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

Memorandum by Jane Thomas (RG 47)

  In the absence of any directly elected regional body with formal, statutory powers we still find that Britain is defined too much by what happens in that square mile that is London, and too little by the rest. Currently only about 25% of public sector spending is controlled by regional and local government—well below most other comparable countries, such as Germany or the United States.

  But we are the sum of our parts and the English regions are not well-served by a highly centralised, one-size fits all approach to policy making. The move towards devolution and delegation away from the centre is welcomed but begs many questions about accountability, transparency and joined-up governance.

  One of the Governments top priorities now is the improvement of public services. People's expectations of publicly funded services are high. As was stated in the Treasury's Report Devolved Decision-Making (2004) the next phase of reform requires an evolution in the relationship between central government, local government, regional organisations and front line. Central government should have a strategic role, ensuring national standards are met and maintained but allowing greater local flexibility.


  1.1  Currently there are 910 Public Bodies and 86 Executive Agencies (as of March 2005) many of whom operate at sub-national level. In March 2001 the Government ordered a review of the arrangements for Executive agencies in the context of the Modernising Government White Paper and Civil Service Reform Paper.

  1.2  In terms of simplifying existing arrangements there are a number of areas where the Government has already responded. The Treasury response to the Regional Emphasis Documents indicated a willingness to take on board some recommendations especially where there was evidence of cross-department working. The practice of pooling budgets as happened with the Regional Skills Partnerships could happen in other policy areas. The Business Link franchise has come under the control of the RDAS, as has much of the work of the Countryside Agency and much of the tourism portfolio from DCMS.

  1.3  This all suggests a growing recognition of the value of a single regional body to be able to plan holistically. This makes sense—and as long as appropriate scrutiny and transparency is applied, the function AND delivery side will be enhanced. But the high national standards and accountability that underpin the reforms can only be achieved by appropriate and rigorous scrutiny.

  1.4  Yet tensions will continue to rise whilst ever there is obscurity over the relationship between key regional bodies, quangos and central government. For example the move to RSS under the Planning and Compulsory Purchase Act of 2004 was a significant move and makes the Regional Assemblies, in all regions, the designated Regional Planning Body. However the delivery of RSS will continue to be hampered by the continuance of what Hetherington refers to as regionalised centralism (further centralised control by Treasury/Government over spending priorities of Departments and their executive agencies). So you can have as much integrated and regional planning as you like but these are likely to be overridden by national/central demands (it will be interesting to watch transport spend in the northern regions in the years running up to the Olympics for example).

  1.5  At a sub-regional level there are still serious issues about co-ordination of key policy areas, such as housing new build, transport plans and economic development, which simply are just to large to handle at the level of local government that currently exists. This is brought into sharp relief with some key new initiatives such as Pathfinders and LEGI—initiatives that cross local authority boundaries but need a degree of co-ordination and leadership that simply cannot be provided under the current structures.

  1.6  As budgets are devolved increasingly more decisions are made at sub-regional level. This begs the question about accountability of public spending and also the role of quasi autonomous bodies that are increasingly circumnavigating local authorities (especially when the LSPs are NOT the local authority).

  1.7  Allowing the real and necessary flexibility that underpin the Governments reform agenda in the absence of regional government is hard. Much is done on good will—but relationships vary region to region, and can dramatically affect the outcomes of well-intentioned policy. Regional bodies, notably the RDAs and Regional Assemblies play an increasingly vital role, in managing the relationships of regional stakeholders and bring together key regional and sub-regional bodies.

  1.8  It also begs a number of questions about how you deal with cross-cutting issues and how you align these within target frameworks, planning and spending cycles and funding streams. The continued role of key executive agencies and public bodies at regional and sub-regional level also needs reviewing in the light of the continued moves towards devolution and delegation. The Prime Ministers speeches have outlined high national standards and clear accountability as part of the principles of reform—these are in danger of getting lost unless these relationships are sorted.

  1.9  Suggestions:

    —  In the Dynamics of Devolution, Hetherington and Sandford argue that there is a case for a single regional spending budget for things like economic development as it allows flexibility and targeting in a way that the multitude of local economic projects simply cannot do and it can lessen considerably inter-local competition.

    —  A moratorium on public bodies/quangos/NDPBs as requested by the British Chamber of Commerce in 2001!

    —  Place on some statutory footing the need for key agencies to consult with regional Planning Body—for example, the Highways Agency, and the Environment Agency.

    —  Some analysis of the success, or otherwise, of the Regional Transport Board and Housing boards and some analysis of policy fit (ie is there an alignment of work of the Board with say Pathfinders, Local Authorities, Housing Corporation and ODPM?)

    —  Regional select committees at Westminster.

    —  More use of cross-cutting Forums.


  2.1  There are currently no formal powers that exist at a regional level. There are, as has already been pointed out, numerous bodies, making decisions about spending of public money. However that is not the same thing. To devolve from one level to another assumes you have multi- layered governance arrangements which simply do not exist at the moment in England.


  3.1  The 2002 report "Better Government Services; Executive Agencies for the 21st century reflected on how some agencies have become disconnected from their sponsoring Department. Despite clear intentions to the contrary and good examples of working together, the gulf between policy and delivery is considered by most to have widened. They can also create perverse incentives and inefficiencies. Quite often Area-Based Initiatives (ABIs) duplicate or overlap or fail to deliver.

  3.2  The report gives 12 very clear recommendations and calls for, amongst other things, simpler governance connecting agencies with departmental aims and making better use of non-executive directors.

  3.3  There is a continuing tension between controlling inputs that is at the expense of managing outcomes. PSA targets often seem overlooked by centrally imposed management systems and structures that simply do not reflect or allow responsive delivery on the ground. This could be much improved with clear strategic direction giving a line of sight from agency targets to department targets. A clear line of sight is also needed to PSA agreements with the PSA targets at the heart for improving service delivery.

  3.4  The success or otherwise of joint initiatives, or programmes with a cross-cutting theme, is largely determined by having carefully articulated and shared targets. However as noted in 1.8 this can be problematic without an established framework for joint working.

  3.5  The Devolved Decision Making suggests a number of things including:

    —  Fewer targets but still within the framework of PSAs.

    —  Stronger local accountabilities and incentives.

    —  Increased performance management.

  The report states that "a more devolved approach makes it essential that local accountabilities and incentives to improve are strengthened . . . central government and its agencies should set fewer targets and controls beyond PSA".

  3.6  The principle of flexibility and subsidiarity must be applied. Local transport decisions are often best taken by those who provide and pay for the service. However the move towards Regional Transport Boards and the inter-relationship between this and the RSS is significant. It is early days but it will be important to ensure that there is some alignment between LTPs and Regional Transport Plans. More significantly will be how much this will feed into national transport plans—and crucially how the Spending Reviews are cognizant of what is being planned in the regions.

  3.7  Suggestions:

    —  Reduce number of funding streams for ABIs and a better alignment of target frameworks, planning and spending cycles and funding streams.

    —  Clear strategic direction with a line of sight from agency targets to department targets and a clear line of sight to PSA agreements.

    —  Fewer targets but still within framework of PSAs.

    —  Better linkages could be made between LSPs and regional bodies and strategies. This could be done by means of protocols between LSPs and regional and sub-regional bodies.

    —  A more formalised dialogue between the centre and the regions at a strategic level to accommodate in particular the aims and aspirations of Regional Economic Strategies and the Regional Spatial Strategies.


  4.1  The renewed interest in city regions has been driven by a number of things—not least because of the perceived void created by the failure of the North East referendum. Much academic work has also been undertaken, drawing on the experience of Europe where city regions have had some notable success in the economic fortunes of their area.

  4.2  However it is hard to see how city regions address the issues that regional government attempted to address (democratic deficit, devolution of powers). It is even harder to see how city regions can attempt to replicate the success of their European, or even American counterparts, without being supported by the same political architecture. In other words successful city regions elsewhere sit within a properly constituted elected regional body, or federal state, that has formal powers and a devolved budget.

  4.3  That is not to say that city regions do not present some opportunities. The evidence that cities can act as economic drivers for their regions is compelling. The New Local Government Network City Regions Commission suggests that city regions should be allowed to emerge "from below" in an asymmetrical fashion, and crucially calls for enabling legislation to pass powers over housing, planning and transport to the new bodies. The IPPR's Centre for Cities has boosted the network's research in this area with its own studies of regional housing markets and the role of cities in this regard.

  4.4  The question is to what extent a city region would break the fixation with London and become indigenous economic powerhouses in their own right. Certainly Greater Manchester and other city regions covered in the Northern Way can see some opportunities with this agenda.

  4.5  Elected mayors and their role within city regions do not have the support that was first thought. Certainly in Manchester there is no widespread support to move towards elected mayors, even though the majority of local politicians support the city region model. A recent report from the Joseph Rowntree Foundation suggests that elected mayors have not necessarily resulted in the strong political leadership and democratic renewal that was initially expected.

  4.6  Suggestions:

    —  City regions will only work within a more balanced system of government than at present.

    —  The model should not be imposed and should reflect local identity and consent (although no-one would want to repeat the referendum process in much of a hurry).

    —  Local government will need to be strengthened and reconstituted to take on the responsibilities and aspirations that a city region should have.

    —  Political leadership is vital—it confers legitimacy and presence but this does not necessarily mean in the shape of an elected mayor. Strong, elected local government that can be held to account and answerable to local people is vital.

    —  Move to unitary local government throughout England and more financial autonomy.


  The growth of city regions will only work if it is organic and if size and shape reflects local sensitivities and geography. At one level most people do not really care who collects their bins as long as someone collects them. They want quick and responsive delivery of local services and a person at the end of the phone when things go wrong.

  Identity however is important, even if sometimes this is more imagined than real. Rural areas often have little in common with large cities and experience a different set of problems that require a different set of solutions.

  The management of relationships—both formal and informal—is crucial. The role of the current Regional Assemblies could be enhanced to act as broker and mediator and to ensure a forum for more region-wide thinking. However as was stated in 1.7 they will need to be put on a much firmer footing with statutory responsibilities.


  This has to be both welcomed and encouraged. Indeed inter-regional co-operation has been taking place for many years in the North—enhanced by the presence and lead the RDAs have been able to take on transport issues for example. Greater regional co-operation will go some way to meeting the challenges of globalization and the ability to address productivity issues.

  However one of the most obvious ways to address the issue of economic disparities is to ensure a level playing field across the regions of England. That means ensuring that the distribution of money is fair, equitable and transparent. Infrastructures projects, and in particular transport spend, has to be given a greater priority outside of London and the South East to enable all the regions to compete in an ever changing market.

  And if the Government is serious about the PSA target on regional disparities then it needs to allow regions and sub-regions the flexibility and powers needed to apply more locally-based and owned initiatives. Delivery must take place at the most appropriate level, as locally as possible, and within a framework of a strong regional strategic framework to ensure proper joined-up government.

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