Local Democracy, Economic Development and Construction Bill [HL]

The opposition amendments provide for each RDA to have the power to delegate any of their functions to a local authority or group of local authorities in the region. If the amendment were accepted, it would mean that any RDA function could be delegated to a local authority or group of authorities. The amendment could potentially undermine parts of the regional arrangements we are putting in place through this Bill by, for example, allowing an RDA to delegate its functions in relation to a regional strategy to a local authority. This would cut across the working arrangements that we want to see; in effect, the amendment would go far beyond what was intended in the SNR originally and beyond what would work or what is appropriate. Our position on delegation is a change of emphasis from the one we set out in 2007 in the sub-national review. I have absolutely no problem in saying that. The e-mail that was quoted was written in response to an LGA e-mail suggesting that we could delegate fully without legislation. However, the position is that delegation, giving funds and responsibility for spending without recourse back to the RDAs, does need legislation. We are talking now about a very different background from the one that we faced in 2007. In the Bill we are looking at a joint responsibility and a new approach, with the RDA and the leaders’ board working together to produce and implement the regional strategy. That configuration, frankly, opens up far greater possibilities for joint working. We are trying to get away from oppositional policies at regional and local level and from the idea of us and them. Thanks to the work of everyone involved—BERR, CLG, the Local Government Association, the RDAs and local authorities’ representatives—we have created a framework which takes the oppositional threat out of the situation as far as possible in order to ensure that the right outcomes are delivered. Fundamentally, we all agree that what counts is that the best outcomes are delivered. Those do not need new powers or new legislation and the best impacts can be achieved within the current legislative provisions of the RDA Act. The best proof is that this is already happening in many parts of the country through multi-area agreements and with RDAs working closely and successfully with local authorities. All this can be confirmed and enhanced within the new framework. We will have a new regional structure of joint responsibility that will rest on the leaders’ boards and RDAs which are going to design, plan and implement the delivery of the regional strategy. They will decide where investment will be made. Those decisions will take the shape of joint agreements on the programmes to be taken forward and how they should be delivered. This is the investment planning approach outlined in the Government’s response to the SNR consultation. Within these broad plans, where the interests of local authorities will be already represented, individual authorities will have a great deal of scope to influence and determine what they want to do in their areas. One of the advantages of using this approach is that it can be taken forward now, without waiting for legislation. Let me share with the Committee some examples of where RDAs are already using joint investment planning in sub-regional partnerships with no need for legislation. One North East—this will be of particular interest to the noble Baroness, Lady Maddock—spends £50 million a year in locally led regeneration schemes. It has been fully involved, for example, in developing the Tees Valley MAA and is a key partner in its delivery. All this is built up from a pragmatic joint investment planning approach such as we will see in the future for regional strategies. EMDA—the East Midlands Development Agency—spends about a third of its budget through sub-regional partnerships. The noble Baroness is quite right to emphasise sub-regional partnerships and we shall come on to that issue in the next part of the debate. The challenge is to make the right decisions at the right spatial level, of course, and EMDA spends a third of its budget through sub-regional partnerships. Indeed, it is moving to contract directly with local authorities to provide funding to support MAA development and delivery. In the north-west—this will be of interest to the noble Lord, Lord Greaves—NWDA works closely with sub-regional partners; for example, in Cumbria with Cumbria Vision, with the district councils and alongside the Pennine-Lancashire authorities to develop the MAA. All this involves joint investment planning. But noble Lords have argued that they want to make absolutely sure that the RDAs delegate funding responsibilities to the appropriate level. As I have said, the Government are clear that this can be achieved without legislation but, in addition, guidance is being developed with local government representatives that will make clear that local authorities should have an important role in working on programmes best delivered at local and sub-regional level. We are also committed to streamlining the processes to make delivery of the strategy as straightforward as possible. Our position is a change of emphasis, not of policy. The RDA, as part of its joint responsibility for delivery of regional strategy, needs to be able to ensure that the programmes and projects that it funds are consistent with the strategy so that there is coherence and fairness across the area, so that lessons learned from evaluation work of programmes in different areas about what is working effectively and value for money are adopted. It is also vital, especially at this time, to preserve the flexibility of RDA budgets so that they can, if necessary, be flexed to address economic imperatives. It has been proven over recent months that to respond to economic shocks, one needs flexibility. It is worth emphasising to any body that thinks that it is acting in the interests of local authorities—I understand the case being made by the LGA—that the full implications of legislative change must be understood by the local authorities themselves. RDAs are non-departmental bodies. They are accountable through BERR to Parliament. Full legislative delegation to LAs would bind local authorities into the same financial framework as applies to RDAs. The financial framework is rather different for non-elected bodies. Local authorities have said that they want RDA money to come with long-term funding agreements, end-of-year flexibility to carry forward money not spent in a particular year and freedom to vire between projects and budgets. The Government are looking at what flexibility there may be in the framework within the joint investment planning approach, but whether there is a joint investment approach or formal delegation, those freedoms are not currently available to RDAs. With the best will in the world, RDA money will always come with some strings attached. In summary, the amendment is too wide. For all the reasons that I have set out, it is also unnecessary to achieve all that we want and what is at the heart of the SNR proposals. That is that interventions or plans that most effectively deliver the regional strategy; that those are delivered at the right level, whether regional, some regional or local; that there is alignment between all those levels; and that effective partnership working takes place between all parties in the region. On those grounds, I hope that the amendment will be withdrawn.