Memorandum by the Office of the Deputy
Prime Minister (RG 32)
The Select Committee has launched an inquiry
into the future for regional government and has called for written
evidence by 23 January. This memorandum is the Government's response
to that call and addresses the areas identified in the Committee's
Terms of Reference.
This reply covers the ODPM family and, therefore,
addresses the Committee's request to the Government Offices in
the Regions.
ODPM is the lead department for regional policy
across Government. The development of a regional approach cuts
across a number of Whitehall departments' responsibilities and,
as the Committee has commented in previous sessions, one of ODPM's
key roles is to influence the actions of other Government Departments.
Therefore, this memorandum incorporates evidence from other Whitehall
departments[25]
approached directly by the Committee for evidence.
EXECUTIVE SUMMARY
Regional context (paragraphs 14-29)
1. The Government is committed to the development
of fit-for-purpose regional institutions and to continue its clear
policy to devolve and decentralise power to regions, where this
adds value. This is integral to creating sustainable communities.
The underpinning rationale for the Government's approach to the
regions can be broken down into three main cases:
The economic case (paragraphs 31-53)
2. There are demonstrable differences in
regions' economic performance and a greater understanding of these
and their underlying causes allows regions, and therefore UK plc,
to realise their economic potential. This also allows targeted
and effective policy interventions, where necessary.
3. The Government also has a specific target
to reduce the gap in economic growth rates between the regions.
Business-led Regional Development Agencies have been created and
are key strategic drivers of regional economic development working
to promote, among other aims, regional competitiveness, regeneration
and sustainable development.
4. The Government supports inter-regional
co-operation where regions themselves identify an innovative approach
to prioritising investment across their regions, including the
Northern Way.
The strategic case (paragraphs 54-80)
5. Regional institutions bring a unique
strategic perspective to policy development and spatial decision
making; they bring together a range of expertise drawn from all
levels and sectors within their region to better plan and integrate
investment decisions. The regional level focuses on a strategic
role rather than service delivery.
6. Regional assemblies are inclusive strategic
bodies "of the region" and bring together representatives
from key sectors across the region, sub-region, major cities and
city areas and the rural areas. They also embrace the full range
of political opinion in the region. This all-embracing nature
places assemblies in an ideal position to contribute to and ensure
consistency across regional strategies.
7. There are key spatial issues which need
to be addressed at the regional level including housing and planning.
These are issues which often cross local authority boundaries
and entail investment over a number of years. Therefore, a regional
strategic tier can plan successfully for a region's future.
8. The Government is ensuring deeper regional
involvement in policy development through innovation, for example
inviting regions to advise on their priorities through Regional
Funding Allocations. This is intended to ensure full advantage
is taken of regions' unique perspective across these funding streams
and to assist them in planning for the longer term.
The pragmatic case (paragraphs 81-85)
9. There is a practical element to the Government's
regional approach. There are some issues which are best decided
and implemented at other levels, for example tackling disadvantage.
The regional tier is not intended to replace such action. However,
there are other issues which cross local authority boundaries
which may not be best resolved locally and need a co-ordinated
response. The regional tier is not intended to focus on service
delivery, rather to provide an enabling framework for deciding
priorities and ensuring co-ordinated delivery.
London (boxed text, page 16)
10. The governance arrangements in London
are the most advanced example in England of devolving to a strategic
regional tier in England and provide a particularly compelling
case for regional government. These unique arrangements have been
widely seen as a success. The Government is currently reviewing
the GLA powers and responsibilities, with a view to devolving
more power from national government to London bodies to ensure
that there is an appropriate balance between the national, regional
and local tiers.
Government Offices Network (paragraphs 86-93)
11. The Government Office Network operates
as central government in the regions; its activities have been
decentralised from 10 Whitehall departments. The GO knowledge
of their particular region has added real value to policy development
and to joining up Government activity. The Government has been
reviewing the Government Office role and they are developing a
more strategic, place-based policy role, including negotiating
Local Area Agreements.
Regional relationship with other levels (paragraphs
94-118)
12. The Government's regional policy does
not operate in isolation. It interacts with the national, regional,
sub-regional, local and neighbourhood levels in a number of ways
including: bringing local government together; providing the strategic
framework tough decisions on difficult issues like transport;
and, being flexible enough to consolidate and support sub-regional
approaches where this is the best way, for example, to encourage
growth areas.
Other Whitehall developments (paragraphs 119-133)
13. One of ODPM's roles is to engage with
other Whitehall departments to support, influence and develop
regional approaches. Ten Departments work through the Government
Offices and there a demonstrable regional approach is developing
in Whitehall in key areas including skills, health and policing.
These developments will build on the regions' strategic regional
role and promote strong, coherent and relevant regions.
INTRODUCTION: REGIONAL
CONTEXT
14. It has been recognised by successive
Governments that there needs to be a level of decision making
and input into policy development between the national level,
which can be seen as remote, and the local level which is not
always a large enough unit.
15. For example, economic regeneration,
transport and housing supply are inter-related and inter-dependent
and decisions taken in one of these areas impact on the others.
They often entail investment over a number of years and require
long term planning so that the investment is phased effectively
and delivered coherently. These decisions tend to impact across
local authority boundaries.
16. It is the Government's responsibility
to ensure that the right policies and institutions are in place
to enable particular geographical areas to maximise their strengths
and tackle their weaknesses. This is integral to creating sustainable
communities.
Regional policy and institutions
17. There is demonstrable diversity within,
and between, the regions of England and they face different economic,
environmental and social challenges. To meet these challenges
the response from key players needs to be innovative, integrated
and flexible. Regional policy in England recognises the need to
promote economic growth across all the English regions and that
Government must create the conditions in which the regions can
develop their indigenous potential.
18. The Government is responsible for developing
innovative and effective approaches to policy development and
delivery to ensure that action is taken at the level most likely
to deliver positive solutions. It is in this context that the
Government is committed to the development of regional institutions
and to continue its clear policy to devolve and decentralise power
to the regions, where this adds value.
19. This encompasses a range of policies
and institutional arrangements, some where decisions and accountability
belong directly to regional institutions; others in which regional
institutions give advice to Ministers to inform Government decisions.
20. To enable regions to exploit indigenous
strengths and to address weaknesses the Government needs to ensure
that there are also institutions in place at the right level,
with the right powers and accountability.
21. For example, Regional Development Agencies
develop and drive economic growth through the Regional Economic
Strategies which set out priorities for the region and local areas.
These are agreed with key stakeholders and backed up with significant
resources.
22. The Regional Assemblies prepare Regional
Spatial Strategies which set out spatial priorities for the region,
including the region's housing and transport strategies. The development
of these strategies, taken together, provide the crucial framework
and vision for the future economic and social development of the
region. These strategies are strengthened as they have been developed
by the region and, in particular, by those organisations who will
be responsible for delivering on the agreed priorities.
23. The Government Offices operate as central
government in the regions and provide an excellent example of
activity being decentralised from traditional Whitehall departments,
where their regional knowledge adds real value.
24. There remain issues which are best decided
at the national level; other issues which are most effectively
dealt with at the local level. For instance, tackling disadvantage
at the local and neighbourhood levels remains the level most likely
to effect positive change. A regional approach is not intended
to replace such action.
25. Regions have an important role in drawing
together different sub-regional groupings and ensuring that they
work together constructively and consistently. The region can
take a strategic overview to ensure that all areas of their region
are represented, for example ensuring that rural areas are integral
to the region's development.
26. The Government's regional policy also
recognises the role of cities as motors for growth and the development
of cities and city-regions should be seen within the current regional
context. Regional institutions can enable city regions to act
collectively to ensure issues such as connectivity and investment
are considered strategically and to maximise benefits to the wider
region.
27. Also, inter-regional approaches such
as the Northern Way are excellent examples of innovative regional
co-operation to tackle issues and focus resources to meet need.
Elected regional assemblies
28. As the Committee noted, a referendum
was held in the North East on 4 November 2004 on whether to establish
a directly-elected regional assembly. The proposal was turned
down by voters and the Government accepted that decision. As the
Deputy Prime Minister acknowledged in his statement to the House
on 8 November 2004, there are no further referendums planned for any
other region. However, should a region express interest in an
elected regional assembly, the Government would consider the case
further.
29. The Deputy Prime Minister also reiterated
the Government's commitment to regional government and to continue
to devolve and decentralise powers to the regions.
Rationale behind regional policy
30. The Government believes that a regional
approach is necessary to create the optimal conditions in which
policy decisions and the delivery of those policies can effect
positive change to people and places. In this memorandum the underpinning
rationale for a regional approach can be broken down broadly into:
The economic case—there are demonstrable
differences in regions' economic performance, for different reasons,
and a greater understanding of these and their underlying causes
would allow regions, and therefore UK plc, to realise their economic
potential.
The strategic case—regions bring
a unique strategic perspective to policy development and spatial
decision making; they bring together a range of expertise drawn
from all levels and sectors within their region to better plan
and integrate investment decisions. The regional level focuses
on a strategic role rather than service delivery.
The pragmatic case—there are issues
which cross local authority boundaries and taking a view across
a wider area ensures that resources are being invested effectively.
These are each discussed in more detail below.
THE ECONOMIC
CASE
31. The Government believes that to run
successful economic policy there needs to be decentralisation
and devolution to the regional and local levels. At these levels,
institutions must have the capacity, leadership, flexibility and
policy levers which enable them to deliver their objectives.
32. There are demonstrable differences in
regions' economic performance, for different reasons, and a greater
understanding of these allows regions, and therefore UK plc, to
realise their economic potential. This also allows targeted and
effective policy interventions, where necessary.
Regional economic performance
33. The Government has recognised for some
time the need to be proactive on improving regional economic performance.
This was made manifest in the setting of a Regional Economic Performance
PSA Target (REP PSA) following SR2002, and revised in SR2004.
The REP PSA is to:
34. "Make sustainable improvements
in the economic performance of all English regions by 2008 and
over the long term reduce the persistent gap in growth rates between
the regions, demonstrating progress by 2006."
35. The target is shared between ODPM, HM
Treasury and the Department of Trade and Industry. The Government's
approach to this long-term target is two-fold—to tackle
market failures in employment and the five productivity drivers
(skills, investment, innovation, enterprise, and competition)
in all parts of the country, and to build effective regional and
local institutions with the local knowledge, economic capacity
and vision to drive up economic performance in their area. The
eight Regional Development Agencies and the London Development
Agency,[26]
and RDA-led inter-regional growth strategies such as the Northern
Way, are therefore key to the delivery of this PSA.
Progress towards the target
36. Regional GVA per head is the main measure
for the PSA. Although the final outcome can only be measured over
a full economic cycle, 2003 and 2004 GVA results are encouraging,
as the poorer performing regions have narrowed the gap in growth
rates with London, the South East and East. This has been partly
due to employment growth in the Northern regions, which has resulted
in the average employment rate in the North, Midlands and South
West regions rising to within around 0.5% of the average London,
South East and East rates. (This gap was over 2% in 2001).
37. In the short term, the Government expects
to further reduce the employment rate gap through DWP's Pathways
to Work programme. This is helping to tackle Incapacity Benefit
claim rates which remain higher in the Northern regions. As at
February 2005, almost 10% of the working age population in the
North East was claiming incapacity benefit, with an average of
8.6% of the working age population across the three Northern regions.
38. To achieve the PSA target will also
mean increasing productivity in the poorer performing regions,
which is a more complex and long-term challenge. However, effective
working by inter-regional, regional, city, and local agencies
has the potential to be transformational.
Regional Development Agencies (RDAs)
39. There are eight RDAs outside London
and these are non-departmental public bodies, accountable to Ministers
and to their regions (through regional assembly scrutiny). Their
primary role is as strategic drivers of regional economic development
in their region. The RDAs' aim to co-ordinate regional economic
development and regeneration, enable regions to improve their
relative competitiveness and reduce the imbalance that exists
within and between regions.
40. Each RDA has five statutory purposes,
which are:
— To further economic development and
regeneration.
— To promote business efficiency, investment
and competitiveness.
— To enhance development and application
of skills relevant to employment.
— To contribute to sustainable development.
41. The RDAs have developed Regional Economic
Strategies, in consultation with regional partners (seven of which
are presently being reviewed; the other two were undertaken in
2004). In the six years of their existence, the RDAs have supported
thousands of regeneration schemes, skills projects and initiatives
to promote innovation and competitiveness.
Funding
42. The Government is providing RDAs with
year-on-year resource increases from £1.8 billion in 2004-05
to £2.3 billion by 2007-08. ODPM is nearly doubling its support
between 2000-01 and 2007-08 (£879 million to £1.598
billion).
43. Individual RDA budgets are allocated
according to a formula based on population and economic strength.
The formula provides more resources per head to poorer regions.
Performance
44. The Government and the RDAs have embarked
on an impact evaluation of the effectiveness of the RDAs' regional
economic delivery since their inception in 1999. This work is
led by DTI, on behalf of Departments, and overseen by a joint
RDA and central government steering group including ODPM and HM
Treasury.
45. The first stage was the development
of a methodology and evaluation framework which is now complete.
The second stage, which has now begun, is the framework implementation
phase primarily based on RDA self evaluation with support as needed
from DTI-appointed consultants. The third stage will draw together
emerging findings into an overall assessment, in preparation for
the evidence-gathering phase of CSR 2007.
RDA Strategic Role: West Midlands
The West Midlands RDA, Advantage West Midlands, set up the "MG Rover Task Force" in April 2005 in the wake of the closure of MG Rover Longbridge plant. Led by Advantage West Midlands Chairman Nick Paul, it also includes Jobcentre Plus, the Learning and Skills Council, Birmingham Chamber of Commerce and Business Link, Birmingham City Council and Worcestershire County Council.
On 21 June 2005, 66 days after MG Rover's collapse, the MG Rover Task Force was able to report to the Prime Minister that the West Midlands was fighting back from the biggest company closure in years. Key progress that had been made by the Task Force since the closure was:
—nearly 1,250 former MG Rover workers had found new jobs;
—1,092 former workers had started training out of 2,200 booked onto courses;
—3,000 "at risk" jobs had been temporarily safeguarded in companies supplying MG Rover.
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Inter-Regional Growth Strategies
46. Inter-Regional Growth Strategies are long-term plans
focussed on achieving economic growth in the regions of the UK
through regions working together to deliver policies pan-regionally
where it is the right level to do so, building on what is already
happening at the regional level, and concentrating on what they
can do for themselves. They identify the key drivers that will
improve economic performance across the regions.
The Northern Way
47. The Northern Way is the first and most developed
example of an Inter-Regional Growth Strategy. The Deputy Prime
Minister challenged the three northern Regional Development Agencies
to develop a realistic long-term plan for creating a step change
in economic growth in the North to add value to what already happens
in each region.[27]
48. In response, the Northern Way took shape, directed
by an independently chaired Steering Group and led by the RDAs,
and set itself the target of narrowing the £30 billion output
gap between the North and the UK average by promoting collaboration
across the whole of the North.
49. Moving Forward: The Northern Way[28]
is their long-term strategy to close the output gap. It identified:
10 key areas that would help accelerate economic growth eg tackling
worklessness, strengthening the knowledge base and improving connectivity;
and eight city-regions[29]
(where most people live and economic activity takes place) as
being key to achieving its goal. The report was welcomed by the
Deputy Prime Minister and, to kick start the strategy the ODPM
provided £50 million toward a Northern Way Growth Fund. This
was matched by the northern RDAs.
50. In June 2005 the Northern Way published their fully
costed Business Plan[30]
covering the period from 2005 to 2008, which gives a costed work
programme for each of the 10 investment priorities and presents
the progress made by each of the city-regions.
Midlands and South West Ways
51. The value in pursuing this approach was recognised
in the Midlands[31] and
the South West[32] regions.
Similarly, this work is being driven forward by the regions' RDAs
working with key regional partners using structures that best
fit their individual needs. Government has welcomed the regions
leading the way for themselves and supports and facilitates this
work where useful.
52. Unlike the Northern and Midlands' Ways, the South
West's The Way Ahead focuses on intra-regional development.
The South West is a relatively prosperous region but one that
suffers the greatest intra-regional disparities in England with
significant issues in terms of its geographical and economic diversity.
There are a number of peripheral towns and cities in the region
and The Way Ahead focuses on ensuring that the whole region benefits
from growth not just the success stories in the east of the region.
53. A small advisory group has been formed to steer further
work. It is focussed on five key areas—Bristol, Plymouth,
Swindon, Exeter and the key Cornish towns—and developing
key deliverables to support growth in these areas.
THE STRATEGIC
CASE
54. Regions bring a unique perspective to policy development.
The regional level is not intended to focus on service delivery;
rather it is an effective level at which to decide priorities
across a wide geographical area, bring together a range of expertise
drawn from all levels and sectors within its region in order to
plan and better integrate investment decisions.
Regional assemblies
55. The regional assemblies are voluntary, multi party
and inclusive bodies established in each of the eight regions
outside London. Local Government members make up at least 60%
of the membership and at least 30% are regional partners from
economic, social and environment sectors. Regional stakeholders
provide a specialist and regional input representing a broad range
of interests while the local authority members ensure the people
in the region can have their views represented.
The assemblies have three main functions:
(i) They have been designated under the Regional Development
Agencies Act 1998 as the body their RDA must consult during the
preparation of the Regional Economic Strategy;
(ii) They have been designated under the Planning and
Compulsory Purchase Act 2004 as the Regional Planning Body with
responsibility body for preparing the Regional Spatial Strategy,
including the Regional Housing and Transport strategies on behalf
of the relevant Secretary of State; and,
(iii) They have a role as the voice of the region and
have taken the lead with regional partners in drawing up regional
strategies such as the regional sustainable development framework.
56. Regional assemblies are inclusive strategic bodies
able to draw on the experience and knowledge of representatives
from the key sectors across the region, sub-region, major cities
and city areas and the rural areas. They also embrace the full
range of political opinion in the region. The all embracing nature
of the regional assemblies place them in an ideal position to
contribute to and ensure consistency across regional strategies.
57. The regional assemblies work with key partners in
their regions contributing towards the wide range of strategies
that exist at the regional and sub-regional level prepared by
a variety of regional organisations to different timetables. Assemblies
provide a focal point for the region and are able to speak on
the region's behalf as they represent the interests of the region
both within the region itself and more widely, working with a
variety of public, private and voluntary sector partners.
58. The make up of regional assemblies reflects the individual
circumstances of each region and its sub-regional areas. The Government
does not impose a single model on assemblies. However, it is seeking
assurances from them that they are continuing to develop their
structures and organisations and streamlining their operations
to further improve their effectiveness.
59. The Government has indicated it will give assemblies
additional functions where it considers it appropriate. It has
accepted the Barker recommendation that Regional Housing Boards
and Regional Planning Bodies be merged and that the regional assemblies
should take on this new merged role. Therefore, the assemblies
have been invited to submit proposals how they would effect the
merger of the Regional Planning/Regional Housing roles, how they
can improve strategy alignment of the regional housing strategy
with other strategies and provide details of internal operational
arrangements such as the executive and policy boards in place
to deliver effective decision making.
60. Assemblies will be responding around the end of January
and subject to these containing suitable arrangements a formal
announcement on them taking on the regional housing board role
would be made in March.
Regional planning
61. Regional planning is essential to address regional
or sub-regional issues that often cross county or unitary authority
boundaries and take advantage of the range of development options
that exist at that level. This would include, for example, major
transport decisions of regional importance, the balance within
a region between major areas of housing growth, with the supporting
infrastructure they require, and where constraint cannot be decided
at the local level.
62. It means looking at the bigger picture over the medium
to long term. In the context of the regional spatial strategy
it means setting out policies that are applicable to the whole
region or parts of the region across a range of policy areas which
set the framework for the policies in local development documents.
A regional spatial strategy for example will not include site
specific proposals.
63. The objective of an RSS is to contribute to the achievement
of sustainable development and should provide a broad development
strategy for the region for a 15 to 20 year period.
64. RSSs should be spatial strategies setting out the
strategic policies and proposals, including infrastructure proposals
and management policies, governing the future distribution of
regionally or sub-regionally significant activities and development
within the region.
65. The Act also provides for the preparation of sub-regional
policies as part of the RSS. The PCPA 2004 aims to promote greater
regional ownership of RSS policy. There is a strong role for the
local planning authorities and regional stakeholders in preparing
the strategy and openness in the process, including the holding
of an examination-in-public to consider issues raised in representations
on the draft revision.
Regional housing
66. The Government believes that housing is another issue
which benefits from a strategic regional approach. For example,
as part of the Sustainable Communities Plan, the Housing Investment
Programme and Approved Development Programme funds were drawn
together into a single "Regional Housing Pot".
67. Previously, the HIP and ADP funds had been allocated
separately, without a common strategic background. In order to
make better informed decisions that cut across local boundaries,
the Government took the decision to ask for the region's advice
about how the resource should be spent. This approach also provides
the added benefit of taking into account that housing markets
do not neatly align themselves with precise borders.
68. Also as part of the Sustainable Communities Plan
and to facilitate this approach, Regional Housing Boards (RHBs)
were set up in March 2003. They were charged with producing a
Regional Housing Strategy, which provided the regionally-agreed
background to advice to Ministers on strategic housing investment
priorities for their region. Having senior representatives of
the regional planning body and the Regional Development Agency
sitting on each RHB also ensured that housing policies were better
integrated with the planning and economic strategies at a regional
level.
69. The Government believes that housing advice from
a region is likely to be well-informed as regional bodies are
better placed to understand the impacts of decisions within their
region. The priorities in the advice are also more likely to have
support as the mechanisms for producing the RHSs bring together,
for the first time, all key bodies with a strategic interest in
delivering new and better housing in a region.
70. The RHBs work within a broad national framework.
Within that framework, there is a strong presumption in favour
of Ministers taking the advice offered. Only on relatively few
occasions has the RHBs' advice been amended and, even then, generally
to take account of a new priority emerging during the decision-making
process.
71. In practice, RHBs also act as a catalyst and "honest
broker" for activities across local authority boundaries.
This is particularly important for housing given the increased
focus on private sector housing and the fact that housing markets
rarely obey local authority borders, either at the County or District
levels. A regional approach is best able to take this overview
of housing markets, whilst retaining local links.
72. RHBs enable a better read across between the RHS
and other regional strategies, including the Regional Spatial
Strategy discussed above. This will be reinforced by the decision
to transfer responsibilities to the Regional Assemblies.
73. RHBs can also act to ensure the development of robust
and consistent evidence bases across the region. We have many
examples of where the RHB has acted as the key player using innovative,
inclusive approaches to deliver a housing strategy for their region
which both supports strategic objectives for the whole region
and is well targeted on specific areas of need within the region.
Example of the RHB role
In 2004-05 the West Midlands RHB funded regional research to inform the production of a new RHS. The research supported the identification of housing markets in the regions and baseline information on the level of need for differing tenures and types of housing across West Midlands. The RHB was then able to use its status as an "honest broker" to encourage the formation of sub-regional groupings of local authorities in line with housing market areas.
Outputs included the identification and agreement on where a rebalancing of regional funding was needed. The research made it clear that the worst stock condition problems existed in the Central and North Housing Markets and the most acute affordability problems were in the South and West Housing Markets. These findings underpinned recommendations on the targeting of funding for affordable housing and to address stock conditions to Ministers. The work sponsored by West Midlands RHB on housing markets has become a benchmark for other regions.
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REGIONAL FUNDING
ALLOCATIONS
74. Regional Funding Allocations (RFAs) aim to deepen
the regions' involvement in policy development and to enable them
to align their strategic priorities covering key funding streams
in housing, transport and economic development, within a realistic
funding envelope. This is intended to ensure that full advantage
is taken of regions' unique perspective across these funding streams
and to assist them in planning for the longer term.
75. In July 2005 four departments—ODPM, HM Treasury,
DfT and DTI—published details of funding allocations for
each region for the period up to 2007-08 for each of key elements
of transport, housing and economic development, as follows:
|
| | |
| | | |
| | | £ million
|
| | NW
| NE | Y&H
| EM | WM
| SW | SE
| E | Total
|
|
| 2005-06 | Transport | 113
| 42 | 83
| 71 | 88
| 84 | 135
| 92 | 708
|
| Housing | 250
| 86 | 144
| 116 | 182
| 137 | 367
| 167 | 1,449
|
| Economic Development | 382
| 240 | 295
| 156 | 272
| 153 | 157
| 129 | 1,784
|
| Total | 745
| 368 | 522
| 343 | 542
| 374 | 659
| 388 | 3,941
|
| 2006-07 | Transport | 115
| 43 | 85
| 73 | 90
| 86 | 138
| 94 | 724
|
| Housing | 249
| 88 | 147
| 125 | 186
| 158 | 384
| 191 | 1,528
|
| Economic Development | 400
| 251 | 310
| 163 | 284
| 159 | 163
| 134 | 1,864
|
| Total | 764
| 382 | 542
| 361 | 560
| 403 | 685
| 419 | 4,116
|
| 2007-08 | Transport | 117
| 43 | 87
| 74 | 92
| 88 | 141
| 96 | 738
|
| Housing | 249
| 91 | 154
| 143 | 193
| 203 | 421
| 241 | 1,695
|
| Economic Development | 409
| 258 | 316
| 167 | 291
| 164 | 167
| 138 | 1,910
|
| Total | 775
| 392 | 557
| 384 | 576
| 455 | 729
| 475 | 4,343
|
|
76. The Departments also published longer term planning
assumption figures for each region—by projecting forward
the allocations for each funding stream beyond 2007-08 to give
regions a sensible basis on which to plan strategically for the
future. These are based on an annual increase of 2%, in line with
Government's inflation target, and gave indicative figures up
to 2015-16.
77. Whilst housing and economic development allocations
had been published previously, this was the first time that such
allocations had been identified for transport.[33]
78. The Government has asked each of the regions to provide
it with advice identifying the region's priorities for investment
both within and across these three inter-related and inter-dependent
funding streams. Government has also set four criteria for this
advice. The advice should be: evidence-based; agreed within the
region; realistic; and, consistent with national policy objectives
and local strategies.
79. The RFA exercise also gives regions an opportunity
to align more closely their strategies on these key areas of activity.
The indicative allocations should enable regions to ensure their
Regional Economic Strategies and other regional strategies are
based on realistic funding assumptions and help develop an effective
evidence base underpinning each of the strategies.
80. The Government Offices are facilitating the advice
which is to be drawn up by the RDAs, Regional Assemblies and other
relevant stakeholders and submitted to central Government by the
end of January 2006.
THE PRAGMATIC
CASE
81. There is a practical element also to the development
of a regional approach. There are a number of issues where decisions
taken in one area have a direct effect on another: for example
decisions relating to housing, transport and economic development.
Indeed, a number of the examples considered previously could fit
equally into this section. A further example of ODPM policy where
the regional level makes sense on pragmatic grounds is civil resilience:
Civil resilience
82. Increasingly incidents, either accidental or deliberate,
require a cross boundary response. To tackle this the Government
is putting in place the legislative framework to facilitate that
response while balancing and respecting local autonomy. The legislative
framework encompasses the Civil Contingencies Act (CCA) and the
Fire and Rescue Service Act. Shortly, fire and rescue service
(FRS) will be given new duties to respond to major catastrophic
incidents, having funded fire authorities with the resources to
do so.
83. As part of this there is a regional tier for planning
and preparation. This works to link national and local stakeholders
and co-ordinates preparation for, and response to, wide area high
impact events—for example 'flu pandemics and fuel supply
issues. This is a practical and necessary element which does not,
however, remove the primary focus for planning and response from
the local level.
84. In the FRS, new equipment and training is being developed
on a regional basis, specifically aimed at providing an effective
response to catastrophic incidents. This includes equipment for
dealing with structural collapse, mass decontamination and major
flooding. This work complements the wider work on FRS modernisation.
85. At the same time, FiReControl will deliver a modern,
cost effective and resilient command and control network to ensure
the efficient and effective deployment of FRS capabilities. Regional
Control Centres will be run by Local Authority owned companies
and will be accountable to locally elected members of fire and
rescue authorities.
LONDON
The governance arrangements in London are the most advanced example of devolution to a strategic regional tier in England and provide a compelling case for regional government.
The GLA is made up of the directly elected Mayor of London and the separately elected 25-member London Assembly. The first London Mayor and Assembly took office following elections on 4 May 2000.
The GLA is a focused, strategic authority providing vision and a voice for London. It has three principal purposes in relation to Greater London:
— to promote economic development and wealth creation;
— to promote social development; and
— to promote the improvement of the environment.
The Mayor is the executive arm of the Authority, influencing London's strategic direction through his strategies and plans and proposing a budget (some £9 billion) for the Assembly to consider and agree. The Assembly is the scrutiny arm of the GLA, holding the Mayor to account for his policies, decisions and actions, and can amend the Mayor's budget by a two-thirds majority.
GLA Review
The Government is currently reviewing the powers and responsibilities of the GLA, with a view to devolving more power from Whitehall to London. The review is informed by three key principles:
— that the GLA is widely seen as a success, and should remain a focused and strategic body as originally conceived;
— there should be an appropriate balance in London between national government, the regional tier and local authorities; and
— the review should focus on the powers and functions of the GLA rather than on London governance structures as a whole.
In November 2005, Ministers published a consultation paper setting out proposals and options for additional powers for the Mayor in four key areas—housing, skills, planning and waste management/waste planning—and in health, culture, energy and appointments to the Boards of the functional bodies.
Most of the additional powers subject to consultation would be devolved from central Government, but in specific cases, such as waste management, Ministers are also exploring the case for the Mayor assuming control of some borough functions where it may be more sensible to deliver them at the regional level. The consultation paper also includes proposals for enhanced powers for the Assembly to balance those of the Mayor.
The consultation period ends on 22 February. Ministers aim to agree a final package of proposals in the spring, and will implement the outcomes of the Review at the earliest opportunity.
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GOVERNMENT OFFICE
NETWORK
86. The Government Office Network is central government
in the regions and provides an excellent example of activity being
decentralised from traditional Whitehall departments and where
a regional approach can add real value.
87. Government Offices (GOs) were set up in 1994. They
have first-rate knowledge of their respective regions and this,
combined with their ability to join-up the work of individual
departments, is what makes the GOs so important in delivering
Government priorities.[34]
88. The Government has considerably strengthened the
role of Government Offices. There are now 10 government departments
represented within the GOs and they are involved in the delivery
of over 40 national Public Service Agreements, including seven
ODPM PSA Targets. The breadth of this work may continue to increase
as departments continue to implement their response to the relocation
and efficiency reviews.
89. The key importance of GOs is in their ability to
join up programmes and policies and ensure better alignment and
integration of regional strategies and investment decisions. Their
activities can be split into the following main categories:
— Leading—for central Government in negotiating
local area agreements, including setting stretching targets for
achievement by local authorities and their partners.
— Delivering—many of the activities link to
Departmental PSAs, with a clearly identified GO role in ensuring
delivery of national priorities through agreements with individual
departments.
— Influencing—regional partners in preparing
regional strategies, from transport to sustainable development.
— Improving—through working with poor and
weak local authorities to assessing performance of local strategic
partnerships.
— Planning—for emergencies. GOs have taken
a leading role in responding to crises such as the fuel protest,
foot and mouth, flooding and bombings.
— Administering—a continuing, though diminishing,
role in the sound administration of programme expenditure.
90. The nature of GOs is that they are cross-cutting
bodies, and much of the work they do for ODPM directly impacts
on the work they do for other departments. Their work for ODPM
is set out at Annex A and includes neighbourhood renewal, regional
economic performance and local government.
The Developing GO Role
91. Following the 2004 Spending Review, the Regional
Co-ordination Unit, (a Directorate of ODPM) and the Treasury have
been conducting a review of the GO Network to identify ways of
improving its efficiency and effectiveness. The Review has engaged
a wide range of stakeholders from Whitehall, local government,
GOs, and other regional institutions, and found broad support
for a more strategic role for the GOs. This is consistent with
the way in which GO work has evolved over recent years, from process-orientated
work such as grant administration, towards more strategic, place-based
policy work such as the negotiation of Local Area Agreement (LAAs
are discussed in more detail under the "Local Government"
section below).
92. The Chancellor's Budget 2005 statement announced
the Review's emerging conclusions, which include:
— a more focused role for the GOs in working with
local authorities and other local partners on performance, and
on the oversight of regional strategies, while looking over time
to transfer grant administration functions to other agencies;
— new freedoms and flexibilities for the GOs to
enable them to join up their activities more effectively across
departmental boundaries;
— a transformed and more strategic network, including
a higher proportion of staff with professional skills and delivery
experience;
— a challenge to departments to decentralise activity
from Whitehall to the regions and to integrate this activity into
the GOs where this can improve delivery;
— stronger links between GO Regional Directors and
departments on policy development, with a particular emphasis
on policy implementation;
— a strong performance management framework to underpin
these new flexibilities driven by a small corporate centre with
a strong focus on improving performance; and
— building on the challenging efficiency agenda
for the GO network set in the 2004 Spending Review, a smaller,
more focused network in the years to come.
93. The final report on the GO Review is currently being
worked up with a view to publication early in 2006.
REGIONAL RELATIONSHIP
WITH OTHER
LEVELS
Local Government: Clarifying roles and responsibilities
94. ODPM is leading the development of a Government-wide
strategy for the future of local government. Under the banner
of local:vision, a debate with other government departments, local
government and other stakeholders began in July 2004 as to what
the future role and functions of local government should be.
95. Through the local:vision debate, the Government seeks
to:
— Understand what the strategic role and function
of local government should be in the future, given prevailing
trends in government policy and changes in society (eg expectations,
demography and technology).
— Build consensus for that new role across local,
regional and central government, and other partners working to
govern and deliver in local areas.
96. ODPM has always recognised that the relationship
between local government and its partners with regional and central
government is an integral part of the debate on the future of
local government. This was set down in the discussion document
"Securing Better Outcomes: Developing a New Performance Framework"
published in March 2005 that ODPM would be looking to develop:
— A clearer understanding of the relative roles
and responsibilities of bodies involved in securing particular
outcomes at national, regional, local and neighbourhood level.
— For each tier of government, the importance of
a coherent framework across all services which is understandable
and capable of effective implementation—but allows for appropriate
variation to respond to different issues and challenges.
— The unique role of local authorities within this
structure—as the body below national government with direct
democratic accountability to represent all citizens and interests
within an area.
97. The local:vision debate will be drawn together in
the summer of 2006 in the form of a White Paper and Government
is continuing to engage with stakeholders on the issues the debate
has raised and welcome any further contributions to it from interested
parties.
Local Government: Local Area Agreements led by Government Office
98. Local Area Agreements (LAAs) are a new way of striking
a deal between central Government, local authorities and major
local delivery partners in an area. LAAs simplify funding streams,
allowing greater discretion with the use of funding, and reduce
the bureaucracy attached to multiple funding streams. Areas agree
to meet a broad suite of targets, and are given flexibility to
achieve them, for example in the form of reduced bureaucracy/reporting
requirements, and the ability to merge money from different funding
streams.
99. Government Offices are at the forefront of managing
Government's relationship with local authorities and driving up
local authority performance. The role of GOs is critical in the
successful development and implementation of LAAs. Government
Offices are responding to this challenge by restructuring roles
and responsibilities so that a great deal of day-to-day business
is managed through the development of the LAA. This is a particular
challenge for 2005-06 where half of local areas will be developing
or implementing their LAAs and the remainder waiting for the following
year. It is hoped that LAAs will become the key mechanism by which
government delivers its priorities with local areas.
100. Following last year's round of 21 pilot LAAs, work
is proceeding in each region to negotiate the next 66 LAAs which
are to be in place by end of March 2006. Negotiations will then
start in March on LAAs with the remaining 63 local authorities—to
be agreed by March 2007. GOs are also responsible for monitoring
LAA performance. The pilot LAAs reported progress to GOs at a
"six month review" in October.
101. A great deal of work has been done by ODPM and other
departments to ensure that GOs have adequate guidance and opportunities
to share best practice. A network of key GO LAA officials meets
regularly, and regional sounding boards are held every couple
of months (one each in the north/south/midlands) to bring together
departments, local authorities and GOs to discuss progress, problems
and good practice.
Sub-regional: Cities
102. The relationship between the region and its cities
is key to improving regional economic performance and meeting
the PSA target (discussed separately above). The competitive performance
of cities, and city regions, is crucial for to regional and national
success.
103. The concept of city-regions was debated at the City
Summits with the Core Cites, and some "business cases"
which are due to be presented to Government shortly are likely
to include proposals for city-region approaches to strategic issues
such as transport, skills and planning.
City-regions as economic drivers
104. A city's success—economically, culturally
and socially—depends heavily on the establishment of a strong
inter-dependent relationship with neighbouring towns and cities
in its region. That said, there is no standard definition of what
constitutes a city-region and the following should be seen in
this context.
105. Recent evidence strongly suggests that city-regions
are the appropriate level to make economies work.[35]
This is because city-regions offer an understanding of how the
real economy operates through the interaction of important market
factors such as labour and housing markets, retail catchment areas,
business and investment markets with customers and suppliers,
culture and higher education.
106. As a result, the city-region may be the appropriate
spatial level to plan strategically for the delivery of services
that will promote sustainable development such as transport, skills
and housing.
107. The Northern Way's First Growth Strategy employs
a city-region approach, within a regional framework. It recognises
that the eight main city-regions are the key to accelerating economic
growth in the North as they contain over 80% of the wider region's
economic assets and activity.
Core Cities
108. David Miliband and other Government Ministers recently
held City Summits in the eight Core Cities—Bristol, Birmingham,
Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield.
109. The Summits were intended to allow Cities to discuss
their vision for the next 10 years, and the economic and social
changes needed to achieve it.
110. Following the Summits, each city was invited to
prepare a "business case" for the changes they see as
central to realising their full potential in the future. The "business
cases" will be presented to David Miliband shortly for consideration.
The next round of summits for smaller cities and towns
111. The objective of these Summits is to understand
better the assets, barriers and enablers of cities and towns which
are not Core Cities.
112. From this we aim to develop a package of options,
from which individual cities and towns could choose those approaches
which they felt would help develop their locality. The Summits
will take place from February to May 2006.
Sub-regional: Growth Areas
113. The newer Growth Areas (Milton Keynes and South Midlands,
Ashford and London-Stansted-Cambridge) were identified alongside
the already established Thames Gateway in Regional Planning Guidance
9 (March, 2001), based on the proposals by regional and local
partners. Following further studies and assessments into the scope
and viability of sustainable growth in these areas, the Government
identified the Growth Areas programme as part of the Communities
Plan (February, 2003). The London-Stansted-Cambridge Growth Area
has since been expanded to incorporate the Peterborough sub-region.
114. Growth Areas were designated on the basis of focussing
on locations where significant levels of sustainable growth could
be achieved.
115. Geographical boundaries of the Growth Areas do not
correspond with those of the regions, which requires flexibility
from the regional tier to fully integrate the Growth Areas approach
into the strategies of more than one region. For example, the
London-Stansted-Cambridge-Peterborough area covers parts of London
and the East of England region, the Thames Gateway is spread over
parts of London, the South East and the East of England, while
the Milton Keynes and South Midlands boundary covers parts of
the East, South East and East Midlands. The exception is Ashford,
which is contained within the South East region.
116. This geographical spread means that strong cross
regional working is essential to successfully take forward the
Growth Areas agenda.
117. Good progress has been made so far. For example,
the Milton Keynes and South Midlands Growth Area is benefiting
from the close joint working of those involved in the proposal
for the area. Three Regional Planning Boards are working efficiently
together, as are the respective Government Offices who have established
a joint office in Milton Keynes to help facilitate a joined-up
approach. This has resulted in the publication of the area's Sub-Regional
Strategy (March, 2005), which provides alterations to the Regional
Spatial Strategies covering the East of England, East Midlands
and South East of England and sets the strategic framework for
the Local Development Documents in the Sub-Region. An Inter-regional
Board has also been established in this Sub-Region to bring together
key regional and local partners to facilitate close working arrangements
and to help co-ordinate investment throughout the Growth Area.
118. In the Thames Gateway, an Inter-regional Planning
Statement was published in August 2004 to provide a co-ordinated
approach between the three Regional Planning Bodies (East of England,
London and the South East) covering the Gateway area. While it
is a non-statutory document, it provides the regional partners
with an agreed strategy and assessment of potential development
capacity.
OTHER WHITEHALL
DEVELOPMENTS
119. In addition to the policy developments outlines
above one of ODPM's roles is to promote the regional agenda within
Whitehall to influence the organisation of bodies who could benefit
from co-terminosity with existing regional boundaries. Below are
three examples, at various stages and related to various Departments,
which explore the developing regional terrain:
Strategic Health Authorities
120. In July 2005, the Department of Health (DH) published
"Commissioning a Patient Led NHS", which focused
on how the Department would develop commissioning throughout the
whole NHS system, with some changes in function for Primary Care
Trusts (PCTs) and Strategic Health Authorities (SHAs).
121. One of the key proposals from Commissioning a Patient
Led NHS was to reconfigure SHA boundaries with Government Office
boundaries.[36] By realigning
SHA boundaries in this way, DH believes that SHAs would be more
fit-for-purpose organisations, with strengthened relationships
and better co-ordination.
122. The Government also proposed to improve coordination
on social services through greater congruence of PCT and Local
Authority boundaries. Currently, 44% of PCTs are consistent with
Local Government boundaries and DH expects this will rise to a
minimum of 77% as a result of the proposed changes in PCT boundaries.
123. However, Commissioning a Patient Led NHS also
identified seven other criteria which must be met when considering
PCT reconfiguration. This may mean that coterminosity with local
authorities may not be the optimum configuration in all cases,
and a range of options will be considered.
124. Taken together DH believes that these proposals
will deliver more effective health and social services. At the
same time, the Government will maximise efficiency gains, achieving
a £250 million saving in management and administration costs
for re-investment in services in 2008-09.
125. In October 2005, SHAs submitted their proposals
for the reconfiguration of SHAs and PCTs. These proposals have
now been assessed by an independent external panel and Ministers,
who agreed that proposals for reconfiguration of SHAs and PCTs
were fit to go forward for local consultation. Consultations began
on 14 December 2005, and will run for 14 weeks until 22 March
2006.
Regional Skills Partnerships
126. The creation of Regional Skills Partnerships (RSPs)
was announced in the 2003 Skills Strategy White Paper—21st
Century Skills recognised that there was an important regional
dimension to the country's skills needs and put a strong emphasis
on establishing robust partnerships to drive forward the skills
agenda at regional level and ensuring that skills development
was effectively integrated with employment and business support.
127. RSPs have been in place in all the English regions
since April 2005. They bring together Regional Development Agencies,
the Learning and Skills Council, Jobcentre Plus, the Skills for
Business network, the Small Business Service and others, including
the higher education sector, the TUC, employers and local authority
representatives.
128. The role of RSPs is to ensure that the supply of
skills, training, business support and labour market services
is planned and delivered in a more coherent way which supports
the priorities set out in the Regional Economic Strategy and which
connects better with the needs of employers and individuals. Key
objectives for RSPs include:
— Raising the ambition and demand for skills.
— Ensuring that regional priorities take account
of sector priorities as set out in Sector Skills Agreements.
— Ensuring that colleges and training providers
become more responsive to the needs of the demand side.
— Improving the alignment the planning cycles and
targets of partners in order to ensure more joined delivery.
129. Regional Skills Partnerships are already having
an impact, for example in the North East region the RSP has:
Developed:
— an integrated planning process to align partner
funding against shared priorities—in 2004, the LSC in the
North East aligned its funding and activity to objectives and
priorities outlined by the RSP and did not produce a separate
statement of LSC priorities.
Identified:
— a skills need in the construction sector which
led to a significant enhancement of construction related education
and activity; and
— the need to improve regional capacity to deliver
skills for life provision which resulted in more effective use
of LSC resources to support important quality improvement measures
130. RSPs across the country have the potential to complement
and support cross-Departmental work to address regional economic
disparities. The most recent White Paper gave them important new
roles and responsibilities and they are now an established feature
in the policy landscape.
Police forces
131. In September 2005, Her Majesty's Inspectorate of Constabularies
(HMIC) published the "Closing the Gap" report which
reviewed the ability of the existing structure of policing in
England and Wales to meet current and future policing needs. It
recommended:
— effective and sustainable regional protective
services;
— local neighbourhood policing; and
— better value policing services.
132. To meet the challenges of modern policing the Home
Office has signalled its intent to move to larger, strategic police
forces in line with the existing regional boundaries and is taking
this forward.
133. ODPM is working with the Home Office to maintain
close links between the regional level and key organisations,
including local authorities and fire and rescue services. Departments
are working together to ensure the most effective fit between
the benefits of greater strategic policing, quality neighbourhood
policing and local accountability. In addition, the Departments
are ensuring that existing co-operation with the fire and rescue
service on road traffic accidents, arson investigation and responding
to terrorist incidents and natural disasters will be maintained.
25
Namely, the Department of Trade and Industry, Department for
Transport, Department for Education and Skills and Department
of Health and the Office for National Statistics. HM Treasury
have notified the Committee that they are content for the lead
Department to respond. Back
26
The London Development Agency is part of the GLA family and is
accountable to the Mayor. Back
27
See the Sustainable Communities Plan Progress Report Making
it Happen: The Northern Way, Back
28
Published September 2004 and available on the Northern Way website
at http://www.thenorthernway.co.uk/report-sept04.html. Back
29
The eight Northern Way City Regions are: Central Lancashire;
Liverpool; Manchester; Sheffield; Leeds; Hull and the Humber Ports;
Tees Valley and Tyne and Wear. Back
30
Published June 2005 and available on the Northern Way website
at http://www.thenorthernway.co.uk/docs/2005/NWBP.pdf Back
31
Smart Growth: The Midlands Way, published February 2004
and available on the Advantage West Midlands website at http://www.advantagewm.co.uk/smart-growth---the-midlands-way--1569-18-k-.pdf. Back
32
The Way Ahead: Delivering Sustainable Communities in the South
West, published February 2004 and available on South West Regional
Development Agency website at http://download.southwestrda.org.uk/file.asp?File=/regeneration/general/SOUTHWEST_lr2.pdf. Back
33
Note, the actual transport funding is subject to final decisions
by the Secretary of State on specific schemes. Back
34
Note, the context in which the Government Office for London operates
is different to the other regions as a result of the unique set
of London arrangements. Back
35
Such as "The State of The Cities Report" and the ODPM-commissioned
"city-regions" study both due to be published in Spring
2006, and the Urban Task Force Report published in November 2005. Back
36
The exceptions are the South East and the South West where, in
addition to the option for direct co-terminosity with Government
Offices, both propose to consult on an option for two SHAs in
each region. Back
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