The Draft Regional Assemblies Bill (HC 972-iii) ODPM Committee 14 Sep 2004

Evidence given by Richard Allan, Director of Regional Policy, Ian Scotter, Regional Assemblies Division Manager, Andrew Campbell, Regional Development Group, Office of the Deputy Prime Minister, and Jonathan Blackie, Regional Director, Government Office for the North East; Stephen Barber, Chief Executive, and Paul Briggs, SEP Co-ordinator, North East Regional Assembly, Steve Machin, Chief Executive, North West Regional Assembly, Paul Bevan, Chief Executive, South East Regional Assembly, and Councillor Bransby Thomas, English Regions Network; Alan Clarke, Chief Executive, and Pat Richie, ONE North East RDA, Chris Roberts, North East Regional Director, and Rob Wye, Learning and Skills Council, George Cowcher, Chief Executive, Chamber of Commerce; Roy Wicks, Director General, South Yorkshire PTE, and Ken Kemp, Planning Manager at Nexus (Tyne & Wear PTE), Passenger Transport Executive Group (pteg), Stewart Francis, Chairman of the Rail Passengers Council, Commission for Integrated Transport.

Q259 Mr. David Clelland: Can I ask Jonathan Blackie: if the referendum is won and we do eventually get an elected regional government in the North East, what will be the continuing role for the Government Office for the North East?

Mr Blackie: We currently represent about ten government departments in the regional office, so we cover quite a wide spectrum of government activity across the region. The draft Bill sets out the functions, which cover particularly economic development, planning, transport and housing, so we currently estimate that about 80 to 100 of our staff out of a total of 300 would transfer to an elected regional assembly So there would be a significant transfer of functions, but there would still be quite a wide range of activity that would be focused in the government office, and clearly there would be a relationship between the government office and the elected regional assembly itself, particularly as a conduit into government.

Q260 Mr. David Clelland: Have you made any estimate of what the transitional costs would be to move to the new structure of regional governance?

Mr Blackie: There are estimates in the White Paper and the Bill.

Q261 Mr. David Clelland: I was specifically thinking about the North East, but that applies to all regions?

Mr Allan: The average figure for the set-up cost that we have given is about £33 million. That would be the cost of the setting up of arrangements and moving from here to there, and then the sort of annual remit comes to about £24 million in the North East and more for assemblies in a larger region.

Q262 Mr. David Clelland: Have you any idea: how does that compare with the current costs already involved in running the non-elected assemblies and that whole system? What is the overall net cost, for instance?

Mr Allan: I cannot speak for the costs of the existing assemblies, which vary considerably in their size and are not directly funded by government except for certain purposes, but we reckon that about five million per annum out of the £24 million per annum that I have mentioned would be the cost of running other bodies, which would be transferred and therefore netted off the figures that I have given.

Q263 Mr. David Clelland: So the 24 is gross of that?

Mr Allan: Yes.

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Q304 Mr. David Clelland: In examining the political statistics are we not forgetting about the role of stakeholders in all of this? There will be other people, politicians, on the scrutiny committee and therefore that will influence the decision of the committee in the end. It will not necessarily just be a governance against opposition?

Mr Scotter: Yes, absolutely. That will not be a requirement. There is the facility to co-opt stakeholders onto committees. Members of the assembly will have to be the majority on any sub-committee, but, yes, there is room to get a different set of views than necessarily the political views onto those committees.

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Q327 Mr. David Clelland: Is Councillor Gibson suggesting that the general powers of regional assemblies should be extended in the Bill that comes before Parliament?

Cllr Gibson: I think the weakness in the Bill and the powers is around transport and connectivity. I think it is a weakness and has been a weakness for many, many years. The government's strategies around transport tend to be around congestion in the South East and not the regional economic development of the North East, and that has been a huge problem for us over many, many years. We see regional government beginning to put that right. We have to remember that we are the poorest region in the country. Your own select committee here indicated that quite clearly. The point was well made. Since then, those two years, we have become poorer. Nothing has happened. The drive for regional government, the imperative for regional government has been there in the North East for the last 20 years. It is about self-preservation at the end of the day. We are not doing well under the present system and have not done so for many, many years. During the eighties the North East was almost entirely wiped out, the whole of the Durham and Northumberland mining, the shipping, the steel, went. We are still recovering from that, and that is wrong. Regional government we see as an opportunity to put that to rights.

Cllr Thomas: Could I come in on the previous question which you asked about the moving of powers from local government. There certainly is a perception out there that that is something which occurs when this sort of devolution occurs, but let us be quite clear on this. The regions at the present time, the ERN is quite clear about its position. Devolution should mean that power is devolved from the centre to the regions and not take local authorities up to the regions. The delegation of power should be made absolutely clear within the Bill.

Mr Machin: If I could add, Chairman, the evidence from Scotland, where the fears were exactly that when the devolutionary arrangements were extended to Scotland that the Scottish Parliament would suck up powers from local authorities in Scotland, did prove to be unfounded. What did happen was that Scottish authorities, local authorities, found themselves far more subject to the need to provide resources to be consulted - and this ties in with the earlier session - and also to think through their own relationship with, as it was in Scotland, the national level. So the similar issue in Scotland was not founded, but there are, I think, needs for local government to begin to organise itself regionally in the North East and in the North West so we get the opportunity to carry out a different role with relation to the regional level.

Q328 Mr. David Clelland: Given the importance in terms of national, regional and local services, is it realistic for the government to restrict the powers of regional government in areas of health and education?

Mr Machin: I think that there are issues in health where you could move forward; certainly public health, crime and disorder, regionalisation of the criminal justice system and public health issues do all have a common thread. We know in the North West there are 1,050 different wards, and, if you plot them on a geographic mapping system, incidents of crime and disorder, incidents at which the fire and rescue management service attend, areas where public health issues are paramount are all the same wards; and you know this from your own constituency experience. So it is possible to extend some of those issues at regional level, but I think it needs to be done with caution.

Q329 Mr. David Clelland: I was interested reading the North East Regional Assembly's arguments about equality and diversity. As Robert Gibson is aware, the draft Bill only requires councils to have regard to equality in numbers. Would you like to say why you feel the Regional Assembly in the North East thinks that this should be extended to a primary duty?

Cllr Gibson: I think we would take it further than that. We are looking to mirror that clause in the Welsh Assembly Bill that talks of - that brings about an absolute duty on regional government around diversity and equality. I think it is a huge opportunity to make it happen, to set the Bill to make it happen. We do not try hard enough to bring women and ethnic minority groups into mainstream politics. A lot of work has gone on but I think it is not the work that should be done. We have an opportunity here to mirror the Welsh Assembly and have written into the Bill a clause around equalities, diversities etc. The Welsh Assembly is congratulated by me on many occasions for achieving 50 per cent of women in Parliament. I think that is absolutely wonderful and terrific and should be happening everywhere.

Mr Machin: It is absolutely key, Chairman, in the North West. In my constituency three miles from the centre of Manchester there are: 42 different languages spoken; three different Somali communities; a huge diversity in the region; 45 people per square kilometre in Blackpool; 2.2 people per square kilometre in the Eden Valley. There is an absolute need to make sure the Bill is used to extend the opportunity of tackling that democratic deficit, as well as dealing with regional economic disparity.

Mr Bevan: I think the question of stakeholder involvement is closely related to this. No matter what sort of electoral system one has you can only achieve the representational involvement of diverse and minority groups through some additional mechanism. I think the stakeholder participation arrangements are simply permissive in the Bill and there should be some scrutiny on regional assemblies perhaps through a comprehensive performance assessment, so that while you are allowing them the diversity of arrangements to be stakeholders those are tested regularly and routinely in a public way.

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Q336 Mr. David Clelland: Given the fact that the Government has decided the assembly should be restricted to 25-35 members, what problems does that give in terms of representation of huge constituencies?

Mr Machin: Certainly in a region like the North West, Chairman, it will cause enormous problems. The areas of the North West which are predominantly rural - and even areas in West Cumbria which, despite their geographic separation, are predominantly manufacturing based - are going to find their needs (which range from rural issues through to manufacturing and traditional industries) will need to be assured that representation will be there. Already the Committee has identified that in a 35 member body; 25 will have a geographic-specific constituency of, let us say 290,000; the other ten from the top-up list will have a region-wide constituency. They are likely, I think, in terms of the electoral system that has been chosen, to be from these smaller parties; so you will therefore have the situation (which is on occasion replicated with the Liberal Democrat Party) where in a region like the North West you have one Liberal Democrat MEP who is covering a region of 6.7 million people, with an economy of £77 billion. I think there are real issues there. The North West Regional Assembly believes that for a region of our size a regional body should have a membership of around 50.

Cllr Gibson: Our own view from the North East is that we are seeking one from every constituency. It will cause problems but it means the interface with the MPs, the local authorities, stakeholders and the thematic groups -----

Q337 Chairman: ----- you are asking for more.

Cllr Thomas: The assumption that almost one size will fit all is incorrect. The regions are as different as chalk and cheese in terms of their size and geographic areas. If we are talking about representation within the region then 25-30 is not enough for the larger regions.

Q338 Mr. David Clelland: What about implications for the North East with the proposal of the local government system of Cabinet-style government, both in terms of the regional government giving 3-7 members performing the executive? What implications does that have?

Cllr Gibson: One of the models of regional government we are looking at are thematic groups around education, housing, community safety etc., with elected members, and the brightest and best in education and health working with them on strategically planning health, education etc. right across the region. It brings the elected members, stakeholders and experts in various fields together so that everybody has a handle on what is happening in the North East. It is a model which works very well in local government. I am not saying it will be the model but it is a model we are looking at as a regional government model which has a shared responsibility among the elected members, stakeholders etc.

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Q346 Mr. David Clelland: The estimated cost of an elected regional assembly for a Band D council taxpayer is around 5p a week. Do you think that is a realistic figure in your view, or do you think the Government has provided sufficient tax-raising powers for elected regional assemblies?

Cllr Gibson: It is difficult one to work through. I would like to see a paper on this. I do not know where the 5p comes from. I do not know where the £25 million comes from. I do not know where the 300 jobs come from. I do not know where the £400 million building comes from. So it is a difficult one. For me if we can achieve what we set out to achieve in terms of workless-ness, connectivity, a better regional development strategy then 5p in the pound on local tax seems fairly cheap.

Q347 Mr. David Clelland: It could be difficult for regional assemblies to have real clout and real authority when they can only influence things rather than actually have a financial power to do things.

Cllr Gibson: The Bill is what it is. It is what we derive and drag out of Government from then on. It is a process than begins on November 6th; it is not an event that ends on November 4th.

Cllr Thomas: The other aspect of finance which is rather strange is that this Bill is tighter on the block grant that is coming through, proposed through Government, than was proposed in the original White Paper when there was much greater flexibility for the assembly to be using it.

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Q350 Mr. David Clelland: What flexibility will regional assemblies have under the terms of the general grant they will get?

Mr Bevan: I think the functional body approach is a real limitation. It is bad enough within a government or local government organisation to take money from one department and put it into another to reflect your priorities; but if you have got functional bodies with relatively autonomous boards that makes it even more difficult.

Q351 Mr. David Clelland: Cllr Gibson mentioned his ambition in the North East for additional powers certainly in terms of transport. Why is that so important?

Cllr Gibson: I think we do not have powers in the North East. The powers in transport are here in Westminster and Whitehall. The strategies for the region tend to be around congestion in the South and South East and not the economic development needs of the North East. We need now to be looking in the North East at our links with Scotland, and our connectivity with Scotland, through to Ireland and Europe; and our connections with Manchester, Liverpool and Leeds. We cannot deal with issues - we are not allowed to deal with issues - unless the priorities are set down here in Westminster and Whitehall. We have argued for years about dualling the A1 into Scotland and it gets laughed at because people say, "Why do you need to dual carriageway the Lake District?" It is not about that. It is a serious problem of getting the North East connected to Scotland and connected to Manchester and the South etc. so they will begin to develop.

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Q378 Mr. David Clelland: You might have heard the discussion this morning about the size of regional assemblies and how, given there are only 25-35 members, there might be a democratic deficit there. While I have some sympathy with that view, I generally put the argument that there will be a lot of people involved in the regional assemblies with a wide range of stakeholders. Clause 53 of the Bill would require assemblies to encourage and facilitate stakeholder participation "to such extent as the assembly thinks appropriate". Do you think this ought to be a more definitive statement in the Bill?

Mr Cowcher: We believe that should be strengthened significantly. From the original White Paper we think there has been significant movement in relation to stakeholder involvement and that is very welcome. At the moment it is purely facilitative and it is not actually set in statute. We believe that is a significant weakness. It is absolutely vital that there will be a range of stakeholder involvement in the workings and in the decision-making in relation to the assembly.

Q379 Mr. David Clelland: Do you think that the Bill should prescribe which stakeholders should be involved?

Mr Cowcher: It would be very helpful if that was the case. Obviously representing the business community we would hope we would be one of those numbers.

Mr Wye: I think it would be important that it was not exclusive, and give a range of stakeholders who must be involved and others as appropriate. I also think it would be inappropriate if the Bill defined how the assembly engaged the stakeholders in laying down particular structural arrangements.

Mr Clarke: I think from my point of view the principle is absolutely right. I do not think it should be too prescriptive. I think there should be some local flexibility. Some of the ideas the assembly put forward in their evidence is quite positive. I think the other thing we ought to bear in mind is, if this goes ahead, we would have 25-35 elected representatives who have been elected so that they are there also representing the views of local communities. That role brings with it obviously leadership responsibilities. I think there is and has been in my experience in different regions something of a tension between, on the one hand, having to make very focused choices about what the priorities are and where the resources will be spent, and almost consultation overload to the point where you end up with the lowest common denominator. I think that is a real issue.

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Q395 Mr. David Clelland: I know you see that the new Regional Assemblies will have some effect on the work of the PTEs and there may be some areas of conflict. Does that mean that you feel that this is not an opportunity that ought to be grasped to improve the work of both PTEs and local authorities within the region in terms of transport, or do you think that things should be left the way they are and we do not need a new authority?

Mr Wicks: I think our view is you have actually got to look at what is right for each region in terms of how you make some of the delivery changes. Certainly I think there is benefit in there being a clearer regional accountability for the overall funding, because I am a great believer that transport problems are broadly solved within a travel-to-work area, which tends to be the sub-region but it does not necessarily have to be a particular PTE area because they can vary. That is where you will actually solve transport problems, but they then have to be solved within a regional context, because it is no good Leeds or Sheffield sorting out its problem and competing, in a sense, with York or Hull or somewhere else. So there has to be a regional dimension, which is why I think I welcome the regional transport strategy that is there already, and we work very closely with the regional assembly at the moment in doing that. I think that the funding powers have to be given alongside that which are commensurate with that, and I think the appropriate funding powers at the regional level are initially allocational and, if you like, organise spending profiles that fit in with those collective political priorities. So I think, yes, that is welcome and that is something that could improve things, because at the moment it is very much a sort of bi- to tri-lateral relationship between individual local authorities, the government office and the centre. By making, in effect - although this is not what the legislation proposed - the Government more accountable at the regional level you could improve that part of the process. So we certainly see it as an opportunity, and I think what I am really saying is that to grasp that opportunity we need to go a bit further and a bit faster.

Q396 Mr. David Clelland: Local funding is one thing but there are other areas of responsibility that might be usefully housed in the Regional Assembly's power. We are very conscious in this Committee and those of us who believe in regional government that we are devolving power down from the centre, not up from local government. On the other hand, as I am sure you are aware, in some PTE areas local authorities have different policies when it comes to things like bus lanes and traffic regulations, which PTAs themselves would like to see brought under the one umbrella, so we have a commonality. Is this not an opportunity for regional government to have a regional overview of regulations like that?

Mr Wicks: Certainly a regional transport strategy would. I think there is an interesting debate about at what level some of those delivery type powers should rest. I think that whilst I see a strong role for the planning, the funding and the strategy at a regional level, necessarily having traffic management powers at a regional level may not necessarily work. I think the evidence shows that that, perhaps, (if you look back to the mid-70s and 80s at the metropolitan county councils, which was, in effect, an attempt to do some of that at the sub-regional level) did not necessarily prove a success. I think a lot of those things - I go back to my opening - want to relate generally to the travel-to-work areas because I think that is the area over which the policy requires. Separately from that, the White Paper Future for Transport does signal that the Government wants to keep an eye on how the powers in the Traffic Management Bill, which presently influence the management of the highway system, are used. They have flagged up in that an intention, if they do not feel that is effective, to look at whether those powers might not more appropriately rest with the PTA or PTE. I am not arguing that because I work for a PTE, my view is I think most of those powers work best at that local, sub-regional level rather than necessarily at the regional level.

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Q401 Mr. David Clelland: Coming specifically to transport strategy, looking at the current proposals in the draft Bill, what value do you think the transport strategies drawn up by Elected Regional Assemblies will have?

Mr Wicks: The Regional Transport Strategy, at the moment, is a key document. We have to have consistency at the local level with the regional strategy. If it is aligned with funding, if you are inconsistent with the Regional Transport Strategy it will influence the level of funding you have got. So I think at the practical level it will be important. As I said in my opening remarks, I do think it is very important that you join up the issues about where you want economic development, where you want housing, and where you want transport. If you do them in isolation you get the jobs in one place, the housing in another place and then demand the transport to link them up, and you may not be able to afford the transport you actually want. So by looking at the extent to which transport is a constraint or an opportunity when you are making those economic investment decisions and decisions around housing, it seems joining up those strategies at the regional level is very important. So, therefore, consistency with those strategies and then the funding for those does actually give you quite a powerful set of tools.

Mr Francis: I think it encourages Regional Assemblies to address the really tough decisions out there, about how much money is available for realistic transport projects.

Q402 Mr. David Clelland: How can Regional Assemblies ensure that national and local agencies actually implement the regional strategies? Are there sufficient powers in the Bill to allow them to do that?

Mr Wicks: I think there would be sufficient powers in terms of the local authorities because the way I envisage it is that under the present system the Government rewards or penalises authorities that do not use the funding in the way that contributes to the strategies they signed up to, and there is no reason why if the regional authorities had that funding discretion they could not follow the same system. In terms of investment in the strategic highway network and the regional rail network, that would be more complicated given that those bodies are not under the direct control of regional authorities, and are not envisaged to be in the legislation. Clearly, the process of having a statutory duty to consult before they make their plans would help provide some check on that.

Mr Francis: It also is pretty clear to me that long-term funding from government needs to be firm and not indicative, as the White Paper on transport says. I think that the sensible approach would be step-by-step; that you should actually pilot this arrangement in a particular area - you have got to do it over a reasonable period of time, which might be five years - and see how this is actually managed. I think a pilot in a particular area might be helpful. This whole business of indicative funding rather than firm funding - I do not really understand what that means.

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Q405 Mr. David Clelland: If each region is drawing up its own transport strategy, what about inter-regional and national issues? How would they be addressed?

Mr Francis: I think the CfIT paper makes it perfectly clear that - certainly from a consumer point of view - the national motorway network, trunk road network and the national rail infrastructure are national treasures that must be maintained nationally. Again, we would advise caution and that one should carry out an audit, for example, of the road network and decide exactly what is and what is not a trunk road, what fits regionally and what fits nationally. Clearly the national strategy must be dictated nationally and must be preserved, but that audit would show you the bits that can be controlled regionally.

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Q414 Mr. David Clelland: We have heard pleas for more devolution of transport decision-making from the centre down to the regions and below. Looking at the proposals before us, to what extent do you think the Department of Transport have been involved in drawing up this draft Bill?

Mr Wicks: Certainly I can see consistencies in the White Paper, which refers to the indicative spending decisions. That is in the Transport White Paper. They clearly have been involved in the devolvement of rail powers because they have used the same language of the powers for Regional Assemblies as they have used for the Passenger Transport Authority areas. So they clearly have been involved, but I have no personal knowledge of how great ----

Q415 Chairman: Do you think they have fought hard to keep their powers rather than devolving powers?

Mr Wicks: Certainly in my meetings with the DfT they have been keen to extol the virtues of delegation down to the regional level of spending decisions.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.