6 Conclusion
180. In this report we have focused on an analysis
of the existing structures of regional governance and on the single
emerging policy—city-regions—which appears to have
the potential to provide a credible alternative to the current
arrangements.
181. While individual local authorities are essential
for the implementation of strategy and for service delivery, the
evidence we have received both from those supporting the existing
regional structures and from proponents of city-regions is that
strategy is often best determined on a regional or sub-regional
basis. This is particularly the case in relation to issues such
as environment, resilience and strategic planning for housing,
industry and transport.
182. There remains a question as to whether the existing
regional arrangements are the right ones. They are clearly not
perfect. In this report we have suggested a number of recommendations
which, together with the plans already announced by the Government,
should go some way towards improving the existing arrangements.
Our recommendations are particularly focused upon improving accountability
of the 'three pillars' within the regions—which we believe
is fundamental to their credibility—and on providing for
more comprehensive dialogue between the regions and the centre.
In the short to medium term the further development of relationships
between the reformed Government Offices, the RDAs and more confident
Regional Assemblies, coupled with a greater willingness by the
Government to involve these bodies in strategic decision-making
(for example, through the Regional Funding Allocations), may make
for a more effective and responsive approach to the specific needs
and requirements of each region.
183. Whether the existing arrangements have a place
in the national structures in the long term appears to depend
in large part upon the Government's willingness to enable the
development of powerful city-regions. At present, the Government
is proving extremely cautious about the devolution of real powers
to the emerging city-region partnerships. Nonetheless, advocates
of the city-region policy such as the ippr have expressed visions
of a future in which city-regions could exercise considerable
control over sub-regional expenditure in fields such as transport,
economic development, culture and skills training; the possibility
that city-regional authorities might be afforded local tax-raising
powers has also been mooted. Examples of city-regions such as
Lille, in France, are testament to the fact that such city-regions
can work very effectively although they may take many years in
which to become fully established.
184. If city-regions are to be granted such powers,
and such resources, this will in the long term impact upon the
existing regional governance structures—for the powers and
budgets which city-regions will seek will logically be drawn down
from the regional level. This is likely to affect the RDAs most
strongly, as any loss of strategic oversight and budgetary control
in relation to sub-regional economic development may diminish
their capacity to support other parts of the region as they now
do. Concern about the potential implications of city-regions for
the RDAs has clearly influenced the NLGN publication on the future
course of English devolution and, it may be speculated, the same
thinking may have influenced the eventual (and rather disappointing)
contents of the Local Government White Paper on this subject.[242]
The Government now needs
to determine how the specific powers, resources and governance
structures of each city-region can be best designed whilst avoiding
undermining the capacity of the Regional Development Agencies
to support and promote prosperity in surrounding areas.
185. Taking the argument further it may be suggested
that if city-regions should be successful in delivering economic
development, and particularly in extending the benefits of that
greater competitiveness to outlying areas, the need for the RDAs
would in any case be diminished. In the decades which it might
take for such city-regions to come to fruition it might well be
determined that RDAs had in any case outlived their usefulness.
For both these reasons, any desire upon Government's part to act
currently with a specific view to secure the long-term future
of the present structures may seem over-protective.
186. There is potentially a greater danger facing
the Government than the eventual demise of the RDAs. This is that,
having encouraged significant numbers of authorities to explore
the potential for establishment of city-regions, it is failing
either to clarify its vision of how such arrangements would work
(either extensively or as exceptions to the general rule), or
to provide sufficient incentives by means of powers or budgets
to give the policy real momentum. The encouragement of local partnerships
and co-operative working is a good place to start; but this in
itself is not going to deliver the improvements in competitiveness
which are required by PSA2.
187. Real change will require the devolution of real
power. If steps are not taken soon which mark out clearly the
direction of the Government's policy on powers for the city-regions
there is a clear risk of inertia setting in to those partnerships
and cities, or even disillusionment that the apparent promise
of the city-regions has been denied. In our view the potential
for disengagement of so many key players is also worth taking
seriously: we hope that the 2007 Comprehensive Spending Review
will provide some of the answers which were missing from the Local
Government White Paper.
188. The city-region policy is at an early stage
of development (as, indeed, the regional governance structures
are still relatively new). There is, therefore, the capacity for
both policies to evolve side by side for a number of years to
come, and even to establish the means by which regional and sub-regional
bodies can co-exist beneficially in many areas. We
would encourage the Government to commit itself to a clear city-regions
policy, indicating the extent of city-region feasibility, and
the powers and resources which will be made available, so that
this alternative to regional governance can be properly explored.
242 Ed Balls MP, John Healey MP and Chris Leslie, Devolution
and evolution in England, (NLGN London July 2006) Back
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