Decentralisation in England: How far does SNR take things forward, 2008

8/9/2019 Decentralisation in England: How far does SNR take things forward, 2008

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WWW.IPPR.ORG/NORTH

DecentralisationinEngland:HowfardoestheSub-NationalReviewtake

thingsforward?Adiscussionpaper

byOlgaMrinska

June2008

InstituteforPublicPolicyResearchNorthChallengingideas Changingpolicy


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ipprnorth|DecentralisationinEngland:HowfardoestheSub-NationalReviewtakethingsforward?2

Abouttheauthor

OlgaMrinskaisResearchDirectoratipprnorth.

ipprnorth,theNewcastle-basedofficeoftheInstituteforPublicPolicyResearch,producesfar-

reachingpolicyideas,stimulatingsolutionsthatworknationallyaswellaslocally.Theseareshaped

fromourresearch,whichspansthenortherneconomicagenda,publicservices,devolution,foodpolicyandruralissues,aswellasastrongdemocraticengagementstrandwhichinvolvesawiderangeof

audiencesinpoliticaldebates.

ipprnorth,BioscienceCentre,CentreforLife,NewcastleuponTyneNE14EPTel:+44())1912112645

www.ippr.org/ipprnorth.RegisteredCharityNo.800065

ThispaperwasfirstpublishedinJune2008.ipprnorth2008

Theopinionsexpressedinthispaperarethoseoftheauthoranddonotnecessarilyreflecttheviews

ofipproripprnorth.

Aboutipprnorth


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Executivesummary

AtatimewhenallthemajorpoliticalpartiesinBritainareinagreementthatgreaterdecentralisationis

neededtoincreasetheeffectivenessofpublicpolicyandtostrengthentheeconomicpotentialof

regionsandlocalities,specificpolicymeasuresandinstrumentstoenablesuchdecentralisationare

urgentlyrequired.TheGovernmentiscommittedtoempoweringlocalauthoritiesandregionsandhaslaunchedaprogrammeofreformstoachievethis.Butthesereformshaveoftenattractedheavy

criticismfromlocalleaders,businessesandvoluntarycommunity.Atthesametime,noneoftheother

partieshasyetofferedanycomprehensiveorpracticalalternativestothecurrentpolicymechanisms.

Andwhilethereisapolicydrivetowardsdecentralisation,inpracticelocalandregionalplayersstill

havelimitedauthoritytoactautonomouslyandresponsibly.

ThispaperdiscusseshowthereformssuggestedintheReviewofSub-nationalEconomicand

DevelopmentandRegeneration (knownastheSub-NationalRevieworSNR)cantakethe

decentralisationagendaforwardandwhatshouldbechangedinordertoturngoodopportunitiesinto

areality.

OpportunitiesprovidedbytheSNR

TheSNRprovidesastrongbasisforfurtherdecentralisationofpowerstotheregions,sub-regionsand

localitiesofEngland.Itdrivesanempowermentagendaforlocalgovernmentintheareaofeconomic

developmentandregenerationwhichgoesbeyondtheexistingframeworkandopensupnew

opportunitiesforterritoriestousetheirlocalpotentialinabetterandmoremeaningfulway.Many

proposedchangesstreamliningregionalstrategies;givingagreaterroletolocalauthoritiesin

designing,implementingandscrutinisingpoliciestostimulateeconomicgrowth;enablingthemtojoin

uptheireffortsandresourcesthroughvoluntarysub-regionalpartnershipswillresultinthe

emergenceofmorecapablepartnersandmoreproactiveinitiativesattheregionalandlocallevels.

Obstaclestodecentralisation

TherearealsoissuesthatarenotaddressedbytheSNRandthatmighthampertheprogressof

decentralisation.

First,theGovernmentdoesnotproposeabalancedredistributionofpowers.Whilethereare

substantialgovernancechangesattheregionalandlocallevels,thestructure,processesand

mechanismsofdeliveryatthenationallevelremainunchanged,leavingquestionsabouthowprepared

Whitehallistodelegatepowersdownstream.

Second,thedocumentdoesnotshedlightonthefinancialandfiscalchangeswhichareneededto

makenewpolicyinitiativeseffective:itdoesnotprovideanyevidencethattheGovernmentis

preparedtoinitiateatleastsomedegreeoffiscaldecentralisation.

Third,thesub-nationalgovernancelandscapethatisdescribedlackssomekeyexistingelements(such

asRegionalMinistersandGovernmentOffices),providesfewdetailsonsomeoftheproposed

innovations(suchasforumsoflocalleaders)andremainssilentontheroleofbusinessandvoluntarypartners.Allthesemightdramaticallyaffecttheeffectivenessofprocessesofreachingagreementand

makingdecisions.

Atthesametime,iftheproposedchangesareimplemented,therewillbeasignificantdispersalof

powersintheareasofeconomicdevelopmentandregeneration,withdifferentfragmentsofthesame

responsibilitiesassignedtotheregional,sub-regionalandlocaltiers.Aseconomicdevelopmentand

planninghavetraditionallydifferentproceduresofagreementanddegreesofaccountability,this

mightcreateconfusion,witheveryonebeinginvolvedineverything.Theprocessofdecision-making

inareasinwhichpromptdecisionsandclearprioritiesarerequiredwouldthusbedelayed.

ThereasonsbehindtheabovefactorsmightbeexplainedbythefactthattheSNRisinfactaimedat

achievingtwocoregoals:addressingthedemocraticdeficitbetweenthelocalandnationallevels,and

enhancingtheeffectivenessofeconomicgrowthpoliciesattheregionalandlocaltiers.Whilethe

changesproposedbytheSNRmighthelptoachievethefirstaim,itislessclearwhethertheywillbe

effectiveinmeetingthesecond.


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Introduction

TheReviewofSub-nationalEconomicDevelopmentandRegeneration(knownastheSub-National

Review,orSNR)wasfirstpublishedinJuly2007andiscurrentlybeingfinalised.Itrepresentsan

importantsteptowardsmoreeffectiveandresponsiblegovernanceoftheEnglishregionsand

localities.

However,therearealsoanumberofissuesthatareeitherpartiallyaddressedoronlybriefly

mentionedinthedocumentwithoutofferingspecificinstrumentsandresourcesforimplementation.

Thepurposeofthisdiscussionpaperistohighlighttheseissuesandtoinitiatedebatearoundthem,in

ordertofindsolutionsthatwouldaddvaluetotheforthcominglegislationandimplementation

process.

Forsometime,differentstakeholdersatthenational,regionalandlocaltiershavechallengedthe

complicatedandoftenunaccountablepoliciesandproceduresthathaveguidedthecountrysregional

economicdevelopmentandregeneration.Theneedforchangestothelegalandgovernancesystems

waswidelyacknowledged.

TheSNRoffersacomplexframeworkofreformsaimedatempoweringthesub-nationallevelsofgovernmentintheareasofeconomicdevelopmentandregeneration.Whenembeddedintolegislation

andmadeoperationalthroughactualpolicyinstruments(expectedtohappenoverthenexttwoyears),

thesechangeswillmeanthatdecisionsaffectinglocalandregionaleconomicdevelopmentwillbetaken

atthemostappropriatelevel.Thereareseveralencouragingsignsofcontinuousreformsuchas:

Streamlinedstrategiesatregionallevel

Agreaterroleforlocalauthoritiesindeterminingandimplementingthepoliciesthatarenecessaryforunlockingtheirareaspotential

Theopportunitytopoolresourcesandideasthroughsub-regionalpartnerships.

TheGovernmentscommitmenttodevelopingplacesandcommunitiesanditswillingnesstodelegate

morefunctionstosub-nationallevelsisanimportantelementofaprogressiveagenda.Thereisa

globaltrendtowardsgreaterdecentralisationanddevolutionofpowertotheregionalandlocaltiersas

nationalgovernmentsrealisethatonesizefitsallpoliciesnolongerdeliverthedesirableresults.The

freemovementofgoods,services,capitalandpeopleischangingtheroleofnationalstates,while

technologicalprogressandtherapidgrowthofknowledge-andinnovation-intensiveproductionare

shapinganewroleforglobalcorporateplayersandsupranationalorganisations.Atthesametime,

localandregionalpartnersaregainingnewbargainingpowersintheglobalcompetitionforresources

andskills.

Allthesedemandmoreeffectivecentralmechanismstomanagediversityinasensiblemanner,

especiallyascitizensareconcernedthattheymightloseoutintheso-calledpostcodelottery.

Moderntrendsofsocio-economicdevelopmentrequirenewapproachestothewaythatthestateis

managedandtohowpowerisdistributedacrossdifferenttiersandsectors.Ifastatewantstobecome

andremaincompetitiveintheglobaleconomy,centrallyplannedandimplementedgrowthand

productivitypoliciesalonearenolongeranoption.Greaterflexibilityandagreatercapacitytoadjust

quicklytoglobaltrendsanddemandsareessential.Thiscouldbeachievedbygivingmoreleverageto

sub-nationalstakeholders.

Butitisnotonlyglobaltrendsthathighlighttheneedforamorebalancedredistributionofpowers

betweenthecentreandtheregions/localities.Inrecentdecades,therewassubstantialcentralisation

ofpowersintheUK.ThistrendbeganundertheConservativesinthe1970s,andwasnotreversedby

theLabourPartywhenitcametopowerin1997.Despitemanyinitiativesaimedatstrengtheningthe

roleofsub-nationalplayersinEngland(suchasthecreationofRegionalDevelopmentAgencies,the

failedattempttocreateElectedRegionalAssemblies,andtheinitiationofdebatesaroundcity-regions

andcorecities),centralgovernmentremainedinfullcontrolofthedevelopmentandwell-beingof

regionsandlocalities.Itisoftenarguedthatthisisthebestsolutiontomanageinequalitiesinan

effectiveway.


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However,currenttrendsillustratethatinequalitiesinBritainremainverysignificant,territorial

inequalitiesinparticular.TheUKcurrentlyhasthebiggestproductivitygap(measuredasGDPper

head)intheEuropeanUnionbetweenthemostdevelopedandleastdevelopedregionsandthisgap

haswidenedoverthelast10years(EC2007).Thoughthistendencytowardsgreaterdifferentiationis

typicalinmanyEUcountries,nootherEUmemberstatefacesthesamelevelofdivergence.Itisthus

difficulttojustifythecorrelationbetweengreatercentralisationandamoreequalsociety.Amore

decentralisedapproachtomanagingthecountryssocio-economicdevelopmentmightbebetter

suitedtounlockthepotentialoftheBritishnationsandEnglishregions.Combinedwithawell-

establishedsetofnationalminimumstandards,thiscouldhelptocombatpersistentregional

inequalitiesintheUK.

ThepolicychangesinlocalandregionaldevelopmentandgovernanceofferedbytheGovernment

overthelastyear(forexample,theLocalGovernmentWhitePaper,theGovernanceofBritainGreen

Paper,theLocalGovernmentandPublicInvolvementinHealthBill)arecrucialforenhancingthe

powerandeconomicpotentialofEnglishregionsandlocalities.TheReviewofSub-nationalEconomic

DevelopmentandRegeneration,whichiscurrentlyintheprocessoffinalisation,isaveryimportant

steptowardsalesscentralisedstate.

TheSNRcallsforgreaterfreedomtobegiventosub-nationaltiersofgovernmenttomanage

economicdevelopmentandregeneration.OriginallypublishedinJuly2007,thedocumentisdesigned

tobeavehicleforreformofpublicinstitutions(HMTetal2008:5)bybetteraligningfunctionsand

bydelegatingauthoritytothelevelthatisthemostappropriateforachievingstrongresults.This

representsthesubsidiarityprinciple,whichwasdeclaredasoneofthekeyprinciplesinrelations

betweentheGovernmentandlocalauthoritiesintherecentlysignedConcordat.

Theneedforreforms

TheSNRsprimaryobjectiveistoenhancetheeconomicperformanceoftheEnglishregionsand

localitiesbyempoweringthemtounlocklocalpotentialandaddresstheneedsofthelocalpopulation.

ItalsorepresentsoneoftheGovernmentskeyinstrumentsforclosingtheproductivitygapbetween

themoreprosperouscommunitiesoftheGreaterSouthEastandtherestofthecountry.

Despitemanyeffortsoverthelastfiveyears,fulfillingthiscommitmentremainsachallengingtask.

Theyearsofstrongeconomicperformancewerecrucialforspurringgrowthacrosstheregionsand

nations,andthosethathadtraditionallylaggedbehind(suchasScotland,NorthernIrelandandthe

NorthEast)benefitedthemostfromdynamicgrowth(seeONS2007).However,thegapin

productivity(measuredbyGrossValueAddedpercapita)remainssignificant,withnosignofreduction

onthehorizon.

Asweenteramoreturbulent,lessfavourablemacroeconomicclimate,theGovernmentsestimatesof

economicgrowthforthecountryanditsregionswillhavetoberevisitedandwillmostprobably

becomelessoptimistic.ItwillbecomeevenmoredifficultfortheGovernmenttomeetitsPublic

ServiceAgreementobjectivetoimprovetheeconomicperformanceofallEnglishregionsandreducethegapineconomicgrowthratesbetweenregions(HMT2007:66).Ashistoryproves,itishardto

sustainhighratesofeconomicgrowthintheleastdevelopedregionsunlesstheyexperience

fundamentalstructuralchangesthatmaketheregionaleconomymoreresilienttocrises.Inthecurrent

situation,however,itisunclearhowregionaleconomiescouldbedisentangledfromtheglobaland

thenationaleconomies,whicharebothshowingsignsofaslowdown.

TheSNRhighlightstheimportanceoftakingdecisionsatthemostappropriatelevel.Forsomeissues,

particularlythoserelatedtoeconomicdevelopment(wereferheretoeconomicdevelopmentina

broadsense,includingaspectsofhousing,transport,skillsandemploymentpolicies),thesub-regional

orregionallevelmightbethemostappropriate.Oftenthislevelplaysanimportantstrategicrole,

whichinvolvesdevelopingavisionforanarea,identifyingthechallengesandopportunitiesitfaces,

andspecifyingpriorityactionsandresourcesnecessaryforachievingthisvision,basedonavailableevidence(CLG2008).Thesearenotsimplytechnocraticdecisions,butonesthatwillimpactonthe

livesofcitizens,suchaswhichareasshouldbeprioritisedforregeneration,orwhethertofocus


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developmentonurbancentresortheperiphery.

Thiscreatestwoproblems.Thefirstisoneofaccountability.Therearenodirectlydemocratic

institutionsattheregionalorsub-regionallevel,yetagreatdealofactivity,especiallyinrelationto

economicdevelopment,takesplaceattheselevels.Asthereareonlytwocentresofdemocratic

legitimacyinEngland(Westminsterandthelocallevel)thechallengeistoinjectsomedemocraticlegitimacyintoregionalandsub-regionaldecision-makingthroughtheengagementofthenational

andlocallevels.Forthisreason,thegreaterengagementoflocalauthoritiesinregionaldecision-

makingisverywelcome.

Thesecondisoneofeffectivegovernment.Muchregionalandsub-regionaldecision-makingrelieson

agreeingstrategicprioritiesthroughpartnershipworking,buttherearesomeconcernsaboutthe

abilityofsuchpartnershipstodeliverhard-headedstrategicdecisions.

Itisimportanttorecognisethechangingnatureofthewidergovernancestructureofthestate.Over

thelastyear,somenewplayershaveenteredtheregionalscene(suchasRegionalMinistersandthe

proposedregionalselectcommitteesintheHouseofCommons),whileothersarebeingabolished

(RegionalAssemblies[RAs])orarehavingtheirresponsibilitiesseriouslyreshaped(Regional

DevelopmentAgencies[RDAs]).Reformstolocalgovernmentarealsoongoing,withsingle-tier

authoritiesreplacingmanypreviouslytwo-tierareas.

ItisunfortunatethattheSNRconsultationdocumentdoesnotincludethiswiderpictureandgivesno

clueastotheroleplayedinthenewsystembyRegionalMinistersorGovernmentOfficesinthe

regions.Thereismoreclarityabouttheroleoflocalauthoritiesandsub-regionalformations;however,

somenewfunctionslookuncertain,astheyarepresentedonlyinvaguetermssuchastherighttools

toincreasegrowthintheregion(CLGandBERR2008para.2.4)andevenlessclearlystated

prospectsoffinancialflexibility(theabilitytomanageresourcesindependently).TheSNRdocument

alsocompletelyignoresthequestionofhowcentralgovernmentshouldbechangedinordertoadjust

tothenewsystem.

TheproposedchangesBelowweanalyseaspectsoftheproposedchangesatthedifferentspatiallevels.

Nationallevel

TheSNRsuggestssomefundamentalchangesinthewaydecisionsabouteconomicdevelopmentand

regenerationaretakenatsub-nationallevels.Itentailsaquitesignificantredistributionofpowers,

whichwillmainlybenefitlocalauthoritiesasitenhancestheircontrolovertheperformanceofregional

andsub-regionalquasi-governmentalinstitutions(suchasRDAs).Italsooffersrelativefreedomto

localauthoritiestodecidehowexactlytheyaregoingtobuildconsensusacrosstheregionin

achievingimportantgoalsofeconomicdevelopment(whichmaybemorechallengingthanpreviously

expectedseebelow).

However,itignoresthefactthattobringaboutmeaningfulresultsfromallthesechanges,nationalgovernmentstructureswillalsoneedtochange.Thereisthusariskthatthegovernanceinnovations

suggestedbytheSNRwillnotaddressEnglandsfundamentalproblemofover-centralisation.

Asipprarguesinotherresearch,whenpowersweredevolvedtothethreenationsofScotland,Wales

andNorthernIreland,Whitehallfailedtoadequatelyreflectthisnewrealityinitsinstitutional

framework(seeforexampleLodgeandSchmuecker2007).SomeWhitehalldepartmentsremain

insensitivetodevolvedpolicyareas,andthereisalackofcapacityatthecentreofgovernmentto

coordinatedevolvedactivitiesandmanagepolicydifferences.Unlesssomeintegrityandcoherenceis

broughtintothewayBritainsnationsaregoverned,thetensionbetweenLondonandthedevolved

administrationswillnotease,andmightevenincrease.

WiththeEnglishregions,thesituationisquitedifferentandthelevelofpowersdecentralisedtoregionsandlocalitieslessprominent.DecentralisationwithinEnglandcutsacrossmultipleWhitehall

departments,whereasdevolutiontothenationswasrelativelymorestraightforward,justrequiringthe

democratisationofthealreadyadministrativelydevolvedterritorialdepartments(includingtheScottish


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OfficeandWalesOffice).However,theroleofsub-nationalstakeholdersineconomicdevelopment

policiesisabouttobeenhancedand theadministrativestructure,processesandmechanismsof

deliveryatthenationallevelshouldbechanged tobecomemorecoordinatedandresponsiveto

whatshouldbeamoreflexibleanddiversesystem.

Whitehallshouldmovefromastrictlyfunctionaltowardsamoreterritorialapproachwhendealingwithdecentralisinganddevolvingpowersofeconomicdevelopment,regeneration,improvingqualityoflife

andsoon.Thiswillalsorequirebettercoordinationmechanismsatthenationallevelgiventhatthe

presentarrangementatregionallevel(throughGovernmentOffices)isnotthemostsuitablewayof

deliveringthenewagendaasitdoesnotprovideastrongplatformfordeliveringregionalvoicestothe

nationallevel.Currently,therearethreedepartmentsthatdealwiththecoreissuesofregionaland

localdevelopment(includingfundsallocation):DepartmentforCommunitiesandLocalGovernment

(CLG),DepartmentforBusiness,EnterpriseandRegulatoryReform(BERR)andtheTreasury(HMT).

Ofcourse,therearealsoarangeofotherministriesthatcontributegreatlytotheeconomic

developmentagendathroughtheirprogrammesandbudgets,includingtheDepartmentforWorkand

Pensions(DWP),DepartmentforChildren,SchoolsandFamilies(DCSF),DepartmentforInnovation,

UniversitiesandScience(DIUS),DepartmentforTransport(DfT),andtheDepartmentfor

Environment,FoodandRuralAffairs(DEFRA).

ToachievetheresultsarticulatedintheSNRdocument,thelevelofcoordinationbetweenthese

departmentswillhavetobestrengthened.Asinglecoordinationcentreatthenationallevelwhich

willbeafaceforcommunicationswiththeregionsandlocalitieswillhavetobeformedandgranted

withrespectiveauthorityandresourcestoinfluencecoredepartments(whichtheexistingRegional

CoordinationUnitdoesnothave).ItmightbeestablishedonthebasisoftheexistingCLGoranewly

expandedDepartmentforNations,RegionsandLocalGovernment(orDepartmentforNationsand

LocalitiesseeLodgeandSchmuecker2007).

TheSNRgivesnoindicationsthatanyofthesereformsareplannedbytheGovernment.Itwas

suggestedintheinitialSNRdocument(HMTetal2007)thatRegionalMinistersmightexecutethis

coordinationrole.Butwithninepeoplerepresentingninedistinctiveregions,thiswouldbedifficulttoachieve.Moreover,theMinistersgoalsandthescopeoftheirresponsibilities(ontopoftheirmain

portfolioasallhaveotherministerialjobstoo)remainunclear,andtheylackadministrativesupportto

carryouttheirregionalfunctions.Theconsultationdocumentshedsnolightonhowtheywillfunction

underthenewsystem(seebelowunderRegionallevel).

Fortheentiresystemtobecomeeffective,whatisneededisasortofmirrorSNRfornational

governmentwhichwouldoutlinehowcentralgovernmentisgoingtochangeinordertomanage

ever-changingsub-nationalgovernancestructures.Thiswillcreateopportunitiesforgrowingnational

andregionaleconomies,andwillallowamoredecentralised,hands-offapproachinrelationswith

localauthoritiesandgroupsoflocalauthoritiesthatareactiveatthesub-regionallevel.Ifnothing

changes,theGovernmentwillstillbetryingtoaddressthechallengesofincreasingterritorialdiversity

throughaninflexible,functions-drivenadministrativesystem.

ThereisalsosomeconcernabouthowserioustheGovernmentisaboutitsintentiontomakesure

that,inthewordsoftheSNR, decisionsaretakenandimplementedatthemostappropriatelevel.

AquitesophisticatedconsultativeprocesshasbeenintroducedtodevelopandagreeIntegrated

RegionalStrategies(IRS).YettheGovernmentreservestherighttoamendthestrategydocument

whenitissubmittedbytheregionsafterfullapprovalfromtheRDAsandLocalLeadersForums.

Admittedly,situationsmayoccasionallyarisewhentheGovernmentdoesindeedneedtostepinand

amendastrategydocumentwhereitgoesagainstnationalstrategicpriorities(forexample,inthecase

ofhousing).Yettheregulationsshouldclearlyidentifyunderwhatcircumstancesthisispossible,since

itwouldbeamistaketoallowageneralamendmentoptionforallareasoftheStrategy.

TheopportunityfortheGovernmenttomakeblanketamendmentsthrowsintoquestiontheSNRs

overallambitionofempoweringlocalauthoritiestoidentifyandrealisetheirownpriorities.Itlooks

liketheGovernmentisencouraginglocalauthoritiestobringtheirprioritiestothenationallevel

(throughIntegratedRegionalStrategies)onlyforthemtobe(possibly)rejected.Ifthispowerisnot


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exercisedwithrestraint,andonlyinclearlydefinedcircumstances,itcouldunderminethewhole

processanddisengagelocalactors,includingfromthelaterstagesofimplementingIRSpriorities.

Theywouldbelikelytoparticipateonlyformallyinfulfillingtheirobligations,sincetheGovernment

willstillhavethefinalwordevenwhendecidingthemostlocalisedissues.

Thispotentiallynegativefactorcouldbeovercomebyestablishingsinglenegotiationsframeworksomesortofcoordination/consultationmechanismatthefinalstageofstrategyapproval,which

bringsallkeynational,regionalandlocalstakeholdersaroundonetable,wherebylocalauthorities

wouldhavethechancetoconfronttheGovernmentsdecisionsandtoprotecttheirrighttochoose

certainpriorities.Atthemomentthewholeprocessisstagedarounddifferentlevelsofconsultations,

engagementsandresponses,alsoallowingsomecontractualrelations(intheformoftheConcordat

betweentheGovernmentandlocalauthoritiesortheMemorandumofUnderstandingbetweenRDAs

andlocalauthorities).However,thisprocesswouldbeevenmoreeffectiveandinclusiveifatthefinal

stagetherewereoneforum,possiblyfacilitatedbytheRegionalMinister,wherealllevelscould

advocateandnegotiatetheirpositions,reachcompromiseandfinallyagreethedocument.Thiswould

alsomeanthatlocalauthoritieswouldfeellessdisengagedfromthefinalapprovalprocess,which

foreseesthepossibilityfortheSecretaryofStatetoamendthestrategydocumentafterithasbeen

alreadyagreedbyallregionalstakeholders.Havinganopportunitytopresenttheirvisionanddefend

itwhennecessarywillpromptlocalauthoritiestobemorecooperativeandproactive.

Locallevel

Localauthoritiesaretheclearwinners fromthereformssuggestedintheSNR,andtheirgreater

involvementintheprocessofdevelopingandimplementingregionalandsub-regionalstrategieswill

helptoaddressthequestionofaccountabilityofthesetiersofgovernment.Afterthefailureto

introduceElectedRegionalAssembliesfollowingthenegativeresultsofareferendumin2004,the

Governmentexperiencedseveredifficultiesfillingthedemocracygapattheregionallevel,while

continuingtoperformimportanteconomicandsocialfunctionsatthatlevelinresponsetoeconomic

conditionsandneeds.

Thenewlyproposedforumoflocalauthoritiesleaders(knownastheForum)couldbeastepinthe

rightdirection,thoughmuchwilldependontheabilityoflocalauthoritiestosteertheprocessina

waythatcontributestothedevelopmentoftheirregion.Also,thelevelofpowersdelegatedfrom

regionaltolocalauthoritiesinthesphereofeconomicdevelopmentandregenerationwillgreatly

dependonthecapacityofthelatter.TheForumwillthushavetoworkalongsidethekeyinstitutions

responsibleforexpertcapacityatthelocallevel(localauthoritiesandtheirassociations,Regional

EfficiencyandImprovementPartnerships)iflocalauthoritiesaretofullyenjoythefruitsof

decentralisationoffered(conditionally)bytheGovernmentandfromtheregionallevel.

Still,therearesomeobviousweaknessesinthemodelsuggestedbytheSNR.Oneoftheseisthe

introductionofthelocaleconomicassessmentduty.Thisisareductioninstatusfromthelocal

economicdevelopmentdutythatwasofferedintheinitialSNRdocumentinJuly2007.Whilethereis

nodoubtthatsuchanassessmentisessentialforthedevelopmentstageoftheprocess(preparing

andreviewingthestrategy),itwillhavelittlerelevancefortheimplementationandmonitoring/control

stages,whichareequallyimportant.Thisdutyisalsodesignedtoenhancethecapacityoflocal

authoritiestomanageeconomicdevelopmentandregenerationsothatmoreresponsibilitiescouldbe

delegatedfromtheregionallevel.

However,theassessmentdutymighthelptodeveloponlycertainaspectsoflocalauthoritiescapacity

intheareaofeconomicdevelopmentandregeneration,astheywillnothaveapracticalopportunity

todeveloptheirskillsindeliveringactionplans,exertingcontroloverresourcesoroverseeingthe

meetingofpreviouslyagreedtargets.

TheSNRissilentaboutthespecificinstrumentsandresourceswhichlocalauthoritieswillhavetotake

forwardtheprioritiestheybelievearecrucialforenhancinglocaleconomicgrowth(itmentionsonlytherighttoolsforimplementation,withoutmakingclearwhattheyactuallyare).Moreover,the

limitedresourcesavailableunderthecurrentandnextspendingreviewsettlementsforlocal


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governmentwilllimititsabilitytobecreativeandflexibleindesigningactionplansthatwillbebased

ontheassessmentsoflocalareas.Themselveshavinglimitedresourcesforconductingassessment,the

authoritieswillhavetofollowtraditionalroutestogainingnewknowledgeaboutthearea(thereare

someprescriptionsalreadyofferedbytheGovernmentintheSNRannexes),whichwilllimitthe

potentialfordevelopingnewskillsandknowledge.Itmayalsoendangerlocalauthoritiesprospectsof

gettinggreaterdelegatedpowersfromRDAs,asthelatterwillassessthereadinessoflocal

governmenttoperformspecifictasksintheareaofeconomicdevelopmentdependingontheir

capacity.Norwillithelptochangebusinessstakeholdersnegativeperceptionsofthecapacityoflocal

authorities(seebelow).

Itcouldbearguedthatlocalauthoritiesalreadyhavethepowertopromoteandimprovethe

economic,socialandenvironmentalwell-beingoftheirarea,asestablishedbytheLocalGovernment

Act2000.Iftheydonotusethisopportunity,providedeightyearsago(andtheGovernmentreports

thatonlyonein12localcouncilsusetheirpowerofwell-being),thereisnosenseinduplicatingthe

functionthroughanewduty.However,thepowerofwell-beingrequiresmoreadequateresourcesand

practicaltoolswhichwouldallowlocalauthoritiestomakethemostofit.

Theleveloflocalfiscalflexibilityisquitelimited(inEnglandonlyaboutonequarteroflocalbudgetsoriginatesfromlocalincome)anddoesnotallowformoreambitiouslocaldecisionsaimedat

harnessinglocalpotentialandincreasingwell-being.Inthecurrentfiscalclimate,evenwiththe

increasedpredictabilityofcentral-levelfundingpromisedbytheGovernmentitwillbedifficulttotake

risksinimplementinglocallymeaningfuleconomicprojectswithoutfirstensuringtotalsupportfrom

thenationaldepartments,astheyremaintheonlysourceoffundingforanysignificantinvestment

project.Itmightbemoreusefultoredirecttheenergylocalauthoritiesspendonbiddingfortheshare

ofcentralresourcestothemeaningfulengagementwiththebusinesscommunity,gainingbusiness

support(includingfinancialsupport)inimplementingcrucialinvestmentprojects.

Wewelcometheideaofregionalforumsoflocalauthoritiesleadersandflexiblearrangementsfor

howtheyareorganisedindifferentregions.Forthcomingresearchfromipprnorthsuggeststhat

voluntarypartnershiparrangementsoftenworkbetterthanonesthatareestablishedinresponsetoanexternalrequirement(Schmuecker,forthcoming).Therefore,allowingtheprecisearrangementsfor

localforumstobedeterminedbyeachregion,solongastheyconformtospecifiedprinciples,seems

tobetherightwayforward.Theseprinciplesshouldbeclearlyestablishedsothattheindividualityof

forumsfunctioningindifferentregionsisnotovershadowedbyinequalityofopportunitiesfor

individuallocalauthorities.

Thereareinevitablybigdifferencesbetweenagreeingastrategyinaregionwith12localauthorities

anddoingthesameinaregionwithmorethan70localauthorities:leadershiparrangementsshould

beselectedaccordingly.However,aminimumgoldstandardstipulatedbytheGovernmentfor

decision-makinginForums,forexamplewithregardstovotingrules,mightbeuseful.Otherwise,one

regioncouldfailtosubmitafullyagreedstrategyduetoonlyoneopposingauthorityrepresentedat

theForumifaunanimousvoteisrequired,whileinasituationwhereonlyatwo-thirdsmajorityisrequired,anotherregioncouldprovideasuccessfullyapproveddocumentevenifnearlyathirdofthe

Forumsmembersvotedagainstit.

TheSNRoffersanopportunityfortheGovernmenttostepinandapprovetheregionalstrategy

submittedbyanRDAifthereisnoagreementamongtheForumsmembers.Whetherornot

governmentshouldinterveneiftheForumfailstooperateeffectivelydependsonwhatismeantby

failuretooperateeffectively.AForumthatfailstoreachaconsensusshouldnotnecessarilybe

regardedafailure,aseconomicdevelopmentandplanningareinherentlypoliticalmattersand

invariablyinvolvedisagreementanddebate,whichishealthyfordemocracy.Tostriveforconsensusis

likelytoresultinthecontinuationoflowestcommondenominatorstrategies,ratherthantough

strategicdecisionsbeingtaken.Infact,RDAs,especiallyinthelaststrategicplanningcycle,have

managedtoavoidlowestcommondenominatoroutcomesthankstotheirnon-accountabilitystatus,whichhasallowedthemtotakebolderdecisionsregardingeconomicdevelopmentandthusto

performmoresuccessfully.


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Localauthoritiesaregainingmorepowersinastreamlinedregionalstrategiccycle,whichenvisagesa

mergingoftheRegionalEconomicStrategy(RES)andtheRegionalSpatialStrategy(RSS)intoan

IntegratedRegionalStrategy(IRS).AftertheabolitionofRAsin2010,RDAswillbecomethekey

strategicstakeholdersresponsibleforthedevelopmentandimplementationoftheIRS.Theywillhave

tosharemanymoreresponsibilitieswithlocalauthoritiesandsub-regionalpartnerships,fromevidence

buildingthroughtocontrolandmonitoring.RDAsarealsoencouragedtodelegateasmanypowersas

possibletothelevelsbelow,ifthecapacityoftheauthoritiesinquestionisadequate.Atthesame

time,localauthoritieswillusetheirpowerofscrutinytooverseeprogressinimplementingthestrategy

andrecommendchangeswhentargetsarenotmet.

However,thereisapotentialforconflictofinterest,asthesameauthoritieswillberesponsiblefor

designingthestrategy,thentakingpartinitsimplementation,andfinallyforjudginghowsuccessful

thewholeprocesswas.Thereisaneedtocarefullythinkthroughhowtoseparatetwocrucial

functionsoflocalauthoritiesstrategydevelopmentandimplementationontheonehand,and

scrutinyontheothersothatthewholeprocessisnotcompromised.TheForumoflocalauthorities

leadersmightprovideanarenaforseparationbyorganisingdifferentgroupsorcommissionswhich

havecarefullyidentifiedresponsibilitiesfordifferentstagesofstrategicprocess.However,thismight

complicateconsensusbuildingevenfurtherandwillrequiremorecooperationfromlocalauthoritiesto

reachacompromise.

Regionallevel

ThegovernancestructureattheregionallevelproposedbytheSNRandalsotheGovernanceof

BritainGreenPaper(MinistryofJustice2007)hasstimulatedvividdebates.Thereisgeneral

consensusthatthestreamlinedstrategicprocessatregionallevelisaverypositivestepforward.

However,thelackofdirectmechanismsforRDAsdemocraticaccountability,alongsideanexpanding

oftheirfunctions,causessomeconcern.

OurresearchdemonstratesthatRDAsareeffectiveinimplementingtheirfunctions,whichare

currentlylargelyconcentratedonbusinessandinvestmentaspectsofregionaldevelopment(Johnson

etal2007).Thesearebusiness-ledorganisationswhichinthenextfewyearswillhavetochange

dramaticallyinordertoabsorbverydifferentaspectsofregionaldevelopmentrelatedtospatial

planning,transport,housingandenvironment.Someofthenewpriorities,particularlyinsocialand

environmentalspheres,willbeindirectconflictwiththebusiness-orientatedprioritiesoftheRESs,

andthecompromisewillbedifficulttoachieve.RDAswillinpracticebecomesocio-economic

developmentagencies,andtheirstructureanddeliveryprincipleswillhavetochangetoreflectthat.

Inparticular,theroleandexpertiseofRDABoardsneedtoberevisedsotheybecomemorecomplex

anddiverse,astheyarecurrentlystronglybusiness-led.

WhiletheSNRgrantsanextendedsetofRDAfunctions,atthesametimeitsuggestsamuch

simplifiedperformanceevaluationframeworkforRDAsbasedonasingleoverarchinggrowth

objective(largelybasedoneconomicproductivityindicators)(HMTetal2007).Inawaytheseare

contradictorystatements,asitwillbedifficulttoholdRDAstoaccountforthenewresponsibilities,

suchasspatialplanning,housing,orsustainabledevelopment,throughapurelyeconomicobjective.

Innowayarewesuggestingthatthereshouldbeareturntotheover-complicatedandcumbersome

RDAperformanceassessmentframework.However,itiscrucialtoensurethatthenewresponsibilities

ofRDAswillbemonitoredaccordingly,andthusanextendednotionoftheregionalgrowthobjective

isrequiredthatwouldencapsulateallotherareasforwhichtheRDAsareresponsible.Thiswouldalso

meanthattheregionsperformancewillnotbemeasuredonlyagainstnarroweconomicindicatorsbut

willincorporatesomewidermeasuresofwell-being,incongruencewithmodernprinciplesof

sustainableeconomicgrowth(seeJohnsonetal2007).

WiththeextendedpowersRDAshaveindevelopingtheIRS,itisimportanttoremembertheir

responsibilitytoengagekeyregionalstakeholdersfromdifferenttiersandsectors(voluntarysector

organisations,businesscommunity,TradeUnionsandsoon)intheprocessofpreparing,implementing

andmonitoringthestrategy.ThereisaquestionastowhetherRDAsshouldbeobligedtoengage

localandregionalstakeholdersintheprocessofdevelopingandagreeingthestrategyattheearlier


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stage,ascurrentlythereisnothingthatcanforcethemtodoso.Thismightbedonethroughanew

dutytoengage.Ontheotherhand,itispossibletoharnesstheroleofstakeholders(especiallyfrom

thebusinessandvoluntarysectors)throughanindependentpanelsuggestedbytheSNR.Itremains

tobeseenwhatfunctionsandpowersthispanelwillhaveinreality(whetheritwillsimplybe

consulted,orifitwillamendorsignoffthedocument),especiallyinasituationwheretheRDAand

theforumoflocalauthoritiesleadersareunabletoreachacompromiseoverthefinaldocumentand

itissubmittedtoministerswithoutagreement.Thisissuerequiresfurtherdiscussion.

ItisdisappointingtoseethattheroleofRegionalMinistersisnotexplainedordevelopedfurtherin

theSNRdocument.Theseninepostswereestablishedtotestwhetheritispossibletoenhancethe

accountabilityofregionalinstitutions(mainlyRDAs)throughthenationallevel(Westminster).

However,sinceregionalministerswereintroducedinJuly2007torepresentthevoiceoftheregions

inthecentralgovernment(MinistryofJustice2007:37)therehasbeenlittleprogress,andmanyfeel

thatthisinitiativehasturnedintojustanothervoiceofWhitehallintheregions.

Theroleofthenineministersinthenewregionalgovernancestructuresisunclear,theirrightsand

responsibilitiesarevague,theircapacitytoactuallytakemeaningfulactionstopromotetheregionsas

importantplayersinthenationalcontextislimited.Withtheideaofregionalselectcommitteesstillintheprocessofrefinement(onlyParliamentitselfwilldecidewhetheritneedstocreatethemandin

whatform)theabsenceofclarityaboutRegionalMinistersaddstotheworrythatthedialogue

betweenthecentreandregionswillonceagainbeone-dimensional.However,thereisachancefor

RegionalMinisterstobecomeaverydesirablemediatorbetweenthelocalauthorities(Forum),

regional/sub-regionalinstitutionsandcentralgovernmentintheprocessofagreeingthestrategy,

fillingthegapsinthecoordinationprocessasidentifiedabove.

OtherimportantregionalstakeholdersmissingfromtheSNRaretheGovernmentOfficesforthe

regions(GOs).DespitethefactthatGOsareperceivedasthevoiceofWhitehallintheregions,we

believethereissomescopeforthemtotakepartintherevampedgovernancestructuresfollowingthe

SNR,especiallyinareaswherethereisapotentialconflictofinterests.Forexample,thereform

envisagesthatRDAswilldelegateresponsibilitiesineconomicdevelopmentandregenerationtolocalauthorities,subjecttoasatisfactoryleveloforganisationalcapacity.However,RDAsmightbe

consideredtobebiasedsincethescopeoftheirpowerwilldependdirectlyonhowmuchisdelegated

downstream.Thereisadangerthattop-downdelegationbeingconditionaloncapacitywillbeused

arbitrarilytopreventlocalauthoritiesfromgettinginvolvedintheimplementationprocess.

WebelieveGOsmightbebetterplacedtoprovideaneutralevaluationofthecapacityoflocal

authoritiesorgroupsoflocalauthoritieswhichcouldthenbeusedbyRDAsasacriterionfor

delegatingpowersineconomicdevelopmentandregeneration.Also,theSNRdoesnotrefertosome

otheragenciesthatarecrucialintheregionalgovernancejigsaw(suchastheHomesand

CommunitiesAgencyandhousingboards)andwouldinevitablychangethebalanceofresponsibilities

andpowersinthenewlyproposedarrangements.Thereisthusaneedtoensurethatanyfuture

analysisandproposalsforfurtherregulationsareextendedtoincludesuchareas.Forexample,thenewHomesandCommunitiesAgencywillbemosteffectiveifitfitsintotheemerginggovernance

architectureatthesub-nationallevel,ratherthancreatingadditionalstructuresthatcouldcomplicate

thesituationfurther.

Sub-regionallevel

TheSNRoffersafairlyrobustagendaforenhancingthesub-regionaltierofgovernance,arguing

thatthisisoneofthemostappropriatelevelstoperformeconomicandplanningpoliciesthatgain

fromeconomiesofscale(HMTetal2008;seealsoCLG2008).Yettheissueofdirectaccountabilityat

thesub-regionallevelisasacuteasattheregionallevel.Thereisaperceivedriskthatlocalauthorities

mightloseyetmorepowerstosub-regional,directlynon-accountable,partnerships(thoughinsingle-

tierauthoritiesthesub-regionallevelwillhavedirectlyaccountablebodiesasthebordersofthetwo

willmatchtogether).However,thenewlyproposedarrangements(suchasMultiAreaAgreements

MAAs)areofferedonavoluntarybasis,solocalauthoritiescansimplyoptoutandthusavoidthis

perceivedrisk.Moreover,ifMAApartnershipsprovetheireffectivenessinsub-regionaldecision-


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making,theirpowerswillbegainedfromRDAsandcentralgovernmentdepartments,notfromlocal

authorities.

Therearesomeconcernsabouthoweffectivelypartnershipscantaketoughstrategicdecisions.In

particular,theOECDTerritorialReviewofNewcastleandtheNorthEastarguedthatpartnershipsare

lesswellsuitedtoaddressingstrategicissuesandpoliticallycontentiouschallenges,insteadbeingbetterforshort-term,task-specificengagement(OECD2006).However,experienceintheNorthEast

region,suchasthatoftheTeesValleyPartnership,suggeststhisisnotnecessarilythecaseandwe

believeMAAsandotherarrangementscanperformwellintheformofpartnerships.Wedo,however,

needtounderstandbetterhowtocreatetheconditionsforsuccessfulpartnershipworking.

ipprnorthsresearchfindsthatthereisnosingleblueprintforwhatregionalandsub-regional

governanceshouldlooklike,anddifferentstructureshavesprungupinresponsetodifferentregional

andsub-regionalchallenges(Schmueckerforthcoming).Theintensityandqualityofrelationships

betweendifferentlocalauthoritiesandagencieshavebeenakeyinfluence,withthehistoryofrelations

playinganimportantrole.Insomerespectsthisisasitshouldbe,aslocalareasshouldhavethe

flexibilitytodevelopappropriatejointstructuresinordertorespondtolocalneedsandopportunities.

However,thereisagrowingdangeroffragmentationandconfusionoverwhethermultiple

partnershipsareoperatinginalimitedspace.Differentcentralgovernmentdepartmentsare

suggestingnewinitiatives,incentivesandrequirementsforfurtherpartnerships(forexampletheCity

Strategy,SkillsandEmploymentBoards)whichmaycomplicateregionalandsub-regionalgovernance

systemsevenfurther.Also,localauthoritiescapacitymightbestretchedtoofarastheyareexpected

totakepartinmorepartnerships,whichentailsmoredemandfortheirskillsandresourcesatleastin

balancingdifferentpartnershipsandusingtheminthemosteffectiveway.

Statutorysub-regionalarrangementscouldprovemoreeffectiveandreducecomplexity,butthey

couldonlyexistwherethereisbroadlocalsupport.TheSNRofferssuchanopportunityforlocal

authoritiestojointogetherifthereisadesireforcollaborativeinitiativestogosignificantlybeyond

theofferedeconomicdevelopmentareas(transport,skillsandemployment).Butthispossibilityis

quitechallenging,asitmeansthatlocalauthoritieswouldhavetosurrendertheirpowerstothenewly

createdsub-regionalstatutoryauthority.

ForMAAstobecomeeffective,otherpublicsectorbodiesshouldhavethedutytocooperate (where

relevant)andthisshouldbethecaseregardlessofwhethertheyarestatutoryornot.Thiswill

enableLAstoeffectivelyleadtheagendaatthesub-regionallevel.Thereisalsoanoptionforthis

dutytobeextendedtotheregionallevel,astheprocessofdevelopmentandimplementationofthe

IRSwillnowincludeamuchwidercircleofstakeholders,meaningcollaborationwillbeessentialfor

thestrategytobecomeasuccess.

Fiscaldecentralisation

Theabilityofcouncilstoraisetheirownfundinganduseexistingfinancialinstrumentsdesignedby

centralgovernmentinadiscreteandflexiblewayshouldbeseenasapre-conditionforenactinga

localvisionandpriorities.Thispotentialiscurrentlydifficulttorealise.Theincentivestocollectmore

revenuesaresimplynotstrongenough,andeachprogramme,fromLocalAuthorityBusinessGrowth

Incentives(LABGIs)toEmploymentZones,hasitsownentrenchedproceduresandperformance

frameworks.Notalothaschangedinthewaythatresourcesaredistributed,apartfromlocal

authoritiesgainingtheprudentialborrowingpowerthefreedomtoborrowforcapitalinvestments

withoutseekingpermissionfromcentralgovernment(throughthe2004PrudentialBorrowingregime;

60percentofauthoritieshaveuseditsofar).TheGovernmentisalsoworkingonincreasingthe

certaintyoflong-termcentralfunding,whichisalsonecessary.

However,muchmoreneedstobedonetoincreasetheincentivesandflexibilityoflocalauthorities

toattractandallocateresources,whichtheSNRitselfidentifiesasoneofthecrucialchallengesfor

promotinglocaleconomicdevelopment.Itseemsunbalancedtogivelocalauthoritiesnewduties

withoutmakingthemmoreresponsibleandaccountableforbothactivitiesandresourcesaimedat

promotingeconomicgrowth.Overtime,greaterfinancialfreedomcanalsobeexpectedtoforce


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(most)localcouncilstouseresourcesmoreeffectively.Notonlywilltheyhavetolearnhowtoactina

morecompetentandresponsibleway,theyarealsomorelikelytostartpoolingresourcesincases

wheretheneedarisesorwhenfundingisinsufficienttodeliverthefunctionslocally.Restructuring

resourcegenerationandallocationmechanismswouldalsoprovideanotheropportunitytoenhance

sub-regionalcollaborativemechanisms.

Butwhilearguingforfiscaldecentralisationitisimportanttobearinmindthetaxbasedifferentiation

acrossthecountry:notallregionsandlocalitieshavethesamestockofbusinessesandassetstobring

comparableamountsofincome.Northernregionsfaceparticulardifficultiesincreatingasolidtax

basebecauseofhowtheeconomyisstructuredandthedynamicsofrestructuring.Thus thedebate

aroundfiscaldecentralisationshouldhaveawiderframeworktoembracefiscalequalisation.There

isalsoaneedtoopenwiderperspectivesforlocaltaxation:fromacommunityinfrastructurelevy

throughsupplementarybusinessratestolocalincometaxtop-ups.

TheSNRsuggestedthattheRegionalFundingAllocation(RFA)willsetaclearfinancialframework

fortheregionstodeveloptheirstrategies,andregionsandlocalauthoritieshavealreadybeeninvited

tocommentontheRFAforthenextthreeyears.However,ifregionsandlocalauthoritiesareinvited

toadviseondetailedallocationbysectors(whichwillthenbereflectedindepartmentalspendingprogrammes)priortodevelopingtheireconomicassessments,IRSanddeliveryplans,theprocesswill

bethewrongwayaround.Themoneyallocationwouldbespecifiedfirst,withastrategythen

developedtomatchtheidentifiedpriorities.Intheory(andthisisthepracticeinotherdeveloped

countries),adetailedfinancialallocationshouldbedevelopedalongwiththedeliveryplanafteran

assessmenthasbeencarriedoutandastrategyhasbeendevelopedandapproved.

UnlessthecurrentRFAroundisdesignedasatestbedforsub-nationalstakeholders,givingthem

thechancetodeveloptheirexperienceinprioritisationandfinancialplanningsothattheyarebetter

preparedforthenextroundoftheRFA(whennineIRSwillalreadyhavebeenpreparedandaction

planswillhavebeenconfirmed),theGovernmentshouldreviewtheproposedtimings.Anew

frameworkshouldbedesignedwherebyresourceallocationisdeterminedafter localitiesandregions

areclearerabouttheirprioritiesfordevelopmentoverthenextfivetotenyears.

Engagementofsocialandeconomicpartners

Itisimportanttobearinmindtheroleofbusinessandvoluntarysectors inthechanginggovernance

landscapeatsub-nationallevel.WiththedisbandmentofRegionalAssembliesandwiththe

introductionoftheproposedForum,localauthoritieswillhaveagreaterroleintheplanning,

implementationandscrutinyoftheIRS.However,businessandespeciallythevoluntarysectorstand

toloseinfluence,weakeningtheirinputintothepolicyprocessincrucialissuessuchasplanning,

housing,environmentalprotectionandsustainability.

Businesscirclesareinsomewaysinabetterposition,sincetheywillretaintheirinfluenceover

regionalstrategicprocessesthoughRDAboardmembership(thoughtherearechallengessurrounding

howtheboardsofRDAsneedtochangetoreflecttheirnewrolesinplanning,transport,housing,andsoon).Ontheotherhand,localauthoritiesmayfacegreatdifficultiesinchangingtherather

suspicious,ifnotnegative,perceptionoftheeffectivenessoflocalgovernmentamongbusiness

representatives.Muchofthebusinesscommunityremainstobeconvincedthatlocalauthoritieswill

enhanceratherthanslowdownorunderminethestreamlinedstrategicprocess,especiallyinareas

thatarecrucialtobusinesssuchasplanningandhousing(duetothedifficultiesofbuilding

consensus,especiallyintheSouthofEngland).Manywouldstillpreferastronghandofgovernment

toovercomeproblemsatthelocallevelandensuremorestraightforwardprocedures.

TheIRSissupposedtocombinesimplifiedRegionalEconomicStrategyprocedureswiththemore

sophisticated,publiclyaccountableRegionalSpatialStrategyprocess,yetthereisconcernthatthis

maydelaytheagreementandimplementationoftheIRS.Onething,however,isclear:thereisaneed

forgreaterdialoguebetweenbusinessandlocalauthoritiesinordertoallaysomeconcernsandtofindsolutionsforothers.Inordertoplananddelivergenuinelylocaleconomicandregenerationpolicies,

whichisseenasakeyobjectiveofSNRproposals,localauthoritiesneedtobebettergearedupfor


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dialoguewithbusinessnotonlybyconsultingtheminaformalway,butalsomakingthemstrong

partnersandinterestedinvestorsintheprocessofstimulatinglocaleconomicgrowthandprosperity.

Theroleofthevoluntarysectorinpost-SNRgovernancestructuresremainslessclear.Itwillnolonger

havetheopportunitytoengageintheregionalplanningprocessthroughtheRegionalAssemblyand

noclearalternativehasbeenoffered.SincetheGovernmentintendstoengagethevoluntarysector(andtheprivatesector)moredeeplyinthedevelopmentandimplementationofsocio-economic

policies,thevoluntarysectorwillrequirebetterskillsandenhancedcapacityifitistobeactivelyand

effectivelyengagedinthenewprocessesatsub-nationallevels.However,theSNRoffersnoactionsin

thisdirection,whichmightaggravateexistingcapacityimbalancesevenfurther.

Whilelocalauthoritieswillreceivesubstantialhelpinstrengtheningtheircapacitytomanagelocal

economicdevelopmentandregeneration,thescaleandnatureofsupporttothevoluntarysector(for

examplethroughtheCapacityBuildersprogramme)isstilltobeseen.TheGovernment,jointlywith

thirdsectorleaders,needstodevelopaprogrammeofactionsthatwouldpreparevoluntary

organisationsformoreproactiveandsubstantialengagementintheprocessofregional,sub-

regionalandlocalstrategicplanning.

WiderEuropeancontext

ItisimportanttoremembertheultimategoalofthereformssuggestedintheSub-NationalReview:

enhancingeconomicgrowthinEnglishregionsandlocalitiesandreducingtheproductivitygap

betweenthemostdevelopedandleastdevelopedregions.Itisoftenarguedthatinacountryofsuch

greatspatialcontraststhereisaneedtofindamorerealisticandbalancedbenchmarkingframework

(ratherthanalwaystakingLondonandtheGreaterSouthEastasthebenchmark),whichwouldallow

assessmentoftherelativeperformanceofEnglishregionsandlocalitiesonthebasisofwider

measuresofwell-being(cfJohnsonetal2007).

ThereisalsoaneedtolookatthewiderEuropeancontext andtocomparetheperformanceof

EnglishregionswiththeperformanceofregionsinotherEUcountries.TheEuropeandimensionis

currentlycompletelyabsentintheSNR,whichisunacceptablegiventhepressuresoftheLisbonStrategyforGrowthandJobsadoptedin2000andrelaunchedin2005.TheUKundertookobligations

toimprovethecompetitivenessofitsnationaleconomyandtheeconomiesofitsnationsandregions.

ItwouldthusonlybelogicalifrelevanttargetsandobjectivesfromtheLisbonProcesswerereflected

intherenewedinstitutionalandpolicycontextoftheregionaldevelopmentofEngland,asthe

objectivesofthesetwopoliciesareverymuchcongruent.

Conclusions

TheReviewofSub-nationalEconomicDevelopmentandRegenerationisingeneralaverypositive

steptowardsempoweringlocalauthoritiesandinstitutionsoperatingatregionalandsub-regional

tierstodelivermoreindividuallytailoredandneeds-basedpoliciesaimedatenhancingeconomic

growthandthewell-beingofthelocalpopulation.

However,webelievethatinproposingreformsintheSNRtheGovernmentwasdrivenbytwoquite

distinctiveandfundamentalgoals:(1)toaddressthedemocraticdeficitexistingbetweenthelocal

andnationaltiers;and(2)toimprovetheeffectivenessofdifferentpoliciesaimedatmoredynamic

economicgrowthattheregionalandlocallevels.Itwouldbefairtosaythatthenewlyproposed

mechanismsarebetterattacklingthefirstchallengethanthesecondone.

Thestreamlinedregionalstrategicprocessandthegreaterroleoflocalauthoritiesineconomic

developmentandregeneration(supportedbysomenewpolicymeasuresatthenationallevel)will

ensuregreateraccountabilityatthesub-nationallevelofquasi-governmentalorganisationsandtheir

policies.However,thedispersalofpowers,wherelocalgovernmentwillgetsomepowerineconomic

developmentwhileRDAswillhavenewplanning,housingandsustainabledevelopmentfunctions,

mightaddtotheconfusionandslowdownimplementation.UnderthenewarrangementRDAswillstillremainthecoreorganisationsresponsibleforeconomicdevelopment,whileplanningandhousing

remaincorefunctionsoflocalgovernment.Bydispersingthesefunctionsacrossseveralspatialtiers,

theGovernmentiscertainlypromotinggreaterinclusion,butitalsoriskscreatingcomplicatedand


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counter-productivegovernancearrangementsinwhicheveryoneisengagedineverythinganditis

impossibletoagreeondevelopmentprioritiescrucialfortheregion.

Thelossesfromexcessiveconsultation,coordinationandpartnershiparrangementsmight

potentiallyoutweighthegainsofgreateraccountabilityandnegativelyaffecttheeffectivenessof

regionalstrategicprocesses. Thus,despitethedrivetowardsmorestreamlinedregionalstrategiesthereisaneedtorecognisethesubstantialdifferencesinproceduresandlinesofaccountabilityin

differentareasthatwillbecoveredbyIRS(suchaseconomicdevelopmentandspatialplanning)and

tohaverealisticexpectationsabouttheprocessofagreementandimplementation.

Italsoremainsunclearhowthestructureofcentralgovernmentwillbereformedinorderto

adequatelyrespondtoamoresophisticatedandflexiblesystem.IftheWhitehallapproachremains

unchanged,thefateofregionalandlocalinitiativesmightbelesspositive,sincemanygovernment

policiesremainspatiallyblind(eventhoughtheysubstantiallyaffectthebalanceofpowersand

resourcesintheregions).TheGovernmentshouldsuggesthowitwillrearrangeitsstructureand

functionsinordertocopewiththenewgovernancearrangementsandchallengesandtoexplainhow

itwillmanagemorediverseandpotentiallylesscontrolledregionsandlocalities.Withoutthis,the

entireideaofdecentralisationmightbeindanger,asanover-centralisedgovernmentcannotleadadecentralisedcountry.

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Documents

Decentralisation in England: How far does SNR take things forward, 2008