BIS Informs, Europe Rules

Interesting Statistics, Honestly

BIS have published a helpful breakdown of RGF first round bid statistics for us to pore over.

The final figure is 464 bids totalling £2.78bn if all were approved. That sum is coincidentally not far off the last uncut full year of RDA’s. So it would seem that the need and bidding appetite for regeneration is as strong as ever across the country. Unfortunately the first round bids add up to twice the total available for the entire lifetime of RGF.
So what can we glean from the BIS information? Firstly, not everybody read the instruction manual in so far as 4% of bids were for less than the £1m minimum threshold. The fate of these 19 bids should be sealed but if some have been submitted by plucky little private sector or third sector bodies then the outcome may not be so certain. Lord Heseltine may turn out to have a soft centre.

At the other end of the scale another 4% proportion of bids are for over £25m. 18 proposals in all but the BIS analysis does not make clear how much over £25m these bids go. 1NG, the Newcastle Gateshead city development company, is trying for a bid of £50m. Is this the single largest bid? Nearly two thirds of bids are for less than £5m – 299 proposals in all.

With no hint of irony BIS has broken its analysis down by the old nine regions. Midlands and the North have put in the most bids representing 75% of the total. Intriguingly 76 bids have come from organisations other than LEPs and we want to know all about these and how they compare in quality , imagination and diversity to the LEP efforts.

Want to Know More? So Do We

It is difficult to read a great deal into the BIS breakdown without a more qualitative analysis of the bids ie what type of proposals? Capital or revenue? People or places? How many bids are business led? Lots of questions asking for answers and, unless there are commercial confidentiality considerations, BIS should ideally publish all proposals and at the least a more refined analysis to follow this first foray. It might make our preparations for Round 2 more rewarding. Sir Ian Wrigglesworth deputy chair of the independent advisory panel for the RGF, has hinted at some round 1 feedback to inform round 2 bidding.  Once again, one would hope that the opposition or select committee could be asking some more questions.

The speed of the RGF round 1 process will inevitably have restricted capacity to develop and negotiate entirely new large scale projects. The bigger, capital proposals are likely to have been in development for some time and none the worse for that. 85% of bids were for less than £10m, mostly less than half that sum. BIS has whetted our appetite and it would do no harm to reveal some more information. We should be allowed to examine and understand the totality of proposals, warts and all.

Nil Points

The nasty rumour circulating is that up to 75% of RGF bids have fallen foul of State Aid rules.  If that is the case then something has gone drastically wrong and much time, enthusiasm and money has been wasted in the negotiation and preparation of unusable proposals. Too early to pass judgement at the moment but we should be preparing the lab for the autopsy. If State Aid was the cause of death then we should be looking to press charges.

RDAs were adept at keeping on the right side of EU rules. A little forethought and less precipitous politicking on the part of government and there might have been some transitional expertise from RDAs to support RGF bids. Expertise on the complexities of EU rules and regs used to exist in the regions in strength and the private sector in particular has consistently found it useful in keeping on the right side European funding support. A lot of English companies have benefitted from public funding because their local RDA knew how to handle State Aid rules. Sometimes you don’t notice the good things until they’re gone.

Cable and Pickles can’t say that they weren’t warned about the dangers of haste. Without an orderly transition from RDAs to LEPs some cracks were likely to appear and people with the necessary skills were going to fall through them.

Richard Cohen
22 Feb 2011