Regional governance in England is changing – and it looks set to continue changing up to and beyond the next general election. The creation of a strong layer of governance between Whitehall and local authorities has been one of the most significant administrative changes made under Labour. John Prescott never realised his ambition for directly-elected assemblies with powers over economic development, housing and a range of other issues – but he did bequeath the Regional Development Agencies (RDAs) to the English regions.

The powers and scrutiny of those RDAs are now in flux, with the government part-way through implementing reforms recommended by a 2007 study. Meanwhile, the Conservatives’ recent policy paper on localism envisages devolving many of their powers to local authorities, with RDAs – long the bêtes noire of many in the opposition – either emasculated or abolished outright. 

All of this matters to Whitehall because RDAs are responsible for dispensing over £2bn of central government cash every year – often in the form of grants supporting business growth, community development projects and land regeneration. Jeff Moore, chief executive of East Midlands Development Agency – currently the ‘lead’ RDA – says the agencies have their “eyes firmly fixed” on helping businesses tackle the recession, and are not distracted by structural changes. However, there are fears that uncertainty over the fate of RDAs – and regional governance in general – could start to hamper work being done both at the centre and in the regions.

The government is enacting plans to ‘streamline’ the regional tier of government along the lines of the 2007 sub-national review of economic development and regeneration (SNR). This recommended abolishing the regional assemblies that devise regional development plans, oversee planning policy and scrutinise the RDAs. These functions are to be divvied up among a variety of bodies, with beefed-up RDAs formulating overarching regional strategies encompassing both the previously segregated economic and spatial arms of planning.

Collaborating in these strategies will be “local leaders’ boards” made
up of councillors from across the region. These groups of councillors will also have an oversight function, with further scrutiny via the parliamentary regional select committees first mooted in the separate Governance of Britain green paper.One of the problems with relying on regional assemblies to scrutinise the RDAs is the assemblies’ relative anonymity, says Phyllis Starkey, Labour chair of the Commons communities and local government committee.

Although many of the bodies perform well, Starkey says, when her committee took evidence, “apart from the members of the assemblies themselves, nobody knew what the assemblies did or was terribly keen on them.” Starkey would like to see regional governance scrutinised by hybrid committees of MPs and local authority leaders. But at the minute, even the planned regional select committees look weak; with sceptical opposition parties refusing to nominate members, the panels currently contain only Labour MPs.

There is some confusion over how and when regional assemblies will phase themselves out. The North West assembly has already done so, having mutated into the North West Regional Leaders’ Forum last July, while others, such as the East Midlands body, will continue their work until 2010, when they must be replaced. In the meantime, says Jeff Moore, he has spoken to the chair of the East Midlands select committee – Sherwood MP Paddy Tipping – and worked out “a programme of scrutiny going forward”.

Moore adds that while RDAs welcome effective oversight, there has to be a “balanced” approach. “It’s about not duplicating something anybody else is doing,” he says. “The assembly is planning to carry out scrutiny until April 2010, and the new regional select committee is planning to start scrutinising us next month – so we need to get the balance right.” It’s a view echoed by Andrew Jackson, a specialist with consultancy Stanton Marris, which works with the South East of England Development Agency. “There’s a danger of too much complex governance at regional level,” Jackson says. “Too many people are accountable to too many people.”

Regional governance will also see changes in its accountability to Whitehall. Both the Departments for Business, Enterprise and Regulatory Reform (BERR) and for Communities and Local Government (CLG) will have to approve the enhanced regional strategies submitted by RDAs and local authority leaders. The Government Offices, central government’s main delivery arm for a range of policies in the regions, are structurally unaffected but will hope to benefit from the intended simplification of decision-making. In addition, the government says, departments whose work is directly affected by regional planning – including large capital spenders such as the Departments for Transport and of Health – will benefit from a streamlining of decision-making.

While regional bodies, local authorities and central departments begin the transition to these arrangements, the Conservatives have forced their way into the debate on regional policy with a well-publicised policy paper promising a “drastic” shift of power from Whitehall to local authorities. There was no promise of the complete abolition of RDAs, as former shadow local government minister Eric Pickles long promisedHowever, core powers such as economic development and planning would be stripped away and given to new partnerships of councils. The Tories say these council groupings would form more “natural economic units”, unlike the vast and sometimes incoherent regions covered by RDAs. The exception to this would be the capital, where the relatively successful work of the mayor, assembly and London Development Agency would be left untouched.

Neil McInroy, chief executive of think tank the Centre for Local Economic Strategies, says that while any genuine devolution of powers is welcome, the Conservatives’ plans focus too much on the appropriate level of bureaucracy and not on the responsibilities being devolved. “Form seems to be rushing ahead of function,” he says. “There needs to be clarity about what exactly the function of any [remaining] regional government entity would be.” Moreover, he says, the Conservatives would have to spend time and energy “hacking away” at the regional structures created, and currently being adjusted, by Labour.

For civil servants, the likelihood of seeing a Conservative government in little over a year brings with it the prospect of a dismantling of regional governance structures hard on the heels of this dramatic regional restructuring. So few are getting too excited about the prospect of RDAs being empowered to develop regional planning strategies, despite the approach’s potential for better integration of policy and strategy across fields including transport, housing, energy and environment. Instead, civil servants may well have to adapt to a world in which departments work directly with emerging clusters of local authorities; a more amorphous world that would demand astute political and local judgement.

In the meantime, says Jeff Moore, the RDAs are concentrating on their core job of supporting growth. Does he fear the future? “It’s not particularly worrying,” he replies. “We’ve already lived through a period of constant change.”