Rt Hon Nick Raynsford Minister for Local & Regional Government

REGIONAL DEVELOPMENT ACROSS THE UK

Since 1997, the government has been extending the opportunity for devolution to the nations and regions of the United Kingdom. This country used to have one of the most centralised systems of government in the western world. We made clear from the outset our commitment to devolve power and responsibility from Whitehall and Westminster.

In our first term, we established the Scottish Parliament and the National Assembly for Wales, and re-established democratically elected citywide government for London. The people of the English regions are now being offered a similar opportunity to choose, in a referendum, whether to have directly elected regional assemblies.

The government's 2002 White Paper, 'Your Region, Your Choice: Revitalising the English Regions', described our proposals to strengthen all the regions. As well as providing the choice of elected regional assemblies, we have made significant improvements in the system of regional governance and development throughout England.

We established eight Regional Development Agencies (RDAs) outside London (as well as a London Development Agency under the Greater London Authority). In their first two years, these agencies created or safeguarded more than 80,000 jobs.

To complement this, we also encouraged the development of a network of regional chambers to scrutinise the RDAs. The chambers (known as 'assemblies') include representatives from local government and economic, social and environmental partners in the region. They have improved accountability and helped to give these regions a new voice. We have progressively built on this success through an increase in their responsibilities and available resources. Since 2001 the government has provided direct funding for the chambers to support their RDA-scrutiny function and develop their role as a voice for the region. This has worked well and we are committed to continue this funding programme until 2005-06. The chambers are now the planning bodies charged with the responsibility for drawing up regional spatial strategies.

We have also increased the policy areas dealt with by regional government offices, and devolved responsibility to take some of the decisions that have traditionally been made in Whitehall for the whole of England.

At the heart of our regional-policy agenda and underpinning all these measures, is the aim of empowering the nations and regions of the UK to boost their economies and the quality of life of those communities. This will benefit the whole country.

We had to recognise that the old approaches to renewing economic activity have not always been successful. Past governments channelled large sums of money into enterprise zones, targeted subsidies for development and grants designed to compensate for unemployment. These policies, while helping to ameliorate some short-term problems, achieved no long-term economic gain. They did not reverse the imbalance in regional economic development that has characterised the UK economy in recent decades.

The government's efforts are now increasingly focused on measures to encourage and foster indigenous skills, talents and potential for local people and communities. The emphasis is on drivers of home-grown local economic activity. The objective is to help each region to build on its strengths and to take greater control of its own economic destiny.

To help achieve this, the government has increased RDA funding from £900mn in 1999 to more than £2bn by 2005-06. And this funding is now provided in a 'single pot', so that the RDAs have maximum flexibility in allocating their resources.

RDAs have put in place long-term frameworks for regional employment and skills. They have, for the first time, produced up-to-date regional manufacturing and economic strategies, and have launched venture capital funds in each region to improve access to finance for small firms.

Neighbourhood renewal
Another challenge we need to address is the variation in circumstances and performance both between and within regions. In 1999 the rate of business start-ups in areas of high deprivation was just one-sixth of the rate in more prosperous areas. Overcoming these obstacles to create sustainable communities means focusing resources in our most deprived areas. Over this Parliament, the government will put £1.9bn into the 88 Neighbourhood Renewal Fund areas and a further £2bn over 10 years into the 39 New Deal for Communities areas throughout England.

Sustainable communities need a strong economy, jobs, good schools and hospitals, good public transport, a safe and healthy local environment, high-quality design and enough housing to meet the needs of local people.

In 2003, the government's new Communities Plan, 'Sustainable Communities: Building for the Future', was launched to address some of these issues. The Plan put in place proposals to spend some £22bn over three years and to meet the very different problems of low demand for housing in the North and shortage of housing supply in the South. It is based on the recognition that many of the key issues are best dealt with at regional level.

New Regional Housing Boards will take direct responsibility for the preparation of regional housing strategies. Those strategies will form the basis for advice to ministers on strategic housing investment priorities in the regions. And from April 2004, the government will establish a new single pot for housing investment in each region, in order to best meet their strategic housing needs.

Directly elected regional assemblies
All of this demonstrates the government's commitment to regional diversity and to decentralisation of responsibilities. The government remains firmly committed to improving conditions for development across the whole country. Elected regional assemblies are part of this framework.

Those English regions that opt for elected assemblies will have more powers to make a difference, with greater control over finance, which has traditionally been in the hands of central government. Over the coming decade this will mean the replacement of the traditional top-down centralised approach, with greater autonomy at both local and regional levels.

Directly elected regional assemblies will democratise an existing tier of governance. They will be responsible for the RDA alongside associated responsibilities, including regional planning, housing, skills, transport, arts, tourism and sport, public health, and the environment. These powers will be devolved from central government and its agencies in the region, not taken from local authorities. The government believes that local authorities should remain the main body for delivering local services, while the assemblies concentrate on those matters which are best dealt with at a regional level - developing strategies and allocating spending according to regional priorities.

Assemblies will be streamlined bodies, with just 25-35 elected members and a strong focus on delivering results. Furthermore, because we believe that three tiers of government below the national level would be one too many, we have made it clear that local government should be reorganised on a wholly unitary basis (as in Scotland, Wales and London) in any region opting for an elected assembly. The government has directed the independent Boundary Committee for England to review the local government arrangements in those regions where we envisage holding a referendum.

There will be a separate referendum on local government structure in each two-tier local authority area in the region, in parallel with the regional referendum on establishing an elected regional assembly. This separate referendum will ask people in the two-tier areas to vote on the options for unitary local government, which will come into effect if the region as a whole votes to have an elected assembly. We expect the first referendums to be held in the autumn of 2004.

A chance to shape the future
This is about choice and adding value, not bureaucracy. Elected assemblies will only be established in regions that vote for one in a referendum. And each assembly will be democratically elected. This will bring regional decision-making closer to the people and make government more efficient, more effective and more accountable.

Nonetheless, there are lessons to be learnt from the current regional institutions. We would not want to lose all the expertise and commitment that social and economic partners have contributed to the regional chambers. Each elected assembly will therefore be required to engage stakeholders in their work, in the way that best suits the region and that best reflects its diversity. Stakeholders might take part in scrutiny, they might help develop policy, or they might work on specific regional strategies. Assemblies will be able to fund stakeholder involvement in order to develop their capacity to participate, although only elected people will be full members of the assembly.

Not all regions will choose to have an elected assembly, at least not initially. But the government's agenda is relevant to the whole of England. We have strengthened the existing arrangements in all regions, giving the regional bodies more say over the issues that affect them and setting the framework in place to allow each region to develop according to its own preferences and priorities.

The government is now pressing ahead with its regional agenda - giving the regions the opportunity to shape their own future.

Supplied by courtesy of the Rt Hon Nick Raynsford MP, Minister of State for Local government and the Regions, Office of the Deputy Prime Minister (ODPM)