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Rosie Winterton MP, Minister for Regional Economic Development and Coordination
Local Government Information Unit Conference, Wellcome Collection conference centre, London, 15 July 2009
It’s a real delight to be with you today for my first major speech as the Minister for local government and Minister for regional economic coordination.As I was looking at the delegate list on the way here I was struck by how varied and distinguished the audience is today. It is a testament to the Local Government Information Unit’s success and reach over the past 25 years. So it’s no surprise you were voted Think Tank of the year last July.
I want to thank you for bringing together such a thought-provoking essay collection in the publication ‘Do Regions Matter?’. I’ve been looking closely at the ideas it contains. This is one of the key issues we are facing at the moment.
In my foreword to that publication, and in my speech to you today, I want to set out how I want to work across Government – to speak for our regions in Whitehall and Westminster, and help local authorities drive economic growth in all areas of the country.
But I do want to emphasise that one of my key objectives is to make sure that we do have a very open dialogue. It is that kind of collective thinking, that exchange of ideas, that dialogue, that organisations like the LGIU provide so well and that I want to take advantage over the coming months and years.
As I hope everyone today will recognise, the Government is absolutely committed to economic prosperity and opportunity for all – whoever they are; wherever they live – and thriving, cohesive communities are built on strong local and regional economies.
We all know that at the moment, because of the global downturn, people are worried about their jobs and their homes and we have to be there to help them.
The Prime Minister has made it very clear that minimising the effects of the downturn and achieving a rapid upturn is the Government’s top priority.
Every area of the country is feeling the downturn, but in different ways, and to different degrees. So our response must be region by region, area by area, so that we are supporting local economies in the most effective way.
My role is to make sure that we are connecting local, regional and national action.
I want to support the work of Local Authorities, Regional Development Agencies, delivery partners and the business community, bringing together my role in Communities and Local Government as Local Government Minister with my role in the Department for Business, Innovation and Skills, and coordinating the work of the regional ministers. But giving it a new, sharper focus on the economy.
So as you have probably gathered, I strongly believe regions do matter.
I have always been in favour of regional government. I worked with John Prescott on the Alternative Regional Strategy, which formed the basis of many of the structures we see today. I campaigned hard in the referendum in the North East, and I was disappointed with the outcome.
But my view is not rooted in dogma. It is based on the clear evidence that a regional approach to economic development does work.
In 1999 we set up the Regional Development Agencies, to promote enterprise and drive economic growth in every region. And I don’t agree with the argument that they have been a costly failure. I believe the RDAs have been extremely successful.
The independent study by PricewaterhouseCoopers, released earlier this year, showed that, on average, every £1 spent by the RDAs generates an extra £4.50 for their regional economies.
RDAs have also created or safeguarded 720,000 jobs between 2002 and 2008.
And they are beginning to narrow the historic gap in economic performance across the English regions. By the first half of this decade the gap between the growth rate of the greater South East, and the Northern, Midland and South West regions had started to close, defying the long-term trend.
So I think these facts speak for themselves. Active regional policies deliver real economic results.
The RDAs have flourished during our fight back against the global recession. They have been able to provide economic leadership; they have been able to catalyse investment in key infrastructure projects; they have worked to attract vital inward investment; and they have played a critical role in sustaining viable companies. All these are essential building blocks for economic recovery.
As well as supporting businesses, through the ‘Real Help’ initiatives, there are examples of RDAs around the country intervening to blunt the impact of the recession:
Interventions like these can be absolutely vital to reinforce what local councils are doing to support local industries and to develop a strong business environment.
The Regional Improvement & Efficiency Partnerships, led by local councillors, harness the expertise of local authorities to drive forward greater efficiency, innovation, citizen engagement and collaborative procurement.
They have been very successful at regional level, and that’s why I am pleased to announce today that I can confirm we are investing another £68m in the RIEPs this year.
All this is part of our planning for the future so we are prepared for the upturn when it comes. Because, despite the worldwide downturn, the global economy is set to double in size over the next two decades.
That’s why, last month, Gordon Brown launched Building Britain’s Future. It set out the smarter, more strategic approach to industrial policy that the Government needs to take, to ensure our people and businesses are equipped to compete in the new global economy that will emerge from this downturn.
What we need to do now is work together – Whitehall, town halls and RDAs - to translate that vision for the future into a blueprint for action in every region and every local area.
The new Single Regional Strategies will be crucial to that process. These will enable councils and RDAs to set their economic priorities and target investment on growth sectors.
For example, the South West RDA is earmarking £11million to develop new capabilities in aerospace technologies; and in the Midlands, the East Midlands Development Agency and Advantage West Midlands are investing over £40million in the Manufacturing Technology Centre near Coventry.
But the success of the strategies depends on local government. Councils have to be at the front of the drive to develop local and regional economies.
Over the past twelve years the government has given Local Authorities more freedom and flexibility, whether through Local Area Agreements; through Multi Area Agreements, which have provided a new framework for joint working between councils; or through the first ever three-year finance settlement.
But I want to go further and help focus local authorities and regions squarely on improving our economic prosperity.
So let me set out my three main priorities for the coming months and years.
First, it’s vital we continue to give councils a strong economic role to help get through this recession as quickly and painlessly as possible.
Councils know their local areas, they know their local businesses and it is right that they lead their communities out of the downturn - and it’s right that Government supports them. That’s why we have asked councils to focus on worklessness and lead our £1billion fund to create 150,000 new jobs.
We are determined not to leave another generation on the employment scrapheap, which happened in previous recessions.
Already, through Local Area Agreements, Councils are tackling economic priorities in their areas.
Today I am publishing research that CLG commissioned, which shows that councils are increasingly making economic development a priority, and that the LAA process is valued locally because it brings stakeholders together to decide upon local economic priorities and, importantly, how they can work together.
We’ve seen fast action from Local Authorities during the downturn. Giving debt advice to people worried about paying the bills; training to get people back in to work; and support for business.
Local Authorities in Yorkshire and Humber have signed up to an economic pledge, which cements their commitment to the economy of their areas. The Authorities have made twelve promises to their area – for example, paying bills promptly to keep cash flowing to local companies; helping get people into Council jobs and other local jobs; and using the Councils’ buying power to benefit local businesses and to benefit the local economy.
To translate commitment into action, close co-operation can often be absolutely essential. We can already see this working in the ten Multi-Area Agreements, where councils can, over a wider geographical area, shape services around the needs of communities - in skills, employment, education, and health.
We are currently legislating to allow groups of councils to create Economic Prosperity Boards. These will provide a further option for MAA partnerships that want stronger sub-regional governance, and I am keen to ensure that serious economic development powers and flexibilities are placed on the table to give these new vehicles real impact.
But we certainly need to think further about other ways to motivate local leaders to help businesses with job creation. This might include a new set of incentives to drive the fight against worklessness further up the agenda of every single local authority.
As I have said, economic development now needs to become the core business of councils, working in partnership with RDAs.
That is why today I can announce that I am reopening the LABGI scheme with £100m over the next two years – money which councils are free to use to help increase local business and jobs so they can drive their economies beyond the downturn.
And there are other opportunities for Authorities to do more for their communities. Yes, we need to think about incentives for job creation. But there are already powers available – like charging, trading and the wellbeing power.
There are some good examples of councils applying real imagination to economic problems:
And if those powers don’t go far enough then let’s hear your new ideas. Tell me what more is needed to better serve local communities. I think it is vital that we examine very carefully, across government, ideas that can help local economies in these difficult times.
Secondly, we need to ensure no towns or cities are left behind.
When the country last faced serious economic difficulty in the 1980s and 1990s, local problems were still tackled centrally with top-down solutions. Councils didn’t feel they had the powers, the skills or the financial resources to respond. In a sense, London stood alone as an economic powerhouse with its own local control.
But today, what we’re seeing is that London is one of those areas hit hardest, so we need other cities and regions to drive and support growth more than ever before. Industrial strength and competitive advantage in the regions must provide the foundation for our national economic success.
Over the last 12 years we have made that possible by regenerating our towns and cities. And now Leeds and Manchester are at the forefront of that as the city-regions pilots, but that does not mean other areas shouldn’t up their game too. Let me make it clear that success isn’t just for urban areas. The Pennine Lancashire MAA shows what ambition rural areas can show with the drive to make it happen.
Our English regions don’t need permission from Whitehall to get on with driving their economy and I want to make sure we remove any barriers in their way. So those are the ideas I want to hear.
Thirdly, alongside the push for greater efficiency we will continue to ensure Local government finance is on a firm and secure footing. Any savings councils make can be recycled back into services or used to keep council tax down.
Councils are often the largest employers in many towns and cities and they purchase billions of pounds of goods and services. But we should be asking ourselves whether our procurement practices allow authorities to support and invest in their local economies, keeping local firms involved and giving local businesses a fair chance to bid for these tenders. We should think about how we can perhaps do more to support that.
Local councils and regional agencies have done a tremendous amount of innovative thinking over the last 12 years. We in government need to support that innovation and make sure it continues to flourish in difficult economic times.
We need to celebrate that innovation and make sure we are always introducing fresh thinking into our policy development.
I think we can take inspiration for fresh thinking from the founder of the building we meet in today.
Sir Henry Wellcome was a well known pharmaceutical entrepreneur and founded one of the world's largest medical charities – the Wellcome Trust.
But what you might not know is that he started his career in the 19th century by marketing his first invention – invisible ink. He advertised his invention as ‘Wellcome’s magic ink’ in his local newspaper. Pretty impressive at the age of 16.
He was an innovator – although customers for his so-called ‘magic ink’ may have been disappointed to discover that it was actually made from ordinary lemon juice!
Our innovations are more tangible. Based on evidence. Affecting people’s lives for the better. But we should always think creatively about how to work together.
This Government has, I believe, already made great strides in protecting the country against the worst excesses of the global downturn.
Our challenge – together – is to do more, to go further, to dig deeper to boost our economies, so we are ready to springboard into the upturn.
We need to support our people and communities in difficult times and prepare them for the future. Together, I believe we can do that.
Thank you.
As I was looking at the delegate list on the way here I was struck by how varied and distinguished the audience is today. It is a testament to the Local Government Information Unit’s success and reach over the past 25 years. So it’s no surprise you were voted Think Tank of the year last July.
