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Sub-national economic development: Where do we go from here? Pugalis 2011


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The UK’s Liberal Democrat–Conservative (Lib–Con) Coalition Government has been quickly dismantling New Labour’s policy framework since it gained political control in May 2010. Contemplating how this transition might play out and the impact upon regeneration policy, a preliminary map of the road from the incumbent English Regional Development Agencies to myriad Local Enterprise Partnerships is sketched out. The analytic interpretations are based on insights ‘in the field’ over the past decade and grounded in policy ‘chatter’. Reflecting on the importance of timing, resource availability and the policy vacuum arising between localities and national government, attention is drawn to countless questions that remain unanswered. Further, the Lib–Con’s sub-national economic policy architecture is demonstrated as remaining very much work in progress. The paper highlights that the current transitional period is likely to be disorderly and possibly ineffective: deconstruction is all well and good if the alternative reconstructions offer added value, but the potential to lose out is significant. While hope is expressed with a localism agenda which could potentially empower localities to devise unique policy solutions administered by tailored spatial configurations, it is cautioned that new spatio-institutional ‘fixes’ may open up new issues just as old ones are closed off. A policy story still being written, the analysis is of broader international appeal. Consequently, those plying their trade outside England can reflect on this and act accordingly the next time a new (and presumably better) policy innovation is proposed

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Sub-national economic development: Where do we go from here? Pugalis 2011

  1. 1. Sub-national economic development: Where do we go from here? Lee Pugalis, September 20101Paper should be cited as:Pugalis, L. (2011) Sub-national economic development: where do we go from here?, Journalof Urban Regeneration and Renewal, 4 (3), pp. 255-268.Abstract The UK‘s Liberal Democrat–Conservative (Lib–Con) Coalition Government hasbeen quickly dismantling New Labour‘s policy framework since it gained political control inMay 2010. Contemplating how this transition might play out and the impact uponregeneration policy, a preliminary map of the road from the incumbent English RegionalDevelopment Agencies to myriad Local Enterprise Partnerships is sketched out. The analyticinterpretations are based on insights ‗in the field‘ over the past decade and grounded in policy‗chatter‘. Reflecting on the importance of timing, resource availability and the policy vacuumarising between localities and national government, attention is drawn to countless questionsthat remain unanswered. Further, the Lib–Con‘s sub-national economic policy architecture isdemonstrated as remaining very much work in progress. The paper highlights that the currenttransitional period is likely to be disorderly and possibly ineffective: deconstruction is allwell and good if the alternative reconstructions offer added value, but the potential to lose outis significant. While hope is expressed with a localism agenda which could potentiallyempower localities to devise unique policy solutions administered by tailored spatialconfigurations, it is cautioned that new spatio-institutional ‗fixes‘ may open up new issuesjust as old ones are closed off. A policy story still being written, the analysis is of broaderinternational appeal. Consequently, those plying their trade outside England can reflect onthis and act accordingly the next time a new (and presumably better) policy innovation isproposed.Keywords: Sub-national governance, regeneration, economic policy, regional developmentagencies and local enterprise partnerships1 Dr Lee Pugalis Senior Lecturer Urban Theory and Practice, Northumbria University Visiting Fellow, Global Urban Research Unit, Newcastle University 1
  2. 2. SETTING THE SCENESince the emergence of regional industrial policy in the 1930s, followed by an explicit urbanpolicy focus not long after, England has become a veritable laboratory for sub-nationaleconomic policy innovations. Usually, this tends to involve reshuffling the pack of cardsresulting in variable spatial ‗fixes‘ and governance reworkings. It is therefore no surprise thatthe UK‘s Liberal Democrat–Conservative (Lib–Con) Coalition Government has been quicklydismantling New Labour‘s policy framework since David Cameron (Conservative PartyLeader and now Prime Minister) and Nick Clegg (Liberal Democrat Leader and now DeputyPrime Minister) shook on a deal in May 2010. On 22nd June, 2010, George Osborne, theChancellor of the Exchequer, set out his ‗Emergency‘ Budget with a five-year plan to rebuildthe British economy.1 The plan sets out tough action to tackle the public-sector budget deficitand change the tax system, as well as measures to encourage enterprise and stimulate private-sector-led economic prosperity. As a result, it is widely expected that regeneration over thenext decade will be more austere than it was under New Labour‘s stewardship during theprevious decade.2 While the details are lacking at the time of writing (September 2010), and what littlehas been publicised by Ministers has often been contradictory, the Budget formalised theLib–Con‘s intent to replace the incumbent eight English Regional Development Agencies(RDAs) outside London with myriad Local Enterprise Partnerships (LEPs).3 Paragraph 1.8 ofthe Budget states that ‗[t]he Government will enable locally elected leaders, working with business, to lead local economic development. As part of this change, [RDAs] will be abolished through the Public Bodies Bill. A White Paper later in … 2010 will set out details of these proposals. As part of this, the Government will: support the creation of strong [LEPs], particularly those based around England‘s major cities and other natural economic areas, to enable improved coordination of public and private investment in transport, housing, skills, regeneration and other areas of economic development‘.1This briefest of statements was followed by a letter from Government, dated 29th June 2010,inviting ‗councils and business leaders to come together to consider how [they] wish to form[LEPs] … enabling councils and business to replace the existing [RDAs]‘.4 2
  3. 3. Guided by the objective ‗to help strengthen local economies‘, LEPs are put forwardby the Coalition Government as the only key apparatus by which to reform sub-nationaleconomic development. Penned by Vince Cable, Secretary of State for Business, Innovationand Skills, and Eric Pickles, Secretary of State for Communities and Local Government, theletter claims that Government is ‗working with the [RDAs] to enable this transition:[Government] are reviewing all the functions of the RDAs‘, surmising that ‗some of these arebest led nationally, such as inward investment, sector leadership, responsibility for businesssupport, innovation, and access to finance‘. It can be contended, however, that, if all thesepresent RDA functions were centralised, this would significantly undermine the Coalition‘slocalism agenda, together with the ability of LEPs to influence their local economies. In contemplating how the transition may play out, a preliminary map of the road fromRDAs to LEPs is sketched out. The analytic interpretations given are based on the author‘sinsights ‗in the field‘ over the past decade, including stints as a civil servant (at the thenOffice of the Deputy Prime Minister and Government Office for London), quango employee(representing One North East Regional Development Agency), researcher (based atNewcastle University), and more recently a local government officer (serving DurhamCounty Council). Grounded in policy ‗chatter‘ influenced by and influencing blogs, newsstories and articles, alongside ‗official‘ — although often contradictory — ministerialpronouncements and letters, departmental press releases and snippets of text in Governmentpublications, it is demonstrated that the Lib–Con‘s sub-national economic policy architectureremains very much work in progress. Though the analytical focus of this paper is spatiallyspecific to England, the policy story unfolding of economic space in transition is of widerappeal. It is hoped that the international community of researchers, practitioners, policymakers and academics can draw on these insights to help inform the scale, scope and pace ofeconomic policy transitions in other spatial contexts. The remainder of the paper analyses England‘s transitional sub-national economicpolicy. In the next section, a brief background to the role and purpose of RDAs is provided astheir eventual downfall is analysed. The third section examines the intended function ofLEPs. In the fourth section, the previous analysis used to theorise the transition from RDAsto LEPs is drawn upon. The paper concludes at a preliminary point with some final thoughts. 3
  4. 4. ONE-STOP SHOPS: THE ROLE OF ENGLISH REGIONAL DEVELOPMENTAGENCIESConceived under a Labour Government, RDAs are non-departmental public bodies, orquangos, set up under the Regional Development Agencies Act 1998 to facilitate regionaleconomic development (see Figure 1). Intended as strategic drivers of regional economicgrowth, under the Act, each Agency has five statutory purposes, which are:1. to further economic development and regeneration2. to promote business efficiency, investment and competitiveness3. to promote employment4. to enhance the development and application of skills relevant to employment5. to contribute to sustainable development.These five duties were encapsulated in Regional Economic Strategies, which RDAs werecharged to produce on behalf of their respective regions.5 According to the UK Departmentfor Business, Innovation and Skills (BIS) ‗The RDAs‘ agenda includes regeneration, taking forward regional competitiveness, taking the lead on inward investment and, working with regional partners, ensuring the development of a skills action plan to ensure that skills training matches the needs of the labour market.‘6Whitehall responsibility for sponsorship of the RDAs moved from the former Department forthe Environment, Transport and the Regions to the then Department for Trade and Industry in2001, then to what was the Department for Business, Enterprise and Regulatory Reform from2007, and now rests with BIS. The RDAs have received funding through a Single Programme budget (known as the‗single pot‘) since April 2002, which includes contributions from BIS, the Department ofCommunities and Local Government (CLG), the Department for the Environment and RuralAffairs, UK Trade and Investment, and the Department for Culture Media and Sport. Fundingsupport totalled £2.3bn for the nine RDAs in 2007–08, which has reduced to approximately£1.5bn per annum over the past couple of years and has been markedly eroded since theCoalition entered power. The merry-go-round of departmental sponsors, together with adiffuse collection of departmental funders — the largest being CLG — necessitated RDA 4
  5. 5. flexibility, as they have had to adapt to new responsibilities such as a statutory planningfunction.Figure 1: Map of the UK distinguishing each of the English regions Indeed, as Lord Mandelson, the then Business Secretary, began to play a lead role inthe remit of RDAs towards the end of Labour‘s term in office through his ‗industrialactivism‘ brand of economic development,7 he declared: 5
  6. 6. ‗Industrial activism has to be built on precise regional knowledge of what is needed in terms of infrastructure, investment and training. I see the RDAs taking a leading role in this. Indeed I believe it should now be their defining role. Driving a jobs and growth agenda with regional partners, regeneration and infrastructure bodies, and, importantly, local authorities.‘8The Labour Government‘s 2007 ‗Review of sub-national economic development andregeneration‘ (SNR)9–11 and national Regeneration Framework in 200812 recognised the needfor RDAs to ‗reprioritise their investments‘ so as ‗to maximise the impact of the single pot onregional economies … [and] ensure that investment in physical regeneration and businessinvestment complement each other and support the RDAs‘ overarching economic growthobjective‘.13 One only has to take a glance at each of the nine RDAs‘ corporate plans,investment priorities and plethora of strategies, to appreciate that they have an extensiveremit, but arguably of more interest is each RDA‘s spatially flavoured economic developmentapproach. Some have prioritised place quality enhancements and physical regeneration, whileothers have looked to innovation or enterprise, which is reflected in the organisationalstructures of each RDA, with some opting to use local delivery partners more than others. But according to Vince Cable, a leading figure in the Coalition Government, RDAperformance has not only been unsatisfactory, but also ‗wasteful‘,14 which accords withrecent critiques of hyperactive, fragmented and congested sub-national economicgovernance.15 Nevertheless, in 2006 the National Audit Office adjudged some RDAs to be‗performing strongly overall‘,16 and independent evaluation (of sorts) in 200917 concludedthat, for every £1 of RDA investment, there has been a return of at least £4.50 for regionaleconomies, which increases to £6.40 when longer-term economic benefits are considered.18Even so, the writing was on the wall for RDAs when David Cameron proclaimed in May2008 that ‗[t]here‘s a very strong case, at least in parts of the country, that the RDAs shouldgo altogether‘, claiming many have been a ‗disaster‘.19 The Coalition Government haveconfirmed their intent, subject to legislation, to abolish RDAs by no later than March 2012,with many expected to be wound up much sooner. Views from the field show that manyRDA employees are sitting around twiddling their thumbs, as central Government haveeffectively curtailed the development of new economic programmes and regenerationinitiatives. In addition, many sub-regional soft policy spaces — including city regions andlocal economic partnerships — are well placed to hit the ground running, perhaps signallingthe demise of some RDAs well before 2012. 6
  7. 7. The Labour Government‘s national Regeneration Framework set out a revised role forRDAs in 2009 including ‗work[ing] with national, regional and sub regional partners todeliver economic plans and investment which raise the sustainable economic growth of theregion and provide economic opportunities to people throughout the region, helping toconnect areas of need with areas of opportunity‘.13 Further, they were expected to ‗identifythe functional economic areas within the region that are the priority areas for regeneration‘.13Nevertheless, the downfall of RDAs, as perceptively anticipated by some commentators,20can be attributed in part to their unaccountability to local government; operating in effect as‗arms of central Government‘. New Labour‘s failure to implement elected RegionalAssemblies meant that the inception of business-led RDAs created a gaping democraticdeficit. Consequently, this new ‗hub of power‘ resting in the hands of a dozen or so privatesector individuals on the board of each RDA has often resulted in the marginalisation of localpriorities, viewpoints and needs. It can be argued that RDAs — following Labour‘s SNRpolicy — have tended to back winners: focusing investment in areas of opportunity, including‗employment hubs‘ and other choice places. Such an approach obviously has its benefits,with supporters pointing towards economic competitiveness, while detractors draw attentionto social justice and environmental sustainability, for example. Recently, and aligned with the demise of Labour and rise to power of the Lib–Cons,the political rhetoric has sensationally changed to the point where players in the game areadapting their language in a manner not too dissimilar to the way in which chameleons adapttheir colour to blend in with their environment. But, will the transition from RDAs to as-yet-undefined LEPs be worth it? Will ongoing policy fixes enable an enterprise surge or will theregeneration successes over the last decade quickly rescind? These questions and otheremerging issues are considered in the remainder of the paper.ABOLISHING BUREAUCRACY? LOCAL ENTERPRISE PARTNERSHIPSAs the 2010 Cable–Pickles letter paves the way for ‗local businesses and councils to worktogether to develop their proposals for local enterprise partnerships‘ before the set deadline of6th September, 2010 — with additional policy guidance not expected to emerge from thewidely anticipated White Paper on sub-national economic growth until after the October 2010Comprehensive Spending Review — Government ‗want to encourage a wide range of ideas‘guided by some broad parameters covering: 7
  8. 8. — role— governance— size(see Figure 2 for a detailed breakdown of Government parameters and criteria).Figure 2: Government parameters and criteria While the letter was co-signed by Cable and Pickles; providing the impression of aunited front, noises of a ‗turf war‘ between the two figureheads and their respectivedepartments, continue to grow louder. The former is thought to see the benefits of retaining aregional economic presence in the North and Midlands, whereas the latter is antipathetic toanything ‗regional‘ (or indeed ‗strategic‘, as many planners and developers would attest inresponse to the hasty revocation of Regional Spatial Strategies).21,22 Despite theGovernment‘s determination ‗that the transition from the existing RDAs be orderly, workingto a clear timetable‘, the Coalition‘s ad hoc policy pronouncements, to date, have arguablybeen haphazard and ill-timed. Indeed, Pickles‘ infamous letters are causing consternation upand down the country as he slavishly undoes CLG policy developed by the previous Labour 8
  9. 9. Government over more than a decade, with little consideration of legalities, practicalities andconsequences. Following the revocation of regional strategic planning, and by implication housingdelivery targets in England, on 6th July, 2010, statutory planning has been left in a whirl ofconfusion. Consequently, development uncertainty spirals as practitioners wait for theappeals system to enter overdrive. Indeed, by 10th August, CALA Homes, a privately ownedhouse builder, made an application for a judicial review into Pickles‘ decision to scrapRegional Spatial Strategies. Believing the revocation of the regional planning framework tobe ‗unlawful‘, CALA issued a statement asserting that as a ‗consequence of the Secretary of State‘s decision, whether intended or not, has been to curtail development in many areas including those where there is a clear need … Without consultation, transitional arrangements, or even a very clear idea of what the regime will look like, there is now a policy vacuum. We are simply seeking to establish the legal framework that we operate in.‘From a practitioner‘s perspective, the regional tier of policy and governance is perhaps bestdescribed as a necessary evil: bureaucratic, cumbersome and at times appearing irrelevant atthe local level, it nevertheless provides a space to negotiate strategic decisions that transcendlocal administrative boundaries and thus provide development certainty.THE TRANSITION FROM RDAS TO LEPSContending that the transition period is likely to be anything but orderly, the remainder of thispaper sets out a preliminary map to navigate the road from RDAs to LEPs. First, timing is paramount. With most RDAs set to stay operational (to lesser orgreater degrees) until March 2012, it is crucial that LEPs are up and running well in advance.In economic policy circles, it is a widely held view that the rollout of LEPs will take place atvariable speeds. Some areas will be fortunate enough to build on existing partnershipcollectivities, such as Multi Area Agreements or City Development Companies (CDCs),23and therefore be able to establish LEPs reasonably quickly. At the opposite end of thespectrum, however, some areas may not have the same level of trust among partners or a 9
  10. 10. limited history of cross-boundary and cross-sector cooperation. In these cases, institutingLEPs is likely to take much longer, and it may take several years until they are fullyoperational in the sense of transforming local economies. Coordinating the rollout of one sub-national economic entity with the rollback of another would provide the option for key skillsto be retained as RDA staff are transferred to LEPs or nationally ‗led‘ programmes. Amismatch of timings would not only threaten the livelihood of thousands of regenerationpractitioners, but also put in severe jeopardy the economic future of those fragilecommunities they are tasked with supporting. Another key transfer would involve RDA assets — in the form of arm‘s-lengthcompanies, joint venture arrangements, land holdings, property and development options —to LEPs or alternative bodies, such as local authorities. As Osborne‘s Budget took an axe tocapital spending (with most departmental budgets anticipated to operate with at least 25 percent fewer resources over the medium-term financial planning period), an asset-led approachto regeneration is likely to be one of the few deliverable options open to LEPs. ‗Sweating‘local authority and other public-sector assets is a tactic that many English councils havebecome accustomed to over the past few years. Yet this asset-driven approach has ofteninvolved the expertise and resources of RDAs. Government pronouncements that thetransition will be smooth appear unlikely. If the Lib–Con Coalition decides to cash in onRDA assets as a short-term strategy to ease the budget deficit, it may well result in significantdelays to long-term regeneration schemes underpinning the revival of depressed localeconomies. With a dearth of investors, and development financing almost impossible toobtain without pre-lets, the stalling and ‗mothballing‘ of complex urban regeneration projectswould struggle to regain development momentum. Against a background of fiscal austerityand private-sector conservatism, it would not be so surprising if many of the flagshipregeneration initiatives championed (and financially backed) by RDAs fell off the deliverycliff. Despite the best wishes of the Coalition Government for an ‗orderly transition‘ whichmaintains the momentum of delivery,6 it has been argued24 that this latest round ofinstitutional upheaval is an example of the untoward British vices of short-termism andmasking centralisation as decentralisation. Drawing on international exemplars, such as theMinistry of International Trade and Industry in Japan, the German Fraunhofer Institutes andSitra, the Finnish innovation fund, it is asserted that institutions require time to develop andmake a positive impact. Perpetual restructuring, akin to ‗musical chairs‘, tends to paralyse the 10
  11. 11. whole system, by creating ‗uncertainty about who will be left standing when the game ofmusical chairs comes to an end‘.24 As a result, time and resources are disproportionatelyexpended on navigating transitional spaces, different governance networks and grappling newpolicies, procedures and institutional rules. It is further suggested that the only winners in thisperverse game are the ‗army of highly paid consultants‘, who in the authors experience often‗ask you for your watch in order to tell you the time‘. As new organisations are constituted, new forums convened, new relationshipsnegotiated, new skills acquired and new funding competed for, what will happen to the taskat hand? Continuous tinkering is an unwelcome distraction from the central task ofsupporting businesses and regenerating communities. At the same time, ongoing institutionalupheavals can result in the loss of ‗tacit knowledge‘,25 local political nous,26 institutionalcapacity and expertise. Consequently, ‗nine times out of ten the costs of transition outweighthese modest gains‘.24 It could be suggested that the reconfiguration of sub-national economicgovernance, thereby producing a transitional economic space, is an unwritten policy ploy ofthe Lib–Cons. Focusing attention on governance aspects, strategies and process issues overthe next few years may be an ideal way of concealing the colossal reductions in regenerationresources. Secondly, the laudable role of LEPs must be supported with a reasonable level ofresources. Different versions of the Cable–Pickles letter relating to the matter of singlerunning costs have obscured the picture.27 Regardless, the issue of quotidian operational costswill be incidental if the finance (including lending powers) is not in place to deliver economicregeneration support initiatives. While aspects of the Lib–Con‘s ‗Big Society‘ and ‗localism‘agendas — which seek to return responsibilities to localities and their communities — arelaudable, if perhaps a little impractical, new powers and responsibilities for councils via LEPswill be almost futile without the financial resources and instruments to deliver. Likewise,LEPs with limited financial muscle will struggle to maintain proactive private-sectorcommitment. Interest and activity relate fundamentally to the supply of money: when thestream of money dries up, the dynamic input of private-sector entrepreneurs can (sadly)wane, as their attendance clearly tends to fall off when agendas lack actions. Resignation ofbusiness members from LEPs is to be expected when ‗bureaucracy gets in the way ofbusiness‘. The fleetingly mentioned Regional Growth Fund (RGF), trailed as a £1.4bn pot ofcash available for private- and public-sector bodies to bid for funding, which will run initially 11
  12. 12. from 2011 to 2014, is a fraction of the resources that the previous Labour Governmentcommitted to RDAs.28 Excluding separate funding arrangements for housing and transport,the RGF is likely to be the principal means of accessing funds for sub-national economicinterventions.29 But, the extent to which a national economic fund, of less than £500m perannum, is likely to achieve the Coalition‘s lofty objective of a rebalanced economy remainsan open question. Considering that Whitehall departments, local authorities and the quangosthat do survive — such as the Homes and Communities Agency — are bracing themselvesfor severe budget reductions over the next four years (and possibly longer), it might becautioned that savage public service cuts together with devastated regeneration initiativesmay trigger what economists refer to as a ‗double dip‘ recession. If such a double dip doesnot materialise, it remains probable that marginal places will suffer disproportionately.Consequently, the present author would concur with other commentators, such as Coaffee,2that regeneration interventions over the next decade will be more focused (and might beadded financially constrained), and hope that his conjecture that activities are likely toconcentrate ‗on areas of acute poverty with investment strategies following the path ofgreatest need‘ rings true. It is doubtful, however, that social justice ideals will usurpneoliberal opportunism: when it comes to the crunch, funding decisions are usually swayedby the extent of private-sector ‗leverage‘.30 Lib–Con rhetoric that the public sector needs to retract from an interventionist role inorder to release the business community to lead an economic recovery may have some meritin those places underpinned by a relatively buoyant private sector. For the rest of the country,however, the areas of need and public-sector dependence, outlying the places of (investment)choice and opportunity, including much of Northern England and the Midlands, there is adanger that the progress made over the previous decade up until the credit crunch will rapidlyrecoil.31,32 In its place may not be a flurry of private enterprise envisaged by the Coalition, butinstead, former public-sector workers (including regeneration practitioners) adding to thenation‘s unemployment register, as talent is, in effect, wasted. Slavishly reducingregeneration resources for those places most in need, and in turn where the private sectorrefuses to invest, is akin to ‗robbing Peter to pay Paul‘: savings made through regenerationfunding cuts are likely to be soaked up by increased demand for health and welfare support. Itis probable that the rollout of this type of sub-national economic policy will exacerbate‗unequal places‘ in cities,33 as well as between regions. 12
  13. 13. Thirdly, a cavernous policy vacuum is expanding between localities and the nationallevel. It appears that, with the Coalition‘s fixation on eradicating anything with the merename ‗regional‘ in its remit, they have become ideologically blinded to the reality that theEnglish regions provide a pragmatic spatial scale for bridging the national–local divide. Todemonstrate this point, an indicative map of how the geography of LEPs may look, based onjust fewer than 60 initial submissions to Government, is shown in Figure 3. Yet the mapshown here comes with the caveat that things have already changed in a number of areas andare expected to change considerably over future months. Also, the map fails to demonstrateadequately the complex picture relating to lower-tier district councils, some of which areproposing to be members of LEPs that cover a unitary authority outside their own upper-tierauthority. There were also rival bids submitted to Government, with the spatial reach of somepropositions not correlating with their signatories or supporting organisations. A recent‗structured review‘ of 50 of the outline proposals found that ‗approaching 70 [local authoritydistricts] were included within two submissions and four seemed to feature within three‘.34While it remains highly unlikely that Government will endorse and seek to progress a highproportion of these initial propositions, it would be reasonable to surmise that the geographyof sub-national economic policy, governance and delivery looks set for a radicaltransformation. With a conservative estimate suggesting that 25–30 LEPs could eventuallyreplace the eight RDAs outside London, a key question is how London-based ministerialdepartments could feasibly engage with each LEP on an individual basis? Without some form of strategic economic body to negotiate the policy space in-between, the spatial particularities of LEPs, outside the ‗big hitters‘ organised around a corecity, such as Birmingham or Manchester,35 may struggle to make their voices heard inWhitehall policy circles. Notwithstanding the limitations of regional administrative areas inproviding the ideal spatial fix for the delivery of all sub-national policy, strategically focusedregional bodies would help in coordinating the activity of LEPs, facilitating cross-boundarycooperation, the management of some programmes, including the intricate administration ofthe European Regional Development Fund, and could even assume responsibility forsignificant strategic projects (unworkable at smaller or larger spatial scales). Accordingly,there is a case for retaining a small body of public-sector officers in regions to provide aminimum of intelligent coordination for the areas further in travel time from London. If onthat basis the southern regions did not claim this need, the Government would be entitled toimplement a distinction between North and South. 13
  14. 14. Figure 3: An indicative map of the geography of LEPs 14
  15. 15. FINAL THOUGHTS AT A PRELIMINARY POINTSince the Coalition Government‘s recent announcement to abolish democraticallyunaccountable RDAs and establish joint local authority-business-led LEPs to promoteeconomic development, there has been a spate of activity as stakeholders, or perhaps moreprecisely stakeholders frequently led by councils, decide which neighbours they would like tocollaborate with under the auspices of a LEP. As a means to navigate the road from RDAs toLEPs, a preliminary map of how the space of transition may play out in policy and practicehas been provided. Based on ‗official‘ — although often contradictory — ministerialpronouncements and letters, departmental press releases and snippets of text in publicationssuch as the Budget Report in June 2010,1 combined with blogs, news stories, articles and,most importantly, policy chatter, it has been demonstrated that the transitional period is likelyto be disorderly and potentially chaotic. The paper has also illuminated how such policyturmoil and governance reconfigurations may possibly be ineffective. Reflecting on theimportance of timing, resource availability and the policy vacuum arising between localitiesand national government, to state that the English regeneration sector eagerly anticipates thepolicy guidance due to be set out in the forthcoming White Paper on local growth is asizeable understatement. Countless questions remain over the transitional process. Does the Government have aspecific blueprint for LEPs in mind, and what powers and flexibilities might LEPs begranted? Will LEPs be ‗loose associations‘ of local authorities and businesses or will theyrequire a legal personality? Is it realistic for LEPs to reflect ‗natural‘ economic areas whentheir geographical building blocks will be administrative districts? In addition, how long willit take to set up LEPs and get them functioning as effective economic leadership vehicles?When established, will the boards of LEPs be composed of the usual suspects? Alternatively,is democratic accountability and business leadership a recipe for disaster? Might governanceissues and institutional reconfigurations distract attention from on the ground economicinterventions? On the aspect of funding, will the RDAs Single Programme be subsumed intothe RGF? Further, how will succession planning be carried forward and in what ways maynoteworthy RDA successes provide a positive legacy for successor bodies? In terms of multi-level governance and coordination across multiple spatial scales, how will nationally ‗led‘economic programmes interact with LEPs and other local initiatives? Indeed, does such anapproach run the risk of contradicting the localism agenda? Only time will tell. At thisjuncture, however, there must be some scepticism that the Coalition Government possesses 15
  16. 16. the majority of the answers. While the Lib–Cons have been steadfast in denouncing theeffectiveness of New Labour‘s RDAs as part of their media savvy ‗bonfire of the quangos‘,alternative sub-national economic policy architecture remains very much work in progress.Deconstruction is all well and good if the alternative reconstructions offer added value.Critics suggest, however, that a slight reshuffle of the same pack of cards is merely‗economic development on the cheap … a no-frills version of the economic policy of the pastdecade‘.36 If this is so, improvements remain ambiguous, but the potential to lose out issignificant. Not least for any place on the periphery of a LEP board‘s spatio-economicpriorities, or worse still, for any local authority left out of the LEP equation. As England isimmersed in this space of transition, against a backdrop of austerity measures, there is agenuine threat that regeneration will fall off a cliff. Let us hope that the Lib–Cons stay true to their localism philosophy, which would putthe onus on localities (including all those with a ‗stake‘ in their local economy) to deviseunique policy solutions administered by tailored spatial governance configurations. If thisproves to be the case, the ‗abolition‘ of RDAs may actually turn out to be a much more subtletransformation in some regions, if local views determine that a strategic economic body at theregional scale is still desired. Views on the ground in the North East of England,37 togetherwith other regions across the North and Midlands, would indicate that this is the case. It isperhaps appropriate to end with a note of caution; suggesting that old wine in new bottlesmay not necessarily result in economic improvements. Indeed, new spatial and institutional‗fixes‘ may open up new issues just as old ones are closed off. Maybe those plying their tradeoutside England can reflect on this and act accordingly the next time a new (and presumablybetter) policy innovation is proposed.Notes and References1. HM Treasury (2010), ‗Budget 2010‘, The Stationery Office, London.2. Coaffee, J. (2010), ‗Editorial: Learning from the successes and failures of regeneration in the 2000s‘, Journal of Urban Regeneration and Renewal, Vol. 3, pp. 337–338.3. Separate arrangements will apply in London, where discussions are currently under way with the Mayor of London concerning decentralisation, particularly in the context of the abolition of the Government Office for London. 16
  17. 17. 4. The letter is available at–1363.pdf, last accessed on 2nd July, 2010.5. For a more detailed discussion of the role and remit of RDAs, see Pearce, G., and Ayres, S. (2009), ‗Governance in the English Regions: The role of the Regional Development Agencies‘, Urban Studies, Vol. 46, No. 3, pp. 537–557, and Pugalis, L. (2010), ‗Looking back in order to move forward: the politics of evolving sub-national economic policy architecture‘. Local Economy, Vol. 25, No. 5-6, pp. 462-471.6. Department for Business, Innovation and Skills (2010), ‗England‘s Regional Development Agencies‘, available at development/englands-regional-development-agencies, last accessed on 15th July, 2010.7. Mandelson‘s ‗industrial activism‘ brand of economic development is focused on developing sectoral strengths such as high-tech manufacturing, the automotive industry, aerospace and biosciences.8. Mandelson, P. (2009), ‗Putting regions at the heart of industrial activism‘, Journal of the Institution of Economic Development, Vol. 108, May, p. 11.9. HM Treasury (2007), ‗Review of sub-national economic development and regeneration‘, HMSO, London.10. Department for Business, Enterprise and Regulatory Reform and Department of Communities and Local Government (2008), ‗Prosperous places: Taking forward the review of Sub-National Economic Development and Regeneration‘, The Stationery Office, London.11. Hildreth, P. (2009), ‗Understanding ―new regional policy‖: What is behind the government‘s sub-national economic development and regeneration policy for England?‘, Journal of Urban Regeneration and Renewal, Vol. 2, pp. 318–336.12. Department of Communities and Local Government (2008), ‗Transforming places; changing lives: A framework for regeneration‘, The Stationery Office, London.13. Department of Communities and Local Government (2009), ‗Transforming places; changing lives: Taking forward the Regeneration Framework‘, The Stationery Office, London.14. Finch, D. (2010), ‗Vince Cable on RDAs‘, Centre for Cities Blog, available at, last accessed on 25th July, 2010. 17
  18. 18. 15. Catney, P. et al. (2008), ‗Hyperactive governance in the Thames Gateway‘, Journal of Urban Regeneration and Renewal, Vol. 2, pp. 124–145.16. National Audit Office (2006), ‗Independent performance assessment: One NorthEast Development Agency‘, National Audit Office, London.17. See, for example, Larkin, K. (2009), ‗Regional Development Agencies: The facts‘, Centre for Cities, London, who suggests that some of the project evaluations that the meta-evaluation used are unlikely to be objective and impartial.18. PriceWaterhouseCoopers (2008), ‗Impact of RDA spending — National report — Volume 1 — Main Report‘, Department for Business, Enterprise and Regulatory Reform, London.19. Hayman, A. (2008), ‗Cameron: We would strip RDAs of their powers‘, Regeneration & Renewal, 16th May.20. Deas, I. and Ward, K.G. (1999), ‗The song has ended but the melody lingers: Regional development agencies and the lessons of the Urban development corporation ―experiment‖‘, Local Economy, Vol. 14, No. 2, pp. 114–132.21. Pugalis, L., and Townsend, A. (2010), ‗Can LEPs fill the strategic void?‘, Town & Country Planning Vol. 79, No. 9, pp. 382–387.22. The letter is available at, last accessed 6th July, 2010.23. See, for example, Gulliver, S. (2008), ‗The City Development Company model: The implications for economic development‘, Journal of Urban Regeneration and Renewal Vol. 1, pp. 286–296.24. Mulgan, G. (2010), ‗RDA demise‘, Regeneration & Renewal, 12th July.25. Peck, F., Bell, F. and Black, L. (2010), ‗Addressing the skills gap in regeneration and economic development in Cumbria‘, Journal of Urban Regeneration and Renewal, Vol. 4, pp. 76–89.26. Rowe, M. and Ashworth, C. (2010), ‗―Let a hundred flowers bloom‖: Enhancing innovative practice in regeneration management‘, Journal of Urban Regeneration and Renewal, Vol. 4, pp. 90–99.27. The original Cable–Pickles letter indicated that no national government resources would be available to support the day to day operation of LEPs, but a revised version suggests that this may not necessarily be the case.28. The RDAs‘ combined budget was £2.3bn in 2007–08 and just over £1.4bn in 2010–11. 18
  19. 19. 29. The labyrinth of New Labour‘s (relatively well resourced) economic regeneration programmes, including the Local Enterprise Growth Initiative and Working Neighbourhoods Fund, are expected to be abolished, cut or absorbed into the new regional ‗super‘ fund.30. See, for example, the criteria identified in Department for Business, Innovation and Skills (2010), ‗Consultation on the Regional Growth Fund‘, The Stationery Office, London.31. Parkinson, M. et al. (2010), ‗The credit crunch, recession and regeneration in the North: What‘s Happening, What‘s working, what‘s next?‘, The Northern Way, Newcastle.32. Parkinson, M. (2009), ‗Guest Editorial: The credit crunch and regeneration‘, Journal of Urban Regeneration and Renewal, Vol. 3, pp. 115–119.33. Cooper, M. and Shaheen, F. (2008), ‗Winning the battles but losing the war? Regeneration, renewal and the state of Britain‘s cities‘, Journal of Urban Regeneration and Renewal, Vol. 2, pp. 146–151.34. SQW (2010), ‗Local Enterprise Partnerships: A new era begins?‘, SQW, London.35. Dermot Finch suggests that some LEPs, such as ‗Greater Manchester will no doubt be front of the queue, asking (and getting) more than most other areas. That suggests LEPs will proceed at different speeds — which is fine with us‘: Finch, D. (2010), ‗LEPs — a new acronym is born‘, Centre for Cities Blog, 15th July.36. Larkin, K. (2010), ‗Regions after RDAs‘, Public Finance Blog, 1st July.37. The Association of North East Councils and the Northern Business Forum have been collaborating to make a case for a regional strategic economic body, known as the North East Economic Partnership. 19