Research by the New Local Government Network showed that the key ingredients to success in sub-regional partnerships included building up an evidence-base and sound understanding of the sub-regional economy, good leadership with vision and ambition for the partnership, and operational capacity to ensure that the local area is capable of delivery. Placing a new “duty to co-operate” on local authorities, public bodies and private bodies that are critical to delivery, such as infrastructure providers, is helpful. However, in order to overcome natural barriers to collaboration – such as fear over loss of sovereignty, a lack of clarity over accountability, local political interests or issues around resources – the most powerful tool is devolution of a strong financial or policy-based power to make worthwhile the time-consuming and costly business of partnership.
Moreover Regional Development Agencies (RDAs) were backed by substantial financial clout from central government, and with access to sources of funding from Europe which was match-funded by central government. Indeed it is reported that it could cost as much as £1.4 billion to wind them down and complete existing programmes. Meanwhile, the LEPs come with no budgets to encourage their formation. The much-heralded Regional Growth Fund of £1.4 billion over three years is nowhere close to the sum given to RDAs, and will not be solely dedicated to LEPs.
The government has set out some of the roles it foresees LEPs fulfilling, most notably around local transport, housing and planning, as part of an integrated approach to growth and infrastructure development. LEPs are also to play a key role in pooling and aligning funding streams to support housing delivery, setting out key infrastructure priorities, and supporting or co-ordinating projects.
However, a round key issues such as skills and welfare to work (the second most common theme in the 56 original bids received by government after rebalancing the economy), there is little evidence yet of the devolution of powers concerning the commissioning or strategic delivery of welfare to work
programmes. The recommendation they “work with” local employers, Jobcentre Plus, and learning providers to help workless people into jobs is fairly nominal. Nor will the ability to “make representations” on the development of national planning policy mean much when planning is such an integral part of regional growth.
For a government that has set such store by its commitment to localism and decentralisation, there are still real concerns about the willingness of Whitehall to let go. In the transition from RDAs, there remain key concerns about what will happen to some of their main functions which are likely to be drawn up to central government and its agencies rather than devolved to LEPs or to local authorities. Inward investment and key sector development will be centralised, and skills funding will be routed through the national Skills Agency straight to colleges and training organisations. These are crucial levers to drive local economies.
As the Total Place approach appears to have run into the sand across Whitehall, it is vital that pressure is maintained in encouraging central government to become more integrated and more willing to devolve budgets and powers.
The government’s broader public service reform agenda also provides a challenge to Britain’s future growth. The localism agenda, for example, aimed at empowering individuals and communities to have more say over their localities, holds many potential problems to integrated, strategic economic development.
On planning, despite a “national presumption in favour of sustainable development on all planning applications”, there is a fear that the bottom-up approach this government is taking – by giving local residents and communities more planning powers and abolishing Regional Spatial Strategies – could be anti-development. The New Homes Bonus is the cornerstone of the government’s framework for encouraging housing growth. It provides a few small incentives but it remains to be seen if this is enough to drive regeneration. Current evidence would suggest it is a long way off-target.
Alongside this, there is rapid and substantial reform across public services that is in grave danger of fragmenting local delivery and working against moves to create better integration. Direct elections for police commissioners, commissioning directly by GPs, and free schools all provide new, and potentially conflicting, forms of accountability at a local level, which could mean that driving and leading economic regeneration becomes more disparate and difficult.
Moreover, financial challenges faced by localities through Cameron’s intense squeeze on public sector spending, and particularly the local government settlement, means localities have a sizeable economic task ahead of them. The government continues to argue they are “confident” the private sector will fill the gap in employment, but between the first quarter of 2000 and the start of the recession, more than a fifth of all job creation came from the public sector. The need for private sector rebalancing may be urgent in areas that have benefited most from the expansion of the public sector, such as many of the formerly industrial economies of the north east and north west, but there is no evidence to suggest this is about to take place. This will leave many localities badly affected by this poor design in policy.
Take Swansea for example. This is a fairly modern city that, at one time relied on heavy industry coming from car manufacture, steel and aluminium production. As this degenerated over the last 20 years, it was replaced by an array of public services. Local and central government, Welsh Assembly and DVLA – these were just a few of the broad range of government offices that came in to pick up the slack of joblessness in the area. Now many of these government departments are being closed or downsized, leaving the threat of large scale unemployment looming over the city. Over 30% of the population works in the public sector and any shrinkage in jobs seems, at the moment, to be replaced by the emergence of a new private sector.
All this gives additional credence to the argument that Tory localism has been ill-conceived, ill-planned and ill-timed. It will leave communities in South Wales, the Midlands, the North-West and North-East totally devastated, unless Cameron and Pickles radically rethink their strategy and now implement a rescue plan. With no evidence of this forthcoming it bodes badly for people in these communities.
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