Memorandum by the Institution of Economic
Development (IED) (RG 19)
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
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
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.
THE IED RESPONSE
2. THE POTENTIAL
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 regionalismthe
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
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
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
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
6. THE IMPACT
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
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 itBristol. 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.