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

Memorandum by the English Regional Development Agencies (RG 42)


  1.1  In 1999, the eight Regional Development Agencies (RDAs) were established under the Regional Development Agencies,1998 with direct accountability to the elected Minister of State.[47] For the first time, economic development and regeneration policy was to be developed and co-ordinated strategically at the regional level. The advent of the RDAs consolidated previously separate economic development funding programmes into one single budget, the Single Pot.

  1.2  The RDAs were given five statutory purposes:

    —  To further economic development and regeneration;

    —  To promote business efficiency, investment and competitiveness;

    —  To promote employment;

    —  To enhance development and application of skills relevant to employment;

    —  To contribute to sustainable development.

  1.3  The Regional Development Agencies' key concern is to focus on regional priorities in support of improving the economic performance of the English regions. The Regional Economic Strategies provide the over arching strategic framework for the regions, which ensure the ability to:

    —  Identify and prioritise actions needed to strengthen regional economies through a robust evidence base;

    —  Develop solutions appropriate to regional conditions;

    —  Concentrate resources behind those solutions;

    —  Mobilise other regional partners and lever in private sector finance to support those solutions.

  There is clear added value for all regions in having clearly articulated visions and priorities, enjoying broad stakeholder support to promote the joining up of strategic functions.

  1.4  Given the economic disparities that exist between the English region[48] the RDAs would urge the Select Committee to place sustainable economic growth and development, that seeks to maximise economic impact and return on investment, at the forefront of any considerations and proposals for changes in regional and sub-regional structures, governance arrangements, roles and responsibilities.

  1.5  Over the past few months, the RDAs have been working closely with the ODPM and local partners to develop the city regions agenda in away which will maximise regional economic growth. While the detailed nature of the proposed solutions differs from region to region thereare a number of key principles that we believe should be enshrined in any proposed changes to strengthen economic development strategyand delivery at the regional or below regional (sub-regional and city regional) levels. Any devolution of powers or responsibilities should aim to:

    —  Ensure that Regional Economic Strategies (as the shared regional economic framework) continue to provide the overarching context forthe economic development priorities for regions, sub and city regionsand local areas;

    —  Ensure the alignment of Regional and other budgets (eg Local Authority, LSC, Job Centre Plus, rail budgets etc) around common, clear, evidenced priorities;

    —  Have the ability to be able to raise or lever in private sector resources to invest in the economic development;

    —  Integrate different policy areas (both spatially and temporally) (eg schools, transport, housing, regeneration, etc) behind common strategic priorities as articulated in the RESs. Achieving this integration is a complex task as it requires "things to line up" at National, Pan-Regional, Regional, Sub-Regional and Local levels;

    —  Build regional and city regional capacity to develop and utilise a stronger evidence-based approach which in particular demonstrates a clear understanding of the City Region's "functioning economy" and builds on international best practice in economic development;

    —  Separate Strategy and Delivery. A critical factor in moving to a more rigorous prioritisation process will be the clear separation of strategy development and the delivery/promotion of specific projects;

    —  Engender strong political and business leadership which can win the authority and confidence of partners required to represent the range of public and private sector interests within that area;

    —  Provide clear governance structures, with clear decision-making processes which would have the necessary strength of leadership to facilitate tough decisions to focus on fewer, bigger priorities which have the potential to maximise investment potential.


  2.1  The RDAs would like the Select Committee to note that the reasons for the "no" vote in the North East for an elected regional government on 4 November 2004 were complex.

  2.2  However, in the absence of elected regional government, the means of simplifying existing arrangements is more challenging. There currently exists a complexity of accountability and decision-making arrangements in the English regions. The need to simplify existing arrangements can be supported by a brief analysis of the current situation:

    —  RDAs—directly accountable to the Secretary of State, responsible for the preparation of Regional Economic Strategies (also accountable to their Boards);

    —  Government Offices—representative of central Government in the regions and have a lead role in the production of Regional Housing Strategies;

    —  Regional Assemblies—Voluntary bodies (not public bodies) with statutory responsibility for developing Regional Spatial Strategies,(including Regional Transport Strategies) and scrutiny of the RDAs. The current roles and responsibilities of the Regional Assemblies evolved primarily in anticipation for elected regional government. Given that this is no longer feasible, it might be appropriate to review current arrangements;

    —  A variety of other institutions with differing regional responsibilities for example, the Highways Agency, English Partnerships, the Strategic Rail Authority, the Learning and Skills Council, the NHS.

  2.3  The above analysis demonstrates the need to review the existing governance arrangements within the regions. There is potential to simplify and rationalise arrangements, improve accountability and better align regional strategies, priorities and investment through anumber of possible options including:

  2.4  Option 1: Extending the remit of Regional Funding Allocations

  The Government's intention to devolve additional power to regional bodies in the areas of economic development, housing and transport is strongly welcomed by the RDAs. However, we are strongly of the view that the scope of the strategies and spending areas covered should be extended to include Learning and Skills Council expenditure, English Partnerships, Job Centre Plus and rail expenditure which is critical to ensure effective integration for achieving the Regional Economic Performance PSA target and the Government's wider economic, social and environmental objectives.

  2.5  Option 2: Sub/City Regional "Local Area Agreement"

  Experience suggests that achieving regional sustainable economic development, which not only delivers a step change in economic growth but also addresses environmental and social concerns depends upon the appropriate alignment of relevant funding streams. A Sub-Regional Area Agreement may provide the means to determine strategic priorities at a sub-regional level within the overarching framework of the RESs. RDAs and other bodies could then choose toinvest some of their money into these agreed priorities. This process could help to better align regional strategic priorities, rationalise funding streams, simplify monitoring processes and reduce bureaucracy. Sub-Regional Area Agreements could provide centrally agreed frameworks, which could be used to better understand the impact of nationally determined policy on the regions.

  2.6  Option 3: Regional Minister/A Regional Leadership Executive[49]

  2.7  A regional Minister would be responsible for leading a reform Regional Government Office in co-ordinating the work of key regional and sub-regional stakeholders. The Regional Ministers would be directly accountable to Parliament, providing a direct democratic linkbetween the delivery of regional policy and Central Government. Comprising key representatives from regional spending/policy bodies, a Regional Leadership Executive would improve governance and ensure that the main streams of public investment in the region are working coherently together in pursuit of national and agreed regional priorities. The primary considerations for any new accountability mechanisms should be flexibility and non-bureaucracy in order that the RDAs cancontinue to develop timely regional solutions according to regional economic conditions.


  3.1  All the RDAs currently work primarily with local government and their partners through sub-regional partnerships in recognition that economies and markets cut across administrative boundaries and economic development and regeneration cannot be planned solely at a local level.

  3.2  Whilst arrangements are different in every region, sub-regional arrangements and partnerships provide a mechanism for facilitating collaborative working on cross cutting issues, agreeing strategic direction and identifying shared priorities for funding.

  3.3  Most local authorities are represented on these partnerships though they do not have a direct mandate to work at this level. The Local Government Act 2000 sets out the powers of local authorities to do anything (within or outside its local area) to promote the economic well-being of its area. The RDAs would urge the Government to help facilitate stronger local political leadership in working at the tier beneath the regional level in order to improve accountability and increase local buy-in to cross boundary working initiatives.

  3.4  Stronger sub and city regional partnerships will help to:

    —  Engage greater business leadership and involvement in collaborative working;

    —  Maximise private sector leverage of funding;

    —  Strengthen prioritisation processes and decision-making through a stronger evidence based approach;

    —  Better align investment priorities for regional and local funding.


  4.1  In addition to exploring the potential for improving the alignment of investment between regional and sub-regional levels, we would encourage the Select Committee to consider the potential for devolution of powers from national to regional (see above) and local levels.

  4.2  In order to strengthen and maximise the economic impact of regional and sub-regional arrangements, the RDAs are supportive of appropriate further devolution of decision-making powers from the national to the local level. In particular, powers that would facilitate stronger collaborative sub-regional arrangements which would deliver better economic outcomes are welcomed. The need therefore to strategically co-ordinate sub-regional and local activity within theregion becomes even more critical. The integration between strategic activity and the inter relationship between sub/city-regional areas is something that can only be done at the regional level. Hence a very strong relationship between the regional and sub-regional levels must exist.

  4.3.  There are also arguments for some powers, including strategic planning, to be mandated from a local to a regional level, particularly when local planning powers create barriers to regional economic growth.


  1.5  Generally the RDAs are supportive of the development of Local AreaAgreements (LAAs) and their wider aims at the local level. However, as stated above, the development of the economic development and enterprise fourth block and other strategic cross cutting issues for example, transport would be better determined at an appropriate sub or city-regional level. In developing LAAs, the approach should be one of encouraging regional and sub-regional bodies to invest in agreed sub-regional priorities rather than simply devolving pots of money per se.

  5.2  The overarching strategic framework provided by the Regional Economic Strategy ensures that the relationship between economic development activities, priorities and funding at the regional, sub or city-regional and local levels are aligned for maximum impact. It is essential that any proposed arrangements strengthen this relationship.


  6.1  It is first important to clarify and define what is meant by a city-region. The term city-region refers to a recognition that the functioning geographies of city economies and societies, including travel-to-work areas, retail catchment areas, housing market areas, global markets and strategic transport links, are not constrained by local administrative boundaries.

  6.2  As strong and successful cities are often recognised as key drivers of regional economic growth and competitiveness, the city-region has become an important spatial level for analysis in order to inform strategic and delivery decisions that will provide the maximum return on investment and impact. The city-region generally represents an area of highest economic growth potential. The RDAs therefore welcome moves to strengthen the contribution that cities can make to regional and national economies and many have been working inclose partnership with key partners in their city regions to develop this potential and inter-linkages.

  6.3  The development of a city-region evidence-base that informs strategy and demonstrates a clear understanding of the city-region's functioning economy can equally be applied to other appropriate economic sub-regional areas.

  6.4  The different economic geographies and administrative arrangements of the English regions require different regional approaches to wards sub-regions. Rather than a one-size fits all approach, what is needed is a framework that incentivises collaboration within sub-regions and regions.

  6.5  Different sub-regional arrangements are necessary in each region. Regardless of the approaches taken in each region, what is important is that the Regional Economic Strategy continues to provide the overarching framework for the economic priorities for the region, sub-regions and local areas. In addition, any move to strengthen city-regional or sub-regional governance should seek to meet the aims and principles outlined in the introduction above.


  7.1  The principle of sub-regional partnership working is now well established by the RDAs and already makes a huge contribution to the economic growth of regional economies.

  7.2  Sub-regional partnership working and collaboration is not solely focussed around a core (or city) area. Sub-regional working exists in all geographic areas of a region to address current and future need, economic potential and opportunity.

  7.3  Where city-regions exist, they have a strong interdependent relationship with adjacent rural and other areas. There are economic gains to be had from building stronger complementary relationships between urban and non-urban areas.

  7.4  Through the priorities identified in Regional Economic Strategies(RES), the RDAs ensure that everyone within the region is able to contribute to and benefit from the economic and quality of life opportunities that economic growth can offer. Indeed, each RES is developed in consultation and partnership with a range of public, private, voluntary and community sector stakeholders, which ensures a regional strategic vision shared by all partners in the region. The development of the RES often requires the RDAs to reconcile conflicting local partner interests.

  7.5  The RES recognises the importance of all urban areas to the continued economic prosperity of the region, whilst simultaneously balancing the need to maintain sustainable communities in both rural and urban areas.


  8.1  The importance of all co-operation and collaboration at any level is the identification of agreed and shared principles and aims which underpin and govern future activity.

  8.2  Inter-regional collaborative arrangements to date have sought to build on cross-regional strengths and assets and add value to existing activities in order to boost economic growth and address regional economic disparities.

  8.3  Inter-regional co-operation, whether at regional, sub-regional or local levels, is encouraged where economic opportunity or need is best addressed through cross boundary collaboration. To ensure added value, it is vital that collaborative arrangements are not duplicative and activities and policies are underpinned by a strong evidence base that demonstrates the appropriate spatial level for intervention and action.

47   The London Development Agency (LDA), the ninth English RDA, was established under the Greater London Authority (GLA) Act 1999 and is directly accountable to the Mayor of London. The LDA's position will be submitted as part of the GLA response in view of the Review of London Powers. Back

48   Regional Economic Performance PSA Target: Make sustainable improvements in the economic performance of all English regions and over the long term reduce the persistent gap in growth rates between the regions. Back

49   Pilch, T (ed), 2004, Towards a Modem Regional Policy, London: The Smith Institute. Back

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