Memorandum by the Chief Economic Development
Officers Society (CEDOS) (RG 25)
1. The Chief Economic Development Officers
Society (CEDOS) provides a forum for Heads of Economic Development
in upper tier local authorities throughout England. Membership
includes county, city and unitary Councils in non-metropolitan
areas, which together represent over 47% of the population of
England and provide services across over 84% of its land area.
The Society carries out research, develops and disseminates best
practice, and publishes reports on key issues for economic development
policy and practice. Through its collective expertise, it seeks
to play its full part in helping to inform and shape national
and regional policies and initiatives.
2. Successful and sustainable economic development
is critical to the future of this country and all its constituent
areas. In this context and in the light of the "no"
vote in the North East devolution referendum on 4 November 2004,
the Committee's Inquiry is very timely and CEDOS is pleased to
put forward its memorandum of evidence, which focuses on the key
issues identified by the Committee.
The validity and effectiveness of
current regional arrangements are seriously questioned.
As Regional Development Agency responsibilities
increase, there is growing concern at their lack of democratic
and political accountability.
Alternatives to RDAs need to be considered,
with a viable option being regional partnerships accountable to
their sub regional partners.
If RDAs are retained, there must
be greater accountability and transparency in decision making,
and a stronger scrutiny role for Regional Assemblies/Chambers.
There is a need to maximise the devolution
of powers from RDAs to local authorities with the capacity to
deliver. County councils, city councils and unitary councils have
a particularly crucial role to play.
The management and spending of resources
by the RDAs is over-complex and handicaps progress. Barriers,
which impede the effectiveness of local authorities include too
many funding streams and too much filtering of funding through
too many layers of bureaucracy.
Core cities are not the only drivers
of regional economies. England's county areasthe county
regionshave a crucial role. A balanced approach is needed
that recognises the contribution that the county regions and their
towns, cities and rural areas can and do make and provides for
a more equitable share of national and regional resources.
There may be a case for a city region
approach in the metropolitan areas but county regions and county
governance must continue to play a key role in most areas of England.
There is growing concern that the
increasing focus on the core cities will have a seriously detrimental
effect not only on other towns, cities and rural areas but also
on the goal of driving up national and regional economic performance
and reducing regional disparities.
The development of pan-regional strategic
approaches such as the Northern Way further emphasises the democratic
deficit in England at regional level and the importance of action
not being constrained by arbitrary geographic boundaries.
3. CEDOS considers there is a need for effective
action at regional, sub-regional and local level if sustainable
economic development is to be achieved, but we seriously question
whether the current regional arrangements provide a sound basis
for such action.
4. Whilst the Regional Development Agencies
(RDAs) in England are making a contribution, there is concern
about their variable performance. Too often, they are remote,
bureaucratic and inconsistent in their decision-making. A major
concern is their lack of political and democratic accountability,
which has intensified as they have assumed broader responsibilities
and have become an increasing focus for receiving and distributing
national funding eg Business Link contracts, former Countryside
Agency initiatives and some of the skills funding. Whilst the
business leadership of RDAs has benefits, it provides too narrow
a focus, which can be influenced by sectional interests. This
is in marked contrast with the best performing local authorities
with their broader, more holistic perspective and their democratic
and political accountability.
5. The appropriateness and relevance of
the Regional Development Agencies must be seriously questioned
and other solutions explored. Prior to the creation of the RDAs
there were well established organisational frameworks involving
strong strategic local authorities and other public bodies working
together to formulate regional strategies for, amongst other things,
transport and regional planning guidance. In the West Midlands,
for example, the regional forum of local authorities was a medium
through which the sub regions worked together on regional matters,
creating regional offices such as the West Midlands office in
6. These earlier regional frameworks proceeded
on the basis of cooperation and consensus. In contrast, the one
unifying feature of the current RDA structures is the tension
in all regions between a strong unaccountable regional body on
one side and strong sub regional organisations on the other. Alternatives
to RDAs need to be seriously considered. For this, a viable option
would be tightly configured regional partnerships, which depend
on and are accountable to their sub regional partners, which would
agree the regional strategies and empower sub regional organisations
to deliver them.
7. If Regional Development Agencies are
retained, it is essential that there is greater transparency in
their decision making, communication with stakeholders is improved,
and that their actions are as accountable as possible within the
region. The Government's Regional Assembly proposals offered a
way forward but with the "no" vote in the North East
referendum, other ways of increasing accountability will need
to be explored. One would be to strengthen the role of the existing
Regional Assemblies/Chambers, with a significantly increased role
for democratically elected local government representatives; a
direct involvement in setting RDA agendas; and increased weight
being given to their involvement in scrutinising the work of the
RDAs, so that they at least share the responsibility of Government
Offices for reporting on RDA progress against objectives. At the
moment, it appears that RDAs can ignore Regional Assembly views.
Whether or not this is the case may well be illustrated in the
West Midlands in three months time, when the Regional Assembly
is to review how the recommendations contained in its 2004 scrutiny
report of the RDA's policies on Regeneration Zones have been implemented
by the RDA.
8. However much the role of the existing
Regional Assemblies is strengthened, the fact remains that they
are not directly democratically elected. Strengthening their role
must be accompanied not only by an increased role for local authority
elected members within the Assemblies, but also by increased devolution
of the implementation of RDA economic development responsibilities
to the sub-regional and local level.
9. The importance of local action and in
particular the local authority role cannot be over-emphasised.
Economic development and regeneration is an increasingly important
part of the local government agenda and of Government's expectations.
Local government action is central to a range of Government priorities,
including achieving sustainable economic growth, creating sustainable
inclusive communities, delivering prosperity by driving up productivity
and competitiveness, and tackling the problems of deprivation.
Local authorities play a crucial role at the sharp end of delivering
economic development and regeneration not only in implementing
regional strategies but also in providing the strategic leadership
and action to ensure that local needs and problems are met and
10. There is a clear need to maximise the
devolution of powers from regional to local level but it is important
to be realistic in assessing the potential for doing so. The Government's
report Productivity in the UK: 4 The Local Dimension  underlines
the central role of local authorities in shaping regional economic
strategies and in leading and developing partnerships to take
them forward. At the same time, it acknowledges that this is a
complex task, which requires a "significant corporate capacity
to deliver". In this context, the strategic local authoritiesthe
county councils, city councils and unitary councils have a particularly
crucial role to play:
they have a mandate to promote economic
development as a key part of their community leadership in promoting
economic, social and environmental well being;
the linkages between their economic
promotion activities and their other service functions, in particular
land-use planning, transportation and education, mean they can
take a wide ranging, joined up approach to economic development;
they have the scope, the resources,
and the specialist skills to tackle and take forward the big agendas;
they have the strategic and corporate
capacity to provide leadership and bring together and sustain
the partnerships that are the pre-requisite of achieving and delivering
successful economic development; and
as big players and good joiners,
they have the influence to get other key players to the table
and to use their resources to lever in match funding to maximise
the ability to drive forward economic growth.
11. The county councils, city councils and
unitary councils have clear potential for increased devolution
of powers. They have an established track record of action and
achievement in supporting and harnessing the key drivers of growthenterprise,
innovation, competition, skills and investment to achieve sustainable
economic development. Many examples are given in the report published
by CEDOS and the CSS "England's County Sub-regionsCornerstones
of Economic Growth".
12. The strategic local authorities through
their leadership and influence and their capacity to deliver have
demonstrated their ability to develop, facilitate and lead the
partnerships that are the instruments of successful economic development
and regeneration. The past few years have seen the development
of a range of sub regional partnerships and operational frameworks
including local strategic plans and partnerships which could provide
the mechanisms for delivering regional strategies at sub regional
and local levels.
13. The way resources are managed and spent
by the Regional Development Agencies and the equally unaccountable
sub-regional partnerships that many RDAs have set up to deliver
their agendas are governed by over-complex bureaucracies and decision
making which handicaps progress. In economic development, barriers,
which impede the effectiveness of local authorities in managing
and delivering services include:
too much filtering of funding through
too many layers of bureaucracy that inhibit the local solutions
for local problems approach and run counter to the principles
of localism and Local Area Agreementssomething that surely
needs investigation by the National Audit Office/Audit Commission;
too many partnership requirements
imposed upon local authorities, leading to an over-complex partnership
landscape and, frequently, partnership overload and fatigue;
too many staff resources taken up
by time consuming and uncertain competitive and other bidding
having to "jump through too
many different hoops" to gain access to different funding
streams with different application processes, criteria and performance
too often, RDA and other externally
funded programmes are output driven to match the funder's own
targets at the expense of other outcomes that could be more worthwhile;
decision-making on many strategic
issues is too remote and may not take into account the special
circumstances that apply to a locality.
14. Efficiency and effectiveness can be
improved by more devolution of powers and funding to local authorities
and an acceleration of the process of increasing local freedoms
and flexibilities in programmes and spend, currently being introduced
slowly through Local Area Agreements and related programmes. At
the regional level, there is a case for carving up the regional
"pot" according to regional priorities agreed by regional
partnerships described above.
15. There is always potential for putting
in place new arrangements for governance whether at regional,
sub-regional or local level. Existing arrangements need to be
kept under review and alternatives examined. But before making
changes, there is a need to be sure that changing structures and
administrative/service delivery arrangements really are needed.
For any reorganisation to work there must be genuine value for
all involved. We must guard against the tendency to continually
reorganise. Petronius' observation that it can be a wonderful
method for "creating an illusion of progress, whilst producing
confusion, inefficiency and demoralisation" remains as true
today as it was in AD 60.
16. Any new arrangements that are introduced
address the current democratic deficit
at regional level;
reduce the barriers, which impede
the effectiveness of local authorities in managing and delivering
recognise regional and sub-regional
diversity and avoid a "one size fits all" approach.
17. It is at the current regional level
that new arrangements are needed to address the present democratic
deficit, remove bureaucratic barriers and improve efficiency and
effectiveness. The overwhelming "no" vote in the North
East referendum has shown that the public has no appetite for
a new tier of regional government being created. In this context,
the alternative approaches referred to earlier in this memorandum
could, if necessary, be pursued sequentially according to circumstances
and preferences within each region:
retain the Regional Development Agencies
in England, increase the democratic legitimacy of the existing
Regional Assemblies by drawing their membership entirely from
elected local authority members and strengthening their scrutiny
powers over RDAs; and
dismantle the existing structures
over time, allowing them to be replaced by new regional arrangements
that are not imposed by central government but are achieved through
democratically elected local authorities entering into strategic
alliances, with other stakeholders where appropriate.
18. New arrangements formed from local authority
strategic alliances should not be constrained by the straightjacket
of arbitrary geographical boundaries being imposed. Administrative
regions do not equate automatically to economic regions. Tourism
regions are an obvious example. Another is "Motorsport Valley",
which stretches from Norfolk though the Midlands and southwards
as far as Hampshire. This is an economic growth region that transcends
conventional administrational boundaries, underlining the danger
of imposing a conventional administrative framework on complex
economic sector "regions".
19. There is currently much emphasis, indeed
in our view an over-emphasis, on the role of the "core"
cities and city regions. Increasingly, the core cities, expanded
as city regions, are seen not just as the principal motor for
regional economic growth but judging by a number of Government-sponsored
reportsthe only motor. This increasingly narrow focus is
not only naïveit risks being seriously counter productive.
CEDOS believes that if national and regional economic performance
is to be improved in a sustainable way, a balanced approach is
needed. This must recognise the opportunities that county regions
as well as city regions can offer.
20. In this context, it is important to
make clear that the city "regions" should not be regarded
as the equivalent of regions drawn at a broad scale as in the
case of the standard economic regions within which the RDAs operate.
In this broader context, both city regions and, in most cases,
county regions are more properly considered as sub-regions but,
for convenience, in the rest of this memorandum are referred to
21. It is important to improve the performance
of the large regional cities in order to achieve regional economic
growth, for as HM Treasury's regional productivity report stated:
"large conurbations outside London have had generally poor
labour market performance and have also fallen behind other urban
and rural areas' productivity".
Despite the shortcomings in the economic performance of some of
the core cities they are, or should be key drivers of regional
economies but they are not the only drivers. The contribution
of county areasthe county regionsto national and
regional economic growth must be recognised and built upon and
a balanced approach taken.
22. County areas are a large part of Englandin
local government terms, those parts of the country outside London,
the eight identified core regional cities and the metropolitan
authorities. Covering 121,653 square kilometres, they account
for around 93% of the land area of the country. In 2002, their
combined population reached 30,721,00062% of England's,
with the figure rising to 73% when London is excluded.
23. The county regions embrace both urban
and rural areas. They include cities such as Chester, Derby, Hull
and Stoke on Trent, and county towns and cities from Worcester
and Warwick to Durham and Devizesas well as large rural
areas with their networks of market towns and smaller communities.
Their very diversity is one of their strengths. Individually and
collectively, they are vital to regional economic performance.
Alongside the core cities and the other metropolitan areas, the
county areas are key components of every region in the country
outside London. They are a major part of our national social and
economic infrastructure. Indeed, research by CEDOS in conjunction
with the County Surveyors Society has shown that that the county
regions account for around three quarters of England's economic
activity outside London.
24. There may be a case for a city region
approach in the metropolitan areas but it is not a panacea for
most areas of England. As the recent report
by the New Local Government Network's (NLGN) City Region's Commission
recognises, there are many areas of the UK where city regions
would not be appropriate and where a county approach may be the
best approach to strategic governance. The report makes clear
that city regions alone cannot provide a comprehensive model of
25. Whatever the future of the City region
approach in some areas of the country, there can be no doubt that
county regions and county governance must continue to play a key
role in most areas of England.
26. Whilst new city region arrangements
might be relevant in some areas, too much emphasis on the core
cities, with the skewing of national and regional investment that
this implies, will have a seriously detrimental effect on other
towns, cities and rural areas. There is growing concern that the
increasing focus on the core cities will adversely affect the
county regions to the detriment not only of the county areas themselves
but also to the goal of driving up national and regional economic
performance and reducing regional disparities.
27. Core cities are, or should be, key drivers
of regional economies but they are not the only drivers. In the
West Midlands, for example, the economic system is polycentric,
with many of the key developments of the regional economy taking
place away from the core city. The revival of the core city is
important, but here, as elsewhere, the revival of the core should
not be at the expense of the county areas, where the new economy
is often at its most vibrant.
28. England's county areasthe county
regionshave a crucial role in regional economic development,
but one they will only be able to fulfil to maximum effect if
Government and the Regional Development Agencies properly recognise
the contribution they make and provide a more equitable share
of national and regional resources. A balanced approach is needed
that recognises the contribution that the county regions and their
towns, cities and rural areas can and do make and, as the ODPM
Committee itself recognised in its 2002-03 session, acknowledges
that each regional economy has different strengths, weaknesses
and opportunities. This diversity means that different organisational
responses are needed in different regions.
29. The need to compete effectively in the
21st century global economy can require closer inter-regional
cooperation to tackle regional disparities. In this country, the
"Northern Way" and the "Midlands Way" illustrate
the interest being shown in developing inter-regional strategies
to achieve economic growth, the leadership of which is being placed
in the hands of the Regional Development Agencies. The development
of pan-regional strategic approaches further emphasises the democratic
deficit in England at regional level and the importance of action
at regional level not being constrained by arbitrary geographic
boundaries. It gives further weight to the need to consider seriously
new regional arrangements in this country.
12 In the SEEDA region everything it seems has to
have a regional level of administration eg local food initiatives
have a regional co-ordinating group (and staffing); "Sustainable
Business Partnerships" which are County-based and in part
funded by SEEDA, have a SEEDA team co-ordinating them; SEEDA have
put £250,000 into setting up a regional creative and media
industries group (South East Media Network) which co-ordinates
the county-based partnerships (eg Wired Sussex and Wired Wessex).
In most cases, these co-ordination activities do not improve efficiency-they
simply add another layer of bureaucracy and inhibit the local
solutions for local problems approach. The same is true in the
South West region, where regional strategies and coordination
are constantly imposed on locally focused initiatives, with a
consequent reduction in funding available, and may inhibit the
potential for joint funding, added value and partnerships with
sub regional agencies such as county councils and other local
Productivity in the UK: 3-The Regional Dimension. H M
Treasury & Department of Trade & Industry. November 2001. Back
Seeing the Light? Next Steps for City Regions. New Local Government
Network. December 2005. Back