This is a joint submission by the South West Regional Assembly and the South West Regional Development Agency and is indicative of the close partnership working there is between the two bodies to promote long-term economic prosperity and improvements in the quality of life experienced by the region's residents.

  A summary of the submission is that the Assembly and the RDA see the following as particularly important factors in addressing regional disparities:

—  In national policy making and resource allocation, there should be an equivalent focus on intra- regional disparities as on disparities between regions.

—  For the South West Region, significant investment in transport and other communications infrastructure is needed to address disparities.

—  There is a need for more co-ordinated national policy to balance development needs and pressures and provide a context for infrastructure investment decisions.

—  There is a need for flexibility within a national framework for regional organisations to tackle issues and opportunities in ways which are best suited to their needs.

THE IMPORTANCE OF ACHIEVING THE TARGET

  The South West Regional Assembly (SWRA) and South West RDA (SW RDA) support the national priority of reducing disparities between regions. However, regional level statistics are not necessarily the best guide to policy and action. For example at a regional level, the South West may appear to be performing better than some other regions, but this disguises significant variations within the region. A more sensitive approach is required which takes account of circumstances within each region which may not be reflected in regional average figures for GDP/Head or any other measure.

  The South West has significant variation in its underlying economic performance across the region In addition a number of factors relating to its peninsular geography, its pockets of deep rurality, its aging population structure and the adequacy of its social and economic infrastructure including telecoms, IT and transport all play a significant role in emphasising intra regional disparities in economic and social conditions. The basic premise of the SWRA and SWRDA is that to address regional disparities it is necessary to raise the performance of those parts of each region which are performing poorly and to tackle the causal and contributory factors.

  This approach reflects the position outlined in the Budget Report 2002 which stated that the Government's "goal of full employment in every region therefore requires policies to address the barriers which prevent local people from taking local jobs, as well as additional support for the most disadvantaged groups." The report goes on "within every region there remain localised pockets of high worklessness and deprivation and these areas have failed to share in the rising national prosperity that economic stability has brought."

WHETHER THE TARGET CAN BE ACHIEVED WITH CURRENT AND PROPOSED POLICIES INCLUDING THE IMPACT OF CURRENT REGIONAL STRATEGIES

  In the South West the focus is on intra-regional disparities. This is because the South West is the largest of the nine English regions and has the most disparate and diverse economy, both in terms of performance and activity. Compared to other regions the South West demonstrates the widest variations in sub-regional economic performance. Whilst some parts of the region demonstrate growth that is comparable with the South East, for example Swindon and Bristol, other parts of the region lag economically, for example Cornwall and the Isles of Scilly which receives European Objective 1 funding. Regional Planning Guidance for the South West (RPG 10), the Regional Economic Strategy (RES) and SWRDA's Corporate Plan emphasise that a primary focus is on addressing intra-regional disparities. For example RPG 10 identifies a number of "Areas of Special Need" and Strategic Objective 2 in the RES focuses on addressing economic disparities by encouraging economic inclusion. This focus on poor performance within individual parts of the South West also enables the economic performance of the region to be driven up, thus closing the gap on regions which have had a faster rate of growth than the South West.

  Both of these regional strategies are long term, looking 10-15 years ahead. Addressing regional disparities both within and between regions is essentially a long-term task. Overcoming the inherent weaknesses in local or sub-regional economies and achieving greater social inclusion may take several decades. There is therefore a need to secure commitment to long-term investment in social, economic and physical infrastructure and to discount that investment over a long enough period.

WHETHER THE INTRODUCTION OF THE NINE RDAS HAS CONTRIBUTED TOWARDS A REDUCTION IN, OR INCREASED THE DISPARITIES BETWEEN THE REGIONS

  The successful models of the Scottish and Welsh development agencies have demonstrated that a regionally focused economic approach can be effective in reducing regional disparities with the rest of the UK. An analysis of the RDA Annual Review documents would demonstrate that much excellent work has been begun and that in some cases there have been some effective quick wins. For example in the South West projects the RDA has contributed to have had an immediate effect on the economy of the far South West; the development of the Eden Project; decision of Ryanair to start flying in to Newquay airport, and developments such as the Tamar Science Park are providing the necessary infrastructure which will underpin future economic success. It is not possible at this early stage to account for any change in economic performance in terms of available economic statistics although the effects are being monitored.

WHETHER THE PROPOSALS FOR REGIONAL ASSEMBLIES WILL MAKE A DIFFERENCE TO THE ACHIEVEMENT OF THIS TARGET

  The proposal for directly elected regional assemblies provides central government with another model to address economic development and social exclusion and specifically to meet the regional disparity target. Under the existing model the RDA has the responsibility for economic development within a strong national policy framework, working with the government offices in this context, but being scrutinised by the existing regional chambers. Under the proposed new model the directly elected regional assembly would have responsibility for the RDA and its budget, and therefore could have a stronger role in the direction of economic development. In this context, although there would still be a national policy context which would operate on the RDAs, the directly elected regional assemblies would probably wish to take a much stronger regional approach to economic development, and ensure effective integration of economic, social, environmental and spatial policy making . This means that such assemblies could potentially better address the needs of the region. However, this approach could only be a significant improvement on the current arrangements if there was greater devolution of power and decision making to Regional Assemblies on significant areas of policy, most significantly transport and promotion of social inclusion, that complement the important "single pot" flexibility which RDA s now have to promote economic development. In particular, there would need to be greater regional control of capital expenditure on road and rail infrastructure.

WHETHER A COHERENT NATIONAL POLICY CAN BE ACHIEVED AND IF SO HOW

  The issue of how national policy and regional policy relate to each other is a complex one that will need to be examined more closely as the regional agenda develops. Clearly the establishment of RDAs themselves was partly an attempt to get away from the more centralised national policy approach of the past which has not successfully reduced regional disparities. The rationale of a regional policy approach which allows much greater recognition, and understanding, of local conditions and problems is therefore a logical response. However, balancing the freedom of the regional approach, within the national context, is problematic. Currently coherence is achieved by using national sectoral policies as an overarching framework which sets out the high level strategy, aims and objectives, but leaves freedom for interpretation in terms of the strategic focus and delivery at a regional level. This national framework is important because the regional agenda needs to join-up with other parts of national policy, for example health care. The Integrated Regional Strategies that are being developed regionally should be the formal regional response to such a framework.

  One significant omission in national policy which does impinge on the development of a coherent approach to tackling inter regional disparities is the absence of a national spatial strategy. Regional Chambers are being given powers through the Planning and Compulsory Purchase Bill, to act as Regional Planning Bodies and produce broader based spatial strategies which should guide investment in a number of sectors, ensure sufficient land is available and transport and other infrastructure is coordinated with development. Government could use a national spatial strategy as a mechanism for addressing inter regional growth issues and as a guide to regional allocations of funding for transport and other infrastructure.

  A recent Cabinet Office Report: "Incorporating Regional Perspectives into Policy Making" has highlighted the need to integrate regional thinking more clearly into national policy making, and to break down some of the cultural barriers in Whitehall which may prevent adequate engagement with the regional agenda. Any changes in Whitehall culture which reinforce the importance of a regional perspective on national policy should be welcomed.

WHAT LESSONS CAN BE LEARNED FROM PAST REGIONAL POLICIES

  The unique influence of London and the South East on the potential of other regions and on the availability of resources especially for infrastructure projects needs to be taken full account of. A national spatial strategy mentioned above would provide a long term framework for balancing competing pressures between the regions and for linking national priorities for infrastructure with regional development needs. The absence of such a framework from previous rounds of regional policy and regional planning has resulted in a fragmented approach which has been unable to address some of the bigger inter regional disparities in the availability of regional infrastructure.

WHAT CHANGES TO POLICIES ARE REQUIRED TO ACHIEVE THE TARGET, INCLUDING WHETHER GOVERNMENT DEPARTMENTS, AGENCIES AND NON-DEPARTMENTAL PUBLIC BODIES SHOULD BE MOVED TO LESS PROSPEROUS REGIONS

  The location of public sector organisations can provide positive economic growth in recipient areas, such as the MET office's recent move to Exeter. Public sector jobs are usually relatively permanent and can be relatively well paid in some labour markets Strategic relocations can also help reduce "overheating" in London and the South East and help reduce the problems currently experienced in providing affordable housing for public sector workers which is particularly acute in London and the South East.

HOW MUCH ADDITIONAL FUNDING IS NEEDED IN THE POOREST PERFORMING REGIONS

  It is not possible for the South West RA and RDA to express a view on the resource needs of other regions which exhibit poorest performance on the economic measures used. From a South West perspective, the point has been made about the need for an approach based on narrowing intra regional disparities. The South West has clear priorities for investment in communications infrastructure to improve connections within the region and for greater emphasis on upskilling local workforces. Investment in improved infrastructure will also contribute to better links with external markets and suppliers for the business sector. The recent SWARMMS study has identified the importance of a package of measures which will address inter regional connections between the South West and south east and London. Government investment in improving links identified in SWARMMS is seen as fundamentally important to the future economic performance of the region.