Memorandum submitted by the Regional Development
Agencies
EXECUTIVE SUMMARY
1. The nine Regional Development Agencies
(RDAs), established in 1999, have a common mission: to transform
England's regions through sustainable economic development. They
lead the creation of Regional Economic Strategies (RESs), which
are developed in partnership with, and owned by, a wide range
of stakeholders across each region. Each RES is a ten-year overarching
framework that sets out how the region's strengths can be exploited
and its barriers to growth overcome.
2. RDAs are the leaders of rural economic
delivery at the regional level. In 2005-06 RDAs created, or safeguarded,
over 25,000 jobs in rural areas and almost 5,000 businesses, and
around a third of all outputs were delivered in rural areas. This
role gives RDAs a unique insight into the economy in rural areas.
They combine an understanding of local sensitivities with the
strategic capacity to bring together a wide range of policies
and programmes to deliver against a common goal. They have built
into their tasking framework a recognition of the strategic added
value achieved through their leadership and influencing role,
supporting the longer term sustainable outcomes in regeneration
rather than simply shorter term outputs. As part of the Modernising
Rural Delivery Programme, RDAs are taking on greater responsibility
for socio-economic development in rural areas. This is increasing
the RDAs' ability to provide strategic integrated investment in
rural areas.
3. The single pot approach, by which RDAs
are funded, has allowed the RDAs greater flexibility in delivering
integrated and innovative solutions to meet the regionally specific
objectives set out in each RES. The RDAs are learning from the
success of this model in taking a mainstream approach to rural
policy. Through this approach rural areas can meet their needs
and make the most of their opportunities by appropriating support
from all programmes, rather than a limited number of specially
created rural schemes. The RDAs believe that specific rural interventions
should only be developed where market failure cannot be addressed
by mainstream provision.
4. RDAs would prefer to see their mainstream
approach to delivery supported by a complementary mainstream approach
to target setting from Government, based on rural proofing of
all departmental Public Service Agreements (PSAs) rather than
rurally specific ones. In the meantime RDAs would like to see
the basis for measurement of some PSAs radically reviewed. This
includes Defra's PSA4. More widely RDAs would support a rationalisation
of the targets.
THE ECONOMY
IN ENGLAND'S
RURAL AREAS
5. England's rural areas are making a significant
and increasing contribution to the economic prosperity of the
UK. In comparison to urban areas, rural areas have higher levels
of economic activity, higher levels of self employment and, on
average, higher incomes (State of the Countryside 2006).
6. However, it is limiting to think of rural
areas as having a separate economy to their urban counterparts.
There is considerable interdependence between cities, towns and
rural areas, including substantial similarities in the business
profiles of urban and rural areas.
7. Consequently, economic prosperity in
rural areas can best be secured by tailoring mainstream policy
to meet the needs of those living and working in rural areas,
rather than creating programmes designed solely with rural areas
in mind. Specific rural interventions should only be developed
where market failure cannot be addressed by mainstream provision.
8. There are, however, significant wealth
disparities within regions. For example, although the East of
England is perceived as relatively affluent, there are pockets
of deprivation and a significant number of people who experience
social exclusion. It is estimated that 22% of children and 25%
of pensioners live in poverty. There are also skills issues. In
certain rural districts the percentage of working age population
with no qualifications is over 20%. RDAs address these problems
by helping people into work, improving the skills base of the
local population and encouraging business and entrepreneurship.
DEFRA'S
OBJECTIVES FOR
ECONOMIC DEVELOPMENT
IN RURAL
AREAS, INCLUDING
THE RELEVANT
PSA TARGET, AND
THE FUNDING
AVAILABLE TO
ACHIEVE THEM
RDA performance and PSA targets
9. Each RDA is a regional delivery agent
for a number of national PSA targets. The Tasking Framework agreed
by the RDAs with Government, supports a number of core PSAs (those
which every RDA considers a key priority and which all deliver
against) but also allows flexibility between regions to pursue
a number of non-core PSAs. RDAs do not have sole responsibility
for the targets against which they deliver and work with a number
of partners to deliver against the PSAs at regional and local
level.
10. In the year 2005-06 the RDAs delivered
on their targets areas across the board. This was the first year
in which outputs, such as number of jobs created, were broken
down between rural and urban areas. This clearly demonstrated
the huge impact RDAs are having in rural areas.
11. In 2005-06 Defra contributed £72
(3.5%) million towards the RDAs' total Single Pot of around £2
billion. During this year the RDAs helped create or safeguard
more than 90,000 jobs, of which over 25,000 (28%) were in rural
areas. RDAs also assisted 40,000 people to get a job with 9,000
(23%) of these in rural areas. 15,000 businesses were created
and over 115,000 assisted to improve their performance with a
third of this activity taking place in rural areas.[3]
PSA measurements
12. Rural specific PSAs tend to provide
fewer opportunities than would be afforded by better integrated
targets. They also perpetuate the perception that rural and urban
economies are mutually exclusive. We believe that these problems
could be overcome at national level with a simplified, better
integrated and outcome focused PSA framework. Rather than retaining
"rurally specific" PSAs the needs of rural areas should
be reflected across all PSAs, through the use of appropriate indicators.
Such a new PSA framework must allow regional and local partners
to provide innovative and integrated solutions to meet the needs
of different regions.
PSA 4
13. In some cases, such as with Defra's
PSA4, the requirement for change will not just be in the wording
or location of the target, but also in the way in which it is
measured.
14. PSA4, which was designed to champion
the needs of rural areas, is in fact a rather blunt instrument
which constrains both Defra and its partner agencies. It fails
to recognise the inter-relationships between the urban and rural
economies by attempting to separate out productivity in rural
areas alone. Specifically:
(a) Aiming to reduce the gap between the least
well performing quartile of rural areas and the English median
has little statistical validity. It could be achieved inadvertently
by a reduction in the performance of the most productive region.
(b) Problems with the appropriateness of the
productivity measure were originally raised by Lord Haskins' Review
of Rural Delivery. The use of earnings per head is distorted because
many people in rural areas do not live where they work—often
in nearby towns and cities. This makes identification of lagging
areas problematic.
(c) Rather than focus attention purely on areas
of lagging productivity, RDAs would prefer to focus also on exploiting
opportunities for significant growth in areas where productivity
is perhaps above the median but could be improved still further.
This approach is in keeping with the RDAs requirement to fulfill
the overarching Regional Economic Policy PSA (jointly held by
DTI, DCLG and HMT)—to make sustainable improvements in the
economic performance of all English regions while over the long-term
reducing the persistent gap in growth rates between the regions.
It is also in the best interests of UK plc as a whole.
Adding value to measurement by target
15. RDAs are committed to meeting the targets
set by the New Tasking Framework, which now recognises the strategic
added value that RDAs make through their leadership and influencing
role. RDAs work to build partnerships that deliver long term rather
than simply counting short term outputs such as jobs created.
16. Consequently, RDAs are exploring other
ways to measure, and maximize, their overall performance and impact.
For example:
— The Northwest Development Agency
has worked with the Forestry Commission and other partners to
develop the Public Benefit Recording System. This uses Geographic
Information Systems to develop a combined needs/opportunities
overview of the economic, social and environmental potential of
a site or area. It produces maps that highlight the highest value-added
sites at which to target public sector interventions.
17. Mechanisms of this type allow RDAs to
look at the more complex picture and target resources more effectively
than would otherwise be the case. As these approaches and others
are better refined, we plan to move to a more outcome focused
and realistic approach to performance measurement.
Funding
18. The single pot (whereby money from contributing
government departments is pooled into one single budget for the
RDAs) has allowed RDAs to use their budgets more flexibly in the
regions to pursue the regionally specific objectives and targets
set out in their respective RESs.
19. Historically, direct funding from Defra
has been scattered in its approach and this has contributed to
the confusion for customers referred to in Lord Haskins' Review
of Rural Delivery (2003). We welcome the work being done by Defra
to reduce the number of funding streams and hope that future funding
will be channeled through the minimum number of delivery agents
to meet the priorities set in each RES.
20. The way in which the RDAs manage their
funds and in which they have pursued flexibility to devise innovative
and integrated solutions through a mainstream approach, means
that a far greater percentage of RDA results are achieved in rural
areas than would be suggested by the relatively small contribution
to RDA budgets that is made by Defra. This belies the historic
perception that RDAs are focused primarily on urban areas.
21. Government needs to recognise that where
either mainstream delivery mechanisms need variation to meet rurally
specific requirements, or where there is an identified need for
a specific rural solution, these are relatively expensive to deliver
and hence require additional funding.
THE ROLE
OF RDAS
IN UNLOCKING
THE ECONOMIC
POTENTIAL OF
RURAL AREAS,
AND THE
EFFECTIVENESS OF
DEFRA'S
RELATIONSHIP WITH
RDAS
Mainstreaming policy and regional solutions
22. RDA activity is based on the priorities
outlined in the RES, which alongside the Regional Spatial Strategy
in each region, is the main framework for all sub-national sustainable
economic development. Responsibility for delivering the RES is
shared by many regional, sub-regional and local partners.
23. In taking forward the mainstreaming
model, RDAs draw together region-wide programmes that are sympathetic
to local circumstances and contribute to the growth of each region
as a whole.
24. For example, since April 2005, RDAs
have offered mainstream business support to rural businesses through
the Business Link Network, the single portal for business support
and advice in the regions. Business Link provides impartial information
and diagnosis of customer needs. It acts as a broker, routing
customers to the most appropriate source of help in the public,
private or voluntary sector. This brokerage model simultaneously
supports mainstream provision while recognising that customers
have individual needs. With the Business Link customer proposition
and core service offer agreed, Business Link must be recognized
as the single route to market for business support.
25. RDAs help realise rural potential by:
— bringing together partners to agree
an economic strategy, and guiding the work of delivery bodies;
— being business led and testing new
ways of working;
— employing staff with specialist knowledge
in rural affairs;
— planning long-term investment programmes
and leveraging private funding sources;
— championing the needs of regions;
— bringing together business, government,
local government, academia and the voluntary sector to achieve
common goals;
— and commissioning other work in the
region that will deliver the economic strategy.
26. For further regional examples of how
mainstream RDA activity has met rural needs please see Annex 1.
Relationship with Defra
27. The East of England Development Agency
is responsible for heading the cross RDA agenda on environmental
issues, food, rural affairs and sustainable development policy.
It is leading the Modernising Rural Delivery Programme on behalf
of the RDAs. National working relationships between Defra and
the RDAs are generally strong. The success of the shared partnership
approach between RDAs and Defra is evidenced by the additional
responsibilities that have been given to RDAs through the Modernising
Rural Delivery process.
28. There exists a generally good relationship
between RDAs and Defra where honest opinions are shared. Defra
is a large department with a broad scope, however, and this can
lead to some fragmentation in knowledge and awareness of how activity
contributes to overarching shared priorities. This, combined with
variable levels of understanding as to how regional partners work,
can, in some cases lead to a tendency to:
— fail to engage regional partners
at an early enough stage of policy development;
— micro-management of policy implementation,
ignoring the principles of the devolution agenda;
— a rather process led approach to
implementation, which can hinder innovative thinking.
The RDAs hope that Defra's `strategy refresh'
and a revised target framework will:
— improve the Department's coherence
through its "One Planet Living" mission;
— help to improve its awareness of
regional policy and delivery; and
— help to pursue greater influence
over other departments in their contribution to delivery of its
cross-cutting agendas.
29. We commend the establishment, and the
progress, of the RDA Co-ordination Unit within Defra, which has
improved understanding of how RDAs work. However, since the Unit
is based in the rural affairs section of the department it has
perhaps reinforced the perception that RDAs are not as relevant
to some of the wider Defra agenda. We need to work together to
ensure a wider understanding of potential RDA contributions across
the Department's Directorates.
30. RDAs work in different ways in different
regions to deliver the same overall objectives. Consequently,
relationships with Defra at a regional level are as important
for RDAs as national relationships. These relationships work well
in most cases so there is a need to ensure that they are not stifled
by too centralised an approach from the Department. The need for
RDAs to deliver on the region's RES can at times conflict with
national sectoral strategies from the department.
AGRICULTURAL AND
NON-AGRICULTURAL
PROVIDERS OF
RURAL EMPLOYMENT,
FOR EXAMPLE
HORTICULTURE, AND
POSSIBLE BARRIERS,
INCLUDING THE
STRUCTURE OF
THE RETAIL
FOOD SECTOR,
TO THEIR
FURTHER DEVELOPMENT
Rural employment
31. While farming and tourism remain important
mainstays of rural areas, an ever-increasing share of wealth is
created outside these traditional sectors. In rural areas today,
80% of jobs are in manufacturing, wholesale and retail, public
administration and financial services. These employers play an
important part in local, regional, national and international
supply chains and make a vital contribution to the UK.
32. Rural communities are some of England's
most entrepreneurial and innovative. More than a third of England's
VAT registered businesses are in rural areas, where there are
more businesses per head of population than in England's towns
and cities. And some of the traditional barriers to economic inclusion
have been broken down faster in the countryside. For example,
a higher proportion of women run businesses in rural areas than
is the case in cities.
Barriers to employment: The planning system
33. A significant barrier to business in
rural areas, and particularly to agricultural diversification,
is the implementation of the planning system. Too often, conflicting
guidance causes unnecessary confusion. RDAs would like to see
rural issues mainstreamed through all the Planning Policy Statements
(PPS). Each PPS would then be less open to diversity in its application
and the conflicts that arise from having a separate statement
(PPS 7) for rural areas would be reduced.
34. In addition, RDAs would welcome more
training for planners and council members on rural needs and advice
and training for rural businesses to improve their approaches
to developing planning applications.
Barriers to employment: Access
35. Many people in rural areas have difficulty
accessing employment opportunities. RDAs help mitigate this problem
by schemes to help people get to jobs or training or by programmes
to develop jobs and training opportunities closer to those who
need them, for example through the use of ICT (see Annex 1) or
the development of Multiple Service Outlets.
36. In addition, projects such as "Wheels
to Work" schemes have been funded by Advantage West Midlands
and NWDA. These help young, unemployed and disadvantaged people
get into work. The scheme works to break a vicious circle that
many young people in rural areas can face: without their own transport
they can't get to a job or training; without a job, or the skills
to secure a job in future, they can't afford the means to get
around. Wheels to Work offers short-term scooter loans and some
schemes provide additional services, such as driving lessons.
The retail sector
37. Supermarkets have 80% of the grocery
trade. RDAs therefore take a positive approach to the challenges
faced by local business and producers and work with large retailers
to ensure that the agricultural and horticultural sectors have
access to this market. RDAs are working in a pro-active way to
increase supermarket use of local food, for example:
— With the support of One North East,
Northumbria Larder, the North East's Regional Food Group, was
set up in 2001. It aims to promote and support regional food producers
with a view to increasing their sales and profitability. It also
seeks to create more jobs in the food industry while enhancing
the reputation and standing of the region's indigenous food and
drink. In a short time it has been successful in promoting local
produce and boosting sales through Farmers' Markets, agricultural
shows and also working with large supermarkets. In August 2006,
supported by Northumbria Larder, Asda staged a month-long celebration
of all things local in its stores across the North East. There
are now 27 local producers selling over £20,000 of produce
a week in Asda stores compared with a figure of just £5,000
only a year ago. Some suppliers have tripled their sales in a
matter of months.
— Heart of England Fine Foods (HEFF),
supported by Advantage West Midlands and Defra, has helped to
supply locally produced vegetables to Sainsbury's West Midlands
stores. To promote sales, HEFF provided merchandise ideas including
a mobile kitchen and exciting recipe ideas. As a result of this
initiative, some stores sold 10 times their normal volume of vegetable
products.
THE EFFECTIVENESS
OF RURAL
PROOFING ARRANGEMENTS
IN ENSURING
THAT THE
RURAL ASPECTS
OF ECONOMIC
DEVELOPMENT ARE
PROPERLY REFLECTED
IN NATIONAL
AND REGIONAL
POLICY, INCLUDING
PLANNING POLICY
Rural proofing
38. Rural proofing is inherent in the RDAs'
mainstream approach to economic development. Since few RDA based
programmes are designed specifically to meet rural needs, it is
difficult for programmes that are not in some way applicable to
rural areas to slip through the net. For example, in its Regional
Economic Strategy, the Northwest Regional Development Agency explicitly
states that all its policies and programmes are applicable equally
to all areas of the region unless there is a specific note to
the contrary.
39. All Government Departments should recognise
the role of Defra and work with it to ensure their programmes
are rural proofed. For example there could be policy synergies
between Defra and the Department for Communities and Local Government
on housing issues, and the Department of Health on healthy eating.
These need to be better aligned at the earliest stage of policy
development.
THE ROLE
OF NATURAL
ENGLAND AND
THE COMMISSION
FOR RURAL
COMMUNITIES (CRC) AND
THEIR EFFECTIVENESS
IN TAKING
FORWARD THE
WORK OF
THEIR PREDECESSOR
BODIES
Commission for Rural Communities
40. We are keen to work with the CRC in
the development of their role and to develop shared approaches.
There is a need to clarify the role of the CRC, since its current
status as advocate, watchdog and expert adviser is not clear in
terms of scope or alignment. If the CRC is a watchdog of Government
does it have sufficient independence to carry out this role? It
would be useful to know exactly where the boundaries of its various
roles lie.
Natural England
41. Natural England needs to develop regional
structures, which are able to operate autonomously to a great
extent. This would allow it to work with RDAs and regional stakeholders
to identify solutions that meet specific regional needs. It will
need to work particularly closely with RDAs in developing an integrated
approach to the delivery of the LEADER axis in the new England
Rural Development Programme 2000-07, as well as in the establishment
of innovative regionally relevant initiatives for both urban and
rural areas which reflect the appropriate balance of economic,
environmental and social objectives.
October 2006
Annex 1
SOME EXAMPLES OF MAINSTREAM RDA ACTIVITY
MEETING RURAL NEEDS
Facilitating broadband internet access, while
not specifically a rural policy, can make a real difference to
economic and social opportunities for people in rural areas:
— In 2004, the Northwest Regional Development
Agency (NWDA) approved funding of £20 million for Project
ACCESS, a broadband project which, in partnership with BT, has
seen regional coverage increase from less than 70% of households
and businesses to around 99%.
— In the rural community of Eastgate
in County Durham, broadband access supported by One NorthEast
has made it possible to develop the UK's first renewable energy
village at the home of the former Lafarge Eastgate cement works.
Eastgate is just one of the communities targeted in a project
to bring broadband to 150,000 households and businesses across
the North East.
— In 2004 Yorkshire Forward supported
the enabling of 23 telephone exchanges in the rural areas of the
Yorkshire & Humber region and opening up communities beyond
the range of ADSL technology. Through this Yorkshire Forward helped
connect 1,000 subscribers and 350 Businesses. In 2006 Yorkshire
Forward added a further £150,000 to the original budget of
£450,000 to support 120 subscribers in the North York Moors,
and a further project in North Lincolnshire.
RDA efforts to develop the skills base have
clear benefits for rural areas:
— To meet the Government's animal health
and welfare policy requirements since the foot and mouth outbreak,
there is an increasing need for veterinary surgeons and nurses
in the UK. The School of Veterinary Science at the Sutton Bonington
Campus of The University of Nottingham is the first new veterinary
school to be built in the UK for 50 years. This has been made
possible by a £30 million investment, including £2.5
million from the East Midlands Development Agency, for state of
the art teaching and laboratory facilities. The project has created
272 jobs, and will support an intake of 360 undergraduates.
— In 2005, over eight hundred people
gained additional qualifications through the South West Food and
Drink Skills Network. The project has brought together land-based
colleges, private sector training organisations and the industry
to tackle skills deficits in the food and drink sector. Part funded
by the South West of England Regional Development Agency, the
Network, which runs to March 2008, helps people access sector
specific training courses and can help arrange bespoke training
programmes for businesses. Since the project began in 2003, over
one thousand businesses have benefited from an improvement in
workforce skills.
— To raise the skills levels of businesses
across the south east, the Rural Business Advice and Training
(RBAT) Network brings together training and advice providers across
the region to support the growth and development of rural businesses.
Funded by the South East England Development Agency, the Network
currently has over 50 training providers who collaborate to provide
a simple and easily accessible single service to rural businesses.
RDAs are also at the forefront of the drive
for renewable energy development:
— The East of England Development Agency
has established "Renewables East", as the agency responsible
for facilitating renewable energy activity in the six counties
of the East of England: Norfolk, Suffolk, Essex, Hertfordshire,
Bedfordshire and Cambridgeshire. Its mission is to help the region
meet its renewable energy targets whilst ensuring that the East
of England gains the widest economic benefit. The focus of Renewables
East is on tackling market failures in the deployment of those
technologies most advantageous to the geography of the East of
England (i.e. onshore and offshore wind, biomass and biofuels)
and its workstreams are based around supporting emerging technologies,
breaking down financial barriers, tackling supply chain failures
and providing support and guidance to planning authorities. As
a result Renewables East has facilitated the development of over
150Mw of installed capacity and the region is on track to meet
its target of 14% electricity from renewable sources by 2010.
The majority of Renewables East's activity has focused on rural
areas as both the location for new generating capacity (especially
onshore wind) but also in developing alternative markets for crops
through the developing biofuels and biomass power infrastructure,
and for example, the use of anaerobic digestion in processing
agricultural waste. Renewables East was cited by Sir Ben Gill's
Biomass Taskforce as an exemplar for the development of biomass
energy.
Annex 2
AN EXTRACT OF REGIONAL DEVELOPMENT AGENCIES'
REPORTED END YEAR OUTPUTS FOR 2005-06 (EXCLUDING LDA FIGURES)
| Target | Minimum Threshold Target
| Total Achieved | Rural Outputs
| % Rural Outputs |
| Employment Creation: Number of jobs created or safeguarded
| 67,165 | 90,085 | 25,212
| 28% |
| Employment Support: Number of people assisted to get a job
| 10,821 | 39,299 | 8,995
| 23% |
| Business Creation: Number of new businesses created and demonstrating growth after 12 months and businesses attracted to the region
| 10,540 | 15,829 | 4,759
| 30% |
| Business Support: Number of businesses assisted to improve their performance
| 54,004 | 115,177 | 38,216
| 33% |
3
These figures refer to RDAs reported end year outputs for 2005-06
excluding figures from the LDA. See annex 2 for more details. Back
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