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


Memorandum by the Institution of Economic Development (IED) (RG 19)

1.  INTRODUCTION

  1.1  The Institution (IED) was established in 1983 to represent the interests of economic development practitioners throughout the UK. The IED is recognised as the UK's foremost membership body for those in this field, which today includes a wide range of occupations across a wide range of employers. The IED has members at all levels of governance and delivery and is thus in a strong position to draw on relevant experience when compiling this evidence. It welcomes the Committee's decision to examine issues relating to regional government and sets down areas of concern and caution, rather than provide solutions.

  1.2  It is the IED's belief that when England's regions were established it was primarily to facilitate co-ordination at a more strategic level, and their remit was far less about governance. Government Regional Offices were established in 1994 and in 1999 these were followed by Regional Development Agencies. However, lack of discretionary resources has led, to date, to the image that for the most part regional bodies act more as a channel for national policy, with less ability for original delivery. We welcome this inquiry if it further clarifies roles for local delivery.

  1.3  A further contextual consideration is that improved communications infrastructure throughout the UK (and beyond) mean that knowledge, expertise and experience can be shared over wider areas than ever before. An economic practitioner in Cornwall can, utilising cheap flights and/or the internet, exchange ideas as easily with a counterpart in Cumbria as they can in Wiltshire. What binds activities together are functions of geography (as in city regions) or theme (as in sectoral activities or communities of need, illustrated in the Cornwall/Cumbria example above).

  1.4  At the same time as infrastructure changes weaken some of the ties that bound regions together, there is a great thrust, largely through neighbourhood renewal policies and Local Strategic Partnerships (LSPs), to devolve decision-making to a local, community level. This appears to be a level that is attractive to both local communities (often an example of a function of geography) and to current government thinking. We welcome this but believe that pro rata administration costs of governance at this level are perhaps too high to bear if applied too widely.

ISSUES RAISED BY THE INQUIRY AND THE IED RESPONSE

2.  THE POTENTIAL FOR INCREASING THE ACCOUNTABILITY OF DECISION-MAKING AT THE REGIONAL AND SUB-REGIONAL LEVEL, AND THE NEED TO SIMPLIFY EXISTING ARRANGEMENTS

  2.1  There is a concern to increase the level of accountability at the existing regional level. The trend to focus the delivery of national economic development activity through the Regional Development Agencies is welcomed in that it brings together, and thus enhances the opportunity for improved joint working, a range of activity. However, in some quarters there is concern at the lack of democratic accountability in the management of these funds and there has been frustration at the lack of headroom budget available once legacy programmes take their slice of the budget. As reflected in the NE vote, decision-making at the regional level can be seen as being too remote. The original remit of regionalism—the better co-ordination rather than the management and funding of activity, is more acceptable in some quarters.

  2.2  The principle of increasing the accountability of decision-making at the sub-regional level, as currently defined, is supported. However this does need co-ordination at a higher level and it is highly dependent upon the ability of any local area to accept such responsibility. As the recent evaluation of LSPs showed, "there are very considerable differences in the extent to which LSPs can yet be said to have established robust and sustainable governance arrangements." As the report goes on to say, there need to be stronger ties between LSP's agendas and regional and sub-regional strategies.

  2.3  The drive to focus effort through RDAs is one positive step to simplify existing arrangements. However, whilst appreciating the need for such bodies to remain strategic, to drive up the economic well-being of their particular region, the degree to which their activity can support more localised priorities should be examined. However, the same point about local ability, outlined in the paragraph above, arises in connection with sub regional partnership arrangements. We are aware of areas where they work well, and others that have hardly started, all within the same region.

  2.4  It is appreciated that devolving more to a sub-regional level could amplify rather than simplify arrangements, but it is our belief that if the underlying principles of such delegation reflect geography of space or geography of need, for the user of services the arrangements will be simpler. They will be able to identify with the supplier more easily than with some of the current regional arrangements.

3.  THE POTENTIAL FOR DEVOLUTION OF POWERS FROM REGIONAL TO LOCAL LEVEL

  3.1  As indicated above, the IED believes that there is the potential for further delegation. It is already happening at the LSP level. The current regions are so large and varied that there is little that can be done at that level that is constant across their region. "Fine tuning" to reflect what is needed requires another level of decision-making and delivery. As indicated earlier this may be within a region or across regions.

4.  THE EFFECTIVENESS OF CURRENT ARRANGEMENTS FOR MANAGING SERVICES AT THE VARIOUS LEVELS, AND THEIR INTER-RELATIONSHIPS

  4.1  Devolving power to the regions has been a positive step, and as economic practitioners we can see and have been involved in the efforts to co-ordinate strategies and guidance between regional agencies, to the benefit of subsequent delivery. However, such co-ordination requires resources if it is to be effective and this needs to be borne in mind by the inquiry.

5.  THE POTENTIAL FOR NEW ARRANGEMENTS, PARTICULARLY THE ESTABLISHMENT OF CITY REGIONS

  5.1  The city region concept promotes a functioning geography and as such is welcomed by the IED. If they are to be further developed and evolve to be more than strategic/co-coordinating arrangements and, like the current regions seek to be more effective through having accountability and devolved powers, this will need a re-think of the current regional arrangements. It does leave the question of what happens to those areas of the country which do not form the primary hinterland of these city regions.

  5.2  The IED therefore believes it worthwhile to review what arrangements could effectively reflect the opportunity of the city region and still serve the areas that lie beyond their effective operation.

6.  THE IMPACT WHICH NEW REGIONAL AND SUB-REGIONAL ARRANGEMENTS, SUCH AS THE CITY REGIONS, MIGHT HAVE UPON PERIPHERAL TOWNS AND CITIES

  6.1  Reflected in the comments above, the IED is concerned that it is not just the peripheral towns and cities but also the peripheral rural areas that could lose out from any city region developments. Therefore any review of functioning arrangements should ensure that peripheral and rural regions are able to achieve forms of democratic governance that offer the opportunity for them to make a positive contribution to the social, economic and environmental well-being of the country as a whole.

7.  THE DESIRABILITY OF CLOSER INTER-REGIONAL CO-OPERATION (AS IN THE NORTHERN WAY) TO TACKLE ECONOMIC DISPARITIES

  7.1  One drawback of the way the current regional system for economic development works is that it has not reflected the functioning geography factor. In the South West region, for example, the biggest growth area is in the far north western corner of it—Bristol. Its functioning geography has more to do with South Wales, the Midlands and the Thames corridor, than it does with most of the rest of the region within which it sits. Within the same region, when the police force was recently reviewed to consider restructuring, the locally desired concept of Dorset and Hampshire merging was not allowed to be considered. Even though there was a strong case because of the functional relationship, their formal linkage was not allowed to be considered because each sits in a different region.



 
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