"Prosperous Places: Taking forward the Review of Sub-National Economic Development and Regeneration"
Summary of Main Points and Position Statement

Introduction

This paper summaries the consultation document "Prosperous Places: Taking forward the Review of Sub National Economic Development and Regeneration", published jointly by Department of Communities and Local Government and the Department of Business, Enterprise and Regulatory Reform on 31 March. It also highlights Manchester Enterprises’ (ME) position on key areas.

The consultation period runs until 20 June 2008. Subject to the consultation, the Government intends to legislate to allow development of formal legal status for sub-regional collaborative arrangements to support economic development.

Summary of ME Position

The consultation document iterates the need for sub-regions to be clear about their ability to deliver effectively any activities that may be delegated or devolved under the new arrangements as well as understand what is preventing them from being carried out currently. This should be an important consideration in the development of the new governance structure. Greater clarity is also still required in several areas. Overall, however, the document is encouraging, particularly as many of the activities which Manchester intends to include in the Multi-Area Agreement (MAA) are suggested as possible projects that could be facilitated by giving greater powers to sub-regions.

Background

The Terms of Reference for the Sub-National Review of Economic Development and Regeneration (SNR) were to "identify how to further improve the effectiveness and efficiency of existing sub–national structures in England – including governance, incentives and powers – and identify options going forward that maximise value for money and deliver changes on the ground in order to strengthen economic growth and deliver regeneration and neighbourhood renewal."

The Government published the SNR in July 2007. Key proposals for reform included:

• the abolition of regional assemblies other than in London;
• streamlining regional government by requiring regional development agencies (RDAs) to produce an integrated economic development and spatial strategy;
• strengthening the local authority role in economic development, including a new statutory duty to assess local economic conditions;
• support for local authority collaboration across administrative boundaries, including assistance in the development of MAAs.

The Consulation Document

The consultation document sets out the progress that has been made since the publication of the SNR and outlines how Government will deliver key parts of the package of reforms which would:

1. Streamline the regional tier;
2. Strengthen the local authority role in economic development;
3. Support collaboration by local authorities across economic areas.

1. Streamline the Regional Tier

One of the key interests for ME is how the Government intends to arrange delegation of RDA funding. The document states "RDAs will delegate where appropriate…to those best placed to deliver economic growth outcomes". However, precisely how much, when and by what criteria is not clear, and is the subject of the first formal question in the consultation. Capacity to undertake any delegated activities is clearly a key issue though, and ME will need to prove it can deliver in this area.

The consultation covers the types of issues that RDAs must consider before delegation is agreed. It states that the RDA must be satisfied that:

• there is a clear rationale for the proposed spending;
• outcomes can be identified for the delegated funds;
• success and value for money can be evaluated;
• effective performance management arrangements are in place.

ME backs this process and recognises the need to ensure that the new governance arrangements, under which it would be supporting the Economic Development Commission within the overall control of the Executive Board, will be able to meet these requirements.

2. Strengthen the Local Authority Role in Economic Development

The SNR built on the Local Government White Paper (DCLG, 2006) by providing the framework for local authorities and RDAs to work more closely on economic development and regeneration. The consultation states that interventions should take place at the most appropriate level, be aligned, avoid duplication and contribute to sustainable economic growth.

It also stresses that it will be incumbent on local authorities to promote economic development at a sub-regional level where appropriate, which is in line with the regional strategy. In future, MAAs will provide an important lever for achieving this.

The SNR included a commitment to consult on the creation of a focused statutory economic assessment duty for local authorities. The consultation paper states that this might be introduced by primary legislation, either with or without formal guidance.

3. Support Collaboration by Local Authorities across Economic Areas

There are some specific proposals in this section, which directly reflect what ME and AGMA are trying to achieve in terms of governance within the Manchester city region.

It also builds on the SNR’s recognition that some sub-regions may wish to go beyond MAAs and other existing mechanisms for sub-regional collaboration. It states that placing sub-regional economic development activity on a statutory basis would require primary legislation, providing a framework in which sub-regions would operate.

However, the consultation clearly states the need for sub-regions to be focused on the type of projects which would be facilitated by giving a sub-regional partnership powers to carry out activities of this kind and understand what is preventing them from being done under current legislation. This echos feedback from discussions on the MAA in London in March.

The consultation document envisages these activities might be new duties, or potentially delegations of existing powers from collaborating authorities which would be expected to have strong links to economic development. Many of these, either in whole or in part, appear in our draft MAA.

Finally, the consultation document suggests that the duty to co-operate in LAAs could be extended to MAAs.