This week the Government published a consultation paper on the planned new regional economic role for local authorities outlined in last summer’s sub-national review. John Healey outlines why he believes councils are key to the new economic agenda
England is experiencing a regional renaissance. From the waterfront in Newcastle and the Birmingham Bullring to the Eden Project in St Austell, the regeneration successes over the past decade are clear to see.
I want to make sure the next decade is more successful still, from the North East to the South West. If we reduce the disparity between the poorest six regions and the rest, bringing the poorest regions up to the average, it could be worth as much as £60bn to the national economy.
The new consultation document published this week demonstrates our commitment to major reform in legislation later this year, and seeks your views on three key developments: a new duty on top-tier councils to assess the economic conditions of their area; new sub-regional working arrangements and the development of regional strategies by Regional Development Agencies (RDAs), alongside key business and council leaders.
Further elements of a progressive reform on a number of fronts were set out in the sub-national review of economic development and regeneration published in July, which will radically change the way our regions are governed, to ensure more action on the economy at the local and regional level.
Under our proposals, councils will play a central role in supporting economic growth for their communities. There will be a new duty to assess the economic conditions and challenges facing their local economy, and councils will work alongside local entrepreneurs to support business growth.
With this proposed new role will come new powers for councils: from 2010, the functions of the Learning and Skills Council will be transferred both to councils, who will work with local colleges to help them reform to offer a range of post-16 qualifications to help meet local skills needs, and to a new Skills Funding Agency, which will support the work of the Train to Gain programme: this has already given invaluable support and advice to businesses looking to meet the training needs of their staff.
Councils are already playing a greater role in supporting economic growth in their areas.
The 65 local authorities with the most deprived areas of the country within their boundaries will benefit from a share of over £400,000 unringfenced funding to tackle high levels of worklessness and low levels of skills and enterprise through the Working Neighbourhoods Fund.
The Local Transport Bill will give councils greater control over the availability of public transport and future road pricing schemes.
Under the Planning Bill gives councils the power to impose a Community Infrastructure Levy on new developments in there area, the proceeds of which could only be used to fund new infrastructure.
And we have published proposals for a new supplementary business rate, charged at a maximum 2p in the pound, to fund major infrastructure projects, including Crossrail.
But the economic challenges our regions face rarely fit within neat local authority boundaries. That’s why we are encouraging councils to work together, and working to give these voluntary working arrangements a statutory footing through the new legislation to be published later this year.
This builds on partnerships already being forged by those developing Multi-Area Agreements, or MAAs, through which two or more councils work together to meet jointly-agreed targets on raising economic growth and prosperity. There are already 13 draft MAAs, focusing on issues ranging from housing to transport, from skills to the environment.
The sub-national review also transforms RDAs to give them a strategic role, working closely with local organisations, including councils, to deliver the best for their regional economies.
RDAs have already proved successful in securing economic growth for their regions. Many have offices overseas, enabling them to deal directly with entrepreneurs to secure vital inward investment. And RDAs already have a central part to play in the Government’s Business Support Simplification Programme, which will see the number of business support initiatives greatly reduced, from around 3,000 now to less than 100 in 2010.
But the efforts of the RDAs and councils have been hampered by the fact that a range of different regional organisations are producing a range of different regional strategies, each considering a different policy area.
Under the sub-national review, the RDAs would be given responsibility to produce single, regional strategies, bringing all these existing strategies together, and covering policies ranging from housing and planning, transport, skills and the environment. And the basis for these strategies would be the economic assessments councils would be required to provide.
The reforms contained in the sub-national review also increase the accountability of RDAs to their regions. New locally-led forums of council leaders will be formed, to scrutinise the new regional strategies. And, under plans I am currently discussing with the House of Commons authorities, each RDA would be answerable to a newly-formed regional select committee made up of MPs from that region.
England’s regions have an economic record they can be proud of. In 1997, the economies of only two UK regions were growing at a rate above the European average. Now, every UK region has achieved this.
The challenge now for the regions is to build on this success, to improve conditions for councils and RDAs to ensure every community benefits from increased prosperity, and for business to face increasing competition not just regionally, or nationally, but globally.
With their reformed roles under the sub-national review, I am confident councils and RDAs, working with local entrepreneurs, will be best placed to achieve this.
John Healey is local government minister
