Strengthening Regional Accountability Consultation Paper

1. Summary

1.1 The Government has made major strides towards establishing an effective framework at the regional level to deliver the objective of strengthening the economic performance of the English regions, to help achieve regionally balanced growth, and to tackle the inequalities between and within regions.

1.2 The Regional Development Agencies, working with regional chambers, Government Offices and other partners, have already achieved a good deal. The RDAs have been given substantially more resources for the next three years, and are now getting more flexibility to use those resources to drive forward sustainable economic development and regeneration in the regions. In parallel, they are being set tough targets aimed to ensure that their new powers are directed towards the Government's objectives for the regions.

1.3 Although the RDAs outside London remain accountable to Ministers and to Parliament, it is crucial that they also respect the views and needs of the regions they serve. The regional chambers provide the main link between the RDAs and regions. They provide a forum in which RDAs can report on their activities to the regions, and a means for feeding the regions' views back to the RDAs. The chambers will thus have a critical role to play in ensuring that the RDAs' plans for meeting their new targets and using their flexibilities are consistent with the needs of the region. They will need to be fully involved in the process of developing plans and monitoring performance against them.

1.4 To assist the chambers to exercise this substantially expanded scrutiny role, the Government is establishing a new fund for their use, worth £5 million a year in total. This will enable them to enhance their capacity to assess the RDAs' plans and strategies for meeting their targets, and to provide an effective regional input to the process, in the context of the wider strategic framework for the region, particularly as set by the Regional Sustainable Development Framework. This paper sets out a proposed scheme for distributing this funding to the chambers.

1.5 The views of the regional chambers and other interested parties on these proposals for enhancing accountability within the region, including the proposed funding scheme for the chambers, are invited by Wednesday 9 May.

2. Context

2.1 Strengthening the economic performance of the English regions so as to achieve regionally balanced growth, and tackling the inequalities between and within the regions, are fundamental objectives for the Government. Regional Development Agencies were established in each region outside London in 1999 to develop strategies for the region and to drive forward measures to improve competitiveness, to promote regeneration and investment, and to tackle structural weaknesses. This represented a major step to decentralise decision-making to the regional level, so that the key decisions are taken within the region, by an institution rooted in the region, and which reflects the views and needs of those who live and work in the region.

2.2 The RDAs, working with the regional Government Offices, regional chambers, and other local and regional partners, have already made a considerable impact. They have produced Regional Strategies and action in implementing these is now well under way. They have provided a focal point for regional economic development and regeneration. And they have already established a track record in creating and saving jobs - over 35,000 across England in their first year alone.

2.3 Although the RDAs remain accountable to Ministers and to Parliament, they are specifically aimed to serve the interests of their regions, and so it is essential that they take full account of the needs and circumstances of their regions. Clearly, the RDAs can - and do - work closely with a wide range of partner organisations around the regions.

2.4 But to provide a more explicit focus for representing the regions' interests, and for the RDAs to report to the region, the Government encouraged the establishment of regional chambers in each region. These are bodies set up by each region, comprising representatives of local government and of social and economic partners within the region. The chambers are accountable to the regions and the bodies within the regions who nominate their members, not to Ministers.

2.5 The chambers - most of which now style themselves "assemblies" - have already carved out a valuable role on the regional scene, not least in providing a forum in which each region can engage with its RDA and its regional strategy, but also more generally as a focal point for a broader set of strategies at the regional level. Mechanisms have been established in each region for the RDA to report on its activities to the chamber, and to consult the chamber on its proposed plans and strategies, and for the chamber to feed its views back to the RDA. While there were some initial teething troubles, effective working relationships are now well established. Concordats formalising the relationship between RDA and chamber - and in many cases also the region's Government Office - have been agreed or are under discussion in each region.

2.6 Chambers are also establishing for themselves a more wide-ranging role within the regions, and are providing a framework for bringing together a wider range of strategies and issues and for developing an inclusive region-wide perspective. In some cases, for example, the chambers have taken on, or are taking on, responsibility for the submission to the Secretary of State of draft Regional Planning Guidance, including the Regional Transport Strategy, as it evolves into a spatial development strategy for the region. The Government has welcomed the chambers taking on this responsibility in PPG11 'Regional Planning'. Some chambers are also leading work on Sustainable Development Frameworks at the regional level.

2.7 Looking ahead, the Government has made it clear that the RDAs and chambers, as currently constituted, are not the final steps on the road to modernisation of the governance of the English regions. Ministers have stated their commitment to move towards directly-elected regional government, where there is the demand for this expressed in a referendum. As and when appropriate, the next step is likely to involve a major consultation exercise on the way forward.

2.8 Developing and implementing proposals for regional government, where there is the demand for this, will take time, however. In the meantime, there is a strong case for building on the roles of the existing regional institutions, not least in order to strengthen accountability at the regional level, as the remainder of this consultation paper explains.

3. Building the RDAs' role

3.1 Last year's Spending Review (SR2000) included plans for a major enhancement of the RDAs' resources and flexibilities, reflecting the importance that Government now places on the RDAs as strategic drivers of economic development and regeneration in the regions. In particular, the RDAs will have their programme allocations combined into a single budget from April 2002, with freedom to decide how to use that budget across the areas for which they are responsible, and their total budget will be increased from £1.2bn in 2000-01 to £1.7bn by 2003-04.3.2 In return, the Government is setting demanding new targets for the RDAs in areas such as sustainable development, employment and skills, innovation, regeneration, and new technology, to ensure that they contribute to the Government's objective of regionally balanced growth, in a way which respects the needs and circumstances of each region.

4. Strengthening the RDAs' accountability to the regions and the chambers

4.1 The RDAs remain directly accountable to Ministers for the way in which they use their resources, and for delivering against the targets set by Ministers. But as the RDAs' role and strength within the regions grow, it becomes even more important that they are also accountable to the regions they serve. The chambers, as the body established to provide the voice for the region for such purposes, are ideally placed to develop their present role and play a central part in this.

4.2 As already indicated, the RDAs are already involving the regional chambers in the development and implementation of their plans and strategies. The Government believes that the RDAs should now involve and consult the chambers as fully as possible on how they propose to take advantage of their additional resources and flexibilities, on the actions they plan to take to meet their targets, and on developments as they progress towards the targets. This will be essential to ensure that local and regional needs are properly factored in to the process; the chambers will be well placed to work with the RDAs - and other regional partners - to help ensure that the RDAs' strategies and activities fit in with the wider framework of strategies across the region - notably the Regional Sustainable Development Frameworks, but also including Regional Planning Guidance and the Regional Cultural Strategies.

4.3 The Government does not want to be prescriptive about how the chambers should exercise this expanded scrutiny role. Different regions have different needs, and the regional partners have established different relationships within different regions. Chambers will want to ensure that their expanded role in relation to the RDAs fits in with their own views on promoting the interests of the region as a whole.

4.4 But, by way of illustration, the way forward could involve the chambers establishing a stronger analytical or research capacity to monitor and evaluate the RDAs' plans in relation to the region's performance and to the wider strategic context within the region. In doing so they will, for example, need to lock into the work of the Regional Observatories and consider the links with the work on monitoring implementation of Regional Planning Guidance. It could also involve the chambers holding hearings at which the RDAs could formally explain and answer questions on their performance against their strategies and targets. In turn, the chambers will need to feed back their conclusions to the RDAs and to communicate developments to the wider regional community.

4.5 The Government naturally expects that the RDAs will co-operate fully with the chambers in facilitating the chambers' expanded scrutiny role, for example in involving the chambers from the earliest stage as they develop strategies and proposals, in providing the chambers with advice and information, and in attending meetings, hearings and so on.

5. Government support for the chambers' wider role

5.1 In order to assist the chambers to fulfil this expanded accountability role, the Government proposes to make available a new fund, of £5 million a year - initially for the three years beginning 2001/02 - to enable the chambers to support their capacity to evaluate the RDAs' plans and strategies, and their performance against targets, so as to provide an effective regional input to the process, and to develop their role as a strategic focal point for the regions.

5.2 As it will take a little while to get the scheme under way, it is proposed for the year 2001/02 that up to £500,000 will be available for each chamber, with a further £1 million for initiatives supported by the chambers collectively on setting up the new scrutiny regime. Chambers would be invited to submit proposals to draw down from the fund to the Department by 29 June. To the extent that any funds were not taken up, they would be available for other chambers to bid for. From 2002/03 onwards, there would be more scope for flexibility in allocating the resources; this could involve an allocation of up to around £500,000 for each chamber, but with slightly more for those in the largest regions or with the greatest needs.

5.3 The Government is concerned to ensure that administration of the scheme should not be bureaucratic or burdensome. The procedures will be kept as simple as possible consistent with ensuring propriety in the use of public funds. Where chambers do wish to apply for funding, they will be expected to explain in broad and brief terms the intended use of the requested sums, eg in relation to people, consultants, hearings etc, and the intended outcomes. The Government will meet reasonable requests, up to the maximum amounts set out above.

5.4 A report back to Government after the end of the year in question will be expected from each chamber in receipt of funds, in order to account for how the money has been spent, as a matter of normal financial monitoring. The Government would also welcome an indication from the chamber of how effectively its objectives have been met. However it should be emphasised that the chamber will be using the funds for the purposes of its own scrutiny role, not as an agent of the Government, and it will thus be answerable to the region and not to the Government for the outcomes.

5.5 It is recognised that some chambers may feel they are already adequately resourced to carry out a strengthened scrutiny role, and that they may be concerned to preserve their independence from central Government. There will be no requirement on chambers to apply for these funds.

6. Views invited

6.1 The views of the regional chambers and other interested parties are invited on these proposals for enhancing accountability within the region, including the proposed funding scheme for the chambers. The contents of respondents' comments may be made public unless they are specifically stated to be confidential. Comments should be sent to Andrew Tucker, DETR, RPR4 Division, 1/A6, Eland House, Bressenden Place, London SW1E 5DU, or e-mailed to him at

andrew_tucker@detr.gsi.gov.uk by Wednesday 9 May.

6.2 In common with all public consultation documents now issued by the Government, this document has been prepared on the basis of the Government's Code of Practice on Written Consultation, the criteria from which are included in the Annex to this document.

Regional Policy and Regeneration Directorate
DETR
9 March 2001