Memorandum submitted by Centre for Cities
INTRODUCTION
1. The Centre for Cities ("The Centre")
welcomes the opportunity to respond to the Business and Enterprise
Committee's review of the future role and responsibilities of
the Regional Development Agencies (RDAs).
2. The Centre is a non-partisan research
and policy institute, helping cities improve their economic performance.
We work with cities, employers and central government to develop
practical policy solutions which help urban economies to grow.
Our work focuses on three major themes, of crucial relevance to
city economies: business and enterprise; housing and labour markets;
and city infrastructure.
3. The Centre is actively considering the
future of RDAs as part of its own policy work. We are not convinced
that there is a strong case to maintain RDAs in every region in
their current form. We will be setting out our thoughts on the
future shape, role and functions of RDAs later this autumn. Given
the strong political interest in this issue in Westminster, we
will keep the Committee informed as we progress this work.
4. This short response touches on a number
of the issues highlighted by the Committee. It sets out the Centre's
existing thinking—drawing on our experience of working with
RDAs, cities and business organisations through our research.
NEED FOR
A TIER
BETWEEN CENTRAL
AND LOCAL
GOVERNMENT
5. There is a need for a level of governance
between Whitehall departments and local authorities in order to
deliver economic development, transport, regeneration, training
and regeneration.
6. However, the city-regional (or sub-regional)
level is the most appropriate level at which to co-ordinate, plan,
and deliver key economic development functions—as this level
most closely matches the "real economies" of England's
cities and towns.[74]
Existing local authorities are too small to capture the "economic
footprint" of places, and the English regions are too big.
7. Accordingly, we support the consolidation
of the regional tier—and the shift of delivery functions
toward city-regions—outlined by the Sub-National Review
(SNR). As recognised by the SNR, economic development, business
support and regeneration policies need to be delivered at the
level that matches real economic areas, that of the city-region
or sub-region.
8. RDAs need to be more strategic, and devolve
programme funding (as opposed to project funding) downward to
city-regions and sub-regions. Currently, RDAs are too tactical
and interventionist—and spend considerable time and resource
managing individual projects. They are also trying to achieve
too many priorities at once. In future, RDAs should focus on (1)
setting a high-level investment plan for the region as a whole
via Integrated Regional Strategies, (2) prioritising funds on
and between city-regions, (3) support inter-regional collaboration
(eg Milton Keynes growth area, Sheffield City Region), and (4)
supporting a small number of business clusters where the region
has established strengths.
9. But the commitments outlined by the Government
in the SNR are vague and high-level. Over a year after the publication
of the SNR, there is still an urgent need to set out the detail
of how RDAs will devolve power downward to city-regions and to
local authorities.
RDA PERFORMANCE AND
ASSESSMENT
10. From our work with cities, RDAs and
business leaders across England, the performance of RDAs has been
mixed. For example, the Northwest Development Agency has taken
a proactive approach to developing city-regions—eg in Greater
Manchester—as evidenced by its joint work with the Centre
in 2006.[75]
Yorkshire Forward has been commended for its prioritisation of
investment, notably in transport. And One NorthEast's willingness
to submit the region's economy to a full-scale OECD territorial
review was commendably transparent.[76]
11. However, RDAs are also often seen as
inflexible and unaccountable—and their performance is often
criticised. An example would be in the West Midlands, where Birmingham
City Council and Advantage West Midlands have maintained a tense
relationship over the years—with some projects, such as
New Street Station, slowed as a result. In major cities, RDAs
are sometimes viewed as a barrier to more effective sub-regional
working, rather than an asset.
12. The Government bears some responsibility
for RDAs' mixed performance. First, RDAs have confused lines of
political accountability (more below). Second, they have had to
answer to a number of departments—such as CLG and DfT—in
addition to their sponsors in DTI/BERR. And third, the RDA tasking
frameworks have been complex and confusing—especially after
the failure of elected Regional Assemblies. Confused steers have
made it difficult for RDAs to focus their efforts on a small set
of strategic interventions that promote economic growth. A simpler
RDA performance framework, with a smaller number of priorities,
is to be welcomed.
RDA OVERSEAS OFFICES
13. In our recent report on UK Cities
in the Global Economy, we argued that individual English regions
do not need overseas offices. These are inefficient, and compete
against each other—potentially to the detriment of the UK
as a whole. Instead, city-regions should work through the existing
UK Trade and Investment framework to build up city-regional "brands"
and to attract Foreign Direct Investment targeted on cities' particular
business assets.[77]
We therefore do not support the continued operation of RDA inward
investment offices.
14. We have attached a copy of the above
report for the Committee's consideration.
EUROPEAN UNION
FUNDING
15. Given their expanded control over regional
economic development funding and strategy, it seems sensible for
RDAs to take over the strategic management of remaining EU Structural
Funds. This would enable better match-funding and gap-funding
of key regeneration projects at a time when public expenditure
is tight. However, as argued in previous work, this funding should
be focused on city-regions—and devolved to them on a programme—rather
than a project-by-project—basis.[78]
RDA ACCOUNTABILITY
16. Despite the Government's commitment
to greater accountability in the Sub-National Review, RDAs still
have serious accountability problems. The creation of Regional
Ministers and the proposed establishment of Regional Select Committees
may open RDAs up to greater Westminster scrutiny, but do little
to improve joint working between RDAs and cities and towns. They
also do not help make RDAs better understood within the regions.
17. As evidenced by the Modernisation Committee's
recent inquiry, RDAs have multiple lines of accountability in
Westminster and Whitehall—including ministers, government
departments, and other NDPBs.[79]
RDA Boards and Chief Executives are torn between their statutory
obligations at the national level and a desire to be responsive
to regional businesses and residents.
18. RDAs' principal role requires clarification—as
they are poorly understood by many local and regional stakeholders.
Ministers need to decide, once and for all, whether RDAs are (1)
agents to deliver central government policy in the regions—like
Government Offices, or (2) independent regional actors, tasked
with working with the local authorities. They should also drop
the pretence that RDAs are "business-led"—and
acknowledge that they are public-sector agencies charged with
promoting and investing in regional economic development.
19. The best way to deal with RDAs' local
accountability problem is for them to devolve power and funding
downward to city-regions. Leaders' Forums, the proposed replacements
for Regional Assemblies, will offer some scrutiny of RDA actions—but
not true accountability. Giving city-regions programme budgets
for economic development, transport and housing would be a better
solution—as elected local councillors would then bear direct
responsibility for delivery.
20. The Centre would be happy to offer oral
evidence to the Inquiry, if that would be helpful.
19 September 2008
74 Marshall, A and Finch, D (2006) City Leadership:
Giving city-regions the power to grow London: Centre for Cities. Back
75
NWDA and Centre for Cities (2006) Cities Northwest Warrington:
NWDA. Back
76
Seex, P and Marshall, A (2007) OECD Review of Newcastle and
the North East: One year on Newcastle: Newcastle City Council. Back
77
Brown, H (2008) UK Cities and the Global Economy, London
: Centre for Cities. Back
78
Marshall, A and Adams, J (2006) Last orders! What the new EU
budget means for Britain's cities London: Centre for Cities. Back
79
HoC Modernisation Committee (2008) "Regional Accountability".
London : The Stationery Office Limited, Third Report, HC 282. Back
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