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

Memorandum by the Institute of Local Government Studies (RG 12)

  1.  Any consideration of "the potential for increasing the accountability of decision-making at the regional and sub-regional level" has to start from first principles by clarifying why we might want to decentralise.

  2.  There are three different arguments for decentralisation. Each leads to different kinds of "region":

    (a)  Central Government does not have the capacity, or the detailed knowledge, to decide everything in Westminster or Whitehall. Nor is it good at co-ordinating decisions which are influenced by more than one part of Central Government. It therefore needs agencies which do have that knowledge, and to which it can delegate budgets, and expect that they will co-ordinate spending. This is the administrative argument for decentralization.

    (b)  Certain actions, or investments, are of greater importance when looked at from a perspective out of London than they are from the point of view of the centre. This particularly applies to capital investment—in ports or airports or roads or railways—but also to economic development. For example, in the creation of new clusters of high technology industries, or the redevelopment of strategic sites. This is the argument for local leadership.

    (c)  Finally there is an argument about local government, which will become acute in a system of unitary local authorities, ie without powerful county councils able to mould and influence education and social services, and even more so were we to break up the present unitary or metropolitan district councils into smaller units corresponding to towns or suburbs. There will be a need to co-ordinate the activities of small councils, and to maintain economies of scale.

  3.  The administrative argument requires a small number of large regions, perhaps 8-12, headed by strong bureaucrats capable of co-ordinating [ie banging heads together] and strong political leadership. If there are more than about 12 of these regions, the centre will find it hard to deal with them, and some are likely to be neglected and unengaged. Our present structure of standard regions is broadly constructed on this basis.

  4.  The argument for local leadership does not require a particular size. It does require energy, drive, initiative, and the ability to deal with sources of finance in the public and private sectors [not least the EU structural funds, now to continue to be a major force in the less prosperous parts of the UK]. It is the foundation of the argument for city-regions, because this type of leadership and vision is often associated with cities. This was certainly the case in years of old. It is closely linked with a drive for economic development.

  5.  The argument for co-ordinating local government requires not too large a scale—probably not much larger than many counties—ie 30-40 for England outside London. They may well comprise cities and their hinterlands, but many of the cities will be relatively small. It is primarily an argument about service delivery, dealing with issues which the centre does not want to get involved with [eg co-ordinated admissions systems for a range of local schools].

  6.  The present system does justice to none of these arguments.

  7.  The most radical innovation, with extremely important long-term implications, was the creation of Government Offices in the English Regions. This was done by the John Major government, which is perhaps why many Labour politicians underestimate its significance. At first it was only possible to get four Departments of State to agree to co-ordination of their activities in the regions [Trade and Industry, Transport, what was then Employment (now the Employment and Skills part of the Department of Education and Skills), and the then Department of the Environment, whose responsibilities included local government and housing]. The Home Office put one official in each Government Office. So did Culture, Media and Sport when this Ministry was created. Eventually DEFRA came on board [this becomes urgent when the Common Agricultural Policy is increasingly used for diversification out of agricultural production]. The Department of Health is still reluctant.

  8.  This system potentially facilitates the co-ordination of government policy and spending at regional level. The Government Offices could be as strong as the Scottish or Welsh Offices were before devolution: they are dealing with populations comparable in size to Scotland and larger than Wales. But what they lack at present is political leadership. They do not have strong champions or advocates at Westminster, nor do they have any clear relationship with Regional Assemblies or any other political structures in the regions. Recommendations 1-7 derive from this point.

  9.  The less radical innovation was the creation of Regional Development Agencies by the 1997 incoming Labour Government. These have suffered because they are essentially regional agencies of national government, with boards and key staff appointed centrally, and only loose relationships with regional assemblies. They also suffered because power was held in other national agencies, especially English Partnerships, the Housing Corporation, the Learning and Skills Council, Connexions, and JobCentre Plus. They also had to deal with local government and many programmes run through the Government Offices.

  10.  They were set up as Non-Departmental-Public-Bodies, when they could have been Companies Limited by Guarantee. The latter status would have given them a greater feel and propensity for entrepreneurship. What has actually happened is that they have set up companies as subsidiaries, eg Urban Regeneration Companies, the Regeneration Zones of Advantage West Midlands, and other companies created to develop areas of land or to promote new technologies. The resulting patchwork quilt is confusing for everyone concerned. Recommendations 8-9 reflect these points.

  11.  The currently fashionable argument for city-regions is ultimately a distraction. They are being promoted wherever it suits local interests. Thus the Northern Way includes the large cities of Northern England, but excludes the rural areas, where some of the greatest pressure on housing, and rapid population growth, are likely to occur. In the West Midlands the term is being used for the conurbation: the 7 metropolitan districts that comprised the former West Midlands County Council. City-Regions are being promoted in Essex and Cambridgeshire. There is every prospect, if we go down this road, of another type of patchwork quilt, of different sizes and types of city-region, and long-term uncertainty as to their freedoms and flexibilities, and terms of reference.

  12.  Any system to replace what we have at present needs to be simple and effective, with cross-party political support to maximize its chances of survival long-term. It is not possible in the short or medium term to hold direct elections. But then there are advantages in indirect election, because this is a means of knitting the regional institutions to the sub-regional.

  13.  The argument above leads to the following recommendations, which, if taken together, would bring both the Government Offices and Regional Development Agencies into close relationships with the Regional Assemblies:

    Recommendation 1.  The process, started by John Major, of developing strong government offices in the regions, should be continued, through to its logical conclusion, where the regional activities of all relevant government departments are co-ordinated through them.

    Recommendation 2.  They should be headed by powerful civil servants, appointed by the Regional Assembly.

    Recommendation 3.  The Regional Assembly should develop structures ["portfolios"] which would mirror the main activities of the Government Offices.

    Recommendation 4.  The Chair of the Regional Assembly should have a title: First Minister, President, Convenor, or perhaps Lord Lieutenant (recognising, in constitutional terms, that he or she would also be the Queen's representative in that region).

    Recommendation 5.  Each portfolio should be overseen by an Overview and Scrutiny Committee, involving elected members from a number of local authorities across the region concerned.

    Recommendation 6.  There should also be a cabinet member in the Westminster cabinet responsible for each region [this would be in addition to holding another portfolio, but it would give each region a voice at the highest table].

    Recommendation 7.  English Partnerships, the Housing Corporation, the Learning and Skills Council, Connexions, JobCentre Plus, and perhaps the Further Education Funding Council should be wound up as national bodies, and made responsible to the Government Offices at regional level.

    Recommendation 8.  The Regional Development Agencies should be reformed as companies limited by guarantee, and be seen as agencies for developing regional investments in land or intellectual property, with a board wholly or largely appointed by the Regional Assembly and reporting administratively and for budget purposes to the Government Office.

    Recommendation 9.  All existing companies set up to develop sites or areas, for example Urban Regeneration Companies, should be reviewed, to decide if they would be better served by reporting administratively and for budget purposes to the Government Office.

    Recommendation 10.  The boundaries of regions should be reviewed, as a whole, and with the above schema in mind. In particular the present South East Region should be divided into three sub-regions (Kent; Sussex, Surrey, Hampshire, Isle of White; Berkshire, Oxfordshire, Buckinghamshire [possibly with Bedfordshire, Milton Keynes and Hertfordshire]). The South-West could be divided into two, the area more closely relating to Bristol and Bath, and the area that more closely relates to Exeter.

    Recommendation 11.  The Regional Assemblies/Government Offices should have direct funding from Westminster, which would cover expenditure on the main services administered by local government—a similar model to the Welsh and Scottish Offices pre-devolution. They would have access to capital funds from the EU, and from prudential borrowing.

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