English Regions: Success in the Regions (HC 592-i) Public Accounts Committee 10 May 2004

Evidence given by Sir Robin Young KCB, Dame Mavis McDonald DCB, Mr Rob Smith, Mr Steven Broomhead, and Mr Martin Briggs.

Q49 Mr. Gerry Steinberg (City of Durham): Clearly, we are wasting our time this afternoon, are we not, because after four years of absolute chaos, interference from central government, ineptitude in the regions, suddenly, six months later, after the NAO report, everything is perfect. Is that right?

Sir Robin Young: No, I do not think we have been saying that. This is one of the reports we worked with the NAO on. I thought this Committee was encouraging us to work positively and practically with the NAO. That is exactly what we have been doing.

Q50 Mr. Gerry Steinberg (City of Durham): What were you doing for the four years previously, Sir Robin?

Sir Robin Young: I have tried to set out before that for the first two years, the RDAs were merely administering hypothecated amounts which previously were administered by other people. They did not have any new freedoms, broadly speaking, though they had some new freedoms. After two years, we gave them a single pot and asked them to improve their regional economic strategies. We also started joining up better within the government, so that government departments worked more closely together. After four years, with our encouragement, we have worked with the NAO in producing all these recommendations, all of which we are implementing. So we should not be criticised, I hope.

Q51 Mr. Gerry Steinberg (City of Durham): You should be criticised. You have wasted four years.

Sir Robin Young: I think you would be the ones to criticise us if we had given RDAs the current arrangements in year one.

Q52 Mr. Gerry Steinberg (City of Durham): How would you have answered my question if this report had come out in November and we had had the meeting on November 20th?

Sir Robin Young: This is not one of these ones where we have been found guilty of maladministration.

Q53 Mr. Gerry Steinberg (City of Durham): You just told us this afternoon that after receiving this report, you implemented the recommendations in the last six months.

Sir Robin Young: These recommendations came jointly from us, with us. They were not plonked on us by surprise. We had a very proactive and friendly, non-critical, non-finger-pointing relationship with the NAO, which I thought was the new way of doing these things, and we came up with joint recommendations. It is not as if maladministration has been found. It is not like that.

Q54 Mr. Gerry Steinberg (City of Durham): Sir John, how long did it take you to prepare the report? Four years?

Sir John Bourn: Perhaps I could explain the background to the report. I am the external auditor of the RDAs. During the course of our financial audit work, the RDAs expressed a concern that their opportunity to promote the economic and social development of their regions was limited. I had a discussion with the chairs of all the RDAs, and they said "We are hampered and can do less than we could." We then got down to analysing the reasons for this in detail and, as Sir Robin has said, as we did this, productive relationships were developed between the NAO and the DTI and the Office of the Deputy Prime Minister. So as we came to complete the report, there was agreement, and as the C&AG, I am glad that the departments say these are recommendations that they can adopt. But the reason for doing the Report was concern on the part of the RDAs that they were hampered. That is why we did the report.

Q55 Mr. Gerry Steinberg (City of Durham): How long did it take?

Sir John Bourn: The report would have taken altogether seven months, and that was in discussion, of course, with all the RDAs.

Q56 Mr. Gerry Steinberg (City of Durham): I am not at all criticising you - I would never dare - but the answer proves my point that they were sitting on their backsides, doing nothing, until you came in. If it had not been for the NAO coming in, we would still have been going on in the same old way as before. This report is frightening, because we supposedly have regional government coming in very shortly, in terms of elected regional government. This report terrifies me. I have never been in favour of and I have not been very supportive of regional government, but if this is the alternative, then the quicker we get regional government the better, frankly, because if your interference, the way it was over the first four years, is anything to go by, no wonder the regions are all wanting extra resources. They need a kick up the backside, to be quite honest. It seems it is not their fault; it is the DTI's fault. You only have to look at some of the cases to see that. If we get regional government, what will your role be, Sir Robin? Will you still have the same influence as your department has now, and you, Dame Mavis?

Sir Robin Young: No, no. In areas which choose elected regional assemblies, the RDAs will be responsible to those assemblies.

Q57 Mr. Gerry Steinberg (City of Durham): They will be responsible to the elected regional assemblies, which means you will not have any responsibility?

Sir Robin Young: Yes, in relation to the RDAs.

Q58 Mr. Gerry Steinberg (City of Durham): I do not mean that personally; I would not be so rude as to mean it personally. But your department and central government will not have any influence. You will not be able to hold up projects for two years, for example. It says in this report - case 5, page 33, if I remember correctly - that your department held up a project in the East Midlands for two years.

Sir Robin Young: Yes, and in answer to the previous questioner, I said that four and a half months of that two years was the period between when formal approval was sought and when formal approval was given. Normally speaking, when I come before this Committee I am criticised for allowing agencies too free a hand, for wasting their money, for having inappropriate ways of stopping them wasting taxpayers' money.

Q59 Mr. Gerry Steinberg (City of Durham): You cannot have it both ways.

Sir Robin Young: With respect, nor can the Committee.

Q60 Mr. Gerry Steinberg (City of Durham): We can have it as many ways as we like.

Sir Robin Young: I withdraw my comment.

Q61 Mr. Gerry Steinberg (City of Durham): The fact is that if we are going to have regional government and regional assemblies, they have to make a pig's ear of it, not you. Your interference has given them a bad reputation. You say it did not take two years in case 5. Why is it, Mr Treasurer, that in case 7, for example, when the North East wanted to have a project and they called a meeting, your department could not even be bothered to turn up?

Mr Glicksman: I am not sure I would phrase it like that. The Treasury was not represented there.

Q62 Mr. Gerry Steinberg (City of Durham): That is the same as not turning up, is it not?

Mr Glicksman: I think we do agree, and we have now changed the arrangements so that we are represented on the Committee.

Q63 Mr. Gerry Steinberg (City of Durham): The point I am making is that here we are, in the regions, supposedly working to targets and to projects, to rekindle economic development, and your department does not even turn up to the meetings. Your department stopped a project for over two years. That has to be great for the regions, has it not?

Mr Broomhead: Can I just say, as a relative newcomer to this, Mr Steinberg, it seems to me what we now have is a genuine partnership between the DTI and the ODPM and other government departments, based on achievement, maturity and trust, and certainly, from my point of view, having come from local government, there seems to be less interference than big stick and carrot coming from the departments about the way in which my particular development agency invests its money, reports its performance and deals with its achievements now. I think that is part and parcel of that developing evolutionary approach. You asked a question about what would happen if there were elected regional assembles in the parts of the region. We would become the economic development arm of the elected regional assembly, but we would still be asked to produce a regional economic strategy, which obviously would take account of the wishes of the electorate, but also have to contribute to the wider policies and targets of UK plc. We would not be declaring independence from the rest of the country.

Q64 Mr. Gerry Steinberg (City of Durham): How long have you been chief executive?

Mr Broomhead: I have been the accounting officer, Mr Steinberg, since 1 September last year.

Q65 Mr. Gerry Steinberg (City of Durham): And you were in local government before that?

Mr Broomhead: I was.

Q66 Mr. Gerry Steinberg (City of Durham): So you have been there six or seven months, six or seven months, since the NAO came in and did their report?

Mr Broomhead: One of the first documents to cross my desk was this one.

Q67 Mr. Gerry Steinberg (City of Durham): Let us just change tack a little. When it comes to regional government, if we get it, presumably there will be national priorities, presumably there will also be regional priorities. Which ones will take priority?

Dame Mavis McDonald: We expect that the dialogue would continue. There will be some national priorities.

Q68 Mr. Gerry Steinberg (City of Durham): If you have 30 people or whatever it is, who have been elected to a regional assembly, you can have as much dialogue as you want, but they will make the decisions.

Dame Mavis McDonald: They will be free to make the decisions.

Q69 Mr. Gerry Steinberg (City of Durham): Even if it is against national policy, for ideological reasons?

Dame Mavis McDonald: The government will introduce legislation which will set out what the functions of the elected regional assemblies are, the way in which they are going to be funded, and the choices of what they then do with that funding will be for the elected regional assemblies to make. The proposal is that there will be a single pot of money to fund all their responsibilities and they will be able to take the decisions about how they prioritise between the different areas of responsibility, which will include housing and spatial planning as well as economic regeneration and activity through the regional development strategies. That will be their choice. But it does not mean there will not be continuous dialogue between national and regional level about what national government is seeking to achieve.

Mr. Gerry Steinberg (City of Durham): As we say in the North East, "neither nowt nor summat." That is what we have at the moment, is it not, to be quite honest? We have either got to move towards regional government from the way this report tells us, or we have to scrap the whole idea and let central government get on with it.