Regional development agencies and the Local Democracy, Economic Development and Construction Bill - Business and Enterprise Committee Contents


60. The SNR was published in July 2007 by the Treasury and the Departments for BERR and CLG (Communities and Local Government). The Government proposed that, in the context of globalisation and technological change, "regions and localities need greater flexibilities, powers and incentives to respond to economic change, and to ensure that all areas, including the most deprived, are able to contribute to and benefit from economic growth".[48]

61. The SNR proposed reforms in four key areas:

    1) empowering all local authorities to promote economic development and neighbourhood renewal, with greater flexibility, stronger partnership working and cooperation from other agencies, and better incentives for achieving economic growth and for ensuring disadvantaged areas benefit from and contribute to economic development;

    2) a differential approach that supports local authorities in all areas to work together more effectively where they so wish, for example through pooling resources, responsibilities and targets at the sub-regional level, and supporting the development of robust decision-making at this level;

    3) streamlining the regional tier outside London, based on more effective and accountable RDAs which would be responsible, working closely with local authorities, for preparing a single strategy for the region. RDAs will also provide support to local authorities and sub-regions in delivery of sustainable economic development, with stronger performance management; and

    4) sharpening focus of central government departments through clearer objectives and responsibilities to provide more effective support and better coordination for economic development and neighbourhood renewal at all spatial levels.[49]

62. Essentially, therefore, the SNR proposed radical reform to the roles and responsibilities of bodies at regional, sub-regional and local level which make and deliver economic development and regeneration policies. Its proposals were intended to increase the role of local authorities and other sub-regional partners in delivering economic development programmes and to enable RDAs to take a more strategic and co-ordinating function, allowing decisions to be taken at the most appropriate level.

63. It should be noted that the proposals relating to RDAs do not apply to the LDA, although the proposals relating to reforming the local authority role in economic development and neighbourhood renewal will apply to London.

64. On 31 March 2008, BERR launched a consultation, Prosperous Places: taking forward the review of sub national economic development and regeneration,[50] on the delivery of key parts of the proposals set out in the SNR. The consultation concluded on 20 June 2008.

65. Following its consultation, the Government published its revised proposals on 25 November 2008 in Prosperous Places: taking forward the review of sub national economic development and regeneration—The Government response to public consultation.[51] This document stated that responses to the Government's consultation strongly supported the aims and purposes of the SNR. The Local Democracy, Economic Development and Construction Bill (the Bill) was introduced in the House of Lords on 4 December 2008.

Timing of the sub-national review

66. Over the course of the inquiry, the Committee questioned whether it was sensible to expand RDAs' responsibilities during the current recession. There were concerns that implementing the SNR proposals would require significant resources which might otherwise be targeted on supporting business and economic development. The Chair of EMDA acknowledged that the timing was not helpful, stating "if you ask me as a businessman, no, I would not do it now, but that does not mean that I would not do it. That is an honest answer".[52] On the other hand, he noted that RDAs operated within a 'big picture' with a 20-year horizon.

67. Whatever the merits of the timing of reform during a major recession, it would be easier to implement if there was clarity about the proposals. Throughout the inquiry, the Committee was surprised and disappointed by the lack of detail contained in the Government's proposals about how the new arrangements for sub-national governance of economic development policy would operate in practice. This can only be a cause of significant concern for the RDAs and local authorities faced with implementing the legislation. We believe that much of the clarification called for in this report could, and should, have been provided at an earlier stage. It must be available during the Committee stage of the Bill.

48   SNR1, page 7 Back

49   SNR1, para. 6.5 Back

50   Prosperous Places: taking forward the review of sub national economic development and regeneration (SNR2) - Back

51   Prosperous Places: taking forward the review of sub national economic development and regeneration - The Government response to public consultation (SNR3) - Back

52   Q216. Back

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