Public Bodies Bill [HL]

Lord Hunt of Kings Heath Excerpts

Wednesday 23rd March 2011 Lords Chamber

[Lord Grantchester]

I shall speak to Amendment 17A in the absence of my noble friend Lord Liddle. In doing so I declare my interest in the region, having served on the sub-regional body Cheshire and Warrington Economic Alliance, one of five sub-regional bodies under the Northwest Regional Development Agency.

In the run-up to the most recent election, early versions of the Conservative-led Government’s regional policy seemed to suggest that both the north-western and north-eastern development boards would be retained, as there was general recognition of the benefits that each had brought to their regions. That recognition was reinforced by an independent evaluation undertaken by PwC, drawing attention to the strategic coherence brought and the GVA delivered.

It was therefore something of a disappointment when it was announced that all RDAs were to be disbanded. As a public-private partnership, the new Cheshire LEP is taking the coherency of the sub-region forward, but without any resources. It is undertaking some very worthwhile projects, such as with Liverpool University to explore the value of the equine sector in Cheshire West, and in rural housing, through a joint commission set up by rural regeneration and housing teams. That is all very worth while, but it is without the wider coherency of reciprocal support provided from the NWDA, following agreement on priorities across the whole region. The concern is that, without the wider regional strategy brought by the NWDA, policies will fracture into parochialism, with so-called local areas failing to see the bigger picture, to share best practice or to co-ordinate. I refer in this respect to the leadership shown on climate change policies and guidance that is so necessary if we are to meet our future obligations.

I will not repeat the debate in Committee, as my noble friend Lord Campbell-Savours has spoken tonight very powerfully. At the moment, there is confusion over the process of change. The decision to abolish the RDAs so quickly has created major challenges for existing destination organisations and, accordingly, rather than focusing on opportunities such as provided by the 2012 Olympics, they have been forced to reorganise. This has lost time and momentum, especially with there being no strategic transition plan in place to guide the move from RDAs to LEPs.

To continue with the 2012 theme, there is a great risk that this opportunity cannot be grasped. For the visitor economy, there is a need to provide the national organisation, visitEngland, with support to fill the current gap, while existing visitor businesses need to engage with new organisations that will emerge, albeit that they will be much reduced in terms of both human and financial resources. Another disappointing consequence of the plan to disband the NWDA concerns the future provision of the EU funding provided through the economic rural development funds. This highlights the vacuum in the present Government’s policy on regions. Instead of providing access to these much-needed rural development funds under Pillar 2 local arrangements at local level, the Conservative-led coalition seems to favour implementing these centrally, in direct contradiction to its localism agenda. The rural economy deserves better.

Finally, there seems to be no thought on what will happen on asset ownership, both physical and intellectual, and how the area can derive maximum benefit from their previous investments. There is still time to reconsider. I support my noble friend’s amendment.

[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.

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In proposing changes to the delivery of local economic development, we have two guiding principles. The first is partnership. Although the RDAs have broadly representative boards, these were selected in Whitehall. The boards of local enterprise partnerships are chosen locally and directly involve local authorities and businesses with a stake in a specific area. The second is appropriate geography. As in our previous discussion, I refer to the south Midlands, where joint work on economic development was hampered by the borders of three different artificial regions. I live on the border between the east Midlands and the eastern region and it creates real practical difficulties.

[Lord Hunt of Kings Heath]

My Lords, the Minister refers to the problem of borders but how are the Government dealing with the problem of borders by splitting Birmingham from the Black Country? It is sheer madness in terms of getting support across a region for the major infrastructure projects that are so desperately needed.

[Lord Taylor of Holbeach]

I think the noble Lord is under a misapprehension. The difficulty with RDAs was that they had clearly defined, strict borders. The great thing about LEPs is that they are partnerships and they are flexible enough to be able to work together when they need to. That is our answer to the question of the north-east. There are opportunities for LEPs to work together across boundaries. That is their huge advantage over the strictly geographically delineated boundaries that existed between RDAs and the difficulty of getting joint projects going with them.

The south Midlands was an area of the country where the south-east, the east Midlands and the eastern region met in an area around Milton Keynes, Northampton and Bedford. That particular group now has an LEP in common. It is a true economic region in the sense that there is a community of interest across what previously was RDA territory. We have deliberately placed the onus on the partners to show that they have identified a real economic area to cover. We have not sought to second-guess them. We have asked the partners to think again about a particular proposal only where there is a substantial difference of view in the area itself and in the places around it.

The RDAs were expensive bodies to run and often duplicated activities which could be better undertaken at local or national level. In much of the country people felt little or no attachment to regions. In our earlier debate much was made of the local support for the north-eastern and north-western regions. The noble Lord, Lord Clark of Windermere, talked of the way in which Cumbria identifies more strongly with Newcastle than with Manchester. Only yesterday the House approved the creation of the Greater Manchester combined authority. The noble Lord, Lord Beecham, and I took that through as a statutory instrument in the Moses Room last week. It reflected the desire of that area for a stronger local focus. I remain doubtful that the enthusiasm for a unified north-east region runs quite as high by the Tees as it does by the Tyne.

In our new circumstances we need lighter, more nimble bodies, capable of forging new linkages and alliances, rather than being caught up in regional straitjackets. Where partnerships wish to work together, we welcome it. If they had chosen areas which had matched one or more of the former regions and been able to demonstrate economic benefits and support from businesses and local authorities, we would have welcomed that too, but the fact is that they did not. In our previous discussion I pointed to the enthusiastic response we have received throughout the country to our call to develop local enterprise partnerships. On 8 March 2011 the 31 partnerships sent 90 representatives to a summit in Coventry. The Prime Minister, the Deputy Prime Minister and the Secretaries of State for Business and Communities were all present. They confirmed their support for the formation of an association to help partnerships share knowledge and ideas. This idea came from the partnerships. The Deputy Prime Minister also announced that the second of the regional growth funds would open on 12 April, and those successful in the first round will be announced shortly. Some £1.4 billion will be in that fund over the next three years.

I am grateful that my previous letter has been well received. I shall do my best to answer some of the questions that have been asked tonight, although it may not be possible to do so in the case of some of those which were highly specific. I shall do my best to give answers that cover some of the most central points raised. The first question was what the Chancellor announced today. He announced that the Government would introduce 21 new enterprise zones. I do not belittle them—the noble Lord, Lord Prescott, did rather. They will all be important; they will all be established in LEPs; and they will be focuses for growth. The Budget names the LEPs that will receive the first enterprise zones, plus London. The next 10 will be established through a competitive process. Benefits include the business rate discount over a five-year period.

It was asked whether LEPs have the capacity to take on the wide range of projects envisaged—the noble Lord, Lord Campbell-Savours, made this point particularly strongly. The capacity of LEPs will vary initially. Some are based on well established structures—Manchester being an example of an existing structure, let alone the fact that it now has a combined authority—but others are entirely new. The LEPs are establishing a network to share experience and best practice to bring new partnerships up to speed quickly.

The noble Lord, Lord Campbell-Savours, in what I acknowledge was a very impassioned speech, asked whether there would be a fire sale of assets. The brief answer to that is no. It will be a managed process. Assets of which it makes commercial sense to dispose in the short term are being identified and a list will be made available to local authorities shortly. However, where it is more sensible to dispose of assets over the medium or long term, it will be done. It is important to emphasise that the RDAs are liaising with the local authorities within their patch and with the LEPs to make sure that this process is managed efficiently.

It was suggested, I think by the noble Lord, Lord Beecham, that the LEPs will not have a role in inward investment and European funding. That is not the case, because UKTI and the DCLG have made it clear that they will work closely with LEPs and other local partners on inward investment and on the European regional development fund. The noble Lord, Lord Beecham, also asked what discussions were going on about the position of the North East Economic Partnership and its assets. Discussions are ongoing; I cannot comment on the path that they are taking. However, we have confirmed that that we are not able to pass on assets as gifts or for deferred consideration to that partnership.

The noble Baroness, Lady Quin, also raised questions about the north-east.

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[Lord Kennedy of Southwark]

My Lords, Amendment 20 would remove the Valuation Tribunal Service from the Schedule. I am not quite clear about what the Government propose here. I could be persuaded to withdraw my amendment and not divide the House, but I need quite a detailed response from the Minister on what he is proposing. I look forward to his response and hope I will not have to divide the House. I beg to move.

[Lord Hunt of Kings Heath]

My Lords, I am grateful to my noble friend for moving the amendment and for allowing us to debate for a few minutes the Valuation Tribunal Service. It is one of a number of bodies which are either listed or not listed in the Bill and whose work is not particularly well known by the general public. However, these are bodies that have played an important role in terms of the good order of society. As we have debated the 150 or so bodies under consideration, there has been a tendency and temptation—given that we have all agreed that it is right that these bodies should be reviewed on a regular basis—to underestimate the contribution of the people who have worked for them or sat on their boards. It is right for me to invite the Minister—who has, if I may say so, expertly steered the Bill through your Lordships’ House—to reflect on the importance of the tone with which we debate these organisations.

I say that because, in relation more generally to debates in your Lordships’ House, in the other place and among the public on public services, there has been an unfortunate tendency to speak in a pejorative way about back-office functions. That is a matter for regret. It is not sensible to suggest, for instance, that only a policeman is doing a good thing while someone who works for the police force in a back office is not. That is not a sensible way forward. Back-office staff are being made redundant from police services, while bureaucratic tasks have to be undertaken by front-line police officers. That demonstrates some of the perverse incentives of taking a black-and-white approach.

I mention that because, as we close our first day on Report, we have an opportunity to reflect on the fact that many of these organisations will go out of business. The functions of some will be transferred to another body while the functions of others will come to a close. It is important to send a message out to the people who have worked in these bodies that we do not underestimate the contribution that they have made. The regular review that is taking place should be sensible, but in no way should it be taken as a criticism of the work that is done by thousands of people up and down the country.

[Lord Taylor of Holbeach]

My Lords, I happily associate myself with the remarks of the noble Lord, Lord Hunt, because we all share his sentiment. The more you become involved in this process, the more you realise that you are dealing with bodies that in many cases are performing important tasks and are staffed by people with a due sense of purpose and public service.

What is interesting about the amendment—I am grateful to the noble Lord, Lord Kennedy of Southwark, for giving us a chance to talk about it—is that in many ways it brings continuity between the previous Government’s proposals in the area of tribunals and our own. As will be clear from my explanation of why the Valuation Tribunal Service is in Schedule 1, noble Lords will recognise that the foundations for this decision were laid by the legislation of the previous Government.

The Valuation Tribunal Service is a non-departmental public body that provides administrative support and all the services required by the Valuation Tribunal for England, which hears appeals on council tax and business rates—in other words, national non-domestic rates.

Taken together, the Valuation Tribunal for England and the Valuation Tribunal Service—I will use the acronyms from now on—provide an independent appeals service for business rate or council tax payers who wish to challenge either the basis on which the banding or valuation of their property has been calculated, or their liability to pay business rates or council tax. In the Government's recent announcement about the future of arm’s-length bodies, both the VTS and the VTE were identified as bodies that could be abolished. However, I stress that the Government recognise that the jurisdiction that the VTE exercises, and the functions undertaken by the VTS, are still necessary—the noble Lord, Lord Hunt, is correct—and plan to transfer them so that they become part of the unified structure for tribunals, thus ensuring that the independence of the appeals process for business rates and council tax will be maintained. The achievement of these transfers would be a further step in the achievement of the long-standing policy introduced by the previous Government, following the 2000 Leggatt report, Tribunals for Users: One System, One Service, which this Government are continuing. The aim is to bring central government-sponsored tribunals in England and Wales under a single umbrella organisation.

The Government's proposal is that the jurisdiction of the VTE and the functions of the VTS should transfer respectively to the First-tier Tribunal and Her Majesty's Courts and Tribunals Service. It is important that noble Lords should note that the planned transfers are fully supported by both the chairman of the VTS, Anne Galbraith, and the president of the VTE, Professor Graham Zellick. The jurisdiction of the Valuation Tribunal for England will be transferred to the soon-to-be-created Land, Property and Housing Chamber—the Land Chamber—of the First-tier Tribunal, which was formally established under the Tribunals, Courts and Enforcement Act 2007. Powers in the 2007 Act would allow the formal transfer of the VTE's jurisdiction to the First-tier Tribunal, and the subsequent abolition of the VTE as a separately constituted tribunal. Since the 2007 Act powers are already available to achieve this, the Government do not need—and nor do they intend to seek—its abolition through the powers in the Bill. I trust that noble Lords will be comforted to learn that the jurisdictional independence currently enjoyed by the VTE will continue, following the transfer of that jurisdiction to the First-tier Tribunal.

Noble Lords will also wish to be made aware that the transfer will bring added opportunities. Members who would formerly have been in separate tribunals will be able, following the transfer, to sit on tribunals in all jurisdictions exercised within the First-tier Tribunal Land Chamber. Such arrangements are already in place elsewhere and have brought significant operational and jurisdictional advantages.

I turn to the Valuation Tribunal Service that is the subject of the amendment. If the jurisdiction of the VTE is transferred and the VTE is abolished, the VTS will effectively cease to have any purpose and powers. Therefore, the Government's intention is that, in tandem with the transfer of the VTE, the parallel administrative functions provided by the Valuation Tribunal Service should also transfer at the same time to Her Majesty's Courts and Tribunals Service, an executive agency of the Ministry of Justice that is shortly to be established following a merger between Her Majesty's Courts Service and the Tribunals Service.

The functions of the VTS, which are essentially to provide all administrative support for the operation of the VTE, including staff, accommodation and IT, would be absorbed into the tribunal service to sit alongside the administrative support for all jurisdictions within the First-tier Tribunal and Upper Tribunal. Once these functions had been transferred, there would be no further need for the VTS to remain in existence as a separate body and it could then be formally abolished. However, as the VTS was established under statute—in the Local Government Act, to be precise—new powers would be required to achieve both the transfer of the VTS’s functions and its subsequent abolition. The power set out in Clause 1 would allow an order to be laid to achieve this transfer, and that is why the VTS is included in Schedule 1.

Planning for the transfer of both jurisdiction and administrative functions is in its very early stages but, following the transfer, we confidently expect the realisation of economies of scale, operating efficiencies and added service improvements, which the unified tribunals system was established to provide. The noble Lord will, I hope, recognise and be reassured that the Government’s proposals will maintain and sustain the independence of the appeals process for council tax and business rates, and that they are a continuation of the policy pursued by the previous Government. Therefore, I hope that he will feel able to withdraw his amendment.