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


APPENDIX B

A GOVERNANCE MAP FOR GREATER MANCHESTER REPORT OF THE ASSOCIATION OF GREATER MANCHESTER AUTHORITIES

INTRODUCTION

  1.  One of the key issues which is likely to have an increasing profile over the coming months is City Regions and their governance arrangements. A Government White paper is promised later this year, and the intention behind this analysis by AGMA is to position Greater Manchester on this important debate, and create a framework for the potential development of a common approach.

KEY ISSUES

  2.  AGMA has identified the following key issues which it believes should inform Greater Manchester's overall approach to the issue of governance:

    —  The significance of City Regions, and the Manchester City Region in particular, to future national, regional and local policies.

    —  The key functional/programme areas which are considered to be essential to us achieving our full potential.

    —  What are seen as the major constraints to effective governance, and what we see as the components of successful and effective change in the future, and

    —  An analysis framework for the main options and a suggested way forward.

    Each of these matters is covered in the following paragraphs.

CITY REGIONS—WHY THEY MATTER

  4.  City Regions are increasingly acknowledged nationally as the driving force of economic achievement, and the key to the delivery of national competitiveness and inclusion strategies. This has been a policy change which has been hard won, and is manifesting itself in a range of policies and new initiatives, most notably the Northern Way strategy which has the potential to challenge the conventional approach to strategic planning and provide new opportunities for inter-agency and intra-regional working and collaboration.

  5.  For AGMA and its constituent authorities, the potential gains are the greatest of all. The Manchester City Region, with its concentration of key economic assets and its proven growth and development profile over the last few years in particular, is more important than most. We account for over 50% of the GVA for the whole of the North West of England. If we fail to achieve our full potential, there is no prospect of achieving regional or national job/wealth creation targets; and just as crucially, there is no serious and sustainable counter-balance in the UK to London and the South East.

  It is equally clear that many national Public Service Agreements (PSA) targets, including key floor targets, will only be achieved if they are achieved in City Regions. It is in City Regions that gaps in outcomes are widest. Many of the outcomes that need to be improved to secure sustainable communities such as skills, crime and health require City-Regional analysis and treatment.

  6.  AGMA has made clear its view that building upon City Regions is not inconsistent with the wider regional agenda. Indeed, it sees City Regions providing urgent and much needed focus to this agenda. This perspective is gaining increasing support amongst other stakeholders as evidence grows about the need to address dispassionately the future strategic direction of the Assembly.

GOVERNANCE: WHY IT MATTERS

  7.  There are three drivers for the development of successful and dynamic City Regions: driving economic competitiveness and skills development; supporting and facilitating investment in transport infrastructure; and building sustainable communities, ie places where people choose to live. These are all functional areas where local authorities, and other public sector partners, need to align spending programmes within a coherent policy framework. The particular additional role of local authorities as democratic and accountable institutions, is to provide the essential leadership and therefore the capacity to drive this process of economic and social change.

  8.  The policy framework which is required must be long-term in nature, so that it provides certainty and stability to a range of stakeholders—private as well as public—whose investment is essential to future growth.

  9.  Achieving growth and change also requires co-ordination of policies across the public sector, and harnessing their investment programmes to meet long-term policy objectives that define and deliver robust investment frameworks which sequence developments, both hard and soft. This is the key to providing a focus for the public and private sectors to work in partnership and ensure the effective deployment of resources, reduce duplication and, in practice, fill in the gaps in the provision of resources. The present situation within the City Region on a number of key issues—skills is one obvious example—point clearly towards a lack of integration. There exists, through the emerging relationship between AGMA, Manchester Enterprises (ME) and the Greater Manchester Local Learning & Skills Council (LSC) the potential to address this fragmentation but this needs to be developed and embedded in a way that locks in key commissioners, funders and providers.

  Government policy to increase diversity in public service provision is leading to more autonomy for providers eg schools, hospitals and housing management. The need within City Regions to understand the combined impact of services on competitiveness and sustainability of communities suggests that there is a strong case for Whitehall to have a different, or at least a more sophisticated, relationship with public services in City Regions. The degree of complexity and challenge in City Regions presents a compelling case for a level of governance between Whitehall and front-line delivery units which can hold providers to account for prioritised outcomes whilst freeing them from input and process controls.

  10.  There are a number of problems with existing governance arrangements for the full range of public functions, both on a regional and sub-regional basis. The main ones are as follows:

    —  Structures lack of legibility, portray a lack of focus and flexibility, and generate disproportionate costs There is an absence of an effective scrutiny process even for organisations like the North West Development Agency (NWDA) which perform a crucial role in promoting economic performance.

    —  Structures are not able, at least consistently, to prioritise the needs of the Manchester City Region, a fatal flaw, given we are the most important influence on the future success of the North West.

    —  The interface between key public services configured at a regional (eg Arts Council) or sub regional level (eg Police, Strategic Health Authority and Local LSC) and local priorities is, at best, inconsistent.

    —  There is an inability to secure consistent policy and programme integration, and

    —  There is a lack of consistent engagement with key partners, particularly the private sector.

  Put simply, there is no single or integrated focus for co-ordination and action which brings together all those key players which possess the resources and power to make a difference.

NEW GOVERNANCE REQUIREMENTS

  11.  It is considered that new arrangements must display a number of characteristics, as follows:

    —  Effective leadership, the capacity to vision and drive the process of change,

    —  Strong accountability and scrutiny, to hold to account key partners for performance, and their capacity to align programmes,

    —  Improved capacity and capability of services arranged at sub-regional or regional level to focus their modernisation and improvement programmes on shared objectives and priority places within the City Region,

    —  Consistent and effective engagement with partners, particularly with the private sector,

    —  Flexibility. We need the capacity to work within and outside established administrative boundaries, eg in East Lancs, North Cheshire and across the Pennines particularly on transport and economic issues,

    —  Transparency of the process of engagement in order to secure greater public credibility than existing regional arrangements, and

    —  Legibility and visibility of the new arrangement to ensure that there is clear recognition of the existence of the Executive and its role in the eyes both of key partners and the public.

  We believe the essential requirement is to place democratically accountable institutions at the heart of a new governance structure for the area.

REGIONAL STRUCTURES

  12.  AGMA has led the initiative this year for a fundamental review of regional structures and functions and has received very encouraging support within the region on this issue. Significant progress is now being made to streamline arrangements within the North West Regional Assembly (NWRA), which should result in a stronger and more consistent representational base built around sub-regions. This should take us forward, and at the very least eliminate some of the potentially damaging outcomes of policy development in key priority areas which characterised the NWRA activities recently.

  Whether regional structures per se are here to stay for the medium term is of course another matter but what is becoming increasingly clear is that the present arrangements, and potentially any fundamental change in the future, underline the absolute requirement for each sub-region to develop a robust framework for the development and leadership of policy and strategy. The challenge is all the greater for the Manchester City Region given its economic contribution to the wider region, and the leadership role it is increasingly expected to display.

SUB REGIONAL STRUCTURES

  13.  There are two broad optional approaches which require analysis:

    —    One which is akin to a Greater London Authority (GLA) model (also similar to pre 1986 Metropolitan Counties) with direct elections, with or without a Mayor.

    —    The other is a federalist model building upon AGMA, and possibly streamlining existing arrangements as they relate to Police, Fire, Transport etc.

  Whether or not preferences within some Ministerial circles for a GLA model will become more visible over the coming months, it is the case that if we are to make a serious input to the future debate, we will need to have demonstrated that options have been considered and evaluated dispassionately, and that a persuasive case has been presented to underpin a preferred approach. We will, therefore, need to show how a preferred model will in practice work in a City Region context. There is a case to commission an independent agent to support this process.

  14.  The sort of analysis which will be required would bring a number of issues into a sharp focus:

    —  Accountability: how we secure maximum efficiency for the costs of governance itself, and whether in practice it is possible to increase accountability by the addition of another layer of bureaucracy.

    —  Leadership: whether the issues within the sub-region are fundamentally about a lack of leadership, or, as is likely, more to do with how we secure within a single focus the active engagement of public and private sector partners with the resources and power to make a difference at the city-regional level.

    —  Constitution: whether the development of local PSAs or "City Region Area Agreements" can add strength to the process and increase accountability for agreed outcomes leading to new innovations and freedoms, and whether a new statutory power to co-operate is necessary to underpin any principle of change.

    —  Engagement: there is a clear will to collaborate across the Local Government partners and in some key public agencies in Greater Manchester. We need to explore whether there is a need to press for the introduction of a new duty to collaborate, across the public sector, in order to deliver key agreed city-region outcomes. Such a duty would need to be underpinned by new frameworks for inspection and regulation.

    —  Capacity: how through a single focus we need to deliver a stronger capacity to support integration etc.

    —  Flexibility: how structured models can embrace the dynamics of change and the various types of collaborative arrangements, particularly with agencies outside Greater Manchester.

  There is also the debate taking place within Government about the structures of Police Authorities and the configuration of Police Forces, Fire as well as Transport. The analysis which is required should embrace these matters, and in principle provide an outcome which enables AGMA and its partners in Greater Manchester to position themselves on these emerging debates too.

PROVISIONAL ANALYSIS

  15.  While there is no substitute for a more dispassionate and thorough analysis, it is clear that a federalist approach involving say a "Manchester City Region Strategic Board" has, in principle, a lot to commend it.

    —  There could be an Executive Board made up of leaders broadly in line with the present AGMA Executive with clearer responsibilities, thus underpinning accountability. The Board would secure coherence, synergy and leadership of the total process.

    —  It would build upon the comparative success of AGMA and other partners in developing an integrated approach to the development of key strategies (economic development etc), and which has already started to encourage key public sector agencies aligning their delivery arrangements to those of AGMA and its constituent authorities.

    —  The work of the Executive could be underpinned by LPSAs (and possibly a new statutory framework creating the power and the duty to collaborate) between local authorities, other public sector partners and the voluntary sector etc, which regulate working relationships with clear outcomes which can be performance managed. This would strengthen the role of the Greater Manchester Forum.

    —  We could also promote the notion of a "City Region Business Leadership Forum" to work with an Executive Board to provide significant and effective private sector input to policy and strategic development. The new private sector focus would recognise that most of the region's leading players are located in the City Region.

    —  The structure provides maximum flexibility to accommodate potentially different working and reporting relationships between the Executive and public sector and other partners inside and outside Greater Manchester. These could take the form of "compacts" which develop particular partnerships for particular functions or work areas.

    —  The model has the capacity to be progressed, albeit incrementally, on a voluntary basis given the support of AGMA authorities and other public partners. The creation of the Executive would reinforce the existing thrust of AGMA's work to develop a shared strategic framework for the conurbation and will serve to strengthen the existing AGMA Federation.

  All of these potential advantages would need to be reviewed in the light of the alternative Mayoral model which, in leadership terms, has the advantage of greater legibility.

CONCLUSIONS

  16.  This paper is designed to facilitate the input of partners across Greater Manchester into a debate which is likely to gain an increasing profile and intensity over the coming months.

  It is clear that the Secretary of State for Communities and Local Government is keen to promote an early debate on the issues of city-region governance. He is embarking on a series of "city summits" over the Autumn with a view to establishing a clear and distinct framework for each of the core city-regions.

  The Manchester "City Summit" is scheduled for 3 October and this will provide an ideal opportunity to set out our emerging views as to how an effective strategic federation might operate in the Greater Manchester area. It is therefore intended to include this proposal in the draft itinerary for the City Summit on that day with an initial view of the thoughts of other partners from across Greater Manchester.



 
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