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


Memorandum by Graham Pearce and Sarah Ayers (RG 24)

1.  SUMMARY

  1.1  This memorandum draws upon the findings of a recent ESRC study into English regional governance. Since 1997 a momentum has been established to extend the responsibilities of the regional tier. However, regionalism has been pursued piecemeal and there are uncertainties about how the regional agenda should be managed. In particular, there is a need to improve the co-ordination of national policies with a regional dimension, align the delivery of policies administered by a plethora of region based, government bodies, take greater account of regional priorities and diversity and improve the connections between regional and sub-regional working.

2.  THE NATIONAL POLICY CONTEXT

  2.1  Regional institutions operate in the context of a tradition of Whitehall dominance over decision-making. Indeed, regional reforms have proceeded against a background of entrenched central and local government interests. By contrast to elsewhere in the UK and other EU states, central government has maintained its capacity to devise new tools to exert control over regional decision-making and resources (Ayres and Pearce, 2005). Despite the presence of a multiplicity of regional strategies, including economic development, the environment, housing, spatial planning and transport, decision-making remains centralised, while responsibility and accountability for delivery are fragmented between national agencies and a multitude of local authorities and private and community interests, limiting the capacity of regional actors to shape policies to the needs of their territories.

3.  MULTI-LEVEL GOVERNMENT

  3.1  Within these constraints measures have been adopted to boost the vertical links between Whitehall and regional agencies, foster cross-departmental collaboration on issues with a regional dimension and encourage horizontal links between regional stakeholders, including both public bodies and "social and economic partners" (SEPs) (HM Treasury and Cabinet Office, 2004).

3.2  National government

  3.2.1  Whitehall departments and their executive agencies are responsible for framing and administering government policies and exert direct control or influence over more than 90% of public expenditure in the regions. In addition, EU policies play a specific role at the regional tier through support for agriculture and economic development. The Treasury has shown a growing interest in the regional tier as a way of tackling regional economic disparities and as a focus for decentralisation where this can contribute to improving service delivery. Other departments, too, have a strong interest in regional issues—the ODPM in respect of Regional Housing and Spatial Strategies (RHs, RSSs) and the Sustainable Communities Plan, the DTI for regional economic development, especially the activities of the Regional Development Agencies (RDAs), the DfT because of the role of Regional Transport Strategies (RTSs) in regional development and DEFRA, because of its sponsorship of Regional Sustainable Development Strategies.

  3.2.2  To assist Whitehall present a more coherent approach to regional policy making a Regional Coordination Unit (RCU) was established in 2001. It is intended to support the Government Offices for the Regions (GOs), provide a channel of communication between GOs and the centre and facilitate a more corporate approach to regional issues across Whitehall. Given its limited resources, however, the Unit faces considerable problems in encouraging inter-departmental working around regional issues and in combining the tasks of assessing the potential impacts of government policy at the regional level with managing and representing the GOs. Furthermore, it can seen to be hampered by being located in the ODPM, rather than the Cabinet Office or Treasury.

3.3  Regional government institutions

  3.3.1  GOs (annual budget: £6.4 billion) administer many central government activities in the regions, monitor the RDAs' activities and coordinate regional inputs to Whitehall spending reviews. Since 2000 seven additional Whitehall departments have formally "co-located" in the GOs: DEFRA, the Home Office, DfES, DCMS, DWP, DoH and the Cabinet Office. Nonetheless, GOs remain reliant on the ODPM, DTI and DfT for 90% of the expenditure which they manage or influence. Although GOs have a shared administrative budget, departments retain control over "front-line" funding and have followed different approaches to decentralisation. Within these limitations GOs have made progress in addressing cross-cutting agendas through inter-departmental and area-based teams. They have also become active regional partners, resolving disagreements and ensuring that organisations "buy into" the Whitehall agenda.

  3.3.2  The 2005 Budget Report endorsed the principle that departments should decentralise activities and integrate these within GOs (HM Treasury, 2005). The Offices should also work more intensively with regional partners to improve performance and oversee regional strategies, while senior GO and Whitehall officials were encouraged to establish closer links on policy development. In addition, GOs should be granted new flexibilities to enable them to join up activities across departmental boundaries and beefed-up management structures and staffing to improve performance, in exchange for a stronger lead in implementation. Taken together these roles are extensive and there is some evidence that their increased responsibilities, coupled with a lack of appropriate staffing skills, have made it difficult for GOs to provide a clear focus to their work.

  3.3.3  Departments are also represented in the regions through a dense, but disjointed layer of Non-Departmental Public Bodies (NDPBs). Information about their precise numbers is sparse, but the Eastern GO reports the presence of 130. Their existence has prompted debate about their legitimacy and accountability, but also how best to secure a degree of alignment between their activities. Following the White Paper, Your Region: Your Choice, "Regional Boards", were established, chaired by GO Regional Directors, to review and co-ordinate the strategies of NDPBs operating in their regions (Cabinet Office and DTLR, 2002). Coordination is hampered, however, by the quasi-autonomy of NDPBs, which work to separate parent departments, different timetables, funding regimes and geographical boundaries.

  3.3.4  In addition to GOs the two other key institutions that comprise the regional "troika" are the Regional Assemblies and Regional Development Agencies. Assemblies are nominated bodies, including representatives of local government, business, trades unions, higher education, faith and minority ethnic communities. They were to provide a semblance of regional democracy in advance of elected regional bodies and are responsible for scrutinising the activities of the RDAs and assisting in regional strategy coordination. They also act as Regional Planning Bodies, responsible for preparing statutory RSSs, and are likely to gain responsibilities for Regional Housing and (potentially) Transport Boards. Assemblies are largely reliant on the ODPM for the bulk of their expenditure (annual budget <£30 million) and must rely upon influence through a multiplicity of partnerships to achieve their objectives. The ODPM has been active in augmenting the Assemblies' functions, especially by encouraging them to become a focus for partnership working, which has raised the Assemblies' profiles. It can be reproached, however, for a lack of strategic thinking about what tasks Assemblies should perform, and why, and the funding required for their delivery.

  3.3.5  RDA Boards are accountable to the Secretary of State for the DTI. They have a high Whitehall profile and, with a combined annual budget of some £2.2 billion, have been granted additional discretion over the use of their funding, new responsibilities for rural areas, tourism and transport and encouraged to work with Learning and Skills Councils and the Small Business Service to improve the delivery of skills and support for business. Nonetheless, government policies remain a decisive influence on regional economies, leaving a question mark over the RDAs' legitimacy as bodies capable of developing innovatory solutions to regional policy issues or as quangos accountable for delivering national policies (Select Committee on Public Accounts, 2004).

3.4  Social and economic partners

  3.4.1  Increasingly, successful policy implementation is seen to involve working across public, private and community sector boundaries. At the regional level the troika has engaged with social and economic partners (SEPs) capable of speaking for and influencing the sectors which they represent. Fostering such relationships is seen as a way of adding legitimacy, developing policies in step with regional needs and expanding the regions' delivery capacity. SEPs participate in Assemblies, RDAs are required to cooperate with public, private and voluntary and community interests and GOs are obliged to work with regional partners to maximise regional competitiveness and prosperity and promote social inclusion.

3.5  Sub-regional institutions

  3.5.1  Regional bodies are also expected to work with a range of sub-regional institutions, including local authorities and Local Strategic Partnerships (LSPs), comprising local authorities and a range of public, private and community bodies, responsible for preparing and implementing Sustainable Community Strategies, Local Neighbourhood Renewal Strategies, Local Area Agreements and Local Development Frameworks. Assemblies are responsible for assessing the conformity of Local Development Frameworks with RSSs. Similarly, RDAs are dependent upon on sub-regional institutions to deliver their economic strategies while GOs are responsible for mediating the engagement of regional and sub-regional organisations in LSPs and working with local authorities on Area Agreements.

4.  INTRA-REGIONAL WORKING

  4.1  Government accountability mechanisms discourage cross-departmental collaboration and national targets and funding streams constrain efforts to align regionally determined objectives and targets or pool resources. Departments have not always fully examined the regional impacts of their policies and are not well equipped to respond to upward pressures from the regions. Moreover, Whitehall remains suspicions about decentralisation and regional policy coordination.

  4.2  Despite uneven economic and social geographies and calls for a shift away from "one size fits all" solutions, there is a high degree of congruence in institutional structures and policies across regions. Centrally prescribed structures reinforce the view that regions are predominantly uniform, while the limited capabilities of regional institutions hamper policy innovation.

  4.3  Recognition of the need to improve horizontal linkages between the activities of regional bodies is reflected in recent Government guidance on indicative, longer-term, regional funding assumptions for economic development, housing and transport (HM Treasury et al, 2005). This opens up opportunities for greater co-ordination of regional programmes and highlights the need for increased transparency in the allocation of resources within regions; a vital first step in ensuring that funding is geared to territorial priorities. The challenge for the regions is to have in place collaborative mechanisms that are able to provide robust and defensible advice on regional priorities which, over time, could lead to "devolved budgets" being extended to other policy areas.

  4.4  The absence of a clear regional "template" has made it difficult to join up national policies and public expenditure within regions and, despite a proliferation of regional strategies, it remains hugely difficult to align these strategies and translate objectives into delivery. Strategy-making may have assisted in developing a fuller understanding of regional conditions and priorities, but executive powers remain in Whitehall. In these circumstances inter-organisational alliances may be forged but will have limited impact, diminishing the perceived value of collaboration among stakeholders.

  4.5  Given the absence of a single regional body charged with coordinating the activities of multiple stakeholders, reliance has been placed on the willingness of diverse regional interests to act jointly through a multiplicity of partnerships. This is reflected in the high levels of interaction within the troika, the accumulation of regional partnership structures around Assemblies, the business and voluntary sectors' enhanced representation at the regional level and the close links established between the GOs and RDAs and their Whitehall counterparts. These measures are regarded as a way of achieving "better" decisions, but evidence of their effectiveness has yet to be fully tested.

  4.6  The preparation of regional spatial and economic strategies marks an important step in regional policy making, matched by a strengthening of technical capacity and an increasing stress on implementation. Regional working in other policy fields is less well developed.

  4.7  Regional institutions share objectives, but each is influenced by different agendas, accountabilities and variable capacities to influence both policy and delivery. Such asymmetries may be constructive, but they also reflect the presence of multifaceted structures and overlapping organisational roles and responsibilities, which hinder co-ordination.

  4.8  The proliferation of mandatory and voluntary regional strategies and the activities that flow from them has given rise to mechanisms for their co-ordination, including Regional Concordats and Integrated Regional Strategies. However, their capacity to influence joint working or keep pace with the constantly evolving regional agenda is problematic. The value of a single regional strategy document, for example, is qualified by the complexity of aligning strategies, the lack of a single organisation charged with driving through its delivery and uncertainties about funding streams.

  4.9  Assemblies are required to hold RDAs to account for their activities through a process of "scrutiny" and RDAs must gain approval from Assemblies for their strategies. But, since both sets of bodies are dependent on one another to achieve collective goals, accountability is unclear. Similarly, RDAs are subject to increasing monitoring by the GOs, but the two organisations are also expected to work together on regional economic issues.

  4.10  There is a tension between the GOs' partner role and their quasi-judicial function in scrutinising regional strategies and challenging regional partners to secure greater policy effectiveness. Moreover, while GOs are expected to co-ordinate the activities of government agencies operating in the regions, Assemblies have a parallel responsibility for strategy co-ordination. Since the Assemblies' remit also extends to influencing such agencies, this division of responsibilities can be regarded as ambiguous.

  4.11  Beyond the "core" regional institutions the troika has adopted a variety of mechanisms to engage with regional SEPs. Their inclusion is intended to lend legitimacy to regional strategies, but SEPs are often unable to compete with "resource-rich" public bodies. Indeed, while valued by "insiders", partnerships may marginalise less well positioned interests.

  4.12  Common values and shared cultural identities have eased joint working between RDAs and the business community in a way that has not always been possible for elements of the voluntary and community sectors.

  4.13  GO teams are expected to bring coherence and add value to the delivery of Whitehall programmes by drawing together key regional partners. In general, SEPs view GOs as important but low key actors and are unclear how GOs add value, their capacity to formulate clear regional priorities, contribute to framing and delivering regional policies and representing regional interests. While GOs are seeking to break down silo-dominated structures the Offices still struggle to join up programmes, a key issue for the voluntary and community sectors

  4.14  There is a widespread impulse to equate "better" regional decision-making and delivery with partnerships, but their effectiveness is not the outcome of serendipity and there is a need to rationalise the responsibilities, relationships and accountabilities of bodies taking forward related policies at the regional level. Moreover, reliance on partnerships raises complex issues about inclusivity, transparency and accountability. Sharing responsibilities for policy-making and delivery can also be regarded as time-consuming and requires staff with communication, negotiating and network skills, which are in short supply.

5.  REGIONAL—SUB-REGIONAL WORKING

  5.1  Although regional bodies are expected to work with LSPs, there is limited evidence that links have been established between community and regional and sub-regional strategies. Furthermore, while LSPs might provide the opportunity for the alignment and delivery of regional strategies, in practice actions at the sub-regional level to reconcile inconsistencies between strategies can achieve only limited impacts. This highlights the need for organisational mechanisms that integrate policy and delivery at the regional and, indeed, at the national tier.

6.  CITY-REGIONS

  6.1  In responding to long-term concerns about the economic performance of major provincial cities and the need for a more balanced pattern of national spatial development, the Government has indicated its commitment to establish city-regional authorities. It is asserted that administrative units should more accurately reflect socio-economic realities and local authorities serving major urban areas should develop their joint capacity to tackle shared problems more effectively. City-regional plans are currently being prepared in several core cities, including proposals for governance structures, funding arrangements and delivery mechanisms.

  6.2  City-regional administrations in some regions would form an intermediate form of governance between regional and local government. Because all regions now possess sets of sub-regions, usually tied to local government boundaries, city regions would, therefore constitute a single or group of sub-regions, geared specifically to meeting the needs of major urban areas.

  6.3  It is not yet clear, however, how city-regional bodies would be constituted. A case can be made for elected city-region authorities, based on the London model, charged with developing strategies and providing a powerful political platform on behalf of their constituents. However, the more likely outcomes are structures based on joint panels of local authorities, assisted by executives. They would be akin to the joint boards that existed in the metropolitan areas following the abolition of the metropolitan counties. While some groups of authorities had some success in mobilising alliances around shared agendas, elsewhere joint working produced mixed results.

  6.4  In some regions, including the Eastern, South West and South East, there are few contenders for city-regional status. Where city-regions are adopted they will adhere to administrative boundaries and will exclude, for example, journey to work areas in neighbouring shire counties. Basing city regions on existing administrative boundaries would appear to negate the presence of the strong functional linkages between some shire county areas and the major urban centres. Many of these former areas are nationally among the most prosperous and, geographically, account for the greatest increase in population and employment. By contrast, areas beyond this "outer ring" of urban influence are often sparsely populated with limited economic opportunities. The creation of city regional authorities could lead to a greater proportion of public expenditure being allocated to major urban areas and these more remote sub-regions being neglected.

7.  WHAT NEXT FOR ENGLISH REGIONALISM?

  7.1  Future reforms are likely to be modest and though regional institutions may acquire some additional discretion over institutional design, policy and delivery mechanisms, this will only be endorsed in those areas where there will be the least challenge to the centre. These limitations reflect political and bureaucratic realities but, if the regional tier is to provide a platform for improving service delivery and economic performance, Whitehall needs to adopt a more systematic approach. This is vital in minimising ambiguities and maintaining confidence in the regional tier as an arena for policy-making and delivery.

  7.2  The recent referendum outcome has resulted in demands from some quarters for the Assemblies' accountability and co-ordination functions to be dismantled and for responsibility for regional spatial planning to be returned to local government. In addition, lobbies favouring a shift towards "localism" and "city-regions" as an antidote to England's "failed devolution" experiment have become more vocal. As a consequence there are dangers that stakeholder commitment to the regional tier may wane.

  7.3  Nonetheless, the structures of regional governance and the interlocking policy issues associated with regional economies, housing, spatial planning and transport remain. Furthermore, the Government appears committed to extending the responsibilities of the regional tier. Whitehall, however, has yet to fully get to grips with the consequences of decentralisation. Indeed, there is a lack of clarity in its approach to the reform of sub-national government. Rather than adopting a piecemeal approach and adding new organisations it is essential that the contributions of existing institutions and the means for securing improved cooperation between them are examined.

  7.4.  In the absence of elected regional government, emphasis should be placed on delivering policies by building on the joint capacities of the regional troika and other public bodies operating in the regions. These bodies' capabilities should be assessed to ensure they are "fit for purpose".

  7.5  Consideration should be given to examining the alignment of policies, delivery mechanisms and funding arrangements at national, regional and sub-regional levels. Discussions with regional practitioners indicate the need for a systematic evaluation of the effectiveness of current mechanisms for regional policy co-ordination.

  7.6  The effectiveness of Whitehall's, its constituent departments' and NDPBs' responses to the regional agenda should be monitored and evaluated.

  7.7  There is a need to assess how regional stakeholders' views are considered and balanced in regional decision making and how this process can be more effectively managed to comply with government guidelines on strategy formulation and delivery and ensure inclusive, transparent, consistent and robust policy making procedures.

  7.8  The Sustainable Communities Plan and the Northern Way initiative are notable for encouraging a degree of cross-regional working. There is scope, however, for increased pan-regional working as a way of resolving territorial conflicts, sharing experience and developing a more effective regional voice in Whitehall.

REFERENCES  Ayres, S and Pearce, G (2005) "Building regional governance in England: The view from Whitehall", Policy and Politics 33, 4, 581-600

  Cabinet Office and Department for Transport, Local Government and the Regions. (2002) Your Region, Your Choice: Revitalising the English Regions, Stationery Office.

  HM Treasury. (2005) 2005 Budget report: Investing for our future: Fairness and opportunity for Britain's hard-working families, Stationery Office.

  HM Treasury and Cabinet Office. (2004) Devolved Decision Making: 1—Delivering better public services; Defining targets and performance management, Stationery Office.

  HM Treasury, Department for Transport, Department for Trade and Industry and Office of the Deputy Prime Minister. (2005) Regional funding allocations: Guidance on preparing advice, Stationery Office.

  Select Committee on Public Accounts. (2004) Success in the regions, 51st Report, Session 2003-04, Stationery Office.





 
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