Deloitte, the business advisory firm, has welcomed the publication of the Government’s Sub National Review (SNR) of economic development and regeneration on Tuesday 17 July 2007 but warned that the key to its success is whether it can be delivered appropriately.

Phil Holt, Director at Deloitte’s Economic Development and Regeneration practice, commented: “The review is a comprehensive and impressive analysis that clearly recognises the regional competitiveness challenge. The proposed direction of streamlining delivery and clarifying roles of various organisations is right, however, it is not clear how these recommendations and proposals will be delivered.” 

The SNR Review feeds into the forthcoming 2007 Comprehensive Spending Review and aims to strengthen economic performance and tackle deprivation in regions, cities and localities throughout the UK.

Commenting further on the Review, Phil Holt said, “The key challenges remain: developing a framework for local scrutiny and decision making, achieving consensus on some of the most challenging issues such as delivering the new housing agenda and providing the right tools and resources for Regional Development Agencies (RDAs) and Local Authorities to facilitate the delivery of economic growth objectives. The intentions of SNR are welcome but if the execution of this new approach is not well thought through, there could be profound unintended consequences, making regional economic development even more complex and challenging. It’s the right direction but the devil will be in the delivery.”

Deloitte has highlighted the following conclusions about the SNR’s likely impact on the economy and regional government:

• Combining spatial and economic strategies into a ‘single’ regional strategy is a major leap forward but delivering it will pose a real resource and skills challenge for RDAs and their partners. 
• The RDAs have now been given the central regional role across economic development, regeneration, planning and housing in preparing the new integrated regional strategies. In light of regional assemblies being effectively abolished, questions remain about RDA representation in central government, the funding and the role of local authorities in scrutinising RDAs. And how national, regional and local strategies can be successfully aligned.
• The expectation that RDAs delegate funding to the lower levels is recognition of the localism agenda, but they need to ensure that they retain sufficient resources and influence. Experience so far suggests that where RDAs have delegated their investment to sub-regional partnerships they have seen the strategic thrust of the RES diluted.
• There is a challenge in terms of RDAs’ capacity to manage the political dimensions of contentious planning issues such as the Green Belt and housing numbers. The precise role of the new homes agency (Communities England) is still unclear, particularly in how its investment role will be aligned to the new integrated regional strategy.
• The SNR responds positively to the Regional Infrastructure Funds (RIFs) which have to be a fundamental way forward in tackling big ticket infrastructure to enhance the competitiveness of our regions.
• The City Development Company (CDC) concept is highlighted again in the SNR and this will support the moves many local authorities are making to develop these – but precise models remain vague. In our view, the real leap forward will be if the Local Asset Based Vehicles can be delivered, recognising the significant financial and governance challenges involved.
• The strengthened role for Local Authorities in delivering economic prosperity through Local Area Agreements (LAAs) and Multi Area Agreements (MAAs) within a broader Strategic Commissioning role is welcomed, but local authorities are short of the resources and capability needed to make this work effectively.

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