24 March 2006
Chancellor Gordon Brown this week injected further momentum into the government's devolution agenda – but the tone emerging from Number 11 points towards a regionalist approach at the expense of council-directed 'localism'.
A report on the potential for devolving further powers from Whitehall, published alongside the Budget, outlines the Treasury's growing belief that regional development agencies could act as the co-ordinating hubs of plans to empower 'city-regions' to boost UK productivity and regeneration.
Meeting the regional economic challenge: the importance of cities to regional growth highlights 'the importance of the interaction between different strands of sub-national governance in maximising the economic potential of cities and regions.'
In line with a recent Office of the Deputy Prime Minister report, the Treasury's findings – which will inform the forthcoming local government white paper – suggest that cities should be better 'integrated into the wider strategic role of regional economic development.'
But the report draws repeatedly on the successes of the Northern Way (a collaborative project involving three RDAs) and the East of England Development Agency as co-ordinators of regeneration.
Chris Leslie, director of the New Local Government Network, which has called for powers to be devolved to councils or city-regions, told Public Finance: 'Any acknowledgement of the need to devolve further powers is welcome. This report gets full marks for regionalism, but scores low if you're a “localist” because it indicates that councils, for example, may have to go through RDAs to co-ordinate reforms.
'The big question now is… are RDAs capable enough, and accountable enough, to perform that role effectively?'
In line with potential new roles for RDAs, Brown also published plans to overhaul regional government offices by streamlining ring-fenced grants and cutting staff by around a third. The offices will in future focus on 'strategic' services, the Treasury said.
However, Brown still made it clear he expects city-regions or cities to deliver key elements of the government's productivity and welfare reforms.
Continuing the welfare theme, Brown revealed plans to get Labour's child poverty targets back on track. The government aims to halve child poverty by 2010 and had already committed itself to increasing the child element of Child Tax Credit in line with average earnings up to 2007/08.
Brown this week extended that to 2009/10.
PFmar2006
