English regions disbanded: European funding and economic regeneration                                                 impl...
development activity, rebuked by government as part of a political rescaling strategy todemonstrate that a new era had arr...
2000s (Mawson, 1998; Pugalis, 2009; 2011d; Webb and Collis, 2000). Based on carefulmonitoring of the (ongoing) production ...
this politically-induced upheaval are examined. Fourthly, concluding remarks are presentedalongside posing some unanswered...
Following the election of a Labour Government in 1997, Regional Development Agencies(RDAs) were established in the form of...
and laborious regional programmes reliant on dense policy and top-down managerialism (seePugalis, 2011a for a more detaile...
what they considered to be little more than bureaucratic machinery. Consequently, alongsidethe abolition of RDAs (subject ...
accountability with National                    Select Committees and                    Government departmentsAt the hear...
Figure 3. England’s emergent landscape of LEPs, July 2011Functions, such as, business support, innovation, international i...
business finance, the RDAs Grant for Business Investment (GBI) and Research & Development (R&D) grant have been subsumed i...
Governance      The majority of LEP bids largely mirrored the      Cornwall and Isles of Scilly LEP                Cable–P...
management of the Rural Development Programme for England (RDPE) is now deliverednationally by the Department for Environm...
support services from elsewhere, which is anticipated to have ramifications on the ability todeliver projects and may resu...
Fourthly, to what extent were European funded projects contingent on RDA SingleProgramme finance to deliver projects? Inde...
Haughton, 2009; Haughton and Allmendinger, 2007; Haughton and Allmendinger, 2008;Haughton et al., 2009) and ‘soft policy’ ...
administrative responsibility of European funds brings into doubt the ability of LEPs toreflect and support the ‘functiona...
economic regeneration have been centralised with the remaining responsibilities localised asa new round of, almost compuls...
property values rather than investing in economic production’ (Cable, 2010). But will he bein office long enough to heed h...
ReferencesAlbrechts, L. (2006): Shifts in strategic spatial planning? Some evidence from Europe andAustralia, Environment ...
Fuller, C., Bennett, R. J. and Ramsden, M. (2002): The Economic Development Role ofEnglish RDAs: The Need for Greater Disc...
Liddle, J. (2001): RDAs, Sub-Regional Partnerships and Local Regeneration, LocalEconomy, 16(4), pp. 312-323.Marks, G. (199...
Pugalis, L. (2011d): Look before you LEP, Journal of Urban Regeneration and Renewal,5(1), pp. 7-22.Pugalis, L. and Townsen...
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2011- English regions disbanded: European funding and economic regeneration implications - Pugalis and Fisher

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The investiture of a UK Coalition Government in 2010 heralded the (ongoing) production of new sub-national geographies of governance in England. Of primary concern is the disbanding of the English regions, outside of London, which were New Labour’s preferred scale for ‘managing’ economic regeneration during the 2000s. In a bid to rollback the role of the state as part of their deficit reduction plan, the Coalition embarked on a political rescaling strategy resulting in various institutional reconfigurations. This rescaling of state power has significant policy implications in the context of European funding, which is the focus of this paper. By analysing a field of policy activity during a period of significant motion, the intent is to highlight some notable dilemmas, aided by posing some practical questions; in order to prompt some much needed policy discussion and academic deliberation.
Pugalis, L. & Fisher, B. (2011) 'English regions disbanded: European funding and economic regeneration implications', Local Economy, 26 (6/7), pp. 500-516.

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2011- English regions disbanded: European funding and economic regeneration implications - Pugalis and Fisher

  1. 1. English regions disbanded: European funding and economic regeneration implications Pugalis and FisherCite as:Pugalis, L. & Fisher, B. (2011) English regions disbanded: European funding and economicregeneration implications, Local Economy, 26 (6/7), pp. 500-516.AbstractThe investiture of a UK Coalition Government in 2010 heralded the (ongoing) production ofnew sub-national geographies of governance in England. Of primary concern is thedisbanding of the English regions, outside of London, which were New Labour’s preferredscale for ‘managing’ economic regeneration during the 2000s. In a bid to rollback the role ofthe state as part of their deficit reduction plan, the Coalition embarked on a political rescalingstrategy resulting in various institutional reconfigurations. This rescaling of state power hassignificant policy implications in the context of European funding, which is the focus of thispaper. By analysing a field of policy activity during a period of significant motion, the intentis to highlight some notable dilemmas, aided by posing some practical questions; in order toprompt some much needed policy discussion and academic deliberation.Key words: European funding, economic regeneration, sub-national development, staterescaling, governance, Regional Development Agencies, Local Enterprise PartnershipsIntroductionThe present UK Government is a ‘Coalition’ formed between the Conservatives and LiberalDemocrats. After striking a deal in May 2010 following days of intense negotiations (HMGovernment, 2010a), the Coalition made it clear that they wanted to institute a more radical,new ‘localist’ approach to the governance and delivery of economic regeneration inEngland.1 ‘Regions’, understood here as a spatial unit for managing sub-national1 The other parts of the UK – Scotland, Wales and Northern Ireland – are outside the remit of the analysis due totheir unique devolutionary arrangements (see Goodwin et al., 2005). 1
  2. 2. development activity, rebuked by government as part of a political rescaling strategy todemonstrate that a new era had arrived. The Coalition has, in effect, erased the notion of‘region’ from the contemporary English policy vocabulary. To illustrate the ‘death’ of theregion as an organising principle for policy activity (Bentley et al., 2010), civil servants havequietly advised prospective funding bidders to ‘drop the word region’. It is within this climatethat practitioners sardonically joke about belonging to or representing places ‘formerlyknown as regions’. Charting the perpetual stream of supposedly innovative remedies formanaging the ‘regional problem’, it is observed that sub-national development activity hasundergone intermittent periods of policy upheaval, including the 12 month window ofconsiderable change since the election of the Coalition that this paper peers through.Across Europe, sub-national governance reforms over the past decade have enthusiasticallysought out a scalar management fix for the multi-scalar spatial dynamics of contemporarysociety (Gualini, 2006; Haughton et al., 2009; Healey, 2004; Salet et al., 2002). Evans andHarding (1997), for example, point towards the trends across European countries, includingItaly, France and Spain, to embark on projects of decentralisation to regional tiers ofgovernment. Prior to the election of a New Labour Government in 1997, the UK wascuriously out of sync with a Europe of the Regions (Ibid.). Associated with theories of the‘hollowing out’ of the state (Jessop, 2002) through rescaling upwards (e.g. supranationalorganisations such as the EU), downwards (e.g. regional governance) and outwards (e.g. non-state actors), it is well recognised that the role of the state has changed dramatically overrecent decades. Alongside the shift from ‘government’ to ‘governance’ (Davies andImbroscio, 2009), para-state actors and agencies now play a much more prominent role in thepolicy-making arena; a ‘filling in’ of state space (Jones et al., 2005; Shaw and MacKinnon,2011). For some ‘a territorial focus’ has merit in bringing this heterogeneous array of actorstogether (Albrechts, 2006) – a ‘meeting ground’ for integration through a shared sense ofplace (Counsell et al., 2007). What remains more disputed is whether the (ongoing)reterritorialisation of state power has witnessed a reduced or enhanced role of the state, as‘new state spaces’ are being produced (Brenner, 2004).In a bid to rollback the role of the state as part of their deficit reduction plan, the Coalitioninstigated a series of economic regeneration policy reforms as part of a rescaling of statepower. Of primary concern is the disbanding of the English regions, outside of London,which were New Labour’s preferred scale for ‘managing’ economic regeneration during the 2
  3. 3. 2000s (Mawson, 1998; Pugalis, 2009; 2011d; Webb and Collis, 2000). Based on carefulmonitoring of the (ongoing) production of new sub-national geographies of governance thathave begun to emerge in England over the first 12 months of Coalition rule, this paperfocuses on some of the most significant policy implications in the context of Europeanstructural funding. It draws on a range of sources of qualitatively rich material – from localpractitioners, regeneration media and institutional networks – which has recently been shownto produce useful insights (Broughton et al., 2011), especially during periods of momentouspolicy upheaval (Pugalis, 2011d). In addition, the paper is also informed by the authors’reflections of performing a range of professional economic regeneration roles over the pastdecade. Experience includes participating in the production of regional machinery as well asscalar roles above and below the regional governance terrain.2 This unique position providesreflections that perceive the regional scale to be neither ‘good/bad’ or ‘right/wrong’, but as anappropriate spatial unit for coordinating some aspects of sub-national development.It is necessary to point out that the Coalition’s approach remains fluid with many keydecisions yet to be taken. It is within this context that analytical observations presented arenecessarily exploratory and, thus, remain provisional. Writing in June 2010, Harding notedthat ‘The crystal ball … is still a little murky’, but not to such an extent that it should preventus from ‘start tracing in the broad contours of future change’ (Harding, 2010, p. 8). Whilst thecrystal ball remains shadowy, the implications of doing away with regional policyarchitecture remain profound (Pugalis and Townsend, 2012). In light of Walburn’s caution,that ‘[p]ublic policy is now preparing to abandon the experience of recent years, including thegroups practitioners involved, and embark on new initiatives without relying on any clearevidence base’ (Walburn, 2011, p. 76), it is crucial to ask: is it all worth it? By analysing afield of policy activity amidst the throes of significant flux, the intent is to highlight somenotable dilemmas, aided by posing some searching questions; in order to prompt some muchneeded policy discussion and academic deliberation. The remainder of this paper is organisedinto four sections. Firstly, a brief historical review outlines the contours of the trajectory ofEnglish regional policy development. Secondly, the emergent post-regional geography ofgovernance is elaborated on in comparison to previous arrangements. Thirdly, some of thekey European funding and economic regeneration policy implications that have arisen from2 The authors’ combined professional practice includes over a decade employed by a Regional DevelopmentAgency, alongside time spent at a Government Office Region and national and local government. 3
  4. 4. this politically-induced upheaval are examined. Fourthly, concluding remarks are presentedalongside posing some unanswered questions.Regional policy pre and post European Integration‘Regional policy’ has an extensive lineage, with some important international strandsproducing dissimilar trajectories, theoretical divergence and practical departures, alongsidesome more characteristic strands of commonality and convergence. The recent demise of ‘theregion’ from policy discourse aside, most scholars would agree that English regional policycame to prominence during the 1930s (see, for example, McCrone, 1969). A fuller historicaloverview, of what has been described as a ‘topsy-turvy’ course (Walburn, 2011) that has‘ebbed and flowed’ (Pugalis, 2011d), particularly over more recent decades, is beyond thescope of this paper (see, for example, Albrechts et al., 1989; Pike et al., 2006, for a detailedaccount). Nevertheless, it is important to point out that English regional development policywas not a sole outcome of European integration. For example, the establishment of the nineGovernment Office Regions (GORs) (Mawson et al., 2008; Mawson and Spencer, 1997), in1994, under a Conservative Government, partly to satisfy some European environmental andfunding requirements, was not a radically new step. For several decades, England had beenorganised into regional units for statistical purposes. Also, regional administrative outposts ofWhitehall had been a common feature since 1945. See Figure 1 for a map of England’s‘standardised’ regions.Figure 1. England’s standardised regions 4
  5. 5. Following the election of a Labour Government in 1997, Regional Development Agencies(RDAs) were established in the form of QUANGO’s (Deas and Ward, 1999; Fuller et al.,2002; Liddle, 2001; Pearce and Ayres, 2009; Pugalis, 2010). They were tasked withproviding strategic direction and delivery capabilities to support the development of regionaleconomies. The responsibility for the management and administration of EU structuralfunding at the regional level was subsequently transferred from GORs to RDAs. Regionaloversight of European programmes remained with the RDAs for more than a decade;delivered within a regional governance framework with agreed priorities, such as those setout in Regional Economic Strategies (RES). The Coalition’s rejection of regions as a scalarplatform for governance and spatial unit for ‘managing’ economic regeneration interventionsresulted in some crucial upward and downward state rescaling strategies. Notably, thisincluded the centralisation of regional grant apparatus and the creation of a centrally-administered funding pot, curiously named the ‘Regional Growth Fund’ (RGF). Otherelements, including planning, are expected to be localised (subject to legislation).Since the policy recognition of the so-called ‘regional problem’ in the 1930s to date,3 newpolicy remedies have been sought and administered to cure ‘the problem’. A regular featureof the highly centralised system of government operating in England, almost unparalleledacross much of Europe, has been the institutional reworking and rescaling strategies of anincoming government. Typically, the pots of public funding shrank under a ConservativeGovernment, therefore reducing the size and scale of ‘assisted areas’ supported by theregional policy of the previous Labour Government. Based on this understanding, theCoalition’s commitment to disband England’s regional machinery – which had beenincrementally strengthened, though not without some significant setbacks (Rallings andThrasher, 2006; Shaw and Robinson, 2007; Valler and Carpenter, 2010), and developedunder 13 years of Labour Government between 1997 and 2010 – is not uncharacteristic.Although perhaps less characteristic, particularly in an international context, is the speed andmanner of change. Whilst critiques of an almost amnesic state of policy development havelambasted ‘change for change’s sake’, the implications of this state reterritorialisation projectwarrants closer consideration. Nonetheless, it is necessary to briefly sketch out what newpolicy remedy has been designed to combat what the Coalition considered to be ineffective3 Regional differences in terms of GDP per capita are more pronounced in the UK than in any other EU country(European Commission, 2007). 5
  6. 6. and laborious regional programmes reliant on dense policy and top-down managerialism (seePugalis, 2011a for a more detailed discussion).A post-regional geography of governanceIn the lead up to the last general election in May 2010, it was clear that failing a Labourvictory, the status afforded to regions as a scalar platform for governance and spatial unit for‘managing’ economic regeneration interventions would retract. Indeed, the pledges andmanifestoes of both the Conservatives and Liberal Democrats proposed (in outline) to replaceEngland’s nine statutory RDAs with more ‘locally’ accountable governance ensembles (seeFigure 2). Yet, these initial proposals indicated that at least some of the new scalar remedies –under the guise of a Local Enterprise Partnership (LEP) – would reflect standardised regionsin terms of units for spatial organisation.Figure 2. Election pledgesAdapted from Pugalis (2011a).What subsequently transpired was, what was popularly termed a ‘bonfire of the QUANGOs’,as the Coalition systematically set about stripping away, almost entirely without consultation, 6
  7. 7. what they considered to be little more than bureaucratic machinery. Consequently, alongsidethe abolition of RDAs (subject to legislation), GORs were rapidly axed (by March 2011) andstatutory regional plans such as the Regional Spatial Strategy (RSS) revoked (again subject tolegislation) (Bentley et al., 2010; Pugalis, 2011c). In turn, state funding for RegionalObservatories, Regional Leaders’ Boards and Regional Select Committees was withdrawn astheir functions were considered largely defunct (CLG, 2010). Importantly, the act ofdeconstructing Labour’s top-down regional policy architecture, see Table 1, created space,sub-nationally, which prepared the foundations for a new political project; that of LocalEnterprise Partnerships (LEPs) (Cable and Pickles, 2010; HM Government, 2010b; Picklesand Cable, 2010; Spelman and Clarke, 2010).Table 1. Defunct regional policy functionsPolicy function Overriding remit Coalition rationale for abolition/withdrawing fundingRegional To create sustainable Rejection of regions and specifically RDAs onDevelopment economic growth in each of grounds of being unelected, expensive andAgencies the nine English regions unaccountable which fail to represent functional economic geographiesGovernment Office Implementation and Lack democratic accountability, create burdens andRegions monitoring of national policy bureaucracy for local councils and impose arbitrary and the regulatory administrative boundaries over ‘real’ communities management (budget and contractual) of spending programmes of sponsoring government departmentsRegional Spatial Provide regional level Such regional plans and processes were consideredStrategy/Regional planning, economic and to be cumbersome, unresponsive, top-down andEconomic spatial frameworks in expensiveStrategic/Regional collaboration with regional Purported to go against the grain of ‘localism’Strategy stakeholdersRegional Formed by regional No longer a mandate for Regional Observatories toObservatories organisations to provide provide a function at the regional level independent, impartial Some functions considered to be overlay onerous analysis of data to support and duplicitous decision-making and policy ‘Valuable’ activities to be carried forward and development at a sub-national undertaken by other bodies, such as local level authorities or LEPsRegional Leaders’ Responsibility for Unelected to perform a regional roleBoards representing local authorities The Coalition pointed towards an annual public in the production of Regional saving of £16m as further rationale for their Strategies. Other functions termination included: regional funding allocations and local authority cross-boundary issuesRegional Select Established to scrutinise and Closure of RDAs and with no manifestoCommittees monitor RDAs and the authorisation Regional Select Committees had no delivery of services in the further mandate regions to ensure complementarity and 7
  8. 8. accountability with National Select Committees and Government departmentsAt the heart of the Coalition’s ‘new model’ for sub-national development was the incrementalstate sanctioning of more than 30 (larger than local or sub-regional) LEPs (see Figure 3).Acting at the institutional interface between national government and individual localities,LEPs were formed to replace RDAs. Considering that many LEPs, whilst still formative,have a small fraction of the RDAs’ financial draw, is one of several key features whichillustrate that LEPs are not necessarily a suitable replacement for RDAs.Locally constituted cross-sectoral economic regeneration configurations, LEPs vary in termsof their geographical scope, governance, organisational form and priorities (see Table 2).Whilst national policy rhetoric suggests that LEPs have the autonomy to intervene in mattersto enable local growth, the ‘freedom’ of LEPs is significantly curtailed by the lack of statefunding. Confirming suspicions that the Coalition’s discourse of localism is a thinly veileddisguise for the (re)centralisation of powers (Bentley et al., 2010; Pugalis, 2010; 2011d), theLocal Growth White Paper set out permissive guidance on what policy areas LEPs maychoose to engage with (i.e. additional responsibilities without additional powers/resources)and also ‘regional’ policy activities transferred to Whitehall (HM Government, 2010b). Also,it has been observed that fiscal restraint measures are resulting in more centralisedcommissioning powers wherein ‘decisions are moving up the local chain of command’(Broughton et al., 2011, p. 88). The research goes on to note that ‘[w]hile more powers maybe devolved to local authorities, the real power to decide resource allocation is beingcentralized within them – a sort of ‘centralized localism’’ (Ibid.). 8
  9. 9. Figure 3. England’s emergent landscape of LEPs, July 2011Functions, such as, business support, innovation, international investment and businessfinance provide an indication of some significant policy areas previously delivered at aregional scale that are undergoing recentralisation to Whitehall. For instance, in the case of 9
  10. 10. business finance, the RDAs Grant for Business Investment (GBI) and Research & Development (R&D) grant have been subsumed into the Department for Business, Innovation & Skills’ (BIS) national Technology Strategy Board (TSB) and substantially reduced funding amalgamated into the £1.4bn RGF. The RGF was initiated as the Coalition Government’s key financial policy tool designed help ‘rebalance’ the economy by leveraging private sector investment (HM Government, 2010b; HM Treasury, 2011). Recognising that the ‘rebalancing’ trope is multidimensional and permits different interpretations, one key aspect is the geographical facet (i.e. the need to support the regeneration and development of particular places such as those located within the assisted areas of Europe). Table 2. Common characteristics of LEPsKey themes Common characteristics ExamplesRole Most LEPs consider the principal role to be Majority of LEPs, such as North that of strategic leadership Eastern, have continued a Terminology such as ‘influencing’, commitment to provide a strategic ‘advocacy’, ‘support’ and ‘enabling’ has been advisory role rather than a frequently mentioned dedicated delivery capabilityScope and Most LEP proposals tended to reflect the New Anglia LEP has prioritised sixpriorities enterprise brief set out in the Cable–Pickles policy themes and activities: letter, although addressing locally specific business start-up and growth; priorities featured prominently in many bids growth sectors and business Some proposals used the government’s clusters; infrastructure language of ‘rebalancing the economy’ to improvements; lobbying and frame their priorities negotiation; business and community engagement; and skills and workforce developmentForm The proposed form of LEPs tend to be either The Black Country LEP formed as an informal partnership arrangement, often an informal partnership. Several supported by a LA acting as accountable body, LEPs are also considering the or an entity with a legal personality, such as a option of a community interest company limited by guarantee companyFunctions Beyond those functions identified by Cable Cumbria’s LEP intends to: drive and Pickles, such as housing, planning and enterprise, innovation and growth in transport, other functions including access to the Cumbrian economy; stimulate finance, supporting business start-ups and job growth within the private, developing a low carbon economy were community and third sectors; frequently identified in bids provide economic and business Functions identified by government to be intelligence; strengthen Cumbria’s delivered nationally, particularly inward social fabric through pursuing the investment, were considered crucial to the ‘big society’ agenda; and workings of LEPs in many cases influencing the key activities of housing and planning, transport and infrastructure, employment and skills, business and enterprise development, transition to the low carbon economy and support for tourism and other key sectors 10
  11. 11. Governance The majority of LEP bids largely mirrored the Cornwall and Isles of Scilly LEP Cable–Pickles guidance by proposing a have recruited six private sector private-sector chair and equitable board members and five public sector representation across the public and private members sectors. In numerical terms, private sector interests tend to dominate, particularly in comparison to voluntary and sector interests represented at board levelGeography Almost all LEP submissions were composed A single upper-tier bid was of at least two upper-tier authorities, with successful in Cumbria frequent claims of territories matching ‘natural economic areas’Funding and Consistent calls for accessing the Regional Greater Birmingham and Solihullother sources Growth Fund. Several bids suggested that they LEP have indicated that they intend would consider pooling public-sector to borrow money through Taxof finance resources and there was significant interest in Increment Financing aligned with a place-based budgeting proposed Enterprise Zone in Birmingham city centre. Adapted from Pugalis (2011d). Politically-induced upheaval: policy implications In view of regions performing a key role in the administration of European funding, owing to the fact that they form the basis for the EU’s territorial cohesion policy, a (provisional) analysis of the dilemmas introduced and anticipated policy implications arising from the politically-induced disbanding of regions is all the more intriguing. The ‘European question’ of the UK Government’s reterritorialisation project has not bypassed the attention of practitioners and scholars alike. Soundings from workshops held in Leeds, Birmingham and London throughout March 2011 gauged particular concern surrounding the future management of European funding (Mott MacDonald, 2011). Indeed, concerns emanating from sub-national policy circles led Pugalis (2011b) to question ‘How will ERDF be managed and by whom?’. Firstly, in the short-term, what are the anticipated arrangements for the management of European funding? The abolition of England’s RDA network as a preferred delivery vehicle for European funding witnessed a transfer of management arrangements to alternative organisations with different scalar remits. For example, ERDF is now managed at the regional scale by self-contained Department for Communities and Local Government (CLG) units, which is akin to ‘centralised regionalism’. European venture and loan capital programmes (i.e. JEREMIE and JESSICA) are to be transferred to Whitehall, whilst the 11
  12. 12. management of the Rural Development Programme for England (RDPE) is now deliverednationally by the Department for Environment, Food and Rural Affairs (DEFRA) andadministered locally by Local Action Groups. During this transitional period, there was a lossof human resources and tacit knowledge accumulated during years of practice. Combinedwith a lack of policy clarity, the viability of delivering European-funded projects pre and post2013 has been called into question. One former RDA European manager interviewed,believed that the inability of European teams to allocate financial resources in line withtargeted ‘regional’ policy interventions ‘may have a longer-term negative impact upon localand regional economies in the future’. The inference was that the pipeline of projectsfocussed on longer-term, ‘strategic’ interventions could be significantly disrupted or evenbroken beyond repair.Secondly, what impact will the delivery of European funding from a fractured array ofinstitutional organisations have on ‘regional’ priorities? The transition from a regionallyintegrated and embedded (strategic) delivery structure to a more fractured array of disparatemanagement bodies is likely to create a disconnect between strategic priorities and projectsthat receive European funding (Marks, 1997; Pearce, 2001). Indeed previously, Europeanfunding was commonly aligned with regional economic priorities and RDA funding.Assuming ‘regional’ policy and strategy continues to take precedence in the immediate futurehow will current and future European projects correlate with the priorities of LEPs and otherlocal and sub-regional stakeholders? Moreover, what will constitute ‘regional’ priorities post2013? It would be reasonable to envisage that in lieu of a regional policy-framework, LEPsand other sub-national entities will be directly competing for what limited economicregeneration funding remains.Thirdly, in the absence of RDA support services where and from whom will Europeanfunding teams garner support from? The ‘wrap-around’ support provided by RDAs,particularly in the provision of policy, economic and spatial strategy, legal advice, businessfinance, and marketing assistance is no longer available. Without the in-house support andcentral ‘hub’ provided by the RDAs, European projects ‘will be difficult to coordinateindependently and time-consuming to develop, monitor and deliver ERDF funded projects’,argued another interviewee. Retreating from the co-alignment of policy practices, could giverise to further fragmentation, overlaps, duplications and inefficiencies (Healey, 2006). Devoidof assistance from the RDA, project bidders and European funding teams will have to procure 12
  13. 13. support services from elsewhere, which is anticipated to have ramifications on the ability todeliver projects and may result in inefficiencies.Figure 4. European structural funding for England, 2007-2013 13
  14. 14. Fourthly, to what extent were European funded projects contingent on RDA SingleProgramme finance to deliver projects? Indeed, who will fill the funding void left by thedemise of RDAs? In addition to the coordination and delivery of regional economicdevelopment programmes, RDAs were responsible for providing ‘match funding’ toEuropean programmes. For instance, in the past four years, the RDA for the North East ofEngland, ‘contributed approximately £320m or 80 percent of Single Programme matchedfunding to ERDF projects’, according to one officer. Closure of the RDA network is ofparticular concern for the West Midlands, North West, North East, and Yorkshire and theHumber which received over €4bn in EU funding allocation for 2007-2013 (see Figure 4).Without the security and match-funding of the RDA Single Programme the ability of thoseregions to identify co-funding partners and expedite approximately €1.4bn in ERDF projectsis severely diminished.Fifthly, in recognition that LEPs are to receive limited state funding, who will plug thisfinancial void needed to deliver sub-national development objectives? The abolishment ofRDAs has also created a significant financial void. For example, during the 2007-2008funding period, the nine RDAs collectively had a Single Programme budget of £2.3 bn(Pugalis, 2010). Further, the Coalition’s deficit reduction plan has witnessed the retrenchmentof economic regeneration budgets. The public sector was unquestionably the most prominentco-partners in the majority of European-funded projects in England. Contributions from theprivate sector have historically been hampered by state aid regulations and projects biddingfor the first round of RGF assistance were unable to match fund with ERDF. The latter is aprime example of the disjointed practice evidenced during the space of transition. This wouldimply that the dismantling of regional machinery was reactionary rather than proactivelytransformative. Indeed, the government’s economic transition plan lacks strategic awarenessand coherence (Pugalis and Townsend, 2012). The vacuum left by the RDAs couldpotentially derail existing EU projects reliant on Single Programme funding and causesignificant repercussions for longer-term regeneration projects post 2013. As a consequence,England languishes in a position of ‘service delivery organizations fighting for fewer pots ofmoney, each with less money in them’ (Broughton et al., 2011, p. 89). Yet, a glimmer ofoptimism is provided by Broughton and colleagues, who suggest that intensified competitionfor resources could open up opportunities for collaboration. As with any policy shift,adapting to change can render new and innovative working practices. From the wreckage ofdemolished regional institutions, new ‘softer spaces’ of governance (Allmendinger and 14
  15. 15. Haughton, 2009; Haughton and Allmendinger, 2007; Haughton and Allmendinger, 2008;Haughton et al., 2009) and ‘soft policy’ instruments (Hutton, 2007) are anticipated to emerge.Operating in the interstices of formal politico-bureaucratic-legal policies, processes andorganisational confines, the strategies of softer spaces occupy and help connect multi-scalardecision-making arenas, ‘whereby strategies try to integrate European, national and sub-national policies and priorities. Actions within the strategies have overlapping geographiesand actor constellations. And there are few regulatory requirements involved: the emphasis ison utilising existing funds and instruments and coordinating them. The strategies act as a‘bridge’ between vision and implementation’ (Stead, 2011, p. 165). Not necessarily replacingmore formalised ‘harder’ spaces and processes, ‘softer’ ways of operating arecomplementary. They ‘have a pragmatic approach’ (Ibid.).Sixthly, with the production of new geographies of governance, particularly concerning theformation of LEPs, what is the anticipated impact on the medium to long term administrationof future rounds of EU Structural Funding? Transitional arrangements are intended to applyup until the remainder of the 2007-2013 programme. However, post-2013, how willEngland’s sub-national territories align with European policy? Without regional institutions,how will negotiations, relations and representations with the EU unfold? For instance, willthe Coalition Government ‘renationalise’ EU regional policy and financial support? (Bentleyet al., 2010). Such a move would not only further contradict the Coalition’s localism rhetoric,but would present challenges for European territorial policy.Seventhly, what will be the role of LEPs in respect of European funding and what voice willthey have in Europe? The role of LEPs within the management and delivery of Europeanfunding programmes is still to be clearly defined. The Coalition Government’s intention isthat ‘spending decisions provided to England from the EU budget 2014-20 should be taken atthe local level’ (HM Government 2010b). However, there has been no indication fromgovernment that they intend to devolve the management of European funding to LEPs (MottMacDonald, 2011). Whilst ministers have suggested that LEPs will play an ‘important’ rolein this respect, soundings from civil servants suggest that this will be little more thansupporting and/or endorsing funding bids. Thus, it would appear LEPs are expected to play arole, albeit marginal, in shaping the next round of European funding rather than providing theform of management oversight and integration of funding streams previously undertaken bythe RDAs. Moreover, the impracticality of 30-plus entities providing management and 15
  16. 16. administrative responsibility of European funds brings into doubt the ability of LEPs toreflect and support the ‘functional economic areas’ they purport to serve (HM Government,2010b). As one of the few constants amongst significant change, local authorities areappropriate bodies to help address many of the dilemmas presented by the Coalition’s sub-national policy review (Walburn, 2011), in terms of performing a substantial role in theprioritisation, coordination and management of European funds. Yet, despite numerousinternational precedents, the Coalition appears to be following a steady flow of UKGovernments that have variously proclaimed to decentralise powers, although each has failedto relinquish central control.Concluding remarks, dilemmas and unanswered questionsThe geographies of the state are once again in sudden motion in England. Unique to thislatest round of destabilised institutional settings and socio-political contestation, is theprofound European quandary. How will the EU view these changes? Will England be furtherout of step with a Europe of Regions? Across many parts of England, particularly the assistedareas, localities have struggled economically for decades following the first round ofindustrial restructuring in the 1930s. Consequently, economic regeneration funding, whetherdirect grants to businesses, to help upskill and/or retrain the prospective labour force, orinfrastructural improvements, is an essential public policy. European funding performs adecisive role at the sharp end of delivery. ‘Matched’ against other means of funding, it canoften be the deciding factor in a project progressing or not. It is within this context that thedisbanding of the English regions presents some significant policy consequences for thoseplaces in the greatest need of European support. The new direction for English sub-nationalpolicy also poses some important challenges for compatibility with European policy-legislation. The paper concludes with some remarks on identified dilemmas and thosequestions which remain unanswered.Carrying a profoundly anti-regionalist ideology, upon appointment to government theCoalition quickly embarked on the dismantling of RDAs, GORs, Regional Leaders’ Boards,Regional Select Committees and Regional Observatories. Subsequently, the territoriallandscape of England has been radically altered in little over a year into the CoalitionGovernment’s tenure. With public consultation noticeably absent in the quest to makechanges under the banner of ‘localism’, some of the potentially more powerful aspects of 16
  17. 17. economic regeneration have been centralised with the remaining responsibilities localised asa new round of, almost compulsive (Jones, 2010), reorganisation was ushered in. Morealarmingly, England’s scalar politics, organisational reorganisations and endless policyadaptations has repercussions beyond its own shores. Centralising tendencies over the pastfew decades have put England somewhat ‘out of step’ with the rest of Europe (Crouch andMarquand, 1989). With the rejection of regions in 2010, this disconnect shows no signs ofwaning.The transitional governance arrangement for the management and administration of structuralfunds in England is an emerging and not altogether clear landscape. In the short-term, thedisbanding of RDAs resulted in the transfer of ERDF, ESF and RDPE programmes to centralgovernment control with management administered across a confusing array of scales.However, this state rescaling strategy presents significant policy implications for Europeanfunding and raises some serious questions. Firstly, the rejection of regions places theCoalition Government out of step with the rest of Europe. Secondly, it is anticipated that thevoice of sub-national territories of England will diminish in the European arena. Thirdly, ifthe EU does recognise England’s new territorial structure, how will the CoalitionGovernment ‘select’ an appropriate geographical scale for the administration of the 2014-2020 Structural Funds? Fourthly, which institutional delivery bodies, and at what territorialscale, will the Coalition propose to take forward the longer-term management of Europeanstructural funding? Fifthly, and linked to the previous open question, how will such aproposition be viewed by the EU? At this juncture it is unclear whether the management ofEuropean funding will be undertaken by Whitehall, LEPs, groupings of local authorities, orperhaps a new institutional configuration.In light of the EU’s goal of territorial cohesion, through the application of integrated andmulti-level governance arrangements, it remains to be seen what impact England’s disparategovernance arrangements for the management of European funding will have upon ‘regional’economies they set out to serve. Accordingly, a fundamental question arises: is it all worth it?The emergent policy, which remains in motion, will require time to implement and a muchlonger period to bed in. Schizophrenic policy shifts have quashed far too many promisingpolicy innovations. Vince Cable, the Business Secretary, appears to recognise the pitfalls ofsuch an approach, claiming that ‘[t]he perils of short-termism have been all too apparent overthe past few years ... great damage has been done by speculating on a short-term bubble in 17
  18. 18. property values rather than investing in economic production’ (Cable, 2010). But will he bein office long enough to heed his own advice? Expressing more hope than conviction,Walburn has pleaded that ‘out of the wreckage of organizational mayhem which has affectedlocal economic development in recent years, something more permanent and effective mightemerge at last’ (Walburn, 2011, p. 80). Only time will tell, but the changes beingimplemented by the Coalition appear to be more reactive than transformative, which is out ofstep with incremental policy evolution practised elsewhere across Europe. 18
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