The Future of RDAs
12 April, 2007

Chris Leslie, Director
Parliamentary Monitor

The question of regional governance has to a large extent been stuck in political purgatory since the North East overwhelmingly voted against an elected regional assembly in 2004. There are some who still believe that directly elected and accountable regional bodies are the most sensible way forward – John Prescott recently said that “England will eventually move to elected regional government – just as Scotland and Wales originally rejected devolution and then voted for it”, for instance.

The Regional Development Agencies are the first to acknowledge that they are not elected and therefore have to rely on the Regional Assembly process to add legitimacy. Whilst RDAs have made a significant impact on developing regional prosperity, there is concern that there are still too many other regional bodies and Whitehall ‘outposts’ also claiming to lead on policy in a regional context, with the Government Offices also facing questions about whether or not all departments are keen to work through them. RDAs enjoy strong support in the Treasury, unsurprisingly as they are charged with leading economic development and producing a Regional Economic Strategy. However the quality and nature of RDAs is often felt to vary from region to region, and the forthcoming National Audit Office assessment of their work will no doubt throw this issue under the spotlight.

The future of regional economic leadership rests increasingly on the assumption that RDAs will need to step up to the plate and enhance their operations.. As with other public agencies in the front line, their future will largely depend upon political events. An early champion of RDAs was Gordon Brown, who is likely to maintain a strong role for them under his Premiership. Last year I published a report with Treasury Ministers, Ed Balls and John Healey, Evolution and Devolution in England, that offered a suggested new direction RDAs, keeping their strategic role in terms of economic development but guaranteeing local citizens further accountability.

Evolution and Devolution highlighted that strong coordination and leadership at the regional level is crucial. Although there are clear areas of policy best led at the local or sub-regional level alone, there are often larger scale strategic questions where a purely local perspective is too discreet to see the big picture, while leaving these issues simply at national level is too remote to see factor in the detailed local and sub regional picture. This is why we advocated county and city region federations of local authority leaders, coupled with the formation of Parliamentary regional Select Committees to offer additional scrutiny to the work and budgets of RDAs. The Select Committee would be made up of regional MPs and could call for direct responses and evidence from the principal figures within RDAs. They need not be Westminster-centric and indeed could cement their role as a voice for public as well as Parliamentary opinion by meeting in their region itself rather than in SW1.

The fate of RDAs under a David Cameron led Conservative administration is less assured. He has announced that he would support RDAs in regions where regeneration is more obviously required but that areas such as the South East could depend on local councils to address economic development and regeneration. To me this is a false dichotomy: strong regions need both effective regional coordination and powers for local authorities to promote economic development. Cameron was also rather sweeping when he claimed that some RDAs are “a complete waste of money”. We can see huge benefits being delivered by the existing regional bodies who are investing vast sums into regional economies. For example, Yorkshire Forward, the RDA for Yorkshire and the Humber, created or safeguarded 27,312 jobs, encouraging 1,179 new business start ups and attracted £333million of private-sector finance in the last year alone.

In March NLGN will be publishing new research into bridging the regional economic gap and developing improved leadership and accountability in regional decision-making. We hope this will feed into two crucial Government reviews: the Comprehensive Spending Review 2007 (CSR07), which is the largest evaluation of Government spending since Labour came into power in 1997 and the Sub National Review of Economic Development and Regeneration (SNREDR). Both reviews will have major implications for the regional level of governance.

The reviews raise challenges for regional governance and RDAs. They will assess the most effective way for a regional presence to benefit economic development and how institutions should be designed to meet these demands.

Support for RDAs remains constant within the Treasury and the reviews will probably conclude that to benefit economic development, RDAs must retain their structure with executive decision making powers and a single pooled budget to spend as they see fit.

However, we would urge Ministers to consider that to improve RDAs’ accountability and transparency they require an enhanced role coupled with changes to boost accountability rooted more effectively via local and national elected representatives This will not necessarily overcome the entire issue of RDA legitimacy, but could at least safeguard their reputation of developing economic prosperity and growth. That is a useful first step to developing wider discussions on the future of regional governance.