Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Ninth Report


1  INTRODUCTION

  1.  In the 2002 Spending Review, the Chancellor announced a new Public Service Agreement target to,

    "Make sustainable improvements in the economic performance of all English regions and over the long term reduce the persistent gap in growth rates between the regions, defining measures to improve performance and reporting progress against these measures by 2006."[1]

This target with its commitment to reduce the gap between the English regions marked a distinct shift in emphasis in Government policy.

  2.  There is no doubt that action to tackle regional disparities is needed. Six of the nine English regions have consistently grown at less than the UK average, a gap which is said to have persisted since the 1920s.[2] As we heard from the North East Regional Assembly, the regional imbalances create problems for all regions,

    "The persistent gap in prosperity between the regions of the United Kingdom is socially unjust and economically inefficient. It is unacceptable that someone born in the North East of England is likely to have a shorter life, fewer qualifications and earn less than someone born in the South East. It is also unfortunate that those in the South East suffer poor quality of life due to overcrowding and congestion. And, in an era of intense global competition, it is simply not viable that large parts of the UK should continue to contribute less to the national economy than others."[3]

  3.  As the quote from the North East illustrates, the problems caused by economic imbalances extend across public policy. For example, during this and our predecessor Committee's inquiries into Empty Homes, Affordable Housing and Planning for Sustainable Communities it has become increasingly apparent that problems in the housing market are symptomatic of regional disparities in the economy and are best not addressed in isolation. Similarly in this inquiry we have heard how economic differences are at the root of health inequalities.[4]

  4.  We therefore resolved to undertake an inquiry into reducing regional disparities in prosperity, focusing in particular on the Government's new Public Service Agreement Target. Our terms of reference were announced on 6 December 2002.[5] They were to consider:

  • the importance of achieving this target,
  • whether and how the target can be achieved with current and proposed policies, including:

    • the impact of current regional strategies;
    • whether the introduction of the nine Regional Development Agencies has contributed towards a reduction in, or increased the disparities between the regions;
    • whether the proposals for regional assemblies will make a difference to the achievement of this target;

  • whether a coherent national policy can be achieved; and, if so, how;
  • what lessons can be learned from past regional policies;
  • what changes to policies are required to achieve the target, including whether Government departments, agencies and non-departmental public bodies should be moved to less prosperous regions; and
  • how much additional funding is needed in the poorest performing regions.

  5.  In response we received 61 written submissions and took oral evidence from 35 organisations over one evidence session in the North East, one in the South West and four in London. Our inquiry concluded with evidence from the Secretary of State for Trade and Industry, Rt Hon Patricia Hewitt MP, the Financial Secretary to the Treasury, Ruth Kelly MP, and the Parliamentary Under Secretary at the Office of the Deputy Prime Minister (ODPM), Christopher Leslie MP. We also visited Germany. We wish to thank our advisers David Coats, Adrian Healy and Professor Kevin Morgan. We also wish to thank all those who gave evidence to the Committee and the North East Regional Assembly and those we met in Germany for their hospitality. The Treasury Sub-Committee has recently taken evidence on Regional Spending and the Trade and Industry Committee is currently carrying out an inquiry into Support to Business from the Regional Development Agencies.

  6.  In a democracy, it is necessary to have clear and accurate information, so that informed decisions can be made. As our inquiry has progressed, it has become clear that information about the economies of the English regions is limited. Not only does this mean that that regional policy decisions are being made on the basis of inadequate information, it also undermines the Government's approach to monitoring performance against targets, if the indicators chosen are not robust. We deal with the issue of information in greater detail in Section 2 of this report.

  7.  Our report looks firstly at the differences in prosperity between the English regions, the rationale for the introduction of the new Public Service Agreement target and how it is to be measured. We then look at the changes needed in central Government to put in place the building blocks for economic growth in the less prosperous regions, the measures available to the regions and the role of regional bodies.



1   Chapter 5, 2002 Spending Review, Public Service Agreements White Paper, HM Treasury, 2002 Back

2   Chart 1.1 and Paragraph 1.7, Productivity in the UK 3: The Regional Dimension, DTI / HM Treasury, 2001 Back

3   North East Assembly, RRD09 Back

4   Dr Kirkup, Q772 Back

5   ODPM: Housing, Planning, Local Government and the Regions Select Committee Press Notice 11, 2002-03 Back


 
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