise money are not SEEDA’s. It is money that has been that the council did not have, particularly on the brought by other arms of government. Processed: 09-09-2009 16:52:07 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG2
South East Regional Committee: Evidence Ev 25
29 June 2009 Hastings Borough Council and Ten Sixty Six Enterprise
Q99 David Lepper: Is it good value for money? where we are going and we see that SEEDA ought to Simon Hubbard: I guess you would have to say that be, at least for the foreseeable future, part of what is the judgment on that will be four or five years down going on. the line, in terms of the impact of those things happening and depending on other things remaining constant. One of the successes we have had as a Q103 Mr Smith: In your previous answer, you said that it had been constructive and positive: “in the partnership is on reducing crime. That will need to main”. Without wanting to encourage you unduly to be held down to deliver a sustainable town centre dwell on the negative, in what ways was it not quite and a working college. It is important whether, for so positive? instance, schools can be improved during the next Simon Hubbard: I think the taskforce is the main period so that people can take advantage of these work that has happened, and I would describe our opportunities. Like so much of regeneration, you relationship there as extremely positive. Graham can judge it on one level: “Is it good? Yes, it seems to might have a separate view, but the new sub-regional be.” However, the long-term impact is similar to the structures are set up on the basis of particularly wide decline that got us where we are, and that long-term boundaries. We function as districts not just within impact needs to be assessed in the future. our own borough boundaries, but looking very Peter Pragnell: From a historical perspective, there much at our travel-to-work area and the relationship are disagreements over whether it has taken 50 or 60 we have with Rother and Bexhill as an economic years—or longer—to decline to the state that we got area. It is more diYcult and challenging to have a to. There are also questions about what caused it— relationship with SEEDA at that level within the cheap package holidays or all sorts of diVerent new sub-regional partnership structures and things. We are only six or seven years into the processes. With the district council, it is the nature of regeneration programme and it will take a while the beast; we want to have direct relationships and before we can tell what its long-term impact will be. direct engagement. Graham Marley: I would like to pick up on that. I Q100 David Lepper: Can I ask one final question? think—certainly from a Hastings perspective—the Your relationship with SEEDA has been positive, relationship with SEEDA has been generally very from what you have been saying. positive. Partners in other parts of Sussex do not Simon Hubbard: In the main. have that same strength of relationship. There is a Peter Pragnell: In the main. feeling within East Sussex that Hastings gets all the money and no one else gets a look in, and that that is SEEDA’s fault. SEEDA has failed a bit, in terms Q101 David Lepper: Was there some disagreement? of the communication method with those other parts Peter Pragnell: No, we both said, “In the main.” of East Sussex, both to describe the diYculties Hastings has, and to get over the message of what it Q102 David Lepper: Has a point been reached—or has been doing positively in those areas—such as will it be fairly soon—where perhaps SEEDA ought rural development programmes and so on. The to stand back? It could say, “We have done this, this communication leaves a little bit to be desired and this, and have encouraged this, this and this to outside the context of Hastings, where generally it is happen. Now, it’s up to you. We’ll take a rather more positive. SEEDA consults with the business arm’s length view of what is happening in Hastings community in Hastings eVectively, partially because or the Ten Sixty Six area.” we have demanded that. The Hastings area chamber has been very active in both lobbying and supporting Simon Hubbard: At some point that must be true. the work of SEEDA and Sea Space. Again, that One of the points we look at—and it moves a bit, might not be the case in other parts of East Sussex. particularly with the recession—is what we call locally the “tipping point”. That the point at which you make a judgment that the local economy is Q104 Mr Smith: Could I follow that with a question developing in such a way that the private sector can to Graham? In your evidence you say that there is a be expected to play an increasing role in delivering perception that SEEDA is not held to account for its future employment. There are encouraging signs in actions. Could you give an example of how that has some of that. However, it is our belief that we need happened and how the situation might be improved? continuing long-term engagement with SEEDA in Graham Marley: I do not know about a hard this respect, and that we need a relationship with it example—it is more of a perception from other parts that incorporates the new work of the Homes and of the county.Even Rother, where Bexhill is situated, Communities Agency in terms of getting a joined-up to an extent looks almost forlornly at all the nice approach to the needs of the urban area. We said that shiny buildings that have been developed in we have a happy relationship with SEEDA—and we Hastings, and asks, “What’s coming to Bexhill for do. However, a taskforce is a specific body charged us?” That is what I was trying to get over—there is with delivering specific programmes. SEEDA has a perception issue. I do not think that the business had a long relationship with areas. The area community feels it has a voice within SEEDA to say, investment framework process was set up under its “This is what we need.” We have been able to do that leadership. It had a far more holistic approach to for Hastings. Rother businesses do not experience regeneration. As a local authority and local that, though, because the vast majority of them are partnership, we need to have a holistic approach to SMEs, so their voice is tiny. Processed: 09-09-2009 16:52:07 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG2
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29 June 2009 Hastings Borough Council and Ten Sixty Six Enterprise
Q105 Mr Smith: Is there a corollary with what you Chairman: Peter Pragnell described it as a say about the perception elsewhere of everything development company. going to Hastings? Is there a perception within Peter Pragnell: Sea Space? Yes. Hastings—first in the business community, and secondly among the broader public—that it has Q107 Chairman: Was that SEEDA’s idea? Is that the turned a corner and that SEEDA has played an way it is seen? important role in that? Simon Hubbard: It operates as a structure with a Graham Marley: I think Hastings is turning the broad partnership which is basically politicians, corner rather than has turned it—it is an unfinished regional and other partners and the council. It job. If SEEDA were to up sticks and say, “Right, we operates as a loose partnership—people come can’t help you any more—it’s over to you, the together, and then there is a company, HBRL, which borough council and other departments,” I still underpins it, which is the formal mechanism for the think it would be diYcult to make a sea change in delivery of the projects. That concept, if I remember terms of regeneration. A lot more support is still rightly, came from the chief executive brought down required, and the Hastings to Bexhill link road is the to support the Hastings and Bexhill partnership. key. If you are asking for a time scale of when They employed a chief executive who came down SEEDA’s involvement in the area might not be from Scotland, where he had had a lot of experience. required so much, it is after that is built and both housing and commercial developments are at least Q108 Chairman: When you say, “they”, who do part way in train. you mean? Simon Hubbard: SEEDA. SEEDA employs him. Q106 Mr Smith: Just to wrap up my questioning at this point, I think that you answered this with what Q109 Chairman: So SEEDA brought him down you said earlier, but I was going to ask about your because he had experience of running this type of overall perception of the quality of the partnership organisation? work—you have referred to its importance. Would Simon Hubbard: That is right, and particular you say that SEEDA has performed well both as a experience of gaining inward investment. The partner and by engendering the broader structures that were set up—first HBRL, and then partnerships that are necessary for the success of this the subsequent companies that are used to deliver regeneration? individual projects, which, at least until the Graham Marley: In terms of Hastings, it generally recession, were showing signs of getting increasing has. In the initial phases, there were probably some private funding in, as well as state funding—flowed teething troubles between partners—not especially from the expertise that came into the town. the borough council, but other partners, such as Peter Pragnell: One encouraging sign, I think, that Business Link, were struggling to work out where things were advancing was that private finance was they fitted in with Sea Space. However, I think we are coming in. in a position, a couple of years down the line, in which all those partners are working very well Q110Ms Barlow: I would like to move on to the together. In many respects, I would imagine it is an regional economic strategy. You have mentioned exemplar of having a wide range of partners working some deprived and underperforming areas, such as together and pulling in the same direction. From a youth unemployment. Can you explain whether you business-support point of view, we, as the enterprise think the RES addresses the needs of all areas? You agency, work very closely with Business Link, the have said that perhaps it concentrates on areas that university and the local college. We have regular can be helped up, to the exclusion of some others. Is meetings, we all know what everyone is doing and we it addressing all the sectors? are all pulling in the same direction. From what Peter Pragnell: I am not entirely sure. I will pass that other enterprise agencies have said, that does not one over. happen in all other areas—if I was not being polite, Simon Hubbard: Identifying diVerent hubs within I might say “any”. the regions is clearly helpful, at least in principle, in Simon Hubbard: To supplement that, Pam maintaining a continuing focus. We have a genuine Alexander has chaired the taskforce partnership and concern, though, and this goes back to the previous the input has been very high. We also operate other witness. In the current economic situation, the partnerships, such as the Hastings and Bexhill choices facing the Government and SEEDA are Economic Alliance, which works around the fairly diYcult. If you look at the emphasis on growth programme of the taskforce and also looks at the areas within the RES—around Milton Keynes, inclusion area. We have been concerned, since the Thames Gateway and Ashford—in the current partnership review, that SEEDA’s input to that has circumstances and look at the immediate bang-for- diminished, in terms of those contacts. The previous buck argument, those will be the areas that may,over discussion was about the wider issues of the medium term, receive ongoing support from the consultation and engagement on those processes, RDA. I do not think that that is a Hastings-only and we were sitting here agreeing with a lot of those issue. I think there are quite a lot of areas, general comments, if you are looking in the round. particularly on the coast, that share similar issues But, of course, we have very particular local with us in that respect. I think we would have a circumstances because of the taskforce, where, concern, in relation to the diVerence between clearly, that has worked. development and regeneration, that the regeneration Processed: 09-09-2009 16:52:07 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG2
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29 June 2009 Hastings Borough Council and Ten Sixty Six Enterprise side for that part of the region might, in the current value added generally speaking, but from the environment, not get the attention that we would perspective of the types of business that we have in want. Hastings—very small businesses—what impact has SEEDA had at that level? I guess it’s a question of Q111 Ms Barlow: In terms of the sub-regional funding at the end of the day. Where do you want to coastal framework, I presume that has been quite put your limited resources? I think my preference eVective at dealing with Hastings. Do you think it is would be to see wider use of the funding to more eVective enough and are there clear enough targets? general benefit. An example of that would be on the How much is it part of SEEDA’s role to identify financing side, through Finance South East, where these targets and make them clear? SEEDA has invested a lot of money in schemes that Simon Hubbard: The coastal? will aVect a very small proportion of the business Ms Barlow: The sub-regional coastal framework. base. It has spent considerably less on funding up to You mentioned that you were concerned about the the £50,000 level, which is what the vast majority of eVect on the coast of the Ashford development. businesses are looking for. That concerns me, Simon Hubbard: I think that to some extent you particularly in the current market. It has been very come back to the resources issue there, because the slow to look at measures that might fill the gap. The coast is such a huge area, such a large part of the Government’s enterprise finance guarantee scheme region and very diverse. You’ve got places such as could in theory have filled part of that gap, but the Thanet, Dover, Hastings and parts of Brighton, and funding is not making its way out through the banks you’ve also got quite diVerent areas along the coast. at the present time. Local bankers are saying that What we’re not clear on, despite the existence of a they are lending at 35 to 48% of targets; they are not strategy at that level, is where that would then get doing a particularly good job of getting funding out. followed up if you look at it in terms of the region I think that SEEDA should have been looking at and the resources and the push to deliver a strategy other mechanisms—community development covering such a large and diverse area. We would finance initiatives, for instance—as a vehicle to start have to say that the judgment would be out on the releasing funds into the business market. coastal strategy, and I don’t know what people on other parts of the coast think about it. While I would Q115 Chairman: Particularly into smaller business? have contact, say, with some colleagues in Thanet Is the implication of what you are saying that the because it’s a similar area with similar issues, I loan schemes that are in place are not suYciently wouldn’t know what the view was on lots of other well designed for small businesses? parts of the coast. Graham Marley: No, the loan schemes available through Finance South East generally start in excess Q112 Ms Barlow: As a member of the coastal group of £100,000 and are a mix of either debt equity or of MPs, I know there are a lot of similarities in mezzanine-type finance. For the vast majority of coastal areas—for example, high levels of houses in businesses in the region, and certainly in the areas we multiple occupation (HMO), a lot of mental health cover, that is not appropriate. During my time at issues, seasonal employment and so on. What you 1066, you could probably count on one hand the seem to be implying is that the sub-regional coastal number of times we are approached for the funding framework certainly has not made it very obvious to that Finance South East would be looking at. you in Hastings as to the coastal push, and that SEEDA has not tied in in that way all the similarities of coastal areas—say, between Southampton, Q116 Chairman: Are you not suggesting, eVectively, Brighton and Hove, Hastings and so on. that SEEDA has to go into the banking business? Simon Hubbard: Many of the issues that you have Traditionally it was the role of the high street banks identified—HMOs, say—in the end are issues that to understand what small businesses would prosper can be identified in a SEEDA-led document, but the in an area and to make money available to people means for dealing with a lot of the issues will be via who had a good business case. Are you suggesting other bodies and other funding. Some of the issues that SEEDA somehow needs to step into their place? such as coastal transport are clearly ones where we Graham Marley: I am suggesting that SEEDA could would hope that the RDA played a positive role in help to provide funding to open up the market. improving things, but I wouldn’t have thought it was There are mechanisms—community development fair or appropriate to expect the leadership on, say, finance initiatives, for instance—that are already HMOs and those sorts of issues to have come from lending within the region and could facilitate that SEEDA. It is clearly an issue that is there. process. There are people on the ground who have subsidiary companies providing that sort of finance Q113 Ms Barlow: And regeneration? across Kent, Sussex and Surrey. I am saying that Simon Hubbard: Yes, we need to look at that. SEEDA needs to do more to support that sector in lending to people who cannot access bank finance, whether they be pre-starts, start-ups or established Q114 Chairman: With that in mind, is SEEDA businesses. targeting the right business sectors? Graham Marley: My concern is that through the RES there seems to be too much focus on high- Q117 Chairman: Broadly, the three of you seem to be growth technology-driven businesses. I’m not saying painting quite a bullish and optimistic picture. Does that that’s a bad thing, because obviously it’s high that have anything to do with the high proportion of Processed: 09-09-2009 16:52:07 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG2
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29 June 2009 Hastings Borough Council and Ten Sixty Six Enterprise public sector jobs in Hastings? Perhaps, therefore, Q118 Mr Smith: I have a couple of final questions on you are not seeing the full eVects of the recession in the implications of possible future changes in the way that other areas are. regional policy. With the SNR giving a more Graham Marley: I think I am bullish, although there strategic role to SEEDA, do you think there is a may be statistics coming out that show we are danger that as it takes that strategic approach its beginning to suVer from the recession. My concern ability to focus on the needs of places such as is that we may not feel it as deep but we may well feel Hastings will diminish? it for a lot longer. Part of that may be mitigated by Simon Hubbard: There is a danger that its view may the new spaces that Sea Space has developed over become too broad and not focused enough. Having recent years. If it can attract a couple of good inward worked in the West Midlands for a period where investment cases, as it has the quality of space, that there was a strong sense of regional identity and a may go some way to alleviating some of the increases centre to the region, my worry would be that because we are in a region that does not have that kind of in unemployment. It may well leave us with a lower focus, it is going to be much more diYcult when proportion of public sector employment. In a there is pressure for maximum growth in the diYcult market it may be diYcult to do that, but if economy. That will come from the bits close to it does not happen I think Hastings might suVer a London, close to transport networks and all those longer-term problem. things that people know about. It will be very easy, Simon Hubbard: I think it is not fair to say that at least for a time, for more peripheral towns— Hastings has not suVered from the recession. First, Hastings is not a major city; it is a town—to be anyone employed in a public sector job will have ignored because they do not have that significance. concern for the future. Secondly, look at the So, we would have a concern that in this era it would diVerence in jobseeker’s allowance claim rates be quite easy, particularly when money was in very between February 2008 and February 2009. The short supply, for those more localised interests to be JSA rate was 5.6% in February 2009 against the ignored—not deliberately, but as a product of the national rate of 3.8%. The three-month rise that we crisis. have is not only the highest in East Sussex, but is higher than the rise in the region and in the country Q119 Mr Smith: Just to shift away from SEEDA for as a whole, so to say that that is the case is wrong. a moment, may I ask a question about the When the recession started, there was a hue and cry Government OYce for the South East? How well from various areas about how comparatively does your relationship with it work? Do you have wealthy areas, because of their links to the finance any comments to make? industry, were going to be hit worse. At the very Simon Hubbard: On the whole, it works well. We see beginning that was true, but as the economy shakes a lot less of it, though. It clearly has to treat local out it is becoming clear that the kind of economy we strategic partnerships—for instance, at district have—small business, and a lower-value and lower- level—diVerently from how it treated them five years ago. When neighbourhood renewal funding began skills economy in some cases—suVers throughout and Hastings was a recipient of it—it came not via the recession. county-level structures, but via district-level Peter Pragnell: We started oV bad and it got worse structures—a lot of emphasis was clearly put on more slowly to start with, but it has got worse since. supporting and developing local strategic New figures came out today, but we have not had a partnership structures at district level. It is almost a chance to look at them yet. They show that the rate necessary corollary that the Government are of increase may be slowing in East Sussex, but it is focusing a lot of what they want to do around still climbing. It is funny that over a year ago having unitary and county-level authorities. That makes it 43% of our employees in the public sector seemed a more diYcult to get that kind of focus and attention. bad thing, but in the short term it is seen as a good Having said that, we are not saying that we do not thing. As Simon said, in the next year or so, whoever get it; it just makes it more challenging. the Government are, if you are in the public sector Mr Smith: Thank you. you are going to be watching your back. Chairman: Thank you very much indeed.
Witnesses: Harvey Bradshaw, Regional Director, Southern Region, Environment Agency and David Edwards, South East Director, Homes and Communities Agency, gave evidence.
Q120 Chairman: Welcome to you both. Thank you Q121 Chairman: Do you want to make a statement for taking an interest in our work and being prepared or just answer questions? to give evidence. Would you like to introduce David Edwards: I would be very happy to answer yourselves? questions. David Edwards: I am David Edwards, the Regional Director for the Homes and Communities Agency in Q122 David Lepper: I welcome you to my the South East. constituency as well. May I ask both agencies here— Harvey Bradshaw: I am Harvey Bradshaw, the and I don’t mind who goes first—if the South East Regional Director for the Environment Agency in needs a regional development agency? Could we get the Southern Region. along quite well without one? Processed: 09-09-2009 16:52:07 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG2
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29 June 2009 Environment Agency and Homes and Communities Agency
Harvey Bradshaw: The advantage for us is to get our the economic downturn as much as others. What do input into a single regional tier. From there, it gets your two agencies feel are the key challenges facing widely disseminated into all the various decisions SEEDA at the moment? that go across the South East. With environmental Harvey Bradshaw: There is one clear answer to that factors, we are often talking about issues that go from the perspective of the Environment Agency: in beyond local authority and unitary boundaries. the pursuit of growth and regeneration, the Climate change is the obvious one, but water stress environment will be seen as a cost rather than an and energy eYciency are others. There is a value for opportunity—that, in short, is the nuclear risk. That money argument about getting regional agreement said, our relationship with SEEDA is close. Only a on the standard we want in the South East. Once our couple of weeks ago, we discussed these sorts of engagement has been delivered there, it will make issues with the chief oYcers of SEEDA, and they subsequent engagement on an application-by- said the fact that the environment needed to go hand application or LDF basis so much easier. in hand with economic and social regeneration was David Edwards: From my point of view the answer a no-brainer—it was fully accepted across the piece. is yes. First, in general, I believe that at the strategic So I am relatively relaxed, given the way things look, and regional level—in terms of economic that the environment will be an opportunity to help development—an agency is appropriate and can get us out of the current downturn and into long- deliver value. Secondly, there is a need for co- term sustainable prosperity. However, the key risk is ordination in terms of economic development that it will be seen as a cost that cannot be borne at activity,particularly in the context of the South East. the moment and that we will focus on regeneration With regard to our arrangements and structures, we until such time as there is enough money to look at are a complex region and we also have the capital on the environment. our doorstep. David Edwards: There are two broad areas of challenge. The first is that the organisation is in transition and that is not something that is easily Q123 David Lepper: I will ask this because I do not achieved. It is moving towards strategic planning think you were here when I asked an earlier witness and having its remit refocused on to economic the same question. You, Mr Edwards, referred to development. That means some of its previous this being a complex region. Do you—either or both activities are no longer seen as core—or as being a of you—feel that if we were starting again from priority. That is a challenge in itself, particularly scratch, your organisations would have a clear idea under the current circumstances. The other about where the boundaries of the South East region challenges it faces are very much of the economy: should be drawn? Would they be diVerent from what issues on the priority in place in terms of we have at the moment, and why? regeneration and physical development. Where it David Edwards: Gosh! I would almost need notice of has played a key role in the past, economic that question because it is so complex and it is about development issues—employment, skills and a series of trade-oVs and compromises. Activity does training—are the priorities going forward. There is a not stop at a regional boundary, and this is as much changing agenda there, and there are some about culture as it is the economy. If I am honest, diYculties in terms of other agencies that are going that is a diYcult question. I think that at the moment through transition. Pulling those things together in a it is about right. There are some complexities and I period of substantial pressure and change is would cite in particular the south Midlands and the challenging to any agency. relationships there. The rest is more or less—give or take—a reasonable compromise. It would pay to look at the south Midlands and Milton Keynes area Q125 David Lepper: There are targets within the and ask if we have got that right. regional economic strategy that are of interest to Harvey Bradshaw: Briefly, we have given some both your agencies. Sometimes—at least in the thought to boundaries because ours are slightly media—it appears that there is a crash between obscure to members of the public, in so far as they targets relating to housing and those related to follow water catchment boundaries, which are not sustainability.I hope that is not actually the case. Do well understood. We periodically kick around the you think that SEEDA can, within the RES, meet point about boundaries. The general view at the the targets for which the Homes and Communities moment is that you need to have a very strong Agency and the Environment Agency are outcome-based argument to change them because responsible, for example? Does it have that there will be a heck of a lot of energy and internal capability? focus going into that. You will need some pretty David Edwards: I think it has the capability to work clear outcomes to justify that. We have looked across with us to drive towards those targets. It is not it on only a very broad and relatively superficial SEEDA or nothing; there has to be a partnership level, and our conclusion is that we should work with and a shared vision if you want to reach for that what is here, rather than argue for any changes. across the region. So it is not just us, but local authorities and everybody else. There is a clear understanding about the balances and the issues we Q124 David Lepper: Again I address this question to need to address on the environmental side and about both of you. SEEDA has the smallest budget of any housing and economic growth. Those have to be of the RDAs. The South East region is being hit by weighed carefully. Certainly, as regards forward Processed: 09-09-2009 16:52:07 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG2
Ev 30 South East Regional Committee: Evidence
29 June 2009 Environment Agency and Homes and Communities Agency planning, it is extremely important that we get the David Edwards: From our perspective, having best decisions we can. I know that that sounds spoken to my predecessors—I have to say it was terribly general. before my time, and before the HCA was David Lepper: I was going to ask if you could say a established—I can confirm that we did feel engaged little bit more about it. in the RES and, in terms of priority areas and places David Edwards: Some of the areas we are working on and so on, there was a shared understanding of with SEEDA at the moment are its historic where we should be focusing. Taking that forward, regeneration projects—the Southamptons, the we have a continuing dialogue with SEEDA about Chatham Maritimes, and so on. We are working priority investments, locations for investment and alongside SEEDA to see how we can restructure and working through the regional housing board on refinance some of those schemes, which have stalled priority areas. I do not think that the approach just in the present environment. They are needed from fixes issues in the RES to an extent—that is a not only a housing perspective, but an economic and position at a point of time in the planning. employment one, so it is important that we get it right. That is an example of working together. You Q127 Mr Smith: Out of interest, do you carry out mentioned Hastings—again, we work closely with joint ongoing monitoring of the contribution that SEEDA in our work there. housing provisions make in a cyclical fashion to Harvey Bradshaw: May I add to that? This is where helping the economy in these diYcult times? the advantage lies in the regional economic strategy; David Edwards: I can give you part of the answer. We it goes back to the first question you asked me. From monitor in terms of housing completion stats where an environmental point of view, that is quite good. we put in our investment, so we can identify that With the clauses relating to water eYciency, I think right down to the last unit. In terms of the it gives us quite a good platform to work with local contribution that makes to the local economies, that authorities, the HCA and others to ensure that when is quite diYcult to ascertain. It depends on the nature we meet one need we are not storing up long-term of the builders, where they get their contractors and costs. For example, highly water-eYcient houses materials from and everything else. There is no being built now will save us more than £1 billion over doubt that, at the strategic level, the regional the next 25 years as we will not need to build new economic studies that I have seen—I cannot quote reservoirs. That is clearly a benefit for the South East you a figure, but I am more than happy to find one— of England, but it would be easy to see water show that the contribution of the construction eYciency as a cost on a new house when we are industry and housing construction in the South East looking to build aVordable new houses and to kick- is significant. It is a significant employer and also a start the economy and so on. I think the RES major circulator of money through wages, provides us with quite a good platform to make sure expenditure and everything else. we are making decisions in the current situation— the current bubble, which obviously is dominated by Q128 Ms Barlow: You referred to the importance of the economic downturn—with a longer-term the construction industry. Of course, there is also a strategic mindset. knock-on eVect on the housing waiting lists and the need for homes. You mentioned viability problems for some schemes in the current downturn, which we Q126 Mr Smith: Would each of you care to comment know about to our cost in Brighton and Hove. We on how well SEEDA consults when putting together also know that SEEDA will be focusing less on the regional economic strategy? delivering housing and regeneration in these times. Harvey Bradshaw: We felt fully and appropriately What is its role? What will it be doing if it is not engaged. The comment we made in our submission delivering regeneration? was that we thought the process generally was good David Edwards: It will come under two headings. It and positive. We compared it with the South East is not fair to say that it will not be delivering—one plan, where sub-groups were used to try to turn the reaches for the choices, priorities, and everything dynamic from one of consultation—this is what we else. It will not be able to do as much in the current think; what do you think about it?—into one of environment. There is still a large job to be done in involvement and proper engagement. We found that terms of working with agencies and partners on co- there were areas of the plan where we thought that ordination and planning, and providing some of the had worked well and the economic strategy could technical skills, which we do as well. Inevitably, with usefully adopt such engagement. A tangible example regard to funding, because their receipts have been of that might be in the case of water eYciency reduced and the Government’s priorities about standards within the regional economic strategy, allocating money have taken the RDAs towards which were not originally agreed by the water looking much more at economic development, companies, which clearly are critical players. With people will look to us—the Homes and SEEDA, we have gone through a period of work and Communities Agency—to step up and see where we collaboration with the water companies to get a can help. That is what we have been doing. We have majority of them signed up to the thinking in the sat down with SEEDA on all its projects and economic strategy. There has been a bit of a retrofit landholdings to discuss what we are doing, where it to the engagement on that, which, had it been more is working and how, together, we can try to move up front, could more easily have brought about the forward. That is not easy because—apart from commitment we were after. market diYculties—we, ourselves, are significantly Processed: 09-09-2009 16:52:07 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG2
South East Regional Committee: Evidence Ev 31
29 June 2009 Environment Agency and Homes and Communities Agency constrained now about putting money into longer understanding around that. I think that SEEDA is term regeneration projects. We plan and prioritise, committed to trying to deal with it, but it is early and we will do our best to keep schemes goings, but doors. we will not be able to do everything for everybody— we are open about that. Q132 Chairman: But SEEDA is, at the end of the day, a development agency, and I suspect that most people were brought into the agency because they Q129 Ms Barlow: And do you think that the understood business issues and how to attract dialogue is working? inward investment. Is it able to get the balance right David Edwards: I believe that it is. Since the credit between environmental issues and the desire to boost crunch, we are all in new territory, so we have all had the local economy? to learn a lot. However, I believe we do have that Harvey Bradshaw: I think that it is. I think that it is dialogue going. Only last week, we had a third committed to that. SEEDA is a very valuable meeting with SEEDA. It has a significant property partner for us. I could easily be sitting here voicing portfolio that is designed to promote and develop some very real concerns on the back of that kind of schemes. We are working with it to see if we can potential conflict. What we have in the South East is bring forward funding from some of our a shared understanding that environmental programmes—which, I have to say, are all pretty protection, environmental infrastructure, quality of fully committed. However, we have to work as best life, and adapting to climate change sit hand in hand we can to see how we can get some of this moving. with economic regeneration. I am very pleased that we have that, but there is work to be done on sorts Q130 Ms Barlow: Harvey, you mentioned water and of skills, and on how we bring to the South East the the opportunities that the current downturn is sort of people who will convert that thinking into providing around that kind of sustainability. What action. about sustainable building? What about moving towards a low-carbon economy? Do you believe this Q133 Chairman: Mr Edwards, does SEEDA is an opportunity in that way, too? understand the housing issues that you are trying to Harvey Bradshaw: A huge opportunity, and there is grapple with and the complexities of the quite a tide of commitment to that thinking. The marketplace? challenge will be to convert the thinking into David Edwards: I believe that it does. We have had a delivery. SEEDA is playing a big part in that, along very open exchange with SEEDA. It understands all with chambers of commerce and local authorities. our marketing intelligence very well. Indeed, it SEEDA runs individual projects—a pathway to zero commissioned a large piece of work about six waste, and a low carbon for homes project—that we months ago, which was published fairly recently, are pleased to collaborate with. It has also recently looking at the state of property markets across the invited us on to the environmental technology South East and making suggestions as to how you steering group, which it chairs, whose function is to could improve matters. I believe that it does have a see how to attract high-value-added jobs based sound grasp of the issues we are facing and what we around the low-carbon industry into the South East, need to do to tackle them. and to become competitive in the global market for that field. We are delighted to work with it on that Q134 Chairman: Is it able to get the balance right kind of thinking. Many people believe this is an between environmental issues, housing issues and opportunity to shift the economic cycle social issues? fundamentally, rather than going back to what we David Edwards: I think that is right. I think that you have done in the past. A lot of energy and thinking would have to say that the organisation, as I is going into it and there is a general agreement that commented on initially, is in transition. It is this is an opportunity. The crux will be whether restructuring at the moment, and I am sure that SEEDA—working alongside us and other some of the skills that will have served it well in the partners—can turn it into delivery. past will not be so prominent. Reflecting on what Harvey has said, we generally need some more players on the pitch—if I can call it that—in terms of Q131 Chairman: Going on from that, does it have the environmental agenda. We are working hard the right skill set to be able to help to you? Does it with the industry. We set standards that we require understand the issues of sustainability and the for the schemes that we are involved with. One of environment that you are grappling with? them—One Brighton, which is quite near here—is Harvey Bradshaw: In the South East, we are all starting to set the tone for some of the quality that probably on a bit of a skill set journey in that respect. we will need to see in our new housing. It is not just It is willing to address skills. Part of the group to a numbers game. which I referred is considering the skills that we are likely to need in the future and the sort of investment Q135 Chairman: I do not want to tempt you into needed to bring on those skills, be they in responding on the housing numbers issue at the engineering or tidal and wind power and so on. I moment, because we have already decided that that think that there is a shortfall, and that that will be is going to be our next inquiry and so I suspect that one of the sorts of barriers to delivery that I you will be back before us at some point in the near described to Celia, but there is quite a lot of future to talk about that. However, there are obvious Processed: 09-09-2009 16:52:07 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG2
Ev 32 South East Regional Committee: Evidence
29 June 2009 Environment Agency and Homes and Communities Agency conflicts within the region. We have the Harvey Bradshaw: I think that the actions within the Government’s aspirations for housing numbers and economic strategy are relatively demanding, and we have SEEDA playing its role in delivering those SEEDA is giving some real attention, as it probably and you playing your roles and, on the other hand, should do, to how it delivers them. The degree to we have what appears to be many of the local county which SEEDA will be impeded by the economic councils taking 10,000 oV whatever numbers the situation is an issue. In other words, through the Government put forward and saying, “We don’t routine monitoring of the economic strategy, will we need that many.” Does SEEDA have the skills to be start to see non-delivery against some of the actions able, as far as its responsibilities go, to try to balance when that non-delivery is related to economic those arguments and weave its way through those activity? I suspect that we will. We need to make sure issues? that that pace on water eYciency, energy eYciency David Edwards: I believe that it does. As I said and flood risk is maintained as far as possible earlier, it will not be a question of SEEDA doing it through the current circumstances. But I think the alone. There are county views, and those need to be RES gives us quite a good basis for that kind of heard and tested. I have no problem with that at all. monitoring; I have observed it being used in that way Similarly, with the mandate we have been given, we and have participated in that. would expect to have a view and to influence policy as well. It is a question of balancing those issues, and Q138 Chairman: As far as housing is concerned, I balancing them openly is the emphasis that I would guess we all tend to look at the bottom line of how put on it. many units are being delivered and do not go much beyond that. Do you think that we need to change Q136 Chairman: And as far as the Environment the way we measure the eVectiveness of SEEDA to reflect slightly more complex social and Agency is concerned, obviously when houses are environmental issues? built you create environmental tensions. Does David Edwards: Yes, I would agree that it is not just SEEDA have the skills set to weave its way through about numbers. From our point of view, the those tensions as well? investment that we put into housing has to meet a set Harvey Bradshaw: I personally believe that we need of minimum standards. We will continue to drive more skills in all these areas. There is a relatively those standards forward and we have made it very small number of people out there who can help us to clear that we are not in the business of compromising deliver the sort of innovation that we need. Those those standards in the current economic climate. We people are by no means common, and I think that believe that they are minimum standards and that to there is a commitment in SEEDA to try to pull in take a step back from them, even given the current those skills and use them in the best possible way. I economic circumstances, would be a retrograde step. think that we have a shared vision that more houses We are clear about where we stand on that. Also, need to be aligned with environmental those standards need to rise, reflecting infrastructure, and if you do that appropriately, you environmental issues as well as broader design and can not only preserve what we have got, but start to social and economic concerns. Going forward, as improve it in terms of flood risk. There are you have reflected, I think that the region is complex developments that can be brought online that and crowded, and there are a lot of growth pressures actually minimise flood risk and bring it down, involved. Therefore, I think that it would certainly instead of increasing it, from its existing levels. I do no harm to review the RES—we have now moved think that all those kinds of arguments are largely in quite a long way since it was originally positioned the past and that we all know what we want, but the and we are in a changing environment—to make skills and the ability to deliver that are a rate-limiting sure that we have the indicators and measurements step, so we need more of the right kind of skills. absolutely correct. Chairman: Thank you very much for giving evidence Q137 Chairman: Given that there are tensions today. As I have said, our next inquiry will be about between social policy and environmental policy, do housing numbers. I expect that both of you will have we need to change the way we measure the something to say about that, so you might be back eVectiveness of SEEDA to reflect the new in front of us before the end of the year. environment, or is the way in which we currently David Edwards: I look forward to it. Thank you. judge its eVectiveness suYcient? Harvey Bradshaw: Thank you. Processed: 09-09-2009 16:52:38 Page Layout: COENEW [SO] PPSysB Job: 434938 Unit: PAG3
South East Regional Committee: Evidence Ev 33
Monday 6 July 2009
Members present: Dr Stephen Ladyman (Chairman)
David Lepper Mr Andrew Smith Gwyn Prosser
Witnesses: Jonathan Shaw MP, Regional Minister for the South East, Pam Alexander, Chief Executive, SEEDA and Colin Byrne, Regional Director, GOSE, gave evidence.
Q139 Chairman: Welcome everyone. Would you like part of my job. We have implemented the sub- to start oV by introducing yourselves for the record? national review, which I know you have spoken Jonathan Shaw: Jonathan Shaw, Regional Minister. about, I have established the South East Economic Pam Alexander: Pam Alexander, Chief Executive Delivery Council, bringing together all partners, and of SEEDA. I have worked in partnership with the South East Colin Byrne: Colin Byrne, Regional Director of the England Development Agency and colleagues in the Government OYce for the South East. Government oYce. There is more that I could say, but I will use that in my answers to you. Q140 Chairman: It is good to see you here. Do you want to start oV by making a statement, or just Q141 Chairman: The terms of reference for this answering questions? inquiry are SEEDA, the regional economic strategy Jonathan Shaw: I am happy to make an opening and issues to do with business and employment in statement, Chairman. I am responsible for a two- the region. I think it would be helpful if you could way flow of information providing a clear sense of each encapsulate in a sentence or two the diVerent strategic direction for the South East and giving the roles that you play in the region, because there is region as a whole a voice in central Government. some confusion as to where SEEDA and the Collectively, Regional Ministers ensure that Government OYce for the South East (GOSE) sit, Government policy takes account of the diVering and how the Regional Minister sits between the two. needs of the nine English regions. To do this, I need Jonathan Shaw: Well I do, and I am. GOSE is the a clear understanding of the South East and what it Government in our region, working to ensure that means for the Government, and I pick this up Government policies are delivered on the ground. primarily from people in the South East with whom An example of that might be the local area I have had the privilege of working as Regional agreement. GOSE will sit down and negotiate with Minister for the past two years. Our region is a great local authorities—there are 19 such agreements region. It is a locomotive of the national economy; across the region—to determine their priorities in it has high-calibre manufacturing, and an excellent relation to what the Government priorities are. service sector. Quality of life is high for many, and Sometimes, there will be a gap—housing is often people want to live here. Businesses want to come one, where the authority is less enthusiastic about here, and employment rates remain high, despite the the number of houses that it needs to see provided recession, at 82.3% for men and 73.3% for women. for the local community, despite, perhaps, high Of course, as colleagues are only too well aware, housing waiting lists—and GOSE will help to reach there are many challenges for our region, with an accommodation of that. In addition, working on pockets of severe deprivation and high the crime and disorder agenda, as well, it will ensure unemployment, as Committee members know from that various initiatives that come out of the Home their own constituencies. There are skills shortages, OYce are brought in at the community level. I guess high costs, particularly in terms of housing, with SEEDA, it is agreeing the overarching RES, pressures on infrastructure and new pressures arising which I know you are aware of, and ensuring it is from demographic change and climate change— implemented on the ground—also focusing on the those are the sorts of messages that I have been priorities for that organisation. My sitting in trying to get across. It is important that we ensure between those bodies is to bring them together with that the flow of information gets to every part of our political interface, because most organisations, be economy and to every community. We do not want they private, voluntary or public, will organise to see any business fall over where that could have themselves now around the regional areas. We can been prevented with the range of diVerent have discussions about whether parts of it should be Government schemes that there are to help, and, in the South West or Eastern regions, but I do not indeed, we do not want to see any family lose their think anyone is seriously discussing that. People home, again, if the schemes that we have put in place want a political interface; as well as meeting the could have helped them. Skills and employment business community,they want to talk to a politician have been my priorities over the last two years. What rather than to Government oYces. was illuminating was a visit to Slough, where only a fraction of the local community is working in the Q142 Chairman: So, GOSE is the Government in the large companies located there, because they do not region, but SEEDA is responsible for business policy have the skills that are needed. The location and the in the region. Presumably, that is, to some extent, the infrastructure are first class, as are the businesses, Government’s business policy, so where does but as I say there is a disparity. Skills are an essential precedence sit and who resolves an argument? Processed: 09-09-2009 16:52:38 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG3
Ev 34 South East Regional Committee: Evidence
6 July 2009 Government Office for the South East and SEEDA
Jonathan Shaw: SEEDA has quite a lot of example, we contribute the most to the national autonomy, particularly with its single pot. Pamela Exchequer, and we create a voice for trying to ensure will say that it has got smaller, which it has, but it still that some of that comes back to the key has quite a lot of autonomy up to £10 million. infrastructure needs of the region. Our job is to Pamela, do you want to say something? resolve those tensions, if there are tensions, between Pam Alexander: Yes, thank you. SEEDA is an the needs of the region and what Whitehall sees as organisation which is driven by funding from the needs of the region. Government to achieve the Government’s objectives, which are twofold: to increase the growth Q144 Chairman: So, all three of you feel that the of every region and to reduce the disparities in relationship is working? growth between the regions. As the fastest-growing Jonathan Shaw: These two have been at this for region, clearly, we focus on the former, but because longer than I have— we have, as the Minister has already said, substantial Chairman: They were at it before you were there. disparities within the South East, we are also Jonathan Shaw: Exactly. I feel that it does, because engaged in looking at how we can help those parts of there is a great deal of consensus across the South the South East that are not growing as fast as others. East, working with the range of diVerent partners, be We have a business-led board, the majority being they in local government or in the voluntary or business people and the chair being a business private sectors, about the priorities of the South person, so there is a real looking of both ways, if I East—Pamela spelt those out. If you create the right can put it like that, to be business driven as well as forums in which that discussion can take place, from delivering Government policy, because our role is to those forums people see cause and eVect. An make those interventions which the public sector can example would be credit insurance. Certainly, in the best make to support the market and enable it to meetings that I chaired with the South East work better. I would suggest there are probably three Economic Delivery Council, which has all the ways in which we do that—we work to intervene business community on it, that came up time and directly with businesses, either to support individual again, and we were able to feed that in—me as the businesses or to support sectors, and we work Regional Minister to the Council of Regional directly with place, so whether it is the coalfields Ministers and then up to the National Economic regeneration programme or working with our Council—so there is a direct link. They can see cause Diamonds for Investment and Growth, we work and eVect, and I think, as a consequence, they can with the local authorities and all the other local have some confidence that we have got the right partners to make the most of the opportunities they infrastructure in place. The business community is have in that place and to identify the gaps that the pretty pragmatic, and it seems to operate with the market is not best able to bridge. Our relationship view, “Let’s get involved and have that dialogue; let’s has strengthened hugely with the role of Regional put our case forward and engage.” Since the new Minister, which Jonathan has filled with great infrastructure—and my ability to have that interface energy, because it enables us to have a representation as a politician—has been formulated, it has proved in the region at political level which we cannot do for very worthwhile. For the business community, there ourselves. We are not a democratically elected have been some dividends. body—we are absolutely an appointed body—and whilst we are funded by Government, there is a distinction to be drawn there. We also have a very Q145 Chairman: Let me put two alternative views to close link with the Government oYce, which is not you, one at a time. First, the Engineering Employers only our voice in Whitehall in relation to the region Federation said to us that the regional development itself and what it is looking to achieve, but is also a agency had the advantage of being able to represent very important conduit for us for some of the regional interests better than if that were left to discussions we need to have about specific policies. national Government. I am assuming that you would agree with that as a justification for having an RDA, otherwise the Government would not have Q143 Chairman: So, you answer to your board. If them—do you want to expand on that? your board forms a view as to a policy it wants you Jonathan Shaw: The EEF is an organisation that I to follow which is at odds with the Government’s know well, and its chief executive sits on our delivery view, how does that get resolved? council. It does not organise itself by administrative Pam Alexander: My board is appointed by the boundaries; it organises itself by sub-regions or Government and my Chair is appointed by the travel-to-work time. If there were a reduction of the Prime Minister; therefore, fundamentally, we are size within which we operate at a regional level, or if there to respond to the Government’s desire to have we just operated at a sub-regional level, I think that a regional development agency. The Government the EEF would find that far too demanding of its have been very clear, since we were created, that they time and bureaucratic. It can only put up so many want that regional development agency to respond people for so many meetings, and one has to get the to the needs of businesses and communities in the economies of scale right. Very often, that will be at a region, so it is our job to ensure that the Government very local level, but you need to operate at all the are aware if the policies are not those which our levels and determine what is most economic. As I businesses or local communities seem to be seeking, say, generally these days, national organisations will and to make sure that we represent the voice of the have some form of regional structure, and they see— South East as strongly as we can in Whitehall. For I am sure most people would agree—that it is better Processed: 09-09-2009 16:52:38 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG3
South East Regional Committee: Evidence Ev 35
6 July 2009 Government Office for the South East and SEEDA that we all have the same parts of England, rather the economic advantages of working together. than lots of diVerent parts, because that lends itself Indeed, SEEDA has put in money to facilitate some to forging better partnerships and understanding of that down there. Without that almost external priorities. perspective, local authorities sometimes find it diYcult to work out where the advantages of Q146 Chairman: Okay. An alternative view was put working together are. Both SEEDA and ourselves to us by local authorities that said, “This is all a do provide that external perspective to very great waste of time; get rid of the regional development benefit in places like urban south Hampshire. agency and leave it to us.” Jonathan Shaw: One of the best examples of local Jonathan Shaw: What I would say is that from authorities working together is in relation to the where, perhaps, some of those people were, to where decision by a previous incarnation—the regional they are today, demonstrates a success for the assembly—to identify through the local RDAs, because once upon a time they would very development funding that Hindhead tunnel was a much work within their silos at a district level, let key piece of infrastructure for the South East. I think alone at a county level. You are seeing the emergence that that involves £350 million. Who would have of cross-border working because of the RDAs and thought a few years ago that that would have been a united response from every single authority—83, or some of the local government reforms that we have 1 brought in. There is a far broader understanding that is it 84 , authorities across the South East? They said, people need to work collectively to get the right “This part of Surrey will be the recipient of all of this economies of scale. We can have a debate about investment because we can see it is not just of where the region begins and ends, but the regional importance; it also has an impact on our fundamental principle—that you need to get a national economy.” That is a good example, but sizeable chunk in the South East co-operating and there are scores of others where we have got people working together for the benefit of community and to step back and see where they sit in the broader business—is evident from some of those local picture. That has to be of benefit to the communities authority behaviours. Also, a number of them would that the local authorities look after and to us all as point to the success of the RDA in its leverage and citizens. what it has been able to do to put people on the same Pam Alexander: May I add that I think this is a page. You were taking evidence from colleagues dynamic picture because what is appropriate to from Hastings, for example; I read the transcript, diVerent levels varies over time? At the moment, we and it was very positive about the impact of Sea are certainly looking at where our focus should be Space, the body that SEEDA set up, and what it has and drawing away from some of things we have done been able to lever in. I have been to Hastings on a in the past. There are at least three diVerent levels at number of occasions and seen that for myself. which if GOSE is the Government in the region, we Without the RDA and without that broader seek to be the region in Government. We are also thinking, I do not believe that Hastings would have trying to achieve interventions ourselves. At the made the advancements that it has to date—if we’d place-based level, for example—as the Minister has had a system that we inherited in 1997. suggested in relation to Hastings—it has been about building capacity, going into Government, finding resource and drawing it down into the area. Q147 Chairman: Just to finish oV this section of Increasingly, it is also about trying to help the area questioning, I think those same local authorities to work together in a way that will hopefully help it would suggest that they know their areas better than to sustain itself into the future. At a level that SEEDA does. Where cross-border working needs to requires consistency across the region, but with local be negotiated, GOSE could provide a brokerage variations, we may have economies of scale—for service to do that. Do you feel that is a realistic way example, in the Business Link contract—which can forward, Mr Byrne? then be directed by local area agreements at the local Colin Byrne: It is an interesting debate that the level. At some levels—for example, in relation to our region is having itself. A number of the leading inward investment activity around the world—it players in the region—I think that Councillor makes sense to have it at a regional level. In some Carter, the chair of the Strategic Board, is one of places, it makes sense to have it at a pan-regional them—have increasingly started to recognise the level, so that, for example, we can work with other important role that SEEDA and GOSE play in the Greater South East authorities or, in Milton Keynes region. That is a diVerent role. Among my and the south midlands, with that whole area. The colleagues, I play the role of being central level at which it is appropriate will change all the Government’s clear representative in the region. time. Sometimes I have to give very harsh messages to Chairman: Okay. Perhaps we should have some local authorities and sometimes I act as a policeman questions about the budget now, Mr Lepper? with them, particularly over issues such as child safety. In other areas, I play a partnership role. If we Q148 David Lepper: It is true that, despite what has look at the example of the Partnership for Urban been said about the importance of the South East South Hampshire, we see that until PUSH came region in the national economy, SEEDA has the along local authorities traditionally did not work as second lowest budget of the English RDAs and, I co-operatively as they might have done. It was SEEDA’s involvement and, indeed, our own that 1 Correction by Witness: The number of local authorities in helped them come to a point where they recognised the South East is 74. Processed: 09-09-2009 16:52:38 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG3
Ev 36 South East Regional Committee: Evidence
6 July 2009 Government Office for the South East and SEEDA think, the lowest budget per head of population of there are some interventions where we get a really any of them. Pam, when we met you and the good return. Many of those were to do with chairman in Kent back in May, we asked about the supporting businesses specifically, whether through eVects of the cuts or reductions in budget that had sectors or through inward investment or trade been announced in the comprehensive spending activities. We want to focus on those areas where we review. I think you told us about losing £52 million can make the biggest diVerence, so those will have a oV the corporate plan budget, so that you would be priority going forward, whether it is collaboration in refocusing priorities and taking proposals to the research and development programmes—we have a Department for Innovation, Universities and Skills number of those—or whether, as I said, it is our at, I believe, the end of May. Is that process complete inward investment activity, where we actually had now? Have you presented a new or revised the best year ever last year, with 90 successes of corporate plan? companies attracted into the South East from Pam Alexander: It is still in draft, and it is still under around the world. Our core purposes are very clear discussion, but yes, we have worked down that road at the moment: helping business to survive the to try and identify, where we have flexibilities, what recession and developing the capacity to make the they should be focused on. Of course, as I said then, most of the upturn. That, again, will be part of the I believe that a very large proportion of the budget priority in selecting projects to go forward. Then, that we have over the next two years is already our new focus is on our core oVer, the high-growth committed. businesses that we can support and the regeneration activities which we will give priority to. We have Q149 David Lepper: Okay. When do you anticipate given some very clear guidance already that the eight that your revised plan will be available for taking to diamonds for investment in growth and the four the Department? existing priority regeneration areas, which we have Pam Alexander: Well, the Department has the draft set out, will be taking precedence. So there is both at the moment, and we are waiting for their functional and spatial priority within all of that, and comments on it. we have been working very closely with partners to try and make sure that wherever possible, we Q150 David Lepper: I see. Thank you. You said that manage an exit from those things that we can’t take much of the major spending is committed for the forward ourselves. next two years. Does it look as if there are any schemes—perhaps looking a bit further ahead than Q151 David Lepper: Have there been any points over that—that you might not be able to proceed with, or the last few months where you have had to say to the indeed any that you have had to call a halt to Minister, “In developing this revised plan, it looks as already? if some really crucial things could suVer”? What Pam Alexander: Indeed; already. We have taken an leverage can you, Minister, put on the Government? approach that starts with our legal commitments. Jonathan Shaw: I will say something in respect of Legal commitments are £212 million of the budget of that. The reason why the South East regional £251 million, which is a very substantial proportion. development agency has had some of its money When we did that budget review, we had a pipeline taken away—all the RDAs have—is that we have of very much more than the remaining gap. By the put it into other priorities to help us get through the time we had identified those projects which were not recession. For example, we have recruited more suYciently far ahead for us to consider as part of that review, we still had a pipeline of over £50 people into Jobcentre Plus, because we have to give million-worth of projects which we had been looking a good service. We have to bring forward more at. Our approach has been, first of all, to identify housing, which you want desperately in Brighton for whether there are other funding sources for some of your constituents, David. We are also making those. So, for example, we have worked very closely training much more flexible and accessible. Those with the Homes and Communities Agency to are decisions that the Government have taken for identify areas where they might be able to come in the greater good, as it were, so that we can grow our behind projects. One is the Brownfield Land way out of the recession as quickly as possible. Such Assembly Company,for example, which we set up to an approach will not be without consequences. invest in small housing sites in order to make them of There are consequences for us in the South East and suYcient critical mass to be of interest to developers. for every region. As Pam has said, some of the With the new architecture of the Homes and projects that were worked up and ready to go, such Communities Agency, we feel that it is more as the one in Southampton, will not be proceeding appropriate that they take that forward. Although now. Those are diYcult decisions, but the right ones we will remain involved in the company, they will be in terms of the broad economic policy for the putting in the £4 million that we had originally country. anticipated spending there. So there are some Pam Alexander: It has been very helpful to know examples like that. There are some very clear that we have a Regional Minister who is able to spell priorities which we have set out, on the basis of a out some of the diYculties that we may face if we number of diVerent things. First of all, there is the were to have any further raids on our budget, and to evidence of the impact evaluation work done by help us understand, at a political level, how we can PricewaterhouseCoopers, which I think we make this as easy as possible, even though it is discussed at the last hearing and which suggested painful. Processed: 09-09-2009 16:52:38 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG3
South East Regional Committee: Evidence Ev 37
6 July 2009 Government Office for the South East and SEEDA
Jonathan Shaw: Of course those reductions do not major areas, particularly housing, transport and go down well in the region, but the extra money skills, which are the three areas that all businesses coming into other areas is always well received. It is identify as their most burning priorities. part of our job to deliver that tough political message. Q153 Gwyn Prosser: It grieves me to bring us back from the high spots of the high-speed train success to Q152 David Lepper: Twelve or 13 years ago, there the low spots of budget reductions, but I want to stay was this perception about the South East that with it a little longer. You will know that when Lord because it was prosperous and doing well, it did not Mandelson appeared before the Business and need the investment that other parts of the country Enterprise Committee and was pressed about did. From time to time, all of us here still hear that budget cuts in the RDAs, he said, “we have dipped view being put forward. This afternoon, you have all into their budgets from time to time.” That talked about the importance of the South East to the Committee recommended that if RDAs need national economy. Jonathan, is there still a battle to anything, they need some sort of security in terms of be fought in terms of making sure that, across their budgets so that they can plan ahead. Dipping Government, the importance of not only the into RDA budgets is no way to do that. Don’t you economic dynamism of the South East but dealing agree that that is the case, priorities aside? with some of those black spots and problem areas is Jonathan Shaw: I have to say that they were still properly recognised? Have we moved on a great operating in glorious isolation from the rest of the deal from that period of 12 or 13 years ago? world. Okay, so we continue with the budget as it is, Jonathan Shaw: I think that we have. If you look at but then we do not have the resources to increase the the spend in areas such as public infrastructure— number of people working in Jobcentre Plus and we whether it is on transportation, hospitals or do not have the opportunity to bring forward schools—you see that we have done well. One of the moneys for extra house building. People need houses questions that I have slightly anticipated is the issue in your constituency. We need to keep construction about the colleges. Of course, that is the diYculty. workers working. One can present this as budget However, let’s not forget that £443 million has been cuts, but the money has been reprioritised in light of spent in our colleges. Now, 12 or 13 years ago, the the circumstances that we face in the recession. If we total capital spending for colleges was nothing. So, just stood back and did nothing, saying, “No, we that in itself—getting on for half a billion pounds— have to continue in vain and there will be no demonstrates investment. I can point to a number of change,” we would stay in the recession for longer. If diVerent projects, not least the channel tunnel rail you look at past recessions, there is ample evidence link, which will provide enormous opportunities for to demonstrate that with active intervention, you the constituency of the Chairman and that of Mr can make a recession shorter and shallower. That is Prosser in Dover, not to mention my own. That what we have to do so that we get back to a point would not have happened if we had not been where we can see the further growth opportunities determined to build the first high-speed rail link in that we want for your community and the rest across this country in hundreds of years. I think that, the country. Just to look at the RDA budget in absolutely, we have moved on, but I am not isolation is wrong. You have to look at how it complacent. Everyone understands the diVerences interfaces with the resources we have available for all within the region and between the regions. To the priorities across Government. west, in Oxfordshire, we have some of the highest Pam Alexander: I think you would expect me to say levels of PhD anywhere in the country. To the far that I have a responsibility to recognise the east, in Steve’s constituency, we have one of the constructive tension in the relationship and that, of highest levels of households with no one in course, having secure budgets enables us to plan in a employment anywhere in the country. There is every more sensible way than having to respond. Having disparity you could possibly think about in the said that, all RDAs have been very responsive to the South East. needs of the recession. As we have had to Pam Alexander: I see our role as ensuring that we reprioritise, that is what we have done. focus constantly on the importance of the South East to the upturn. If we do not grow the South East economy at the head of the upturn, we will not grow Q154 Gwyn Prosser: We all accept that politics is all the UK economy either. We need the investment that about priorities; that is the centre of it all. But our will enable that to happen. The second aspect is that priority in this Committee has to be the South East. we welcome the increasing flexibilities that we have That is the way of the world. When Lord Mandelson achieved to get decisions made regionally and sub- was pressed on that same issue, the Business and regionally about Government spending in the Enterprise Committee eVectively said, “Look, we regions. The Minister has already referred to the want more money for these budgets.” To paraphrase Hindhead tunnel. That was one of the first areas him, he replied, “Well I will go back to the where the regional funding advice enabled us to say Chancellor and the Chief Secretary and not only that we want more money for the South communicate your concerns.” Do you think it is part East, but that we want it spent on the things the of your responsibility, as a champion for the South South East feels are the most important. We will East, to press the Treasury for more money for the continue to press for increasing flexibilities in the South East and for SEEDA in particular? Processed: 09-09-2009 16:52:38 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG3
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Jonathan Shaw: It is interesting, because it defines Q156 Gwyn Prosser: Lastly, do you think it’s part of the role. I’m not going to be outside the appropriate that SEEDA should be accountable to Treasury with a board saying, “What do we want? the Secretary of State in the Department for More money now. Rotten Government, why aren’t Business, Innovation and Skills, rather than be you giving it to us?” I am not going to do that, responsible to someone who has representation because I am bound by collective responsibility. I within the region—someone like you? ensure that there is a flow of information to the Jonathan Shaw: I work closely with the chairman of various partners, and that information from the RDA and I have a role in the appointment of the partners in the South East comes up the line as well. chair. As part of the Chair recruitment process, I am For example, businesses were finding credit asked to oVer my recommendations to my insurance diYcult, and there were announcements in colleagues in BIS. Obviously, I am in a good position the Budget about that. Pam has referred to the to know the qualities of the individuals coming Hindhead Tunnel regional funding allocation, which forward from this region . Those recommendations I am very much involved in. Most certainly, the job then go to the Prime Minister. So I have that of GOSE and SEEDA on the ground, talking to responsibility. That obviously has an impact on the partners, is improved and enhanced if they have relationship, so there is a degree of authority, but my someone right at the heart of Government talking to work with the chair is a partnership. We chair the Ministers, making sure that the priorities and the South East Economic Delivery Council. I want to messages are getting through. I do that a lot, whereas see business and the Government working hand in it might take a little while longer through the hand, and I want the rest of the world to see that, traditional route—via the civil service, up to the particularly at this time. Department, which will filter that information and perhaps provide the Minister with an interpretation Q157 Mr Smith: Turning to the regional economic that might have been nuanced a little bit in the strategy,I have a question for Pam. SEEDA has now journey from the region to the departmental produced three regional economic strategies. What, Ministers. But, obviously, I can get it straight from if anything, has been the change in emphasis with the Government oYce or from SEEDA, or from each one? In particular, are you becoming more other areas, and speak to colleagues directly. focused on particular sub-regions, or has your focus stayed constant? Q155 Gwyn Prosser: In terms of who gets what Pam Alexander: Of course, the regional economic strategy is not SEEDA’s corporate plan—it’s the portion of the overall funding pot, David Lepper strategy for the whole region. The region, which referred to whether the South East is still looked didn’t exist before 1999, has taken some time to upon as a prosperous South East that has enough work through its priorities. Obviously, I was anyway. Of course, there will always be arguments personally involved only in the last one, which we by Back Benchers in the House about where the delivered in October 2006. In the first RES, the money should flow, but lots of us in the South East— organisation had come together from English the South East chamber of commerce in particular— Partnerships and had a legacy of regeneration have made the point that anything invested in the projects and programmes, and we have a clear focus South East, because of its bigger returns and on making sure that those and the single compound growth eVects, has a much more positive regeneration budget, which we were also responsible eVect on the national purse in terms of banging for, clearly focused on the priority regeneration money into UK plc. So that is all for the good and areas in the region. That was very much the thrust of more money should come in, rather than less, the first RES. As we came through the second RES, because of our relatively prosperous overall we got into a very clear focus on the drivers of position. What is your view on that? productivity—employment, skills, innovation and Jonathan Shaw: There are funding formulas across so on. That enabled us to become even more clearly Government that you are familiar with, in terms of focused on how to lift areas of underperformance where money is placed in respect of deprivation and lower productivity, as well as investing in areas levels; for example, in the region, two areas have the of high performance and growth to get the highest working neighbourhoods fund—the Chairman’s return on that investment. The third RES, which we constituency and in Hastings and Rye—because produced in 2006, really focused on what it means to they hit the criteria in terms of deprivation levels. be a world-class region—what innovation and Your district authority may make priorities for that investment in science and technology and what the within its own boundaries; I know that the county real drivers of top-class innovation required—in a does. My district council in Tonbridge and Malling world that was also beginning to address the value of does that and prioritises where the need is greatest. quality of life in terms of the elements that we market But in terms of the bottom line and investment, we as being why companies and people enjoy living in have all had an equal proportion in important things the South East. For the first time, we put a real like access to the health service. Whether you live in meaning behind sustainability in terms of Birmingham, Norfolk, Manchester or Dover, you sustainable economic development. We looked at it don’t wait any longer now than 18 weeks for your in terms of sharing the proceeds of growth by trying hospital operation. So there are some things that are to grow productivity per head across the whole universal and some that are, perhaps, means-tested. region. 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6 July 2009 Government Office for the South East and SEEDA to achieve growth that reduced, rather than voluntary sector around the same boundaries, increased, our ecological footprint. In achieving because that increases the likelihood of co- that, we have drawn together a group of bodies to ordination and co-operation and getting as many implement the regional economic strategy that have, bangs for our bucks, which we need to do in the for the first time, taken real individual responsibility South East, as we have heard. I think things have for the diVerent elements of the programme and the moved on. Occasionally, when someone says, diVerent targets in it. As we have monitored it “Don’t you think this part should be in it?” I say, together through what we have called the living RES “Shall we have a wholesale review, because we won’t process—our conferences of RES partners and the be able to do it just for ourselves? How much time RES steering group, which has changed over the and energy will that be? Or shall we talk about period of delivering the RES to become its outcomes and what is best?” Then it goes away. implementation group and which will now, as we go There is a small minority, but the majority of players forward, probably become part of the economic say, “This is it. Let’s focus on outcomes.” development and skills board that will underpin the regional partnership—we have got a much clearer focus through looking at sustainable productivity on Q160 Mr Smith: I was not suggesting it was simply what not only drives growth, but spreads it. a question of boundaries—whatever the boundaries are, they are as they are—but do you think that the question of perception of identity and the extent of Q158 Mr Smith: Thank you. On this focus on world- common purpose and ability to learn from one class performance, what other world-class regions another and collaborate for collective success has do you benchmark yourselves against? How are we been informed by the regional economic structures? doing? Pam Alexander: We have benchmarked ourselves Jonathan Shaw: I do not meet so many people who against a group of regions around the world, most of say, “I am a man” or “I am a woman of the South which are not capital cities but are closely linked to East” as someone from the North East might say,for the capital cities of their countries. We had an example. It is a much smaller area and it has more evidence base that we developed in order to justify of a natural regional identity. Leaving that aside, in those selections—places such as silicon valley in terms of the evolution of the RDA, and what that California, Shanghai in China and the heartlands of has meant in terms of co-operation between that Europe. In terms of the international league tables, body and the local authorities and business, I think we are slipping down them, and we are slipping that it has been informed. It’s a funny old chunk but down them for two reasons: first, the emerging that chunk is recognisable by both organisations economies are moving up them extremely fast with that I have referred to. So that in itself means that rates of growth that are very dramatic indeed, and there is a better identity and one that lends itself to secondly, the emerging economies of Europe have co-operation. themselves been oVering more challenge than in the Pam Alexander: Can I give an example? Out of the past. Also, we need to ensure that we get an last regional economic strategy came the idea of increasing return on investment and we need to be Diamonds for Investment and Growth, and that has sure that we are doing the things that will keep our been taken up in the regional spatial strategy as well. businesses at the forefront of global economies. We We are now working very much together to create an are reviewing the sectors in the South East that will implementation plan focused on those city-based really drive that growth and ensure that we are areas, which will deliver more than half the growth leading world-class development, whether it is in that the region is seeking. We led some work with the environmental technologies, aerospace or the Diamonds to look at their ecological footprint. All creative industries, to see what our businesses need the political leadership of all eight diamonds to support them in those markets. committed to stabilising their ecological footprint a year earlier than the regional economic strategy Q159 Mr Smith: Thank you. This is a question to the proposed. I do not think that that would ever have Minister. Is the question of the definition of the happened without the framework of intellectual identity of the South East still an issue or a problem, discussion of the evidence base followed by policy and do you think the regional economic strategies development, which the RES provided. Nor do I are adding any value? think that it would have happened without some sort Jonathan Shaw: As I said earlier, there will be parts of ongoing process of monitoring and evaluation of the region where you could make a reasonable that enabled them to come together and say, “Well, argument that it should be in the eastern region or it unless we do something together, this will not should be in the south-west or indeed in London. happen”. It would not have happened without the But the boundaries have been around for a long time tools either. The mechanism that we produced is a now—not boundaries put in by this Government but toolkit that says, “Okay, here are some easy ways of by the previous Government when the Government reducing your ecological footprint.” All of us as oYces were set up. I think that most organisations citizens, let alone as members of organisations, have now, particularly since the advent of the RDA, have been crying out for that. That is an example of where mirrored themselves around those boundaries, not we have achieved critical mass and policy focus at just here in the South East but elsewhere in the the regional level, but we are not doing it as the country. It is far better for the RES, for the economy South East. We are doing it as eight places that have generally, if you’ve got the public, private and real identity in their own terms. Processed: 09-09-2009 16:52:38 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG3
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Q161 Mr Smith: Thank you. I have another question engage the voice of business, and other stakeholders for you, Pam. In Brighton, the view was put to us as well”. I would be interested to hear the comments that, whereas the process for drawing up the South of SEEDA and the Minister particularly, and also of East plan had been about engagement, the process the Government oYce on that view described by Mr for drawing up the regional economic strategy was McNally. more about consultation. Do you recognise and Pam Alexander: You will remember that my agree with that view? How have you changed, or are chairman, when we put our last piece of evidence you changing, how you talk with, and listen to, before you, set out the discussions on the sub- interested parties since drawing up the 2006 RES? national review as they went forward, and made Pam Alexander: I have read what Ross McNally said clear our position, which was that we would have on behalf of the Chambers of Commerce, and I must liked a lot more stakeholder engagement in the admit to being quite surprised. We started the 2006 regional partnership board as we go forward than RES process, back in July 2005, with some extremely there has been. That has been a process of open debates. More than 2,000 people were involved discussion, negotiation and agreement with the across the 15 months that it took to create the RES, South East councils—as it should be as a which of course is substantially less than it takes to partnership. We have got to where we have got to on create a regional spatial strategy. Those were very that, which is two stakeholder representatives on the open debates. We had very eminent people come and strategy board. That won’t be the end of it, and it will talk about where the global markets were going and certainly not be the end of it as far as SEEDA is what sort of problems there were likely to be if we concerned. We have a number of committees that have income polarisations, as we believed we were engage with business separately from, indeed, the seeing in the region, with many highly paid and low- paid people, but very little in the middle. Peter Hall South East Economic Delivery Council itself, which came to talk about the development of cities and the I am sure the Minister will talk about. We want very impact that they might have. Sustainability was much to make sure that business’s voice is heard discussed very openly. We had workshops and loud and clear. We see our own board members as working discussions, at which there was no SEEDA representing that voice on the partnership board, the prospectus at all. We were simply having very open strategy group and the delivery boards, but we very debates. Then as we went forward with the steering much want to make sure that it is kept to the group—that was one of the reasons for creating the forefront, and we will find ways of doing that. group in the first place—some key players in the Jonathan Shaw: It is interesting to note those people region took those debates and shaped them into who champion the regional assembly. I wonder what some propositions that we could then consult upon. their original words were when it was first set up. In my view, we went from very broad engagement to, Perhaps they were not quite as eVusive as they now of course, consultation on some propositions that are since its demise. If we believe in devolution and then became a framework that I think was both clear local decision making, we cannot have a Whitehall and targeted, which is what we were aiming to do. blueprint for the way that local authorities and local Given that we needed to do all that in not much more business engage. It must be one that they develop than a year, I think it was a sensible process. I think themselves. What we did do—it is part of my role— the sort of process that we are looking for in the in terms of some of the SNR implementation was to future will be very diVerent, because the integrated obtain some changes. I spoke to local authorities regional strategy will have the same statutory and businesses, and there is now a statutory duty to function as the regional spatial strategy, and that engage with the business community about requires it to have a very diVerent process that will developments. That is there. As Pam said, there is inevitably take longer and be very much more the strategy board, and that is only one of many formalised. My worry will be that unless we get a mix diVerent forums in which there is engagement. The of the two, it will take as long as the regional spatial statutory duty is important. That is one that I strategy has, which is really quite diYcult for any recommended to the Secretary of State arising from sort of dynamic process of engagement. discussions in the South East. You could say that might have happened anyway, but I am not so sure Q162 David Lepper: Mr McNally made another it would if there had not been a politician in place point when he answered our questions, on behalf of having that close contact. the chamber of commerce, a couple of weeks ago. He said that, although the RDA is supposed to be business led, his organisation thought that its Q163 Chairman: Jonathan, may I interject? I hear members were losing the voice that they thought that what you are saying, but under the previous they had in the past in relation to aVecting decision arrangements, there was a formal process for making, particularly with the demise of the regional engaging stakeholders that included the business assembly.I am sure that you have read the transcript. community, the trade unions, and the third sector. He actually said that:“the opportunity to directly By definition, if there are only two seats now on the influence and have a vote at the table has gone. We board, one of those will be missed out. Assuming will live with that, but what we would like is a that you have the trade unions and the business protocol, a template if you like, agreed and community there—two parts of commerce—the formulated at regional level, whereby local third sector is not being consulted any more. 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6 July 2009 Government Office for the South East and SEEDA consult—but on the face of it at least, the evidence your real priorities and is there a danger that issues suggests that those three groups will not be consulted with regard to the protection of the environment as well as they used to be consulted. might be squeezed out of bed, so to speak? Jonathan Shaw: The stakeholder group nominates Pam Alexander: As I said earlier, in relation to many the two people to sit on the board. It is a smaller of the very important elements of the RES, our job board, and there is a type of focus. Is it what it was? has been to get other agencies working to achieve No, it isn’t, but it is certainly an improvement on the them. I see that as something that was always about original decisions taken by local authority leaders. not intervening ourselves, but making sure that we We were able to influence that and shape the debate, built the capacity in other organisations and and this is what we have arrived at. I know that it agencies, and the focus, direction and commitment, isn’t seen as being as good as what went before, but to make sure that they delivered on those agendas if we believe in devolution and local areas developing and that, in our agendas, we took them very much their own consultative processes, we can’t have tight into account, so that we were looking at sustainable prescription from the centre. The relationship varies growth. Yes, I think you are right and I think it is from region to region, but as I said, there is a generally known that I am about to launch a very statutory right to consult and engage, and this is not major restructuring of the agency, which will not be the only forum in which there is discussion. It is an about trimming bits oV everything. It will be about important one, but as Pam said, the South East refocusing very clearly on those things that will Economic Delivery Council has business enable us to have the economic research and analysis representatives, trade union representatives, local to underpin where we make our own interventions authority representatives, and public sector delivery and also to contribute to the spatial and economic bodies. That is one of many. planning that will underpin the work of the regional Colin Byrne: I can add to that from practical partnership board. We did refocus a substantial experience, because I had the dubious pleasure of amount of our attention and financing from last sitting on the various committees of the regional summer as it became clear that businesses needed assembly as they drew up the South East plan for diVerent things and, in listening to what businesses about five years and I saw the engagement in said was needed, we have refocused our resources practice. Clearly, there was a level at which political accordingly. For example, we have brought Business decisions were made, which was generally the South Link to focus on free health checks and 11,000 East assembly, where everybody had a vote. At the businesses have had those since last October. We time, the key debate was about housing numbers, asked Finance South East to create new funds that and of course the business sector said, “Look, we’re would enable businesses that could not get finance to disfranchised here,” because all the local authorities access finance to enable them to continue to grow. gathered together and plumped for a series of That has been very successful and has now been housing numbers that were much lower than overtaken by the work that the Government are business thought was appropriate and, indeed, the doing to create new venture capital funds and also Government thought was appropriate. But where loan guarantees. So we have already done some the majority of the work went on was in the technical reprioritising. We need to make a really major shift working groups that sat some way below that big to focus on those sectors and businesses that will assembly meeting. It covered the 95% of issues that bring us out of the upturn, whether it’s in the areas were not politically contentious. The business of the region which have both university and private representatives, voluntary sectors and business focus on really world-class, collaborative environmental partners played a very important role research, or whether it’s those parts of the region— in thrashing out those issues at that level. The [Interruption.] expectation is that, under the new arrangements, Jonathan Shaw: Has someone put the kettle on? there will still be that engagement with the business Pam Alexander:—whether it’s those parts of the sector and the environmental sector to thrash out region that are looking to create new opportunities. those issues. It is an important point, when it comes So, yes. And it won’t be, as I think I read somewhere to the actual decision making, that there is a link in one of the transcripts, something called SEEDA- back into the democratic role. That is why the lite, which was a bit of paying for everything. It will partnership board is made up of leaders of local be about really defining where our focus is. authorities alongside the RDA. I think that is probably appropriate. But at the working level, there will be enormous amounts of engagement that will Q165 Gwyn Prosser: In terms of that help, you’ve be similar to the engagement that took place in the told us about the input into helping businesses. production of the South East plan. What is the output? Are you able to tell us how successful or otherwise those eVorts have been? Have you got any benchmarks or results to show Q164 Gwyn Prosser: We have talked about priorities us yet? already,but within the priorities of the RDA, is it not Pam Alexander: The most recent, of course, is the a fact that with the recession we should be calling for impact evaluation framework, which gave us some more intervention and more work from the RDA, quite detailed evidence on the impact of our diVerent and also, at the same time, your remit is expanding interventions. As I said earlier, we’re going to be in terms of planning, spatial issues and so on? Going focusing on those which have had the greatest beyond the comments you have made so far, Pam, is return. Overall, SEEDA was seen to have produced there any more paring down you need to do to meet a return of well over £5 for every £1 we’ve invested, Processed: 09-09-2009 16:52:38 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG3
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6 July 2009 Government Office for the South East and SEEDA with a substantial range, up to over £11. That was in Q167 Gwyn Prosser: I am grateful for that, for your the business-focused interventions. We will be highly successful visit to Dover and for last week’s learning lessons from that. One of the things that I Dover ministerial summit, which everyone is still think we’d want to take very carefully into account talking about. My last rather cheeky question, which is that that was very much focused on creation of I did not compose myself, reads, do you think that jobs, and there is other work that we do which may SEEDA is focusing too much on the needs of places take longer: for example, investment in skills may like Chatham and not enough on business need to be a longer-term investment. Certainly, development across the region? investment in physical regeneration, as I think each Jonathan Shaw: Absolutely not, I would say that it of you know from your own constituencies, is a long- hopes enough for Chatham. Where the RDA has term business. We mustn’t be discouraged by the fact been able to concentrate its eVorts has been up to that results are not instant. I think if we look to the some of the partners. The RDA cannot do long-term returns on investment, we will see everything on its own. It requires local authorities substantial ones, such as in Hastings, where we’ve and business, and co-operation from other public already seen, over the first five or six years of that delivery bodies. Where you see success happening, programme, an increase in the average wage in you will see a cemented partnership. What you have Hastings and Bexhill from 69% of the regional just referred to, Gwyn, and the work you are doing average to well over 80% of the regional average. in Dover is an example of organisations coming together on the same page and having a clear focus. That’s tangible for those people. We’ve seen rents Where that has had some time to bed in, the fruits are double in Hastings due to the new work that’s been evident. Pam has referred to Hastings, which is a done to create not just new floor space but new good example. There are others around the region. businesses and new skills, so I think that there is They cannot be in every place. Some of it is about some real, tangible evidence on the ground of partners and other bodies making some of the impact, and what we’re going to be doing is majoring running as well. on that in the future.
Q168 Chairman: I think that we will try to make a bit Q166 Gwyn Prosser: How do you feel about your of quick progress because I want to keep you for particular RDA, SEEDA, having the smallest only another quarter of an hour. Given what you budget of all the RDAs? said, Pam, about the need to prioritise, one of the Pam Alexander: Well, obviously, I’d much rather it concerns I have been asking about in our sittings, as had a much bigger budget. At £20 per head for the I am sure you have seen in the transcript, is that there region that is the engine of the UK economy, I think are a number of business parks that do not have we could be investing a lot more. Having said that, businesses yet. There is a beautiful service business because we don’t have large budgets, we have to park on the edge of my and Gwyn’s constituencies invest the skills and time of our people, because called Betteshanger and another beautiful business that’s how we try to create capacity elsewhere. park called Eurokent in the centre of my That’s the point about getting other agencies and constituency that have no businesses. And yet, other organisations to work more eVectively incubator units, which you have also funded, are together. completely full. My question is, how are you deciding to make those sorts of investments? How Jonathan Shaw: Some of the work that the RDA long do you envisage it taking to fill them up? What does that isn’t always easy to quantify and to are we doing about making the little businesses that measure is the work that it does under the radar. One go into those incubators grow big enough to be able of the examples from the economic council has been to move out on to those business parks, as well as to bring the banks together. We’ve been able to pulling major inward investments in from overseas successfully do that—to get them in the same room to fill the business parks? with businesses—which is vital for them to Pam Alexander: That is absolutely part of the understand each other. Not least of all, they purpose. Taking the question more generally, it is challenge banks about delivering on what their absolutely crucial that in making investments like national leaders say that perhaps some of them feel that we are working with the business community isn’t always borne out at a local level. That’s an and the local authorities in any area to understand important bit of work that’s been undertaken, as the immediate objectives and the long-term well as the Enterprise Finance Guarantee Scheme, prospects. It would be true to say that looking to the under which I think in the region of £50 million has future, we will be looking to invest in business- been loaned to businesses. It is being the provider of critical infrastructure—those elements that really information, and also ensuring that companies take would be needed by business today. Hopefully we advantage of things like time to pay, which isn’t the can grow and find spaces for small endogenous most catchily named scheme but allows businesses businesses so that they can move on. That critical to delay their tax payments to the Government. To move-on stage is vital. We also need to have the sort take our region, 24,550 businesses have had a delay of world-class business space that we can attract on their tax returns, and that’s kept £432 million in businesses to from around the world, as you have the South East economy. Mr Prosser’s county has suggested. That will not always happen instantly,but £62 million alone. That’s a huge sum of money, we need to have enough to produce them, which you’ve delivered on your own, of course. particularly in those parts of the region that do not Processed: 09-09-2009 16:52:38 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG3
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6 July 2009 Government Office for the South East and SEEDA automatically have an attractive oVer. We do not Q171 Mr Smith: Sorry to interrupt, but who will be have any diYculty in attracting certain businesses to employing the spatial planning and environmental the sectors and clusters that already exist in parts of people while they are collaborating with you in this the western side of the region, but we have to create virtual unit? those sectors and clusters of attractiveness in the Colin Byrne: Technically, they are employed by eastern side of the region. It is right that we should SEERA Ltd, which was a stand-alone body which try to do that and have tried to do it. What we need provided that service to the regional assembly, which to do is make sure that the business support lines are will now be providing that service to the partnership absolutely developed so that we can create routes to board—the joint local authority SEEDA board that the future both from our internal businesses and oversees this production of the strategy. The plan is external ones. I do not want there to be any places that SEEDA and the local authorities will recruit a where we have built something that will not be filled, director of this new virtual unit, who will be but I want us to recognise that regeneration is often responsible to a small executive board on which Pam a long-term business. Unless you take the first few will sit, along with Chris Williams, the chief steps, you will never create the tipping point that will executive of the Buckinghamshire authority, for the bring those businesses—perhaps with one or two local authorities. They will report into the strategy core businesses to cement the opportunity—to the board and the partnership board of the new places that currently do not have as much thriving arrangements for producing the strategy.Ultimately, business as we would like for the future. it’s for the partnership board to take the strategic decisions that will influence the direction that the strategy will go in, and the members of the team will Q169 Mr Smith: You touched on this earlier, Pam, in follow those strategic decisions. relation to restructuring given the changing role of Pam Alexander: Perhaps I should say this is already the RDA; how far do you have the staV with the happening. We’ve already had several meetings of skills and expertise in areas like spatial planning and the executive steering group which Chris and I chair the environment who you are clearly going to need jointly. We have already brought together our own when drawing up the single regional strategy? How teams within SEEDA with SEERA Ltd, which is are you planning to shift the balance of your staV reporting in a sense to the South East England between those with those sorts of skills as compared councils, but definitely working together with my with economic generation experience? staV to create the joint eVort. Also, we have the first Pam Alexander: I am trying to shift the balance of meeting of the regional partnership board later this the staV towards economic development and month. This is coming together, and that cohesion is business needs, but that is because we are able to already evident. work with others to achieve what is needed on the regional strategy. We will very much be working as a virtual unit with the staV who have been involved in Q172 Chairman: Before you go on, Andrew, may I the past with the regional assembly in creating the take you back to something I was asking about spatial strategy, so we’ll be putting together our earlier—consultation and stakeholders. experts in economic development with their experts Stakeholders such as businesses, trade unions and the third sector have said to us that under the old in spatial planning. We are not going to try to arrangements they had oYcer resource to help them duplicate or in any way double up; we’re going to formulate their ideas, but that oYcer resource has create a virtual team that is able to do both. There gone. If we can take SEERA Ltd and move it into will be new skills needed in there, I have no doubt, this new group reporting in the local council leaders and we’ll need to make sure that we develop them or, board, as you suggested, why can’t we also make if necessary, buy them in, but your reference to the sure that some oYcer resource is provided to those environment leads me to say that we will not try to stakeholders so they can continue to have their say? do everything ourselves. As I think I have said Colin Byrne: I believe that the oVer from SEEDA already this session, we really need to be working and local authority leaders is to give stakeholders with those who are the experts. Our job is to build some support and to provide them with the back-up the capacity and make the partnerships work by to make an input into the process. I believe that the bringing people together to lead on those areas, stakeholders are considering how they should make rather than by trying to become the experts in best use of that resource. everything ourselves. Jonathan Shaw: I agree.
Q170 Mr Smith: I take the logic of that approach. Q173 Mr Smith: Related, a follow-up question to the How will suYcient coherence to the whole process be Minister. Do you think that the way SEEDA’s ensured? Perhaps that is a question for the Minister performance is measured will need to be changed to as well. reflect the social and environmental considerations Pam Alexander: The process of regional planning? in the single regional strategy? Mr Smith: Yes. Jonathan Shaw: I think that we will have to look at Colin Byrne: May I answer that? Pam has mentioned how we measure the RDA. If it is changing, we need the virtual unit, which brings together the planners to look at what value it is adding—gross value who used to work in the South East England added. We need to be sure that it is outcome focused Regional Assembly Ltd alongside experts in and that it has a good rapport with stakeholders. We SEEDA— can measure certain things—gross value added, and Processed: 09-09-2009 16:52:38 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG3
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6 July 2009 Government Office for the South East and SEEDA so on—but it is reputation as well. That stems from the investment that we need, and through which we its ability to be able to use its resource and expertise work together to deliver the investment that we to drive forward on the priorities and help diVerent need—whether it is for the growth of the appropriate areas to come together, to realise their ambitions, housing for the region, the transport infrastructure, whether in a sub-regional organisation like PUSH, the skills infrastructure, or the business support. the other MAA that is being developed in north That is how we will measure whether the work on the Kent, or in assisting with the ambitions in Dover. As integrated regional strategy is successful, and by we see the regional strategy emerge, it is important whether it creates a framework that enables us to for us to have that wider debate within the region. drive sustainable economic growth and a better What do we want from it? How are we going to quality of life through the region. measure that? It is not just ourselves and Colin Byrne: Can I just add that a single regional politicians—be they local or national—but it is strategy will be the judgment of whether we have important that the business community and other sustainable development right in the region? Public stakeholders have an input into that debate as well. examinations of the drafts of that will be led by the planning inspectors. They will form a judgment on It will most certainly be diVerent. Quite how it will whether, as a result of the engagement processes that land will be determined in our region. have gone on, we have got it right. They will also Pam Alexander: May I add that I think that in some come to a judgment about how eVective the ways that diVerence will be building on what we consultation and engagement processes have been, currently have? We will increasingly try to measure as part of that process. So, at a point in the cycle of the outcomes that we deliver in terms of gross value producing it, we will have some quite clear evidence added, as the impact evaluation framework did. But as to how we have gone about producing that the plans that we produce are not there just as pieces strategy. of paper. Clearly, as a statutory framework, which Chairman: I am quite content to wind things up now, then cascades through the planning system, it is unless anyone is desperate to say anything else? crucial that it is an eVective plan that is owned by the Thank you all for coming. This has been quite a region. As the Minister says, that is absolutely marathon session for you. I am very grateful and we something that people believe in. We also need to will discuss our report with you at some point. provide the framework through which we argue for Jonathan Shaw: We look forward to receiving it. Processed: 21-09-2009 21:12:35 Page Layout: COENEW [SO] PPSysB Job: 434938 Unit: PAG4
South East Regional Committee: Evidence Ev 45 Written evidence
Memorandum submitted by Association of South East Colleges (AOSEC) (SE 01) About AOSEC Association of South East Colleges (AOSEC) represents 59 Further Education (FE) Colleges in the South East of England. Member colleges include General Further Education Colleges, Sixth Form Colleges, Tertiary Colleges and Specialist Colleges (eg land-based). AOSEC’s Chief Executive sits on the Regional Assembly (SEERA) which scrutinises the Regional Development Agency (SEEDA). In addition AOSEC is one of the regional partner organisations with responsibility for delivering some of the targets identified in the Regional Economic Strategy. AOSEC is aYliated to the Association of Colleges.
Summary of theKeyPoints in AOSEC’sResponse — The South East England Development Agency (SEEDA) has a valuable role to play in providing expertise to deliver a holistic response to the region’s planning needs such as for housing, transport and the economy. — The recession is impacting on businesses and Further Education colleges in the South East substantially. Many businesses are seeking to take advantage of the Government’s Train to Gain service to up-skill their employees, however a funding cap on the budget has meant that FE colleges are not able to respond to the high business demand. Likewise a short-fall in the funding for the new FE college building programme risks undermining the plans to deliver world-class facilities for young people and adults to gain the skills which the region’s businesses and economy require. This also impacts significantly on the construction industry. — AOSEC welcomes plans to increase local accountability and the introduction of Local Authority Leaders’ Boards in the Local Democracy, Economic Development and Construction Bill. However, there needs to be a mechanism in place to ensure that the expertise of Social and Economic Partners can robustly feed into the planning process, particularly for further education and skills, which are at the centre of the region’s economic and sustainable development strategy.
1. The role, responsibilities and accountability of SEEDA 1.1 The South East has a three-tier economy with inner, rural and coastal variation. AOSEC considers that the Regional Development Agency, SEEDA, is well-placed to make decisions which require a regional overview, such as in policies relating to the housing, education and transport needs of the South East. An example from Further Education of where this overview is worthwhile is with the region’s four agricultural colleges which serve the South East as a whole, rather than just a local area. 1.2 SEEDA also has a useful role to play in targeting market failure within the region. It has been instrumental in bringing about education-led regeneration projects, such as at Hastings where SEEDA supported Sussex Coast College (formerly Hastings College) with its new build, resulting in £120m being invested by central Government. 1.3 In addition, SEEDA has the regional expertise to pull together the varying requirements of the sub- regions and provide useful monitoring of plans and statistical information. 1.4 In terms of accountability, AOSEC (alongside other Social and Economic Partners) has sat on the Regional Assembly Committee which scrutinises SEEDA. This provides an invaluable opportunity to ensure that the views of the FE sector (which is at the heart of many of the region’s economic and sustainable development plans) are made clear to policy makers. However, as a result of the Sub-National Review, the Regional Assembly is now dissolved. The stakeholder partners brought valuable experience and a place in the new structure is being sought. 1.5 AOSEC welcomes plans to make Regional Development Agencies more democratically accountable via Local Authorities which will improve transparency. However, it would emphasise the value of keeping Social and Economic Partners to input into the RDA accountability process to ensure that the regional expertise and perspectives (such as for education) are retained, which Local Authorities are less likely to have. AOSEC notes that Further Education colleges tend to work sub-regionally with a strong steer from the regional Learning and Skills Council (LSC). As the LSC is being discontinued, there needs to be a structure in place to maintain this regional and sub-regional educational perspective. 1.6 AOSEC considers that SEEDA, along with other RDAs, also needs to remain accountable to Parliament through its sponsoring department.
2. The process by which the RES was drawn up and the level of involvement of regional stakeholders 2.1 Further Education, through AOSEC, has been fully involved through the development of the RES. It continues to be part of the monitoring and review processes and present at the stakeholder conferences. Processed: 21-09-2009 21:12:35 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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3. The eVectiveness of the RES for the South East in delivering against its targets including the degree to which the regeneration of areas of deprivation and the former coalfield areas has been successful 3.1 For Further Education, the priorities and influence of the Learning and Skills Council have been more significant at a local level.
4. The eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors such as manufacturing, service industries etc 4.1 AOSEC has been aware of various eVects on business as a whole across the South East. In particular, the recession has led to more organisations sending their employees to FE colleges for training and learning new skills. In the South East, there has been a massive take-up of people following courses under the Government’s Train to Gain service, which has resulted in the Train to Gain budget being depleted and Colleges no longer able to deliver the free training which they had initially marketed. 4.2 More specifically, AOSEC is conscious of the impact of the recession on the FE college sector and the construction industry. Many FE colleges in the region have been due to undertake extensive rebuilding programmes, but due to a short-fall in the funding by the Learning and Skills Council, these plans and the construction contracts have been unable to progress. This will also impact businesses in general as the new college building programme is necessary to provide the best possible facilities for young people and adults to learn the skills which the region’s economy and local businesses will need in the future.
5. The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of SEEDA 5.1 AOSEC welcomes plans to improve local accountability. FE colleges, universities and Local Authorities all have a vital role to play in strengthening local communities and need to be entrusted with more control to respond to local needs. As the Learning and Skills Council (LSC) will cease to exist in 2010, and the regional structure of the future Skills Funding Agency, Young People’s Learning Agency and National Apprenticeship Service has yet to be clarified, AOSEC proposes that FE colleges (instead of the LSC) should be included in the list of organisations to be consulted directly, to ensure that the voice of the FE sector is understood at regional level. 5.2 AOSEC supports the introduction of Local Authority Leaders’ Boards to increase local accountability. This democratic input should provide greater transparency to the work of the Regional Development Agency, thereby increasing the public’s perception of SEEDA and the Integrated Regional Strategy. However, AOSEC is also concerned that much of the expertise from the Social and Economic Partners on the Regional Assembly would be lost in the new arrangements. AOSEC would suggest that there needs to be a mechanism in place to ensure that Social and Economic Partners, such as Further Education and Higher Education, can eVectively input into the economic and sustainable development plans for the South East.
6. The role of other Government agencies such as the Government OYce for the South East, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES 7. How eVective initiatives such as Business Link are being in assisting businesses in the current climate, including helping them to gain access to funding both from Government funding streams and through the banking system 7.1 AOSEC would again highlight the point made above (section 4) that in the South East there has been tremendous demand for training under the Government’s flagship Train to Gain Service (and funding stream). FE Colleges have now reached the funding cap and are no longer able to respond to business demand. AOSEC strongly recommends that this funding stream be increased to allow colleges to deliver the training that businesses require to pull through this recession and emerge well-placed in the future.
Memorandum submitted by the Campaign for the Protection of Rural England (CPRE) (SE 02) Summary CPRE South East understands and generally welcomes the purpose of SEEDA. We continue to have concerns however that SEEDA’s remit, and its preferred indicators of success are biased towards a narrow definition of economic growth, rather than using broader measures of sustainability. We are concerned also that the changes proposed by the Local Democracy, Economic Development and Construction Bill (LDEDC Bill), which include giving the same body spatial planning powers and a remit for driving economic development, are a recipe for confusion. We regret the downgrading of partnership working, and the possible impact on bottom-up participation in the region. Processed: 21-09-2009 21:12:35 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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1. Background 1.1 CPRE South East welcomes the South East Regional Select Committee’s Inquiry into the work and eVectiveness of SEEDA and the RES. The Campaign to Protect Rural England exists to promote the beauty, tranquillity and diversity of rural England by encouraging the sustainable use of land and other natural resources in town and country. CPRE submitted comments on the original RES in 1999, as well as on all the subsequent reviews and implementation plans. CPRE has always welcomed the work of SEEDA, and recognised the need for a Regional Economic Strategy which places sustainable development at its core. 1.2 We are aware that the 1998 Act sets out the Regional Development Agencies’ statutory duty to contribute to the achievement of sustainable development in the UK where it is relevant. This is an important requirement that has been increasingly well addressed by SEEDA. Changes which we have welcomed include SEEDA’s use of a basket of indicators to measure growth, beyond GVA.CPRE recognises that GVA is important, and that other Quality of Life indicators can include measures of environmental capacity, and such aspects as tranquillity. Our concerns about the emerging changes to regional structures are that this element will be either lost or eroded, as the indicators of success under the changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill (LDEDC) are all narrow economic measures. 1.3 Under the LDEDC, the RDAs may be unable to address matters that do not directly contribute to economic growth. We are concerned about the dangers of narrowing the meaning of “sustainable economic development”. This could run counter to the concept of sustainability in its broader sense. “Sustainable economic development” could, of course, be interpreted as a broad expression that includes wider aspects of sustainable, and if so, this should be explicit. 1.4 We set out below our comments to the areas the Committee has indicated they are particularly interested in. We have also suggested some additional themes and issues which we consider relate to the Parliamentary Select Committee’s Inquiry into SEEDA and the RES, and are of direct concern to CPRE.
2. The role, responsibilities and accountability of SEEDA 2.1 SEEDA was given a clear base mandate to promote economic development and regeneration in the region, mainly through the RES. The RES was never seen as SEEDA’s own strategy, but that of the region itself. SEEDA’s work has been continually assessed through the Regional Assembly’s programme of regional scrutiny committees. The LDEDC Bill will implement the Government’s reforms to regional planning. Ahead of this Bill receiving Royal Assent regional structures have already begun to evolve. 2.2 SEEDA will now have to work with the new Partnership Board of local authority leaders in developing the new Regional Strategy. SEEDA will have to face a culture change and, critically, will have to acquire a new set of spatial planning skills to underpin its new role. The issue of accountability remains important and all meetings of the new regional boards need to be held in public. SEEDA may wish to consider the role of stakeholders in the process of strategy development.
3. The process by which the RES was drawn up and the level of involvement of regional stakeholders 3.1 CPRE South East considers that the RES consultation process could have been clearer and more democratic. The RES process was mainly developed through internet consultations. Hard copies of the consultation documents were often sparse, and enquirers were referred to the website. This has not always helped to stimulate a high level of responses or generate public interest. The consultation documents were never a draft of the next RES, and this led to confusion over how to respond. Rather than “drafts”, they were discussion papers. Accompanying documents, such as the Economic Profile were substantial and thought provoking documents, yet it is not clear how they related to each other. The status of the Chairman’s introduction, however crisp and powerful, was never clear and many of its welcome sentiments were not reflected in the subsequent text. 3.2 The relationship to sub regional priorities was also unclear. If these are merely supplied by others, as appears to be the case with the Environmental Initiatives, then they must fit in with the overall strategy. Another puzzle is the role of the Action Plans, which under the first RES were largely impenetrable documents. A better explanation of the whole process was needed.
4. The eVectiveness of the RES for the South East in delivering against its targets 4.1 The South East region plays a critical role in shaping the future of this country, the challenge is to do this in a way that is sustainable within the region and which recognises the role of other regions. Our publication Even Regions, Greener Growth, (CPRE, February 2002) dealt with this question by oVering up the concept of “discerning development”. This would allow the less prosperous regions to “catch up” economically, and, if harnessed to urban renaissance, may also help to relieve pressure and congestion in the wider South East. 4.2 The SEEDA Corporate Plan targets are only one measure to be considered when assessing the eVectiveness of the RES. The RES is a partner-approved, rather than a single corporate strategy. The RES has produced innovative principles to promote development. The concept of Smart Growth, with its emphasis on innovation and creativity and its focus on carbon footprints is the most sustainable approach Processed: 21-09-2009 21:12:35 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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to measuring development. However, its “drivers of prosperity” will falter without addressing the challenges posed by both sustainability and the challenge of global pressures. Challenges for the RES include the need to promote economic growth which is sustainable, and therefore consistent with the principles set out in the Government’s Sustainable Development Strategy. 4.3 In line with the Sustainable Development Strategy the key challenges of sustainable “prosperity” should include references to rural economies, and the importance of a healthy region. We support the inclusion of climate change and energy as key issues in the RES, as well as natural resource protection and environmental enhancement. These factors are important in determining delivery against objectives. 4.4 The impact of the Regional Economic Strategy has been considerable. It is accepted that the RES is primarily an economic instrument; this, however, does not preclude assessing and making provision for a range of other factors that are an essential support to economic success. The relationship of the RES to RSS has long been of concern. The creation of a single Regional Strategy by the LDEDC Bill will help integrate spatial and economic planning, but economic concerns should not be seen as the overriding priority for regional planning in the future. 4.5 The role of the “Greater South East” needs to be more clearly set out in the RES and successor documents, as well as the interrelationship of the region to London; the South East is no longer a rural hinterland, but this is not always apparent within Government policy. 4.6 The RES has not always been consistent with the South East Plan and this has caused confusion in the region. The RES should not, for example, be promoting levels of growth that are inconsistent with the South East Plan.
5. The eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors such as manufacturing, service industries 5.1 The economic downturn is having a devastating eVect on businesses in the region, with a marked slowdown in the housing market and other sectors, although some areas and sectors remain active for now. More broadly, we have shared with SEEDA the view that the quality of the countryside and the urban environment are critical factors in regional economic success. This means a clearer focus on using brown field land for all kinds of economic development, such as factories, oYces and warehouses. The cultural, historic and natural assets of the region are easily threatened by inappropriate development, and incidences of urban decline and dereliction will inevitably undermine regional prosperity in the longer term. We are particularly concerned that, in the current climate, the search for growth and development should not come at the expense of the countryside—the brown field targets must remain in place. 5.2 CPRE is strongly of the view that new businesses should be supported and encouraged. Rural business and genuine diversification should receive support in greater measure. Overall, sustaining existing and new businesses must be preferable to stimulating outside investment. SEEDA has a potentially unique role in this, and its scope and coverage should be clarified.
6. The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of SEEDA 6.1 The LDEDC Bill has led to the demise of the Regional Assembly, and to the down-grading of partnership working. The partnership approach had spread across a wide range of structures, and had endured for a decade. An essential element lost in the partnership approach is the involvement of stakeholders. The new Partnership Board proposed for the South East is an amalgam of SEEDA Board members and Council Leaders. There is no room for stakeholders in decision-making any more, as there was with the Assembly and with SEEDA committees and advisory groups. The involvement of stakeholders in task and finish groups or in technical working parties is a poor substitute for direct or closer level engagement. This diminution of engagement will have a detrimental eVect on the region, insofar as it will lose many levels of understanding as well as coherence and legitimacy. 6.2 Although SEEDA has begun to make changes in recognition of its new role in regional planning they will need to continue to evolve. Land use planning must place equal weight on environmental, economic and social issues and this will require a further shift in thinking. SEEDA was established to be economically focused and business-led, but this cannot continue to be the case if it is to successfully undertake this vital role in regional planning. We are concerned about the propriety of giving the same body spatial planning powers and a narrow economic development remit, without receiving reassurances that checks and balances will be in place. 6.3 The development of the new regional strategy must fully involve local communities and stakeholders and this cannot be done purely through web-based consultation. SEEDA will need to consider carefully how best they can consult people and work closely with the Leaders’ Board. There is a need for more transparency as the new Boards also have a planning remit. There is a fundamental need to have all full meetings in public, following the tradition and practice of local authorities. 6.4 CPRE considers that SEEDA should primarily adopt a strategic role, allowing other partners and agencies to deliver the agreed objectives of the RES. SEEDA should essentially drive the strategy, monitor performance and help others, including identified key partners, to deliver. SEEDA can also help by Processed: 21-09-2009 21:12:35 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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facilitating partnerships. Project initiation is also beneficial, particularly where these act as demonstration projects, to encourage others into an emerging market such as renewable energy.Monitoring and publicising knowledge transfer should be seen as an essential and budgeted part of SEEDA activities.
7. The role of other Government agencies such as the Government OYce for the South East, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES 7.1 With the dissolution of the Regional Assembly the only remaining partners with a real overview of the region are GOSE and SEEDA. The new Leader’s Board will have to acquire a similar perspective. It is important that the Government OYce seeks to create a clear model of engagement. This should cover business, communities and other stakeholders, allowing the diversity of the region to inform its work. There is scope to improve the current model of “stakeholder engagement” and to benefit from the knowledge and perspectives that organisations like CPRE can contribute. Possibly a shared approach with SEEDA to regional engagement would provide a much more valuable and robust approach than the current model. 7.2 The Government OYce is an ideal focus for regional intelligence gathering and would add real value if it could bring together the expertise of organisations with essential knowledge of the region. 7.3 CPRE will continue to co-operate and champion activities in our areas of key interest. We are pleased to work with SEEDA, and had active representation on the SEEDA Sustainable Development Committee, on a partnership basis. This committee went into abeyance with the departure of its chairman. It was a useful forum showing SEEDA’s close involvement with these issues, and should be reconvened. We will support SEEDA in its sustainability objectives and would be pleased to help facilitate partnerships with our branches, as appropriate. Our regional group co-ordinates eight county based branches. Many of these would be able to help deliver agreed sustainability initiatives in their areas. We would expect such initiatives to help encourage a vibrant countryside and environment.
8. Other Key Challenges The following paragraphs highlight some of our concerns about the scope and coverage of the Regional Economic Strategy: 8.1 Transport Infrastructure — The RES should align itself with the wide ranging consideration of transport policy over recent years. This includes the Regional Transport Strategy of 2004, and the revision in the draft South East Plan. The work of the Regional Transport Board in defining strategic priorities is innovative, and should be supported by the RES. — The RES should develop policies to reduce travel-to-work time, and to promote greater sustainability and self-containment in all future developments. 8.2. Sub Regions in the RES — Overall, the strategy needs a stronger urban emphasis for future development; appropriate levels of rural development, and the addressing of intra-regional economic and social disparities. The RES should support continued economic growth in ways that minimise pressures on land and labour resources; as well as protection and enhancement of key environmental, cultural and historic assets. — The defined Economic Areas in the South East need to relate better to the South East Plan. The spatial emphasis appears to coincide, but has been simplified. — The suggested Diamonds for development, such as Gatwick, should complement, and relate well to the rural fringes, as well as the “string of pearls” along the coast. 8.3. Rural Economy and Communities — Declining services and deprivation in rural areas remains a problem, as well as homelessness and access to aVordable housing. Rural businesses are increasingly lifestyle enterprises, and the attraction of country living is important. — There is a need to continue to foster the local food sector, including infrastructure, downstream to supply chains, but also upstream to link supply chains to local landscapes. Support for the successor Rural Board and Rural Forum is vital to help facilitate and monitor developments. — Rural development should focus on Smart Growth, and development that supports rather than detracts from local assets, including landscape and tranquillity. 8.4. Building Sustainable Communities — Prosperity and quality of life should be seen as working together. Similarly, the inequalities of the region need to be fully addressed in SEEDA programmes. — The value of culture and heritage in binding communities should not be overlooked. It should be seen as a positive force giving character and stability to communities, as well as providing continuity and adding value. Processed: 21-09-2009 21:12:35 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
Ev 50 South East Regional Committee: Evidence
— With many people now asked to live in higher density developments, there is a need to demonstrate high quality design, as the key to long term success. — The South East region has a vital role to play in health innovation and enterprise. This should also link to the environmental agenda.
Memorandum submitted by the Environment Agency (SE 03) Summary The Environment Agency has worked closely with the South East England Development Agency (SEEDA) on the development and delivery of the current version of the Regional Economic Strategy (RES), since its launch in 2005. Our role is to ensure that the environment is at the heart of economic development including the protection of air, land and water quality and the prudent use of natural resources. The current RES goes beyond the 1999 version and we believe makes positive contributions to pressing sustainability issues such as climate change, resource management and a reduction in the size of the region’s ecological footprint. It recognises sustainability at the heart of the Strategy, and acknowledges the principle that a good environment supports a prosperous economy. The real challenge has been to turn these aspirations into reality. The following points summarise our evidence: — We were closely involved in drafting the RES. The Environment Agency’s Regional Director is on the Steering Group. However we believe that the process of engagement might have been improved by wider partnership working. — The eVectiveness of the RES in delivering against its environmental targets is still under review. Action has centred on high profile projects whose outcomes have yet to be fully realised. Other mechanisms are needed to deliver transformational change such as identifying where partners’ day to day activities can contribute to delivery of the RES. — As SEEDA will be taking the lead on drafting the Regional Strategy it is important that they are able to take a broad overview of the planning process. — Businesses that actively manage their environmental impacts have not been exempt from the eVects of the current financial and economic situation, although access to credit has been improved for those businesses looking to invest in products and embrace eYciency measures. — It is crucial that delivery of the Sustainable Prosperity agenda is maintained and the pace of delivery increased. — The development of a new Regional Strategy, bringing together economic and spatial plans, will be an important mechanism to help the South East emerge from the economic downturn with a strong low-carbon economy. — We are ready to partner SEEDA to ensure that the Regional Strategy is ambitious but realistic, setting priorities that reflect regional pressures and enhance the region’s environment.
1. Introduction 1.1 The Environment Agency is the lead public organisation for protecting and improving the environment in England and Wales. 1.2 We welcome the opportunity to respond to the South East Select Committee’s inquiry into SEEDA and the Regional Economic Strategy.Our response is informed by our work at a regional and local level, and our direct involvement as a consultee and partner in the preparation and implementation of the Regional Economic Strategy. Our comments address areas identified by the Committee which we feel able to comment on.
2. The process by which the RES was drawn up and the level of involvement of regional stakeholders 2.1 The Environment Agency was represented on the RES Steering Group by our Regional Director. This gave us the opportunity to ensure that sustainability remained high on the agenda. 2.2 The format of the engagement process, while good, might have been enhanced by wider partnership working, rather than the iterative process of providing comments on drafts of key documents. 2.3 The process diVered from the development of the Regional Spatial Strategy (RSS), which used advisory groups to ensure partners had full engagement. We would advocate the use of this or a similar approach for the consultation on the Regional Strategy (RS). Processed: 21-09-2009 21:12:35 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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2.4 Greater engagement during the development of the RES could have led to better ownership of some of the key RES targets. For example, the RES water eYciency per capita consumption target of 135 l/h/day by 2016 was not agreed with water companies. Whilst both Southern and Thames Water now have adopted similar targets (albeit for 2030 and not 2016), this was in response to Defra aspirations and not the RES.
3. The eVectiveness of the RES for the South East in delivering against its targets including the degree to which the regeneration of areas of deprivation and the former coalfield areas has been successful 3.1 We contribute to delivery of four of the targets within the RES. These are associated with achieving the objective of Sustainable Prosperity and include Target 9—Physical Development and a Sustainable Built Environment, Target 11—Climate Change and Energy, Target 12—Sustainable Consumption and Production, Target 13—Natural Resources and the Environment.
3.2 Achievement of the RES targets relies heavily on partnerships forming to deliver projects and programmes of work. We are currently engaged with a number of high profile projects covering areas such as resource management, green infrastructure, low carbon business development and climate change. These are listed in Annex A.
3.3 While these projects will help to achieve some of the aims of the RES there is a need to increase the pace of delivery. In addition, other approaches will be required to achieve the breadth of transformational change that SEEDA aspires to such as creating a more water eYcient economy.
4. The eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors such as manufacturing, service industries etc 4.1 Our outline assessment of the eVect on the industry sectors that we regulate within the South East, indicates that it is the chemical, food and drink and paper sectors that are worst aVected.
4.2 At the same time, while credit from more traditional means has been squeezed, more loans have become available for “green businesses” or businesses that wish to upgrade their equipment to save energy and save money. For example, The Carbon Trust is providing interest free loans to small and medium enterprises, and a new UK scheme oVering subsidised loans to companies investing in green products was approved by the European commission on 27 February 2009 under EU state aid rules.
4.3 Additionally there is the potential for growth in the energy sector through the new build programme to establish new companies developing new “green technologies” which could provide professional/skilled jobs in the south east.
4.4 We feel the time is right to take practical action to help the region emerge from the economic downturn with a low carbon economy that is both more environmentally sensitive and more competitive. For example, the government have set a target for all new domestic developments to be carbon neutral by 2016. During this quiet time for the construction industry there is an opportunity to up-skill the sector in sustainable building techniques to aid the achievement of this carbon target and other environmental targets once construction picks up.
5. How will the changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of SEEDA 5.1 With SEEDA taking the lead on drafting the RS it is important that they are able to take a broad overview of the planning process.
5.2 In particular we will look to SEEDA to take a balanced approach to considering the content and policy direction of the RS—giving equal weight to environmental, economic and social considerations. Given the current climate there is a real threat that by focusing too closely on economic growth the region may miss the opportunity to emerge from the downturn with a greener more cutting edge economy that is both prosperous and competitive.
5.3 SEEDA must act to ensure that the reforms do not result in future policy and/or investment priorities that fail to protect the environment or maximise opportunities for delivering genuinely sustainable development.
5.4 SEEDA will need to be equipped with the necessary expertise to ensure that they can eVectively discharge their new planning responsibilities. These must not just “bolt on” but be embedded in their business plan and integrated throughout the entire organisation. Processed: 21-09-2009 21:12:35 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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6. The role of other Government agencies such as the Government OYce for the South East, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES. 6.1 Our role is to work alongside our partners and SEEDA in contributing to delivery against the targets set out in the RES Implementation Plan. We achieve this by carrying out our statutory duties and through the type of partnership working described in paragraph 3.2. 6.2 At a strategic level we monitor progress of the Implementation Plan through the RES Leadership Group. Our role on the group is to advise on influencing opportunities and to promote the environmental agenda. Our view is that the group, perhaps like the plan, remains very close to SEEDA and lacks wider regional representation. We would like to see it widened to draw in other partners. 6.3 We have taken the lead in setting out the environmental infrastructure needs across the South East for the coming decades. This covers water supply, water quality, waste, flood defence and biodiversity in particular. It is set against a background of our State of the Environment reporting, which contains the underpinning evidence for the delivery of a sustainable RES.
7. How eVective initiatives such as Business Link are being in assisting businesses in the current climate, including helping them to gain access to funding both from Government funding streams and through the banking system 7.1 Our involvement with Business Link has been through the local government sustainable business partnerships.
Annex A PARTNERSHIP PROJECTS THAT CONTRIBUTE TO THE RES Pathway toZeroWaste Partnership—SEEDA, Environment Agency and WRAP. A three year project that aims to create a demand for recycled materials and divert waste from landfill (Target 12).
SE GreenInfrastructureFramework andBuilding forNature Partnership—SEEDA, Environment Agency, Natural England, GOSE. A series of projects that promote the use of green infrastructure and sustainable construction techniques within new developments (Target 13).
EU PowerProject Partnership—SEEDA, Environment Agency. A European project that provides funding to support eco-innovations and “cleantech” businesses in the South East (Target 11).
ClimateSouthEastBusinessGroup Partnership—members of the Climate SE Partnership. A group tasked with developing a range of business initiatives that will increase resilience to climate change.
Memorandum submitted by HM Government (SE 04) Summary — The South East England Development Agency (SEEDA) is playing a key role as part of the Government’s response to the recession, as set out in the booklet “Real Help in the South East” published on 23 February 2009.1 This sets out how Britain is taking decisive action to come through the global economic crisis and explains the real help that is available now to families and businesses in the region, and where to find it. Announcements of additional support are ongoing, and the Budget announcement on 22 April will set out further measures. — The Regional Economic Strategy (RES) sets out the region’s strategic vision and its priorities and plans for achieving improved regional economic performance. The strategic vision of the South East RES is “to be a world class region achieving sustainable prosperity”. — Through its contributions to the development and delivery of the South East’s Regional Economic Strategy,SEEDA has a key role to play in supporting delivery of Public Service Agreements (PSAs) that impact on the economy at a regional and local level, particularly the Regional Economic Performance PSA.2 All of SEEDA’s interventions should be geared towards contributing to sustainable regional economic growth.
1 http://www.realhelpnow.gov.uk/pdf/southeast.pdf 2 Regional Economic Performance Public Service Agreement (REP PSA): Make sustainable improvements in the economic performance of all English regions and reduce the persistent gap in growth rates between the regions. Processed: 21-09-2009 21:12:35 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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— The Regional Development Agencies (RDAs) are making a real diVerence to the economy. An independent study by PricewaterhouseCoopers has shown that, overall, every pound spent by SEEDA over the period 2002–07 has created an average of £5.60 in value for the region. Jobs created with assistance from SEEDA have contributed £2,639m to the SE economy during the same period. The recent BERR Select Committee also noted strong support overall for RDAs, particularly in relation to their business focus.
— Implementation of the Review of Sub-National Economic Development and Regeneration (SNR) will strengthen SEEDA’s role, promoting more eVective joint working between SEEDA and local authorities in delivering a new Regional Strategy for the South East that integrates spatial and economic priorities to deliver an environment that enables sustainable economic growth.
The role, responsibilities and accountability of SEEDA 1. The Regional Development Agencies Act 19983 sets out the roles, responsibilities and accountability of England’s RDAs. Section 4(1) of the Act sets out the following purposes for each RDA, applying equally to both rural and urban areas:.
(i) to further the economic development and the regeneration of its area;
(ii) to promote business eYciency, investment and competitiveness in its area;
(iii) to promote employment in its area;
(iv) to enhance the development and application of skills relevant to employment in its area; and
(v) to contribute to the achievement of sustainable development in the United Kingdom where it is relevant to its area to do so.
2. Corporate Plans provide full details of how the RDAs will allocate their budgets to deliver progress in meeting the objectives set for the Agency by the region’s RES, and how this activity will contribute to the targets that the RDAs have been set.
3. RDAs are not the only contributors to the economic development agenda in their regions. Other Government agencies play a key role—for example the Learning and Skills Council (LSC) and Jobcentre Plus (JCP)—as well as local authorities and the third sector. But the private sector contribution is also hugely significant. By way of context, BERR’s Regional Competitiveness and State of the Regions Report (May 2008)4 shows that, between 1998 and 2004, total investment by UK and foreign owned companies in the South East region averaged £12.9 billion per annum. SEEDA’s budget between 19995 and 2004 averaged around £106 million per annum.
4. SEEDA is accountable nationally to Parliament through the Secretary of State for Business. Regionally, the organisation is accountable to its Board and through its annual public meeting to partners. Until recently, all RDAs were scrutinised by their Regional Assembly. The South East Regional Assembly dissolved in March 2009.
The process by which the RES was drawn up and the level of involvement of regional stakeholders 5. The RDA Act (1998) required the RDAs to develop a strategic vision for each of their regions set out in a Regional Economic Strategy (RES). Government issued statutory guidance (revised version 2005)6 to the RDAs on how they should draw up their RES. The guidance applied five criteria for developing sound economic strategies—evidence, analysis, consistency, realism, and uniqueness—to ensure that each RES would make a clear and eVective contribution to the REP PSA.7
6. The guidance recognises the RES as a document owned by the region and recommends alignment with other regional strategies including the Spatial Strategy and the Sustainable Development framework.
7. A report by the National Audit OYce in 20068 noted that the inclusiveness of the consultation process that accompanied the development of the 2006–16 South East RES attracted near unanimous praise from partners and stakeholders.
3 http://www.opsi.gov.uk/acts/acts1998/ukpga 19980045 en 1 4 http://stats.berr.gov.uk/sd/rci2008/index20080530.asp 5 First year that SEEDA received a budget. 6 2005 Guidance to RDAs on Regional Strategies—http://www.berr.gov.uk/files/file38984.pdf 7 Regional Economic Performance Public Service Agreement (REP PSA): Make sustainable improvements in the economic performance of all English regions and reduce the persistent gap in growth rates between the regions. 8 National Audit OYce—Independent Performance Assessment of the South East Development Agency 2006 http:// www.nao.gov.uk Processed: 21-09-2009 21:12:35 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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The role of other Government agencies such as the Government OYce for the South East, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES 8. As the representative of twelve central government Departments9 in the region, the role of the Government OYce for the South East (GOSE) is to promote the integration of Government policies and programmes at a regional and local level in a geographically sensitive way. GOSE supports 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). GOSE’s corporate plan for 2008–1110 explains how the OYce supports the region’s priority issues. 9. GOSE supports SEEDA in delivering the aims of the RES through membership of the RES Steering Group,11 the aim of which is to support delivery of the RES targets and implementation plan, ensuring widespread ownership of the agreed actions. In addition to SEEDA, a number of other statutory agencies have a role in supporting relevant aspects of the RES. GOSE provides a clear national policy steer and has played an important role in ensuring that the RES and its implementation plan set a clear framework for economic indicators in LAAs and MAAs. For example, the South Hampshire MAA12 is a key delivery vehicle for sub-regional economic priorities, reflecting eVective joint working between SEEDA and local authority partners under the auspices of PUSH (the Partnership for Urban South Hampshire).13 10. Half of the 14 RES targets are led by SEEDA with the other half led by other organisations, but all are delivered by a range of partners working together across the region. By way of illustration, the LSC, SEEDA, JCP and local authorities are the key regional delivery partners for implementation of RES target 6.14 Other stakeholders are involved through the Regional Skills for Productivity Alliance and associated networks. Local authorities have a particular role through “14-19 strategic partnerships” and Childrens’ Trusts for raising levels of aspiration and achievement for young people. GOSE supports delivery of this target by: — providing support to the Regional Minister’s work on employment and skills; — challenging and supporting the work of regional partners; — negotiating challenging employment and skills targets in LAAs, which are aligned with the RES;. — providing strategic direction to the European Social Fund Programme to ensure alignment with the RES; and — helping facilitate ongoing delivery as LSC functions transfer to Local Authorities, the Young People’s Learning Agency and the Skills Funding Agency.
The eVectiveness of the RES for the South East in delivering against its targets including the degree to which the regeneration of areas of deprivation and the former coalfield areas has been successful 11. It is for SEEDA to inform the Committee on the impact of the RES in delivering its targets. This response is intended to set that information into the wider context of Government policy on these issues. 12. Overall, the South East is the least deprived region in England on the measure of Indices of Deprivation (IOD) 2007.15 However, this masks considerable variation within the region. The IOD oVer a general overview of deprivation across a range of issues. IOD 2007 showed that 318 Lower Super Output Areas (LSOAs) in the South East lie within the lowest quintile16 nationally on the Index of Multiple Deprivation. The South East accounts for only 4.9% of the most deprived quintile of LSOAs in England, but nearly one third of the LSOAs in the least deprived quintile.17 13. Between the 2004 and 2007 Indices, the South East rankings shifted slightly towards the more deprived end of the scale with an increase of 47 (17%) in the number of LSOAs in the lowest quintile nationally.
9 Cabinet OYce; Communities and Local Government; 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. 10 http://www.gose.gov.uk/497648/docs/167404/GOSECorporatePlan FINALsmal1.pdf 11 Includes representatives from SEEDA, local authorities, GOSE, Environment Agency, Natural England, Regional Skills & Productivity Alliance, business groups, third sector, trades unions, Sustainable Futures Group, Forum for Sustainability and the Regional Housing and Transport Boards. 12 http://www.push.gov.uk/Publications and Documents/Publications/maa.aspx 13 Includes the 11 local authorities that make up PUSH; Transport for South Hampshire; partners in delivery of the PUSH Business Plan, including Job Centre Plus, Learning and Skills Council, Business Link and SEEDA. 14 Maximise the number of people ready for employment at all skill levels, and ensure they are continually equipped to progress the labour market: Regional Economic Strategy 2006—2016 Implementation Plan. 15 The Indices of Deprivation (IOD) includes the following measures of deprivation: — The Index of Multiple Deprivation (IMD 2007); — Income Deprivation AVecting Children Index 2007 (IDACI 2007); — Income Deprivation AVecting Older People Index 2007 (IDAOP 2007). 16 ie The bottom 20%. 17 ie The top 20%. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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14. As the map below shows, the most deprived areas in the South East lie on the south coast or in the major urban areas. It is however, noticeable that there are some more scattered pockets of deprivation generally in the region, including in rural areas, and often surrounded by relative aZuence.
SE Lower Super Output Areas in the 20% most deprived in England on the Index of Multiple Deprivation 2007
© Crown Copyright. All Rights Reserved. OS Licence No 100018986 Source: DCLG
15. For context, the physical and economic regeneration addressed through the RES should be considered alongside social regeneration. The impact of broader Government regeneration investment in the South East since 1999 is set out in Table 1.
Table 1 EXAMPLES OF THE BROADER REGENERATION INVESTMENT ACROSS THE SOUTH EAST SINCE 1999
Level of Geographic Funding Source Timescale Funding Coverage Objectives and Impact Neighbourhood 2001–08 £2 million Brighton & To target Community Safety; Renewal Fund Hove; Hastings; Education; Health; Environment/ Portsmouth; Housing; Employment and Southampton Enterprise in the most deprived areas of the South East. Portsmouth and Southampton only received funding until 2006 because IMD score improved suYciently. Working 2008–11 £7.6 million Thanet; Combatting deep seated Neighbourhood Hastings worklessness in most deprived Fund areas as identified by 2007 IMD. New Deal for 1999–2011 £96 million East Brighton; Resident-led initiative focussing Communities Thornhill on closing the deprivation gap in (Southampton) relation to Community Safety; Education; Health; Environment/ Housing; Employment and Enterprise. MORI data shows good improvement in positive perception of local area, crime prvention and education for adults although tangible broad Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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Level of Geographic Funding Source Timescale Funding Coverage Objectives and Impact improvements in health, worklessness and youth education attainment are less obvious. European 1997–99 £12 million Thanet Scheme designed to address Regional unemployment. 2,600 jobs Development created or safeguarded. Fund Obj 2 European 2000–06 £26 million Thant; Objective 2 is aimed at the Regional Hastings regeneration of areas of economic Development deprivation. It has created or Fund Obj 2 safeguarded over 2,000 gross jobs (1,700 in net terms) and 270 businesses Coalfields 2005–08 £396k Dover Key agency promoting social and Regeneration economic regeneration in former Trust coalfield areas. This includes initiatives helping people into work, supporting communities through helping find suitable training and employment. 65 local groups supported—many from voluntary/community sector. Rural 2007–13 £60 million South East Social and economic objectives. Development Now managed by SEEDa; Programme for expected to make a real England contribution to delivery of RES objectives in rural areas. European Social 2007–13 £190 million South East Programme focuses on reducing Fund workless ness among disadvantaged including those facing multiple barriers to work and developing a skilled and adaptable workforce.
16. Looking more broadly at the impact of the RDAs, PricewaterhouseCoopers (PwC) were commissioned by BERR in December 2007 to bring together the evidence on the economic impact of RDA spending.18 The study looks at the impact of £580 million spent by SEEDA and reviews 25 evaluations covering spend of nearly £470 million by SEEDA between 2002 and 2007. 17. The report concludes that there is credible evidence that all RDAs have generated regional economic benefits which exceed their costs and add value to their regions. Overall, the average return of RDA programmes is at least £4.50 for every £1 spent during the life of the RDAs’ programmes. While there are variations across programmes, generally business support programmes generate the highest economic impact relative to their cost; physical regeneration has significantly lower returns, particularly in the short to medium-term; and people and skills interventions also have lower returns- evaluation of the latter did not include productivity gains. At the regional level, PwC evidence to SEEDA shows that jobs created with assistance from SEEDA have contributed £2,639 million to the South East economy from 2002–07 and every £1 spent by SEEDA over this period has created an average of £5.60 in value for the region.
The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of SEEDA 18. 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. 19. 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.
18 www.berr.gov.uk/rdaevaluation. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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20. 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 the option of a similar underpinning of duties on partner agencies in MAAs as in LAAs;19 — 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. 21. Implementation of those elements of the review that require legislation is now being taken forward through the Local Democracy,Economic Development and Construction Bill, which is currently proceeding through Parliament. 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 2009.20 22. The Government would specifically highlight the importance of the new Regional Strategy, being introduced through the LDEDC Bill, which will bring together existing regional economic, spatial and other strategies. The Regional Strategy 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. 23. A new South East England Partnerships Board (SEEPB) is being established jointly between SEEDA and a local authority Leaders Board21 that will lead on the development of the SE Regional Strategy. Close partnership working between SEEDA and local authorities will be a feature of the new arrangements. 24. Pending the new legislation, and following the dissolution of the Regional Assembly on 31 March 2009, the Government has recognised the SEEPB as a replacement Regional Planning Body (in line with existing legislation). 25. SEEDA and the Leaders Board plan a number of delivery boards and working groups to help steer specific aspects of the new Regional Strategy. They are currently considering the detail around the roles and membership of these diVerent groups and the relationship between them, working closely with delivery agencies and with social, economic and environmental stakeholders.
The eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors such as manufacturing, service industries etc How eVective initiatives such as Business Link are being in assisting businesses in the current climate, including helping them to gain access to funding both from Government funding streams and through the banking system 26. SEEDA is the Government’s lead economic agency in the South East. They provide regular economic intelligence reports to Government via BERR and the Council of Regional Ministers.22 GOSE provides the context and soft intelligence. SEEDA’s evidence to the current inquiry will address the Committee’s specific questions in this area. However, SEEDA works in the context of the wider Government response to the economic situation, and that response is outlined here. 27. The regional response to the current economic situation is led by the South East Economic Delivery Council (SEEDC)23 which is jointly chaired by the Minister for the South East and the Chair of SEEDA. SEEDC provides a forum for business, the public sector and the third sector to agree collective action to tackle the specific issues currently aVecting the SE economy. It also feeds local intelligence into central Government policy making, particularly through the Chairs’ membership of the Regional Economic Council.24 28. The Government’s response focuses on the impacts of the recession on individuals, local authorities and the third sector, as well as on businesses. The wide range of regional and national support available is set out in the “Real Help for the South East”25 document.
19 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. 20 See http://www.communities.gov.uk/citiesandregions/thesubnationalreview/takingforwardsnr/ 21 The Leaders Board is the Executive of the new South East England Councils (SEEC) that was formed in 2008, represents all 74 county, district and unitary councils across the South East, along with the New Forest National Park. 22 http://www.gose.gov.uk/gose/584390/783374/ 23 http://www.gose.gov.uk/gose/economy/786980/ 24 http://www.gos.gov.uk/497648/docs/171030/NECRECCRM 25 http://www.realhelpnow.gov.uk/pdf/southeast.pdf Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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29. In terms of business support, region-specific examples include SEEDA’s £3 million Transition Fund for businesses facing diYculties in obtaining credit. The Continuing Employment Support Service, a joint SEEDA/JCP initiative provides support to workers facing redundancy. 30. Some of the key national support available for business is set out below. All figures are national except where stated.
Help withBusinessFinances Enterprise Finance Guarantee Scheme 31. Government will provide £1bn of guarantees to support up to £1.3 billion of bank lending to smaller firms. Over 230 businesses in the South East have been oVered loans to date, with a potential lending value of almost £23 million.
Working Capital Scheme 32. The Working Capital Scheme (WCS)—will provide banks with capital relief by guaranteeing portfolios of loans and enable additional new lending to businesses.
Capital for Enterprise Scheme 33. 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. Several hundred businesses nationally have registered their interest.
More Time to Pay Tax Bills 34. The new Business Payment Support Service oVers viable businesses in temporary financial diYculty a streamlined service for arranging to pay their HMRC tax bill to an aVordable timetable. In the SE, around 17,000 time to pay agreements have been made to spread the payment of tax, amounting to £300 million. This is more than any other English Region.
Regional lending roadshow 35. On 21 April 2009, Ministers will be holding a roadshow with businesses and representative bodies in the South East, focusing on what Government has done to get banks lending again and the Real Help available for businesses facing the current economic downturn.
Help with Managing Businesses 36. 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.
Health Checks for Businesses 37. Small and Medium sized Enterprises can get a free review of their business with a professional business advisor. The “Health Check” oVers a holistic review, looking at all key aspects of the business. Since October 2008 over 7,000 businesses have benefited in the South East. Key issues emerging focus on marketing activity on customer retention; identifying new markets and widening the customer base and maximising cash flow. Other key issues include: tightening payment terms & conditions; trying to reduce dependency/risk from reliance on one major supplier or contract; formalising HR policies and procedures; putting staV onto more flexible employment contracts; and reducing overheads. 38. Business Link advisors are the Government’s “front line” in helping small businesses through the recession and ensuring those with growth potential can help accelerate the upturn when it arrives.26 The South East has a team of Advisors directly supporting businesses. These staV are funded from the £24 million core Business Link funding and £6.1 million Skills Brokerage funding provided by SEEDA. In the 12 months to end December 2008, they supported more than 17,500 businesses to develop plans for growth. In the same period, the Business Link Customer Service Team (47 strong) worked with 142,154 customers (41% of the business base) via the phone, web, email and at small events. Of these, 93% were satisfied overall with the service received. In addition, the regional Business Link website has seen increasing activity with a peak of over 1,200 new registrations for the South East in January 2009.
26 Businesses can access real help through www.businesslink.gov.uk/realhelp or contacting their local Business Link adviser on 0845 600 9 006. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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Real Help with Training 39. 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 next year. 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 Job Seekers Allowance 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 focused support for small and medium-sized enterprises (SMEs).
40. Further funding of £190 million is available through the EU Competitiveness and Employment programme and the European Social Fund budget. This is focussed on extending employment opportunities by training for disadvantaged groups and in developing a skilled and adaptable workforce by supporting those already in employment. Funds are used to complement the other training activity such as Train to Gain and delivery in the South East is through SEEDA, the Learning Skills Council and Jobcentre Plus (on behalf of DWP).
Train To Gain And Business Link 41. As part of the Government’s “Solutions for Business” initiative, the Train to Gain skills brokerage service has come together with Business Link oVering a joined-up service to simplify access to information for employers and providing free, impartial advice to help them improve and grow their businesses, and encourage them to develop a more highly skilled and qualified workforce.
Memorandum submitted by Hastings Borough Council (SE 05) Summary — As highlighted in the RES, the South East is a region of contrasts. The subregion defined as the inner southeast could generally be described as the region’s economic powerhouse. In stark contrast to this, the coastal southeast is characterised by high concentrations of economic inactivity, low business density, start-up rates and productivity. It is notable that many coastal communities in the region and beyond have not shared in the UK’s recent prolonged period of growth.
— SEEDA estimates that an additional £13 billion in GVA would be added to the national economy annually if the economic performance of the coastal southeast was brought up to the UK average.
— The second of the three overarching RES objectives directly addresses the need to invest in the underperforming parts of the region. Improving the economic performance of the coastal southeast will be a crucial test of the success of the RES.
— Lying within the coastal southeast, Hastings is ranked 29th most deprived of the 354 local authority areas in England (2007 IMD). This puts it in the poorest 10%, alongside Wolverhampton and Blackburn, making it by some way the most deprived area in the region.
— SEEDA’s substantial commitment to the regeneration of Hastings and the neighbouring town of Bexhill demonstrates the scale of investment necessary to halt the spiral of decline in underperforming areas, and also highlights the need for a long-term approach to sustainable economic regeneration. The Hastings and Bexhill city region has been identified as one of the region’s hubs and is a distinct economic area within East Sussex. It was designated a Primary Urban Area in the 2006 State of the English Cities report.
— SEEDA, together with local partners, formed the Hastings and Bexhill Task Force in 2002 to develop a 10-year economic regeneration plan for the area. SEEDA’s leadership in driving the implementation of the Five Point Plan has had an important catalytic eVect in securing other significant investment in the area’s infrastructure.
— The delivery of the Plan’s employment and other targets is incomplete. There is a need for further investment in higher education, workforce skills and business premises. Given the demographics of Hastings, sustained action around economic inclusion is also required to ensure the benefits of the capital investment are realised for local people. Without a focus on raising economic activity rates in underperforming areas like Hastings, key RES targets will not be met. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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— The recession presents challenges, particularly for areas with weak economies and high levels of deprivation. The overarching objectives of the RES remain relevant, however, and the strategic emphasis on economic restructuring towards a higher skilled economy is correct, despite the current economic downturn. — Whilst SEEDA’s significant budgetary constraints is recognised, we consider it vitally important that a balance is maintained between investing in the region’s economic powerhouses and in the weak coastal southeast economies. Without an appropriate balance there is a risk that the existing two-tier economy will be sustained and even intensified as the impact of the recession is felt more severely in disadvantaged areas.
The role, responsibilities and accountability of SEEDA 1. SEEDA has played a leading role in articulating the need to create sustainable jobs and businesses in coastal towns. It is critically important for a continued emphasis on this in SEEDA’s investment strategy and partnership arrangements for the region. SEEDA’s continuing support for and investment in Hastings’ Five Point Plan is important in underpinning the successes achieved to date and in ensuring that the economic regeneration of the area is sustainable. 2. Notwithstanding Hastings’ fall in the IMD rankings between 2004 and 2007 from 39th to 29th, the town has seen an improvement in several indicators: unemployment and crime have fallen; while health, resident satisfaction, and business registrations have risen. 3. It is worth briefly reviewing some of the improvements achieved or under way: 3.1 The pioneering University Centre Hastings is well established, and Phase 2 is under development. 3.2 The dramatic new South Coast College campus in the town centre is due to open in late 2009, with a new health centre alongside. 3.3 Infrastructural works in the Ore Valley Millennium Community have commenced. 3.4 The regenerated Marine Pavilion is now a successful seafront restaurant and business venue. 3.5 The Lacuna Place development has bought high grade oYce premises to Hastings for the first time in decades. 3.6 The Innovation Centre and Creative Media Centre have encouraged new knowledge-based and media businesses to Hastings. 3.7 Early adoption of a broadband-enabled exchange was backed up by support to business through the Broadband Centre and e-Biz project. 3.8 The Enviro-21 business parks hold out the promise of establishing Hastings and Bexhill as a centre of excellence in the environmental goods and services sector. 3.9 The Link Road proposal continues to make progress, with the prospect of opening up much- needed new employment and residential land in neighbouring north Bexhill. 3.10 Academy status now being sought to build new secondary schools in Hastings supported by University of Brighton, BT and the County Council. 3.11 Development of a new arts and cultural initiative centred on a new public performance space, to complement a new Art Gallery funded by the Jerwood Foundation. 4. SEEDA is instrumental in all of these. The use of public/private partnerships and the excellent relationship with sources of finance developed through the Sea Space team provide a model for creating the conditions where private finance can build on public investment. 5. SEEDA’s support for specific regeneration projects in Hastings where it is not the lead agency is highly valued, notably in Central St Leonards, and the Stade/Jerwood development. 6. There is a need to consider the appropriate form of partnership moving forward to ensure sustainable socio-economic development that builds upon investment in the area’s physical infrastructure. It would be advantageous to have a single partnership structure that is supported by SEEDA and other regional agencies for all aspects of economic development and inclusion activity within the Hastings primary urban area. This approach is desirable in order to bring together the economic growth and worklessness agendas. 7. The SNR reforms that encouraged devolution of government funding and decision making to local levels were widely welcomed. This approach is even more important during times of recession to better ensure flexibility and responsiveness to fast moving local conditions. 8. We remain concerned about changes made to subregional partnership arrangements within the last 18 months. Prior to this, SEEDA actively supported local partnerships which were set up at SEEDA’s behest in growth areas across the region and through which SEEDA devolved Area Investment Framework funds. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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9. The structures that were established subsequent to SEEDA’s partnership review, while oVering coherence in some areas, cut across functional economic contours in others, and do not facilitate greater partnership working between areas with common issues, such as, for example, coastal urban conurbations in East Sussex. The reliance on a County-based partnership in this part of the region does not reflect the contours of functioning economic areas.
10. We believe there is a need to review SEEDA’s subregional partnership structure in order to ensure:
10.1 alignment to the economic geographies at subregional levels; and
10.2 a more coordinated and focused approach by a range of government agencies in order to better exploit the potential of functioning economic areas.
11. Regarding the emerging focus on support for high value sectors, we believe it is also critically important to support industries providing entry level employment and transferable skills for workers, particularly in the coastal subregion where the indigenous workforce is predominantly low-skilled and a large number of young people leave school with minimal or no educational qualifications. There is a compelling need to invest in workforce development schemes for small employers within the manufacturing and service industries, and in diversification of the employer base in the coastal resort towns within the southeast.
The process by which the RES was drawn up and the level of involvement of regional stakeholders 12. The drawing up of the RES was based on sound evidence, comprehensive analysis and forecasting. There was substantive involvement of regional stakeholders and appropriate consultation opportunities for stakeholders. The Implementation Plan is consistent with the main strategic thrust. However, whilst there is substantial emphasis on interventions targeting the region’s “diamonds” for growth, there is less clarity about focused interventions in underperforming areas or in exploiting the untapped potential of the “hubs” across the region.
13. The emphasis on improving workforce skills through engagement of business in shaping training programmes has not been suYciently manifested in underperforming areas like Hastings where low workforce skills are a key barrier to economic growth. The Coastal Framework drawn up by SEEDA following the publication of the RES and Implementation Plan articulated some potential priorities for the coastal southeast but was less clear about the level of investment required to fully exploit the economic growth potential of the hubs in this subregion. Neither the Implementation Plan nor the Framework are clear on SEEDA’s specific role in reducing the high levels of worklessness and improving productivity rates in coastal urban areas and city regions.
The eVect of the financial and economic situation on businesses in the region, including the eVect on diVerent sectors such as manufacturing, service industries, etc 14. Assumptions have been made that areas with a strong dependence on manufacturing and service sectors will be hardest hit, whereas areas (such as Hastings), where the public sector is the biggest employer, are largely immune to the impact of the recession. This assumption is not reflected in JSA claimant counts which reveal that the rise in Hastings’ claimant rates between June 2008 and March is, in fact, marginally higher than for other districts in the southeast with high employment rates in the manufacturing sector, and they are not dissimilar to those of other districts such as Reading, Milton Keynes and Crawley, where there are higher percentages of residents employed in the services sector generally.
15. Hastings, with only 18% of East Sussex’s working-age population, accounts for 29% of its unemployment.
JSA rate (%) JSA count Feb 2008 Nov 2008 Feb 2009 1 yr rise 3 mth rise Nov 2008 Feb 2009 3 mth rise Hastings 3.6 4.2 5.6 2 1.4 2,162 2,888 726 Rother 1.9 2.3 3.3 1.4 1.0 1,054 1,486 432 E Sussex 1.9 2.5 3.5 1.6 1.1 7,076 10,054 2,987 GB 2.2 2.8 3.8 1.6 1.0
16. We consider that the impact of the recession will be deeper and more sustained in urban areas like Hastings where there already is a fragile economy that consists predominantly of micro and small businesses dependent on a local market, a relatively large public sector employment base, and which is isolated by poor transportation and communication links from national and international markets. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of SEEDA The role of other Government agencies such as the Government OYce for the Southeast and of partnerships between Government agencies, local government and the private sector in delivering the aims of the RES 17. We welcome measures that support devolution of decision-making away from central government, and strongly support principles of empowerment that acknowledge the strategic and delivery role of agencies not just at regional and county level, but also at district level. 18. SEEDA can play an important role in supporting eVective devolution to local areas, particularly to functioning economic areas and hubs such as Hastings. As previously indicated, former devolution of SEEDA budgets to local economic areas has been reversed, and it is recommended that this is reviewed in light of the government’s emphasis on increasing devolution to local areas. 19. We believe that SEEDA’s focus on place-based investment and support for particular sectors should take account of the government’s strong emphasis on reducing worklessness and driving up employment rates. This is clearly aligned to SEEDA’s targets around increasing economic activity, particularly in the underperforming parts of the region. 20. Equally important is maintaining a long term approach to economic development, without which there is a risk that the benefits of previous investment will not be sustained. For example, SEEDA and other partners have invested considerably in the Hastings and Bexhill area’s physical infrastructure, and this was on the basis that a 10 year investment programme would be needed in order to reach a point where the economic turnaround would be sustainable. The recession will undoubtedly have an impact on what can be achieved within this timeframe. SEEDA can play a critical role in promoting a long term multi-agency approach to economic growth—and this is particularly important in terms of tackling worklessness, economic inactivity and low productivity rates in the worst performing parts of the region. 21. SEEDA and GOSE have the potential to add further value to the government’s worklessness agenda by, for example: 21.1 supporting flexible and demand-responsive actions beyond mainstream provision; 21.2 supporting activity by Third Sector organisations and at neighbourhood level, recognising that engagement in the community is an essential first step to bringing excluded groups towards economic activity; and 21.3 facilitating partnership working between mainstream agencies and the private sector at a local level. 22. The linkages between SEEDA’s economic development role and the role of GOSE in terms of Local Area Agreements and the wider work around economic and social inclusion and community cohesion are not well reflected in partnership working at a local district level. It is considered that the joint influence of SEEDA and GOSE at a local level could be instrumental in bringing a greater focus and cooperation by other government and regional agencies on priorities that also contribute to RES and LAA objectives.
How eVective initiatives such as Business Link are being in assisting businesses in the current climate, including helping them to gain access to funding both from Government funding streams and through the banking system 23. The eVectiveness of Business Link in supporting businesses with high growth potential is unquestioned. Somewhat less clear, however, is the impact of some BL services on supporting enterprise development in areas where there is significant market failure and where more sustained support is required to help small entrepreneurs gain a firm footing, to encourage small businesses. 24. In recognition of this, Hastings Local Enterprise Growth Initiative funds were targeted on support for small entrepreneurs and employers in the most disadvantaged areas of the town, and on skills development programmes for local young people. Most recently, Hastings Borough Council has committed Area Based Grant funds for employability and skills development programmes, and in support for enterprise start up and business retention. The business support interventions will complement existing mainstream services and provide the additional sustained and targeted support for small employers that the BL services available locally cannot provide. 25. Business Link has achieved a higher profile in Hastings recently, but more remains to be done. It is important to ensure focused and continued investment in support for enterprises and workforce development in the region’s hubs and particularly in the coastal towns where there is significant market failure, and where workforce skills and productivity rates are low.
KeyChallenges 26. We have five areas of concern for the future: (a) The RES implementation plan is weighted towards a drive to increase GVA and, given the potential of the Thames Valley and inner southeast together with SEEDA’s budget constraints, there is a risk of a focus on the economic powerhouses at the expense of the underperforming Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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areas in the coast southeast where significant investment is needed to drive up economic participation rates and productivity. Unless this underperformance is turned around, this part of the region will continue to deliver at the level of the North East. (b) In 2007–08, only 44.7% of Hastings school pupils achieved five or more grade A*-C GCSE passes. This is the very worst of all 354 local authority areas in England. Poor education is the greatest long-term impediment to economic development and inclusion. SEEDA might consider how to maximise its contribution to improving academic and vocational success rates in underperforming areas like Hastings, both in its own right and via strategic links with business, higher education, the Education Authority and LSC, and other stakeholders. (c) Locally, the Hastings & Bexhill Five Point Plan is not yet complete, and although there are modest signs of economic recovery, the tipping point has not yet been reached. Continued SEEDA commitment is critical to achieving the challenging targets set by SEEDA and other partners. (d) Continued investment in infrastructure needs to be matched with action to increase the ability of the community to take advantage of new opportunities. The skills levels of the local workforce is insuYcient to enable many people to benefit from new opportunities in high value companies, and there is a need to strengthen the capacity of local industries providing opportunities for people with low to intermediate skills. Investment in higher value industries and high skilled employment opportunities needs to be matched by support for entry level employment and workforce skills development. Without a balanced approach in this respect, there is a risk that the benefits of regeneration will not be felt across the disadvantaged parts of the area and the high levels of economic inactivity locally will essentially remain unchanged. (e) The implications of the recession will need to be eVectively managed, both in terms of investment decisions, and in mitigating the adverse impacts on businesses, employees, and local communities as a whole across both the diamonds for growth and the underperforming areas. Given the structural and longstanding weaknesses of the coastal urban economies it is likely that the coastal region will emerge from recession more slowly than the west and centre of the region.
Memorandum from the Homes and Communities Agency (SE 06) 1. Introduction 1.1 The Homes and Communities Agency (HCA) is the new, single housing and regeneration delivery agency for England. It was established on 1 December, combining the land and property expertise of the former English Partnerships; the aVordable housing delivery expertise of the former Housing Corporation; and various Communities and Local Government functions and programmes including Growth Areas/ Points, Decent Homes, ALMOs, PFI and Gypsies & Travellers. The HCA also incorporates the former Academy for Sustainable Communities providing expertise to external organisations on creating and renewing high quality sustainable places. 1.2 The HCA’s vision is to create opportunities for people and places: — for people, a home they can aVord and a place they want to live in; and — for places, fulfilling local needs, aspirations and ambitions. 1.3 HCA has only recently been established but its predecessors have worked with SEEDA at both the regional and local level. With SEEDA taking the lead on the new Single Regional Strategy, and with the HCA linking its significant public investment to the broader economic, social and environmental agendas, the relationship of the HCA with SEEDA will take on increasing importance in the future. This is more so, given the current market conditions. 1.4 This written response focuses primarily on SEEDA’s role with respect to physical regeneration and its future roles and responsibilities. The HCA is not in a position to give a view on all of the areas of focus of the Select Committee.
2. Production of theRegionalEconomicStrategy and theLevel ofInvolvement ofRegional Stakeholders 2.1 The predecessor organisations of the HCA (Housing Corporation and English Partnerships) were involved in the consultation process to produce the latest version of the RES through their membership of the Regional Housing Board. This primarily involved attendance at workshops to provide feedback on draft versions, and the opportunity to comment on proposed priorities and actions of relevance. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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3. Effectiveness of theRegionalEconomicStrategy inDeliveringAgainst itsTargets 3.1 The RES has a clear geographical focus with its growth priorities (based on a “Diamonds for Investment and Growth” and the strategic “Hubs” approach) and the regeneration priorities (based on coastal areas and towns in the region). It also has some key region-wide priorities such as a focus on the rural areas, primarily from an economic/business perspective but on sustainability more generally. 3.2 This presents a sound geographical basis that covers a significant part of the region and is consistent with other key regional strategies, notably the South East Plan. 3.3 SEEDA is committed to working at a sub-regional and local to deliver on its objectives. It rightly confirms the Local Area Agreement (LAA) and Multi-Area Agreement (MAA) vehicles as crucial to ensuring its objectives link and relate to more local objectives. This is a view shared by other key stakeholders in ensuring that local ambitions and aspirations are met, whilst set within an over-arching regional framework established through the RES. 3.4 Whilst the RES can support policy objectives and work with the market, the broad targets and expected outcomes are strongly influenced by broader economic and market conditions. For example measures to reduce the aVordability ratio measured by median house prices and median income will have improved in the last 12 months due to the general housing market conditions with lower average or median house prices in the region. 3.5 The RES has an expected outcome of 32,000 new homes per annum, with 35% of these aVordable. Recent housing numbers have been close, and even exceeded this annual average, but in the immediate future numbers will decrease for reasons beyond the region’s economy. Likewise, aVordable housing where the overall numbers and 35% target has not been achieved, this reflects planning policy and market conditions rather than the RES. 3.6 At a more local level SEEDA is an important player in supporting and co-ordinating the activities of the Brownfield Land Assembly Company (BLAC), which is funded through HCA. BLAC acquires and remediates small, often derelict, brownfield sites that the market is not interested in and to make them available for aVordable housing. This contributes to the regeneration of a local area and the provision of more aVordable housing. It is also an example of public sector intervention when the market has failed. 3.7 SEEDA has also been strongly supportive of the concept of a Regional Infrastructure Fund operating in the South East, including the provision of funding. This is in the business planning stage in the South East but close to implementation. 3.8 SEEDA has played an important role in a number of localities in the region, primarily to achieve its regeneration objectives through a number of activities such as land and property acquisition: notably, its flagship scheme at Chatham but also in a number of other locations such as Rochester Riverside, Hastings and Ashford. 3.9 In addition, SEEDA manages the National Coalfields Programme sites in the region on behalf of HCA. There are four sites in the South East where former coalfield communities have been assisted to create a combination of employment, homes, community facilities and public open space. With former coalfield communities suVering greater levels of deprivation this has contributed to the RES objective of narrowing inequalities. 3.10 Finally,SEEDA has been active in the newly formed South East Economic Development Committee (SEEDC), and is a member of the sub-group on housing and regeneration led by HCA.
4. TheEffect of theFinancial andEconomicSituation 4.1 SEEDA’s physical development activities have been aVected by the current economic downturn. 4.2 A number of schemes have encountered viability problems and SEEDA is in close liaison with other key regional stakeholders, including HCA, about supporting the most critical regeneration schemes and those with the most potential to transform communities. Examples of this include Chatham Maritime and Woolston, Southampton. 4.3 In addition, following the Sub-National Review, with a new focus on economic development and skills, and a constrained funding environment it is anticipated that SEEDA will be focusing less on delivering housing and physical regeneration.
5. TheProposedChanges toRegionalPolicy 5.1 The Local Democracy, Economic Development and Construction Bill oVers SEEDA a more strategic role. 5.2 The main change will be responsibility of SEEDA for the South East’s Single Regional Strategy covering the range of economic, spatial planning and housing issues faced in the region. The relationships with local authorities and sub-regional partnerships will need to be re-ordered to ensure the balance between regional priorities and meeting local priorities and ambitions is achieved. This is reflected in the new arrangements following the abolition of the Regional Assembly. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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5.3 SEEDA will need to build on its relationships with key regional stakeholders who will have responsibility for delivery and implementation of the single strategy, which include, HCA, Highways Agency, Environment Agency. SEEDA has recognised at a very early stage the key role of other regional partners in both the strategy formulation and implementation aspects of the Single Regional Strategy.
5.4 It is also imperative that in the change of responsibilities and new governance arrangements that short term priorities and focus are not lost. In the current economic conditions, for example, momentum and focus needs to be maintained on housing delivery.
6. Working withOtherStakeholders toDeliver theRegionalEconomicStrategy 6.1 Previous sections of this submission have made reference to SEEDA’s current and planned work with stakeholders. For example, in taking forward developments which have stalled in the current economic climate, and SEEDA’s recognition of the importance of key stakeholders in formulating and implementing the Single Regional Strategy.
6.2 The HCA is a national agency that works regionally and locally. This means balancing national/ regional targets and objectives, and local needs and ambitions. This approach gives rise to the need to work with a wide variety and number of stakeholders at diVerent geographical levels.
6.3 With SEEDA taking responsibility for the principal over-arching strategy for the region it will be important that it takes a similar approach both in formulating strategy, consulting with the region and implementation. This should include working with stakeholders, and where it may be appropriate for stakeholders to lead on areas of strategy. In the case of housing delivery, HCA has the expertise to add value in this area.
6.4 The current RES was written at a time of buoyant market conditions. At present and in the near future it is important that SEEDA works closely with other organisations, public and private, to look at new business models in relation to physical development.
Memorandum submitted by Kent Police (SE 07) ExecutiveSummary — Operation Stack is the co-ordinated multi-agency response to increased demand on the road networks of Kent, caused by reduced capacity for vehicles to leave the UK via the Port Of Dover or the Channel Tunnel. Reduced capacity can occur spontaneously, for reasons such as bad weather, engineering failures or major incidents; or sometimes can be predicted by engineering works or pre- planned industrial action.
— Kent and Medway experience approximately 130,000 vehicle movements on the roads, each day. Up to 5,000 of these are freight vehicle movements through the port of Dover on route to Europe. The impact of any blockage at Dover Port or the Channel Tunnel is significant, with increased traYc congestion and potential “gridlock” of the County’s roads.
— The primary tactic of Operation Stack is to use sections of the M20 motorway to “stack” Heavy Goods Vehicles (HGVs) until normal service at the port/tunnel can be resumed. Whilst this is a well-practised tactic by Kent Police, supported by the Highways Agency, it is costly and resource intensive, diverting large numbers of oYcers and staV from their primary functions. Despite its regular use to manage abnormal traYc flow, Operation Stack only provides a short-term contingency arrangement.
— The wider impact of Operation Stack is significant, with both social and economic implications experienced at a local, regional and national level. The operation disrupts the commercial and residential communities of Kent & Medway by depriving them of the use of sections of the M20 motorway and causing extra congestion on alternative routes. The operation can generate a large volume of complaints and general criticism against Kent Police, Local Authorities and other partner agencies. In recent years, the name “Stack” has become synonymous with negative publicity in both local and national media.
— In light of the considerable impact on the communities of Kent & Medway and on the demands of Kent Police, Operation Stack is unsustainable as a longer-term solution to traYc congestion in the south of the County. Alternative options continue to be explored but require a progressive and co-ordinated partnership response across a number of agencies. The SEEDA Regional Economic Strategy includes a core activity to deliver an alternative holding facility and Kent Police would welcome engagement in delivery of this solution. To date no approach has been received. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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1.Overview ofOperationStack 1.1 The strategic aim of Operation Stack is to “Work in partnership to keep Kent moving by minimising the impact of cross channel traYc disruption”. Through implementation and management of Operation Stack, Kent Police seek to: — minimise the risk to the public travelling on the road network in Kent; — minimise the social and welfare impact on the residents of Kent and Medway; — minimise the economic impact to cross channel business operators and businesses within Kent and Medway; and — maximise the opportunity for free movement of goods and people through the County.
2.Implementation 2.1 Kent Police and its partners regularly monitor the flow of commercial traYc into the county in order to identify excessive congestion at the earliest opportunity. In advance of traYc flow exceeding available holding capacity, a decision is taken to implement Operation Stack. The respective holding capacities of Dover and the Channel Tunnel are: — Port Of Dover% 800 lorries — Channel Tunnel (Including entrance road)% 250 lorries 2.2 In the case of Dover, where the number of lorries within the port exceeds 500 and planned sailings are unable to accommodate them, the relevant stage of Operation Stack is then implemented. 2.3 Operation Stack has three recognised phases, which can be implemented in isolation with less impact or in tandem to provide a longer-term contingency arrangement where disruption is likely to be for an extended period. The matrix at Appendix 1(a)27 highlights the key demands and implications of each phase of the operation. Appendix 1(b)28 shows the practical application in map format.
3.ResourceImplications 3.1 The resource requirements for implementation of each phase increase in line with the number of vehicles accommodated. The holding queue is a high-risk environment due to the continuous movement of HGVs and emergency vehicles, which requires a full risk assessment and experienced staV. 3.2 For complete implementation of Operation Stack (all phases) the resource demands for Kent Police total 2 Inspectors, 5 Sergeants and 101 Police Constables. This eVectively consumes all available “Roads Policing” oYcers from the Strategic Road Networks (SRN) of Kent. Additional support is required from BCU/District oYcers in order to cover incidents elsewhere on the SRN and this in turn can reduce local response capabilities. 3.3 Application of Phase 3 or a protracted application of Phase 2 (in excess of 48 hours) would require the provision of mutual aid arrangements from neighbouring Forces. 3.4 There is the opportunity for greater assistance from Highway’s Agency TraYc OYcers (HATOs) in the staYng and management of the holding queue. This is provided in a Memorandum of Understanding, although to date these much needed resources have not been forthcoming. Kent Police continue to lobby key stakeholders in an eVort to secure this additional support.
4.CommunityImpact 4.1 Each phase of Operation Stack involves an element of disruption to normal traYc flow, both within the towns of South Kent and over an extended area of the M20 motorway, in both directions. Dependant on the volume of traYc in the holding facility, the management of “return to normality” can take between two and eight hours, thereby extending the impact to local communities and those travelling in the county. A full community impact analysis, prepared in conjunction with Kent County Council, is shown at Appendix 2.
5.Cost andDemandVariables 5.1 Over the past three years, Operation Stack has been implemented an average of 10 times per year. Full details are listed in the cost and demand matrix in Appendix 3. 5.2 The cost of delivering the operation in the last 3 years has exceeded £940,000. These costs relate solely to expenses and police overtime and do not include the cost of standard police time. 5.3 Whilst there is more likelihood of demand in the winter with bad weather disrupting sailings, annual data provide little opportunity for predictive analysis to inform demand profiling and thus reduce staV costs.
27 Information provided, not printed. 28 Information provided, not printed. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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6.TheFuture 6.1 Increasing rates of commercial vehicle movements through the county indicate that in the short term, the three phases of Operation Stack may have insuYcient capacity to accommodate the requisite number of vehicles. Kent Police has conducted an assessment of the potential for an additional “Phase 4” option, which could employ the top section of the M20 (junctions 3 to 2) for vehicle reception (similar to tactics employed in France). There is a clear desire from the Highways Agency to protect traYc flow on the M25 motorway from any Operation Stack impact so this option appears to be unviable. 6.2 In the absence of viable holding capability elsewhere on the Strategic Road Network within Kent, alternative sites need to be considered. The option of diverting Kent bound HGVs from the M25 prior to reaching Kent is therefore to be explored with southern police forces and the Highways Agency via the M25 Integrated Policing Group. An equally viable solution would involve the development of an oV road holding area or lorry park, with the capacity to accommodate 5,000 lorries. This features as a core activity in SEEDA’s 10-year Regional Economic Strategy although to date Kent Police has not been consulted on eVorts to deliver this.
7.Conclusions 7.1 In recognition of the unsustainable nature of Operation Stack as a longer-term solution, seeking an alternative arrangement must be a priority. Kent Police has been proactive in its eVorts to develop a solution to the challenges of cross channel congestion and have developed a range of proposals in line with key partners. 7.2 Whilst Kent Police and it’s partners will continue to meet the commitment to provide a safe and eVective road network in the county this must be in conjunction with extensive multi-agency eVorts to establish a viable and permanent solution to traYc management around Dover and the Channel Tunnel.
Memorandum submitted by the Learning and Skills Council (South East) (SE 08) Summary — Overall there are good working relationships between the LSC and SEEDA and a variety of positive examples from which to build. — There have been a number of issues regarding roles and responsibilities which continue to need to be addressed. — The RES has provided a useful framework at focus at local and regional level supporting improved partnership working and more eVective local responsiveness. Issues have included leadership, coordination, complexity and ownership. — It is critical now to look ahead and focus on drivers of growth, including the implications for skills and how these might drive the South East’s recovery. — Changing roles and responsibilities of partners and challenging resource levels will need to be considered carefully. — Skills must be recognised as a critical business driver, and the organisations taking forward developments and services need to aVorded significant and suYcient attention in future strategies. — Thought needs to be given to the respective roles of SEEDA and the SFA following the transition of the LSC to the SFA and the YPLA.
Our involvement with SEEDA/how we relate to them 1. Overall, there have been many examples of good working relationships across a wide range of work areas. These include some key strategic areas, although this is sometimes constrained by national priorities and targets for the LSC which SEEDA finds diYcult to accommodate. Recent examples of eVective joint working are the Skills and Employment Accord; the development of an Integrated Employment and Skills Strategy; a Recovery Plan in response to the Recession and related interventions on major redundancies (eg Ford); local area-based initiatives; and the transfer of Skills Brokerage. There is however, on occasions, a need for greater coordination within SEEDA itself and for more consistency of approach between parts of the organisation. 2. SEEDA’s current local area arrangements have brought a more eVective approach to working with partners to deliver both the RES agenda and partners’ agendas, such as Local Area Agreements and local skills or economic development strategies. This has led to improved coordination of activities and closer joint working. For example, SEEDA teams have helped, significantly,to identify local issues and to establish appropriate responses. 3. Some of the keys to eVective joint working have included shared accountability, suYcient resources to make an impact and establishing strong interpersonal links between members of agencies. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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4. Occasional “turf and territory” issues have arisen, for example the prominence—or lack of—and inclusion of the LSC as a key stakeholder in some joint events and activities and in some pieces of SEEDA led work.
Our views on the production of the RES 5. There was an eVective and comprehensive consultation process to produce the RES. This however, by implication, probably meant that the process was driven by too many interest groups and agendas. It now serves as a useful policy framework to underpin current activity though it tends to focus on justifying existing strategies and funding priorities. 6. Some sections appear overly complex and led to some confusion, especially in the early days, such as the various geographical contours and some of the concepts (eg Diamonds). Activities to further define these were not always inclusive. 7. Subsequent communications on SEEDA’s Corporate Plan and spending priorities at local level have been useful in coordinating activities. Technical evidence and supporting research have been useful resources. 8. Clearly a major review of the RES is timely; in particular to set the scene for public and private sector investment and resources to support the SE coming out of Recession. It needs fewer, and clearer objectives and to avoid being a “catch-all” for every stakeholder’s priorities. It needs to be visionary and easily understood by all rather than just being a stakeholders’ technical document. It needs full ownership by partners.
Does the RES work in setting regional policy? 9. In a number of ways, RES has set a framework which has steered many regional and local activities. It has provided a much improved and flexible regional strategy to focus local activities and partnership working. In some instances this is obvious due to funding following the strategy and occasionally local activities have been shoehorned to fit the RES priorities. There have also been instances where a more coordinated approach between agencies could have been more eVective such as some of the areas relating to ICT developments. 10. The recession changes the emphases on certain sections of the RES and serves to highlight the Global Competitiveness objective due to the post recession requirement to grow and create businesses capable of capturing, especially, international market share. This should not be at the expense of other objectives. 11. There has been an ongoing question about whether the RES is a jointly owned strategic framework for the region or a SEEDA owned strategy. It could be supported by a more explicit and jointly owned SE employment and skills strategy to secure ownership, align priorities and targets and guide resources.
What do we need to do the other side of the recession? 12. There needs to be a commitment to fewer objectives and those actions for public sector intervention which will make a real and significant diVerence and identification of how limited resources will be best deployed to achieve these. Overall we need to identify and commit to investing in areas of the economy which will make a long-term diVerence and to the rigorous economic analysis and forecasting to support this. We need to agree the focus for public sector investment that will contribute to this and to set out how this will lever in private investment. There is likely to be a spatial element of this. Underpinning this is the importance of clarifying the role and scope of the RES as a widely owned regional economic strategy. 13. Policy development will need to reflect the changing roles of partners and our budget challenges. We will need to identify how we can be more influential, on resources and behaviours, without being constrained by programmes or funding streams. Through this it will be important to prevent duplication and to fill in any critical gaps. There also needs to be a more structured approach to responding together to policy developments which are introduced during the life of the RES. 14. It is likely that a joint approach will be needed to continue to respond to the downturn and it is important to recognise that such challenges, exacerbated during a rescission, continue when the economy recovers. 15. Streamlining and simplifying services remain critical and we need to avoid any risk of watering down the focus on critical business areas, including skills. 16. It will also be important, within SEEDA’s emerging focus, not to divorce social and economic issues, and to ensure that areas such as lower level and intermediate skills are fully accommodated in future strategies 17. ICT will remain critical. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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How do we ensure training takes place against backdrop of recession and reduced LSC funds? 18. Clearly this is challenging but we need to prioritise better; align resources more eVectively and actively influence provision. We need to bring together various resources to ensure critical gaps are filled and business needs are met. Levering in other funds, including from the private sector will be important. Technological advancements may also provide opportunities.
Lessons learnt in the way we have worked together 19. Areas in which we have worked successfully together have been where we have ensured joint ownership; coordinated resources and funds and identified clear roles and leadership responsibilities. This needs to be taken further in the light of ever more focussed priorities and resources. Activities must complement one another and there is a need to ensure the established partnerships and relationships between two organisations are taken forward as we evolve into new agencies. 20. We can probably do more, collectively, to influence upwards to challenge national policies and increase resources for the region. And we need to avoid show-case activity which is not rigorous in its implementation or cuts across national initiatives.
Things to do next time 21. It will be important to build further on the strong working relationships such as those which have developed with the signing of the Employment and Skills Accord. There is a need to ensure that the LSC carries with it these established relationships and contacts into the new agencies. We also need to ensure agencies recognise the logic, and opportunities, of working within those relationships. 22. Leadership roles regarding skills and learning will also need to be clarified. The strategy must continue to promote the value and need for skills development at all levels—recognising the shared responsibility between state, employer and individual. The RES and its partners have a critical role in promoting this and influencing the prioritisation of funds. It is also important that Business Link has a strong role, including relations with providers and in embedding and strengthening skills within its business services. 23. It will be important to establish the appropriate structures to deliver the strategy. We are concerned about the lack of funding for ESB manager posts—especially as it is not clear where plans/influence for adult learning will come from, as the SFA is unlikely to have the same planning and local intervention role as the LSC has. There is a need for continuing strategic leadership and support/encouragement of local authorities/ economic partnerships to ensure activity and impact at local level. The future and structure of ESBs in the SE still needs clarifying as there remains uncertainty about their importance, their role and where the regional/local balance of activity on ESBs lies. If they do have a significant role, dedicated support is needed to enable them play an important role in skills development. 24. There is also a need to identify clear, interlinked spatial and community strategies which will support economic growth and sustainability. Many actions focus on Diamonds, but there is a need to consider more substantially the importance of other growth areas and also the impact on the whole region of London and internationally. More can be done to join up strategy with London—growth, Olympics, information about the recession. The same is important for the growth area of MKSM. 25. We are also mindful of the impact of development in future of a single plan and measures to take forward the Sub-National Review as these could impact the positioning and focus of skills within future strategies and the strength of our partnership working. We cannot risk underplaying skills as critical to economic and social success. In addition, the processes must fully recognise our respective roles and develop jointly owned strategies that can be collectively championed.
Memorandum submitted by Natural England (SE 09) Summary Natural England is a DEFRA NDPB responsible for conserving, enhancing and improving public access to the natural environment. We employ 200 staV and deliver some £60M annual spend in the South East. The natural environment has been defined in the RES as a key component of the South East’s competitive advantage. Natural England’s strategic goals are a) to align our delivery work in the region with wider economic and social agenda to provide full value public benefit from our activities and b) ensure that regional strategic planning serves to conserve and enhance the environmental asset base that serves the region. Natural England (and formerly our founding bodies) has worked closely with SEEDA on the development of the current RES. — Natural England supports current RES aspirations in relation to sustainable prosperity as the underpinning for regional investment—however, we are concerned that current pressures may deflect SEEDA from this agenda. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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— We have worked with SEEDA and other partners over recent years to develop and implement the RES—closer engagement in future RES/SRS planning and delivery management would be mutually beneficial. — New structural plans for the region should build eVective partnerships to deliver a sustainable future, not fragment existing collaboration; in particular we wish to see the environment sector properly integrated with strategic decision-making fora.
1. Role, responsibilities and accountability of SEEDA 1.1 No comment is needed on SEEDA’s current role. There is however considerable regional uncertainty over the nature of SEEDA, post Sub-National Review. Proposed regional structure changes raise questions over the new balance of priorities that SEEDA will take within the region and the means by which stakeholders from the breadth of sectors will engage eVectively with SEEDA. It is too early to draw any definitive conclusions, however the risk is that fracture of established regional partnerships across sectors could lead to reduced capability to deliver on the crucial sustainable prosperity agenda set out in the RES.
2. Process by which the RES was drawn up and the level of involvement of regional stakeholders 2.1 There has been extensive and substantial external consultation, with opportunity for stakeholder input to the design of the RES through a number of large events. 2.2 The format of consultations could be improved, with fewer large events—where comments can become lost; instead more focussed inputs, either through working with individual partner organisations or through topic based discussion. 2.3 Any future SRS consultation process needs to be more engaging with more structured opportunity for input by stakeholders. 2.4 Natural England has worked with SEEDA in the development of the evidence base underpinning the RES, in particular work to define the value of the environment sector to the regional economy. More work needs to be directed in the future towards analysis of alternative investment strategies, relating to both public and private finance, to understand better where investment in the region’s environmental asset base might be best directed (in terms of contributing to regional economic targets); this work should address both risks, for example climate change related costs and opportunities, for example eVective marketing and enhancement of our National Parks.
3.EVectiveness of the RES for the South East in delivering against its targets including the degree to which the regeneration of areas of deprivation and the former coalfield areas has been successful 3.1 Natural England work with SEEDA and other partners on a number of targets, and lead target 13 on Natural Resources and the Environment. It is early days to make any judgement on the extent to which SEEDA targets will be met as a result of activity generated by the RES. 3.2 One area where chances of delivery could be improved would be through clearer internal linkages within SEEDA. Whilst oYcers in the sustainable prosperity side of SEEDA are well versed with many of the issues relevant to the environment sector, it is unclear on the extent to which this shapes thinking elsewhere, either in SEEDA’s other strategic teams or at the operational delivery end. It is unclear whether the wider sustainability agenda is understood across the business.
4.EVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors such as manufacturing, service industries 4.1 The eVects of the current economic situation are seen by Natural England in two key ways: (a) in terms of a changing economic outlook for land managers, and (b) through changing development patterns reflected in numbers of planning applications where we are a statutory consultee. 4.2 Farming profitability has been subject to large fluctuations in cereal prices, partially oVset by changes to input prices. Prospects of higher prices over the medium term have led to some farmers staying out of land management schemes delivered by Natural England. However, we remain in a position where our schemes are suYciently competitively priced to secure the necessary level of uptake in the most environmentally valuable areas of the region. Within the sector it is unclear yet whether the economic conditions are changing patterns of demand within the region, for example for local food products. 4.3 On the development activity front we have anecdotal evidence of a clear slow down of planning applications, which we should be able to record more clearly over the coming months. Whilst this may serve to reduce pressures in some circumstances, this slow down in activity may also mean development that does take place may do so operating on finer margins. This could reduce opportunity for delivery of green infrastructure as part of sustainable prosperity. 4.4 Finally, there are significant opportunities for the region to invest in sustainable prosperity as part of the region’s positioning to emerge from the economic downturn; this does not appear high on SEEDA’s agenda at present however. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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5. Changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of SEEDA 5.1 As above, we hold concerns over the balance of priorities that SEEDA will pursue under new arrangements and a new funding climate; the risks are that SEEDA may take a retrograde step away from investing in the region’s sustainable prosperity underpinnings towards more short-term economic growth. Such a move could prove both environmentally and economically damaging over the long term, and could result in an unnecessarily high level of beaurocratic activity between diVerent arms of government within the region. 5.2 New structures and pressure on public funds must make SEEDA recognise that the way forward is through more eVective partnership and integration of funding and delivery objectives, not the fracturing of these same arrangements. 5.3 In planning for the future SEEDA should consider the impact of global trends on carbon as a key factor in setting a vision for the region, our economic base and societal trends.
6. Role of other Government agencies such as the Government OYce for the South East, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES 6.1 Natural England works closely at a regional level with other government agencies in particular the immediate Defra family. To some extent there are too many regional fora at present (linked to SEEDA, GOSE and formerly SEERA) with a lack of clear accountability across these. There would be merit in providing clearer accountability through a single set of regional fora operating to deliver a Single Regional Strategy; clearly this would require the collaborative, engaging approach suggested above, with objectives set to reflect social, environmental and economic priorities.
7.EVectiveness of initiatives such as Business Link in assisting businesses in the current climate, including helping them to gain access to funding both from Government funding streams and through the banking system No comment available.
Memorandum submitted by Oxford City Council (SE 10) 1. The role, responsibilities and accountability of SEEDA The City Council has had a good working partnership with SEEDA on West End Renaissance project. The West End Partnership is Oxford City Council, Oxfordshire County Council and SEEDA as equal partners in this project. In this role SEEDA are both a revenue funder, and input oYcer time and knowledge. SEEDA have been working collaborative with the City Council as Oxford (and Central Oxfordshire) is identified in the RES as a Diamond for Growth and Investment. They have also funded a project manager to help coordinate the work of the Diamonds Board. SEEDA have been growing and strengthening their involvement in Oxfordshire Economic Partnership (OEP). SEEDA sit on the Oxford Strategic Partnership (OSP).
2. The process by which the RES was drawn up and the level of involvement of regional stakeholders I think it is fair to say that there was limited involvement with stakeholders in the production of the RES. This initself is not a critisism. The production of the RES was a quick and suscint process which then provided an adopted document which we could then use to guide and shape the economic and regeneration policy of our area. In comparison, the production of the South East Plan (regional spatial strategy) has been a long drawn out process which has been highly political. This has left a “vacuum” in terms of regional guidance and an excuse for some councils to do nothing.
3. The eVectiveness of the RES for the South East in delivering against its targets including the degree to which the regeneration of areas of deprivation and the former coalfield areas has been successful The RES is an eVective tool for the development of our policies and approaches. As Oxford (and central Oxfordshire) is identified as a Diamond for Growth and Investement it has assisited in focusing resources on the needs of Oxford, and assisted in the support for further allocations of land for additional economic developent. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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4. The eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors such as manufacturing, service industries etc As is the case nationally the current economic climate is aVecting businesses across the board locally. So far it has been most evident in terms of impact on retail businesses, as covered by the local press, and the release of almost 800 workers at BMW.
5. The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of SEEDA This Bill features three key areas with an impact upon economic development—a new duty for Local Authorities to assess economic conditions, a joint duty on RDAs and Local Authorities to produce a single regional strategy, and, powers for Local Authorities to cooperate in promoting economic development. In all three cases close working arrangements with SEEDA will be important, and, whilst this is welcome, SEEDA needs to properly acknowledge what Local Authorities both do and are capable of.
6. The role of other Government agencies such as the Government OYce for the South East, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES At the local level, Goodmans (formally Arlington Business Parks) have been keen to promote a new site for a business park in line with the City’s designation as a diamond in the RES. This would be for upto 1,000,000 sq.ft of economic floorspace. This is supported by the City Council’s emerging Core Strategy, and is expected to be supported in the South East Plan. However, there is still a issue with the Highways Agency and their arroach to major economic development near the trunk road network. This could be a major issue in the delivery of the RES locally.
7. How eVective initiatives such as Business Link are being in assisting businesses in the current climate, including helping them to gain access to funding both from Government funding streams and through the banking system Business Link working locally have been very good and have been running regular clinics from our OYces in the City centre to provide advice to locals businesses. Business Link have also been an active partner in the Oxfordshite Task Force. This is a group, chaired by SEEDA to look at what is happening as a resultof firms downsizing their staV, and prroviding advice and support for individuals. It seems that there are still major blockages to accessing finance through the banking system. This is a national issue, which calls for a national response. Business Link working with business at the local level are unlikely to bypass the blockages which have their roots in the national and even global financial systems.
Memorandum submitted by Regional Action and Involvement South East (RAISE) (SE 11) 1. ResponseSummary 1.1 As a delivery partner in the RES, RAISE welcomes this opportunity to provide comments to the South East Regional Select Committee inquiry. RAISE is committed to supporting the delivery of the RES objectives for the benefit of the people they serve. 1.2 Views represented here include those of the RAISE Board and RAISE membership available in the consultation timescale. This RAISE response follows the sequence of consultation questions issued in the 25 March request for written evidence. 1.3 Key points: — RAISE is keen to work as a key partner in new regional arrangements, building on its experience in cross-sector partnerships, and the new regional Compact29 between RAISE, the VCS (voluntary / community sector), and statutory bodies in the South East. This is in line with current Government policy on the future role of the Third Sector /VCS. — The VCS is a large employer in the South East region, with about 6% of the region’s workforce. This needs greater recognition in current regional economic strategy. RAISE and its VCS members oVer wider potential to support the delivery of sustainable prosperity objectives than is reflected in the current RES. — VCS skills should be used to address the current challenges facing the South East’s economy, and targeted support should be oVered to the VCS which is facing increased demand for its services, but reduced funding — Successful partnership working to deliver regional strategy needs clear roles, responsibilities and accountability, with agreed long-term SEEDA strategy and appropriate supporting funding commitments.
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— SEEDA’s should drive strategy, monitor performance and help other partners and agencies to deliver it — SEEDA should demonstrable what diVerence has been made by the RES to the region’s sustainable prosperity through a) its own interventions and b) those of its delivery partners.
2. RAISE 2.1 RAISE was established in 1999. It exists to champion the Third Sector’s unique contribution to making South East England socially, economically and environmentally sustainable. 2.2 RAISE is governed by an elected representative Board consisting of 24 voluntary/community individuals from the South East. The Board reflects the diversity of the Third Sector and is accountable to the Sector in the South East. 2.3 The Third Sector is diverse and includes organisations ranging from national charities with multi- million pound turnovers, to small volunteer-run community groups. RAISE has a core membership of small and medium VCO organisations in the third sector, with 1500 members overall, including more than 75 second-tier VCS infrastructure organisations which between them represent over 10,000 front-line VCOs. 2.4 RAISE has strong partnerships with the region’s key policy makers as the voice and champion of the Third Sector in South East England. Funding partners include SEEDA and the Government OYce for the South East (GOSE). 2.5 Good practice in partnership working at a regional level has been formalised through the development of a regional compact between the regional VCS and public bodies, launched in March 2009. The purpose of this document, Our South East Regional Compact, is to enhance partnership working between South East Third Sector partners (SERCC, RAISE,) and statutory agencies (GOSE, NHS South East Coast, NHS South Central, SEEDA, LSC), and to support Local Compacts and the National Compact.30 2.6 RAISE is a formal SEEDA partner in implementing the RES, with a role in coordination of the implementation of RES Target 14. RAISE is also a member of SEEDA’s RES Leadership Group.
3.SustainableProsperity:Value of theRegionalVoluntary andCommunitySector 3.1 Within the South East the voluntary and community sector makes an important contribution to the region’s GDP (3.4%), and the economic impact of voluntary and community sector organisations is particularly felt in local communities. — There are up to 34,500 voluntary and community organisations in the region31 including 28,702 registered charities generating over £6 billion income.32 — 100,000 people work in the South East voluntary sector, the highest of all the regions.33 — One in 11 of the region’s residents volunteered, a total of 726,000 people with an estimated value of £932 million.34 3.2 This VCS value is recognised within SEEDA’s RES (2006–2016) document: “The region’s voluntary and community sector is a key asset in ensuring that prosperity is inclusive. With up to 35,000 organisations employing over 200,000 (about 6% of the region’s workforce) and with an additional 700,000 volunteers, the sector accounts for over 3% of the region’s GVA”. 3.3 Nationally, the VCS represent a growing sector with particular characteristics relevant to the sustainable prosperity agenda: — The sector’s total income was £27.7 billion in 2004–05.35 — The UK voluntary sector workforce has increased by 28% in 10 years. — Almost one-third of UK voluntary sector employees live in London or the South East.36 — One third of voluntary sector workers (32%) are employed in workplaces with less than ten employees compared with the private sector (25%) and the public sector (8%). — Nearly one in five people (18%) working in the voluntary sector has a disability which is higher than in the public sector (14%) and private sector (13%).37
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— The voluntary sector has a high proportion of employees who are female, working part-time hours and in small workplaces.38 — Between 1996 and 2005, the voluntary sector had a higher percentage of employees with degrees than both the public and the private sectors.39 — Around 3 in 10 voluntary employers report under-skilled staV within their organisation. Small organisations are more likely to report skills gaps due to the need for staV to be multi-skilled to perform a variety of functions.40 — In 2003, 42% of people in England and Wales volunteered through a group, club or organisation at least once, equivalent to approximately 17.9 million people.41 — An estimated 1.2 million full-time UK workers would be needed to replace formal volunteers, well over twice the number of full-time equivalent paid employees in the voluntary sector at a cost of approximately £27.5 billion.42
4. Q1: Role, responsibilities and accountability of SEEDA 4.1 SEEDA’s enabling remit is to be “a catalyst for change within the South East, working with partner organisations—businesses, education at all levels, local authorities, Government agencies, voluntary and community organisations and many others—to produce clearly recognisable results”.43 The RES is the framework for this SEEDA activity, and defines the region’s priorities and targets for the work of all the partners in its delivery. 4.2 SEEDA has committed considerable time and eVort to developing a “living” RES document, delivered with partners to meet agreed targets. The intended proportion of SEEDA: partner delivery was stated initially to be 25%:75%. Lead partners have been identified for targets, but role clarity, and clear— delegated—responsibilities and accountability for delivery have not been secured consistently. 4.3 The role of partners in decision making processes to revise the RES has not been consistently transparent, leading to some role confusion and lack of wider ownership. 4.4 Perhaps because of this, the RES appears to be predominantly ‘owned’ by SEEDA, and the role, responsibilities and accountability of SEEDA to either its partners or to wider regional stakeholders has not been explicitly defined. A more strategic implementation role would be helpful; SEEDA should drive the strategy, monitor performance and help other partners and agencies to deliver it. 4.5 Role clarity and accountability would be improved if underpinned by consistent, clear decision- making processes, corporate communications and stakeholder relationship procedures. 4.6 RAISE supports a streamlined approach to any revised stakeholder/partnership arrangements, so that scarce capacity in key external specialist sectors is used to best eVect, and partner engagement can be managed more eVectively at regional, sub-regional and local level. 4.7 Given the broad scope of the RES, public accountability and reporting needs development. This could include regular regional, sub-regional and local RES progress (outcomes) reports, based on clear baselines, targets, roles and accountabilities. 4.8 SEEDA should be able to demonstrable what diVerence (ie strategic added value) the RES has made to the region’s sustainable prosperity through a) its own interventions and b) those of its delivery partners.
5. Q2: Process by which the RES was drawn up and the level of regional stakeholder involvement 5.1 SEEDA made significant eVorts to engage partners in the development of the current version of the RES, including themed stakeholder workshops and commissioned research. This raised the profile of the RES and increased stakeholder engagement. 5.2 However, this development process was prolonged and complex, and required significant capacity and resourcing by stakeholders in order to engage with it, and to influence emerging RES proposals. For example, RAISE activity to support a VCS members’ response (1500 organisations) was extensive. It included attending all 2005 pre consultation workshops; a regional questionnaire; RAISE Board consideration; VCS “think tank”; further VCS written responses, awareness raising through newsletters and networks; and collaboration with relevant social and environmental fora. 5.3 Barriers to VCS engagement in the RES development process included accessibility of the regional events and consultation procedures, but also the initial lack of RES focus on the VCS and its value in the region. This made it diYcult for the wider VCS to understand any explicit delivery role, or for SEEDA to maximise RES outcomes through partnership with the VCS.
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5.4 Uneven SEEDA communications and stakeholder engagement processes also led to inconsistency of stakeholder representation, and a confusion of external communications—including numerous RES consultation versions. 5.5 As a result, it was not always clear to external consultees how, why or when changes to the RES were being eVected, and this led to some concerns and frustrations about the value and impact of stakeholder contributions within such a fluid and ambiguous process. 5.6 Future regional strategy development needs a Compact44 compliant SEEDA communications strategy, and structured partner/stakeholder relationship management, using streamlined expert advisory or stakeholder input. This would allow cost eVective and relevant specialist regional and local input, using existing external partner networks where appropriate.
6. Q3:EVectiveness of the RES for the South East in delivering against its targets including the degree to which the regeneration of areas of deprivation and the former coalfield areas has been successful 6.1 Although RAISE and its VCS members oVer potential to supporting the delivery of many RES objectives, the only RES target that engages them specifically is Target 14: Sustainable Communities. RAISE welcomed involvement by SEEDA as a Partner in co-coordinating the delivery of this target. Some collective progress has been made towards achieving the ambitious RES targets, which would be diYcult to deliver without VCS interventions. 6.2 However, this focus for RAISE and the VCS on Target 14 has been perceived by some members to “silo” the potential contribution of the Third Sector to other RES objectives and targets. The RES objectives have many inter-dependencies, and RES implementation could better link the social, economic and environmental impact of each. RAISE would support a sustainable development approach that integrates the social and environmental contexts with economic growth while ensuring sustained quality of life. 6.3 EVective delivery of RES targets could be improved by a greater focus on outcomes, and by ensuring a distinction between strategy and delivery.Successful partnership working needs clear roles, responsibilities and accountability, with agreed long-term SEEDA strategy and appropriate supporting funding commitments. Without this framework, the achievement of RES outcomes through partner organisations will not be realised. 6.4 RAISE and its members are keen to support future regional strategy and to participate fully in its successful delivery. This is in line with current Government policy on the future role of the Third Sector.
7. Q4:EVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors such as manufacturing or service industries 7.1 The VCS is a large employer in the South East region, with about 6% of the region’s workforce. This employment role is frequently completely overlooked, and needs a greater recognition in current regional economic strategy. 7.2 VCS skills also need to be utilised in addressing the current economic challenges. Local VCS organisations oVer valuable knowledge about the area in which they operate and the people which they serve; this expertise can be used to ensure that economic development is sustainable and successful and meets the needs of local areas and their communities. 7.3 In the current economic climate, funding to the VCS is likely to reduce, although demand for its services will rise. RAISE has submitted an initial report to SEEDA on the impact of the economic downturn on the VCS in the South East, based on an on-line survey in January 2009. Headlines include: — Over half of VCS respondents (56%) stated that demand for services has increased. — Increased debt among the communities which VCS members serve was the main issue for 42% of respondents, followed by limited access to jobs (25%). — Nearly three quarters of respondents (72%) anticipate that sector funding will decrease over the next six months. — Over two-fifths of respondents (42%) indicated that their income has decreased over the past six months, some by as much as half. — Over one in eight of RAISE members (13%) have already had to make staV redundant due to the current financial crisis. — Over half of respondents have seen no change in the number of volunteers over the past three months. Just under two-fifths (39%) have seen volunteering increase 7.4 The current increase in volunteering is not only an opportunity but a threat for the sector. If individuals volunteer for positions and need training, they will drain organisation resources if they do not stay long enough for organisations to recoup costs.
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7.5 RAISE is disappointed that the role and funding of the VCS as a contributor to economic recovery has received little regional profile to date, and that where there has been attention, this has been a disproportionate focus on social enterprises as opposed to the majority of VCS organisations. 7.6 The VCS needs support in quite a diVerent way to the private sector, as it faces increased demand with reduced funding. Standard small business advice is therefore unlikely to help the vast majority of the VCS, and a more sophisticated, targeted support package is required. 7.7 Creative, timely interventions would be welcome, for example, a matching service between VCOs and people made redundant with specialist skills, support for increased VCS collaboration to share costs, and sustained investment (rather than short term) programmes.
8. Q5: Changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on SEEDA’s work 8.1 RAISE welcomes these proposals, which support the benefit of stakeholder expertise, advice and knowledge at an early stage in preparing regional strategy. It also welcomes the requirement for bodies that are responsible for plans or programme making, to consult widely, and to approach stakeholder engagement and community involvement in a way which is transparent and accountable. 8.2 Although national consultation regulations and details of regional arrangements are yet to be confirmed, RAISE is pleased that the Bill already specifically mentions the voluntary sector within the proposals for stakeholder engagement.
9. Q6: Role of other Government agencies such as the Government OYce for the South East, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES 9.1 RAISE recognises and supports the progress to date in engaging partners to deliver the RES. EVective cross-sector partnerships are essential to implement sustainable development principles. For example, the Department for Communities and Local Government has recently recognised the important interrelationship between social and economic problems45 in addressing housing need. They advocate a holistic approach with partnership working at its core, including a range of service providers: debt advisors, Job Seeker Direct, mental health services and social services. 9.2 RAISE supports this type of holistic approach at regional, sub-regional and local level. Social stakeholders must be included and underlying social issues addressed if sustainable economic growth is to be achieved, especially in areas of deprivation. It can also bring regional and sub-regional structures more in line with the partnerships that are at the heart of LAAs and MAAs, eg in supporting the place shaping agenda. 9.3 RAISE is keen to support the new regional arrangements, and has a successful track record of cross- sector partnership working in the region, already working strategically with sub-regional and local partnerships to deliver local targets, eg LAAs. This experience oVers a “joining up” role between sectors to look at the balance between social, economic and environmental indicators to support sustainability.
10. Q7: How eVective initiatives such as Business Link are in assisting businesses in the current climate, including helping them to gain access to funding both from Government funding streams and through the banking system 10.1 RAISE notes that that businesses and individuals use a variety of sources of business assistance, of which Business Link is only one. The VCS contribute in many ways to this agenda, as do public libraries. Research would be useful to identify the relative contribution and cost eVectiveness of Business Link compared to other local advisory sources, with a future review of investment priorities. 10.2 For social enterprises, Business Link lacks suYcient specialist understanding either to enable detailed set up support, or to provide ongoing support for existing enterprises. Currently, this support is not universally available in the region; where it is available, it is often provided by RAISE members, eg Community Action Hampshire.
Memorandum submitted by the Royal Institution of Chartered Surveyors (South) (SE 12) The Royal Institution of Chartered Surveyors (South) is pleased to be able to contribute to the work of this Committee at such an important time in the transition from former governance structures, in which the organisation was able to contribute as a stakeholder member of the Assembly, to the new arrangements where opportunities for structured and continuous engagement are less clear.
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SEEDA now remains as one of two, rather than three, bodies dedicated to the regional tier in the South East. RICS South therefore wishes to highlight the importance that SEEDA must attach to developing insight to the businesses, expert organisations and communities so that this large and populous region can continue to make a significant contribution to the nation’s economy and provide a high quality environment for its people. In challenging economic times the insight that this regional dialogue provides into the impact of the recession and government policy on communities in the region is extremely valuable.
RICS South does acknowledge the genuine diYculties involved in achieving consultation across such a large Region with many diverse needs, challenges and opportunities. We are of the considered opinion that strategic planning is essential at this level but remain uncertain as to how this can be achieved in any sustainable way without the input of the wider region in policy development and decision-making.
RICS in the South East therefore wishes to share our experience and insight into the work of SEEDA in the hope that this will contribute to your work and understanding of how SEEDA’s potential in promoting sustainable development in the region can be pursued most eVectively. We would be pleased to clarify any points in this submission and provide oral evidence to this Committee.
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 South East has approximately 18 500 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.
KeyPoints — SEEDA will need to acquire new skills and expertise to integrate economic policy in the new Regional Strategy.
— Considerable organisational change is needed to support SEEDA’s eVective joint working with the former Assembly secretariat in developing this eVectively.
— There is a mismatch between SEEDA’s economic objectives and measures of success and the overarching statutory sustainable development duty that exists in spatial planning, as measured through the Sustainability Appraisal. Consistency between the RDA duty and performance measures and statutory sustainable development requirements is needed.
— SEEDA’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.
— SEEDA’s working arrangements lack transparency and the organisation appears inaccessible, so that it cannot harvest regional expertise consistently when developing or delivering regional strategies.
— It is wasteful in the current economic situation to discard the expertise that stakeholders from business, expert organisations and the voluntary sector can oVer.
— SEEDA needs a coherent and eVective way of connecting with sectors and communities to harvest the diversity of the South East as the largest English region.
— Its Stakeholder Management Strategy and ways of working could be improved.
— SEEDA board participation could benefit from wider input by regional MPs and stakeholders to speak for their constituencies and wider organisations in the region.
— The economic downturn’s negative impacts have been profound. RICS is well placed and willing to contribute professional expertise in relevant sectors.
— Deprivation in former coalfield areas persists despite SEEDA’s best eVorts. This reflects historic origins of settlements and the development of local economies.
— GOSE and SEEDA should consider how best to develop a coordinated approach to regional engagement with sectors and communities to harvest available expertise and insight to inform their discussions and decisions. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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Role, responsibilities and accountability of SEEDA 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 eVect on the work of SEEDA 1.1 SEEDA’s role 1.1.1 SEEDA’s role has been to deliver economic growth and regeneration in the region in line with the RES. In doing so SEEDA has worked with other organisations in a range of schemes and initiatives that have produced some high quality outcomes. Aspects of the eVectiveness of SEEDA’s work have been evaluated in detail by the former assembly through three scrutiny exercises carried out annually over the last nine years. 1.1.2 The intention of the Review of Sub-National Economic Development and Regeneration (SNR) is that SEEDA is to play a more strategic role and delegate funding and delivery to local authorities and new subregional partnerships. It will then be able to focus at this strategic level. SEEDA will work in partnership with local authorities via the Partnership Board in developing the Regional Strategy to replace the former separate spatial and economic strategies. This will require organisational change within SEEDA and the acquisition of skills in spatial planning so that it can integrate economic priorities with spatial planning in this new strategy.
1.2 SEEDA’s responsibility 1.2.1 The organisation has an economic focus and SEEDA’s measures of success reflect this. That SEEDA 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 was applied within regionally specific sustainability criteria developed in the Regional Sustainability Framework. These 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, using the expertise of the sustainability roundtables in each region. The South East has never set up such a forum, but instead uses the well respected Sustainable Futures Group that has received informal assembly support. 1.2.3 Logically therefore SEEDA’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 SEEDA’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. SEEDA’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 SEEDA’s accountability 1.3.1 SEEDA’s existing accountability to BERR is clear, with funding primarily from that source. SEEDA’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 SEEDA 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 SEEDA. Individuals serving as board members therefore do so on a personal basis with a sole accountability to SEEDA, which delivers central government economic priorities in the region, and not to the organisations or sectors with which they are connected. While SEEDA works with partners in the region, its accountabilities do not lie in the South East. The closure of the former assembly means that it is now less easy for the voices of key organisations such as the NHS, TUC, RICS, National Housing Federation and Federation of Small Businesses 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 Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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longer term loss is highly significant, particularly as there are now no arrangements for scrutiny of SEEDA 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. 1.3.2 Only SEEDA and GOSE now remain as regional bodies and the formal arrangements for stakeholder engagement at this level no longer exist. There appear to be no proposals within either organisation to address this proactively. The current fairly informal and often ad hoc arrangements in these organisations cannot support the continuity of informed regional stakeholder input that is essential to deliver a strategy fit for purpose. 1.3.3 The ways in which SEEDA works are to continue in the post-SNR era, with the following potential weaknesses: Transparency The work of SEEDA covers a wide range of policy areas but little of its work is accessible to the wider public or to interested stakeholders in the region. There is no central point of contact to coordinate input or engagement by regional businesses and organisations. Discussion papers, meetings agendas, minutes, research and supporting policy work that would be useful to engagement are rarely available on the website and it is diYcult for potential regional stakeholders from business or the wider community to find out how they can engage and input the expertise and experience in their sectors. This creates a real deficit in the resource that SEEDA can access and it does not provide for the diversity of engagement and knowledge sharing that is needed. 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. Without a coherent structure the impression can be created that stakeholder involvement and consultation is carried out sometimes without clear objectives and there is anecdotal evidence among stakeholders that consistency in feedback is lacking and that consultation exercises sometimes yield no outcomes at all. 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. The organisation also has real expertise throughout rural and environmental sectors. SEEDA has recently implemented a “Stakeholder Management Strategy” that does not address these issues, and which concentrates almost entirely on public relations objectives and the reputation management of the organisation. It does not recognise that genuine regional stakeholders across economic, social and environmental sectors, including expert organisations such as RICS, are a resource that is available to enhance SEEDA’s eVectiveness in policy development and delivery. The much narrower stakeholder representation proposed by local authorities at regional level following the closure of the assembly means that much that is of value will never be heard in the very 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. 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 and their presence has been replaced by that of SEEDA board members who are accountable only to SEEDA and central government. RICS and others regret the loss of accountability and insight to the region that results from this. It seems anomalous that SEEDA 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. This wider dialogue could add real value and it would also be useful to include regional stakeholders as observers.
The eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors such as manufacturing, service industries etc 2.1 The economic situation has had a profound eVect on businesses in the region, with a marked downturn in property and construction sectors, although some areas and sectors remain relatively buoyant. 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 there is some emerging renewed interest, South East currently has fewer new buyer enquiries than any other region. The unprecedented fall in new house completions in 2008 was highlighted by the Homes and Communities Agency’s report to the assembly in November 2008, and this described a significant reduction Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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in the delivery of aVordable housing. Fears of rising unemployment in the region may also be relevant. The virtual collapse in residential new starts during 2008, shown in the HCA report, will delay the delivery of essential housing in the region for some time to come as there is little now in the pipeline. 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 newbuild 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 South East 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.
The eVectiveness of the RES for the South East in delivering against its targets including the degree to which the regeneration of areas of deprivation and the former coalfield areas has been successful 3. Intraregional disparities continue to exist in the South East, with areas of multiple deprivation at ward level across the region, but heavily concentrated in the former coalfields and in Sussex coastal towns. Despite much investment, deprivation continues and the current economic situation exacerbates this. This intraregional pattern has historic origins, with a contrast in local economies between eastern and the western parts of the region. Towns in the west, including Oxford, Reading and the PUSH area, have succeeded in developing distinct local economies in this polycentric region, while relatively undeveloped economies in the east depend to a great extent on commuting to London rather than on locally generated growth. In the east too there has been a traditional reliance on the former tourism industry of the seaside towns and new economic development would require substantial investment in transport infrastructure to stimulate interregional and cross-Channel connectivity. The roles of Crossrail, the Ebbsfleet CTRL terminal and current road improvements may support future growth, but the lack of success so far suggests that more investment and focus is needed.
The role of other Government agencies such as the Government OYce for the South East, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES 4.1 The closure of the regional assembly means that there now remain only two bodies with a distinct focus on the regional tier. 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. 4.2 Possibly a shared approach with SEEDA 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, particularly in property and housing sectors and in reaching out to business and the voluntary sector to assess the impact of the downturn on local economies and communities.
Memorandum submitted by the South East England Development Agency (SE13) This paper is the response of the South East England Development Agency (SEEDA) to the South East England Regional Select Committee inquiry into the role of SEEDA and its work and eVect on the Regional Economic Strategy. This submission does not attempt to provide detailed responses to all the individual issues raised in the Press Notice of 26 March, but instead to provide a high-level response to each of the questions posed. It also seeks to clarify SEEDA’s overall approach. We look forward to discussing these issues further during the Oral Evidence session on 11 May 2009.
Section 1: Roles, responsibilities and accountability of SEEDA 1.1 Regional Development Agencies (RDAs) were formed in April 1999 with the purpose of furthering economic development and regeneration, promoting employment and business investment and competitiveness, enhancing skills development, and contributing to sustainable development. The principle of partnership is integral to the purpose, role and remit of SEEDA, ensuring all relevant local and regional interests contribute eVectively to a coherent strategic programme in the region. 1.2 Being a non-departmental public body, SEEDA is directly accountable through the Secretary of State for Business, Enterprise and Regulatory Reform to Parliament. StaV are accountable through our individual, business-led RDA Boards, representing a range of organisations, including local government, the voluntary and private sectors. SEEDA’s accounts are scrutinised by the National Audit OYce and signed oV by the Comptroller and Director General. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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1.3 Until the dissolution of the Regional Assembly on 31 March, SEEDA was also accountable to SEERA. SEEDA’s Chair and Chief Executive attended annual “holding to account” sessions with Assembly members in full plenary and SEEDA’s Chief Executive reported to regular meetings of the Assembly’s Executive Committee. Three or four scrutiny inquiries were also conducted each year, focusing on specific policies and interventions across various aspects of SEEDA’s remit. 1.4 SEEDA is also subject to periodic reviews and performance evaluations. The 2006 Independent Performance Assessment (IPA) judged that SEEDA was performing strongly, with 21 points out of a maximum of 24, with Ambition and Achievement both scoring maximum points. Prioritisation, Capacity and Performance were all judged to be performing well. The IPA provides advice for a continuous improvement action plan currently being taken forward. 1.5 SEEDA welcomes the additional scrutiny expected by the Regional Select Committees. We realise will provide a focus on the needs of the whole region and the performance of all public sector partners in supporting sustainable economic growth.
Section 2: The process by which the RES was drawn up and the level of involvement of regional stakeholders 2.1 The South East is a world class region: one of the world’s most prosperous and advanced economies. The key challenge for the region’s economic future is to achieve a continued prosperity which is sustainable in the face of intense global competition; shared by all; and achieved without further damaging the quality of our environment. 2.2 Implementing the RES is not the sole responsibility of any one organisation, but requires a sustained and co-ordinated approach by all. Within the RES Implementation Plan, the main partners who lead to deliver key actions have been grouped into four major categories: Central/Local Government, Business, Social & Cultural, and Environmental. SEEDA works closely with all these partners through the “Living RES” cycle—an annual monitoring and reporting cycle which does not only measures progress, but also develops thinking and prioritises activities with all partners. 2.3 The last RES review commenced in July 2005 with the publication of an impact analysis of the previous (2002–12) RES, and three events addressing the three key challenges facing the region—global competitiveness, smart growth and sustainable prosperity. Over 2,000 representatives attended these and subsequent events. 2.4 The RES Steering Group draws together key business representatives, local authority leaders and representatives of social and environmental partners and acts as a valuable sounding board throughout the review period, and has subsequently been maintained to review RES implementation progress. 2.5 RES Evidence Base (published separately) is the most substantial and complete analysis of the region’s economy yet undertaken. In particular, SEEDA utilised scenarios to demonstrate the alternative futures facing the South East’s economy, thus delivering key conclusions of the evidence base. 2.6 There was close involvement of SEEDA’s Board and the Regional Assembly throughout. Both bodies were able to shape and amend the strategy as it was in development, the final decision resting with SEEDA’s Board while recognising the importance of gaining endorsement from the local authorities and partners represented through the Regional Assembly. This has helped ensure that the actions set out in the RES (many of which lie with other agencies) are owned by those best placed to deliver them, for example the Learning and Skills Council and JobCentre Plus in relation to employment and skills. 2.7 SEEDA conducted two formal consultations during the review, producing over 350 written responses. A full sustainability appraisal was also conducted, again involving a steering group comprising a range of agencies and stakeholders. 2.8 The RES was launched October 2006 with a commitment to maintain an annual cycle of monitoring and review with partners. The RES Implementation Plan produced subsequently leads RES actions through to firm commitments among partners. SEEDA’s own Corporate Plan for 2008–11 maintains this continuity by demonstrating what SEEDA will itself do in implementing the RES. 2.9 Clearly the RES, produced in 2006, did not anticipate the current downturn. Nevertheless, we are clear that the 3 central challenges of the RES referred to in paragraph 2.3 remain the key challenges facing the region’s economy, albeit in changed circumstances.
Section 3: The eVectiveness of the RES for the South East in delivering against its targets including the degree to which the regeneration of areas of deprivation and the former coalfields areas has been successful 3.1 Since the first RES Annual Monitoring Report was published in 2006, and defined the baselines against which progress towards delivery will be measured, we have seen major changes in the economy. The impact of the credit crunch, volatile commodity prices, the sharp rise then rapid fall in inflation and a slowdown in output growth have all led to well-documented declines in business and consumer confidence. Clearly, this will have implications for achieving the RES targets. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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3.2 Despite this, the RES Steering Group concluded that the targets should not be revised—even where they are now most unlikely to be met. Instead, we are committed to giving the public sector leadership necessary to achieve close alignment of partners’ business plans to the RES objectives for maximum impact. 3.3 PriceWaterhouseCoopers (PwC) recently carried out a year-long independent evaluation exercise to identify the directly attributable impact of SEEDA activity and interventions. This showed that SEEDA created jobs which contributed £2.64 billion to the economy of the South East during 2002–07. Every £1 spent by SEEDA over the five-year period generated on average £5.60 in Gross Value Added for the region compared to the RDA national average of £4.50. Given an average rate of taxation of 20% this means that SEEDA generates more output in terms of financial yield than the Agency costs. 3.4 PwC identified that SEEDA’s interventions produced gross tangible outcomes: — creating or safeguarding over 39,000 jobs; — assisting 33,000 business; — 216 hectares of brownfield land made fit for development; — creation of more than 2,500 new businesses; and — 66,000 people helped to develop new skills. 3.5 It also found that 150,000 further jobs could potentially be created during the total lifespan of projects with long-term objectives. But the numbers do not tell the full story.SEEDA has contributed to the economy of the South East in a number of other ways by building capacity in others to generate economic growth by bringing partners together. 3.6 The Agency’s key physical regeneration projects were evaluated, including the regeneration of the East Kent coalfields. 3.7 The East Kent Coalfield (EKC) Regeneration Programme involved the reclamation of land on four former colliery sites—Betteshangar, Chislet, Snowdown & Tilmanstone. Funded, in part, through the National Coalfields Programme 2002–03 to 2006–07, the aim was to regenerate the sites in order to improve the economic prospects of the area and bring lasting benefits to the wider economy, improving the physical environment and infrastructure, bringing new businesses and jobs into East Kent and assisting local business expansion. 3.8 SEEDA’s interventions across the coalfields generated more than £265m GVAfor the region (a return on investment of over 400%). To date, 1,852 (gross) jobs have been created and 2,776 projected, against a target of 2,353 in the EKC projects. The planned total leverage forecast totals £84.2 million (£52 million having been achieved to date) exceeding the target of £79.1 million. However, the remediated brownfield land outputs (153 hectares) fall short of 191 hectares target because of the withdrawal of the original Snowdown project, which impacts across the board on achievement against targets. In value for money terms, the net cost per job across all four sites was £15,156, which compares favourably with benchmarks. 3.9 Work-based employment has risen in the former coalfield, its growth out-pacing the rest of the South East. The area retains a higher concentration of manufacturing in its economy than the rest of England and there has been a significant increase (until 2006) in the number of business units. Whilst EKC continues to experience higher levels of benefit claimants than the rest of the region, there has been progress in closing the gap, with the proportion of the population claiming JSA in EKC decreasing between 1999 and 2006. 3.10 More generally, SEEDA works closely with developers, investors, local authorities, English Partnerships and the Homes and Communities Agency to ensure that regeneration schemes across the region are restructured to respond to the changed market condition. 3.11 The region also contains a large part of the Thames Gateway in North Kent covering Dartford, Gravesend, Medway and Swale. The 2007 Thames Gateway Delivery Plan provided an indicative allocation of £83 million to directly support development and regeneration projects in North Kent. These projects, directly funded by the Department for Communities and Local Government are part of a much more substantial £9 billion investment programme, designed to realise the substantial economic development and housing opportunities of the Gateway as a whole. SEEDA supported a number of these investments as well as helped to build the enterprise and innovation environment for longer-term prosperity. SEEDA, together with EEDA and the LDA, led the development of an Economic Development Investment Plan covering the whole of the Gateway and underpinned by investment of £200m from CLG and the RDAs. SEEDA’s investment in the EDIP will amount to some £30m over the three years. 3.12 SEEDA also invested £10 million to lever further funding into a Regional Infrastructure Fund to provide forward funding of infrastructure. Case studies illustrating achievements of major regeneration projects in Chatham Maritime, Hastings & Bexhill and East Kent Coalfields can be found at Annexes A, B and C respectively. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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3.13 SEEDA also works to achieve output targets identified within its Corporate and Business Plans. The Agency performed strongly against its output targets over the duration of the last Corporate Plan period (2005–08):
Target Achieved 2005–08 2005–08 Variance Businesses Supported Jobs created or safeguarded 14,800 17,476!18% Number of people helped to get work 17,200 32,513!89% Businesses created or attracted to the region 6,960 9,931!43% Businesses assisted in improving performance 99,600 137,659!38% Businesses collaborating with the knowledge base 2,280 3,864!69%
Investment in Places Investment levered (£m) 580 638!10% % Investment levered from private sector 50 45"10% Brownfield land remediated (ha) 242 198"18%
People Assisted People assisted in skills development 88,250 134,626!53% Adults gaining basic skills 9,000 9,977!11% Adults gaining at least NVQ Level 2 1,160 1,893!63%
Section 4: The eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors such as manufacturing, service industries, etc 4.1 Falling demand from businesses and consumers has quickly spread into the real economy with falling volumes of output and the volume of new orders. Alongside falling demand, the liquidity freeze in the global financial markets has led to a liquidity constraint aVecting businesses of all sizes and in particular SMEs. Cost of finance and in particular access to credit is cited as the main factor constraining the level of business investment and growth. 4.2 What started oV as a downturn aVecting a handful of sectors such as construction, manufacturing and financial services has over the past six months spread to most of the other sectors. 4.3 Manufacturing continues to face adverse trading conditions in both domestic and export markets. A significant depreciation of the pound has so far failed to improve the fortunes of South East manufacturers. Manufacturers who import are continuing to feel pressure from higher import prices. 4.4 The automotive sector is experiencing very challenging conditions because of low consumer confidence and high levels of uncertainty. New car sales are significantly down on last year. Defence orientated manufacturers are still doing reasonably well but some firms are concerned that government contracts could “dry up” over the next couple of years. The level of activity within construction remains depressed with little sign of improvement. 4.5 Turning to the service sector, and in particular leisure and tourism, the restaurant trade has been aVected significantly by the downturn except in those cases where outlets (largely chains) oVer discounts or special oVers. Tourist operators are fairly confident of a good summer season, but less optimistic about the oV-season. Conference venues are reporting a significant drop in bookings and luxury hotels are having to reduce their room rates to attract business customers, but budget hotels are doing well. 4.6 In the creative and cultural sector, publishing, design and fashion, leisure, advertising and architecture generally struggling, while music, software and computer services are doing relatively well. Web developers are reportedly seeing increasing orders from businesses seeking new markets. 4.7 Printed media (particularly local newspapers) are struggling due to reduced advertising spend and the challenge from online media. Many businesses are reducing their budget for printed media and switching to online media instead. 4.8 A number of sectors within the Business Services classification are being adversely aVected by the downturn. In particular employment agencies, property related services and management consultancies are being hit particularly hard. Conversely, IT and accountancy services are still holding up. In Financial Services, there is still a concern over the availability of working capital for businesses and prolonged uncertainty within the financial markets is expected to lead to further restructuring within the sector over coming months. 4.9 A copy of the Monthly Regional Intelligence Snapshot can be found at Annex D. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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Section 5: The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of SEEDA 5.1 Taking the two key aspects of the Bill in turn: Regional Planning 5.2 The move to replace RES and RSS with a single Integrated Regional Strategy is a very substantial change. SEEDA and South East England Councils, working with delivery partners and stakeholders, have agreed a governance structure to carry forward their proposed joint duty to prepare the Regional Strategy, submitted for approval by Ministers in late March. 5.3 The potential impacts are: — The need to ensure continued business engagement with a strategy-making process that is longer, more complex and legalistic than previous RES regime; — The shift from sole responsibility for RES to shared responsibility for Integrated Strategy—implying new working relationship with local authorities; — Substantial additional workload on Board members, requiring new skills. Joint Investment Planning 5.4 The approach proposed in the Bill reflects the reality of how SEEDA already works in, for example, Urban South Hampshire and the Thames Gateway. The legacy of debates around devolution/delegation of RDA funding have left confusion and unmet aspirations on the part of some partners. For the future, achieving joint investment planning with a declining resource base raises additional challenges, and potentially puts relationships under further strain. 5.5 A further aspect worth noting is the approach to scrutiny of SEEDA’s activities previously taken by the Regional Assembly, which in SEEDA’s view was a model of good practice. This comprised a programme scrutiny focused on distinct policy issues (often extending beyond SEEDA’s own direct remit), drawing on the views of a wide range of stakeholders and culminating in a series of recommendations against which progress was regularly reviewed. An example of this approach, relating to the Assembly Scrutiny of policies towards Labour Force and Employment, is attached at Annex E.
Section 6: The role of other Government Agencies such as GO-SE, and of partnerships between Government Agencies, local government and the private sector, in delivering the aims of the RES 6.1 SEEDA has a two-fold job of co-ordinating the overall delivery of the RES and contributing directly to individual targets and actions. SEEDA has set out in its Corporate Plan how it will use its resources to fulfil both of these roles over the next three years. 6.2 Following the Sub-National Review, Local Authorities will have an even more central role to play in delivering the RES. They will provide strategic leadership in and across local areas to tackle key areas of economic development and social inclusion as part of their place-shaping role. 6.3 It is business which produces economic success and so it is of vital importance that business is properly engaged both in delivering the RES and influencing the development of it through the “Living RES” process. Some businesses are directly involved in work on particular targets and actions or are represented on strategic partnerships which oversee delivery of particular aspects. However, most businesses are engaged through representative organisations or are recipients of business support through business support organisations. Business Link is the primary access channel for a simplified oVer of publicly funded business support. 6.4 As Multi and Local Area Agreements develop a stronger economic focus to be consistent with the RES, it will be increasingly important that business is fully engaged and eVectively linked to place. More information on Sub Regional Partnerships and Multi Area Agreements can be found in Annex F. 6.5 Social and cultural partners, including the Voluntary and Community Sector, Social Enterprise, the Cultural and Creative Industries and Trades Unions have a key role to play in promoting the need for a cross sector approach to the creation of vibrant places, contributing to social cohesion, helping people to move into employment and improve skills, and supporting 700,000 volunteers in the region. 6.6 As well as contributing to delivery of the RES directly, partners also work through a series of strategic partnerships where a range of perspectives is needed to tackle an issue. These partnerships may be part of regional governance, key groups of providers or partners bringing together key partners across a range of interests. Partnerships of particular importance, providing leadership on key aspects of the RES are: — SESETAC, the Science and Industry Council advising SEEDA; — Regional Skills for Productivity Alliance; — Regional Transport Board; — South East Forum for Sustainability; Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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— South East Climate Change Partnership; and — South East Partnership for the 2012 Games.
Section 7: How eVective initiatives such as Business Link are being in the current climate, including helping them to gain access to funding, both from Government funding strategies and through the banking system 7.1 The Government is simplifying business support to a portfolio of 30 products and making it easier to access with Business Link as the primary point of contact. In partnership with local authorities, SEEDA has taken this forward with no diminution of funding. Having consulted extensively with businesses and partners across the region, this more focused approach includes streamlining specialist support for those SMEs with the greatest potential to innovate and grow significantly. A network of local Innovation and Growth Teams, managed by local partnerships but operating within a regional framework, will build communities of innovation to mentor, coach and connect the businesses to the sources of knowledge, expertise and resources they need to grow. 7.2 SEEDA, with its partners, has introduced a range of measures to support small businesses— particularly through the downturn. The new measures amount to £15 million, including the £10 million Rapid Rescue Response package announced by SEEDA in August 2008. 7.3 SEEDA invests £24 million through Business Link each year. In 2008–09, Business Link supported over 145,750 customers with a 94% satisfaction rate. GVAdata indicates that businesses working intensively with BL are growing at an average rate of 8% pa. A sample of the financial data of 3,000 of the nearly 18,000 unique businesses that have developed plans for growth (“Intensive Assistance”) showed that £4 is generated for every £1 of SEEDA funding to the BL service. 7.4 Nearly 8,000 (19% of the national total) South East businesses have benefited from the free Business Link Health Check introduced in October 2008. 7.5 Through Finance South East (FSE), SEEDA launched a £3 million Commercialisation Fund in 2008 as a key element of the £20 million South East Funding Escalator that aims to catalyse funding into businesses bringing innovative new products and services to the market and then expanding those markets. Since the inception of FSE in May 2004, FSE has helped South East companies raise over £30 million. 7.6 SEEDA is also providing up to £3 million through the South East Transition Loan Fund, a short- term bridging mezzanine debt fund, directed at viable businesses facing diYculties obtaining credit. Funding is provided at commercial rates for these unsecured loans, and interest is rolled up and paid at maturity, thereby making the Fund attractive to some businesses urgently needing to address liquidity problems. SEEDA has made 14 oVers totalling almost £1.6 million and over £1.2 million of this has already been drawn down by 11 companies. There is a strong pipeline, with three applications being considered by the Credit Committee, and a further nine under active consideration. 7.7 For companies with an annual turnover of up to £25 million and looking for a loan of up to £1 million for a period of up to 10 years, the Government’s Enterprise Finance Guarantee Scheme is available (managed through High Street banks). The South East’s share of the £211 million of eligible applications from over 1,900 businesses that have been granted, are being processed or assessed was 205 (10.7%) applications, valued at £19.4 million (9.1%), as of 1 April 2009. Of the 205 eligible applications, 167 businesses have received oVers valued at £15.8 million with an average loan value of £95k per business. 73 of the 167 businesses have drawn down loans valued at £7.6 million. 7.8 Earlier anecdotal evidence suggests that there was some confusion early in the roll-out of the national finance measures as to eligibility criteria with possible lack of consistency between banks at the local branch level. SEEDA have worked hard with the banks over recent months to build stronger relationships and better represent the needs of business. We are now beginning to see the evidence of this eVort. To foster the on-going relationship, SEEDA is in the process of establishing a “Financial Services Forum”, bringing together senior regional representatives of the banks and other major financial services providers to ensure that together we are providing the best possible services to businesses during the recession. 7.9 SEEDA attracts and assists high-value overseas companies to set up and grow in the region through its Inward Investment teams. 80 projects are forecast for 2008–09. SEEDA has rolled out a “softlanding” programme which includes six months rent-free accommodation and free business support services. In partnership with UKTI, each overseas investor is assigned an international Trade Mentor to assist the company access new export markets. 7.10 SEEDA is aiming to strike the right balance between supporting businesses in the recession with investing in the upturn. We are continuing to make major investment into innovation by aligning funding with the Technology Strategy Board in such key sectors as aerospace and low-carbon technologies. We will strengthen our focus on key sectors through, for example, our inward investment activities which will increasingly be aligned with our skills and land & property investments to achieve maximum impact. 7.11 This approach is consistent with the key role of RDAs as set out in the Government’s “New Industry, New Jobs Strategy: Building Britain’s Future” which seeks to match the influence of Government in the economy to the strategic needs of businesses and the needs of the times, to enable businesses to emerge from the recession and the country to return to growth. 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and local bodies. These priorities will be set out in the Government’s new guidance for regional strategies later this year. The new Strategy will support SEEDA in further focusing its business support on the markets and sectors that give our economy the best, and most lasting opportunities such as low carbon technologies, advanced manufacturing, aerospace and digital technologies. 7.12 Annex G provides a little more detail on some of the additional business support packages available to businesses.
Annex A CASE STUDY: CHATHAM MARITIME SEEDA Written Evidence to the South East England Regional Select Committee Inquiry into the South East England Development Agency and the Regional Economic Strategy 1. Chatham has become Kent’s premier business location, employing around 5,000 people through various sectors, including universities and the leisure industry, as well as a growing number of large organisations that have chosen to base themselves there. The vision for Chatham was to create a new community in which people could live, work, study and enjoy their leisure time, building on its illustrious history and heritage, and the spectacular river views to be found there. SEEDA’s Chatham Maritime Programme sought to deliver this vision. 2. SEEDA has been the custodian of Chatham Maritime for the past 10 years. SEEDA has invested £150 million of public sector funding into Chatham Maritime and brought a further £700m from the private sector. With our partners, we have built 1,000 new homes and a million square feet of new oYce space. 3. Following the closure of the Chatham Dockyard by the Royal Navy with the loss of 7,000 jobs, SEEDA proposed that higher education play an important part in securing the vibrant mixed use regeneration of Chatham Maritime and transforming the economy of the Medway. 4. SEEDA encouraged the Universities of Greenwich and Kent and Mid Kent College to work together and bring in other academic and non-academic partners to create a substantial multiversity (various universities) campus at Chatham, enabling institutions to share resources and avoid duplication. SEEDA provided £8.6 million of investment which helped leverage a further £42 million funding package from seven other partners. SEEDA’s involvement with the scheme has helped to promote the development of a major new university campus in the South East that will have long-term skills benefit for local employers and encourage growth in local businesses. At the end of the academic year 2006–07 264 gross new FTE Jobs have been created directly from the project and 2,019 gross additional FTE students have registered at the new campus, with outputs ahead of forecast. 5. The Universities at Medway scheme has helped plug serious skills shortages in the South East, particularly the University of Greenwich’s School of Pharmacy, which is addressing a shortage of pharmacists across the region. The Scheme now boasts 10,000 students. Chatham Maritime boasts a Primary School on St. Mary’s Island and a successful day nursery. Creation of the Multiversity has enabled many students to live at home while studying for their qualifications. 6. Going forward, a further 700 new homes will be built on St Mary’s Island and the two parts of the old dockyard will be reunited with the redevelopment of the land between the Historic Dockyard and Chatham Maritime. 7. The new business district provides 120,000 square metres of high-quality employment space, including smaller units, ideal for start-up businesses and creative industries that will grow out of the universities.
Annex B CASE STUDY: HASTINGS & BEXHILL SEEDA Written Evidence to the South East England Regional Select Committee Inquiry into the South East England Development Agency and the Regional Economic Strategy TheRegeneration ofHastings andBexhill:TheFivePointPlan Contributes to the strategy for the Coastal South East. RES 2006–16 Regional objective of Smart Growth and also Sustainable Prosperity. Contributes to all six of the Smart Growth Targets and actions and additionally Sustainable Communities under the Sustainable Prosperity objective. In addition contributes towards four of the Transformational Actions: — Education Led Regeneration. — Raising Economic Activity Rates. — Skills Escalator. — Next Generation Broadband Coverage. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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The Hastings & Bexhill Task Force was formed in 2002 by SEEDA, bringing key local partners together for the first time. They they created a 10-year programme to revitalise a failing local economy characterised by: a historic lack of private sector investment and a strong reliance on public sector employment; low economic activity, wages, business survival rates and skills; and deep-rooted deprivation.46 The Task Force was set up as a direct outcome of the Government seeking a comprehensive regeneration for the local economy. SEEDA has resourced and led the delivery of this regeneration.
Key Results So far, average earnings in Hastings have risen from 68% of the regional average to 82%;47 oYce rents have risen from £6 to £12.50 per square foot; workshop rentals have increased from £4 to £8 per square foot;48 commitment for 1,000 net jobs (355 net jobs currently have been created or safeguarded);49 and VAT registrations have improved. Figures show more start ups than de-registrations and a better business survival than average for the South East.50 Total GVA impact is estimated to be £24.7 million each year, with a range of £20–40 million.49
StrategicAddedValueAchieved Leadership and synergy SEEDA’s marshalled key, disparate stakeholders behind a shared vision: the Five Point Plan for regenerating the area through specific outcomes for urban renaissance, business support, educational and skills development, broadband and transport. This received Government support of £38 million, with SEEDA itself committing a further £30 million subsequently. SEEDA’s Chief Executive chairs a Steering Group comprising three councils, HCA, GOSE and the two local MPs. SEEDA’s Compulsory Purchase Order powers have enabled it to assemble land to facilitate comprehensive redevelopment in the area and deliver early impact.
Influence SEEDA has influenced partner organisations to take action at a regional and national level. It has led to major commitments from key national bodies: for example, the national LSC decision to overhaul 16! education in the area and build two new college campuses and HEFCE’s 2009 decision for a major increase in assisted student numbers at University Centre Hastings.. Also, major improvements to the road infrastructure between Hastings and London have been prioritised by the Regional Transport Board and ministers at SEEDA’s behest. “The achievements to date have come about through the direct involvement of SEEDA and would not have been deliverable by the local authorities alone”—Chief Executive, Hastings Borough Council
Leverage The Five Point Plan has acted as a catalyst for attracting public funding, including £112 million from the LSC, £7 million from HEFCE, £9 million from ERDF, £15.1 million from EP, £9 million from Network Rail, £21.7 million from local authorities and £21 million from the PCT. East Sussex County Council is leading delivery of the £89 million Hastings & Bexhill Link Road. Private sector funding is vital: £15 million of bank finance is being invested with up to £120 million committed through a joint venture.
EarlyAchievements: (SEEDA LeadFundedProjects) — University Centre Hastings: an innovative strategy for education-led regeneration to an ambitious timescale; 750 students (2,500 with later phases) with an emphasis on assisting hard to reach groups, exceeding targets. — Creative Media Centre: 14,450 square feet of prestigious managed business space for local start- ups, focus for business support linked to the Broadband experience, eBiz and the Enterprise Hubs, with 38 companies on board. — Innovation Centre Hastings: 25,250 square feet of high quality serviced, flexible work spaces for developing and expanding businesses—40 existing companies in place. — Priory Quarter: development of a vibrant new business and education district with other mixed uses. 37,000 square feet of oYce and retail space is complete, with another 46,600 square feet shortly. — Marina Pavilion: A year-round seafront business, hospitality, conference and leisure venue in the heart of St Leonards’ disadvantaged community.
46 Grant Thornton Report: “Sea Space: Evaluation of Early Wins and Phase Two Projects” Aug 2008. 47 Earnings by Workplace 2002 & 2007—NOMIS—OYcial Labour Market Statistics. 48 Dyer Commercial—Surveyors and Valuers, Hastings. 49 Grant Thornton Report: “Sea Space: Evaluation of Early Wins and Phase Two Projects” Aug 2008. 50 BERR—VAT Registrations and De-registrations (2006). Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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— Hastings Millennium Community: In collaboration with EP, 610 eco homes and major education, health and other community facilities. — Enviro21 Innovation Parks: A series of sustainable business parks for environmental technology firms, with construction starting during autumn 2008.
Annex C CASE STUDY: EAST KENT COALFIELD SEEDA Written Evidence to the South East England Regional Select Committee Inquiry into the South East England Development Agency and the Regional Economic Strategy 1. The East Kent Coalfield Regeneration Programme is SEEDA’s largest derelict land reclamation project—involving the recovery of more than 190 hectares (470 acres) of brownfield industrial land in East Kent, on four colliery sites: Betteshanger, Snowdown, Tilmanstone and Chislet. 2. A key objective of the Coalfield Regeneration Programme identified by SEEDA and English Partnerships is to generate long-term sustainable solutions for the former Kent Coalfield sites. These sites are driven by community needs and are based on extensive consultation with local people as well as the Coalfield Communities Campaign, the Coalfields Regeneration Trust, Kent County Council, Dover District Council and local parish councils. 3. The recent PwC Impact Evaluation report found that: — The projects have generated 1,852 actual jobs with a further 924 forecast, a total of 2,776 jobs against a contracted output of 2,353. — The projects are estimated to create 140 businesses in the EKC area. — £84.2 million of public and private funding was attracted to the area because of the projects—which compares favourably to the original contracted level of £79.1 million of private investment. 4. The four projects were good value for money in that the cost per job produced was £15,156—slightly below the EP benchmark range. 5. In terms of net cost of net hectare of brownfield remediated, the cost of the four projects overall amounts to £175,786 per hectare—towards the lower end of the benchmark range set out in the EP guidance. 6. SEEDA’s interventions across the coalfield has achieved more than £127 million GVA outcome at the local level, which is forecast to rise to more than £205 million by completion of all the schemes. At the regional level, SEEDA’s interventions have achieved a £265 million GVA outcome, which is forecast to rise to £412 million with completion of all the schemes. 7. At the local level, SEEDA has achieved a 426% return on its investment cost. By the completion of all the schemes, this return is forecast to increase to 661%.
Annex D CASE STUDY: REGIONAL INTELLIGENCE SNAPSHOT FOR THE SOUTH EAST SEEDA WRitten Evidence to the South East England Regional Select Committee Inquiry into the South East England Development Agency and the Regional Economic Strategy Summary ofEconomicConditions — he latest evidence from businesses and business representative organisations shows that the rate of deterioration in business conditions in the South East has started to slow down, with output, new orders and numbers employed being broadly flat compared to last month. — Manufacturing firms continue to face adverse trading conditions in both domestic and export markets. Significant depreciation of the pound has so far failed to improve the fortunes of the region’s manufacturers with depreciating currency continuing to put upward pressure on import prices. — Largely anecdotal evidence from businesses suggests that there are signs of a more positive outlook for the next few months. Corroborating our latest business survey results (the Quarterly Snapshot), the latest EEF survey shows that the region’s manufacturers are more upbeat about the outlook with businesses expecting a generally higher volume of new orders over the next three months. — The labour market continues to weaken. Over the past quarter for which data is available the number of people in employment fell by 32,000—the largest decline of any region—and the number of people claiming JSA reached 136,000 in February (the highest level since May 1997). With redundancy notifications in March increasing to 5,900 or 9% up on February the labour market is expected to weaken further over the coming months. — Inward investment inquiries are holding up but diYculties in obtaining investment finance remain an obstacle in converting these into solid investments. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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KeyChallenges andHotspots — Falling demand, managing cashflow, and retaining skilled staV to prepare for the upturn are some of the most pressing issues aVecting businesses. — Accessing finance is still proving diYcult for many businesses. — Further weakening of the labour market in coastal areas, smaller commuter towns and rural areas is of particular concern where even relatively small job losses could have a significant impact on demand. Further restructuring within the financial sector, lower demand for other services and the impact of falling incomes as a result of reduced revenues in the public sector are likely to lead to a new round of redundancies in these sectors over the coming months.
BusinessSpecificIntelligence/Information onKeyQuestions — Anecdotal evidence suggests that the take up of the EFG has been slow due to the personal guarantees required, and several other strings attached. — General feedback is that banks are still calling back existing credit arrangements and in some cases reducing overdraft facilities that have already been agreed. See Annex for sectoral and business intelligence.
SectoralOverview The downturn has spread out across a broad range of sectors, with retail, construction and property related activity, manufacturing (especially automotive) and financial services aVected the most. Furthermore, Business Link Surrey are seeing increasing volumes of enquiries from businesses in sectors they wouldn’t normally hear from, such as dentists, solicitors, plumbers and opticians. Manufacturing: continues to face adverse trading conditions in both domestic and export markets. A significant depreciation of the pound has so far failed to improve the fortunes of South East manufacturers. Manufacturers who import are continuing to feel pressure from higher import prices. A number of manufacturing firms have got into diYculties in March, including Carringworth, the West Sussex-based metal components manufacturer with about 250 staV, which has gone into administration, while the engineering firm Active Signs has also gone into administration with the loss of 70 jobs at its Ramsgate- based sign manufacturing business. Kemble & Co, the Milton Keynes based piano manufacturer is said to be considering plans to close its factory in Bletchley with the loss of up to 96 jobs. The automotive sector is experiencing very challenging conditions because of low consumer confidence and high levels of uncertainty. New car sales are significantly down on last year, but there may be some slowing of the decline in April following the issuing of new plates in March. Uncertainty about the introduction of the “scrappage tax” has severely dampened demand, as potential car buyers wait to see if there are likely to be any incentives on oVer. The latest business specific intelligence includes the news that Greens Motor Group, the Kent-based Vauxhall car dealership, has gone into administration with the loss of about 70 jobs. Kent Economic Board report that used car sales are holding up, as are repairs and servicing. Defence orientated manufacturers are still doing reasonably well but some firms are concerned that government contracts could “dry up” over the next couple of years. According to the latest EEF survey, manufacturers in the South East are less pessimistic about the next three months than they were previously. Businesses expect a generally higher volume of new orders over the next three months, with export orders being higher, while the outlook for the volume of domestic orders and volume of output is broadly flat. Employment levels and profit margins are expected to be lower, with further worsening of cash flow over the next three months. Cashflow and access to credit still remain significant challenges for the region’s manufacturers. Energy: The energy sector appears to be performing relatively well, with no major redundancies announced in the past two months, and a number of new plants to be set up and new jobs to be created. For instance, Scottish Power has unveiled plans for a new £500 million 1,000MW gas-fired power station at its Damhead Creek site in Kent, with the creation of 50 permanent jobs, while Ceres Power is to set up a fuel cell manufacturing plant in Horsham, Sussex, creating hundreds of jobs. Retail: Footfall is holding up in some areas such as Brighton and Hove and Milton Keynes, although in West Sussex town centres footfall is down. Food shops are doing reasonably well, but fashion shops and high-end retail continue to struggle, as customers think hard before making non-essential or larger purchases. Home Retail Group has shed 300 of the 1,500 jobs at the Milton Keynes head oYce of its Argos and Homebase operations, while Waitrose is due to create 140 jobs with the opening of a new store in Ashford, Kent later this year. The number of vacant shops is continuing to increase in many town centres, with more redundancies associated with troubled major national chains (eg recent closures of Principles and Marks and Spencer stores across the region). Landlords are being flexible in oVering monthly rental payments for retailers with cashflow problems. Some market traders are seeing a drop in trade as larger stores have reduced their prices heavily. Construction and property: Developers are still trying to sell their stocks of new homes quickly at discounted prices in anticipation of further price falls. One of the most recent casualties of the downturn in house building is Cadenza, the Windsor-based house building firm, which has gone into voluntary Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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liquidation. However there is evidence that some larger developments with long lead times (c 18 months) are starting to come out of moth balls—suggesting that developers are planning to have projects ready to bring to market in anticipation of the upturn. As evidence of this preparation for the upturn, Laing O’Rourke, the Dartford based construction firm is to create a further 1,000 positions for construction apprentices, in partnership with ConstructionSkills, with 200 to be recruited this year. Some increase in construction activity has been reported in West Sussex due to falling raw material prices. There are some reports of buyers still waiting for the housing market to bottom out, but there are signs of increased activity in several parts of the region. Kent Economic Board reports that demand from first time buyers with savings to draw on has increased significantly, which is borne out by increased auction sales and some growth in demand for domestic conveyancing. The rental market remains buoyant, although rents are static or falling. According to Hampshire Economic Partnership employment levels in electrical, plumbing, heating and ventilation and air conditioning are predicted to fall by up to 50% and some apprentices may also be made redundant. Leisure and tourism: The number of pub closures is increasing in some areas. The restaurant trade has been aVected significantly by the downturn except in those cases where outlets (largely chains) oVer discounts or special oVers. Tourist operators are fairly confident of a good summer season, but less optimistic about the oV-season. Conference venues are reporting a significant drop in bookings and luxury hotels are having to reduce their room rates to attract business customers, but budget hotels are doing well. The Forbury Hotel, a Reading-based luxury hotel that recently underwent a £6 million renovation, has gone into administration. Caravan parks are seeing an increase in bookings (up by 40% on a year ago). Holidaybreak is setting up a new chain of none Eurocamp campsites in the UK, including two sites in the New Forest. As the downturn continues to bite, visitor numbers at museums and heritage sites are increasing. Agriculture/land-based: Businesses in West Sussex are reportedly benefiting from higher food prices and the weakness of sterling. Investor Development Managers report buoyant orders for horticultural growers from garden centres in West Sussex. However, the weak pound is leading to increases in the cost of imported inputs. Creative and cultural: There is a mixed picture in this sector, with publishing, design and fashion, leisure, advertising and architecture generally struggling, while music, software and computer services are doing relatively well. Web developers are reportedly seeing increasing orders from businesses seeking new markets. Theatre bookings are holding up quite well, perhaps because people are swapping holidays for less expensive “treats”. Printed media (particularly local newspapers) are struggling due to reduced advertising spend and the challenge from online media. Many businesses are reducing their budget for printed media and switching to online media instead. A number of local newspapers in the region are restructuring and shedding jobs. For example, Kent Messenger Group is planning to shed up to 159 of the 560 jobs at its media operations in Kent, and its printing, mailroom and distribution operations will be outsourced. Meanwhile, the Reading Evening Post is to move from a five-day to a twice-weekly publication. Both feature film and TV production were lower than usual in the first quarter of 2009, but the outlook for the next few months is more positive, with significant budgeting and scheduling work taking place. However, the possible scarcity of good soundstage space in the second quarter of 2009 may limit the appeal of the South East and the UK more generally as a location for TV drama production, with consequent shifting of some projects to central and eastern Europe. Security Innovation and Technology: From a general SME perspective, the market situation continues to deteriorate. Many major customers, potential customers and partner organisations are tightening their belts, reducing budgets and either cancelling or postponing previously planned projects. Very few companies have not laid oV staV in the last few months and most have more cut-backs in the pipeline. Third sector: Figures from Citizens Advice Bureaux indicate that the South East CABx have seen by far the largest number of enquiries of any region regarding unemployment benefits and redundancy. Between January and March 2009 there were more than 5,500 enquiries about Jobseekers’ Allowance (almost one fifth of the total for England and Wales), and at least 5,000 enquiries relating to redundancy (more than one fifth of the total). This equated to more than 100 enquiries per working day. In addition, over 3,100 enquiries about mortgage arrears were received in this period, and more than 3,600 enquiries relating to council tax arrears. Redundancy Notifications: According to HR1 data, the level of redundancy notifications in the South East in March was higher than in February. There were some 5,900 redundancy notifications in the South East in March against 5,400 in February 2009.51
51 Note that this data only captures redundancies of more than 20 employees; some of the job losses are not scheduled to take place until later in 2009; and in some cases the redundancies are happening in another region but are registered in the South East because it is home to the company’s headquarters. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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Relative to their share of regional employment, the telecommunications and finance sectors have seen the greatest increase in redundancy notifications over the past month. These two sectors accounted for over 40% of all redundancy notifications, with telecommunications alone accounting for over one fifth of all redundancy notifications in the South East in the past month. There has been a relatively large number of redundancies in manufacturing, printing & publishing activities, construction and other business activities. Berkshire and West Sussex recorded disproportionately more redundancy notifications than other sub- regions (see map below). For example, over a quarter of all redundancies notified via HR1s in the past month were recorded in Berkshire, which is well above its share of total employment within the South East. With more than one in ten redundancy notifications, Horsham and Newbury, relative to their share of regional employment, were aVected by redundancies disproportionately more than other urban areas, followed by Slough. Dartford and Bracknell were also aVected disproportionately more than other urban areas. Over the past month there was a decline in the proportion of redundancy notifications in the South East due to lower demand. In March 2009 some 44% of redundancy notifications in the South East were entirely or partially caused by lower demand against almost two thirds in February and more than half in January. In Berkshire and Buckinghamshire lower demand accounted for over 70% of all redundancy notifications in March 2009.
Annex F CASE STUDY: SUB-REGIONAL PARTNERSHIP AND MULTI AREA AGREEMENTS SEEDA Written Evidence to the South East England Regional Select Committee Inquiry into the South East England Development Agency and the Regional Economic Strategy SubRegionalPartnerships SEEDA has worked closely, though the Area Teams and Executive Directors, with Local Authorities to agree the form, if any, strategic sub regional economic structures should take to meet the needs of local circumstances. Local Authorities have supported the development of 13 sub regional partnership arrangements, which have financial investment from the public and private sector. SEEDA increased its investment in these arrangements to £5.65 million over the current Corporate Plan period, from £3 million in the previous Corporate Plan period, as core funding for agreed arrangements, based on an investment plan which recognises the complexity of areas, based upon the business stock, population, numbers of Local Area Agreements, Multi Area Agreements and cross boundary working activity through the Diamonds for Investment and Growth. The programme is based upon core activity supported by SEEDAs investment as follows: — Clear evidence of strong business involvement (both through direct membership and through events, communications and consultation mechanisms. — A clear understanding of business and economic needs (as expressed in a strategy or other statement of a clear set of priorities based on evidence). — Capacity to deliver business engagement (which in practice means that the partnership arrangement is generally recognised by local businesses and business representative organisations as being eVective in persuading public sector partners to address agreed business and economic priorities). — A clear commitment to secure results on the ground that are valued by businesses, by achieving a joined-up approach to public funding for economic development (including through the Local/ Multi Area Agreement process).
MultiAreaAgreements SEEDA has worked collaboratively with partners on the development of two MAAs within the South East to ensure that the agreements are aligned with RES objectives. The South Hampshire MAA was signed by South Hampshire partners, SEEDA and Government in July 2008. SEEDA was heavily involved in developing the South Hampshire Business Plan and its associated economic priorities. Reflecting priorities in the MAA, SEEDA plan to invest £48 million in the South Hampshire economy between 2008–11 and is currently working with PUSH on mechanisms for delegating funding to the partnership. SEEDA is also actively engaged with the current development of the Thames Gateway North Kent MAA. In particular, SEEDA has worked closely with partners across the wider Thames Gateway area to develop the Economic Development Investment Plan. This plan was launched by the three Regional Development Agencies working in the Thames Gateway and identifies the major projects that will help the Thames Gateway to fulfill its potential for economic growth, including planned SEEDA investment in Thames Gateway North Kent of £30 million between 2008–11. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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Diamonds forInvestment andGrowth The South East RES 2006–16 identifies eight major concentrations of growth potential—Diamonds for Investment and Growth. SEEDA has worked closely with a wide range of stakeholders to firmly establish the diamonds concept and to work with partners to determine plans and priorities to further unlock the diamonds’ growth potential. Local Authorities and partners from the eight Diamonds for Growth across the South East regularly meet to share good practice and instigate joint programmes. In support of this, SEEDA has funded various research projects and events.
Annex G CASE STUDY: OTHER SEEDA BUSINESS SUPPORT PROGRAMMES SEEDA Written Evidence to the South East England Regional Select Committee Inquiry into the South East England Development Agency and the Regional Economic Strategy 1. A range of business support is funded and managed by SEEDA to help businesses become more productive. These services were enhanced in response to the economic downturn, including addressing finance issues through setting up the “Transition Loan Fund” and making the “Grant for Business Investment” available region-wide. SEEDA produced Open For Business, a guide to help businesses find support available regionally and through the Government’s ‘Real Help for Business’ package. SEEDA is also working with banks—supporting events helping companies identify funding solutions 2. The Continuing Employment Support ServiceoVers companies reporting potential redundancies a free, tailored, in-house package of support including advice on benefits, careers advice, support to re-train or become self-employed and access to companies hiring locally. Over a nine month period, the service supported 8,143 individuals at risk of redundancy (117% increase on last year). 3. Key business support programmes and their achievements are: — MAS South East delivered over £220 million of added value, handled over 20,000 enquiries from businesses seeking advice and visited over 2,700 businesses to carry out diagnostics. The programme focuses on higher levels of technology/innovation, addresses business improvement, low skills, inward investment, public procurement and capital investment. — Designing Demand helps businesses get design into their products/services to gain competitive advantage. 400 businesses have attended design workshops and 70 are developing a comprehensive design strategy. — Sector Consortia are a key interface with over 24% of the region’s businesses, accounting for 20% of the region’s jobs and economic outputs. Their work with priority sectors includes increasing the number of businesses with R&D links to universities and accessing international markets. The Consortia focus on real opportunities, drawing on research identifying technologies within the region and global markets for their exploitation. — Finance South East is a SEEDA subsidiary managing a “Funding Escalator” aimed at diVerent stages of business development. SEEDA/FSE have set up a £3 million “Transition Loan Fund” to deal with liquidity issues that would otherwise be addressed by banks. Since launching in October there have been 110 enquiries with £1.3 million of funding oVered to 12 companies. FSE’s Accelerator Fund loaned over £3 million in 2008–09. 4. Support to regionally strategic companies is provided through Investor Development Managers (IDMs), an account management team delivering bespoke solutions to business issues. For instance, IDMs “match-make” firms hiring with those downsizing and help companies look for new markets overseas (promoting UKTI) and in the UK through encouraging diversification into new markets. 5. SEEDA is developing its support to the region’s growth companies by aligning its Innovation programmes into eight sub-regional “Innovation and Growth” teams—creating a regional support network. A current focus is on helping clients find “bootstrapping” solutions to manage their growth; they are placing emphasis on securing revenue streams through incremental innovation responding to customer needs. 6. Support to specific groups such as Women Entrepreneurs is provided through bespoke events to address the necessity/opportunity of more women becoming self-employed. SEEDA launched a Women’s Business Service providing an environment to support women considering self-employment. Processed: 21-09-2009 21:12:36 Page Layout: CWMEM1 [O] PPSysB Job: 434938 Unit: PAG4
South East Regional Committee: Evidence Ev 93 Further actions Progress and achievements (approx six months after initial response) will be regularly updated Timetable for action RES Partner Conference took place on 29 January 2009 On-going—the Plan will continue to be monitored and developed for as long as required. On-going—the material SEEDA, LSC, Jobcentre Plus SEEDA Responsibility SEEDA AND EMPLOYMENT—RESPONSE FRAMEWORK the business support packages. In terms of actions todownturn, address a the SE impact Joint of Regionalhas the Recovery been Plan developed. This isbringing a together single the plan e V orts ofand SEEDA, JCP LSC in a joined-upprovides fashion. the The basis Plan for aevent, response or to a a significant major numberIt of provides smaller for events. both proactivebusiness work to with minimise the impactdownturn, of as the well as rapid response. material SEEDA already makes available about What SEEDA will do in sustainable economic competitiveness. In addition, SEEDA is producinghelp a businesses booklet through to the manyavailable. o V ers This now will be publishedwebsite on to the complement SEEDA and simplify the briefing response to our recommendation SEEDA has used the RESto Partner make Conference it clear thatthat the the RES need remains to valid, addressand and short-term business economic issues should goputting hand in in place hand longer-term with building blocks of SOUTH EAST ENGLAND REGIONAL ASSEMBLY SELECT COMMITTEE ON SEEDA’S APPROACH TO LABOUR FORCE provides a suitable basis for addressing long-term objectives in the region. undertaking short-term redrafting of the RES, SEEDA will focus on actions to help address the current economic conditions as well as preparing for the upturn. current economic conditions. will be taking itself, asin well partnership as with others, to address issues arising from the — Explain that rather than — Set out key actions SEEDA Assembly Select Committee Recommendation Recommendation 1 Given current economic conditions SEEDA should urgently make a public statement on the statusthe of Regional Economic Strategy (RES). The statement should: — Confirm that the RES still Processed: 21-09-2009 21:12:36 Page Layout: CWMEM1 [E] PPSysB Job: 434938 Unit: PAG4
Ev 94 South East Regional Committee: Evidence Further actions Progress and achievements (approx six months after initial response) continue to meet on a weekly basis for a longrequired as On-going—the bulletin is issued on a montly basis. On-going communication with Area teams and IDMs. Area teams will be engaged in simplification Timetable for action On-going—SEBR will and strengthening the Employment & Skills functionality Boards at sub-regional level. Before 31 March 2009 SEEDA SEEDA, SSCs, SRPs SEEDA’s Employment & Skills, Area teams and IDMs partners Responsibility SEEDA with economic situation and influence onneeded the in action response. Sector SkillsEconomic Councils (and and Learning) Partnerships alsointo feed this. SEEDA’s Employment & Skills teamhand is in working glove with theInvestor enhanced Development Area Managers teams (IDMs) and to share information and maximise impactsub-regional at level. the Work to date has included What SEEDA will do in A senior SE Briefing andteam Response has (SEBR) been set upand within develop SEEDA SEEDA’s response to to monitor downturn. the economic From August 08 SEEDA hasRegional developed Intelligence a Snapshot bulletin to inform government and partners of the regional SE England Leaders Board. response to our recommendation sub-regional mapping, considering 14–19 Reform and arrangements for the16–18 transfer funds of from LSC to local authorities. With partners work up proposalsand to simplify strengthen the regional architectureof in the the post-SNR light decisions by SEEDA and the communication with partners in the region on theeconomic changing situation and SEEDA’s activities. ensure e V ective Recommendation 2 To maximise impact in tackling labour force and employment issues, SEEDA must ensure ita takes joined-up approach across its directorates and area teams. Assembly Select Committee Recommendation — Set out how SEEDA will SEEDA must ensure the e V ective operation of its new “skillssustainable and prosperity” directorate and ensure partners are clearhow on the new arrangement will work. Processed: 21-09-2009 21:12:36 Page Layout: CWMEM1 [O] PPSysB Job: 434938 Unit: PAG4
South East Regional Committee: Evidence Ev 95 Further actions Progress and achievements (approx six months after initial response) Summit to be held in2009. mid- Accord to be in place31 by May 2009. Timetable for action On-going By 31 March and on- going Significant progress towards achieving a new structure should have been made by 31 March 2009 RSPA will develop the Summit in conjunction with the Regional Minister’s o Y ce. SEEDA, SfBN Alliance Responsibility SEEDA SEEDA,LSC, JCP, GOSE, Skills SE SEEDA as well as regional level)Business with Network the (SfBN) Skills Alliance for toinfluence better Government on Skills policy. Summit, supported by the Regionalwill Minister, be used to inform and feedback to partners. SEEDA is developing a new Accord (at national What SEEDA will do in architecture, building on the strengthsRSPA of and the other current bodies,designed. will This be will feed intoBoard the and new the SE SE Strategy Economicand Delivery will Council, provide a strongerfor mechanism any to necessary press freedoms and flexibilities. A follow-up Regional Employment & Skills response to our recommendation SEEDA will use its newSkills, RDA DIUS Lead and Role DWP for toGovernment, influence eg making pro-active interventions to influence policy. To contribute to that influenceSEEDA and with lobbying, LSC and JCP,will and “road other test” partners, the endRecovery to Plan end work, process so in asflexibilities the to and test freedoms. the actual A re-shaped regional employment and skills Assembly Select Committee Recommendation Recommendation 3 Where the need is identified, SEEDA should press the caseGovernment to for greater freedoms and flexibilities to enable partners in the region to e V ectivelylabour tackle force and employment issues. SEEDA should set outit how will work with partnersidentify to barriers and constraints and how it will act on these. Processed: 21-09-2009 21:12:36 Page Layout: CWMEM1 [E] PPSysB Job: 434938 Unit: PAG4
Ev 96 South East Regional Committee: Evidence Further actions Progress and achievements (approx six months after initial response) Timetable for action Action plan to be finalised and agreed by April 2009 Co-chairing arrangement will commence during 2009 Responsibility SEEDA, LSC, Jobcentre Plus SEEDA What SEEDA will do in response to our recommendation The Regional Recovery Plan requestedRegional by Minister the has catalysed activitythe within Accord (see Recommendation 1 above). Early discussion is taking placedevelopment on of the an integrated EmploymentSkills & RES action plan incorporatingactivities the of the Accord Partners. SEEDA is represented on theGroup Regional for Planning the transfer ofauthorities responsibilities and to will local take onchairing the the role Group. of co- Assembly Select Committee Recommendation Recommendation 4 SEEDA should work with the Learning and Skills Council, Jobcentre Plus and other key partners to develop an actionto plan take forward and implementSouth the East Skills Accord. Withforthcoming the changes to the Learning and Skills Council, SEEDA should set out howensure it that will the Accord willto evolve support transition and maintain joint working with all relevant partners in the public, privatevoluntary and sectors. SEEDA should give specific attention to engaging with local authorities regarding their impending new responsibilities on skills. Processed: 21-09-2009 21:12:36 Page Layout: CWMEM1 [O] PPSysB Job: 434938 Unit: PAG4
South East Regional Committee: Evidence Ev 97 Further actions Progress and achievements (approx six months after initial response) Additional CESS broker appointed in January 2009 and further brokers to be appointed by 31 March 2009. Additional LSC funding in place in January 2009. Discussions with Local Authorities to be completed by 31 March 2009 Timetable for action Post to be filled byMarch 31 2009. It is anticipated the post will be filled for two toyears three but the contract will be renewable annually On-going Pilot bulletin for Berks by 31 January. Other bulletins by 31 March 2009 SEEDA, LSC, Jobcentre Plus, Local Authorities Responsibility SEEDA,LSC, Jobcentre Plus, ProSkills SEEDA’s Economic Research team in conjuction with Employment & Skills and Area teams SEEdA’s Economic Research team agreed additional funding for CESSJobcentre and Plus to support additional Information Advice and Guidance. Allagencies main have agreed to feedinformation redundancy to CESS brokers andtalking SEEDA to is local authorities tofrom achieve LAs feed-in too. As an example of sub-regional activity, SEEDA What SEEDA will do in SEEDA’s Continuing Employment Support Service (CESS) has already takenadditional on broker an and has plansservice to further, up expand to the 6 brokers. The LSC has response to our recommendation In recognition of the importanceand of forward-looking up-to-date data and intelligence, SEEDA, LSC and Jobcentre Plusshared are economic creating intelligence a post toSEEDA’s Economic work Research within team but employed by a Sector Skills Council (ProSkills). SEEDA’s Economic Research team hasmap begun data, to including intelligence on redundancies, at a sub-regional levelexpanding and this is work SEEDA’s research team is alsosub-regional working employment with and skills groupsproduce to bulletins for their key sectors. Assembly Select Committee Recommendation Recommendation 5 SEEDA should develop its working relationship with Jobcentre Plus and partners inpublic, the private and voluntary sectors to maintain robust intelligence on the state oflabour the market, with emphasis on the early identification of possible large-scale job losses a V ecting the region. This intelligence should inform SEEDA’s proactive approach to minimising the negative impacts of any job-losses. SEEDA should encourage the use of local labour in fillingvacancies job and where job creation occurs. Processed: 21-09-2009 21:12:36 Page Layout: CWMEM1 [E] PPSysB Job: 434938 Unit: PAG4
Ev 98 South East Regional Committee: Evidence Further actions Progress and achievements (approx six months after initial response) April 2009 operating. Timetable for action Project will start from 1 Certain strands of the programme are already in conjunction with LDA and EEDA within the Thames Gateway Economic Development Investment Plan SEEDA, LSC, Jobcentre Plus Responsibility SEEDA, working mainstream funding and working out of three hubs The SEEDA 40–70 programme isdrive supporting to a re-engage older workersthe who active have labour left market. It(with is additional also support being from geared ESF and through What SEEDA will do in to provide a jobs match service linking up to specific tailored courses) to supportworkers older who maybe at risk of redundancy. response to our recommendation has reviewed Thames Gateway prioritiescondensed and and refined existing projects into one Assembly Select Committee Recommendation Processed: 21-09-2009 21:12:36 Page Layout: CWMEM1 [O] PPSysB Job: 434938 Unit: PAG4
South East Regional Committee: Evidence Ev 99 Further actions Progress and achievements (approx six months after initial response) 31 March 2009 monitored to be agreed by structures will be employment and skills against which current Timetable for action Significant progress towards achieving a new structure should have been made by 31 March 2009. Priorities and actions regional Economic and Learning Partnerships. Directors, Sub- Managers, Area skills board employment and SEEDA, Responsibility SEEDA of partners and to workstructures with to other avoid local duplication andjoined create up a approach to theskills local agenda. employment and whose role is specifically to coordinate the work assigned employment and skills board Managers engagement with the public sector. SEEDA has at sub-regional level so as to simplify business and on how to develop and streamline structures What SEEDA will do in response to our recommendation As set out under recommendationand 3, streamlined a regional re-shaped employment andinfrastructure skills will be designed, buildingstrengths on of the the RSPA andto other fit existing with bodies, the arrangementssupport to of be the created Regional in Strategy,closely and to linking the SE EconomicCouncil. Development The aim is tostrengthen, streamline and and provide greater clarityregional at and sub-regional/local level. SEEDA will work with partnersthe on employment developing and skills board functionality, coordination and alignment with other local structures. relationship and future of the Regional Skills for Productivity Alliance and how SEEDA will work with partners to deliver this. partners to ensure SEEDA will work with Boards, including how Employment and Skills membership of the new — Set out its vision of the role, Assembly Select Committee Recommendation Recommendation 6 SEEDA must ensure that thereclarity is about the roles of,alignment and between, the regional, sub-regional and local structures dealing with employment and labour force issues. This is particularly important given the significant changes ahead. Specifically SEEDA, working closely with public, private and voluntary sector partners, should: — Provide clarity on the role and Processed: 21-09-2009 21:12:36 Page Layout: CWMEM1 [E] PPSysB Job: 434938 Unit: PAG4
Ev 100 South East Regional Committee: Evidence Further actions Progress and achievements (approx six months after initial response) Timetable for action SEEDA is meeting with partners at the end of January 2009, and a full update on the development of the proposed 3rd Learning Infrastructure will be produced by March 2009 Pilots to report back by December 2009 Progress to be reviewed in September 2009 AOSEC, LSC, SSCS, Foun dation Degree Forward, STEMNET, Lifelong Responsibility SEEDA, LSC, RAISE. SEEDA, HESE, AOSEC, HE Kent & Medway, Kent FE Consortium, FE Sussex SEEDA, HEFCE, HESE, activities in support of higherdevelopment. skills The Alliance is focusingcore on areas: three — Developing more employable graduates What SEEDA will do in share best practices that can inform partners’ response to our recommendation SEEDA, along with LSC andconference RAISE, in ran October a 2008 toextensive highlight contribution the of the sectorprosperity to and economic local communities. Thealso event highlighted the opportunities fororganisations VCS to benefit from thewithin new Train to flexibilities Gain, includingfor financial leadership support and management trainingSMEs. for Further work is alsodevelop taking the place VCS to regional andinfrastructure. sub-regional This will engage localorganisation VCS to help build theire V ectively capacity address to their more skills andrequirements training in the sub-regions. SEEDA is working with HE/FEbusiness partners engagement on pilots in KentThe and outcome Sussex. of this workof may the be existing an MoU expansion betweenand SEEDA, HEFCE HESE to include FE. The Higher Skills Alliance activelydevelopment promotes of the higher skills in the region and to Assembly Select Committee Recommendation Recommendation 7 SEEDA should set out howsupport it and will work more closely with the voluntary and community sector (VCS) to maximise collective impact in delivering actions to improve basic skills and employability. This should take particular account of the wide range of opportunities provided by the VCS to help delivertarget the to RES bring residents inregion the back into employment. Recommendation 8 SEEDA should further develop its working relationships with Higher and Further Education institutions and organisations to ensure the right mix of skills and qualifications are delivered in the region and skills shortages and future skills needs reported by employers are addressed. Processed: 21-09-2009 21:12:36 Page Layout: CWMEM1 [O] PPSysB Job: 434938 Unit: PAG4
South East Regional Committee: Evidence Ev 101 Further actions Progress and achievements (approx six months after initial response) and will formally be launched in April 2009 currently being finalised Kent to be completed by July 2009 The STEM UEN is Timetable for action Pilots in Oxfordshire and Reading, University of Southampton, University of SEEDA, NESTA SEEDA, Microsoft, BAE Systems, Oxford University, Responsibility Learning Network entrepreneurship education. provided with quality enterprise and engage and collaborate with businessrespond to to business’s needs. universities as they commit toEntrepreneurial becoming University. an innovation and enterprise of thosein already the workplace universities. development to Senior Management into colleges support and raise awarenessimportance about of the enterprise education inthe FE South across East, leading toincreased improved entrepreneurship and development for students. SEEDA, in conjunction with partners,developing is a Science, Technology, Engineering and Mathematics (STEM) University Enterprise Network (UEN). The UEN aims to: — Enhance the capacity for universities to — Support organisational change in — Ensure all students and graduates are What SEEDA will do in project. The Project will provide professional response to our recommendation — Raising the skills and capacity for — Enhancing business engagement with SEEDA is working in partnership(the with National NESTA Endowment for Science, Technology and the Arts) toEnterprise co-fund Education the in Further Education (FE) Assembly Select Committee Recommendation Processed: 21-09-2009 21:12:36 Page Layout: CWMEM1 [E] PPSysB Job: 434938 Unit: PAG4
Ev 102 South East Regional Committee: Evidence Further actions Progress and achievements (approx six months after initial response) Timetable for action This will be done atSkills Sector Agreement reviews and implementation sessions which will take place over the next 12 months Responsibility EEDA, Cambridge University, Cran- field University, University of Hertfordshire. SEEDA, SSCs. What SEEDA will do in response to our recommendation Assembly Select Committee Recommendation Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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Memorandum submitted by Southern & Eastern Regional Trades Union Congress (SE 14) Introduction The Southern and Eastern Region of the Trades Union Congress (SERTUC) represents around 800,000 trade union members and their families in the SEEDA Region. In the Greater South East of England (SEEDA, EEDA and LDA), SERTUC represents more than two million trade unionists. TUC aYliated trade unions represent the workforces in the private, public and voluntary sectors. In the private sector: manufacturing, food, construction, the wide range of the service industries that make up the service sector, health and social care, finance sector, hospitality, retail, utilities, printing and publishing, creative, communications, media and transport. In the public sector: government departments, government agencies, local government, postal, health and social care, all areas and levels of education. In the voluntary sector: trade union members are in all the wide variety of paid voluntary sector activities. Many individual trade union members are also unpaid volunteers in voluntary organisations Trade unions and their members make a significant contribution to the economy of the South East and play a major part in its development. In reality, there is not a sector of the economy or community that trade unions and their members do not have an involvement or interest in. SERTUC is pleased to make a contribution to the South East Regional Select Committee inquiry into the South East England Development Agency and the Regional Economic Strategy. SERTUC would also be willing to attend the inquiry to answer any questions on our submission or any other questions the committee might like to ask.
KeyBulletPoints — SEEDA makes good eVorts to be accountable. — SEEDA has shown willingness to engage partners and stakeholders in developing the RES. — The RES is widely tested for “Fit for Purpose”. — Manufacturing in the south east is the powerhouse of the UK economy and must be supported. Public sector investment is a key factor against economic depression. — Proposed changes to RDAs give us concern about a possible increase in narrow local or party- political focussed interests, rather than the wider strategic picture. — SEEDA has developed a relationship with public and private sectors across government agencies. — Business support is more than Business Link.
The role, responsibilities and accountability of SEEDA 1. SERTUC believes that SEEDA takes its role and responsibilities seriously and therefore tries to make itself accountable. SERTUC has always had an open relationship with SEEDA. We have attended all the annual SEEDA meetings and have found them useful and informative. 2. SERTUC has been to the recent economic briefings (which also included the Minister for the South East Jonathan Shaw) and found them well organised with a cross section of views. SEEDA’s stewardship of these meetings has led to healthy debate and an openness on the realities of the economic issues facing the South East. 3. SERTUC has also submitted evidence (both written and oral) to the SEERA Select Committees. SEEDA’s performance at these SEERA Select Committees has been robust, open and willing to listen and take on board any criticism and respond in a positive way.
The process by which the RES was drawn up and the level of involvement of regional stakeholders 4. SEEDA is unique in that it is the only Regional Development Agency in England that has a Social Dialogue Forum. This forum brings together representatives of business (CBI, IOD, EEF, TUC, trade unions), major private sector companies, and from the public sector regional local authority representatives, GOSE, NHS, as well as Government Agencies HSE and ACAS. Thus the SDF is a major stakeholder grouping. 5. The SDF is chaired by a SEEDA Board member and has an agreed work programme. Through the chair the SDF reports directly to the SEEDA Board. During the process of drawing up the Regional Economic Strategy the SDF had a very close involvement and was able to input a joint SDF submission. This was clearly important as it put forward the unified view of the major partners of the economic priorities of the region. At every stage of the evolving RES, the SDF and its members were consulted and at a number of the regional road shows SDF members gave presentations. This process went on with other regional stakeholders. Within the process of developing the RES, stakeholders like the SDF were allocated the responsibility of delivering on key targets of the RES. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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6. SERTUC, through its Regional Secretary, is part of the senior group of regional stakeholders monitoring the progress of the RES (SEEDA’s RES Steering Group), and SERTUC has attended the ongoing RES Partner meetings.
The eVectiveness of the RES for the South East in delivering against its targets including the degree to which the regeneration of areas of deprivation and the former coalfield areas has been successful 7. With the economic downturn it is SERTUC’s understanding that the RES has been constantly tested as to eVectiveness and relevance to the current economic situation, this has certainly been the most important theme at any economic briefing: “is the RES fit for purpose”. Prior to the downturn, SEEDA recognised the need for regeneration, not just of the coalfield areas, but in areas like Hastings and Chatham, where regeneration has led to economic improvements and thereby improvements in the standard of living—not just financially, but also regarding the well being of the community.
8. SEEDA’s strategy, set out in its Coastal Contours Policy document, is an attempt to deal with the diVering level and types of economy (rural, urban) and deprivation that impact on a very diverse region.
The eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors such as manufacturing, service industries etc 9. SERTUC’s view is that the current financial and economic situation is impacting on the south east economy in diVering ways: sectoral, geographical, diVering timing of impacts—and not just on the private sector, but also on the public sector.
10. SERTUC is concerned that the strong regional manufacturing base is being eroded and a strong emphasis should be kept by funding (with possible wage subsidy schemes) skills and training maintenance, with robust provisions for public sector procurement.
11. SERTUC is very concerned about the drop in job vacancy levels in already deprived areas (for example the Isle of Wight). The drop in job vacancy levels will impact on those entering the job market, either for the first time or for those wanting to come back.
12. In the financial sector, the diVerential impact of job losses, especially to the lower paid and mainly female employment. SERTUC is very concerned by the job losses in the public sector, particularly in local authorities, which we feel are unnecessary.
13. SERTUC also recognises that some parts of the south east economy are holding up well and the south east has a fairly robust economic structure. SERTUC believes that if the economic downturn continues for a long period of time, the debilitating eVect will not only be in the south east, but the UK economy as a whole. The SEEDA region, as part of the Greater South East, is the economic powerhouse of the UK’s economy. SERTUC believes that more, rather than less, financial investment, whether public or private, should come to the south east.
The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of SEEDA 14. SERTUC has serious concerns about the shift of emphasis from a pan-regional approach to a more sub-regional approach. We recognise the need to involve local stakeholders, democratic structures, the community and those socially excluded, as well as specifically local needs. However we know that economic and employment interests have political boundaries that are porous, and that there are wider social and economic interests that go beyond any sub-regional or local authority boundaries.
15. The south east is particularly impacted on by its interrelationship across and beyond the region, with its travel to work patterns and the importance of London, its global companies who are located in the south east because of its international transport links, along with its relative high skill and highly educated workforce that attracts companies—the south east has national and global importance.
16. SERTUC is particularly concerned that in the proposed restructure narrow local interests could prevail, and that, indeed, powers devolved to a sub-regional or sub-sub-regional level could be abused for party political purposes.
17. In addition, it is looking extremely likely that stakeholders who are now currently involved in shaping the region will be excluded or pushed to the sidelines.
18. We should note here that cuts to Regional Development Agencies’ funding are likely to threaten the continued meaningful engagement of regional partners. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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The role of other Government agencies such as the Government OYce for the South East, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES 19. SEEDA has developed a good relationship with GOSE and the various Government Departments and other government agencies, such as HSE and ACAS, along with the private sector. To illustrate this relationship, SERTUC can give two examples: (a) The Social Dialogue Forum of SEEDA, which brings together private, public sector, government agencies, and trade unions to deliver key RES objectives on: Older workers, Flexible working, Healthy workplaces. The SDF is working with SEEDA and other stakeholders and partners to develop a coordinated approach to the delivery of these RES objectives. (b) Workwise South East is part funded by SEEDA and chaired by the Department of Health Regional Public Health Director, with partners from the public and private sectors, and trade unions from the SDF.
How eVective initiatives such as Business Link are being in assisting businesses in the current climate, including helping them to gain access to funding both from Government funding streams and through the banking system 20. Business Link has recently been reorganised to have a stronger regional focus and now provides a more integrated service to its small business clients, it is developing but has a narrow client base of SMEs. Business Link produces on a regular basis its Hot Topics Spotlight, which covers business issues impacting on the region including banking and loans. Importantly, SEEDA has initiated with JCP and ACAS its Continuing Employment Support Service (CESS), which is a rapid response to threatened or real redundancy situations, and covers all sectors of the private sector, large and small companies. SEEDA has also provided its own loan scheme. Business Link should not be seen on its own but as a part of a wider business support provided by SEEDA. 21. SEEDA has organised regular meetings with regional banking leaders—SERTUC remains to be convinced that the banks are responding appropriately to the requests, from either SEEDA or the government, as regards appropriate loans being made available in a timely fashion to either employers for business development, or to individuals for mortgages for house purchase.
Memorandum submitted by Councillor Alec Samuels (SE 15) SouthEastEnglandRegionalDevelopmentAgency, SEEDA In my opinion SEEDA has been a failure, even a disaster, so far as my city, Southampton, is concerned, and many other places in the south east as I have learned from colleagues in the region. The south east region is not a cohesive or comprehensible concept, stretching from Milton Keynes to Southampton and from Dover to Oxford—and excluding London, thus making a sort of silly doughnut. Government has sensibly abolished the regional assembly but illogically and unfortunately has left SEEDA in existence, and, even worse, proposes to increase the powers of SEEDA. SEEDA is unelected and in eVect unaccountable. There is a lot of loyalty within the shires in the south east, whether they are organised on a county two tier or unitary system or a combination. They are coherent manageable units. Sub regional consensual units such as the Partnership for South Hampshire (PUSH) and Transport for South Hampshire (TfSH) have shown how a group of local authorities albeit of diVerent character can co-operate together in an identifiable travel to work area, to real collaborative advantage. SEEDA is vast bureaucracy, apparently employing some 370 employees, at a very considerable cost. The salaries of the senior people and the expenses of the Chairman are simply mind-boggling. A number of SEEDA people treat local authority members and senior oYcers in a patronising indeed nauseating manner, treating them as if they are naughty, stupid, ignorant, irresponsible school children, who would instantly waste any public money falling into their hands. Local authority members are often experienced in business and the professions and public administration, and indeed in many walks of life. They are answerable to the electorate, the press, the Audit Commission, all the multifarious inspection bodies, and they have a sense of public responsibility. They certainly are not in it for the money And there are the professional local authority oYcers, constantly giving advice, and managing the local authority. SEEDA are always making a lot of play about what they have done with the money they have spent. What do they think that the local authorities would have done with it if they had received the money direct without the intermediate intervention of SEEDA, without this additional tier of administration? The money would have been better and more eVectively spent, much better targeted to the needs of local people. A feature of SEEDA has always been the tardiness of their procedures and decision-making. They have had little sense of expeditiousness, things just wind their weary way, no sense of purpose or action or achievement or finality. Many opportunities were lost in the “good” times. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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Over the years SEEDA has managed to get a finger into many pies. They have been very diYcult to deal with and to co-operate with despite their protestations of partnership and catalysts and seed corn and such like phrases. They are always the last to agree, even if they do agree. They are masters at playing oV one partner against another. Procrastination is the name of the SEEDA game. They seem to like the “cat and mouse” approach. They purport to give encouragement, the nod and the wink. The local authorities spend money in getting up a scheme, often in competition with others, reasonably hoping to get the money. And then—sorry, no go. The sheer uncertainty of relying upon anything SEEDA says is truly depressing and discouraging and deterring, a real obstacle to development. SEEDA will break a promise. In Southampton they promised £4.6M or so for refurbishing Guildhall Square, a big opportunity for the construction industry and an integral element in the development of a whole new cultural quarter. They were all in favour they said. Then at the last minute they withdraw, blaming shortage of funds. The whole project, including Arts Council contributions, has been put into jeopardy. SEEDA is the classic example of the vice of partnership. Along with the City Council SEEDA have put money into pieces of land with a view to ultimate development. They have fancied themselves as smart developers. Then if in the event the land has to be used for another purpose, or disposed of, SEEDA demand their “claw back”, not in principle unreasonable, but they make sure that the original arrangement was vague so that they could subsequently make for diYculties in negotiating the claw back. City Council land in St Mary’s road is a classic example of this abuse. Some years ago SEEDA bought the vacated Southampton Woolston Vosper Thorneycroft shipyard in Southampton for some £15 million. It was for marine employment they said. Subsequently they could not find much marine employment, so they went in for a huge largely private sector style residential development. They caused the selected developers endless diYculties and delays. The recession has now intervened. We are expecting SEEDA strongly to support this project above all others because they thought they were good at development, they got their fingers burned, and now they want to try and get some of their money back. On another site, a waterside site, Driver’s Wharf, SEEDA acquired a small interest. When the overall site came up for development, they refused to release a contamination report in their possession and they refused to agree to a new access road essential to the proposed development passing through their piece of the land and they refused to dispose of their interest. Result: site still undeveloped, benefits unrealised, opportunities lost. The Area Investment Funding (AIF) allocated some money to Southampton. This involved appointing an independent paid chairman, staV and resources, and a big committee of busy local worthies whose attendance and interest was understandably limited. Some of them gave the impression that they thought they were running the city. The committee spent many hours casting around for ways to spend the money. A crazy laser beam scheme was proposed, which aroused huge local opposition, was impracticable, and had to be abandoned. £125,000 was spent on commissioning a wooden model of the city, of practically no use whatsoever. The sooner SEEDA is abolished the better for everybody. Government money should be channelled directly to the local authorities, and particularly where really viable and successful sub regional partnerships such as PUSH can be shown to have the capacity to come up with really sensible infrastructure and public benefit projects. The fundamental problem is Government mistrust of local government, a very unhealthy attitude, leading to the creation of disastrous bodies such as SEEDA. Cllr Alec Samuels I happen to be the Leader of Southampton City Council, but this is a purely personal submission based on direct experience of SEEDA. But I am convinced that many people share my views.
Memorandum submitted by the Federation of Small Businesses (South East) (SE 16) Summary ofEvidence — Following the demise of SEERA, business support organisations need to have another formal mechanism by which they can question the policy and activities of public funded bodies in the region to ensure accountability. — The FSB calls on the Government to address the ongoing under investment in the South East. SEEDA needs to be given operational budget that allows them to fully support the small business sector. — We welcome the engagement by SEEDA of the business community in the provision of the new Business Link contract. — SEEDA needs to clearly detail how the shortfall in their budget will impact on the RES targets. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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— FSB members in the South East have experienced very diYcult trading conditions over the last eight months with the three main problems being decreased trade, access to finance and late payment. — The FSB strongly criticises the complete lack of engagement on the new SNR arrangements with the representatives of the Social, Environmental and Economic Partners who previously worked side by side with councils on the assembly. — SEEDA have demonstrated a positive attitude to supporting businesses through this current crisis. We have particularly welcomed the refocus of its business support services on business survival — The single regional strategy must not lose the crucial focus on the task of promoting economic growth.
1.Introduction to theFederation ofSmallBusinesses 1.1 The FSB exists to promote and protect the interests of entrepreneurs and the self-employed. With over 217,000 members, the FSB is the largest organisation representing small and medium sized businesses in the UK. The FSB has approximately 36,000 members with the South East region.
2.Role,Responsibilities andAccountability of SEEDA 2.1 The role of SEEDA needs to be restated especially in relation to the proposed changes to the regional policy framework under the Sub National Review Proposals (SNR). The role and functions of the RDA will change as responsibility for the delivery of economic development becomes devolved down to the local level (ie local authorities and their partners). The FSB feels that the SNR should be used as an opportunity to clearly communicate the future role and responsibilities of SEEDA, local authorities, business organisations and regional stakeholders in terms of sub-regional and regional economic development. 2.2 With the demise of SEERA, business representative organisations have lost a useful vehicle for the FSB to scrutinise the activities of SEEDA. FSB membership of the SEERA Executive Committee allowed us to engage SEEDA in detailed discussions on their strategies. We do not believe that the revised accountability arrangements put forward by the SNR are adequate. It is a necessity (especially in the current climate) that all publicly funded bodies should be held accountable for spending money that derives from tax payers, and ultimately all taxes are paid from funds generated from commercial activities and that Small and Medium Sized Enterprises (SMEs) generate the majority of the Regional GDP. Whilst the Regional Select Committee will be able to hold any public body in the region to account, we feel it will not be adequate replacement for the regular scrutiny of SEEDA aVorded to the FSB through our membership of the SEERA Executive Committee. We feel that there needs to be another formal mechanism by which business can question the policy and activities of any publicly funded body in the region to ensure accountability.
3.Process forDeveloping theRegionalEconomicStrategy andStakeholderEngagement 3.1 The current “living” RES concept of refreshing the targets on an annual cycle is fully supported by the FSB. Theoretically this approach should allow the strategy to be more flexible to reflect changing economic circumstances. 3.2 The FSB and its members have made a significant contribution in its review of the RES. The FSB time commitment involved in contributing to the review of the RES by the FSB has not be repaid by SEEDA in providing feedback on the outcomes of our input. We would like to have much more direct feedback on our input into any future reviews. 3.3 Previous SEEDA attempts to engage with business stakeholders resulted in the creation of various committees that failed to have a real business focus. The failure of Business South East (set up by SEEDA to be the voice of business) was in part due to the tight control that SEEDA exerted over the meetings agendas. This lead to the decision by the business representative organisations to form the South East Business Forum (SEBUS) independent of SEEDA. To their credit SEEDA have fully supported SEBUS. Senior representatives from SEEDA have always been present at SEBUS meetings for open discussions on their activities. 3.4 The ongoing engagement between SEEDA and SEBUS has lead to the invitation for business representatives to take part in an interview panel for the final bidders for the new Business Link contract (due to come into operation on 1st April 2010). The FSB fully applauds SEEDA for taking steps to open up the procurement process for the new Business Link contract. 3.5 The introduction by SEEDA of area directors have helped to give their regional teams an enhanced profile. The FSB has seen far greater interaction with most of the SEEDA Area Teams over the last 12 months. This has helped to increase understanding of the work carried out by SEEDA and allowed the FSB to feedback how their actions are impacting on small businesses in the regions. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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4.Effectiveness of the RES inDeliveringTargets 4.1 As the South East is the engine room of the UK economy the FSB has always criticised the Governments ongoing failure to provide suYcient funding within the region, despite the South East being the largest net contributor to the Exchequer. Once again SEEDAs budget for 2008/09 was the second lowest budget allocated within the nine RDAs (only the East of England was given a lower budget) and the lowest overall per head of population. 4.2 The National Audit OYce (NAO) Independent Performance Appraisal of SEEDA commended them for their highly impressive record of achievement on a small budget. The FSB echoes this praise, but laments the Government’s failure to give SEEDA an operational budget that allows them to fully support the small business sector. 4.3 In terms of performance against the core output targets, SEEDA in its Annual Reports and Accounts 2007/08 confirmed that they had overachieved on nine out of ten of these targets. Some of these targets have been exceeded by a considerable margin. For example, SEEDA confirmed that on the delivery of Higher Level Skills they were 69% over target, Knowledge Base Collaborations 69% over target and Business Creation, 43% over target. 4.4 However, the continuous over-achievements of targets could suggest that either the targets had been deliberately set low in order to be easily attainable, or that SEEDA has focussed its support on delivering activities that meet the core output targets (“low-hanging fruit”), rather than on the pursuit of more challenging targets specifically designed to tackle the region’s most diYcult issues and deliver strategic added value. 4.5 SEEDA could improve some aspects of their SME engagement in particular in relation to encouraging small firms to bid for public sector contracts, and in relation to the 2012 Olympics. SEEDA seems to be lagging behind other RDAs in respect of these areas. 4.6 Following the announcement in March 2009 of the £50 million budget shortfall for SEEDA which will result in 90 jobs being lost they need to ensure that they eVectively communicates how this will impact on the delivery of the RES across the region. This is particularly important as SEEDA places such importance on partnership working to deliver the RES priorities. 4.7 The budget shortfall within SEEDA is already having an impact. The Employment and Skills Boards (ESB) are the first casualty of this budget shortfall. The proposal to withdraw 2009–10 funding for ESB managers will have a dramatic impact on the skills provision across the region. SEEDAs plans for supporting businesses to take advantage of an upturn in the economy will have far less impact if they fail to focus on skills.
5.Effect of theFinancial andEconomicSituation onBusinesses in theRegion 5.1 FSB members in the South East have experienced very diYcult trading conditions over the last eight months with the three main problems being identified by business owners: decreased trade, diYculty in accessing bank finance and late payment by large companies. 5.2 Survey data from the FSB demonstrates a significant drop in the turnover of small businesses over the last six months. In December 2008, 63% reported a drop in trade, by February 09, 53% of small businesses registered falling orders. Our most recent survey data for April 2009 shows only a very slight improvement with 48% of our members still reporting a decrease in trade. 5.3 Whilst the vast majority of FSB members have struggled during the recession, a minority of our members have fared reasonably well. Even during the last quarter of 2008, 10% of small businesses had seen their trade increase. Our latest data (April 2009) shows that 21% of business owners saw an increase in their trade over the previous two months. 5.4 Given the Government’s latest consultation document “New Industry New Jobs” mentions “Industrial Activism” there is an opportunity for SEEDA to take a leading role in this and also demonstrate the importance of Micro Businesses in the SE economy by setting up a dedicated Centre for Micro Business Activism. 5.5 We believe that the Government is putting too much pressure on SEEDA to demonstrate the “green” shoots of recovery within the South East economy. We understand that the Government wants to be able to identify signs of economic recovery as early as possible, but businesses need SEEDA to remain focused on giving support to businesses that enables them to survive this current period. Preparing for recovery is crucial to the long term picture, but at this present moment ensuring that SEEDA do everything to ensure business survival must remain the overriding priority. 5.6 A primary concern for the FSB remains the increases in the costs to small businesses of existing finance or of new credit, such as loans or overdrafts. FSB data (April) still indicates that business owners are still seeing increases in the cost of bank services with 27% registering an increase in the cost of existing finance (up 2% on February) and the same percentage registering an increase in the cost of new credit (up 3% on February). Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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5.7 In February the FSB produced a report detailing business owners’ experiences of trying to access the Enterprise Finance Guarantee (EFG) Scheme. The majority of case studies came back with negative experiences of business owners when approaching banks to access EFG funds The latest evidence indicates that some of these early” teething” troubles are being addressed and more business owners are now getting access to EFG funds. However, the level of personal guarantee being asked to cover 25% not guaranteed by the government remains an issue for business owners. Despite BERR guidance stating the “the level of unsupported personal guarantee is at the lender’s discretion” the FSB is concerned that banks are asking for personal guarantees from business owners to cover the whole of 25%. 5.8 Late payment by the public sector is having a significant impact on small businesses cash flow with 21% of small businesses having to wait longer than 10 days for the public sector to pay their invoices. The FSB has welcomed the government pledge that Whitehall departments would pay creditors within 10 days, and fully applaud SEEDA for quickly adopting this target for payment times. However few of the councils in the South East are following the lead set by government. Businesses need to have greater certainty that local authorities will pay bills promptly, to help reduce the pressure on their cash flow. 5.9 Late payment by large companies is a more serious concern to the FSB. In February, 39% of small businesses saw an increase in payment times from invoicing to full payment. SEEDA needs to be seen to be taking the lead in promoting the ethical treatment of suppliers by large companies. A key step would be for SEEDA to encourage all large companies on the Corporate Cabinet to deliver on their Corporate Social Responsibility (CSR) commitments and agree to pay all their suppliers in 10 days. 5.10 The current economic climate has given SEEDA their most significant test. Since its creation in 2000 the RDA has benefitted from the strong continued growth in the South East economy. Clearly SEEDAs never envisaged having to deal with a sustained period of economic decline and the majority of the current RES targets have been rendered obsolete by circumstances beyond SEEDAs control. Despite this SEEDA have demonstrated a positive attitude to supporting businesses through this current crisis. We have particularly welcomed the refocus of its business support services on business survival, and in particular, the launch of the free Business Link Health Check service which has been accessed by over 8.500 businesses. We also recognise SEEDAs key role in the creation of the South East Financial Services Forum to bring together representatives of all the major banks around one table to discuss how to support businesses. 5.11 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 South East to avoid any ‘re- invention of the wheel’.
6.Proposals in theLocalDemocratic,EconomicDevelopment andConstructionBill 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 failed to re-aYrm the role of businesses and business representative organisations in steering economic development. 6.2 We recognise the need for the wide spread of skills on the SEEDA Board but we feel that it is vital that under the new proposals the board remains business led. We feel particularly strongly that future appointments to the SEEDA Board should include entrepreneurs and small business owners. This would ensure that the Board is representative of the fact that 99% of businesses in the South East are small businesses. 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 SEEDA and the local authorities. The role of businesses and other stakeholders under the proposals appears to be strictly limited, whereby only a small number of stakeholders from the SEEDA Board will be able to influence the content and delivery activity of the strategy via the new arrangements. 6.4 The SNR was about economic growth. As businesses are the agents creating the 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 business and business organisations will become disillusioned and will disengage. 6.5 The FSB strongly criticises the complete lack of engagement on the new arrangements under the SNR with the representatives of the Social, Environmental and Economic Partners who for the past nine years had worked side by side with local authority representatives on the Assembly. 6.6 The two seats oVered to stakeholders on the Strategy Board are done so with the clear proviso that they are not part of the decision-making process. The real danger is that the business community feeling disenfranchised under these proposals will simply walk away from all participation in the future arrangements. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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6.7 We are concerned that the creation of a single regional strategy will lead to a loss of focus on the key task of promoting the economic prosperity of businesses in the region. This concern has increased following the publication of the South East Plan (May 2009) whose targets are completely out of step with the current economic climate that businesses have to deal with. 6.8 As part of the FSBs response to the failure of the SNR to engage businesses in any of the new structures we have created a small business engagement accord for local authorities to sign-up too. The Accord features 14 recommendations to guide local authorities to improving their consultation with their local business community. SEEDA have been fully supportive of this FSB campaign throughout its development.
7.BusinessLink’sRole inAssistingBusinesses toGainAccess toFunding both from the GovernmentFundingStreams and through theBankingSystem 7.1 Recent figures demonstrate that in January 2009 enquiries to Business Link (BL) were 70% higher than in January 2008 as businesses sought advice on how to deal with the recession. It is clear therefore that BL do have a key role to play in helping businesses to access finance. 7.2 However despite this increase in the usage of BL services, FSB data has shown that the usage of Government Funded Business Support (only 27% of business owners used this service in the last 12 months) by small businesses lags well behind alternative sources of business advice such as other business owners (68%), Internet (68%), Bank (64%) and Central Government (30%). Any strategy for promoting access to loans via BL services has to take into account that most small firms still do not access BL services on a regular basis.
Memorandum submitted by Engineering Employers Federation (SE 17) Summary EEF in the South East has a good strategic and operational relationship with SEEDA being part of their main stakeholder groups which provides good communication links between SEEDA, EEF and our members. Current regional economic activity has shown that businesses are reporting mixed fortunes during the recession with some unaVected, some in diYculties but most being cautious. Although broadly fit for purpose at the time the Regional Economic Strategy could have had clearer objectives focussing on the impacts achieved rather than outputs and the whole process should be much shorter. We welcome aspects of the sub national review but it remains to be seen how the expertise from the business community will be retained but we hope that the established regional business forum (SEBUS) will be engaged within future arrangements.
About EEF 1. EEF, the manufacturers’ organisation is a trusted partner to thousands of employers around Britain. We work on behalf of over 6,000 companies, in manufacturing, engineering, technology and beyond. Together they employ close to a million people. Our regional network brings us much closer to the 670 business sites that we support whilst our oYces in London and Brussels stay equally close to government— influencing the way policy is made and alerting our members to any changes in legislation that might aVect them.
Impact ofFinancial andEconomicSituation onBusiness in theRegion 2. The downturn has contributed to very diYcult trading conditions for large parts of manufacturing in the South East. The global nature of the recession and significant contraction in world trade flows over the past six months has led to a particularly sharp contraction in new orders for export-focused companies in the region. While few sectors have been unaVected by the economic situation, some sectors, such as electronics and medical equipment have been faring better, given their greater reliance on government spending. However, there is a degree of uncertainty about the medium term for these sectors. 3. The most recent survey showed that manufacturing output in the South East continued to decline in the first quarter of 2009, and a balance of companies were expecting both output and orders to contract further in the next three months. Companies also reported further deterioration in profit margins and the squeeze on cash flow had also intensified. Many continue to report diYculties when dealing with the banks eg tighter lending and financial review processes and problems with credit insurers. Our next survey will be published in June and we shall share this with the Committee. 4. As a provider of business services, EEF is also able to track calls to our helpdesks as a way of assessing issues aVecting the sector. Since autumn 2008 we have continued to notice increasing requests for assistance in making redundancies or moving employees to short-time working. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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ThePerformance of SEEDA 5. The Regional Development Agencies (RDAs) divide opinion. Many people argue that they are unaccountable and unnecessary quangos. EEF has a number of concerns about the RDAs, but we believe that they provide a focus and critical mass for promoting regional economic development. Put more simply, they are better able to address what are often region-wide economic issues than central government (too distant) or local authorities (too fragmented). Critics who propose abolishing them completely have yet to come up with a credible alternative. 6. Nonetheless, EEF believes that RDAs need clearer objectives, a greater focus on outcomes rather than outputs and often need to work more closely together to overcome artificial geographical boundaries. In most cases RDAs should also be commissioning bodies, rather than delivery agents. 7. In terms of their performance, EEF published a report in 200752 which found little direct evidence of RDAs having made a major diVerence to regional economic development. However, RDAs have made a major contribution to urban renewal and have come into their own in coordinating responses to regional crises, such as the foot and mouth outbreak or the closure of the Rover plant in the West Midlands. 8. EEF South East has a strong strategic and operational working relationship with SEEDA and believes that they are working well within changing priorities and, more recently, challenging times. 9. We are impressed with their approach to stakeholder relationships. EEF is represented on a variety of SEEDA-led regional consultative groups, such as the Regional Economic Strategy Steering Group, South East Economic Delivery Council, and Business South East. Through these fora we provide intelligence from employers on the economic situation and in turn we are able to feedback information and sources of support to our members. We have been consulted on a variety of other issues on a regular basis eg SEERA regional select committees and Business Link procurement post 2010. We are also fortunate to benefit from quarterly reviews on the state of trade with senior SEEDA personnel and the EEF Region Director. 10. We have welcomed SEEDA’s recent recession-inspired attempts to re-focus its eVorts on help for business. The publication of, Open for Business—A Guide to Business Support in the South East listed new and enhanced grant funding eg Transition Loan fund, Commercialisation fund and a rapid response programme to try to help prevent businesses closing. Anecdotal evidence suggests that some of the new initiatives have helped, for example the transitional loan fund. However more needs to be done on raising awareness of all these initiatives and it is too early to comment on their eVects with any degree of certainty. 11. In addition we welcome the expansion of the “Grants for Business Investment” (GBI) initiative beyond assisted areas to the entire South East. Nonetheless feedback from our members suggests that the eligibility criteria may still be creating barriers.
RegionalEconomicStrategies 12. The process by which the RES was drawn up and agreed, although very thorough, was over consultative and took too long to be agreed resulting in an outdated strategy. More needs to be done to make the process quicker and involve less paperwork and should be replaced by a rolling plan which is evaluated yearly. We were pleased to see that SEEDA included specific measures for manufacturing as a key factor for regional growth. 13. We agreed with SEEDA’s aim that all regional stakeholders should own the RES and that it should be delivered on a partnership basis where possible. 14. The content of the RES was broadly fit for purpose at the time it was written, but is now certainly challenging due to the changed economic climate. This is particularly the case now because targets, for example to increase GVA, were set prior to the recession and funds have been diverted for other purposes eg previously for the housing recovery and latterly recession support.
Changes toRegionalPolicy following theSub-NationalReview 15. EEF welcomed many aspects of the recent Sub-National Review (SNR), in particular the proposals for new Single Regional Strategies (SRS) to bring together the Regional Spatial Strategy and Regional Economic Strategy. 16. 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’ Boards taking joint responsibility for a SRS, rightly addresses this issue. 17. 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 it remains to been seen how eVective this will be.
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18. 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. 19. In the South East, EEF has been represented at Regional Assembly level for some years via the Social, Environmental and Economic Partners (SEEP) group which has vigorously lobbied for real engagement within the new SNR infrastructure rather than merely as a consultee as originally proposed. However subsequent debate has resulted in representatives of SEEP gaining two places on the Strategy Board, but with observer status only. It remains to be seen how the Local Authority Leaders Board will take advantage of the existing experience and knowledge of SEEP,particularly those members from the business community with their knowledge of what needs to be done in support of economic development. 20. Whichever future arrangements are agreed it is important that the existing strong liaison between SEEDA and the business community is maintained and developed. We therefore hope that SEEDA will continue to see the South East Business Forum (SEBUS), which comprises most of the business representative organisations, as a valuable link for business engagement.
Memorandum submitted by South East Chambers of Commerce (SE 18) The role of SEEDA and the nature of the RES must be responsive to the outcome of the SNR and reflect changing economic conditions. South East Chambers supports the principles behind SNR that decisions should be made at the appropriate level in order to support business growth. In practical eVect however there remains a risk that the role of the RDA will become less eVective in delivering significant economic benefits, particularly if the following issues are not addressed: — Business engagement—at a regional, sub-regional or local level it is critical that the business community has a strong input into policies aVecting economic development which reflects the private sector’s role in generating wealth in the locality. We need agreed key principles for eVective business engagement based upon the experience of Chambers which we would like to see taken up by the RDA, Local Authorities and the business community. The business community needs a direct voice at all levels of economic development decision making. — Strategic role—It is essential that the RDA understands its changing role in delivering a strategic framework with less emphasis on programme delivery. The RDA will need to redesign its programme and processes for this new role and it is highly questionable if the current structures and management team possess the right skills for this new approach. If it fails in this new ambition and in eVect it becomes “SEEDA lite” the business community will feel let down. — World class region—The goal of SEEDA in establishing a world calls region can only be achieved if we develop a world class SME business community. Successful regional economies have successful world class supply chains and business infrastructure. This can only be achieved through a new partnership with business and a dialogue is needed to develop this. — Value for money—The future of government intervention will be significantly diVerent from the past. Big Government is no longer an option. The structures of business support created by the business community must be harnessed to greater eVect in the delivery of economic growth. The Chambers of Commerce are ready and waiting for a new delivery partnership and we need an RDA who sees the benefit of such an approach. — Local taxation—with the UK economy facing a downturn and conditions for enterprise under threat, the business community is concerned about the variety of new charges upon business. The combination of Business Rate Supplements, Community Infrastructure Levies, congestion charging and Workplace Parking Levies creates an unacceptable level of unpredictability for businesses. While businesses may want to contribute to improvements to their locality this process must be streamlined to provide greater clarity and accountability. The RDA must champion reduced costs for business freeing up their income streams for business investment. — More funding—The South East is a major part of the engine of the UK economy and too much of the taxation from this economy is not reinvested in the region. The best returns on investment must play a stronger part in decision making and on the basis SEEDA deserves to be better funded always providing the issues above are addresse.
Memorandum submitted by Ten Sixty Six Enterprise (SE 19) OrganisationalBackground Ten Sixty Six Enterprise (TSSE) is a not for private profit organisation owned by the members of the Hastings Area Chamber of Commerce. TSSE provides the following services: — Representation for the business community through the Hastings Area Chamber of Commerce— this includes representation on Hastings Local Strategic Partnership, the Hastings and Bexhill Economic Alliance and East Sussex Strategic Partnership (and Business Board). Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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— Enterprise Agency for Hastings and Rother, providing advice to pre start, start up and established businesses. This is through a mixture of public and private funding—for instance the delivery of business support funded through the Local Enterprise Growth Initiative. The agency works closely with Business Link Sussex, both as a deliverer of service and as a partner. — Provision of loan finance across Sussex, Kent and Surrey to pre start and established businesses that are unable to access conventional bank finance (through its wholly owned subsidiary, Capitalise Business Support). — Management services for Hastings and St Leonards Town Centres. — Management of Locate East Sussex, the Inward Investment service for the County (through Service Level Agreements with the County Council, Districts and Boroughs). — Delivery of the largest business to business exhibitions in Sussex—Lets Do Business.
Response The role, responsibilities and accountability of SEEDA Our various roles as detailed above bring us into contact with SEEDA and Business Link at diVerent levels and in diVerent ways. The role of SEEDA is seen locally in Hastings as being a facilitator of change, through the support of regeneration activity in the town. In this respect SEEDA is seen generally in a positive way and has had a demonstrable impact on the fabric of the town. Whether this will lead to a longer term change in the economic dynamic for the town is still to be seen. Although the principle of “Education Led Regeneration” is generally subscribed to there is an issue of disconnect between the development of University Centre Hastings (which is welcomed by all), and the incredibly poor performance of the Secondary schools in the area. In general terms the perception of the business community, and the wider community, is that SEEDA is not held to account for its actions (either positively or negatively), and it is not clear how some methodologies are tested before full implantation—an example of this would be the Enterprise Gateway service. This was designed as a service that would promote enterprise, particularly in disadvantaged areas. This programme was (as I understand it) a SEEDA initiative, but was worked up in isolation of other provision (such as that of the Enterprise Agency movement). The programme was launched originally with 9 Gateways, with the RES indicating an expansion to 20. I am sure that an analysis of the project on its own would demonstrate “value” and hitting targets, however I am not aware of any analysis or comparison between what the Gateways deliver against what an Enterprise Agency would deliver for the same value. This would be a general criticism of SEEDA who I believe have not always worked eVectively, or encouraged in partnership.
The process by which the RES was drawn up and the level of involvement of regional stakeholders Members of the Hastings Area Chamber of Commerce attended a sub regional event where the draft RES was discussed. Although I believe the event was useful the strategy at that point was so all encompassing that it was diYcult to argue with anything that was being put forward. We also responded in writing and our main concerns revolved around what was perceived as a strong weighting of tone and support to high growth areas and sectors. In actuality Hastings has faired well out of SEEDA which has in some way mitigated that fear, however I believe the feeling across the rest of Sussex is not the same.
The eVectiveness of the RES for the South East in delivering against its targets including the degree to which the regeneration of areas of deprivation and the former coalfield areas has been successful Hastings has benefited significantly from government and SEEDA investment—it is too early to say what eVect that will have in the longer term particularly in the current economic climate. Hastings is certainly still “work in progress” and the key to success will be continued investment into the area. As stated previously the physical improvements should lead to an economic benefit but I am concerned that there is a disconnect between the good works that SEEDA have facilitated, and the most deprived parts of the community where we still have generational unemployment and very poor educational attainment
The eVect of the financial and economic situation on businesses in the region including the eVect on diVerent sectors such as manufacturing, service industries etc To date the Hastings Area economy seems to have faired relatively well in comparison to other parts of the region/ country.This is largely down to the high proportion (46%) of public sector employment. However the concern locally is that although the recession may be shallower than other areas, that it will be longer. The new workspace already brought forward, and in course may go some way to alleviate this issue, but as yet it is too early to tell. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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Businesses are still experiencing diYculties in securing credit—evidenced by a sharp increase in enquiries from established business for our loan fund. A number of businesses have also expressed frustration at being able to access finance through the Enterprise Finance Guarantee Scheme. Two banks that we have spoken to have advised that they are lending between 35–48% of their targets for EFG lending (and this is believed to be the best performance). This is not necessarily a criticism of the banks who may be lending “prudently” in the current diYcult general trading environment. It is more that the government could have done more to support other potential lenders such as Community Development Finance Initiatives, whose remit is to lend to those more “high risk” propositions, and can add value to the borrower through the provision of ongoing advice and support through the period of the loan.
The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential eVect on the work of SEEDA This is not an area of expertise so have no comment.
The role of other Government agencies such as the Government OYce for the South East, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES Hastings has again benefited from the close working and partnership, particularly between SEEDA and local government. The partnership developed to support the regeneration process has joined local authorities, SEEDA, local MP’s and some private sector representation together to develop a coherent strategy. The leading players are undoubtedly SEEDA and Hastings Borough Council, but that is only right and proper. Both SEEDA (through Seaspace its delivery arm) and HBC have consulted regularly and updated the business community on their aim and objectives. The business community has supported the process through lobbying, particularly for improved communication resources, particularly road but also rail and virtual links. The Chamber of Commerce has for instance been working very closely with various partners (including SEEDA, Seaspace and HBC) to bring a high speed Point of Presence into the town to improve virtual connectivity.
How eVective initiatives such as Business Link are being in assisting businesses in the current climate, including helping them to gain access to funding both from Government funding streams and through the banking system SEEDA are currently retendering for the Business Link contract for the region and the move away from six Business Link franchises to one should be applauded as this should reduce “back oYce” costs significantly, and provide more funding to front line service provision. The risk is that this will reduce the local flavour for provision, although SEEDA in their consultations through the process appear to have recognised this risk. The six Business Links have operated in diVerent ways—even through the last couple of years where they should have been working on a more consortium driven basis. The majority of our work has been with Business Link Sussex, who we have had a range of contracts with over the years, and they have generally worked well through local partners, and delivered successfully to businesses. This has not been a methodology used by all Business Link providers where some appear to have established their own internal provision rather than working through partners. The core Business Link provision of small business reviews is an eVective tool, providing businesses with information and guidance—this can be particularly useful in these diYcult economic times. The one gap in provision is that of finance where the banks are unable or unwilling to lend (up to c £50,000). SEEDA has invested heavily in Finance South East which provides finance to high growth (potential) or innovative business through a mixture of debt, mezzanine or equity finance. Although there is undoubtedly a need for financing this type of area, SEEDA has largely ignored the sub £50000 debt sector (other than through funding provided through DBERR (Phoenix legacy funding), or devolved to local partnerships (who have identified the need). A recent independent report on Community Development Finance (Inclusive Finance the Next Steps— March 2009, by BMA in association with Community Finance Solutions) in the region pointed out that Finance South East Services were likely only to impact on 0.1% of the business stock in the region. I believe this is further evidence of SEEDA’s leaning towards high tech businesses, rather than the core of its economy—the small business sector. Capitalise Business Support (CBS) has witnessed a significant increase in enquiries from established businesses—in particular those referred by Business Link, in the last three months. The banks are still wary of lending, even through the Enterprise Finance Guarantee. CBS are in the process of applying to become a lender through the EFG, and although the changes announced by Lord Madelson recently may help the CDFI sector and CBS to use the EFG vehicle, more changes are still required, or further government investment is required if the gap in the finance market is to be filled. Processed: 21-09-2009 21:12:36 Page Layout: COENEW [O] PPSysB Job: 434938 Unit: PAG4
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The CDFI sector has also suVered in the SEEDA region through its own internal staV changes leading to a lack of continuity. At one point SEEDA was funding a CDFI development oYcer, this role then ceased, but SEEDA still maintained a key member of staV to oversee the sector. StaV changes then led to further staV churn and the apparent loss of any key point of contact for around 12 months (at the time the contact was needed most—the start of the recession). SEEDA has now acted and there is a key contact point, and they have funded the above report, and we await further developments, but progress remains slow at a time when action is needed.
Memorandum submitted by South East Diamonds for Investment & Growth Partnership (SEDfIG) (SE 20) 1. We would like to welcome this opportunity to submit comments to the South East Regional Committee inquiry into SEEDA and the Regional Economic Strategy on behalf of the SEDfIG partnership.53 Having taken into account the terms of reference for the inquiry, our comments are based around the following identified areas of interest: — The process by which the RES was drawn up. — The eVectiveness of the RES for the South East in delivering against its targets including the degree to which the regeneration of areas of deprivation and the former coalfield areas has been successful. — The eVect of the financial and economic situation on businesses in the region. 2. Over successive Regional Economic Strategies, SEEDA’s approach has evolved to provide a much greater emphasis on “place”. The SEDfIG believe that this is a welcome, indeed essential, development given the polycentric nature of the south-east region and the economic contrasts within it. In particular, the SEDfIG have welcomed the emphasis on the Diamonds for Investment & Growth as the main centres of significant growth potential within the region. The 2006 RES defined three strategic aims of Global Competitiveness, Smart Growth and Sustainable Prosperity. Across all of these three areas of action it is the Diamonds for Investment & Growth that provide the concentrations of population, employment and development necessary to make a change; we therefore strongly support SEEDA’s place-based focus and recognition of the SEDfIG. The 2006 RES was drawn up against a national policy backdrop of increased focus upon city regions and urban areas as drivers of economic growth. The SEDfIG provided the south east with a response to that agenda; this was the correct response then and, we feel, remains the correct response now. 3. Since the adoption of the RES, SEEDA support and delivery has taken many forms. Across the Diamond areas a wide range of sub-regional partnerships have been established, meeting diVerent local needs, structures and interests. SEEDA support has been important in bringing many of these partnerships to their current stage of development, acting as strategic partner, technical advisor and often part funder. If the south east is to take full advantage of the opportunities oVered by the Sub National Review, as well as meet diVering sub-regional demands arising out of the current economic situation, it is essential that this sub-regional work continues to be supported eVectively by SEEDA. 4. In addition, the SEDfIG have, over the past 18 months, developed a partnership comprised of the nine local authorities at the core of the RES “Diamonds”. Co-ordinated by a Leaders’ Board and supported by GOSE, SEEDA and, prior to March 2009, SEERA, this group has proven eVective as a platform for addressing issues and barriers common across all Diamond areas. The partnership also provides a network for exchange and sharing of best practice and experience, facilitated through biennial networking events. SEEDA support has taken the form of strategic partner, technical advisor, researcher and more recently funder—all essential roles that have proved beneficial to the establishment of the partnership.
5. The Diamond areas have also provided a focus for SEEDA’s new Innovation and Growth Teams, intended to identify and proactively support approximately 200 high growth potential businesses in each sub-region. The first of these teams began operation in April this year, and our partnership will be working closely with SEEDA to monitor their eVectiveness and delivery of the support needed to drive and sustain long-term growth. 6. This long-term focus is, we feel, key to ensuring sustainable future prosperity for the region. The current financial and economic situation has delivered business closures, redundancies and wider challenges across the Diamond areas. This has, quite rightly,necessitated dedicated, intensive work by local authorities, SEEDA and other agencies to seek to mitigate the eVects of the recession and assist those placed into diYculty by it. However, this must not be allowed to deter from a sustained focus on the long-term challenges
53 Basingstoke & Deane BC, Brighton & Hove CC, Crawley BC, Medway Council, Milton Keynes Council, Oxford CC, Portsmouth CC, Reading BC & Southampton CC. Processed: 21-09-2009 21:12:37 Page Layout: COENEW [E] PPSysB Job: 434938 Unit: PAG4
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facing the region. It is vital that SEEDA, and other regional agencies, focus on the longer-term issues and underlying demands that need to be met within the region. In April this year, the SEDfIG launched their “Prospectus for Prosperity”, which set out three strategic aims for the Diamonds: — To deliver 45% of GVA growth within the region in the period to 2016. — To deliver 50% of the required housing provision in the region in the period to 2026. — To stabilize ecological footprint by 2014 and secure a 30% reduction by 2026. 7. These reflect the long-term challenges facing the region, which need to be met if we are to deliver the growth necessary to preserve and enhance our status as a world-class region. We look forward to enjoying the support of SEEDA in taking forward our work as we strive to meet these goals. In a tightly constrained funding environment, it will be essential that regional agencies provide detailed focus upon the courses of action needed to deliver prosperity in the long-term. 8. Across the various Diamonds there are areas of deprivation to be found. In some Diamonds these are localised pockets; in others, deprivation is more sustained and widespread. This deprivation is often the result of complex, embedded problems and, as such, no one agency can be expected to deliver the step changes needed to provide sustained improvement in life chances and outcomes. In our work thus far, we have identified skills as a principal driver of social justice and a means to providing improved outcomes to residents living in areas of deprivation. Work is currently taking place to develop a Skills Strategy and Action Plan for the Diamonds, which will focus upon collective challenges and potential methods of delivery. This takes place against a backdrop of great change within the wider “skills” policy arena and greater clarity on transitional arrangements and likely future funding allocations, from both government and relevant regional agencies, would be welcomed. 9. The south east region is the only net regional contributor to the national exchequer and is also home to many multinational businesses and leading knowledge economy industries. As such, it is essential that the right policy decisions are made to preserve and enhance the position of the south east as a “world-class” region, along with the contribution it makes to the national economy. We feel that areas of deprivation are also areas of immense opportunity,with large resources of currently untapped potential. A place-based focus upon these areas is required, with appropriate policy interventions needed to deliver social and physical regeneration and, with it, economic prosperity. In addition, it is vital that we continue to “invest in success” within the region, if we are to build upon our knowledge economy strengths and develop the potential of our world-class industries. A range of leading ICT, bioscience, engineering and medicine/pharmaceuticals industries exist within the south east. Looking forward, regional policy should seek to sustain and expand these industries, exploiting opportunities for future growth and development. In short, in a more constrained funding environment, the future focus of regional policy and support should be on exploiting current and future opportunities for economic growth within the region. We believe that the Diamonds for Investment and Growth oVer the greatest scope for delivering this potential. 10. In summary, SEEDA support for the SEDfIG has aided the establishment of a strategic partnership that is well placed to monitor the progress of the RES within Diamond areas, addressing barriers as they occur and seeking to lever in extra resources to support economic growth as necessary. In addition, structured work with sub-regional partnerships across the Diamonds is helping to address priorities and drive progress at a diVerent spatial level, allowing for collaboration that reflects diVerences in needs and opportunities across the region. The SEDfIG are critical to the delivery of regional housing and economic growth targets and, as such, sustained and meaningful dialogue with the regional agencies is vital to secure future progress. Maintaining and enhancing the capacity of the Diamonds is essential if we are to meet local needs and deliver eVectively against the growth targets within the RES. We look forward to enjoying ongoing support from SEEDA, both within the sub-regions and across the SEDfIG partnership.
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