Memorandum from the Royal Institute of
British Architects (RICS) (EM 06)
ABOUT RICS
RICS is the largest organisation for professionals
in property, land, construction and related environmental issues
worldwide. We promote best practice, regulation and consumer protection
to business and the public. With 140 000 members, RICS
is the leading source of property related knowledge, providing
independent, impartial advice to governments and global institutions.
RICS East Midlands has approximately 5,000 members
working across a range of sectors in the region who are uniquely
well placed to offer genuine expertise as the leading property
professional body, required by its Royal Charter to place the
public interest at the core of all its activities.
Key points:
— emda will need to acquire new
skills and expertise to undertake the new operational and political
roles proposed in the Local Democracy, Economic Development and
Construction Bill.
— Changes to regional governance announced
in the Bill provide the perfect opportunity for emda to
develop a new approach to stakeholder engagement.
— The negative impact of the current economic
situation underlines the need to maximise the professional expertise
and regional intelligence that stakeholders such as RICS are well-placed
and willing to offer.
— There is a mismatch between emda's
economic objectives and measures of success and the overarching
statutory sustainable development duty that exists in spatial
planning, as measured through Sustainability Appraisals.
— emda's structure and accountability
to central government precludes accountability to the region.
Individual board member appointments by government cannot fill
this gap in effective partnership working.
— emda board participation could
benefit from wider input by regional MPs and stakeholders to speak
for their constituencies and wider organisations in the region.
— Government Office East Midlands, emda
and the emerging East Midlands Leaders' Board should now consider
how best to develop a coordinated approach to regional engagement
with professional bodies, key sectors and communities to garner
available expertise and insight to inform their discussions and
decisions.
ROLE, RESPONSIBILITIES
AND ACCOUNTABILITY
OF EMDA
PROCESS BY
WHICH THE
RES WAS DRAWN
UP AND
THE LEVEL
OF INVOLVEMENT
OF REGIONAL
STAKEHOLDERS
CHANGES TO
REGIONAL POLICY
PROPOSED IN
THE LOCAL
DEMOCRACY, ECONOMIC
DEVELOPMENT AND
CONSTRUCTION BILL
AND THE
POTENTIAL EFFECT
ON THE
WORK OF
EMDA
1.1 emda's role
1.1.1 emda's role has been to deliver
economic growth and regeneration in the region in line with the
RES. In doing so emda has worked with other organisations
in a range of schemes and initiatives that have produced some
high quality outcomes. Aspects of the effectiveness of emda's
work have been evaluated in detail by the regional assembly through
several scrutiny exercises carried out since 2004.
1.1.2 The intention of the Review of Sub-National
Economic Development and Regeneration (SNR) is that emda
is to play a more strategic role and delegate funding and delivery
to local authorities and new subregional partnerships. emda
will work in partnership with local authorities to develop a Single
Regional Strategy to replace the former separate spatial and economic
strategies. This will require organisational change within emda
and the acquisition of skills in spatial planning so that it can
integrate economic priorities with spatial planning in this new
strategy.
1.2 emda's responsibility
1.2.1 The organisation has an economic focus
and emda's performance measures reflect this. That emda
now has a new function in producing an integrated strategy for
the region highlights one area where clarity is needed. Under
pre-SNR arrangements the regional assembly had an overarching
sustainable development duty. This measured how regional policy
delivered balanced sustainable solutions across social, environmental
and economic criteria, within the integrated Sustainability Appraisal
and Strategic Environmental Assessment (SA/SEA), in compliance
with statutory requirements.
1.2.2 Post-SNR arrangements are likely to
mean that a national set of sustainability criteria will be implemented
and that these will be developed by the Sustainable Development
Commission.
1.2.3 Logically therefore emda's
responsibility and measures of success need to be aligned with
the new task of developing the Regional Strategy in delivering
sustainable development. This document is intended to deliver
balanced sustainable development as the regional tier of planning,
but emda's priorities and performance indicators fit within
purely economic criteria. It is therefore anomalous for the statutory
requirement for spatial planning policies to be assessed against
balanced sustainability criteria, when the new focus and measures
of success will be solely economic ones. emda's economic
role and performance indicators may therefore require revision
to include the inclusion of a duty to deliver balanced sustainable
development, together with a change in performance indicators
to measure performance on that basis.
1.2.4 An alternative approach would be to
remove social and environmental criteria from the Sustainability
Appraisal to focus on economic success rather than balanced sustainable
development, but the SEA must remain in place under European requirements.
This approach would require a rejection of sustainable development
objectives that shape land use planning, with profound consequences
for the management of protected landscapes, the built environment,
carbon emission reduction and the implementation of the Sustainable
Communities Plan. A solely economic focus would be unlikely to
deliver sustainable development.
1.3 emda's accountability
1.3.1 emda's existing accountability
to the Department for Business, Innovation and Skills[1]
is clear, with funding primarily from that source. emda's
board members do not therefore represent regional constituencies
but are recruited on a periodic basis as individuals with specific
sector-related competencies and experience. They are appointed
through a process directed by BERR. The accountability of board
members therefore is to emda and through it to BERR. Board
members are not appointed as stakeholders with accountability
to regional constituencies of interest. They undoubtedly have
valuable skills and insight in their sectors, but do not necessarily
have arrangements to reach into the diversity of their sectors
to provide this wider expertise for emda. Individuals serving
as board members therefore do so on a personal basis with a sole
accountability to emda, which delivers central government
economic priorities in the region, and not to the organisations
or sectors with which they are connected. While emda works
with partners in the region, its accountabilities do not lie in
the East Midlands.
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.
It is particularly unfortunate that the loss
of this resource has coincided with the need for real time regional
intelligence during the economic downturn. However, the longer
term loss is highly significant, particularly as there are now
no arrangements for scrutiny of emda from within the region.
The introduction of structured arrangements to ensure that the
diversity of the region's businesses and communities is understood
would be a very positive step forward.
1.3.3 The ways in which emda works
are to continue in the post-SNR era, with the following potential
weaknesses:
RICS would welcome a system that provided an
accessible overview of the organisation and the work planned within
its departments, together with points of contact so that organisations
wishing to make a contribution can do so. A more strategic approach
and better communications would address this and provide a better
sense of purpose.
RICS would be delighted to contribute its expertise
in the built environment and in regeneration to shape regional
policy, particularly in the current market conditions where it
can provide a useful information resource for example through
its market surveys, the most relevant of which are disaggregated
to the regional level. The organisation also has expertise throughout
rural and environmental sectors. There is no mechanism for it
currently to do so.
RICS understands that regional stakeholder representation
may be delivered through two individual, observer seats on a joint
Leaders' Board/emda board. This means that much that is
of value will not be heard in the constrained representation offered,
and there is a risk that organisations with genuine and valuable
connections to sectors across the region will review whether it
is worthwhile for them to continue to engage at all.
Some stakeholders formerly worked with local
authorities under assembly arrangements as the non-elected statutory
component of the Regional Planning Body, but this opportunity
to contribute has now been removed. RICS and others regret the
loss of accountability and insight to the region that results
from this.
The emerging regional governance structure provides
regional agencies with the opportunity to have a fundamental rethink
regarding stakeholder engagement. The model followed by the East
of England region, in which an inclusive East of England Business
Group is partly funded by the RDA, together with member subscriptions,
is a good one. We would urge the East Midlands, in particular
emda, to consider nurturing such a group in order to avoid
losing the buy-in of such valuable professional organisations
as RICS, which until now have been excluded from stakeholder representation
on the assembly.
It seems anomalous that emda board level
discussions do not include regional MPs or the Regional Minister
as observers who could provide balance and breadth to the debate.
Members of local government are represented on the board but MPs
also represent the views of constituents across the region.
The effect of the financial and economic
situation on businesses in the region including the effect on
different sectors and the impact on local employment, and how
well emda is meeting needs in the challenging economic climate.
2.1 The economic situation has had a profound
effect on businesses in the region, with a marked downturn in
property and construction sectors. RICS Housing Market Surveys
have documented on a monthly basis the significant decline in
property prices in the region and the loss of consumer confidence
measured by new buyer enquiries, although this is starting to
pick up. In the current market, a lack of mortgage finance and
economic conditions are restricting the ability of many to consider
the option of entering the market. Optimism that sales will improve
further in the East Midlands market over the next three months
fell back into negative territory in February.
2.2 The RICS construction market survey
(Q4 2008) showed that workloads in the East Midlands declined
for the third consecutive quarter. The net balance fell to the
lowest level in the survey's history (Q2 1994). Private housing
workloads remained the weakest category in the last quarter of
2008.
2.2 The combined effect of these factors
means that in this region the sales to stock ratio has fallen
sharply since mid-2006, an established trend that has produced
significant supply constraints for some time. In order for the
market to recover there will need to be a substantial improvement
in the availability of property for sale, ideally both from renewed
market confidence by homeowners that they can achieve realistic
prices, and from the supply of open market new build and affordable
housing. The significance of the lack of new starts during 2008 is
that this will further constrain supply in 2009 and 2010.
2.3 In the East Midlands first time buyers
are still unable to enter the market and the potential for renewed
house price increases resulting from supply constraint means that,
even if mortgage finance becomes available in future, housing
for them could become even more unaffordable. RICS would welcome
opportunities to share its research and understanding of the local
property markets in the region, as well as in the range of areas
in which it has professional expertise.
2.4 RICS East Midlands would welcome communication
from emda on how it is responding to the downturn, in terms
of extra support for businesses. This invaluable information could
be passed on to its membership.
The role of other Government agencies such
as the Government Office for the East Midlands, and of partnerships
between Government agencies, local government and the private
sector, in delivering the aims of the RES.
3.1 It is important that Government Office
develops a transparent and structured model of engagement with
business, communities and other stakeholders for the diversity
of the region to inform its work. Greater opportunities to improve
stakeholder engagement on a broader and more consistent basis
would be good.
3.2 Possibly a shared approach with emda
to regional engagement would provide a good model. In the current
economic climate Government Office is well placed to act as a
conduit of regional intelligence.
1 Formerly Department for Business, Enterprise and
Regulatory Reform (BERR). Back
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