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Public Bodies Bill [HL]

My Lords, I want to speak to Amendment 56, drawing on my experience as the Minister with responsibility for the south-west in the year running up to the last general election. I agree with much of what has been said in this debate so far, but I want to start by paying tribute to Sir Harry Studholme, the chair of SWRDA, and Jane Henderson, the chief executive, and all of their staff for the excellent work that I observed them doing during that year and the time preceding that when I was a Member of Parliament in the region. They were doing excellent work, largely on the supply side of the economy, developing sites such as Osprey Quay in my constituency, without which the Olympics would not be coming to the south-west, Gloucester Docks and the Science Park Network in the Bath and Bristol area. I endorse the questions that were asked by my noble friend Lord Beecham about assets and what happens to those assets owned by the regional development agency in reality. SWRDA did excellent work in developing skills and 130,000 people have been provided with new work-related skills since 2002 in the south-west. Without SWRDA we would not have the combined university, the only university in Cornwall, which has been doing stunning work in developing the economy in that part of the region. Without it we would not have the marine skills centres across the south-west or the nuclear skills centre that is being developed in Somerset. SWRDA has been developing connectivity—the new generation broadband initiative in Cornwall, for example. It has been developing finance for business. The South West Angel and Investor Network comes to mind, as does the work that I was a part of in trying to get banks to focus on the needs of small businesses. Hooking banks up with a federation of small businesses in the region was very important as we were trying to respond to the recession. So plenty of good work went on across the region, and although it is possible to argue that a region the size of Denmark will have some issues around its edges as to whether, for example, Bournemouth and Poole as a conurbation is best placed in the south-west or the south-east—and similarly with Swindon and Gloucestershire, given that Tewkesbury is closer to Scotland than it is to Land’s End; these arguments will run—I would argue that we were just starting to get a sense of identity in the region as the RDAs were becoming successful. I would argue that the sort of centralisation that we are getting, and which others have argued against, is a backward step. LEPs have already been announced across the south-west but there is none so far in Dorset, Bournemouth, Poole, Devon, Somerset Wiltshire or Gloucestershire. Huge swathes of my region will not have an LEP. Indeed, as the BBC reported, there is one down in Cornwall where we have the interesting spectacle of Sir John Banham being generously engaged for just over 20 days at half his daily rate—it is usually £4,000 but is now £2,000—to produce a strategy which has now been rejected. He has now left at a cost of more than £40,000 to the taxpayer. I cannot see that as good value for money from this new system. We are seeing a centralisation caused by Whitehall dictating what the LEP boundaries should be. As far as I can tell, the LEP proposals from the south-west have been knocked back because they do not appeal to Whitehall’s notion of what the boundaries should be. The regional growth fund has been referred to, as has the centralisation of the Rural Development Programme for England and the ERDF. I had a conversation with a leading multinational technology company based in Swindon which said, ““Once the RDAs are gone we cannot really have a good relationship with the two regions that are most important to us, as we do with other regional governments around Europe. Frankly, we haven’t the energy to engage with lots of individual little LEPs, so we will engage with Swindon council and central government. We can’t afford to do any more than that””. We will have less engagement with the economy and less investment coming from a very important investor around the world. I would also argue that there is an ideology attached to this. Clearly the Government are against regional policy even though it works in many other successful economies around the world. But they are also against an industrial policy and industrial activism. We would not have the Eden project were it not for the risks that were taken in part by the South West Regional Development Agency. Everyone knows the impact on south-west tourism to have Eden developed in Cornwall. As I said, we would also not have the Olympics. We should consider what has been done around creative hubs across the south-west, which is one of the strengths of our region, or for green industries. The Minister needs to give us an answer on whether the Wave Hub, which is so important in the south-west, would have been developed without a regional development agency. Could LEPs develop that? Would it just be one of the things that would bid into the regional growth fund? I do not know. The composite centre, which I was pleased to open, built on the aerospace expertise of the region held by Rolls-Royce, GKN, Westland and Airbus. Aerospace manufacturers and the University of Bristol bring their expertise and they are supported not only by BIS in Whitehall but, crucially, the RDA. World-beating composite technology is being built in Bristol. Would that have happened with a LEP? Would it get through a much more competitive regional growth fund strategy? More than 100,000 public sector jobs are projected to be lost in the south-west, many of them in areas where LEPs are not set up. Under this new set-up, how will those jobs be filled in an area that is peripheral compared with the south-east? My final substantive point concerns value for money. I have already mentioned the scandal of the amount of money that went to Sir John Banham. I looked at the independent evaluations of RDAs, and it appears that only 10 per cent of the overall budget was spent on administration and that it had a clean bill of health from the National Audit Office. That 10 per cent figure is something that many parts of the public sector and indeed some parts of the private sector would be pleased to score. I think that £238 million was spent on administration. That is all the saving that is potentially there. As has already been said, even if my party had been re-elected, we would have had to cut the overall budget and the administration costs with it. It is not a massive saving given that for every pound spent, £4.50—the more conservative estimate—is generated in the economy. These are the questions that the Government need to answer.