East Midlands Development Agency and the Regional Economic Strategy - East Midlands Regional Committee Contents


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:

    PARTICIPATION

    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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