Regional Growth Fund: Has the East Midlands been short-changed again?

The government may face accusations that it has turned its own philosophy on its head with the results of the second round of bidding for the Regional Growth Fund.
This, if you remember, was the £1.4 billion pot of money designed to cushion the blow of the loss of regional development budgets.
The East Midlands didn’t do well in the first round of bidding. In Notts, only one small project was approved, cash which will help a science company expand.
But local politicians – and, significantly, the Derbyshire-Nottinghamshire Local Enterprise Partnership – comforted themselves that the lion’s share of the money, some £900m, was going to be handed out in the second round.
All sorts of local projects submitted bids, a number of them related to small business growth. In Notts, only one bid succeeded again, cash for the Worksop wire rope manufacturer Brunton Shaw..
The decisions released today suggest that the dead hand of national politics has played a part. Derby will, quite rightly, be celebrating the success of the £50m Derby City bid. But it’s difficult not to wonder whether the Bombardier fiasco was in the back of the minds of ministers signing off these decisions.
Giving Derby a second kick in the teeth would have been a political disaster. So good luck to Derby - £50m represents a massive opportunity to make up ground lost through a series of big business setbacks.
Yet it also appears to fly in the face of Conservative philosophy, which suggests the best way to grow a sustainable economy is to avoid an over-dependence on public money.
There was bound to be disappointment in this exercise. While £900m was on offer, the value of the 492 bids nationally totalled more than £3.3 billion.
The point has also been made before that the East Midlands isn’t viewed as a weak economy, so more money is likely to go further north (indeed, nearly 40% of the bids came from the North East and North West).
Yet the East Midlands does appear to have come off badly from this exercise. One of the key measures is the number of direct and indirect jobs which successful bids will support. In the East Midlands it’s 1,400 direct jobs, 7.800 indirect. This is smaller than any other region, including the booming South East.
Three other questions are raised by the RGF result in the East Midlands. One is where this leaves the LEP, which needed a big project to give it some purpose – does the Derby City bid provide that or not?
The second revolves around Boots and its enterprise zone. The company is thought to have put in a bid for £200m. It got nothing, so where does that leave plans for a zone launched personally by David Cameron and Nick Clegg?
It certainly raises the stakes on the fight to win government funding for the dualling of the A453, which Boots views as crucial to the future of its Nottingham site.
The final question is one which seems to have dogged so many civil service business decisions, most notably Bombardier: did it enforce the rules around RGF decision-making literally, or did it interpret them in a way which ensured a desirable result?

Give way...or give up?

It’s long been my belief that the way road signs are erected has little to do with the safe and organised flow of traffic and everything to do with council departments justifying their budgets.

On top of that, it’s turned into a nice little earner for the industry which makes them.

I reached that conclusion years ago after a drive down Southwell Road West in Mansfield where, in the space of around a quarter of a mile, it appeared someone had fly-tipped half of that year’s road sign production.

There were so many that it was impossible to take in all the advice they were giving. Worse, some repeated the same message so often that you began to wonder whether you were living in a goldfish bowl and going round in circles.

And on top of that, they made a clean, simple road look like officialdom had simply emptied a dustbin all over it.

It was confusing, it was annoying, it was wasteful. And it was just one road. You’ll all have your own favourite roads, dual carriageways, alleyways even, where signs are either completely overdone or totally unnecessary. Or both.

So, I was thrilled to hear yesterday that Transport Minister Norman Baker hoped to “dramatically reduce” the number of road signs in the wake of the biggest review into this nice little earner in 40 years.

Let me quote the Minister: “Sometimes the jungles of signs and tangles of white, red and yellow lines can leave people more confused than informed. This expensive clutter can also leave our roadsides looking unsightly and unwelcoming, so the changes I am announcing today will help councils cut the number of signs they need to use.”

I couldn’t have put it better myself – a clear acknowledgement that councils and highway authorities spray white and yellow paint around like it’s going out of fashion, and appear oblivious to the fact that every new sign is yet another unsightly distraction.

It sometimes seem as if highway teams lurk round corners giving virgin tarmac five minutes to set before they dive in and stab it to death with signs in triplicate.

So, Mr Baker’s announcement is going to bring an end to this ridiculous and expensive little industry, right? Not exactly...

Elsewhere in his announcement are a number of phrases which, I confidently predict, highway authorities will leap on and use as a justification for continuing to litter our countryside with ugly and unnecessary statements of the bleedin’ obvious.

I quote:

“These new measures will significantly cut red tape by allowing councils to put in place frequently used signs without needing to get government permission every time.”

Which may be translated at the town hall as: You’ve got licence to plant more signs.

Or:

“There will be new signs to alert drivers to parking spaces with charging points for electric vehicles and councils will be able to indicate estimated journey times on cycle routes, to help people plan their journeys.”

Which translates as: You can also plant a whole load of new signs alongside the ones you already litter the pavement with.

There is a miserable predictability about all this. A government minister admits there is a problem we’ve known about for years and announces clear and decisive action...which will make no difference whatsoever.

I would love to think councils will leap on this as an opportunity to do things differently at a time when they are painfully short of money.

The cynic in me suggests that they simply can’t stop themselves telling you what to do, and that the desire to preserve departments and budgets means this is a habit they can’t kick.

Cynicism aside, there’s a serious point to all this. Road signage and layouts have in places become complicated to the point where they are distracting and difficult to understand. Planting huge yellow signs which shout ‘Speed Kills’ seems almost ironic.

Roadsides are no place for sloganeering.

The Smell of Fear

I wouldn’t bother looking at the TV news if I was you. It’s not very nice. Draw the curtains and make a cup of tea instead.
Over on the continent, you have a sovereign debt problem about to be turned into a banking crisis by political incompetence. Which, I guess, is what happens when you try to get a room full of chalk and cheese to agree on anything.
Over in the USA, the Republican Congress’s determination to turf Barack Obama out of the White House means both sides can't agree on any long-term solution to the USA’s gargantuan budget deficit before the 2012 Presidential vote. Which is certainly brave, but may turn out to be stupid.
With those two elephants in the room, do we even need to talk about the UK’s flat-as-a-pancake GDP? Thought not.
Much as I’d like to dismiss the problems over in the Eurozone – and the political turmoil in particular is a gift to Europhobes – it presents a clear and present danger to our frayed economy. Despite all the talk of China, India, Russia and Brazil being the Next Big Thing in exporting, the amount of money we earn from them is dwarfed by what we routinely rake in from the likes of Ireland, France, Germany, Holland, Belgium etc.
They are our closest trading partners in every sense, and we need to do more with them.
So, imagine a situation where your business partner on the continent says he can’t pay you this quarter and isn’t currently able to finance any new orders. Unfortunately, that scenario is no longer completely in the realms of fantasy land.
The Eurozone crisis is a story of world financial markets ruthlessly chasing down governments and banks who haven’t given a straight answer to the question ‘When are you going to pay off your debts?’. Greece borrowed so much that, whatever the eurozone might pretend, markets have already decided it can’t pay.
So the next question is what happens to the people it and other debtor nations owe money too? That’s where some European banks come in, and they now find themselves in the same situation that UK banks did in 2007-2008: carrying huge debts that they do not have enough of their own capital to cover.
This, though, isn’t the problem. That lies with European governments. Between them, they can decide to let Greece default on its debts and provide banks with all the funds they need to cope. It won’t be pretty, but it can be done in an organised fashion.
It can, but will it? European institutions are not used to taking decisions quickly, when you dissect those decisions they often turn out to be fudges open to localised interpretation, and there is a history of allowing exceptions through opt-outs or different groupings.
What do world financial markets do when confronted with the failure to answer serious questions about debtors? They take the decision themselves.
That’s what is happening at the moment. When indebted European banks go out into the money markets and seek routine funding to support their cash flows they are being told ‘Fine – but the price has gone up’.
This is exactly what happened here in 2008 when the London Interbank Offered Rate – what banks charge each other for lending money – shot up overnight. UK banks responded by clamping down on lending out the money in their own accounts, and the results of that are still being seen in our own dismal GDP figures.
You’ve seen the Bank of England announce today that it will drop another £75 billion into the UK economy through further quantitative easing. That will help us in the medium to longer-term, and may assist some measures of business confidence.
But only when the European question is answered will we be able to look forward.
The Eurozone may yet get cajoled, pushed and kicked into a categorical pledge to support financial institutions come what may and to accept that Greece won’t pay back some of its debts.
That in itself won’t be a get-out-of-jail card. But the alternative is…well, if the alternative happens I’d send the TV set back.