Communities and Local Government

• Cities and regions
• Current agenda

Cities and regions

Current agenda

The review of sub-national economic development and regeneration.

The review of sub-national economic development and regeneration was announced in the 2006 Budget and considers the measures which Government has put in place since 1997 to improve sub-national economic development and tackle pockets of deprivation. It also considers the evidence of progress to date as well as the impacts of globalisation and technological change. Analysis carried out through the review has identified areas where further reform may help ensure that regions and localities can respond to economic change and compete effectively in an increasingly globalised economy.

The review has been led by the Financial Secretary to the Treasury, and has been cross-cutting, involving close working between HM Treasury, Communities and Local Government and the Department for Business, Enterprise and  Regulatory Reform (formerly the Department of Trade and Industry), and extensive involvement by other Government Departments.

The review was launched on 17 July 2007 and will give councils and regions new powers and incentives to drive local prosperity, economic growth and regeneration and sets out how Government can best build on steps already taken to devolve powers and resources to the most appropriate levels. It forms part of Gordon Brown's drive to promote greater devolution in line with the Constitutional Green Paper also published in July to ensure regions and local areas can play a greater strategic role in tackle the challenges they face.

The review announces that Government will:

• consult on the possible creation of a focused statutory economic development duty. This would require local authorities to carry out an assessment of the economic circumstances and challenges of their local economy. This could include the local labour market, skill levels and the condition of and planned investment in local infrastructure
• ensure that Local Area Agreements include a clear focus on economic development and neighbourhood renewal
• reform current arrangements for neighbourhood renewal funding by more intensive targeting of the Neighbourhood Renewal Fund and consider introducing a reward element
• following machinery of government changes, transfer responsibility for funding 14-19 year-olds' skills policy from the Learning and Skills Council to local government
• consider options for supplementary business rates, working with local government, business and other stakeholders
• bring forward options for reforms to the Local Authority Business Growth Incentive (LABGI) scheme before the summer which produce a simpler, more certain scheme with a clear focus on growth
• work with the Regional Development Agencies so they play a more strategic role, delegating responsibility for funding to local authorities and sub-regions where possible unless there is a clear case for retaining funding at the regional level or there is a lack of capacity at lower levels
• provide support for local authorities through the proposed New Homes Agency

Recommendations from the review will be fed into the Comprehensive Spending Review 2007. To access the review please use the link on the right hand side to the HM Treasury website.

Background

There has been extensive engagement with stakeholders on the issues covered by the review. This has included discussions and submissions from the private sector, Regional Assemblies, Regional Development Agencies, local authorities, and other public sector agencies. The issues identified in the core cities' business cases also fed into the review. The business cases have been developed over the last 18 months and focus on measures and obstacles to their long term prosperity.