Memorandum by the English Regional Development
Agencies (RG 42)
1. INTRODUCTION
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 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. THE POTENTIAL
FOR INCREASING
THE ACCOUNTABILITY
OF DECISION-MAKING
AT THE
REGIONAL AND
SUB-REGIONAL
LEVEL, AND
THE NEED
TO SIMPLIFY
EXISTING ARRANGEMENTS
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. ACCOUNTABILITY
OF DECISION-MAKING
AT SUB-REGIONAL
LEVEL
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. THE POTENTIAL
FOR DEVOLUTION
OF POWERS
FROM REGIONAL
TO LOCAL
LEVEL
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.
5. THE EFFECTIVENESS
OF CURRENT
ARRANGEMENTS FOR
MANAGING SERVICES
AT THE
VARIOUS LEVELS,
AND THEIR
INTER-RELATIONSHIPS
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. THE POTENTIAL
FOR NEW
ARRANGEMENTS, PARTICULARLY
THE ESTABLISHMENT
OF CITY
REGIONS
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. THE IMPACT
WHICH NEW
REGIONAL AND
SUB-REGIONAL
ARRANGEMENTS, SUCH
AS THE
CITY REGIONS,
MIGHT HAVE
UPON PERIPHERAL
TOWNS AND
CITIES
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. THE DESIRABILITY
OF CLOSER
INTER-REGIONAL
CO-OPERATION
(AS IN
THE NORTHERN
WAY) TO
TACKLE ECONOMIC
DISPARITIES
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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