GUIDANCE TO RDAS ON REGIONAL STRATEGIES

FOREWORD

Regional Development Agencies are now up and running in all the English regions outside London. I and my Government colleagues, in particular Gordon Brown, David Blunkett and Stephen Byers, are working closely with RDAs as they take responsibility for their programmes.

We are looking to the RDAs to deliver more effective, more integrated regeneration programmes, to take forward at the regional level many of the priorities of the White Paper 'Our Competitive Future: Building the Knowledge Driven Economy' and to develop a framework for improving the regional skills base. The regional strategies to which this guidance relates will give focus and coherence to this work, and to the work of others working in and for our regions.

The Government want RDAs to develop a new strategic vision for each of the English regions. This guidance encourages them to formulate clear priorities for seeking to improve regional economic performance, and to identify strategies for achieving them. The aim will be to help to ensure that regional opportunities are fully exploited, and that those responsible for economic decision-taking are working effectively together, with common goals and accepted priorities for regional development.

RDAs are building partnerships for prosperity. They will want these to be strong and effective partnerships covering a wide range of interests, including the developing regional chambers that will provide a focus for consultation on their strategies.

Establishing the RDAs has involved a great deal of hard work and commitment from many groups, organisations and individuals. I and my colleagues have been impressed by the enthusiasm they have shown. We want RDAs to build on this work in developing their strategies. They will, I am sure, face some difficult decisions and hard choices along the way. They will not be able to achieve all regional ambitions, or meet everyone's aspirations, in their first strategies, which they are aiming to get to us in October this year. But I hope that RDAs will provide the leadership that our regions need to develop sensible approaches to the economic challenges that they face, and that they and their partners can unite behind priorities for action that will, in the end, make a real difference to regional and national competitiveness.

John Prescott
Deputy Prime Minister

INTRODUCTION

Section 7(1) of the Regional Development Agencies Act 1998 ("the Act") requires a regional development agency (an "agency") to formulate and keep under review a strategy in relation to its purposes and to have regard to the strategy in exercising its functions. Section 4 of the Act sets out the purposes of an agency which are:

(a) to further the economic development and regeneration of its area,
(b) to promote business efficiency, investment and competitiveness in its area,
(c) to promote employment in its area,
(d) to enhance the development and application of skills relevant to employment in its area, and
(e) to contribute to the achievement of sustainable development in the United Kingdom where it is relevant to its area to do so.

The Act states explicitly that a regional development agency's purposes apply as much in relation to the rural parts of its area as in relation to the non-rural parts of its area.

Section 7(2) of the Act enables the Secretary of State to give guidance and directions to an agency in relation to the exercise of its functions under subsection (1), in particular, with respect to:

(a) the matters to be covered by the strategy,
(b) the issues to be taken into account in formulating the strategy,
(c) the strategy to be adopted in relation to any matter, and
(d) the updating of the strategy.

Section 7(3) provides that the issues mentioned in section 7(2)(b) include issues relating to any one or more of the following:

(a) the agency's area,
(b) the area of any other regional development agency, and
(c) any part of the United Kingdom outside England.

This document constitutes guidance under Section 7 of the Act. Section 8(1) of the Act empowers the Secretary of State to designate as the regional chamber for an agency a body which is representative of those with an interest in an agency's work. In exercising its functions under section 7(1)(a) to formulate and keep under review a strategy for the region, an agency will be required to consult with its designated chamber and to have regard to any views expressed by the chamber.

PURPOSE OF THE STRATEGY

The fundamental purpose of the regional strategy is to improve economic performance and enhance the region's competitiveness, addressing market failures which prevent sustainable economic development, regeneration and business growth in the region. Agencies' statutory purposes cover a broad spectrum of activity which will require them to take an integrated and sustainable approach to regional economic issues, tackling business competitiveness and the need to increase productivity and also the underlying problems of unemployment, skills shortages, inequalities, social exclusion and physical decay. In developing its vision for the region the agency should seek to join up and develop links between these areas, to ensure an integrated, sustainable and cohesive approach to improving regional economic performance. The strategy will need to focus primarily on those areas that justify action at the regional level.

More specifically, the agency's strategy should provide:

• a regional framework for economic development, skills and regeneration which will ensure better strategic focus for and co-ordination of activity in the region whether by the agency or by other regional, sub-regional or local organisations;
• a framework for the delivery of national and European programmes which may also influence the development of Government policy; and
• the basis for detailed action plans for the agency's own work, setting the wider aims and objectives for its annual corporate plan.

APPROACH TO DEVELOPING THE STRATEGY

National Policy Context
The strategy should aim to support and enhance national policies while addressing the particular needs of the region. In formulating its strategy, the agency should have regard to all relevant statements of Government policy and to any separate guidance issued under the RDAs Act 1998. The Government Office for the Region will advise on the national policy context and its impact on the strategy. Government agencies and relevant national advisory bodies will also be able to provide advice on a range of issues.

Departments will from time to time give the agency additional non-statutory guidance and supplementary advice on matters of Government policy relevant to its functions and activities and to policies and programmes with which it will be concerned. (Some such material is given in parallel with this guidance.)

HM Treasury provide forecasts for the macro-economy twice a year, currently the Pre-Budget Report and the Financial Statement and Budget Report. In addition, the Treasury produce a monthly summary of independent economic forecasts. Agencies should take account of these forecasts in formulating and reviewing their strategy.

Partnership Working
The success and effectiveness of an agency's strategy will depend in large measure on the degree of support it commands in the region. The aim should therefore be wherever possible to proceed through dialogue, working in an open and transparent way, so as to develop a strategy and agreed priorities for action which recognise the principle of subsidiarity, and will provide a focus for all economic development and regeneration work in the region. This will reduce the scope for duplication of effort and ensure that the region as a whole secures value for money for the resources available to it.

It will be for the agency to consider how best to foster regional partnership and co-operation, in both public and private sectors, building on the work that the Government Office and others have begun.

However, it will be important to ensure that those involved in developing and implementing the strategy fully represent economic, social and environmental interests within the region; that they cover rural as well as urban interests; and that they encompass all relevant economic, ethnic and social groups, including the voluntary and community sector. In particular, the agency will need to work closely with its regional chamber. It will want to ensure that its regional chamber and other regional partners are involved in the development of the strategy at an early stage.

It will be important to involve those operating at the sub-regional and local levels, as well as at the regional level. Local authorities will be key partners because they represent their communities and play a major role at local level in many areas of the agency's business ranging from economic development and regeneration to local agenda 21. The agency will need to work closely with other regional interests, including Chambers of Commerce, Business Links, Training and Enterprise Councils (TECs) and the Employment Service. It will also be important to work alongside local partners and local communities and the new Lifelong Learning Partnerships that are being established to provide a focus for effective planning and delivery of education and training provision. The agency will also need to develop close links with organisations, including those at the national level, that cover key sectors of the regional economy.

Existing work of partners within the regions
Much work has already been done by a wide range of organisations and partnerships in the regions aimed at identifying regional needs and developing regional policies to address them. Agencies will want to take account of this existing work and to build on its findings and conclusions. Annex I outlines the types of strategic work already undertaken and indicates how agencies should build on and develop this work.

CONTENT/COVERAGE OF THE STRATEGY

The strategy should include a clear analysis of the regional economy and of the social and environmental conditions which influence it. It should highlight the strengths and weaknesses which the region needs to build on and to remedy, and identify any barriers to regional growth.

The strategy should identify priorities for action and should identify who will be responsible for delivering particular elements of the strategy. It might be necessary for the agency to draw up detailed implementation plans, setting out action to be taken by the agency and by other partners in the region.

The strategy should set out for the medium term (5-10 years) the agency's policies, aims and objectives for the region's economy including:

• how to improve the competitiveness and productivity of businesses in the region, and of the region itself as a location for mobile investment projects;
• how to progress the regeneration of the region (having special regard to the coalfields areas); and
• how to address the region's skills needs, to ensure that they meet the demands of a dynamic and growing regional economy.

Sustainable development is integral to the agency's work on its strategy and, in the development of its policies and proposals, the contribution of the strategy to sustainable development will be a key factor.

The strategy should include an appraisal of the contribution the strategy will make to sustainable development, and how it will foster:

• high and stable levels of economic growth and employment;
• social progress which recognises the needs of everyone (including all social and ethnic groups);
• effective protection of the environment and prudent use of natural resources; and
• integration of economic, social and environmental objectives.

Agencies will need to identify the areas or communities in which there are significant deprivation, inequalities or social exclusion. The strategy should identify the main social, environmental and economic factors which underlie these issues.

Agencies should include proposals for developing strategic sites identified through the planning process which meet business needs. They may wish to propose that additional sites be brought forward through the planning process. Agencies should also identify any clusters of businesses which are, or have the potential to be, of regional economic importance.

The strategy should take account of the particular features of the region's rural areas including the effects of sparsity of population, small settlements and a narrow economic base; relative inaccessibility, remoteness and peripherality; and the role of land-based industries (such as agriculture and forestry) and countryside conservation priorities.

The strategy will provide a context for the agency's more detailed actions plans, including those which Departments have specifically invited the agency to develop on skills, mobile investment, and innovation and technology.

RELATIONSHIP WITH REGIONAL PLANNING GUIDANCE AND REGIONAL TRANSPORT STRATEGIES

Regional Planning Guidance (RPG) issued by the Secretary of State provides the land-use planning framework for the regions as set out in draft PPG11 "Regional Planning". RPG will become a comprehensive spatial strategy for each region and will include the regional transport strategy. It will integrate the planning of major new development at the regional level and the identification of regional transport investment and management priorities. It will provide a long-term regional framework for development plans and local transport plans.

Agencies must, like any other body, work within and alongside the framework provided by RPG and local authority development plans. In formulating their regional strategies, agencies will have to have regard to the long-term spatial planning context for the region, as set out in RPG. However, RPG will in most regions be being reviewed and developed at the same time as agencies are formulating their strategies. The relationship, as these strategic documents develop, between the bodies producing them, is therefore of the highest importance. It will require constructive and collaborative working and on-going dialogue on matters of mutual interest. In developing their strategies, agencies will need to have regard to RPG, and to the developing thinking of the regional planning bodies as they review planning guidance, and develop regional transport strategies as part of this guidance. Similarly, agencies will provide an important input to the preparation of regional planning guidance. A shared understanding of issues, objectives and opportunities will be important. The strategies will need to be complementary if they are to secure the management of change in a coherent and sustainable way.

PROCESS

Cross-regional Working
The strengths and weaknesses of a region will in many respects be exclusively the region's, but there will also be issues and problems which are of interest to more than one of the agencies. Agencies should work closely together in addressing issues of common interest, both to inform the strategies they adopt and to ensure that their action plans are complementary. Agencies should consider areas where collaboration would be fruitful. In some cases, where issues straddle regional boundaries, agencies may wish to work together to develop a cross-boundary strategy or action plan. In particular, they will need to do so in relation to inward investment and the development of supply chains. Consideration also needs to be given to developing appropriate links with Scottish Enterprise, the Welsh Development Agency and the Northern Ireland Development Board.

Each agency's strategy should contribute to the aim of raising the economic performance of the United Kingdom as a whole. Strategies should not, therefore, be directed at the expense of other regions and should be based upon co-operation between regional development agencies and development agencies elsewhere in the United Kingdom.

Evaluation and Monitoring
Development by Government and agencies of the monitoring and evaluation framework for the agencies will be an iterative process and will continue over the coming 12-18 months. An interim framework has been produced which reflects the fact that each region will have different priorities, yet many common over-arching aims. The aim of the framework is to provide a regional context for the agencies and to show the outcome or impact on a region of an agency's activity. It will also include measurable outputs of particular programmes and projects.

Detailed in Annex II are a number of core indicators which all agencies should use to inform the development of their strategies. These cover each of the five statutory purposes of the agencies and include indicators which provide a regional context and others which measure key aspects of regional performance on which the agencies can have an influence. Agencies will also be encouraged to work with each other, and with Government, to develop additional indicators which address the particular features of their regions. This will include exploring the scope for indicators at the sub-regional level and for indicators which address inequality. Use of common statistics and indicators will enable agencies to make meaningful comparisons between regions. We would, therefore recommend the use of the wide range of statistics and information provided by the Government Statistical Service and other Government departments.

In the medium to long term, Government will work in conjunction with the agencies to improve the quality and range of information at the regional and sub-regional level. This work will need to take account of existing indicators such as the Regional Competitiveness Indicators, Quality of Life Indicators, Regional Trends and the Index of Local Deprivation, amongst others. It will provide an opportunity to improve the core indicators.

Consultation
In formulating its strategy, the agency should consult widely, with Government and other interests nationally, and within the region. The strategy should include a statement on the arrangements made for consultation, including a list of those consulted and, where appropriate, of those who have agreed to be associated with its proposals.

Role of Government
The Government Office for the Region will provide the focus for an on-going dialogue with Government as the strategy develops. It will also provide a means of ensuring that the strategy enhances and supports national policies and programmes, that the agency's strategy and RPG are consistent in their approach and that TEC/CCTE strategic plans and Business Link business plans support the agency's strategy, (although in the first instance TECs and Business Links will seek the endorsement of the agency of their plans in order to ensure that they conform with the agency's strategy).

The aim should be to formulate a strategy which the Government is able to support.

Timetable
The agency should produce its initial strategy by October 1999 following consultation within the region and the involvement of regional partners. Agencies will wish to develop their strategies over time to reflect changing circumstances but should aim to review the strategy in full every three years.

Annex I

Agencies will be taking forward much of the strategic work that has previously been developed or co-ordinated by the Government Offices including setting the framework for:

• improving regional competitiveness (through the regional competitiveness strategies)
• regeneration and the allocation of funds from the Single Regeneration Budget
• business support
• innovation and technology (including innovation and technology action plans)
• exports (including regional export strategies)

The agency should also build on and further develop:

• the Regional Development Organisation's work on promoting inward investment and after care
• the work of the Regional Supply Office in developing supply chains
• English Partnerships' strategic work in relation to land and property regeneration
• strategic plans for rural development areas prepared by Rural Development Commission and its local partners
• the work of TECs, the Employment Service, colleges and universities, National Training Organisations and other regional partners to address the region's skills needs.

As they develop their regional strategies it will be important for agencies to consider the other strategic work that will continue to be developed at the regional, sub-regional and local levels by other groups and organisations. This includes:

• the work of the regional chambers
• the work of the Government Office in involving the regional voluntary and community sector networks and fora in regional activity
• work done by regional partners to develop regional sustainable development frameworks
• Regional Tourist Board strategies
• regional cultural strategies
• local authority economic development plans, rural strategies and local agenda 21 plans
• local authority/health authority health improvement programmes
• TEC/CCTE strategic plans and economic development strategies
• Business Link business plans
• CBI regional strategies
• crime and disorder reduction partnerships' strategies
• the work of the Chambers of Commerce

Annex II

Core Indicators for RDAs

The tables below set out core indicators for RDAs. The first group aim to provide contextual information on the state of the region, and the second aim to reflect the activities of each RDA. Where possible, these indicators should be presented at both an aggregate level and disaggregated by ethnic origin, gender and disability.

State of the Region Indicators

RDA Activity Indicators

RDAs will be asked to report, where possible, on each of these indicators at a regional level, for the worst 10% Local Authority Districts (LADs) for the region, for priority Rural Development Areas, and for Assisted Areas.

Data on all measures, excluding skills, will be collected by aggregating outputs across those programmes for which RDAs are directly responsible.

Site Information