English Regions: New Deal (HC 309) Public Accounts Committee 24 March 2004

Evidence given by Dame Mavis McDonald, Permanent Secretary, Mr Joseph Montgomery, and Mr Alan Riddell, examined.

Q12 Mr. Gerry Steinberg (City of Durham): One or two general questions to begin with. How many deprived communities are there all together in the country?

Dame Mavis McDonald: The neighbourhood renewal work which the social exclusion unit did described something in the order of 2,000 to 3,000 small areas where there are pockets of deprivation.

Q13 Mr. Gerry Steinberg (City of Durham): How many actually applied for this particular scheme?

Dame Mavis McDonald: In this particular case we asked local authorities to help us choose the areas for this particular programme.

Q14 Mr. Gerry Steinberg (City of Durham): That was not the question. How many applied?

Dame Mavis McDonald: They did not apply directly to us. We asked the local authorities to identify within the index of multiple deprivations -

Q15 Mr. Gerry Steinberg (City of Durham): How many?

Mr Riddell: It was not an open bidding system. We asked local authorities to identify particular needs.

Q16 Mr. Gerry Steinberg (City of Durham): Just answer the question. How many?

Mr Riddell: Thirty-nine areas are funded and we effectively asked 39 local authorities to put forward areas.

Q17 Mr. Gerry Steinberg (City of Durham): How many authorities actually asked?

Mr Riddell: We did not invite authorities to bid. We approached authorities which were identified as being needy.

Q18 Mr. Gerry Steinberg (City of Durham): So in your view there are only 39 deprived communities in this country.

Mr Riddell: No, there was only enough money within this programme to support that number of areas.

Q19 Mr. Gerry Steinberg (City of Durham): We are told the note you received identified 2,000 communities and 39 received funding. Was any research done on why they were deprived communities?

Dame Mavis McDonald: I referred to something called the index of multiple deprivation. This is a longitudinal survey we have carried out from the Office and its predecessors over time, which tracks against the kind of indicators we are looking at here over time. That is a national assessment which has consistently shown a ranking of local authorities against crime, against health, against housing provision, against a variety of indicators and ministers at various points have chosen to fund a number.

Q20 Mr. Gerry Steinberg (City of Durham): So what you are saying is that we have £2 billion over ten years going into 39 projects.

Dame Mavis McDonald: Yes.

Q21 Mr. Gerry Steinberg (City of Durham): What about the other 1,961 areas of deprivation? What are they getting?

Dame Mavis McDonald: Some of them may not be getting anything other than mainstream funding from the main service providers. Some may be getting additional funding from the neighbourhood renewal fund, some of them may be getting single regeneration budget (SRB) funding which is still continuing.

Q22 Mr. Gerry Steinberg (City of Durham): What about the situation I have in my constituency, for example, which I am sure is relevant in every city in the country? There is an area which has been a deprived area and has had SRB money and literally spitting distance from the SRB area, the deprived area, you have a community which is identical - identical - and they receive nothing. One community sees millions being pumped in and in two yards across the road nothing is being put in. What we find is that the people from the deprived community who have been causing all the problems, the drug dealers, the ones who cause constant problems have moved out of the deprived area, moved 20 yards into another area, the deprived area becomes better and the area next door, ten yards away, declines. You have not solved the problem: all you have done is move the problem.

Dame Mavis McDonald: I do not dispute your analysis, if I may say so, which would be very presumptuous of me, but I am not doing that. We have found ourselves that in areas such as market renewal pathfinders, which are dealing with low demand, that can happen. Then we have to complement the specific area-based programmes with the wider programmes, for example such as the Home Office are running on community safety or through police based programmes across the whole of the area, by local authority area or police area.

Q23 Mr. Gerry Steinberg (City of Durham): What do you suggest to the people who come to my surgeries in the areas which are not deprived according to your analysis, or according to the fact that they are not getting anything, and say to me "Mr Steinberg, just across the road they are putting millions of pounds into the housing estates, they are building new play areas and we're getting absolutely nothing. What are you going to do for me?". What do I say to them?

Dame Mavis McDonald: In the first instance I would want to find out what other options there were for that community to find extra funding which was over and above what you could get from the local authority.

Q24 Mr. Gerry Steinberg (City of Durham): There is nothing, is there?

Dame Mavis McDonald: I would ask the local authority how they were prioritising some of their own resources and also ask other bodies such as the regional development agencies or in certain circumstances PCTs or the police what help they could give.

Q25 Mr. Gerry Steinberg (City of Durham): There is no help, because you are putting £2 billion of resources into 39 areas.

Dame Mavis McDonald: This is just on this particular group.

Q26 Mr. Gerry Steinberg (City of Durham): Exactly.

Dame Mavis McDonald: There are other programmes run by other departments which could address some of the issues you have raised.

Q27 Mr. Gerry Steinberg (City of Durham): I hope I can go back and tell them there is some money available, because I do not know where it is. What do you also say to the people who then come to my constituency surgeries, who are involved in the SRB areas and who have been given this huge responsibility to carry out all the work which is going on? They come to me and say they have fallen out, they no longer trust Mr So-and-So or Mr So-and-So, they have taken over and are not consulting. Huge cynicism sets in with the schemes. How do you then placate those people?

Dame Mavis McDonald: We have a number of ways in which we can and have done that, working through the government offices for the regions and working through our neighbourhood renewal advisers who are experts in various kinds of fields, including skills like mediation, who the NDC can ask to come in to help, at no cost to them, or the government office can ask someone to go in. Joseph has one or two examples where we have dealt with those kinds of situation.

Mr Montgomery: It is important to note that community representatives on NDC boards are typically elected to those boards and where they fail to meet the requirements of their local community they can be voted off. Many of the NDCs have had very high election turnout rates and in one or two instances even higher than the turnout rate for the general election. Beyond that, there is a commitment to try to mediate where disputes arise between the board and local residents. For example in Leicester, Braunstone, where there was clearly a difficulty between the board and local residents, a mediation process was started. It resulted in wholesale change to the way the NDC operated and we are glad to say that NDC is now performing satisfactorily.

Q28 Mr. Gerry Steinberg (City of Durham): What do you say to people who come to me and say they are 20 yards away from a regeneration area and what the regeneration people are doing is collecting rubbish which has been dumped in the streets, putting new play areas down and these are all functions which the local authority should do in the first place. What do you say to these people who come to me and say "They've got a better bin collection than we have and the rubbish in our streets is left there but they are picking it up in that area. They've just got a new play area, new swings, but we haven't". What do you say to those people? The point I am making is that the schemes are actually carrying out functions which local authorities should have carried out anyway and are carrying out in other areas but on not such a grand scale because they do not have the money.

Dame Mavis McDonald: To repeat what I said before, in the first example go to the local authority. If they have any neighbourhood renewal fund money, ask them what they are spending it on and if they have not, ask them whether they can adjust the mainstream service provision as some local authorities which have NDCs in their area have done to meet the standards they are providing within the NDC area.

Q29 Mr. Gerry Steinberg (City of Durham): Are local authorities vital in this or are they not necessary in your view?

Dame Mavis McDonald: Local authorities are vital to the successful partnership.

Q30 Mr. Gerry Steinberg (City of Durham): Not just necessary. They are not just necessary, they are vital.

Dame Mavis McDonald: My personal view is that they are vital for two reasons: one is because they play a very valuable role as the accountable body, which is very helpful.

Q31 Mr. Gerry Steinberg (City of Durham): What are you going to do for these schemes which say they do not want local authority involvement, they want to go down the lines themselves, they want nothing to do with local authorities? Who is accountable? Who makes the decisions on an issue like that, to prevent that happening?

Dame Mavis McDonald: From the Office and through our regional offices we have consistently and in all our formal guidance encouraged the NDC partnerships to work together jointly with local authorities.

Q32 Mr. Gerry Steinberg (City of Durham): What happens if they do not?

Mr Riddell: The evidence is that where they try to do that it does not work and we expect the government office to engage actively and to persuade them to work with the local authority. In all cases eventually that is done. There is one very good example I might give of Sandwell, where they have an NDC and they have used that to pilot changes in the way they run their local authority at neighbourhood level. They use the money the NDC and the community spend in the NDC area to pilot what they are then rolling out across the rest of the authority and that sort of good practice is happening in quite a number of areas now.

Q33 Mr. Gerry Steinberg (City of Durham): As I see it by the very nature of the policy you are determining expenditure in 39 areas for five years and are creating a certain standard in those areas which they have never been used to before, which nowhere else has locally, and you are determining that standard. What happens when you pull out? Will the local authority be expected to pay for those extra standards or will the money suddenly be withdrawn and they left to decline again? If you are expecting the local authority to pay for them after the five years, surely you are then determining local authority policy. You are actually dictating the way a local authority should spend its money in future years?

Dame Mavis McDonald: Our encouragement to the NDCs - and the programme runs for ten years - is that they should plan exit strategies which seek to mainstream into the main service provision, whether it is a local authority or any other provider, the standards they have adopted. Where local authorities have chosen to do that, they quite frequently find it is a cost effective way in which to run a service out across the wider local authority area.

Mr Montgomery: A very good example of this is the Barton Hill NDC in Bristol where they were complaining of exactly what you described a question or two ago: the NDC area was getting a higher grade of refuse collection and environmental cleansing. What the council did was to look at the way the innovative programme was operating in Barton Hill and roll it out across the city and harvest a lot of economies for the city as a consequence of that. Quite often the NDC area is used as a test bed for service improvement, which the council or other service provider can hopefully maintain over the duration. In addition of course, NDCs are committed to trying to develop succession strategies, exit plans which take account of the service improvement they would like to see continue after the NDC resources run out. Plainly many NDCs have started to negotiate service level agreements with the local authority which lead to an improvement across a broader area than just the NDC.

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Q126 Mr. Gerry Steinberg (City of Durham): In my own constituency what has been happening in some of the regeneration areas is very good, but I have this suspicion about it all. The point I was trying to make before was that these areas were allowed to decline and become deprived in the first place and I do not think I got a really satisfactory answer as to why that was allowed to happen in the first place. Sometimes it was bad local authority decisions, sometimes it was a lack of resources or whatever. It seems to me that what is happening here is that areas which were allowed to decline are getting resources pumped into them for ten years and then the same people are taking over again who allowed them to decline in the first place. I do not think that is particularly the best way to do things.

Dame Mavis McDonald: I am not sure I understand your point about the same people taking over.

Q127 Mr. Gerry Steinberg (City of Durham): Let me be blunter. You have an area where a local authority has failed and in some cases failed miserably. You come in, you pump resources in for ten years, you leave and the same local authority then has to take over after the ten years; not necessarily the same people because time has moved on, but the authority will then come in; they failed in the first place and they are expected to take it over again. I just do not think that is acceptable.

Dame Mavis McDonald: The genesis of the multiple deprivation in the areas is very mixed. Some of it is because of wider economic changes which are not necessarily to do with local authority services. There are some excellent local authorities under the CPA scores who have areas of significant problems and have NDC areas in them. There is no direct correlation there. We are very conscious that the NDC is a relatively small programme operating within a much wider range of government-led programmes which are dealing with both income and wider economic development opportunities as well. It is very small and locally focused.

Q128 Mr. Gerry Steinberg (City of Durham): Would you turn to case study 18, page 53, Shoreditch New Deal for Community Partnership and the buses? I have this problem in my constituency, not just in deprived areas, though certainly in deprived areas, of a lack of bus services and it is exactly as described in the Report "In order to reach the Hackney town centre or the nearest hospital, residents were required to take several different bus routes or use taxis. This added a great deal of time, effort, and expense to journeys". I can just shut my eyes and see that is in my own constituency. I can even see the Boundary Commission when they reorganised the wards making it worse for people, even though they were told they were making it worse for people. To go to see a local councillor in one area they have to take three buses and go out of the constituency, but they would not be told because the Boundary Commission knows everything. The point is that we all have situations like that. Every single one of us. Why should one area have extra money put in to solve that problem, when I have people coming to me and saying they cannot get to the doctor's after five o'clock at night because there are no buses, or if they need to get a prescription, they have to catch three buses or take a taxi. Surely the remedy is more public expenditure all round for specific services, not just putting a load of money into one area and solving one very small problem.

Dame Mavis McDonald: There are obviously choices for any government about where it wants to spend taxpayers' money, how much it wants to raise. The point about this programme is the one described earlier. Ministers chose to focus it on areas of multiple deprivation. What we are hoping to do as the programme rolls out - and you quote the Shoreditch one, which is an example of where Transport for London thought what they had done was so effective that they could pick it up and run with it - is to try to show what has worked well and spread the best practice around and try to mainstream it into the way service provision is made.