6 Sub-National Review
88. In July 2007, the Government
published its proposals to reform economic development and regeneration
policy making and delivery at sub-national level, in the Review
of sub-national
economic development and regeneration (SNR).
Following its consultation on the proposals, launched in March
2008, 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 decided:
- To legislate to create a duty
on county councils and unitary authorities across England to carry
out an economic assessment of their area, underpinned by statutory
guidance;
- To legislate to allow for the creation of statutory
sub-regional authorities for economic development—economic
prosperity boards—that will be voluntary in nature, and
to legislate for the option of a similar underpinning of duties
on partner agencies in Multi -area Agreements as in Local Authority
Agreements;[106]
- To refine its plans for producing the regional
strategy and ensuring appropriate regional governance arrangements;
the Government will, in each region, give the RDA and a board
of local authority leaders joint responsibility for the regional
strategy, including its drafting, implementation planning, sign-off
and monitoring; and
- To legislate to create duties on county councils
and unitary authorities to promote democracy and to operate a
petitions scheme, and to create a duty on certain public authorities
to secure involvement in the exercise of their functions.
Implementation of those elements of the review that
require legislation is in the Local Democracy, Economic Development
and Construction Bill.[107]
Single Regional Strategy
89. Clause 67 of the Bill provides that "there
is to be a regional strategy for each region other than London."[108]
The Government intends that the regions develop a single regional
strategy, bringing together the Regional Economic Strategy and
the Regional Spatial Strategy, giving RDAs new responsibilities
for transport, planning and housing matters.
90. Phil Hope MP, Minister for the East Midlands,
described the integrated regional strategy as "the most crucial
part of the region's development as a region."[109]
As he explained, "it will integrate economic plans with spatial
plans, so that we can merge together issues around housing and
planning with issues around jobs and employment. I think it is
a crucial part of the region's future for years to come."[110]
91. Witnesses were in favour of the move to a
Single Regional Strategy; as emda said, "the separate
timescale, overlapping processes and different evidence bases
of the RES and Regional Spatial Strategy (RSS) made it challenging
to fully integrate economic and spatial policies."[111]
Lindsey Bunn, Policy Manager, Federation of Small Businesses East
Midlands, commented:
It is incredibly useful to have a single document
that outlines exactly what economic document is going to happen,
when and where, and how it is going to benefit communities and
individual citizens, not just businesses.[112]
ROLE OF REGIONAL MINISTER
92. The Sub-National Review gives emda
and the Local Authority Leaders' Board joint responsibility for
the regional strategy, including its implementation plan and monitoring
of its delivery. However, "where they are unable to reach
agreement, or where one side acts unreasonably, the Government
will take a power to allow Ministers to direct the process for
producing the draft strategy, with the expectation being that
the task of leading the strategy's development would then fall
to the RDA."[113]
93. EEF expressed doubts about how effective
this would be.[114]
Jeff Moore, Chief Executive, emda, was confident that any
matters could be resolved and there would be no need to go to
the Regional Minister for the solution. He recognised however
that it would be a "complex and difficult task, given the
spatial elements added to the economic elements and the point
that the planning dynamic is a vibrant focus of public interest,
but we believe we can get there."[115]
94. We fully support the production
of a single integrated strategy, allowing better alignment of
policy in the region. We look forward to emda and the Local
Authorities Leaders' Board establishing a good working relationship
and to the production of the region's first integrated strategy.
Stakeholder Involvement
95. The Sub-National Review announced that Regional
Assemblies would be abolished by 2010. They had been established
at the same time as Regional Development Agencies and part of
their remit had been to scrutinise the work of the Regional Development
Agencies. They were informal bodies with no legal powers, made
up mainly of local authority councillors, alongside social and
economic partners.
96. The Review contained proposals for the establishment
of Local Authority Leaders' Boards, made up of local councillors
in the region. They will have joint responsibility with the Regional
Development Agency for preparing the single integrated strategy.
They will no longer have a scrutiny function over RDAs.
97. Witnesses had strong reservations regarding
the abolition of Regional Assemblies. They expressed concern regarding
the lack of stakeholder involvement in policy decisions under
the new arrangements, and the lack of regional accountability
over emda. In its written evidence, the Royal Institution
of Chartered Surveyors commented that:
The evolution of the East Midlands Regional Assembly
into a purely local authority body means that it will be less
easy for the voices of key stakeholders from the economic, environmental,
social and third sectors to be heard and to contribute to policy
decisions at regional level.[116]
The Federation of Small Businesses East Midlands
also noted that:
The role of businesses and other stakeholders under
the proposals appears to be strictly limited […] the role
of businesses under the new arrangements must be much more than
a consultee, otherwise there is a strong possibility that businesses
will become disillusioned and disengage.[117]
98. emda described how they were currently
working alongside the Shadow Local Authority Leaders' Board to
develop the regional Change Management Plan that "sets out
[…] the key principles in terms of groups and structures
to support the Joint Strategy Board and wider stakeholder engagement.[118]
In oral evidence to the Committee, they gave examples of discussions
taking place to discuss mechanisms for involving regional partners,
and had recently held an event in the region:
The event was well attended. There were nearly 80
stakeholders there from a range of organisations across the East
Midlands, from the economic sector, the environmental sector and
the social sector. There were organisations such as Social Enterprise
East Midlands and Emerald, the environmental organisation, through
to business organisation, like the IOD and the CBI.[119]
emda
said it would continue to examine scenarios with a variety of
stakeholders, reporting on stakeholder arrangements by the end
of the year.
Accountability
99. Lyndsey Bunn, Policy Manager,
Federation of Small Businesses East Midlands, described the "significant
accountability gap"[120]
that will be left by the dissolution of the regional assemblies.
She added that:
In terms of the role that regional
assemblies have played, local councillors, business representatives,
environmental partners, trade unions have been able to ask them
searching questions.[121]
Councillor David Parsons, Chair, East Midlands Regional
Assembly, also agreed that a "huge amount of detailed scrutiny
and the detailed recommendation that could have been made to the
development agency on how it could have done things better"
would be lost.[122]
100. In written evidence to the Committee, the
East Midlands Regional Assembly commented that "the loss
of a dedicated regional scrutiny body, comprising of Local Authority
members and regional stakeholders, takes away the opportunity
for an in-depth examination into the key aspects of these regional
agencies' work in the East Midlands."[123]
It described the potential for East Midlands Councils (the body
established to represent Local Government in the East Midlands)
to play a leading role in "plugging the accountability gap."[124]
It noted that joint local authority regional committees are permissible
under Clause 31 of the Draft Local Democracy, Economic Development
and Construction Bill. These powers also currently exist under
the Power of Wellbeing.[125]
101. We are concerned that the
abolition of a regional assembly removes a dedicated and knowledgeable
regional scrutiny body. We are also concerned that this removes
a formal mechanism for stakeholder engagement. We welcome emda's
efforts to develop mechanisms in the region to ensure that the
involvement of regional partners in policy decision making is
maintained and look forward to emda's report at the end
of the year. We will revisit the issue of regional accountability
once the Assembly has been disbanded and any new arrangements
are in place.
Sub Regional Authorities for
Economic Development
102. The Local Democracy, Economic Development
and Construction Bill allows for the creation of statutory sub-regional
authorities for economic development. Witnesses commented on the
current lack of clarity over which functions were likely to be
assigned to emda, sub-regional and local authority levels.
Councillor Martin Hill, Chair, Local Government East Midlands,
stated that "there is not clarity, but hopefully we will
try and work through and get the job done in the best interests."[126]
103. Witnesses from the Higher Education sector
expressed greatest concern. The University of Nottingham stated
that, "with sub-regional economic development responsibilities
moving to the City/County Councils, we do have concerns about
the fragmentation and weakening in the economic and social development
of the Nottingham conurbation."[127]
The East Midlands Universities Association commented that:
If devolution of funds to Local Authorities shifts
the focus and type of investments to very local priorities confined
to small administrative areas, this may limit the role of Universities
as delivery partners, and the significant funds they can raise
against regional investment. The economic footprint of universities
does not always map easily on the administrative boundaries of
local authorities.[128]
104. emda stated that they had a very
strong record of working successfully at the sub-regional level,
and were "leaders in the devolution of funding to our sub-regions:"[129]
… we've given over a third of our money consistently—some
£200 million has been delegated to the sub-regions for them
to decide what to spend and where.[130]
105. We understand the concerns
expressed by witnesses over the lack of clarity for sub-regional
arrangements. We look forward to clarification from emda.
106 Such MAAs would provide for local authorities and
partners to be placed under a duty both to co-operate in developing
the MAA and also to have regard to the targets within the MAA
that relate to their functions. Back
107
The Local Democracy, Economic Development and Construction Bill
will have its Third Reading in the House of Commons on 13 October
2009. Back
108
Clause 65, Local Democracy, Economic Development and Construction
Bill Back
109
Q 209 Back
110
Ibid. Back
111
Ev 102 Back
112
Q 48 Back
113
SNR, para 2.7 Back
114
Ev 160 Back
115
Q 264 Back
116
Ev 99 Back
117
Ev 90 Back
118
Ev 102 Back
119
Q 259 Back
120
Q 46 Back
121
Ibid. Back
122
Q 61 Back
123
Ev 169 Back
124
Ibid. Back
125
Section 2 of the Local Government Act 2000 allows principal Local
Authorities in England and Wales to do anything they consider
likely to promote the economic, social and environmental well-being
of their area unless explicitly prohibited elsewhere in legislation. Back
126
Q 70 Back
127
Ev 131 Back
128
Ev 147 Back
129
Q 261 Back
130
Q 261 Back
| 
