Policies for urban and regional development: the UK experience

1. Policies for urban and regional development: the UK experience Prof. Alan Harding, University of Manchester,Presentation to 2nd Symposium on Regional Development and Governance, TEPAV/EPRI, Izmir, Turkey, 25 October 2007

2. This presentation • Spatial policy and governance in the UK: a brief history • Recent changes under Labour Governments • Devolution and the ‘English question’ • Two spatial policy agenda • Review of sub-national economic development and regeneration (SNR) & Comprehensive Spending Review 2007 (CSR07) • A sustainable future?

3. Spatial policy phase I: Traditional regional policy (1950s-70s) • Aims: Regional economic ‘balance’; deconcentration of economic activity • Mechanisms: Incentives/disincentives to firms, supported by decentralisation measure for population, public employment • Evaluation: ‘Worked’ during late industrial period, unwound/became politically unsustainable with large scale industrial restructuring

4. Spatial policy phase II: urban policy (1980s-2005) • Aims: Attenuate worst consequences of economic restructuring, promote local economic and social development • Mechanisms: Variety of small area-specific interventions focused upon physical redevelopment, enterprise, selective social welfare ‘improvements’ • Evaluation: Supported recent ‘urban renaissance’, particularly in city centres, improved certain neighbourhoods. No marked effect at level of city or on regional disparities

5. Recent spatial debates: towards city-regions? • Context: Uneven urban renaissance, adjustment to ‘knowledge economy’. Growing regional disparities. • Aspiration: Fusion of urban and regional policy, underpinning and spreading benefit of urban competitiveness. • Potential mechanisms: Alignment of national (spatial AND ‘place blind’), regional and local policies, incentives for city-regional collaboration, city-regional governance mechanisms

6. Spatial development and devolution • Labour’s 1st term: 1997-2001 • Scottish Parliament, Assemblies for Wales, Northern Ireland, ‘strategic’ metropolitan authority for London • Regional Development Agencies for the other English regions • 2nd term: 2001-05 • Collapse of English ‘regionalism’ • 3rd term: 2005- • SNR & CSR: confirming spatial schizhophrenia

7. Two spatial policies? • Regional Economic Performance PSA commits Government to ‘make sustainable improvements in the economic performance of all English regions and over the long term reduce the persistent gap in growth rates between the regions’. • Why? The reason that the PSA target was set up like that was exactly in order to prevent taking the easy way out of trying to do one rather than the other of the two aspects of the target, so in order to be clear that we do want to narrow the gap between the economic growth rates of the regions but not simply by slowing down growth of high-performing regions. Equally, we want all the regions to grow, but it is not enough to simply have economic growth in every region; we actually want to narrow the gap as well. It was deliberately done to put the two elements of the target in. If we had thought one was more important than the other, we could have just picked one of those two elements as the PSA target (Minister Yvette Cooper, 2006) • In reality.........

10. TOTAL EXPENDITURE ON SERVICES BY REGION, PER HEAD, 2004-05

11. PERCENTAGE CHANGE IN TOTAL EXPENDITURE ON SERVICES BY REGION, PER HEAD, 2000-01 TO 2004-05

12. The SNR’s brief • ‘To identify, ahead of the 2007 Comprehensive Spending Review, how to further improve the effectiveness and efficiency of existing sub-national structures in England – including governance, incentives and powers – and identify options going forward that maximise value for money and deliver changes on the ground’……by…….

13. SNR’s task • ‘Consider the optimal geographical levels for governance and decision-making for functions directly linked to successful economic development and regeneration of deprived areas • Map the current governance arrangements and incentives for encouraging economic growth and regeneration at all sub-national levels, establishing in particular the interfaces between regional and local institutions • Establish the value for money and effectiveness of key current interventions for encouraging regional economic growth, and develop proposals for improvements • Build on existing work to identify the key drivers of neighbourhood renewal and regeneration, addressing in particular how socially excluded groups and deprived areas can both share in and contribute to sub-national economic growth, and • Establish the value for money and effectiveness of interventions aimed at tackling spatial deprivation, including targeted regeneration funding … and mainstream funding.’ • What it actually did…..

14. SNR outcomes • Local: LAs to be given specific economic development responsibility; recasting of audit and assessment arrangements to give greater priority to e.d. and regen. indicators of success; new power to levy a supplementary business rate for economic development purposes • Sub-/city-regional: Multi-Area Agreements; potential ‘duty of co-operation’ upon LAs, other public bodies; commitment to explore the creation of statutory sub-/city-regional authorities for e.d. & related purposes • Regional: abolition of indirectly elected Regional Assemblies; strengthened RDAs to be more ‘strategic’/delegating bodies • National: ‘regional Ministers’ to champion ‘their’ region in Westminster and Whitehall & oversee Government activity at regional level; possible establishment of dedicated Select Committees for each region

15. CSR 07 • Tight spending settlement for 2008-10: slower real term growth in key spending areas (health, education) BUT • Realignment of major capital projects to support and manage the growth of the London super-region: London Olympics, Crossrail, ‘growth areas’, added to e.g. Heathrow Terminal 5, Chunnel rail link and ‘incidental’ spatial policy (e.g. HE R&D)

16. Sustainability questions Reliance on the London super-region raises key challenges: • Economic • Dependent upon London’s global role in financial regulation • Environmental • Dependent upon effective growth management in London super-region • Political • No alternative visible as yet. Will be interesting to watch the spatial politics of the next economic downturn Does the same go for Turkey? Over to you, but….