Government averts threat of huge EU fines

The  Labour Government left a terrible mess behind in terms of £230 Million fines from the EU concerning the incompetence of regional quangos, of the Government Offices for the Regions and the Regional Development Agencies.

In Opposition Eric Pickles said:

 "Having to pay out £230 million in fines will devastate funding for regeneration and business support at a time when businesses are struggling and the public coffers are empty. This is a financial scandal... Labour ministers need to come clean over the nature of these so-called financial irregularities, and state whether this is fraud, maladministration or incompetence at the heart of Government."

Grant Shapps has now reported to Parliament on progress being made to deal with  this problem:

Free Wi-Fi on the way for Westminster and Kensington & Chelsea

News of an exciting deal between O2 and two neighbouring councils - Westminster and Kensington and Chelsea - to provide free Wi-Fi across the boroughs. Just the sort of project to  help get the economy growing.

It means that Europe’s largest free Wi-Fi zone will be established in time for the Olympics. Wi-Fi access points will be installed in street furniture, initially to a small number of areas but eventually will entirely cover both boroughs. No cost is being incurred by the Council Taxpayer or central Government. In fact it will be a source of revenue for the Town Halls - at least £3 million for Kensington and Chelsea.

Yet I suspect it will do more for economic regeneration that endless bureaucratic state schemes.

O2 chief operating officer Derek McManus said:

“This ground-breaking deal is the first of its kind in the UK and will see us deliver high quality connectivity across London in time for London 2012.

“Our longer-term aim is to expand our footprint of O2 Wifi, which is open to everyone, and also intelligently enhance our services at street level, where people need the network the most.

“Our £500m annual network investment programme is focused on integrating new layers of technology into the existing network to enable a seamless and sustained customer experience.”

Eric Pickles cancels new parking tax on weekly shop

Local Government Secretary Eric Pickles today stopped plans to hit local residents with a new backdoor parking tax on their weekly shop. The last Government was previously considering proposals to levy a new tax on supermarket parking places by increasing business rates on them, on top of existing rates bills.

Some supermarkets were planning to pass on this new parking levy directly to customers, by listing it as an explicit tax on till receipts. Others shops would have passed it on to shoppers through higher prices or as a car park charge.

The new Government has this week rejected these plans for new stealth taxes. Instead, new powers will be given to councils to introduce local tax cuts – which will include allowing small shops and supermarkets that sell local produce to be given business rate reductions to help support the local economy and local farmers.

The Localism Bill, published this week, contains new powers to let councils set local discounts on business rates, provided that they are funded locally. This would give councils the ability to offer business rate discounts that respond to local circumstances, support particular local businesses or encourage certain local good and services.

Councils should do more on rural broadband

Cllr John Andrews, a Conservative councillor on Colchester District Council, says getting broadband to villages would be a genuine investment. BT need a nudge.

Most people know the great importance of High Speed Broadband in rural areas to increase the attractiveness of sites for businesses with high value add to generate wealth in the community.  My definition of High Speed suitable for business is a line at no more than current business ADSL line costs offering UPLOAD speeds of around 10 to 30 Million bits a second and somewhat faster DOWNLOAD speeds.  The relatively high ration of UPLOAD to DOWNLOAD speeds is thought necessary to make
information provision (which might include software and media distribution, complex plans and designs and suchlike) attractive from remote suppliers and thus give the rural businesses comparability with the best in other countries.

A fairly recent meeting was held at which a nearby County Council CEO - by all accounts a capable Officer - was present to discuss such matters with BT, effectively the monopoly suppliers of exchanges and 'last mile' telco connections to most premises in the UK.

The CEO reported at a more recent event being aghast at BT's competence as a lean mean competitive technology company when 17 (seventeen!) BT people turned up needing to be introduced to each
other by said CEO.  No wonder BT is dragging its heels!  With all those salaries, benefits, expenses and sick pay to fund clearly there's no room to fund rural high speed broadband for vital economic - and green gains.

Scrap the RDAs

The Government plan to "replace" Regional Development Agencies. Glyn Gaskarth says they should simply be abolished.

The UK Government has an almost £160 billion annual budget deficit. Regional Development Agencies (RDAs) cost around £2 billion per annum. They should be abolished because they have failed to meet the two objectives they were originally set.

These were:

1. To increase the rate of economic growth in all the English regions. With the exception of London and the South East, the regions experienced higher economic growth (per head and in total output) in the seven years preceding the RDAs creation than in the seven years after.

2. To reduce the disparity in economic growth rates between regions. The Centre for Cities reveals that RDAs have failed to achieve this. During the first seven years of the RDAs existence (1999 to 2006), the Greater South East economy grew by nearly 18 per cent. The rest of England's economy grew by just 15%. Therefore the gap persists.

In fairness the RDA website does not claim to have achieved the objectives the agencies were originally set. Instead it lists ten  ‘success’ stories to highlight their good work. A selection of them is contained below. Regrettably these stories reveal waste rather than achievement. They are available in full here.

How to ‘Do More For Less’ and Still Win Inward Investment

Inward investment consultant Adam Breeze of Breeze Strategy says local councils can cut out the waste in their place marketing and still attract new jobs and investors to their area.

The UK taxpayer currently spends £250 million every year on place marketing and investment promotion activities to attract new companies. Some of this represents excellent value for money; a lot of it does not.

Properly done, inward investment programmes are one of the few proven ways to attract new money and better jobs to our towns and cities. Smart local authorities recognise the potential in making themselves
attractive to potential investors, but simply throwing more money at it, misses a unique opportunity to improve effectiveness and at the same time, cut the burden on taxpayers.

Investment promotion doesn’t have to be expensive. Careful targeting, intelligent research and an informed approach to high-growth businesses can be achieved with a small, business-savvy team, armed with an appropriate travel budget. Where expenditure can run out of control is in the associated paraphernalia of place marketing.

Plea to fund regeneration schemes on the "never, never"

City Council leaders in Birmingham, Newcastle, Liverpool and Manchester have called for the Government to allow regeneration schemes to be funded by Councils issuing bonds. The logic being that the infrastructure schemes would increase future tax revenues and so allow the bonds to be repaid.

It all sounds rather complicated although apparently such "tax increment" financing schemes have been tried in the United States. The property industry are keen for more money to be poured on, pointing out that the recession has meant regeneration schemes stalling as the private sector capital available has diminished.

But is the answer really for the state to just borrow more so that the schemes can go ahead anyway? What if the scheme chosen is flawed and does not result in the increased tax revenues projected?

What Tory councils could learn from Mayor Bloomberg on tackling dependency

The Conservative Councils Innovation Unit have produced a paper published by Localis on what we might learn from Mayor Bloomberg of New York, in terms of mitigating the recession. Often Councils are allocated bits of money from central Government which have to be spent on regeneration projects. My own view is that much the best regeneration project would be that offered by the Conservatives - the chance to offer lower business rates to attract new business and then to keep some of the extra revenue provided by those new businesses.

But we are where we are. So we should make an effort to get the best value for money from regeneration spending as possible. Bloomberg is very much focused on the "hand up not a hand out" school. For instance they will advise people on how to pay off their own debts rather than pay them off for people. "The best welfare programme is to get a job," says his Head of Community Affairs Lolita Jackson. 

The paper also shows how projects are often in partnership with the private sector. Donations are raised via the Mayor's Fund to Advance New York City. If people choose to donate to top up the funding it is an encouraging sign that it is good value for money. The emphasis is on practical help - such as websites offering job vacancies, a financial advice hotline, breakfast clubs in schools. On housing the emphasis is on buying up and restoring derelict empty properties rather than new building.

What makes a city an investment destination?

A company called the Communication Group is inviting councillors to come along, at a cost of £675, to a conference in March on the subject Cities:The Secret of a Winning Destination. I understand they are thinking not just, of even primarily, of a city in terms of a holiday destination but more as a place to invest, for instance, a shopping centre or a sports club.

Aside from the cost (to you) of attending, regular readers will know I am a sceptic as to what these conferences achieve. At least with this one the subject is valid enough. However those wanting guidance on how to make our cities more attractive to investors but who would rather not pay £675 to go to this conference will find there are umpteen think tanks that have produced reports on the subject available to download for free. Often they seem to suggest looking at Vancouver. There is Success and the City from Policy Exchange (not the one that was rude about Liverpool.) It mentioning, for example, the low crime rate in Vancouver. It adds that:"Much like Manhattan, Amsterdam or central Paris, Vancouver almost forces you to walk."