Prime minister Gordon Brown this week spelled out his strategy to reduce economic disparities between England's regions by enhancing the role of RDAs, city-regions and local authorities in economic development, and scrapping regional assemblies.
The Treasury's sub-national review proposes new scrutiny powers for councils over RDAs, a return of sixth-form funding to LEAs, and statutory city-regions to promote economic development.
RDAs will also be expected to delegate responsibility for spending to councils or sub-regions ‘wherever possible.'
Upper-tier local authorities will have a new duty to ‘assess' economic challenges in their areas, and to do so will receive ‘stronger incentives through both fiscal measures and greater powers'.
The review believes councils' role in economic development ‘needs to be strengthened further' especially at city region level backed by long-term funding. And it proposes that the DCLG and the LGA create a ‘concordat' laying out local government's rights and responsibilities.
Confirming a move towards city-region networks, the review backs groups of councils being allowed to set up ‘statutory sub-regional bodies' for economic development and multi-area agreements between groups of councils. Legislation will be needed to set up sub-regions.
The review also says the Government will report back later this year, after consultation on a supplementary business rate but makes no commitment.
Regional assemblies are to be scrapped after 2010 but local authorities will have enhanced scrutiny powers over RDAs, whose budget this year is £2.3bn.
Bringing the poorest regions up to the national average would be worth an extra £60bn to the economy, and the review proposes each RDA has a single strategy setting out its economic, environmental and social objectives. For the first time, each region will have a
single strategy co-ordinating jobs, economic growth, housing, planning and environmental goals, under the aegis of its RDA.
The review was set up by Mr Brown in March 2006 to examine ways of reducing regional economic inequalities. The economic output of England's poorest region, the North East, is 40% below that of London, the highest. The review was overseen by the-then financial secretary to the Treasury, John Healey, who, significantly, is now local government minister with a brief to implement it.
He said: ‘We want to give local authorities which know their communities best a greater role leading jobs, housing, regeneration and sustainable growth.'
And LGA chairman, Sir Simon Milton, added: ‘We welcome the recognition that local authorities have a clear role in generating economic prosperity, although the accountability arrangements for RDAs could be confusing'.
Shadow communities secretary, Eric Pickles, said: ‘The regional assemblies are unelected, unaccountable and unwanted. We will not mourn their passing. But this isn't the abolition of regional assemblies. It's just a game of musical chairs – passing their functions from one distant, regional quango to another.'
Keypoints
