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Economic Reform

Oral Answers to Questions — Duchy of Lancaster – in the House of Commons at 3:33 pm on 17th July 2007.

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government) 3:33 pm, 17th July 2007

With permission, Mr. Speaker, I would like to make a statement on local and regional economic reform in England. The Government are today publishing the conclusions of the review of sub-national economic development and regeneration, launched in the 2006 Budget as groundwork for this year's comprehensive spending review. In this report, we set out the compelling case for reform to give local authorities and communities greater responsibility and opportunity to boost economic growth in their area; to bring consultation and planning for jobs, homes, investment and the environment closer together at both local and regional levels; and to strengthen public scrutiny and accountability of regional plans and the work of regional development agencies, both in the region and in this House.

This report builds on substantial work since 1997 to devolve economic decision making to regions and local authorities. It is informed by Sir Michael Lyons' comprehensive review, in which he underlined the important economic role of local authorities as part of defining and delivering a vision for the places that they serve. It is also informed by Kate Barker's recommendations to bring together planning for homes and the environment with planning for economic growth.

The review takes reform a stage further, giving local authorities stronger incentives and greater powers to support economic growth. As the constitutional Green Paper, which the Prime Minister launched a fortnight ago, said, the sub-national review

"will signal a shift of focus to local authorities, open up the possibility of powerful city regions and give a clearer role for the regions of England".

The report also reflects the Prime Minister's vision of a modern democracy, in which power is exercised at the lowest level, and those with power are held more clearly to account.

Moreover, the reforms are essential as global economic and technological change places an increasing premium on skills, innovation and enterprise. That means that our Government's commitment to increase growth in all regions, reduce regional disparities and deliver neighbourhood renewal will, in future, be all the more challenging and important. It means that further freedoms and devolved decision making are required for regions and local areas: first, to respond to rapid economic change; secondly, to deal with persistent local deprivation or poor economic performance, and thirdly, to enable all places to develop to their fullest potential.

Our year-long review has been very open—we have visited every region and consulted more than 300 stakeholders at all levels. I can confirm our main conclusions to the House this afternoon. First, to give local authorities greater powers, flexibilities and incentives, we will consult on creating a focused statutory economic duty for local councils; put economic development and neighbourhood renewal at the heart of the new local government performance framework; and consider options for supplementary business rates, working closely with business, local government and other local experts. We will require regional development agencies to delegate funding to local authorities and sub-regions whenever possible so that they play a more strategic role, and we will move funding for most 14 to19-year-olds' education and skills to local authorities from the Learning and Skills Council, as announced in the recent machinery of government changes.

Let me deal with sub-regions. To reinforce our cities and larger towns as the engines of economic growth in their areas and to recognise that labour, housing, retail and other markets often do not correspond to council boundaries, we will allow local authorities that work together in sub-regions to strengthen management of transport; develop proposals for multi-area agreements to encourage groups of local authorities to agree collective targets and pooled budgets for economic development priorities; and work with interested city and sub-regions on scope for statutory sub-regional arrangements, which could allow greater devolution of national and regional economic functions.

To strengthen, simplify and improve scrutiny of the necessary strategic role of regions, we will combine the regional economic strategy and regional spatial strategy into a single integrated regional strategy. Following consultation, we will bring together the economic, social and environmental objectives for each region and charge RDAs with executive responsibility to prepare the single regional strategy on behalf of the region. In doing so, they will have a duty to consult widely. They will work closely with local authorities and the first step will be for local authorities to set out a vision for the sustainable development of their area. Regional assemblies in their current form will no longer exist.

The spatial and planning aspects of the strategy will continue to form the regional tier of the statutory development plan, which will remain subject to testing through independent examination in public and will be issued as a statutory document as it is currently. We will strengthen the scrutiny and accountability of RDAs, with the House's new regional Select Committees holding RDAs and others to account in Parliament and with local authority leaders holding the RDA to account in the region and approving the regional strategy. We will consult on how best to implement that.

Finally, at the centre, to improve support and reduce restrictions from central Government we will give the Department for Business, Enterprise and Regulatory Reform single-lead responsibility across Government for performance management of the RDAs and lead responsibility for the regional economic public service agreement; simplify the targets RDAs must meet; and appoint a Minister for each of the regions—we have already done this—to provide a sense of strategic direction to their region and to give citizens a voice at the centre of Government.

The report sets out the principles and direction for future policy and the consultation that we will undertake on our reforms. Important Government announcements will follow: implementing the Leitch report, the housing Green Paper and the welfare reform Green Paper and, in the autumn, the comprehensive spending review. My statement this afternoon is the start of further reform, not the final word. I commend the report to the House.

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Photo of Eric Pickles Eric Pickles Shadow Secretary of State for Communities and Local Government

I thank the Minister for his courtesy in allowing me early sight of the statement and of the sub-national economic development and regeneration review.

It is clear that the Minister comes here not to praise the former Deputy Prime Minister, but to bury him. The regional assemblies were the apple of the eye of the former Deputy Prime Minister—now little is left of the old regime but rubble, broken promises and chaos. Once the people of the north-east rejected regional government by referendum, the writing was on the wall for the assemblies.

Will the Minister confirm the words of the Prime Minister's official spokesman this morning that sub-national government was

"just another word for regional government"?

This is a rebranding exercise masquerading as localism. The key tests are these: are the decisions taken locally and are the decision makers democratically accountable to local people?

On page 95, the review makes it clear that RDAs will become the regional planning bodies in place of the regional assemblies. The regional assemblies are unelected, unaccountable and unwanted and we will not mourn their passing. However, is not their abolition just a game of musical chairs, passing their functions from one distant regional quango to another?

We welcome the admission that Labour's tiers of regional red tape are a hindrance to development and regeneration, with the farce of the regional spatial strategies contradicting the regional economic strategies. The RDAs are already failing to deliver on their existing responsibilities, as both the National Audit Office and the Institute of Directors have warned. Yet loading the RDAs with even more responsibility is hardly going to improve the quality of support that local businesses receive.

On page 94, the review asserts that the regional assemblies are not providing a strong voice for their region. Is not the reality that these unloved institutions have ceased to be the Government's poodle because they stood up for local communities and local people? Now that the regional assemblies are criticising the lack of infrastructure and sustainability in the Government's building plans, Ministers are seeking to sideline their opposition. The Government's control freaks' response is to abolish them and to hand their powers to a super-quango—rather than improving co-ordination, the different tiers of regional bureaucracy have caused confusion.

The regional spatial plans of the regional assemblies contradict the regional economic strategies of the regional development agencies—so much for joined-up government. If the Government wish to speed up the planning system, should the first step not be to scrap the quagmire of regional planning? How do the new regional economic growth initiatives outlined on page 93 square with protecting the countryside, planning against flooding, reducing carbon emissions and improving quality of life? Is not the environment now just a passing fashion for the Government? I fear that the RDAs now have England's green belt in their sights.

The review concedes that there are too many funding streams. Indeed, there are 50 different, fragmented funding streams for social exclusion, housing and regeneration. How many will remain after this announcement? Has Labour not just created a baffling array of conflicting, confusing and inconsistent quangos, grants and agencies? Even the Government's friend, Lord Rogers, has slammed the overlapping regeneration schemes as diluting effectiveness and reducing the vision of an urban renaissance to "mediocrity".

We are, of course, receptive to new powers for local councils to fund infrastructure and transport and to promote economic development. Will the Minister guarantee that any additional revenue from a supplementary rate will not be taken into account in central Government grant allocations? Why are local firms not being given a direct democratic vote on any supplementary rate? How high will a supplementary rate go? Will it be 4p on the multiplier or even more? If local businesses can vote on higher rates in a business improvement district, why can they not be given a vote on a supplementary rate? Does the move not risk becoming a back-door way to hike up business rates?

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Photo of Eric Pickles Eric Pickles Shadow Secretary of State for Communities and Local Government

Good man.

Is the measure not just a stealthy means for the Government to pass the buck of providing infrastructure from the Exchequer to the local taxpayer? Is the move not just higher taxation without any representation?

Month after month since the 2004 "no" vote in the regional assemblies, more and more power has been transferred to expensive and distant regional pen-pushers and politicians. Labour has ignored the voice of the people. Regional government agencies, regional development agencies, regional planning bodies and regional Ministers are all about imposing the will of Whitehall on local communities. Much of the analysis in the report is absolutely correct—it is a catalogue of failure. The problem is that it proposes to reinforce failure with more failure. It risks creating a regional tyranny of governance with no mandate, no legitimacy and no accountability. Only our party will dismantle the regional state, restore power to local communities and make government once more accountable to the people.

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

I am slightly disappointed by the hon. Gentleman's response, but perhaps I should not be surprised. I would urge him and his hon. Friends to read the report rather than simply rehearse their soundbites. My right hon. Friend Mr. Prescott has been one of the strongest and staunchest advocates of regional devolution and of giving greater powers to local authorities. He was one of the architects of our regional economic policy and my announcement this afternoon and the report take significant steps further in that.

The hon. Gentleman really must make up his mind on regional assemblies. Five days ago he said:

"The regional assemblies are unelected, unaccountable and unwanted."

Four days ago, and again this afternoon, he said that regional assemblies had stood up for local people and that that was why we are abolishing them, and that:

"The Government's move is expected since many of the regional assemblies are criticising the lack of infrastructure and sustainability in its building plans, and Labour wishes to sideline this opposition."

Nothing could be further from the truth and, as I have tried to explain, our plans will mean that, for the first time, we are able to bring together the important planning functions within the regions and local areas on jobs, homes, infrastructure and protection of the environment. We will be able to do so better than before and better than through two separate processes. Council leaders will have a stronger role in the new system, not a weaker one—much more so, in fact, than they did through the regional assemblies.

Let me make it clear that we are committed to ensuring that there is strong local authority oversight of housing and planning. The hon. Gentleman's party called for a stronger role for local authorities, and we are delivering that in the plans that I have announced this afternoon. His party also called for simplified arrangements in the regional and local areas, and we have announced such proposals this afternoon.

We have begun to consider options for supplementary business rates, working with business, local government and other experts. We shall continue with that work and report later in the year. We shall also ensure that there is full and close accountability to business in any of the options that we consider.

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Photo of Phyllis Starkey Phyllis Starkey Labour, Milton Keynes South West

I welcome the general approach of the Minister's statement in bringing together economic planning with housing, employment and spatial strategies. I want to ask him a specific question, however, about the proposals for the accountability of RDAs. He appears to be proposing accountability of the regional Committees to Parliament, and also, separately, to council leaders through some other, unspecified, mechanism. Will he consider the introduction of a hybrid committee to bring together MPs from the region and local authority leaders to hold the RDA accountable?

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

I applaud my hon. Friend's interest in this area and the work that she does as Chair of the departmental Select Committee. The principle that we are planning to put in place is that, at regional level, the performance of the RDA in preparing the single regional strategy and in delivering its part of the strategy, as well as the content of the strategy itself, should be subject to greater scrutiny in the region and in Parliament. In the region, that should be conducted by local authority leaders, who will be consulted and charged with scrutinising the preparation of the regional strategy. For the first time, they will also be charged with the role of approving the strategy. In that way, without an elected regional assembly, we shall be able to reinforce public accountability and the democratic oversight of this important work that must be carried out at regional level.

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Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government)

I thank the Minister for providing advance copies of his statement and his report, although to read the latter in the given time would have required a reading speed of two pages per minute, so if I have missed any of its subtle nuances, I apologise to him.

We do not share the phobic hatred of all things regional expressed by Mr. Pickles. There are aspects of the statement and the report that we welcome, particularly the recognition that it is important to re-empower local authorities if we are to deliver strongly on the economy and other important features for our local communities. We very much appreciate the intention to encourage co-operation between local authorities, allowing them to take up additional powers devolved from the regions and, we hope, from central Government. It is also good news that there is at least an intention to bring some of the thousands of quangos—including the Learning and Skills Council budget, the Highways Agency and Jobcentre Plus, with which many Members have recently had difficulties—back under local democratic control.

There are also aspects that cause real concern, however. There is nothing substantial in the document or the statement about environmental sustainability; it is all about growth and expansion. For example, I notice that a regional economic public service agreement is to be signed off by the Department for Business, Enterprise and Regulatory Reform, yet there is no regional sustainability agreement to be signed off by the Department for Environment, Food and Rural Affairs or agreed with central Government. Will the Minister therefore undertake to add environmental sustainability as a key objective of any regional policy reform?

I also note that the regional Ministers will

"provide a sense of strategic direction for their region".

We could put that another way and say that this will involve a totally top-down process. Will the Minister explain how such a Minister—perhaps the Minister for the North West or, even more to the point, the Minister for London—will form a view about what the strategic direction for the region should be? Will he take his cue from the Secretary of State, from the regional development agency, from local authority leaders or just off the top of his head? The Minister may well feel that the loss of the regional assemblies is not a great one, but surely he would agree that any sense of strategic direction should come from the grass roots, from local communities and local authorities, rather than being imposed on high through ministerial edict.

Reference is made to moving towards a single integrated regional strategy. We have some difficulty understanding precisely what the Minister has in mind, so perhaps he can provide further explanation. Surely there has to be a diversity of strategies for different regions, and, within regions, the strategies need to be flexible enough to take account of the differences between the centre of Manchester, Carlisle and rural Cheshire. How, indeed, will a single integrated regional strategy apply to the region of London, in particular?

To summarise our view, we see this as a severe case of top-down, economic-growth-centred thinking that is some 30 years out of date, with the environment forgotten, democracy overridden and diversity scorned.

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

I was encouraged by the hon. Gentleman's early remarks, but somewhat taken aback by the latter ones—especially as I consulted a Lib-Dem policy document published a week ago today, which states:

"We would devolve real power back down to communities and local councils, bring quangos under democratic control and reduce central bureaucracy".

Perhaps I should have borrowed those words and incorporated them directly into my statement, because that is precisely what our plans are designed to achieve.

Everyone in every constituency and in every local authority area is concerned about more jobs and more homes, particularly for young people, as well as about taking proper account of the local environment and finding ways up front to fund the infrastructure necessary to support such growth and prosperity for the future. It is by bringing plans for those functions together that we stand the greatest chance of achieving that.

On the environment, let me remind the hon. Gentleman that regional development agencies, which seemed to be the focus of his concern, operate under the legislation that set them up in the first place. They are under a statutory responsibility to pursue sustainable development in the regions. As part of the new arrangements, local authorities will take the first step in the preparation of the new single regional strategy. As I explained earlier, that first step will be to prepare, for their area, their vision of future sustainable development, taking strong account of the needs, pressures and concerns of the environment.

On the question of Ministers, may I gently explain to the hon. Gentleman that the Prime Minister has appointed some first-rate female as well as male regional Ministers, so it is not just a male preserve? If I know anything about my good friends and colleagues who are now the regional Ministers, it is that they will not take their cue from anyone in particular. They will consult and listen carefully, but they will come to their own views and make their own contributions to the debate about what is best for their regions.

Finally, to be as clear as possible, the proposals set out in this afternoon's review do not apply to London, which has its own arrangements on economic policy planning and its own arrangements for democratic control. The regional strategies are, of course, precisely that: they are strategies for the region. If the hon. Gentleman looked into existing regional economic development strategies, he would find that in many cases they place at their centre the cities and sub-regions that are driving economic growth and prosperity within the wider region, creating new jobs and bringing in new investment. That is precisely what this afternoon's proposals are designed to reinforce.

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Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley

I hope my hon. Friend recognises that some of us feel that the establishment of regional Select Committees is overdue and welcome this commitment to them, but will the Government ensure that they have real teeth? Will they ensure that the Committees have power to oversee the activities of regional development agencies and all the other quangos, and that Government Departments and agencies are answerable to each of them? If we are going to do this, we must give the Committees teeth and power and make the system effective.

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

As the Prime Minister said two weeks ago, it is important to ensure that those who hold power are called clearly to account. The House has a much greater potential to play a strong role in doing just that at regional level.

I welcome my hon. Friend's support for the principle of the proposed reinforced scrutiny and accountability arrangements, but I should tell him that the setting up of regional Select Committees, their remit and the way in which they conduct their inquiries are a matter for the House. No doubt he will play a big part in discussions of those matters over the next few weeks, but it is not for me, as a Minister, to pass direct judgment.

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Photo of Angela Browning Angela Browning Deputy Chairman, The Conservative Party, Deputy Chair, Conservative Party

If the newly empowered RDAs are to be accountable to council leaders in the region, what thoughts has the Minister had about appointments to them? At present it is common practice for council leaders to apply for vacancies on RDAs. Is there not a conflict of interest, in that those who are to scrutinise and hold to account see such vacancies as job opportunities?

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

Our report does not propose any changes to the process of appointments to RDA boards, which are conducted entirely in line with the established code of practice for public appointments. However, the hon. Lady makes a fair point and an interesting suggestion. In future it will be for Select Committees and those who wish to hold RDAs firmly to account in the regions to consider how they might contribute to, influence or in other ways become involved in the process of appointments to RDA boards.

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Photo of David Clelland David Clelland Labour, Tyne Bridge

I welcome my hon. Friend's statement. The changes he has announced have the potential to provide a stimulus to encourage renewed regional co-ordination and activity, and will be welcomed in the north-east if they provide the clarity and the new vision that they promise.

The regional assemblies brought together local government, business, voluntary organisations and trade unions. Is my hon. Friend satisfied that the new structure he has announced will preserve the best of that inclusiveness, while also improving accountability and effectiveness at regional level? What powers will localities have over bodies such as the Highways Agency?

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

I am satisfied that the Government have set out the right principles and the right direction for the reforms that are necessary to ensure that the work of RDAs and other agencies at regional level is held to account to a greater extent both in the House and in the regions. If I were not, I would not have announced them today. We are ready to consult on precisely how best to implement the arrangements, and will do so later in the year.

As my hon. Friend will appreciate, the appropriate arrangements for local authority leaders in particular to exercise their role in scrutinising RDAs' work and approving regional strategies in his area will differ from those in the south-east, where there are 74 separate councils. It clearly makes sense to identify, through detailed discussion and consultation, the arrangements that best suit the circumstances of each region.

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Photo of David Curry David Curry Conservative, Skipton and Ripon

The Minister delivered his statement with such pathos that I thought we would hear the theme music from "Schindler's List" at any moment. I agree with him that city regions are very important, and they may well be the bit of regional geometry that is coming, but why is he so reluctant to endow them with effective powers? There is still a kaleidoscope of delegated responsibilities and conferred duties. Would it not make sense simply to ask city regions rather than the RDAs to deal with such matters as skills and economic development, so that they have real meaning?

If the Minister wants the system to work in Yorkshire, will he note that the parts of north Yorkshire that used to be in the West Riding and wish to be part of a city region should not be imprisoned in a unitary North Yorkshire council, and thus incapable of performing their duties and meeting their responsibilities?

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

I shall take the right hon. Gentleman's last point as a late submission or representation on the local government restructuring that I am currently considering.

During the review, we were urged in some quarters to impose new formal arrangements in sub-regions. We took the view that the best approach was for there to be greater devolution of powers and freedoms to local authorities, and that they should collaborate where their city or region requires an economic effort that goes beyond their city council or borough council boundaries. We want to encourage such collaboration. Where that takes place, there should be opportunities for greater delegation of powers and management control in respect of transport—and also in respect of economic development, planning, housing and some of the 14-to-19 skills plans. If local authorities together wish to move to statutory arrangements—without pressure or prescription from central Government, because it must be their decision to do so—that will open the door for us to consider devolving more powers from national Departments and national agencies and to give sub-regions greater certainty and longer term funding for some of the transport functions that can best be delivered at that level.

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Photo of Richard Caborn Richard Caborn Labour, Sheffield Central

First, may I welcome this timely statement? The regional development agencies were set up a decade ago—in 1997-98—and some of the Opposition's arguments then are the same as those voiced against my hon. Friend today. The RDAs addressed an economic deficit that existed at that time; we inherited a dysfunctional regional policy in 1997, and the RDAs have addressed that. There is now a democratic deficit, and the report and today's statement start to address that through the establishment of Select Committees and through empowering local authorities to play a proactive role. Therefore, I welcome that report and I hope that my hon. Friend will take no account of what the Opposition say. In the 1990s, the electors of Bradford chucked out Mr. Pickles; he holds no sway with local authorities and I suggest that my hon. Friend continues in the direction that he mapped out in his statement.

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

Alongside my right hon. Friend Mr. Prescott, my right hon. Friend Mr. Caborn was perhaps the principal architect of early moves to devolve economic policy making to the regions. Indeed, he steered through this House the legislation that set up the regional development agencies. He played an important role during his years in government, and I am glad that he welcomes the further moves that I have announced to devolve more to the regions and local authority areas. If we are able to bring together in a single regional strategy those policies that are currently produced by two different processes and two bodies, often using different bases of information and analysis, we will have the basis for a strong regional vision and strategy that allows us to address at the one and the same time policies on jobs, homes, investment in infrastructure and protection of the environment.

We will also have the basis for achieving what my right hon. Friend continues to want: stronger partnerships at regional and local level and a better alignment of central Government and departmental spending that can help economic development and regeneration through the learning and skills councils, Jobcentre Plus, the new homes agency, the Highways Agency and also the Environment Agency.

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Photo of George Young George Young Chair, Standards and Privileges Committee

Why in a relatively small country such as England, where we already have well established counties and districts that people relate to, are the Government persisting in developing an unwanted, remote and undemocratic regional tier which people do not relate to?

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

Quite simply, if matters are left at local authority level, there will be concern about equity across regions. As well as that, some projects and priorities need to reach beyond local authority boundaries to foster strategic development in terms of jobs, homes or infrastructure. That is the simple answer, and I hope that the right hon. Gentleman will accept the relevance and importance of some regional level functions. I hope that he will also accept that that is combined with a clear expectation and requirement for RDAs to devolve the funding to local authorities and sub-regions wherever possible and, by doing that, to reinforce the hand of local authorities to play, for the first time, a greater role in shaping the economy and prospects for their people in their area in the future.

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Several hon. Members:

rose—

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Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. Many hon. Members wish to catch my eye and, as always, time is limited. I ask for brief questions and answers, so that more hon. Members will be successful.

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Photo of Louise Ellman Louise Ellman Labour, Liverpool, Riverside

I welcome the recognition of the importance of local authorities, but will my hon. Friend continue to stress the importance of policies decided at a regional level to address regional disparities? Does he commend the north-west's efforts to invest major funding in Daresbury, which has resulted in the region having one of only two centres of excellence for scientific research in the whole country?

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Photo of John Redwood John Redwood Conservative, Wokingham

As someone who wishes to see the South East England Development Agency bite the dust alongside the Assembly, may I ask the Minister to explain why it is that those regions of the UK that have had well financed RDAs for longest—and strong regional planning and intervention for longest—have become progressively less well off compared with areas that have not been blessed with such organisations?

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

Perhaps I should send the right hon. Gentleman the results and the figures that demonstrate that in recent years the progress on skills, employment levels and general prosperity has been faster in the poorest regions than the more prosperous regions, in part because of the economic leadership that RDAs and some local authorities, especially in the cities, have been able to provide.

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Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield

The statement has many welcome aspects and I certainly look forward to further discussions in relation to the accountability arrangements for RDAs. When my hon. Friend talks about the welcome new flexibilities for local authorities, both joined together and on their own, will he address the fact that some of the bigger local authorities at city level, while important as a powerhouse for the region, can be remote from local areas? It will be vital for such authorities to be encouraged to devolve what powers they can internally inside the area, so that community regeneration may accompany economic regeneration.

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

Indeed, and my hon. Friend is the first advocate that I have heard in the Chamber for triple devolution. That is an important principle and it is entirely consistent with the Prime Minister's statement two weeks ago and the Green Paper on constitutional reform. It is important that local authorities do just that, and I hope that my hon. Friend will contribute to further debate and discussion on these matters and consider offering his services to the regional Select Committee in the west midlands.

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Photo of Tony Baldry Tony Baldry Conservative, Banbury

What does the phrase

"develop proposals for multi-area agreements to encourage groups of local authorities to agree collective targets...for economic development priorities; and work with interested city and sub-regions on scope for statutory sub-regional arrangements, which could allow greater devolution of national and regional economic functions" mean in plain English?

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

In plain English, it means that local authorities that cover a wider city area can come together, pool budgets and decide on the priorities that they think are most important for economic development, transport and some of the skills aspects. They can agree those between themselves and with Government, and that will be how we will judge them, how local people judge them and it is what we want to see for the future.

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N

Why didn't it say this in the first place then - isn't it about time that politicians and their policy writers were subjected to the Plain English campaign?

Submitted by Neil Whittaker

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley

I welcome the abolition of regional assemblies and the transfer of powers and resources to local democracy, but I remind my hon. Friend that almost all the powers and resources of the scores of regional bodies came originally from local government. Would not it make sense to go the whole hog and abolish all the regional quangos and thus empower the electorate instead of other parts of the quango state?

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

I know that my hon. Friend, a former leader of Manchester city council, is a leading advocate for that city and for city regions led by city local authorities. However, I must correct him: the arrangements that we have put in place and which we are looking to take further involve some devolution of powers and decision making from the centre. My hon. Friend follows transport policy very closely, and I remind him of what took place in the most recent funding allocations. In that process, £700 million of what would otherwise be determined entirely centrally was allocated according to the priorities set by the regions, and about which they had advised the Secretary of State.

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Photo of Dan Rogerson Dan Rogerson Shadow Minister (Culture, Media and Sport)

I welcome some of the proposals that the Minister has outlined, and especially his recognition that communities of interest, such as the seven counties in the south-west, exist at levels below the Government's regional architecture. Will he take seriously the aspirations of the people of Cornwall to have a greater say over their affairs, especially given the ambitious proposals for a unified structure of local government in the area? Also, will he look again at the case for a locally accountable Cornish development agency, in light of the important convergence funding from the EU?

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

Cornwall still faces some significant economic challenges. It has been greatly transformed by the objective 1 funding that it has received, and by some of the measures that the South West of England regional Development Agency has put in place. I take the hon. Gentleman's comments as another late representation to be considered as part of my work on local government restructuring.

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Photo of Gwyn Prosser Gwyn Prosser Labour, Dover

I warmly welcome the Minister's statement, and his announcement that the regional assemblies will be abandoned. I am especially pleased that the South East England regional assembly will go, as it never understood housing policy or the needs of the east Kent ports such as Dover and Deal. Does he agree that the new devolved structure will reach out to such areas and allow the voices of deprived parts of Kent to be heard? In the past, they have been drowned out by the prosperity of the wider region.

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C

So Deal is now a port? There are no depths to this mans misunderstanding of the locale he represents. Perhaps his "head banging" exercise as reported in the local press, will bear fruit. After all, nobody can be wrong all the time, can they?

Submitted by Colin D Gibbs Read 3 more annotations

Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

Indeed it will, and it is important that those areas that do not shout the loudest or have the strongest clout are at the centre of our policy concerns, as they are in our regional-level planning. My hon. Friend may be interested in the proposals set out in the review for a more concentrated allocation of regeneration funding, and for ensuring that mainstream funding from central Government agencies does more to support local regeneration efforts in the most deprived areas.

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Photo of Mike Penning Mike Penning Shadow Minister (Health)

May I assure the Minister that all my constituents will hear the promises made today to re-empower local government? Will he confirm that that will mean that the 18,000 new homes that have been imposed on my local community are dead in the water and that they will not go ahead if the local authority continues to object?

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

The hon. Gentleman will know that all the regional assemblies are engaged in revising their regional spatial strategies. With the exception of the West Midlands regional assembly, all regional assemblies are due to complete the process by next summer. Under the new proposals, local authorities will be involved in taking the first steps in preparing the regional strategy. They will set out their vision for the sustainable development of their areas, just as 40 towns and cities have raised their levels of housing growth under our growth points programme. The system will reinforce our ability to meet the need for housing, jobs and infrastructure development.

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Photo of Tony Lloyd Tony Lloyd Chair, Parliamentary Labour Party

I welcome today's statement, and remind him that the regional policy adopted by Conservative Governments of the past was very unfair, based as it was on the premise that success should go to the successful. If we are to build a genuinely one-nation approach, we must make sure that there is a regional process that delivers to the people whom this Government want to represent. However, people in my constituency will not know that the regional assemblies are to go, as they do not offer the accountability that we need. Will he guarantee that the Select Committee and local authority approach will mean that regional institutions are properly accountable to local people?

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I am confused as to why Tony Llodys constituents (such as myself) will not know of the abolition of the regional assembly, should they not be consulted on this? For consultations sake and to add my two peneth, I am delighted that the regional assembly is being abolished and would only be more please if similarly our "unaccountable and unelected" RDA is abolished also. The NWDA is appaulingly bad at...

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

The plans we are setting out today for stronger public scrutiny and accountability within the region of the work that the regional development agencies and other regional agencies may do will improve public understanding and public challenge of the work being done in the region on the public's behalf. Clearly, Parliament can reinforce that for the first time, through regional Select Committees, and I hope MPs on both sides of the House will play the most active possible role in making sure that the Select Committees are a success.

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Photo of Bob Spink Bob Spink Conservative, Castle Point

Does the Minister agree that infrastructure is the key to local growth and regeneration, and that building before the infrastructure is put in causes damage to local economies? Will he tell my constituents, who want to hear from him today, how the changes will get Canvey Island its much needed additional access road?

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

The hon. Gentleman is absolutely right. I have mentioned that we are considering options for a supplementary business rate and the review also lays out plans for reforming the business growth incentive we introduced just over two years ago for local authorities. In addition, it confirms that we are considering innovative funding methods, particularly to raise early investment capital for local authorities and local areas to develop infrastructure to support growth in the future.

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Photo of Kevan Jones Kevan Jones Labour, North Durham

I welcome the abolition of regional assemblies and the contribution that will make to lessening global warming by reducing the amount of hot air and strategy papers they produce. I also welcome my hon. Friend's commitment to sustainable development, but in County Durham the regional spatial strategy outlined at present will actually stop development, so will he go one step further and bin the strategy, which has more to do with Soviet central planning than with a modern dynamic north-east economy?

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

Of course the elements of the spatial strategy as a whole, about which my hon. Friend is so concerned, will be subject to independent examination and public scrutiny and, ultimately, to formal statutory sign-off by the Secretary of State.

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Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

It would be far better were powers transferred back to county districts and boroughs, but if we are to persist with some form of regional quangocracy what consideration has the Minister given to establishing a region called Milton Keynes and the South Midlands? At present, that absurd sub-region, involving three parts of three different bigger regions, is meant to control all the housing expansion in Northamptonshire but simply does not provide the transport infrastructure that local people require.

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Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

I welcome the generality of my hon. Friend's statement, especially the enhanced powers for local authorities in 14 to 19 provision and in economic development, and the flexibility in allowing city regions to develop at their own pace, which is very important. As well as extra powers for local authorities, will he also consider extra mechanisms to enable economic development to take place, and especially, as recommended by the all-party group on urban development, enhancing the ability to enter into public-private partnerships and to use tax increment funding whereby future income streams can be brought forward to enable capital infrastructure to be put in at an earlier date?

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

I respect deeply my hon. Friend's experience both as a Sheffield city leader before he entered the House and in his work on the Select Committee on Communities and Local Government. He is right to identify the fact that public money must be used to leverage in much greater private sector investment to help with regeneration and development. He will want to look particularly closely at the passage in the review on our work on innovative funding mechanisms, including possible options for regional infrastructure funds, better use of local authority assets and reliable revenue streams against which local authorities may be able to borrow to fund the infrastructure development needed in the future. We will report back on that work by the pre-Budget report this year.

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Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

I very much welcome my hon. Friend's statement, but I have a concern about the use of private consultants. For too many years, there has been widespread use of private consultants in local economic development. They have been expensive, incompetent and unaccountable. Will he urge all local authorities to do the job in-house, with directly employed public servants, and not to use private consultants?

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Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

I thought that I had moved from the Treasury, where I had to deal with questions like that over the previous five years. My hon. Friend is right in general terms to challenge the way in which local authorities and other agencies may use their resources. I hope that he will play a part in doing just that on the regional Select Committee that will serve his region. However, sometimes it is important that expertise that may not rest within a local authority can be brought in so that local authorities can do a better job of analysing the economic circumstances of their area and plotting and planning priorities for the future.

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