The Conservatives have made a
big policy announcement on their plans for regional and local government today. The Party’s Shadow Local Government Secretary, Caroline Spelman, also
discussed these plans on the
Today programme this morning.
This is important for business, because a lot of government support is delivered at these levels (and IPSOS/Mori are now giving the Conservatives a 20 point lead in the polls so these proposals could become reality sooner rather than later).
EEF has given a cautious welcome to the proposals.On the plus side, they include a number of very sensible ideas to get local authorities to take business growth seriously. (This is clearly a good thing, as many companies will point out!) Local authorities would be able to lower business rates at will, raise rates with businesses’ approval (to pay for things like infrastructure improvements) and keep any extra revenues (relative to a baseline) from increased business growth. The Conservatives have also pledged to review Empty Property Rates, an issue which has been a real concern for many EEF members.
However, and this is probably with the debate over Heathrow expansion in mind, they have also said that they will reverse the recent changes made to planning rules. EEF supported these changes, arguing that they will speed up and depoliticise decision-making around critical infrastructure projects, like new power plants. We would be concerned if we were to return to the days of long and drawn-out planning inquires, which simply cost a fortune and result in delays to critical infrastructure investments.
The Conservatives have also said that they will review the role of the Regional Development Agencies. They have always been suspicious of the unaccountable nature of RDAs and point out that in many areas the Agencies are simply based on administrative, rather than natural, boundaries. To address this issue, a Conservative government would allow groups of Councils to come together to establish Enterprise Partnerships to take over the responsibility for economic development from their RDA. Importantly, the Business Secretary would have to be satisfied that the areas covered by the new Enterprise Partnership reflect natural economic patterns and have strong business leadership, before they transfers the money currently spent by the RDAs. And the Conservatives have told us that where there is a demand, perhaps in an area with a strong region identity, some RDAs may continue to exist.
EEF recognises that there are problems with the performance of some of the RDAs and that they do not always fit obvious economic or geographic boundaries. However we believe that, for the most part, they provide business-led critical mass for economic development across regions. Put another way they cover a big enough area to take an overview of region-wide problems and they are not encumbered by the politics of local government.
Potentially the Tory proposals could mean that some areas will have local authority led Enterprise Partnerships, some will continue to have RDAs and some could have nothing at all (although this is not completely clear). A Conservative Government would therefore have a big task to ensure that such a patch-work quilt of structures had strong business representation and did not lead to confusion and varying or overlapping priorities. It may be that the answer is not to abolish the RDAs, but look again at their performance and, crucially, the areas they cover, while making them work more closely with local government to address the issue of accountability.