Memorandum submitted by Yorkshire and
Humber Assembly
Please find attached a submission from the Yorkshire
and Humber Assembly's Scrutiny Board for consideration by the
Business and Enterprise Committee in its inquiry into the future
role and responsibilities for regional development agencies.
Our response is based on the findings of the
13 scrutiny reviews so far carried out by the Assembly and focuses
particularly on the following areas:
1. The Need for Economic Development, Business
and Regeneration Policy Delivery Between Central and Local Government
2. The Effectiveness of RDAs and Added Value
4. The Extent of, and Need for, Overseas Activities
5. Consequences of the Expanding RDA Remit
6. Accountability of RDAs
7. Measurement of RDA Performance in the Past
and the Future
The response sets out some broad thoughts from
the Assembly's Scrutiny Board about the way the Sub National Review
may impact on economic development and particularly regional development
agencies themselves. Hopefully, our submission and that of others
will assist the inquiry and help us move forward to help deliver
the improvements that Government and our region wish to see.
THE ROLE
OF REGIONAL
DEVELOPMENT AGENCIES
(RDAS)
1. The Need for Economic Development, Business
and Regeneration Policy Delivery Between Central and Local Government
The Assembly has completed thirteen scrutiny
reviews on the Regional Economic Strategy and Yorkshire Forward
since 2001. A consistent message from these reviews has been that
economic development and regeneration is best delivered at the
local level through a combination of public, private and voluntary
and community sector expertise. The Scrutiny Board therefore believes
it is essential that central policy is linked through to local
delivery, and that the Regional Development Agencies (RDAs) are
well placed to undertake this role and bring the various sectors
and partners together. This regional working can:
1. Encourage and support collaboration and sub-regional
working across functional areas
2. Help prioritise investment between places
3. Provide capacity support
4. Deliver economies of scale
5. Give local areas a strong voice in central
government
6. Enable effective responses to local economic
shocks
7. Help ensure a consistent approach to delivery
where appropriate
2. The Effectiveness of RDAs and Added Value
The Scrutiny Board's work has highlighted several
examples of how Yorkshire Forward has delivered economic development
and regeneration in the region effectively. These examples include
the Urban and Rural Renaissance programmes and the re-development
of large areas of derelict brownfield land into new business parks.
Yorkshire Forward have provided real added value in their work
has been their responses to economic shocks. In Yorkshire and
Humber there have been three specific instances where Yorkshire
Forward has swiftly intervened to assist businesses to cope with
unforeseen events:
— Foot and Mouth Disease (2001)—there
were 139 confirmed cases of Foot and Mouth disease in the region,
however, it was estimated that the region's rural economy lost
£125 million due to the impact on the tourism industry. Yorkshire
Forward generated a support package of £6 million to rurally-based
businesses affected by the outbreak, including hardship grants
of £2,000 for 500 businesses, individual business grants
of up to £15,000 to aid recovery and business support to
help land-based industries diversify into other markets.
— Closure of the Selby Coalfield (2003)—the
closure of the mine complex led to a loss of 4,000 direct and
indirect jobs, and impacted on 750 companies within the supply
chain. Yorkshire Forward invested £250,000 to immediately
provide information, advice and guidance services on career paths,
self-employment and training. However, the total amount of funding
invested was £35 million, which included re-development of
the land and business support services to assist the local community
and replace the jobs lost by the closure.
— Extreme Flooding (Summer 2007)—the
areas most severely affected by the flooding of Summer 2007 were
Sheffield, Doncaster and Hull. Yorkshire Forward established a
£5 million recovery fund to help those businesses affected,
including grants of up to £2,500 for small businesses for
immediate recovery needs, and up to £100,000 for medium and
large companies. The purpose of the fund was to cover those costs
that would not be met by business continuity insurance.
These three examples have demonstrated that
the RDAs can administer funds quickly to the areas which are in
most need of support. In all three cases, Yorkshire Forward has
secured the support of other key agencies to ensure a single co-ordinated
response, and this collaborative working has been welcomed.
The scrutiny reviews have also highlighted a
number of areas which Yorkshire Forward needs to develop its activities.
Multiple scrutiny reviews have consistently identified communication
and engagement of the public, private and voluntary sector organisations
as two areas in need of improvement. The Independent Performance
Assessment (IPA) of Yorkshire Forward in 2006 also highlighted
communication and engagement as specific issues which were adversely
affecting the effectiveness of Yorkshire Forward. How Yorkshire
Forward develops this capacity will be key to how effective they
are in their future role of the development of the Single Regional
Strategy which will need to ensure the buy-in of all regional
partners.
3. RDA Expertise
The Scrutiny Board believes that Yorkshire Forward
has built a level of expertise in some areas of the agency. Recent
scrutiny reviews have identified the Innovation and Sustainable
Development Teams at Yorkshire Forward as being highly respected
by regional partners for their skills and expertise. However,
the Scrutiny Board has detected issues with communication between
the different directorates, and expertise within Yorkshire Forward
is not always joined-up when dealing with external partners. The
requirement for the single regional strategy to be examined in
public also presents a challenge and a new way of working for
the RDAs, which they will have to adapt to.
4. The Extent of, and Need for, Overseas Activities
Yorkshire Forward has three overseas offices
in Japan, China and Australia. Through the Northern Way, Yorkshire
Forward also part-invests in an overseas office in America with
the NWDA and One North East. In 2005 the Scrutiny Board undertook
a review of the Northern Way. This review identified that the
three Northern RDAs had attracted a higher level of inward investment
into the North through the American and Australian offices than
the other English regions. The Scrutiny Board concluded that this
was because of the collective and collaborative promotion of the
North, which meant that a higher level of interest was obtained
with a combined and reduced marketing budget.
5. Consequences of the Expanding RDA Remit
There is already a spirit of joint working in
the region. Public, private and voluntary sector organisations
are committed to working in partnership through new governance
structures, and are keen to work with Yorkshire Forward on delivering
their new responsibilities. Partners are keen however, to ensure
that appropriate mechanisms are put in place to provide democratic
accountability.
6. Accountability of RDAs
The current system of accountability means that
partners within the region have a number of opportunities to influence
the work of Yorkshire Forward, either by shaping the policy through
the development of the Regional Economic Strategy or by getting
involved with the Assembly-led scrutiny process which gathers
evidence on how the region is progressing and recommends ways
in which policy can further develop to fit the region's needs.
Both systems are dependent on the success of engaging the appropriate
stakeholders into the processes. The current scrutiny process
is led by Yorkshire and Humber Assembly members who represent
the public, private and voluntary sectors and is heavily focused
on gathering and hearing the views of multiple stakeholders who
are involved with the work of Yorkshire Forward. The direct involvement
of partners at the local level means that the recommendations
made by regional scrutiny are relevant and directly address the
needs of the region. It is important that in any future arrangements
that local people within Yorkshire and Humber have similar access
and opportunity to develop and shape policy.
7. Measurement of RDA Performance in the Past
and the Future
Since 1999, the performance of the RDAs has
been determined by the achievement of the core public Service
Agreement targets outlined by the Department for Business Enterprise
and Regulatory Reform (BERR). During this time, the RDAs have
been expected to produce quarterly written reports for the Government
Offices in the regions, and bi-annual written reports to BERR,
to summarise their expenditure and output achievements against
profile. Whilst the Scrutiny Board acknowledges that the quarterly
and bi-annual reports provide a useful account of performance,
the Scrutiny Board understands that the statistics in these reports
are not externally verified by BERR or rigourously scrutinised.
The Scrutiny Board therefore believes that the mechanisms for
monitoring and verifying RDA performance could be strengthened,
particularly in light of the RDAs increased responsibility for
public expenditure in the future.
The Scrutiny Board welcomed the Government's
introduction of the Independent Performance Assessments (IPA)
of the RDAs in 2005. The Scrutiny Board worked with the National
Audit Office to ensure synergy between the IPA and regional scrutiny
processes. Scrutiny Board members considered the IPA process to
be a valuable activity, particularly as it investigated those
areas which regional scrutiny does not review in depth. With an
expanding RDA remit, the Scrutiny Board believes that the continuance
of the IPA process would provide increased accountability for
the RDAs. The Scrutiny Board is therefore concerned that there
has been no confirmation from BERR or the National Audit Office
that the IPA process will continue, particularly as the next round
of IPA assessments should have already begun.
Throughout the last year, central Government
has been reviewing the Tasking Framework for RDAs, and has subsequently
confirmed that RDAs will be measured on a single output target
of achieving economic growth. The Scrutiny Board has detected
a high level of unease amongst the region's local authorities,
and the region's Social, Economic and Environmental partners,
about measuring the RDAs on a single target. Much of this unrest
is because the economic growth target does not address issues
of sustainable development, and places pressure on RDAs to achieve
economic growth at all costs. Also, in view of the economic downturn
in the UK, a measure of economic growth appears inappropriate.
The Scrutiny Board therefore believes that the RDAs must still
be assessed on their ability to achieve sustainable economic growth,
attain social inclusion, and ensure that the environment is enhanced
and protected.
19 September 2008
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