Public Bodies Bill [HL]

Lord Empey Excerpts

Wednesday 23rd March 2011 Lords Chamber

[Lord Hunt of Kings Heath]

My Lords, I shall speak to Amendment 18. Like my noble friend Lord Kennedy, I find it quite extraordinary that the Government have decided to abolish RDAs on a day when the growth forecast has been reduced yet again. It is a quite bizarre decision.

I speak from the particular context of the West Midlands, looking at the performance of Advantage West Midlands. The West Midlands is a great place to live, but recently our economy faces many formidable challenges. Advantage West Midlands has done a very good job in the past few years, drawing people together and identifying real projects to invest in. As a result, we can see the regeneration of Longbridge, after the collapse of the manufacturing industry there. We have seen the regeneration of Fort Dunlop, with 140,000 jobs safeguarded, 28,000 helped back into work and 160,000 people helped to get better skills. Over 100,000 businesses were helped to improve their performance. As Sir Roy McNulty, the chair of Advantage West Midlands said at its last AGM, it is clear that its abolition has been based on political reasons rather than on its actual track record.

The CBI said that,

“in the rush to abolish Regional Development Agencies … and elicit bids for Local Enterprise Partnerships … there is a risk of throwing out the baby with the bathwater”.

Again, the CBI has singled out transport as a critical issue for improving economic growth. It concluded that LEPs need to find a way to replicate the ability of RDAs at their best to cut across local authority boundaries and to promote a regional level transport agenda. How are LEPs going to do it, given that they cover much smaller areas? For instance, in the West Midlands, is it really sensible to split Birmingham from the Black Country? It is a complete nonsense.

Let us talk about the resources needed for the development of major infrastructure. The number one priority for us is the extension of the runway at Birmingham International Airport. However, the Government’s last-minute decision to change the rules and go only for short-term, quick-win projects for the first £250 million that was available meant that bidding for Birmingham airport expansion was stopped in its tracks. No wonder the Birmingham Post said in a leader on 27 January that the launch of LEPs has been,

“an unmitigated and embarrassing disaster”.

Instead of a region working together, what will we see? We will see arguments and splits between LEPs that are side by side in the same region, when they should be working together.

The Government’s admission that their policy is a nonsense relates to BIS’s decision to recreate regional offices. What better indication could you have that the business department knows that the abolition of RDAs was a very silly decision which anyone concerned for economic development in this country could only oppose? The Government are making a big mistake in abolishing RDAs. Will the Minister respond to my noble friend Lady Quin, who asked why on earth those regions where there was a clear and strong consensus to retain RDAs, are not allowed to keep them going? Why should we be forced to downgrade, disrupt and undermine regional growth simply because there is some kind of doctrinaire political approach that says we cannot live with RDAs?

[Lord Empey]

My Lords, I had the opportunity to make some remarks on this issue at Second Reading. I do not believe that anybody in this House is not in favour of growth or strong regional policy; that is common ground. The point I tried to make at Second Reading was: is the present structure fit for current-day purpose?

I regret that I did not hear the beginning of the remarks of the noble Lord, Lord Campbell-Savours, but I heard several of them in what was a very passionate speech. In referring to one case, he commented that councils did not necessarily have drive. However, leadership in any organisation, whether it is an RDA, a council or anything else, will vary from body to body, just as leadership in a school will vary from body to body. I have to say that there are examples of local authorities doing very difficult things. In my own case, I was a member of a local authority that redeveloped the most polluted site in Ireland—a former gas works. It is now a thriving economic area. We developed the waterfront and brownfield sites. Where the right leadership is in place, you can do a lot of things. We were able to tap into ERDF and even ESF to train the local people who will, we hope, get some benefit from the redevelopment, instead of looking through the railings at the parked BMWs. We can do that if the leadership is in place.

I wanted to say one thing to the noble Lord. He said that it was more difficult to create a structure or organisation than to close one down. I have to take the very opposite view. I had the opportunity to create an organisation like an RDA. I had the opportunity to merge bodies together and the opportunity to close them. The easiest thing to do was to create them. It was more difficult to merge them, and the most difficult thing was to close them. That is why we have so many—not only RDAs but public bodies in general. Departments liked to put a body out there that could take the flak and the front fire to protect the department from taking the blame for things. The existence of a body, whatever it might be, and the ability to say, “These people have autonomy to deal with this”, protects the Civil Service from its responsibilities. It is good to be able to put these bodies out there as a sort of barrage to protect the centre from local criticism, because there is always someone else to blame. That is why there are so many of these bodies.

Many of them have done excellent work. As has already been said, some of these RDAs have been good and some have been not so good; that is human nature. It is the human condition. That relates to the leadership they give, their policies and the opportunities that have been taken. However, we have to be mature about the whole issue of public bodies. Everyone admits that we have too many of them. No matter which one you touch, it is inevitable that a group of people will support it.

In many cases, some of the reasons that noble Lords have put forward have been perfectly plausible. However, the real issue, as I pointed out at Second Reading, is the change in Europe, where the resources that used to be available to this country will no longer be available post-2013, because the money is flowing east, as we all know. The economic profile of our economy has changed. We brought to bear solutions through these large battleship bodies with budgets of hundreds of millions of pounds. Those bodies were right at the time, just as the Agricultural Wages Board was right at the time. However, times have moved on. Europe’s policy has changed. We now have to manage within our own resources.

I am not as pessimistic about the role that local authorities can play and what happens regarding the local enterprise partnerships remains to be seen. However, as always, a lot of this will come down to leadership on the ground. It is the same for the military, a company, a school or a business—and it is the same for a local authority or an RDA. We must look at an alternative model, because circumstances have moved on, and in trying to deal with the plethora of public bodies, you could almost come to a complete standstill if you did not make some attempt to bring about change.

There is no doubt that the biggest challenge we face is on growing our economy. We all complain about the lack of warships and aircraft carriers. Where is the money coming from to pay for them, if it is not coming from economic growth and wealth creation? Those are our only sources, other than borrowing—and we know where that got us. There is little alternative but to try an alternative. I take the points made by noble Lords about assets—that is an important issue—but creating bodies is easiest; amalgamating them is the next most difficult; and closing them is the most difficult. That is my experience and this debate proves the point. Every body that you consider has a lobby in support of it. While I acknowledge the great work that a number of these organisations have done—it would be churlish not to say that—the fact is that the mechanisms we have to adopt to improve our economic growth have moved on and different structures and models must be adopted.

[Lord Cavendish of Furness]

My Lords, I crave the indulgence of the House in intervening in a debate in which I have not previously taken part. Just in case it is felt that the argument has been entirely one-sided, I remind your Lordships that in my part of the world on the Barrow-in-Furness peninsula, where I declare an interest in running a small business, the economy is driven by companies such as these, which employ some 100 or 200 people. I do not want to be unkind to the people in these agencies who have done their best, but in my part of the world it would be fair to say that there is no consensus that we want to keep them. Businesses of my size do not feel that the agencies are approachable or are the answer. We want government to get off our backs and leave us alone. I am reminded of my father, who told me: “My boy, if the Government offer you a grant, it is probably not worth taking”.