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Ec081107exa Review of Economic Development and Regeneratio– EEC/07/360/HQ Executive 18 December 2007 The Sub-National Review of Economic Development and Regeneration Report of the Deputy Chief Executive and Director of Environment, Economy and Culture Please note that the following recommendations are subject to consideration and determination by the Executive (and confirmation under the provisions of the Council’s constitution) before taking effect. Recommendation: It is recommended that Devon County Council: (a) welcomes the proposals contained within the Sub-National Review; (b) notes the broad extent of the proposals; (c) endorses the way forward outlined in paragraph 5. 1. Summary In July 2007 the Government published a Review of sub-national economic development and regeneration (SNR). This report sets out a summary of the review, the implications for Devon and recommends a way forward in terms of organisation and future working arrangements with partner organisations. 2. Background As part of the 2006 Budget it was announced that the 2007 comprehensive spending review would be influenced by a series of policy reviews one of which addressed sub-national economic development. The review was carried out by the Treasury and involved extensive stakeholder consultation and workshops. The Government considers that the Review's conclusions will help to ensure that: • local authorities and RDAs are empowered to spread economic well being and opportunity to everyone in their region; • sub-national structures are simplified, with strengthened accountability; • objectives for promoting growth and tackling deprivation are clear, focused and relevant; and • policy decisions that affect economic well-being are taken at the right spatial levels. While the basis of the SNR is economic, the proposals are far reaching affecting strategic and spatial planning, age 14-19 funding, regional transport allocations and programmes, and housing. 3. Key Proposals The Executive Summary is attached as Appendix I. Some key proposals affecting the County Council include the following, though many will be the subject of a series of future consultations: • the abolition of Regional Assemblies with their role as Regional Planning Body being passed on to Regional Development Agencies. In doing so, however, the SNR recognises that Local Authorities will have an important role - contributing both individually to the Regional Spatial Strategy (RSS) and to the subsequent integrated regional strategy both nationally and as "sub- regions"; • the Government will consult on the creation of a focused statutory economic development duty which will require upper tier authorities to carry out an assessment of the economic circumstances and challenges in their local economy. • the Government will bring forward options for reforming LABGI to ensure there is a clear focus and incentive for local authorities to support economic growth, recognising the relative scale of the challenge in different places. (Consultation subsequently issued) • the Government will consult on proposals for supplementary business rates which will help local authorities to invest in infrastructure to support the long- term economic growth of their area. (White Paper subsequently issued) • the Government will "expect the RDAs to delegate responsibility for spending to local authorities or sub-regions" unless there is a case for retaining funding at regional level. The RDAs will need to be satisfied that the receiving body has the necessary capacity. • the Government proposes to "give local authority leaders in the regions responsibility for agreeing the regional strategy with the RDAs, and for effective scrutiny of RDA performance.” • moving the funding for most 14-19 year olds' education and skills to local authorities. 4. Discussion It can be seen from the above and the summary of the SNR that its proposals will have a significant impact on the County Council. RDAs will be responsible for economic development and regeneration, strategic and spatial planning strategies, the regional transport strategy, and for the regional funding allocation for transport and economic investment. There is an expectation that first tier authorities in their Section 4/4 role will continue to play a significant role in the RSS aspects of RDA work. However, in addition, first tier authorities will be expected to assess their economic circumstances and challenges. This work will need to be evidence-based. RDAs will be expected to delegate "responsibility" for spending to local authorities provided they have appropriate capacity. This delegation is understood to be to upper tier authorities. Whilst responsibility for spending will be delegated, it is not expected that such authorities would necessarily be responsible for carrying out the actual work or project. A number of different delivery bodies might be commissioned by the upper tier authority depending on the nature of the action concerned e.g. Job Centre Plus, Business Links, Rural Renaissance Partnerships, District Councils, Communities England, New Homes Agency, RDA, HE/FE, Destination Marketing Organisations, County Councils, Third Sector and so on. With the RDA becoming responsible for Strategic Planning and Transportation and the Regional Highway Strategy in addition to the Regional Economic Strategy the 'players' involved will vary according to the nature of the project to be commissioned. The County Council currently has a "power" to carry out economic development activities. It carries out this role in partnership with others via the Devon Economic Partnership. A new regime described above will require a new integrated approach by the County Council including an increase in capacity. The proposals give local authority leaders a new position in the context of the SNR both regarding input to and agreeing the regional strategy and in scrutinising RDA performance. 5. The Way Forward The County Council could await various aspects of the proposals coming into being and respond accordingly. Alternatively it could grasp the nettle now and set up the framework for an organisation which could deliver the Council's likely responsibilities under the SNR. It is proposed that the Deputy Chief Executive and Director of Environment, Economy and Culture together with the Director of Personnel and Performance brings forward proposals which integrate economic development, regeneration, spatial planning and transportation to: • better deliver its current responsibilities; • enable the County Council to respond to the new RDA in an integrated manner on economic planning and transport matters; • build up capacity to carry out the required assessment of economic circumstances and challenges based on sound evidence; • to deliver the Council's Section 4-4 role; • to be able to develop with partners sub-national strategies and work programmes; • to give leadership on transportation matters in the County whilst maintaining horizontal links with transport, traffic and highway delivery matters. In light of senior staff vacancies and the importance of this agenda, it is proposed that the changes outlined above be progressed with a view to implementation in April 2008. The Government is concerned that "local authorities need to have a greater sense of ownership of the regional strategy than they do for current regional strategies. This will require a strengthening of local authorities' involvement in the regional strategy development process and in scrutinising the work of the RDAs." Furthermore, "the Government will work with local authorities and other partners to develop arrangements for regional scrutiny and strategy development, based on ensuring that local authority leaders and all sub-regions are represented in a way which enable decision-making and prioritisation of decisions across each region, possibly involving a regional forum of leaders." It is proposed that Devon County Council should play a full part in developing these concepts and in their subsequent operation. 6. Other Matters Consideration will need to be given as to how the important relationship between the economy and the development of the 14-19 education and skills agenda can best be strengthened. 7. Financial Considerations The SNR marks the beginning of a new approach and a new duty being given to the County Council. The costs of the arrangements will have to be considered as the proposals are developed. 8. Legal Considerations Upper tier authorities may have a significant role undertaking delegated work for the RDA but this is dependent upon the progress of supporting legislation. Primary legislation will be required for the delivery of some parts of the SNR. First tier authorities may have to press for the continuation of their Section 4/4 powers. 9. Sustainability/Carbon Impact Considerations The development of any future vision for the economy of Devon will need to reflect the need to be sustainable and to contribute to a greener Devon. 10. Equality Considerations The contents of this report are not considered to pose any equality issues at this stage. It is recognised that there will be a need for further consideration in due course. 11. Options/Alternatives Options and alternatives will be considered as part of developing the proposals outlined in paragraph 5 above. Edward Chorlton Electoral Divisions: All Executive Member for Policy and Resources, Councillor Brian Greenslade, Executive Member for Economic Regeneration, Strategic Planning and Regional Affairs, Councillor Humphrey Temperley Local Government Act 1972 List of Background Papers Contact for enquiries: Edward Chorlton Room No: Lucombe House, County Hall, Exeter Tel No: 01392 382149 Background Paper Date File Ref. Review of sub-national economic development and regeneration July 2007 HM Treasury ec081107exa hak/review economic development 8 101207 Appendix I To EEC/07/360/HQ Extract Executive Summary of Review of Sub-National Economic Development and Regeneration .
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