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

Memorandum by The North East Assembly (NEA) (RG 89)


  1.  The North East Assembly (NEA) is one of the English Regional Assemblies. The NEA was set up in 1999 and has 73 Members, representing a broad range of sectoral interest and stakeholder groups, and providing a level of decision-making and policy development for the region that other regional bodies do not have.

  2.  This memorandum addresses the terms of reference set out by the Committee, paying particular regard to the actual and potential role of Regional Assemblies—focusing specifically on the issues of improving accountability at the regional and sub-regional level; contributing to effective arrangements for the management of services; the potential impact of the emergence of "city-regions"; and new forms of inter-regional co-operation—whilst at the same time seeking to address the Inquiry's central question.

  3.  The NEA is continuing to develop its role as a strategic focal point in the region. Through our breadth of membership, we have a unique place in addressing regional priorities. We have a key role in strengthening relationships between regional organisations and with all sectors of the community. We value the knowledge and experience of all regional stakeholders and we are working towards giving a voice to all sectors of the community and enhancing their capacity for engagement at regional level. We work closely with a wide range of regional organisations and stakeholders to develop a framework for representing the region's views. This work makes us better able to identify and response to the needs of the region.


  4.  In more recent years, successive governments have created and re-created tiers of administration below national government, but above the local authority level to meet the needs of an ever more mobile society. Regionalisation of public administration accelerated after 1997, the Government maintaining that:

    " . . .there has been a growing recognition that there are issues, such as planning and economic development, for which some regional decision-making is necessary. This is because:

    —  a "one size fits all" uniform national solution will not address the specific needs and opportunities of a region;

    —  local authorities and other local organisations may not be best placed to take effective action because, for example, key decisions fall outside their boundaries and their own decisions may have consequences for neighbouring areas; and

    —  there needs to be better joining-up across and between linked policy areas, with better overall outcomes both for the region and for England as a whole."[106]

  5.  More broadly, according to the Government, "the best way to overcome regional disparities in productivity and employment rates is to allow each nation, region and locality the freedom, flexibility and funding to exploit their indigenous sources of growth".[107] Thus, "it is not possible to run a successful economic policy without decentralisation and devolution to regional and local levels".[108] This analysis, which is supported by substantial Government research, continues to provide the basis for the important tasks of regional coordination, integration and representation.


  6.  In this context, the roles and functions of Regional Assemblies have become involved in fields where individual local authority actions are likely to have limited impact and where a regional strategic view, or voice, is required. The roles and functions and their statutory or other basis are set out in Appendix 1. A study for the ODPM outlined the progress made by Regional Assemblies and the distinctive role that they have developed since their inception. These include:

    —    Achieving a degree of political consensus in each region over the role and legitimacy of each Assembly, while attaining a "critical mass" in terms of staffing and organisational capacity and capability;

    —    Fostering strong regional partnerships with local authorities and with a wide range of other stakeholders;

    —    Facilitating the integration of land use and transport planning issues at the regional level, through Regional Planning Guidance/Regional Spatial Strategy (RPG/RSS) and the development of Integrated Regional Strategies.

    —    Developing and demonstrating developed and demonstrated constructive and influential scrutiny roles, primarily in relation to Regional Development Agencies (RDAs).

  7.  In general, Regional Assemblies have exerted an increasing influence in the field of regional policy-making and co-ordination, developing skills in intra- and inter-regional collaboration, seeking to increase awareness of their work within their region, and to make the case for their region on the national and European stages.[109] Recent examples of a pro-active policy influencing role approach taken by the NEA include:

    —    Successful lobbying of David Miliband, Minister of Communities and Local Government, requesting that criteria for determining transport allocations in Regional Funding Applications (RFAs) be amended to reflect economic regeneration and social deprivation issues.

    —    Raising the Department for Transport's awareness of the implications for regional economic development of the Highways Agency's use of Article 14 directions.[110]

    —    Successful lobbying for the RDA's funding streams from central government departments to be rationalised and placed in a "single pot".[111]

    —    Successful lobbying and support for the recent changes to the planning system which made the Regional Spatial Strategy (RSS) a statutory document.

  Policy Integration

  8.   Regional Assemblies have begun to acquire, additional strategic responsibilities, which are most suitably carried out at the regional level. Most notably, Assemblies have gained important new responsibilities for integrating housing and spatial planning activities. The Barker Review on Housing recommended the merger of Regional Planning Boards (now incorporated into Regional Assemblies) with Regional Housing Boards (RHB) on the basis that "Within the current institutional framework at the regional level no organisation has overall ownership of the regional housing market".[112] Barker noted that hitherto Regional Planning Bodies (RPB) have determined the scale and allocation of regional housing provision over a 15 year period in the Regional Spatial Strategy (RSS). The RHBs have advised on the allocation of funding for social and other sub-market housing for a 2-3 year period, private sector renewal and how to tackle low demand in a Regional Housing Strategy (RHS). The Regional Economic Strategies (RES) produced by RDAs have had increasingly important implications for housing demand and spatial planning to meet the needs of the regional economy. Barker concluded that, "All these strategies should, of course, take account of each other but they often use a different evidence base and operate over different timescales".[113] Following consultation, the Government accepted the case for merging the functions of RPBs and RHBs arguing that the merger will help regions to take a more strategic view of housing and infrastructure needs.[114]


  9.  Whilst supportive of the government's Regional Funding Allocation (RFA) proposals(see para.15), the need for improved skill levels is a critical issue in the region, and one on which significant resources are allocated through the Learning and Skills Councils (LSC). Therefore, the NEA has argued that these should also be included in the RFA process. Likewise, it has also argued that if transport integration is to be tackled effectively, then rail infrastructure and services should also be included.

  10.  The NEA and the Regional Housing Board agreed their approach to the merger in March 2005. This will involve incremental changes; the Assembly member will chair meetings of the Housing Board which will have delegated decision-making powers, and the secretariat will become Assembly employees. There may also be some changes to the Board membership, for example to include an Economic and Social Partner (ESP) Member as suggested by David Miliband. The NEA has made it clear to central government that this merger is subject to the necessary resources being made available.

  11.  Regionalisation has continued, for instance, the Department for Education and Skills (DFES) has strengthened its presence in Government Offices. Government Offices (GOs) now contain representation from 10 departments (compared to three originally), and in 2003-04 were responsible for over £9 billion of Government expenditure. In addition, there has been a consolidation of the extensive quango portfolio at the regional level, which remains accountable to Ministers and, ultimately, Parliament. Within North East England, there are around 25 quangos (excluding the NHS)[115] with a more or less explicitly regional mission, and with an expenditure of over £2 billion. Generally, the range of quangos has seen a shift to align more with regional boundaries and has experienced a degree of administrative devolution since 1997. Thus, the bulk of powers exercised at the regional level in England are in the hands of central government and its agencies. While such quangos might be investigated to see whether their functions could be devolved to the local level, in general such agencies exercise functions that are best exercised at the regional level, specifically because this would help to ensure that their overall objectives fit in with the region's strategic priorities. Thus, there is a strong case for Regional Assemblies scrutiny powers to be extended to cover regional quangos with the aim of achieving further integration of regional strategies.

  12.  In a situation where sub-national government and governance remains complex, fluid and uncertain, but important decisions continue to be made at the regional level, Regional Assemblies remain the only bodies that bring together such a wide range of interests (from local government and MPs and MEPs, to the education, private, community and voluntary, faith, trades' unions sectors) and are therefore capable of taking a region-wide, strategic view of broader development issues and providing a voice for the region in its relations with central government. Indeed, Regional Assemblies have developed the skills and capacities to undertake this task through their specific involvement in a wide range of partnerships.


  13.  A study for the ODPM reported that many Assemblies are increasing the degree of innovation with which they carry out scrutiny exercises, which has developed primarily as a partnership between the Regional Development Agency (RDA) and the Assembly. The report also suggested that this has worked best where the Assembly has built a strong relationship with the RDA. The RDA takes the views of the Assembly very seriously, and joint working is leading to real changes in RDA approaches. In several English regions there is evidence that the involvement of the Assembly has led to particular themes (such as sustainable development, social inclusion, and community development) featuring more prominently in RDA strategies and initiatives. The study concluded that Assemblies are having a positive influence on RDAs, helping ensure that RDAs have regard to particular policy issues that they might not otherwise do so and that Assemblies are playing an important role in considering the collective views of partners, and articulating them in a constructive, evidence-based and persuasive manner.[116] For example, in carrying out its scrutiny exercise into Small and Medium-Sized Enterprise Survival,[117] the NEA's evidence gathering sessions included discussions with regional entrepreneurs who had experienced business failure, which gave an unparalleled direct insight into why businesses failed, the stigma of failure and how business support services could be rationalised to help ensure a greater survival rate. This influenced the development of the business brokerage model of simplified access to business support now being implemented by One NorthEast.[118]


  14.  Responding to recent guidance from David Miliband, Minister of Communities and Local Government, the NEA has recently reviewed its working practices with a view to streamlining them and making them more efficient, while at the same time maximising the involvement of stakeholders. The principal outcome of this review was the decision to create a small Executive of 15 Members (reducing its size by just under a half), comprising nine elected local authority Members and six Members who are Economic and Social Partners. The Assembly is focused on its core activities, such as the statutory responsibilities of regional planning and scrutiny of the RDA, integrating regional strategies and managing the housing and transport boards to ensure integration and value for the region.


  15.  Regional Assemblies have also been instrumental in bringing together key agencies to develop a strategic approach to regional engagement with Europe. For example, the NEA provides the secretariat for the Regional European Strategy Group (ESG). Established in October 2004, ESG is made up of senior representatives from regional organisations and MEPs, and provides strategic direction for the region's engagement with Europe. In November 2005, after 12 months of development and consultation, ESG launched the North East England in Europe: Framework for Action.[119] This has enabled the region to focus on the most important issues, and maximise benefit for the region from engagement with other European countries. The Framework for Action was cited as an example of good practice and described as a forward-looking strategy by Alun Michael, Minister for Industry and the Regions.[120] The NEA also works actively with the English Regions Network (ERN) in influencing the EU policy agenda. One recent example was the launch of a joint policy document with ERN and the RDA network to demonstrate the contribution that English Regions had made to achieving the Lisbon Agenda.[121]


  16.  The integration of regional strategies is now a prime task of the Regional Assembly and is vital for ensuring the effectiveness of current arrangements for managing services at various levels and their inter-relationships. In July 2004 a revised Regional Sustainable Development Framework (RSDF), the "Integrated Regional Framework (IRF): Achieving a better quality of life" was published. The sustainability objectives that were developed in North East England's first RSDF remain central to the IRF. They have been reinforced by updating the associated indicators and targets, thus enabling the region to monitor progress towards achieving the objectives. It provides the guiding principles for integrating sustainable development within mainstream policy and decision making. It also commits us to becoming a more sustainable region, and sets out how this can be achieved by partners and stakeholders at all levels. The IRF comprises 17 themes and a series of indicators to measure progress. The 35-point Integrated Regional Matrix is a checklist that businesses and other stakeholders can access to help achieve the shared vision for the region.

  17.  In response to the consultation and informed by the changing agenda and the need for greater integration of the many regional strategies, the IRF now presents a shared vision which will ensure that those strategies share a common purpose in working towards, and achieving, a more sustainable future for the North East. The IRF provides the framework to guide the development of strategies, plans, programmes and policy decisions throughout the region. It can help identify and exploit all opportunities and mitigate any potential negative impacts to sustainable development. The NEA played an active role in developing the IRF, which was subsequently considered and strongly endorsed by its Members. SustaiNE, the region's sustainable development round table, has been delegated the responsibility for preparing, reviewing and monitoring the IRF. Progress is reviewed through the preparation of the IRF Annual Monitoring Report. The Assembly is represented on the SustaiNE Board. The officer working group which supports SustaiNE is chaired by an Assembly officer.


  18.  The Government's new proposals for establishing Regional Funding Allocations (RFAs) covering housing, economic development and transport present a new opportunity and challenge for the regions. The desire to improve the integration of transport, economic and spatial development strategies was signalled in the 2004 Spending Review and the government launched a consultation, alongside the 2004 Pre-Budget Report, on how it proposed to implement regional funding allocations and called on regions to submit their advice to the Government by January 2006, among other things demonstrating evidence of stakeholder engagement and levels of support for advice as presented.

  19.  The proposals for Regional Funding Allocations (RFA) contain two new innovations:[122]

    —    for the first time, there will be regional transport funding allocations for three years up to and including 2007-08, in line with the regional housing and regional economic development allocations already published; and

    —    indicative longer term planning assumptions for regional allocations, beyond the three years of the current spending review, across the three funding streams.

  The advantages of this approach are evident. These clearer planning assumptions should provide a basis for regions to advise the Government on regional priorities, on the basis of realistic funding assumptions, in order to improve future spending decisions and afford regions the opportunity of increased influence through the Spending Review over expenditure. Assemblies have an important role in contributing to the alignment of regional strategies for transport, housing and economic development and the production of a shared set of realistic priorities that are affordable and deliverable that are based on genuine consensus.

  20.  The NEA holds 50% of the places on the Interim Regional Transport Board (IRTB) which was established to deal with transport priorities, and the Housing and Economic Development priorities are dealt with by the Regional Housing Board and ONE NorthEast respectively. The final RFA report will also be considered by the NEA.


  21.  There is clearly merit in developing inter-regional growth strategies as means of tackling regional disparities. Given the scale of the output gap[123] between the Northern regions and the rest of the country and given the shared nature of some problems and potentials, the case for the Northern Way is strong. The Northern Way is likely to succeed if it looks at the North as a whole in order to identify "pan northern investments", which will add value to that which is being undertaken in each of the individual regions. The Northern Way will succeed if it complements the three Regional Economic Strategies, as these define the key proposals to take forward economic development in the three regions of the North. It is also vital that it ensure that each action is taken at the appropriate level—pan northern, regional, city-regional, or more local.

  22.  There clearly are policy issues that are pan-regional in scope and require a coordinated approach that operates across the three existing regions. Key issues raised in the Northern Way that would require this approach are a Northern Airports Strategy, critical transport infrastructure networks and science policy. There is a strong case for policy analysis and strategy formulation for these critical inter-regional policy issues to take place at a pan northern scale, involving close cooperation between agencies in the three regions, if the government's target of closing the economic output gap between the northern English regions and the rest of the UK within the next 25 years is to be met.[124]

  23.  The NEA has been fully involved in the preparation and implementation of the Northern Way. Each of the three northern Assemblies has a Member on the Northern Way Steering Group, and officers are involved on the Strategic Policy Group, which advises the Steering Group. There are also a number of other working groups and city region development groups that Assembly officers attend, and joint research has been commissioned to inform the Northern Way and the Regional Spatial Strategies. A Transport Compact has also been established involving both Members and officers.

  24.  The economic contribution of city regions is recognised in the Northern Way. The interest in city-regions stems from a belief that cities "drive" economic competitiveness and that cities generate economic benefits for their hinterlands. The city-region concept is also an acknowledgement that individual local authorities are too small to compete in the national and international competition for investment. These general arguments are widely accepted by policy-makers, although there are still large gaps in our understanding of the economic processes underpinning city-regions, both nationally and in North East England. Moreover, there is little research into what might be the most effective forms of city region governance in the English context.

  25.  The city region concept is beginning to be embedded in thinking about economic development in North East England, most notably through the mechanism of the Northern Way. The larger part of our population lives in one of two city regions: Tyne and Wear and the Tees Valley. There appears to be little appetite for, nor a strong consensus about, major revisions to governance arrangements (including redrawing local authority boundaries) that might be associated with the economic case for city regions. Whilst there is some distance to travel before a consensus is achieved in relation to appropriate forms city region governance in North East England, there is general agreement that existing regional institutions have an important role to play in helping shape city-region development plans, which are seen as being supported by the Regional Economic Strategy and the Regional Spatial Strategy. By contrast, within some city regions, there is a debate about whether some economic development functions need to be devolved upwards to the city region level from the local level.


  26.  While recognising the economic potential of city-regions, it is important also not to adopt an approach which overlooks the importance of intra-regional variations in performance and potential.[125] Similarly, in improving the economic performance of city-regions, there is a need to ensure that the needs and potential of rural areas are addressed.[126] Regional Assemblies, with their wider geographical remit and stakeholder engagement, have a key role to play in highlighting the positive benefits that can be realised through increased urban-rural relationships and interdependencies.


  27.  In seeking an answer to the question of whether there is a future for regional government there is a danger of seeing the problem a choice between tiers. In reality—and in common with most other mature democracies—the UK is now operates a system of multi-level governance, in which local, regional, national and supra-national authorities and institutions all play a role. The implementation of spatial planning and sustainable development policies at different levels will lead to factors arising which continue to have an impact beyond their immediate geographical boundaries. Therefore, governance will remain important at the regional level.

106   Department of Transport Local Government and the Regions (2002) Your Region, Your Choice: Revitalising the English Regions. Cm 5511. (London: The Stationary Office), para 1.12. Back

107   HM Treasury, Office of the Deputy Prime Minister, Department of Trade and Industry (2004) Devolving decision making 2: Meeting the regional economic challenge: Increasing regional and local flexibility. March, para 1.8. Back

108   Ibid. para 3.3. Back

109   Office of the Deputy Prime Minister (2005) Evaluation of the Role and Impact of Regional Chambers: feasibility study, July. Back

110   The Highways Agency is responsible for implementing the Government's trunk road development control policy on behalf of the Secretary of State. Acting on behalf of the Secretary of State, Article 14 of the (General Development Procedure Order) 1995 allows empowers the Highways Agency to direct that either that a local planning authority shall not grant planning permission for a particular proposed development, or that it may do so only subject to any conditions which he (the Secretary of State) may stipulate. (Source: Back

111   For further details on the Single Pot for RDAs, see for example review/spend sr04/press/spend sr04 press 21.cfm Back

112   Barker K (2004). Review of Housing Supply-Delivering Stability, Securing our future housing needs. March, HMSO, London, para 2.16. Back

113   IbidBack

114   HM Treasury/ODPM (2005), The Government's Response to Kate Barker's Review of Housing Supply, December, HMSO, London. Back

115   For detail on the extent of the quango state in the North East see Tomaney J and Humphrey L (2001) Powers and functions of regional government, report for the NEA. Back

116   Office of the Deputy Prime Minister (2006) Interim Report: Evaluation of the Role and Impact of Regional Assemblies, July, pp 24-26. Back

117   NEA (2003). Strengthening Regional Accountability in the North East: Scrutiny and Policy Developments Second Report, September. Back

118   NEA (2005). The First Report of the Scrutiny and Policy Development Committee, November. Back

119   European Strategy Group (2005). North East England in Europe: Framework for Action, November, NEA. Back

120   Alun Michael MP made reference to the Framework whilst speaking at the Conference on Regional and Rural Development Programmes (2007-13): Delivering the Lisbon and Gothenburg Agendas held at Baltic, Gateshead Quays on 7 November 2005. Back

121   ERN (2005). English Regions: Delivering Jobs and Growth, November, English Regions, Network. Back

122   HM Treasury, Department for Trade and Industry, Department for Transport, Office of the Deputy Prime Minister (2005) Regional Funding Allocations: Guidance on Preparing Advice, July. Back

123   The output gap measured in GVA per head (residency basis) (2004) between the UK and the North East has been calculated as £3,400 (£16,800 and £13,400 respectively). Source: p 1. According to Northern Way, if the output gap was closed was the same as the UK average, regional economic output would increase by £8.8 billion (2002). Across the North as a whole it would increase by £29 billion (2002). Source: Northern Way (2004) Northern Way: First Growth Strategy Report, September, Northern Way, p 7, table 1. Back

124   ODPM (2004) Making it Happen: The Northern Way: Main Report, 2 February Back

125   On this point see Deegan J (2005) City-regions and "non-core" cities, Town and Country Planning, October, p 315. Back

126   See Midgely J & Ward N (2005) "City regions and rural areas", in Hardy S et al (Eds) (2005) Sustainable Regions: Making Regions Work. Conference Proceedings of the Regional Studies Association, November. Seaford: Regional Studies Association. Back

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