ODPM Annual Report and Accounts 2004 (HC 1115-ii) ODPM Committee 19 Oct 2004

Evidence given by Rt. Hon Keith Hill MP, Minister of State, Office of the Deputy Prime Minister Rt. Hon Nick Raynsford MP, Minister for Local and Regional Government, Office of the Deputy Prime Minister Joe Montgomery, Director-General of the ODPM Tackling Disadvantage Group Andrew Wells, Director of Sustainable Communities.

Q206 Mr. David Clelland: Just before I start, Chairman, could I draw attention to my entry in the Members' Register of Interests relating to housing issues, which might come up later on. Good morning, gentlemen. Could you summarise the Delivery Plans agreed for the projects under the Thames Gateway programme and perhaps say something about their progress so far, in terms of their spend and the timescales, and how much of an underspend there was on the programme?

Mr Hill: As you know, in the Sustainable Communities Plan announcement of July of last year, we announced a total package for the spending period of £446 million for the Thames Gateway. That package has been rolled over into the next spending round with an initial spend, I estimate, of something of the order of £394 million by 2007-08. The spending programme, which is devoted to a range of sustainability issues, clearly investment in the physical infrastructure by way of land remediation, flood defences, transport links as well as investment in education and health facilities, is going forward. Last year we spent our £40 million objective in full. This year we are continuing with those projects and new projects. I think that our expected expenditure in total this year is about £190 million, subject to correction on that. We have announced that there is a current underspend of £50 million and we have invited further bids to dispose of that, but we do expect to be on target for our spending plans over the period.

Q207 Chairman: I am sorry, "dispose of" implies that you are going to put it in the waste-paper basket, does it not?

Mr Hill: I can assure you it does not imply that, Chairman. These are on a whole range of valuable projects which go really to the heart of the concept of sustainability, as you know. We have said, certainly I have said repeatedly, that there is no question of our repeating the errors of the past, in terms of the construction of soulless housing estates. Sustainability is about more than bricks and mortar, it is about providing the essential public services and infrastructure which go to make communities in which people positively want to live, where they have children, where they want to bring up their families and which will renew themselves into the future.

Q208 Mr. David Clelland: How will the London 2012 Olympics bid impact on the Thames Gateway?

Mr Hill: Of course, we are strongly supportive of the Olympics bid and have been working very closely to deliver the initial stages of the bid, not least in terms of the support we give to the London Development Agency for land assembly and the support that we have given to the very successful initial stages of dealing with planning permissions to facilitate the development of the Olympics site in the lower Lea Valley. Certainly we will continue actively on that programme, but we do not expect that to divert resources from other main ODPM programmes.

Q209 Mr. David Clelland: It will not affect the regeneration programmes of ODPM, there will not be any funding diverted from that?

Mr Hill: No.

Q210 Mr. David Clelland: It will not have any impact, as far as the ODPM is concerned, on spending in the regions and still in London?

Mr Hill: Certainly not.

Q211 Chairman: Can I just be clear, on this £50 million underspend, what was supposed to be bought with that £50 million?

Mr Hill: Chairman, it can be a range of interventions, support for educational facilities, support for community facilities, support for environmental improvement, we are open to the whole range of bids within the main themes of investment that we have identified for the Gateway.

Q212 Chairman: We were supposed to be quite clear that all these things had to be done in advance, before the houses were built. What you are saying is that there was a slippage of £50 million in that programme, so what effect does it have on the delivery of the houses, are they going to be able to catch up, all that stuff which should have been done last year and still has not been done?

Mr Hill: Our experience is that, at least at these early stages of the programme, because you will understand that, quite clearly, projects need to be worked up and for a proper evaluation that takes some time and resource and certainly we will not support projects which are not well founded, but both last year and I think certainly for this year the major commitment will take place towards the end of the annual spending round.

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Q242 Mr. David Clelland: As one who is normally a great admirer of the Deputy Prime Minister and his Ministers and the work of his Department, I regret to say that there are exceptions to that. One is this plan to build thousands and thousands of new homes in the South East, which I believe will do nothing to assist in the better distribution of wealth and power in this country and actually will be detrimental to regions like mine. However, having said that, this is a policy which the Government appears determined to pursue. There has been some criticism, however, that there is not sufficient, if any, detail as to how the infrastructure for the substantial, new numbers of houses will be achieved. Can you say something about the thinking behind how this infrastructure is going to be provided? Can you ensure that it will be done?

Mr Hill: I hear and recognise the issue which you raised as a trailer to your question, Mr Clelland. The only thing I would say is that I think you have to recognise that our economies across the regions are absolutely interlocked. The London economy generates four million jobs outside London and around the country and the fact of the matter is that at the present time the dynamism in the national economy is located primarily in the South East. Of course, there are massively changing trends elsewhere in the country and obviously we have to accommodate that and seek to spread the benefits of that economic growth nationally. As far as the infrastructure is concerned, yes, it is a commonly-raised issue, but let me avert to what I was saying about the packages for growth, the infrastructure investment that we have in the growth areas, a total of £610 million under the present Spending Review and to be sustained into the next spending round. Investment in infrastructure in the growth areas increases by an annual real 13.7 per cent. So we have a commitment to delivering on that physical infrastructure, which is about land remediation, it is about flood defence, it is about investment in transport, it is about investment in essential public services. Remember as well that, again, in support of the growth areas and in the wider South East, earlier this year the Secretary of State for Transport, in response to the multimodal studies in the South East, announced a massive £2.7 billion programme of investment in transport and transport development. We have talked also about the Community Infrastructure Fund, which is geared primarily to investment in the growth areas.

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Q247 Mr. David Clelland: What about water supplies? We have had some concern, particularly at Ashford in Kent, about the management of water supplies, given this new development. Are you satisfied that is going to be able to be provided, and where will the money come from, who is going to fund the new infrastructure?

Mr Hill: On water, it is an issue which personally I am extremely conscious of, and let me assure you that the Department as well as the local delivery vehicles are in very close co-operation with the Environment Agency and with the water utilities on these issues. It is perfectly clear that there is a challenge here. It is worth bearing in mind, of course, that if you build sustainably then that in itself is a way of using water in a highly efficient way. For example, the Greenwich Millennium Village has excellent recycling facilities of so-called grey water and the homes there use 30 per cent less water than the average. You will know as well that recently we received the report of the Sustainable Buildings Task Force, chaired by Sir John Harman, and we have announced that out of that we will develop a Sustainable Buildings Code with sustainable buildings projects to be built in specifically the Thames Gateway.

Q248 Mr. David Clelland: The matters you have raised obviously are welcome but, having said that, substantial new water supplies will still need to be provided for this extra housing. Are you satisfied that can be done on time and who is going to pay for the work?

Mr Hill: We are satisfied that we can deliver the housing growth on a sustainable basis in relation to water supplies. We will expect the utilities to be the primary investors and deliverers of that water supply.

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Q263 Mr. David Clelland: Are you saying that because of the introduction of the Northern Way departmental programmes such as the Department for Transport's ten-year programme are up for amendment now?

Mr Wells: I think we need to negotiate what can be done to put the Northern Way in place. I think it is fair to say that the beginning of the Northern Way, and it comes out of quite a lot of academic work, was to say there are very large transport infrastructure existing investments in the North, particularly the M62 corridor, and can those be used as the glue, if you like, to tie together a better economic offer from the North. That was partly the concept behind it and I think that needs to be explored, as well as the question of whether more investment is required. As you mentioned, the West Coast Main Line, the East Coast Main Line, also provides very fast travel between cities like York, Newcastle and London and other parts of the North, so there is a lot of transport investment there. In many ways, it provides freer access in those parts of the country, in my experience, than in the South East, where there is a lot more congestion.

Q264 Mr. David Clelland: There are within the regions, and certainly within my region, different priorities for transport infrastructure and transport improvements than appear in the ten-year programme. Are we saying that because of the Northern Way there is a possibility to revisit these issues?

Mr Wells: I think there is always the possibility to revisit them. I think, in fact, the ten-year programme is being revisited. Also there are other developments which were announced in the Spending Review to look at regional spending and to see whether you could provide more guidance regionally about the amount of money which might be available to allow people to form their priorities in different regions better. That is being worked up as well, which will put the regions more in the driving-seat in terms of transport expenditure among other pots of expenditure.

Mr Raynsford: Can I just add to that and I have to be rather careful about what I say here because we are in a further period. The current referendum taking place in the North East is about whether or not people want a new framework which would allow greater regional ownership of planning for transportation and other infrastructure needs that underpin economic improvement. This is very much an issue which is current and where there could well be change.

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Q268 Mr. David Clelland: Coming on to the delivery of sustainable communities and the skills and training necessary to achieve that, could you give us perhaps a brief synopsis of how the Department is taking forward Sir John Egan's recommendations?

Mr Hill: We now have a group of officials working specifically on developing the National College for Sustainability Skills. We are in discussions with the Local Government Association about possible synergies with their own work on local government leadership and we expect to be making announcements at the Sustainable Communities Summit in Manchester at the end of January.

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Q305 Mr. David Clelland: Those of us who are called upon from time to time to sit on statutory instrument committees are finding that it is becoming a more regular practice. Your own Department has produced something like 77 statutory instruments so far this year. Would it not be easier on Ministers and on Members if the work on these could be done in advance and put directly into the Bills, rather than have all these statutory instruments?

Mr Raynsford: This is always a tension, as you will know, between a wish to define as much as possible in primary legislation but the need to make use of the more flexible framework of secondary legislation, particularly for subjects where there is likely to be a change over a relatively short timescale and therefore the process of updating legislation would become burdensome. We are looking at this and we are keen to avoid proliferation of statutory instruments. However, one factor you have got to bear in mind is that we have been responsible for some quite important legislation, particularly the Local Government Act, which made a very large number of significant changes to local authority powers, many of which depended on secondary legislation. The fact that there has been rather a lot in the last year might be seen as a good process, because actually it has extended freedoms and flexibilities to local government through items such as the prudential borrowing regime and other items like that.

Q306 Mr. David Clelland: When might we see the outcome of your deliberations on this issue?

Mr Raynsford: I have not got a specific date, but we are conscious of the need to avoid the proliferation of statutory instruments.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.