Public-private champion - Robert Hough, chair, North-West Regional Development Agency
PrintRegional development agencies are vital to England's economic recovery, argues the private company boss who is now the North-West's public investment chief.
It can't be easy being the new chairman of the North-West Regional Development Agency. Having batted away controversy over a potential conflict with his other role as non-executive director of major North- West landowner Peel Holdings, Robert Hough is now having to deal with a slashed budget and a nagging feeling of the RDAs' imminent demise.
The NWDA - the UK's largest RDA by budget allocation this year - will next year have its budget cut by 23 per cent, from pounds 397 million to pounds 305 million, partly due to the Government's diversion of pounds 300 million from the RDAs' budgets to pay for its Homebuy Direct scheme. The NWDA's spending on its key physical regeneration goal will drop by pounds 30 million over the next two years.
Despite the bleak prospect, Hough dismisses suggestions that regeneration projects will have to be canned. 'We will have to examine and prioritise the new budget allocation carefully, but at the moment I see no need for the elimination of any scheme that's under consideration,' he says.
In a Warrington office adorned with football memorabilia - relics from predecessor Bryan Gray's involvement with the National Football Museum in Preston - Hough argues that the depth of the recession means the impact on specific projects will not be as severe as it might have been had cuts been imposed during boom times. 'The reduction in the budget is counter-balanced by the slowing in the economy, which means schemes are coming through less quickly,' he says.
Nor does he believe that the NWDA should be allocating money to additional projects just because developers are desperate for assistance. 'We won't force forward any schemes that aren't viable or need excessive support,' he says. Nonetheless, the NWDA has funded a number of troubled physical regeneration projects, including pounds 3 million for Liverpool's Mann Island development and pounds 1 million for Penrith New Squares in Cumbria.
Hough accepts that, as a result of the recession and the agency's reduced budget, there will need to be a 'narrowing' of the NWDA's focus. In simple terms, this involves supporting the most vulnerable parts of the North-West's economy, while ensuring that leading businesses are well-placed to spearhead economic recovery, he says. To this end, the NWDA has a transitional Venture Capital and Loan Funding scheme in place, providing finance packages for businesses with turnovers of up to pounds 2 million. A database of 'areas that need particular attention' has also been drawn up. When pressed, Hough declines to reveal what these areas are, saying he 'won't disclose the weak spots' in the region's economy.
According to some critics, the NWDA is itself a weak spot, adding a needless layer of expensive bureaucracy to the region's regeneration. At the Conservatives' annual conference in Manchester this month, there were renewed calls for the party to abolish the RDAs should it win the election next year. Shadow communities secretary Caroline Spelman has said RDAs should be 'dismantled', while Sir Howard Bernstein, the chief executive of Manchester City Council, also appears to be warming to the idea that some form of change is needed in regeneration strategy.
Perhaps predictably, Hough maintains that getting rid of the NWDA - and RDAs in general - would be a mistake. 'I'm not here to lobby for the NWDA's continuation, but to articulate the role we provide for the region. In my view, without the NWDA it would not be as successful a region,' he says, pointing to a government-commissioned study published by accountancy firm PricewaterhouseCoopers earlier this year, which shows that the agency puts back pounds 5.20 into the economy for every pounds 1 it spends.
Hough is convinced that regeneration and economic development priorities should not be considered by councils acting alone. 'A cohesive partnership between the key players - that's the best way forward,' he says.
His key concern is Ocean Gateway, the North-West's largest regeneration scheme, which involves development along the length of the Manchester Ship Canal from MediaCity at Salford Quays in the east to Birkenhead and Liverpool in the west. That the landowner behind this pounds 50 billion project is Peel Holdings - a company for which Hough remains non-executive director - has been a source of some local consternation.
Hough rejects any suggestion that a conflict of interest may compromise his position. 'To the extent to which there is any conflict of interest, there is a clear protocol and where that requires withdrawal or disclosure, I will do so,' he says. He likens the issue to the sort of thing that crops up at council meetings every week.
Yet the scheme's size is unprecedented in the UK among private sector developers, meaning it has the potential to dominate the North-West's regeneration strategy for decades to come. 'My role with Peel has not caused any interference, nor do I anticipate that it will,' says a resolute Hough. 'The amount of attention it's received is beyond my expectation.'
While the kerfuffle over his twin roles seems to be dying down, there's scant evidence that the tumult in the economy will hand the NWDA chair an easy ride over the months ahead.
CV HIGHLIGHTS
1970: Qualifies as a solicitor.
1974: Joins law firm Slater Heelis.
1987: Appointed non-executive chairman, Manchester Ship Canal Company.
1989: Becomes executive chair of MSCC and executive deputy chairman of Peel Holdings.
2002: Appointed non-executive deputy chair of Peel Holdings and chair of Peel Airports.
2009: Becomes non-executive director, Peel Holdings, and chairman, North-West Regional Development Agency.
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