27 July 2007
Before he took over, one of the great unknowns of Gordon Brown's premiership was where he would position himself on the localism debate. As chancellor, his reputation for control was fearsome, so just how likely was he to relinquish or at least relax his grip on the reins of power once he got his hands on them?
But, as chancellor, Brown did commission a review with a decidedly localist and devolutionary bent. Announced in the 2006 Budget speech, the sub-national review was deputed to take a fresh look at the effectiveness and efficiency of economic development and regeneration interventions.
'The review reflects the government's commitment to enable cities and regions to improve their economic performance to deliver full employment and rising prosperity for all,' said the Treasury. 'It will be set within the context of further devolving decision making to the regional and local levels.'
The outcome of the so-called sub-national economic development and regeneration review finally emerged on July 17. Bringing the six economically poorest performing regions up to the standard of the best would net the UK economy an additional £60bn, it claimed. To stimulate this extra productivity, the review suggested changes that refocus powers and responsibilities downwards.
Among these were a new duty on local authorities to analyse the economic challenges for their local economy, as well as a stronger role in the scrutiny of Regional Development Agency performance. Those councils making up city regions will be encouraged to work together through new multi-area agreements, which will allow them to pool economic responsibility on a more permanent basis.
The review also took up one of the recommendations from Sir Michael Lyons' inquiry into local government and promised to consult on the feasibility of allowing councils to impose a supplementary business rate.
Local government minister John Healey said: 'We want to give greater freedoms and powers for good local leaders to innovate, extending their role in promoting jobs, the environment, learning and skills and regeneration. And we want to make sure that plans for new homes are linked closely to new jobs, transport and economic growth in the region.'
The hearts of town hall leaders were at least partially gladdened. The review delivered much of the Local Government Association's wish list. LGA chair Sir Simon Milton told Public Finance: 'We've been given a significant opportunity as a sector to take a lead in economic development. I'm very anxious that we don't spend all our time arguing about structures, but that we seize that opportunity and show what groups of councils working together can do to push their areas forward.'
Other commentators applauded the review as a vote of confidence in the ability of local government to deliver. The New Local Government Network think-tank, which had campaigned for much of what the review presented, called on councils to embrace the challenge the review set down.
NLGN director Chris Leslie said: 'Elected council leaders will have to step up to the plate and take ownership over bigger regional-level decisions which could bring in significant gains for their area. The delegation of funds down from the RDAs to councils… is a welcome shift in the balance of power from central to local government.'
But is it? Another strand of the review is a renewed emphasis on regional policy. RDAs will take on executive responsibility for their regions and will be required to produce a single strategy co-ordinating jobs, economic growth, housing, environmental objectives and the sensitive area of planning.
What has been played down in the flurry of comment surrounding the review is the phasing out of the regional assemblies, to begin in 2010. They have long been criticised as talking shops which delivered little or, if one wished to be really unkind, dumping grounds for troublesome councillors. However, regional assemblies were, if not directly elected, largely composed of elected councillors, met in public and were clearly there to hold their RDA to account.
Ministers are proposing to shift governance responsibilities to myriad groups: councils, regional ministers and regional select committees (the latter were expected to be established next week when the entire select committee architecture is being adjusted to reflect the new-look Whitehall). A consultation on the new regional governance arrangements is promised by the end of the year.
But Milton warned that multiple accountability can, in practice, mean no accountability. 'We think there's a large element of confusion,' he said.
'Nobody believes that regional assemblies were the answer to our prayers… but they were a public body where people who had been elected by the electorate made up 60-70% and they met in public. We're losing that and their functions to a completely private board which is not accessible, and in which it will be very hard for the public to see its views reflected.'
Sue Stirling, director of the think-tank IPPR North, shares some of Milton's concerns, stressing that RDAs and councils will have to work closely together in future. 'How you actually square that triangle of local authorities and RDAs seeking agreement on strategies – a sort of shared delivery and scrutiny role – I think begs a lot of questions,' she told PF. 'It's obviously going to be quite critical.'
Stirling added that, while the notion of a single, integrated regional strategy was welcome, there were questions over how the knowledge currently held by regional assemblies would be picked up by the RDAs.
The regional assemblies themselves have launched a stronger attack. Keith Mitchell, chair of the South East England body, criticised the government for riding roughshod over delicate local relationships carefully nurtured by the Assembly over the past eight years. He warned that councils risked being sidelined.
'Instead of planning collectively for the region through the Assembly, councils look likely to have only a consultative role.' he said. 'The regional framework for local development plans is now to be set by the RDA's business-led board. Government is putting at risk our hard-won local buy-in that is essential to delivering sustainable prosperity on the ground.'
Both Stirling and Milton are agreed that, while the sub-national review sends a strong message that the new prime minister is prepared to decentralise, there are many questions left unanswered.
Stirling said: 'There's a great deal of work to be done to feel confidence that the problems experienced by regions such as the Northeast can be addressed and addressed at an accelerated rate.'
Milton added: '[The review represents] a good direction of travel but it's by no means full devolution. We will keep pressing.'
PFjul2007
