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MINUTES OF THE FORTY EIGHTH MEETING OF SOUTH
EAST ENGLAND DEVELOPMENT
AGENCY
HELD ON 11TH JUNE AT
THE OFFICE FOR MANPOWER ECONOMICS, LONDON
Present
James Brathwaite CBE (Chairman - morning only)
Professor Sir Clive Booth (Deputy Chairman: chaired afternoon session)
Cllr. Ken Bodfish OBE (Deputy Chairman)
Barry Camfield
Poul Christensen
Robert Douglas
Cllr. Sarah Hohler
Cllr. Keith House
Janis Kong OBE
Mary McAnally
Terry Mills
John Peel
Dr Peter Read CBE
In Attendance
Anthony Dunnett SEEDA, Chief Executive
Marianne Neville-Rolfe Agency Secretary and Director, Strategy and Corporate
Services
Paul Hudson SEEDA, Director, Development and Infrastructure
John Parsonage SEEDA, Director, Learning and Skills
Charlotte Dixon SEEDA, Director, Economic Inclusion and Sustainability
Jeff Alexander SEEDA, Director, Business and International
Genie Turton ODPM, Director General for Housing, Homelessness, Planning and
PINS (Planning Inspectorate (agenda items 7 and 8)
Philip Hammond MP Conservative front bench spokesman on regional governance
(agenda item 10)
Jonathan Sadler SEEDA, Project Director for Chatham Maritime (agenda item 9)
Paul Martin Regional Director, Government Office of the South East (GOSE)
Paul Bevan Chief Executive, South East Regional Assembly (SEERA)
Item 1 Welcome and Apologies for absence
Apologies were received from:
Elizabeth Brighouse
Cllr. Thornber CBE
Item 2 Minutes of last meeting (2nd May 2003)
Matters arising
- The minutes were approved as a correct record of the Board meeting
of 2nd May, subject to one minor correction of the text and were signed by
the Chairman.
- The action items were reported as in hand. The Minister for Energy has
agreed to meet the Chairman although a date has yet to be set. (NB since
the Board
meeting, the Minister has changed to Stephen Timms and a fresh
approach has been made to his office). The Audit committee will pursue
the action items
arising from the presentation by the NAO. John Parsonage and Rob
Douglas have met to take forward the action items from the Higher Education
White Paper,
and the ensuing board discussion on related topics including a
brokered bursary scheme and modern apprenticeships.
- The Chief Executive announced his decision to step down at the
end of the year when his contract expired. He thanked the Board
for its support during
his five year tenure, saying that he would leave with regret
but that it was time both to hand over to someone else and for him
to pursue other interests.
Members expressed their appreciation of his stewardship and also
for being informed in person. The appointment procedure was outlined.
The appointment
will be made by the Chairman following an international search
by consultants and consultation with Dti who view this as a critical
appointment.
Item 3 Declarations of Interest
- Janis Kong, as Chairman of Heathrow, expressed an interest in item 5,
the SERAS report on the future development of Air Transport.
- Sarah Hohler,
as a member of Kent County Council, expressed an interest
in item 12(4) which relates to Locate in Kent and East Kent Access.
- Ken Bodfish, as a member of Brighton and Hove Council, expressed an interest
in item 12(2) as his Council is involved in Regional Selective Assistance.
- Although he would have to leave the meeting before item 13, Universities
of Medway, Jim Brathwaite notified the Board that he is a member of the
Court of the University of Greenwich.
Item 4 Chairman's Report
- The Chairman highlighted his meetings with Lord Rooker and John Spellar,
Minister of Transport, from his list of visits. He expressed concern
that the Department appeared to be focusing on small, local, transport issues
(especially
with respect to the SRA) rather than taking a wider, large-scale view.
- Andrew Smith MP, Minister of State at the Department of Work and Pensions,
joined the visit to Oxford. One of the main concerns discussed
during the visit related to affordable housing. The Minister offered
to chair a forum within
the city to discuss the issues raised.
- The Chairman had a constructive lunch with the Chairman of
English Heritage, discussing areas for future cooperative working.
Item 5 SERAS Update
- Janis Kong refrained from participating, and took no part, in the general
debate. She was asked for and made a factual response to a number
of technical questions raised. She did not offer opinions. The Board specifically
asked
her to remain in the Board meeting while this item was being discussed.
- Following the High Court decision that Gatwick should be included in
the consultation process on future aviation growth in the South East, York
Aviation
was commissioned again by the RDAs to produce a combined response.
- Paul Hudson introduced the paper, highlighting that SEEDA's perspective
is conditioned by the review of sustainability. The Board reaffirmed its endorsement
of the unique role of Heathrow, as a national as well as a regional asset,
and that a multi-hub solution is not a viable option. Thirty-year forecasting
is a difficult art, requiring a strategy that can accommodate change and be
accelerated if necessary. It was noted that the Regional Assembly, which has
a different remit, takes a different view from SEEDA, but the Board felt that
while this should be borne in mind, it should not specifically deter or constrain
the Board's deliberations and recommendations. Sarah Hohler
sits on both and can act as a communication channel.
- Members agreed that it was important to recognise the requirements
on the industry to meet fully the environmental costs that it generates.
Recognising
that the issue is complex and that paper provides a summary
of many volumes of analysis. Mary McAnally expressed concern that the Cliffe
option and the
true environmental costs of Heathrow had not been fully covered
in the paper. She wanted to see more analysis of Cliffe, which Paul Hudson
will supply. The
long lead-in time for a new airport meant that some expansion
at other airports would still be needed to cope with immediate needs.
- If Gatwick did not expand but became a centre for low-cost airlines,
some members expressed concern that the present business
benefits of Gatwick would
reduce and companies (especially from the US) would move
abroad. The South East's airports are a major economic generator within
the local economy, creating jobs within their own operations and
in the surrounding
area.
There was discussion on the legal agreement currently operating
on Gatwick.
- The position and role of a low-cost airlines and the airlines' willingness
to engage in meeting external costs were discussed. The
issue of American carriers and access to Heathrow and Gatwick was also reviewed.
- After extensive discussions, and advice from Paul Martin, the Board
agreed that it would not be necessary to challenge the framework of the
legal agreement
in order to accelerate the development of Gatwick. The current
agreement allows for an expansion of 8mn passengers, which is a considerable
increase.
- Subject to Paul Hudson redrafting the section on future aviation growth,
the Board agreed the recommendation that the first priority
would remain as a short runway at Heathrow, then for a second runway at
Stansted with
a second runway at Gatwick as a third development if required
and before a third runway at Stansted.
ACTION
Paul Hudson to provide analytical data on developing Cliffe to Mary McAnally.
Paul Hudson to strengthen comment on future aviation growth.
Item 6 Business and International Division Update
- Jeff Alexander presented an update on BID's programme, covering
the division's three top priorities: enterprise hubs and gateways;
clusters and sectors and global regions. A copy of his presentation is attached
to the
minutes.
- Hub directors are enthusiastically taking forward innovation and linking
into business boffins on the learning and skills side. Two new developments
are the plans for an accelerator by the end of the year to start to meet
the demand, especially from the pharmabio sector, for move on space, and
an international
hub. This will provide a 'soft landing' for companies wishing
to set up in the South East and is part of the two-way networking that is
an integral
part of the success of Hubs. There is now a good spread of hubs and gateways
across region, with future focus on gateways and expanding the outreach from
hubs.
- The work within sectors and clusters is refining into some fruitful
initiatives such as the Sector Skills Councils and the FRESA. Networking
into SMEs is
seen as vital, encouraging them to collaborate for contracts so they
can compete
against the large companies. The SEEDA sponsored MAS has been very successful
and will be developed further in the coming year. Oxford Engineering,
the firm visited by the Secretary of State, has saved £500,000 from
an annual turnover of £8m following advice given by the MAS. On the
cluster side, there is a language cluster developing from the immigrant
community who could
help businesses into the European market.
- On the international scene, there is a lot of activity, but the challenge
is to translate that into realizing jobs. The focus is shifting away
from traditional inward investment towards two-way trade.
- Members felt that the team should further develop contacts with
the large companies within the region and develop relationships with
their
parent-company
headquarters. This is an area that can be facilitated by our expanding
range of overseas agents who are increasingly housed with local development
bodies
and are thus well placed to pick up on emerging developments. This
joint working in partnership with other global regions is well received
by
the regions concerned.
SEEDA is pursuing joint representation with other RDAs where appropriate.
Our representatives abroad are not only a SEEDA resource, helping
us to meet our
inward investment outputs, but can also be of assistance to businesses
and universities from the region.
ACTION
Peter Read to take forward contact with the largest companies through the Business
Group.
John Peel to report back to BID once he has visited all the Enterprise Hubs.
Item 7 Presentation by Genie Turton from ODPM: Departmental priorities with
respect to RDAs
- Implementing the Communities Plan is the most important undertaking in
the Department of the Deputy Prime Minister, with cross Whitehall contributions
to ensure its success. Housing has been named as a constraint to joining
the euro, so has risen even higher up the political agenda. The aim of the
plan
is to tackle the mis-match between supply and demand without either scrapping
planning controls or repeating past mistakes. At current rates of build,
each house will have to last 1000 years. It is as important to tackle housing
failure
and the neglected housing stock in the north, as it is to build a million
new homes over the next 15 years, primarily in the south.
- The RDAs are central to the communities plan as they provide the economic
context for where the houses are being built. Parts of the Thames Gateway
will be used as exemplars. It is particularly important to have the active
participation
of the Department of Health and for RDAs to drive the skills for jobs
agenda. Housing funding will be focused on the communities plan, so other
initiatives
such as the regional housing boards and regional spatial strategies
need to be tied into the communities plan.
- There is a surprising shortage of specific information on the detailed
needs of type and location for key worker housing, in spite of the wide spread
general acknowledgement for it to be provided. A new team in ODPM is working
closely with English Partnerships and the Housing Corporation (and the new
Regional Housing Board on which SEEDA sits) on targeting the £1bn over
3 years that will be spent on key-worker housing in the south east, although
it will also need some sort of employer contribution such as a rental or mortgage
guarantee or provision of the land. The issue of housing in allocation and
key-worker housing will be fully discussed in the new Regional Housing Board
on which SEEDA sits.
- Two new reviews have been announced: the Barker review of the house-building
industry and the Egan review of the skills and capacity required to deliver
sustainable communities. The Barker review will incorporate a consideration
of the planning system but is not purely focused on that. SEEDA staff are
involved in facilitating the Egan review. Sir John Egan will be identifying
both the
critical constraints and the real drivers of sustainable communities. This
is a challenging agenda, but one that presents great opportunities and RDAs
are fundamental to its success.
- During the ensuing discussion, members expressed the need for local
authorities to take a more strategic look at housing provision across
markets, rather
than concentrating on managing stock and transfer issues. They could also
address
land supply issues by removing specific zoning in favour of mixed-use development.
The Regional Housing Board has a key role. A fresh look at existing buildings
could reveal options for better use.
- The issue of affordability is more complex than purely a need for
starter homes. Home ownership options impact on staff retention. Members
voiced
the need for housing of all sorts, including keeping housing in the long-term
rental sector. Key worker and affordable housing needs to be integrated
into,
and
indistinguishable from, other new housing. The Department is exploring
new styles of mortgages.
- Some land that could be used for housing would require infrastructure
investment to unlock it, especially along the south coast. Kent County
Council estimates
that £7bn of infrastructure investment is required for the Communities
Plan to be viable in Kent. These areas are expected to accommodate half a million
houses, but the Department of Transport's budget is already over-committed
until 2010. Novel ways of funding infrastructure are being investigated, especially
at key points where a small investment can have significant impact. Other Departments,
particularly Health and Education, are also expected to target their funding
towards the growth areas, since these communities are planned to meet the needs
of an existing population. Mary McAnally pointed out that the DCMS could also
be involved through the important role played by sport and culture in creating
and maintaining communities.
- The Chief Executive asked that the Department allows the RDAs to
start land acquisition before any announcements on allocations are
made that
will result in costs increasing. SEEDA has not got sufficient spare
capacity to
start to buy land and property without a guarantee of funding from
the Department, but is ready to commence purchasing and thus show
quick wins
within 12 months.
He requested that the Department allowed the RDA to prioritise rather
than have all decisions made centrally.
ACTION
RDA to encourage own networks to feed into ODPM evidence base of specific need
(type and location) for affordable housing.
Anthony Dunnett to write to Department requesting advance guarantee of funding
to be available before the summer break.
Item 8 Housing
-
The paper presented by Paul Hudson was noted. In discussion, members agreed
that local authorities (members and officers) were
constrained in planning matters from strategic considerations by the legal
advice they received. A
cultural shift to development rather than control is
required.
- There is little scope for land to come forward from
the NHS overall as most of its holdings are now handed over to individual
trusts. Opportunities
exist for county councils to work with Primary Care
Trusts and Housing Associations in a wider context to benefit public sector
employees in general. There is
a surprising lack of information on needs across the
public sector, and it is difficult to determine who has responsibility
within the Health Service
for progressing such an initiative since there has
been devolution from the regional level. Mapping of average wages against
house prices would indicate
where affordability is most acute.
ACTION
Social Dialogue Committee to engage in consideration of achieving the necessary
regional pay bargaining
Item 9 Major project update report: Chatham Maritime
- Jonathan Sadler, Project Director for Chatham Maritime and Rochester
Riverside, presented an update report on this major component of SEEDA's
expenditure, so that members could be assured that expenditure was in line
with the business plan. The slides from the presentation are attached to
these minutes. Chatham will benefit from the housing part of the communities
plan in Thames Gateway. The Board noted and supported the progress reported
by the executive against the Business Plan
-
Outputs are on target to be met, and plans are progressing to increase
the number of housing units on site to its capacity
of 2,200. Chatham Maritime is a mixed development, with jobs, recreation, education,
housing and community
facilities all provided. The appropriate development
platform to attract the private sector, including the restoration of listed buildings,
has taken considerable
capital expenditure, but there will be a return
in about five years time when assets could be sold. Major developments have been
identified for all the outstanding
sites.
- The rate of development on St Mary's Island slowed whilst the design
brief was reconsidered, in the light of enhanced
quality and sustainability specifications, increased density requirements,
and expressions of interest
were invited from other architects. Take up has
been very high in the sectors already marketed, with a different product
style in each sector. The units
on the island range from one-bedroom flats to
five-bedroom houses. The percentage of social housing is due to be increased
from 12% (as agreed with the local
authority) to 15% (with the view to increasing
the level of key-worker housing). Medway is well supplied with affordable
housing but there is an expressed
need for housing for business managers. The market
could easily support a doubling
of production at Chatham Maritime.
- The Board reviewed the present building rate,
and after due consideration, encouraged the
executive to increase the build rate from 100 to 200 units
per annum providing the appropriate Letter
of Comfort to the JV partners' bankers.
- During a wider discussion on SEEDA's restricted ability to drive
significant regeneration projects, the Board agreed that SEEDA's budget
was inadequate to fulfil its programmes and implement the RES within the allotted
timescale. Priorities were too often having to be set below capabilities. Research
is needed to quantify how much additional funding would be required for the
region to deliver what is needed, and the outputs that could be expected from
a further £50m.
ACTION
Board to request additional funding on the
basis of research
Item 10: Presentation by Philip Hammond, MP
- Philip Hammond introduced himself as the regional policy spokesman for
the Opposition Front Bench and the MP for Runnymede. He outlined the current
Tory position with respect firstly to the Government's regional agenda
and then to RDAs.
- His party's objections to elected regional assemblies were based
on the following points:
- They considered the approach did not have sufficient support outside
the ODPM
-
The 'English question' on representation
has been neither sufficiently debated nor adequately
addressed
- Most regions are artificially drawn; lack credibility as units for democratic
accountability; and are bureaucratic
functions only
- Power will be drawn from lower tiers and costs will spiral. Representatives
will be from large constituencies,
and the compulsory introduction of unitary authorities will disenfranchise
rural minorities, even in the north
- His party would prefer to see existing local authorities as enablers
as well as providers of services,
allowing flexibility and diversity of structure rather
than always using same defined
regional groupings
- There has been no clear planning beyond the first tranche of elected
assemblies, and inaccurate information
on their purpose and remit in those regions where
elections will be held
- No existing elected Regional Assembly would be abolished without
a further referendum
- The Party's stance on RDAs has evolved due to the
support from business for RDAs, who value the long-term
perspective they give because
they are not
constrained by electoral
cycles. The party policy is being reviewed: there is scepticism as
to whether RDAs would be as effective if controlled by
elected assemblies and lost their business led advantage.
- Mr Hammond acknowledged the importance of the SE to the national economy
and that businesses that left this region were more likely to locate abroad
than in the rest of the UK, although he cautioned that the public see competition
between the regions for the same inward investment that duplicated effort as
wasteful.
- He highlighted politically sensitive issues (Thames Gateway, expansion
at Heathrow, Airtrack etc.) and considered that the perception of voters would
be sensitive to how SEEDA reacted to these big projects.
- During discussion, members discussed the conflict between wanting investment
but not wanting the accompanying
housing. They also wanted to know the Conservative policy towards other
agencies like the LSCs who work closely with SEEDA, and
whose role will also
be subjected to scrutiny by elected assemblies. Members pointed out that
the success of RDAs has been to break down the silos that
exist in Whitehall and make effective partnerships.
- Members indicated that in their opinions, there is a
regional identity, and far from thinking
of London as integral to the SE, many celebrated
that they
lived outside the capital. RDAs are not parochial, but
working for the
good of the
country as a whole. Members questioned where accountability
for public money
should lie and whether the Tory party
might retain the
status
quo with indirectly
elected assemblies. The Chief Executive pointed out that
as accounting
officer,
he is directly answerable to Parliament
and thus to
elected members.
Mr Hammond said that his party's policy on assemblies
and accountability
for RDAs was still under consideration and that he would
feed back the
views of SEEDA members expressed to him.
Item 11 GOSE/Regional
Assembly Report
- Paul Bevan, Chief Executive of SEERA, reported on recent activity within
the Regional Assembly. The elections had slightly, but not significantly, shifted
the political balance within the Assembly. The Regional Transport Strategy
is out for consultation, with SEEDA a key participant. SEERA wish to ensure
that the RTS gets to the Secretary of State by at the end of July. The planning
committee is considering SERAS.
- Work has started on the Regional Spatial Strategy that will be delivered
by 2006. Housing
allocations at district level are controversial. The Assembly has been
told to continue working on the strategy even though the legislation
that enables it
to replaces local structure plans has been delayed until the next parliamentary
session.
- Paul Martin, Regional Director, GOSE, referred to joint GO, SEERA and
SEEDA work on
the target relating to regional disparities in growth (PSA 2). It is
mathematically challenging to narrow the gap between regions whilst all
are tasked with
growing faster. Consultants have been instructed to get better
data, including on intra-regional disparities in performance.
- Anthony Dunnett reported in the absence of the Chairman
that Jim Brathwaite had been invited by the ODPM (and Treasury)
to work on behalf of all RDAs on
the development
of that particular target in time for SR 2004. Treasury are
encouraging
targets to be set iteratively, from the bottom up rather
than coming down from the Departments. This should enable
them to be regionally driven.
Sound regional
statistics are an essential part of the process, which will
take six months
of intensive work to produce. PSA 2 is seen in other regions
as a useful
lever for addressing disparity in other agendas such as science
policy and
relocation of civil servants. The southern regions need to
co-operate to argue their own case. This should be an ongoing
agenda item for meetings
of the South East Science and Technology Advisory Council
(SESTAC)
ACTION
John Parsonage to ensure PSA 2 is discussed at a future SESTAC meeting
Item 12 Chief Executive's Report
General Report
- The Chief Executive apologised for the length of his report, which reflects
the ever-increasing volume of activity within the agency. Members agreed that
it provided a useful summary for public information as it is published on the
website.
- There will be a fuller presentation on the results of the stakeholder
survey undertaken by MORI at the next board meeting. Overall, SEEDA has been
shown to be a top performer, ranked second to North West.
- Joint submissions for funding in all three growth areas have been made
with partners. The proposal for a higher education facility at Milton Keynes,
along the Hastings model, was welcomed.
Regional Selective Assistance Scheme (RSA)
- The report was noted by members, who were pleased to see the level of
assistance that had been offered since SEEDA took over responsibility for the
scheme from GOSE whilst acknowledging the budgetary strains caused by its success.
The management of RSA will be discussed by the audit committee.
Broadband Update
- The Chief Executive presented the quarterly update on the broadband programme
which reflected considerable activity in an ambitious programme. Broadband
has considerable educational and business implications, and requires bold expenditure
decisions above the original profile. Progress on spend can reviewed later
in the autumn if necessary as the programme develops. Additional resources
may be available from the communities plan.
- The board approved the increased rate of expenditure
on broadband to £5m
a year over the next three
years, which is an increase
on the allocation documented
in the Corporate
Plan.
Action
MPC to review in 6 months
Item 14 Operational Review
Finance Report
- The operational and programme report to the end of May were noted. The
year has got off to a good start with a higher rate of spend than in previous
years. The new systems being implemented will improve the accuracy of reporting
committed spend.
Annual Report and Accounts
- Marianne Neville-Rolfe presented the text of the Annual
Report for 2002-03. The numbers will be reviewed by the
audit committee before the board sees
the final version. The text
is longer than in past years, reflecting the ever-increasing
range and rate of activity.
In spite of Dti's preference for shorter
texts, the Board agreed with the Executive that the text should not be cut
and that the annual report should remain as a comprehensive public account
to the region. The Chief Executive's
review acts as an Executive
Summary.
- The annual report will be sealed by the NAO, after which it cannot
be changed, and laid before Parliament before the recess. The Chief
Executive monitors
the preparation of the published version to ensure
it is well presented.
- Members asked the executive to ensure that SEEDA's
statement of service
standards makes clear that either an acknowledgement (for issues
that require fuller investigation) or a full response is sent within five
days,
with longer replies within ten.
- The Board approved the annual report, subject to the amendments discussed.
Contracts Report
- The contract report was noted. There were no conflicts of interest with
suppliers expressed.
Item 13 AOB
- Members agreed that they found it useful to have the notes
from the RDA Chairs' meeting on their web pages.
Item 14 Date of Next Meeting
- The next meeting of the SEEDA Board will be on Wednesday 16 July 2003,
at SEEDA Headquarters, Guildford.
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