§ Mr. Ridley
In autumn 1989, the Department and the board of English Estates jointly commissioned consultants to advise on certain aspects of the corporation's activities. I have considered the consultants' report with the board and have now determined the future strategy for the corporation.
The Government policy is to ensure that suitable premises and sites are available to meet the needs of new and growing businesses in the assisted areas. Wherever possible this should be done through private sector provision. English Estates will continue to make an important contribution to regional policy, but I now want it to move away from direct provision wherever possible, and in many areas to operate primarily as a facilitator, using a range of mechanisms to draw in private sector developers.273W
I am introducing two changes which will further our policy of encouraging the private sector to play a greater part in the provision and management of industrial and commercial property in the assisted areas.
First, I propose to introduce a new grant scheme which will be operated by English Estates mainly through a negative tendering procedure. I shall be discussing details with the European Commission. This will be a new, powerful weapon in English Estates' armoury of incentives to draw in the private sector. The corporation will also continue to use the weapons already available: provision of serviced sites in areas where there are difficulties of land assembly and servicing; provision of market information to demonstrate the opportunities available in the assisted areas; and short-term rental guarantees and joint ventures with the private sector.
There will be some areas where these incentives will still not be sufficient to attract private sector interest. In these cases English Estates will have a residual direct development role. But I hope that with the availability of grant and other incentives the areas of English Estates' direct development will continue to narrow over time, as market conditions allow, in line with the policy set out in 1988.
I have asked English Estates to use the incentives energetically to promote the recent signs of growing private sector interest, in line with Government's aim that in time the normal working of the property market should of itself ensure an adequate supply of industrial and commercial floorspace in all parts of the assisted areas.
I have asked English Estates to aim for an assisted areas programme of up to £52.8 million in the financial year 1990–91, including provision for the Sunderland special programme. In addition, it will have a programme of up to £10.1 million for the provision of managed work space in inner-city areas of England.
Second, English Estates' role as a landlord is peripheral to its main regional policy role. I want to release the capital tied up in the DTI-funded portfolio. The private sector is ready to buy and manage property in these areas. I have, therefore, asked the corporation to plan to sell its DTI-funded assets in the assisted areas. I consider that the broad objectives of maximising the return to the taxpayer from sales and encouraging the involvement of a wider spread of private sector interests, can best be met through a phased sale, with the intention that this should be spread over a period of around three years and with the rate of disposal adjusted to market conditions. Wherever in English Estates' commercial judgment it is practical to do so, in line with these objectives, existing tenants will be given the opportunity to acquire their premises in advance of sales to investors.
I do not propose any change in the role of English Estates in the redevelopment of the former naval dockyard at Chatham.
English Estates' activities on behalf of the Rural Development Commission are being considered separately.