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.