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					                                          21 September 2007 The Friday Report




SUMMER NEWS ROUND UP

 Homes and Communities Agency unveiled
The new homes agency to be formed from the merger of English Partnerships
and the Housing Corporation will now be called the Homes & Communities
Agency. It is set to be operational from April 2009. In early August, English
Partnerships chair Baroness Ford announced that she would be leaving her job -
and her role of setting up the new homes agency - to become managing
director of the Royal Bank of Canada's global infrastructure group. She will take
up her new position on 1st November, by which time a Chief Executive for the
Homes and Communities Agency is expected to be in post.

Federation of Small Businesses reports on Business Support
The FSB has published ‘The Small Business view of Business Support’ examining
which business support services were used most commonly by their members,
and gathers opinions of the business support services provided by the
Government. Although the report found persisting low-levels of awareness of
support schemes, satisfaction among users has increased to 56%. Another key
finding was ‘a strong perception amongst small businesses that there is an
inherent bias towards big business from all government funded business support
services…… this view needs to change in order to encourage increased use
among small businesses.’
The FSB recommends the Business Link brand should builds links to offer small
business careers advice in schools, colleges, and universities, and increase its
visibility to small businesses.

 Conservative Task Forces report on competitiveness and the environment
The Conservative Party’s competitiveness task force published ‘Freeing Britain to
Compete’ making recommendations to ensure Britain’s continued
competitiveness in the face of globalisation. Among the proposals is ‘a single,
integrated funding architecture for all state-funded vocational skills training….
administered by local authorities and county councils….which will replace the
existing architecture of LSCs, SSDAs, RDAs and LLSCs, whose involvement with
vocational skills training will cease.’

A few weeks later, the party’s Quality of Life task force released ‘Blueprint for a
Green Economy’, looking at ways of maintaining economic growth in an
environmentally friendly manner. Page 139 recommends ‘we should abolish the
Regional Development Agencies and transfer their powers and funding to local
authorities’. The report also suggests that a Conservative administration should
not reverse the decision to create a new Homes and Communities Agency
without giving it a chance to prove itself.
                                          21 September 2007 The Friday Report
In what seems to have been a busy summer for the Tories, the Conservative
Parliamentary Enterprise Group has launched a commission to tackle urban
decay. Chaired by Brian Binley MP (Northampton South), the group will examine
the prospects for small shops and town centre regeneration. Submissions are
accepted until October 24th.

Finally, the party’s Small Business Task Force is due to publish the Richard Review
of Small Business this month but an exact date has not been announced. The
interim report surfaced in March and claimed that RDAs spent 33% of their
budgets on administration.

 IPPR Centre for Cities publishes research on financing infrastructure investment
The Centre for Cities has examined the case for a supplementary business rate
(SBR) to fund local infrastructure investment. ‘Financing local growth’ estimates
that towns and cities outside London could raise a combined £300m a year with
a 4p supplementary rate. This could also be borrowed against for further
investment.
A CLG Select Committee report published in early August called on the
Government to support Michael Lyons’ proposals and allow local authorities to
vary local business rates.

 Summer moves (football clubs aren’t alone in frenetic transfer activity)
 Stephen Speed, BERR Deputy Director General of Regions, has been
   appointed as Chief Executive of the Insolvency Service. He will take up the
   post in the next month and will be replaced by Philippa Lloyd, a former PPS to
   Alan Johnson, Alistair Darling, and John Hutton.
 Kulveer Singh Ranger has been appointed Vice Chairman of the
   Conservative Party with responsibility for cities.
 Vernon George is the new Director of Regions & Branches at the IoD. He was
   previously the East Midlands Regional Director.
 Jon Mendelsohn, a former advisor to Tony Blair, has been appointed as the
   Labour Party’s director of general election resources, fuelling further
   speculation that an election is not too far off.
 Peter Dixon has had his second term of appointment as the Chair of Housing
   Corporation extended by up to two years from 1st October or until the new
   homes agency is launched (which is expected in April 2009).
 George Galloway MP (Respect, Bethnal Green and Bow) has confirmed that
   he will run against Transport Minister Jim Fitzpatrick MP (Lab, Poplar and
   Limehouse) at the next general election. Mr Galloway had previously
   indicated that he would not stand for re-election in his present constituency.

 BERR statistics reveal rise in number of UK SMEs
Figures released by BERR at the end of August showed that the number of
business enterprises in the UK had increased by 125,000 from the start of 2005 to a
new total of 4.5 million at the beginning of 2006. Of that total figure, 3.3 million
(73%) of all enterprises were ‘one-man businesses’ with no employees, and small
firms of less than 50 people made up 99.3% of all private enterprises. In total,
private sector enterprises were employing an estimated 22.4 million people and
turning over roughly £2,600 billion per annum, with SMEs accounting for over half
of the employment and turnover figures.
                                              21 September 2007 The Friday Report
         NEXT WEEK                                        FURTHER AHEAD
23-27 September,
                                                         Log in to: www.englandsrdas.com for
Bournemouth                                              further details.

Labour Annual Conference
                                           30 Sep-03 Oct Conservative Party Conf
27 September, London
                                           08 Oct Parliament returns from recess
Engaging employers in the
                                           09 Oct Social Enterprise Conference
curriculum conference
                                           11 Oct OffPAT Practitioners Group
Engaging local employers in the
                                           15 Oct Housing consultation (CLG)
Specialised Diplomas being rolled
out from 2008
                                           ends
                                           17 Oct Rural Regeneration Planning
27 September, London                       Conference
Strong & prosperous                        17 Oct FPB Small Firms Summit
communities conference                     17-18 Oct Sustainable Building summit
How to deliver the major themes
                                           25 Oct Sustainable Communities
outlined in the Strong and
                                           Summit
Prosperous Communities White
Paper
                                           25 Oct Regional skills & employment
                                           26 Oct Deadline for submissions to
27 September                               EFRA Committee Waste Strategy
National winner of                         enquiry
Enterprising Britain 2007                  31 Oct DWP ‘In work/Better Off’
announced                                  employment consultation closes
                                           06 Nov State opening of Parliament
                                           29-30 Oct Northern regeneration conf
                       THE BACK LINE – THE LIB DEM FRINGE
Skills: Work Foundation – ‘Can Leitch deliver?’
Panel: Will Hutton (Work Foundation), Stephen Alambritis (FSB), Keith Brooker (City &
Guilds), Richard Lambert (CBI), Sarah Teather MP (Brent East, Shadow DIUS Secretary)

The panel was divided over the value of the Leitch Review; Keith Brooker said Leitch was
a good overview of skills challenges but that the report would only be worthwhile if it was
acted upon. Sarah Teather asked why no-one had criticised Leitch for advocating ‘top-
down’ provision based on a pact between government and employers that ignored
employees. All felt that Leitch did not address problems of demand and that employers
should be involved in defining skills targets.
Funding was not discussed at great length; there was recognition that public funding
alone would not provide all the training needed, although Richard Lambert was critical
of what he termed ‘political caution and the CSR spending freeze’. The FSB and CBI
                                              21 September 2007 The Friday Report
argued that businesses contribution to skills training should remain on a voluntary basis
which could adapt easily to changing needs and demands. Richard Lambert added
that compulsory, regulated involvement would result in needless bureaucracy.
The most pressing skills shortages were identified in the STEM sectors, particularly among
ethnic minorities and women. Richard Lambert felt Train to Gain was a success but that
Sector Skills Councils were patchy. He added that lifelong learning would be best
provided through partnerships of businesses, FE colleges, and universities.
From the floor, John Wright (FSB Chair) said government wasn’t listening to the needs of
small business, therefore small business wasn’t involved enough in skills training.

Cities: Core Cities – ‘Cities Question Time’
Panel: Dermot Finch (Centre for Cities), Neil Sherlock (Centre Forum) Sunand Prasad
(RIBA), Gareth Philips (DLA Piper), Cllr John Shipley (Newcastle CC), Cllr Warren Bradley
(Liverpool CC), Simon Hughes MP (North Southwark & Bermondsey)

The session was set in the context of the recent ‘Twin Track Cities’ report, searching to
address the phenomena of deprivation and economic success co-existing within the
same city.
The panel agreed that future city development requires financial and decision-making
powers to be devolved to local authorities so that they can address their own priorities
with local solutions. The two council leaders and Neil Sherlock said the regional
architecture was cluttered, with too many organisations (including RDAs) involved in
decision making, and that this prevented the council being run on a more business-like
footing. They did not argue for the reform of these bodies but for their removal. However,
Cllr Shipley (Newcastle CC) did come out in favour of a directly elected regional
assembly to provide regional oversight.

Planning: ERN & TCPA – ‘Revitalising the Regions: Planning for economic prosperity’
Panel: Chair - Nicholas Owen (ITV), Andrew George MP (St Ives), Andrew Stunnell MP
(Hazel Grove), Norman Baker MP (Lewes), Cllr Richard Kemp (LGA Lib Dem Group &
Liverpool CC), Cllr Jill Shortland (Somerset CC)

Despite the title of the session, there was little discussion of planning issues. Instead
debate focused on the decision to abolish Regional Assemblies and transfer planning
powers to RDAs.
All the panel members agreed sub-national decision makers should be directly elected
rather than government appointees, and that ‘centralised, top-down’ devolution would
not work. Andrew Stunnell and Richard Kemp both supported the concept of regional
governance but neither believed Assemblies or RDAs had done anything to improve
regional prosperity. Andrew George dismissed regions as invented ‘Government Zones’,
and Norman Baker questioned the validity of the south east region in its current form.

With the exception of Jill Shortland (leader of the South West Regional Assembly), the
panel agreed that abolishing Regional Assemblies was a welcome move, but none
supported transferring planning powers to RDAs. Jill Shortland felt RDAs had neither the
capacity nor the desire to take on the new powers, while Richard Kemp said RDAs
suffered from weak leadership and poor-quality board members.

Regions: NLGN / SWRDA – ‘Is the North-South divide inevitable?’
Panel: Chris Leslie (NLGN), Juliet Williams (SWRDA), Alan Beith MP (Berwick upon Tweed),
Cllr Warren Bradley (Liverpool CC), Cllr Jill Shortland (Somerset CC)

This session looked at whether regional disparities were fragmenting England, or whether
the gap between the regions was narrowing thanks to regional level intervention and
efforts to achieve the PSA2 target. Alan Beith and Juliet Williams warned that disparities
within regions should not be ignored, as well as disparities between regions.
Jill Shortland felt it economic growth relied heavily on selling the region to attract
external private sector investment. Juliet Williams described the RDA role as an ‘enabler’
                                                21 September 2007 The Friday Report
to economic growth, and that the role of central, regional, and local bodies needed to
be clearly defined. She also said it was necessary to recognise the predominance of the
Greater South East, but to maintain links in to it to stimulate further growth in the other
regions. She said the two most important factors to boost regional competitiveness were
skills levels and transport infrastructure. On the other hand, Alan Beith felt that a region’s
greatest strength lay in organic growth rather than relying on investment from outside.

Warren Bradley believed there had not been a fair distribution of resources to the
northern regions, saying the RDAs and the Core Cities Group could jointly do more to
influence this. He added that private sector investment would be far easier to attract if
power was devolved away from the centre and the number of agencies involved in
economic development was streamlined.
Alan Beith said that central government must increase the powers of regional decision
makers, but that such bodies needed their own electoral accountability (and credibility)
otherwise they would forever be administrative arms of central government.
Both he and Warren Bradley felt there was a case for significant relocation of
government agencies to the regions away from London, although SWRDA board
member Duncan Haynes said (from the floor) that while relocating some of the more
high-tech government departments (such as defence) could stimulate knock-on private
sector activity, other parts of government of the ‘form filling’ variety would not have such
a beneficial effect.

Small Business: FSB – ‘Small Business Matters’
Panel: Lorely Burt MP (Solihull), John Wright (Chair, FSB), Steven Alambritis (FSB)

This session focussed largely on issues of regulation and tax, but Lorely Burt made two
policy announcements; firstly, a Lib Dem administration would ‘guarantee business has a
voice in Cabinet’ by expanding the role of Chief Secretary to the Treasury to include the
role of Minister for Small Business. Secondly, the Lib Dems would relocate the RDAs within
CLG. The shadow BERR spokeswoman did not explain the reasons behind this decision.




Regions: NWDA/ONE/YF – ‘Leading the North’
Speaker: Charles Kennedy MP (Ross, Skye, and Lochaber)

The former Lib Dem leader called for greater regional financial and decision-making
freedoms, but warned against centralising power within any one city or area of a region
as this would only strengthen internal disparities. He added strengthened accountability
would give RDAs greater credibility in their own region and when negotiating on behalf
of the region in Westminster and Brussels. He stopped short of calling for RDAs to be
directly elected however.

In response to comments from Baroness Angela Harris on the limitations of RDAs only
funding projects for three years, Charles Kennedy suggested a model of RDA shared
ownership in a project which would enable longer term funding and also guarantee a
return for the RDA on its investment. Don Stewart (YF) added that the time-frame
stemmed from Corporate Plans only being approved for three years, although RDAs
were now discussing the possibility of more freedoms and flexibilities with government. He
                                             21 September 2007 The Friday Report
felt that SNR would allow funding to be devolved further through RDAs agreeing priorities
and funding arrangements with local authorities. However, he conceded that the
demise of Regional Assemblies would do little for the perception of RDA accountability,
and that new scrutiny arrangements needed to be sorted out quickly.

A representative of the 18 Doughty Street website asked how it might be possible to
increase the public appetite for regional level organisations.
Charles Kennedy replied that it was important for RDAs to be accessible and open to the
public, and that the public could recognise a ‘human RDA face’ in their own local area.
The editor of the Northern Journal asked how the Barnet Formula (which determines
public spending per head of population in England, Scotland, and Wales) could be
replaced. Charles Kennedy replied that it was unsustainable and needed replacing with
a formula that took into account the disparities between and within the regions.
Margaret Fay (Chair, ONE) said that even though the Barnet formula was not ideal,
people needed to stop obsessing about it and instead look at the positive developments
going on in the region.

Climate Change/Enterprise: IoD – ‘Climate Change: business threat or opportunity?’
Panel: David Smith (Sunday Times), Chris Huhne MP (Eastleigh), Miles Templeman (IoD)

Chris Huhne and Miles Templeman agreed that to remain competitive, the energy
industry and businesses from all sectors would have to become more energy efficient
and develop new, more environmentally friendly technologies.
Miles Templeman said that competitiveness had to be at the heart of all decisions on
cutting emissions. However, he pointed out that energy efficiency should be a ‘no
brainer’ for businesses for economic reasons, never mind the obvious environmental
benefits.

Chris Huhne argued that standardising the market through regulation to ensure energy
efficiency in goods and services would force companies around the world to minimise
their carbon footprint. But Miles Templeman argued that to persuade the other leading
industrial nations to reduce their emissions, it was necessary to demonstrate the
economic and competitive advantages of doing so. However, he resisted excessive
regulation, saying that businesses should spend their time trying to save energy and
developing greener technology, rather than filling in forms. He suggested an ‘R&D Tax
Credit’ style system which would allow businesses to claim tax credits against investment
in energy saving technology.

In response to a question on whether Business Link was the right channel to advise
business on energy efficiency, Mr. Templeman said that as many channels as possible
should be used (such as Business Link and the Carbon Trust) but that more should be
done to make businesses aware of the advice that was on offer.