INTRODUCTION

  The Royal Town Planning Institute (RTPI) is the professional body representing over 18,000 chartered town planners. We welcome the opportunity to contribute to the Select Committee's inquiry into how the ODPM is going to achieve its target to "reduce the persistent gap in growth rates between regions".

  This target is defined in the ODPM Public Service Agreement;

Make sustainable improvements in the economic performance of all English regions and over the long term reduce the persistent gap in growth rates between the regions, defining measures to improve performance and reporting progress against these measures by 2006. 1

  It is worth noting at the outset that the target of reducing the gap is (a) placed in the context of improving the performance of all regions; (b) recognised as a long term aspiration; (c) shared with HM Treasury and the DTI but not, for example, with the Departments of Education or Health and (d) the subject of measures which have yet to be devised2. Some of the issues raised by the facts will be covered in the evidence below.

THE IMPORTANCE OF ACHIEVING THIS TARGET

  It is extremely important to realise this target. Regional disparities do not benefit the UK. In economic efficiency terms, prosperous areas, such as London and the South East become overheated. The availability of labour, provision of housing and services become serious issues whilst the less prosperous areas face lack of investment, higher than average unemployment and loss of professional and skilled workers.

  The economic efficiency argument was put well in the White Paper3 which introduced legislation for Regional Development Agencies (RDA's). This clearly expresses the need to address regional imbalance for the benefit of the whole of the UK.

Wide variations in levels of economic activity—reflected in wage pressures, levels of unemployment and movements in house prices—make the task of providing a stable macro economic climate more difficult. In particular setting a national interest rate which suits each region is more difficult when the regions themselves are widely divergent. The risk is lower overall growth and employment rates for the country as a whole.

  As a counter argument, it is often suggested that it is in the national interest that economic growth in the South East should be encouraged, since the SE is "the goose that lays the golden eggs"4. However, it is quite possible that an undiscriminating approach to growth in the SE could so damage accessibility and quality of life as to undermine its economic dynamism. Indeed, in the case of housing for key workers, it is apparent that such disfunctionalities have already occurred.

  In addition, the need to address regional disparities is equally pressing in terms of social equity and of environmental impact. On the former, it is not just that there should be such wide variations not just in such economic indicators as unemployment and wage levels but in wider indicators including those relating to health, educational attainment, crime and poverty. A few statistics taken from Regional Trends 2002 demonstrates some of the gaps between different parts of this fairly small country—in this case, between the NE and the UK average.

	NE	UK
Standardised mortality ratio (UK=100), 2000	110	100
Percentage of pupils achieving five or more grades A*-C at GCSE level or equivalent, 2000-01	43.9%	51.0%
Average gross weekly household income, 1998-20017 (£)	£380	£480
Households in receipt of Income Support/WFTC 2000-01	21%	16%
Recorded crime rate, 2001-02 (notifiable offences per 100,000 population)	10,139	10,440

  The second important reason why disparities should be tackled with a degree of urgency is that economic disparities between regions are increasingc5, 6. "Sharing the Nations Prosperity" published by the Cabinet Office in 1999 illustrated how London benefits from above average GDP per capita whilst other regions, for example Merseyside receive European Objective 1 Structural Funds status.

  The table below shows that the gap in regional GDP per head has widened dramatically since 1997. Moreover, there is a clear correlation between position in this league table and the rate of change in GDP per head: the best-placed regions are accelerating away from the worst-placed. It is also notable that (apart from Scotland) the position in the table is strongly correlated with peripherality relative to the South East core:

Whether and how the target can be achieved with current and proposed policies?

  Whilst the current administration has reinforced the regional agenda with its commitment to regional governance (demonstrated by the introduction of the Regional Assemblies (Preparations) Bill), it will be difficult to effectively address regional disparities with current policies. This is, first, because regional disparities require a national, co-ordinated, comprehensive and spatial approach which is not present in England—this issue is addressed later in this evidence.

  Current policy is expressed almost exclusively in terms of actions at regional level. National policy seems to be that every region should be encouraged to realise and exploit its own indigenous economic potential, with national policy focused on facilitation and encouragement rather than on reducing disparities7. In so far as disparities are to be reduced this seems to be seen as the role of European Structural Funds (c £1.5 billion pa 1994-99) rather than UK Regional Selective Assistance (c £120 million in 2000-01). At present regional issues are addressed largely by a national policy which advocates competition between regions thus exasperating as opposed to reducing regional disparity.

  Implementation of regional economic development is the responsibility of DTI which operates primarily through the medium of nine Regional Development Agencies (RDAs). There is no evidence in DTI's discussion of its expenditure plans that resources are allocated differentially between the RDAs in order to close the prosperity gap8.

  Spending on regional economic interventions (national or European) is dwarfed by the scale of even the smallest regional economies (which range £26-£122 billion per annum). The current total budgets of RDAs are less than 0.5% of the GDPs of the regions in which they operate9. It follows that any impact on regional disparities must depend on (a) how focused such direct economic interventions are and (b) the impact of other regional spatial strategies (eg creating competitive conditions, providing an attractive environment and enabling development and supportive infrastructure through good planning).

  Results to date suggest that current policies and programmes are insignificant compared with the scale of the trends towards increasing regional disparity. The present approach could be characterised as "equal diligence"—trying equally hard everywhere, albeit with varying degrees of success. This does not seem to provide a conceptual basis for any greater success than in the past.

Whether the introduction of the nine Regional Development Agencies has contributed towards a reduction in, or increased the disparities between the regions?

  It has been seen from this evidence both that diparities between regions are increasing and that there is no evidence that indicates that resource distribution by the DTI, which has responsibility for the RDAs is aimed at reducing regional economic disparity and little evidence to suggest that current policies can reverse current trends towards increased disparity—although this could be for many reason including prevailing market trends, competition between regions and agencies as well as the allocation of resources,

  The system at national and regional levels has failed to articulate the spatial impacts of national policy and failed to relate investment in infrastructure with other priorities. In addition to this there continues to be limited integration at the regional between planning, transport the economy and housing.

  As evidenced by the emerging second round of Regional Economic Strategies—which, unlike the first round, do not all contain formulaic phrases related to "going for growth"—the RDAs are becoming more sophisticated in their approach. However, the above statements remain true.

Whether the proposals for regional assemblies will make a difference to the achievement of this target?

  The RTPI supports the introduction of democratically accountable bodies at the regional level and the opportunities that they provide for integration between, for example, the Regional Spatial strategy, the Regional Economic Strategy, the Regional housing Strategy and investment plans for transport and social infrastructure. There is some concern, however, that the limited range of powers and functions proposed to be devolved to regional level in the recent Government White Paper seem unlikely to radically alter this picture. There is the clear need that powers, responsibilities and funding are devolved down from central government and not simply moved upward from existing tiers of local government.

  In addition, as this evidence demonstrates later, proposals for the Regional Assemblies can not alone achieve the target of reducing regional disparities. Regional Assemblies need to be linked to a United Kingdom Spatial Development Framework (UKSDF) working closely with the RDA's.

Whether a coherent national policy can be achieved: and, if so, how?

  Regional development is seen by Government very much in economic terms, and therefore the responsibility of the economic ministries. It is clear, however, that there are important social and environmental dimensions to both the causes and effects of economic disparities. To achieve success against such deep-seated, long standing and powerful adverse trends as these requires a more concerted effort. In particular, the aim of reducing regional disparities needs to permeate all Departments, rather than being seen (as at present) as being the responsibility of specific programmes within one or two. The Government should be challenged to propose a mechanism that will achieve this. It should also be challenged on the lack of any sense of urgency implicit in its target-setting: the fact that reducing regional disparities will take a long time to achieve is a reason for making an early start.

  However, the current regional and inter-regional planning system is not capable of attaining the Governments target to reduce disparities within and between regions. The introduction of regional spatial strategies (RSSs) will create a more strategic system of planning at the sub-regional level10. RSSs should help achieve better integration and communication at a regional level but as the Barlow Inquiry found in 194011 the sum of all regional strategies will not equate to an effective national strategy.

  There are a range of key investment decisions which need to be taken at a national level and which would therefore benefit from a National Spatial Planning Framework, such matters relate to:

—  decisions on key national infrastructure network in terms of transport energy and water supplies, where "terminals"/production points and distribution networks clearly cut across regional boundaries;

—  the increasing interrelationship between regions in terms of labour markets and cluster networks. Regional boundaries are increasing inappropriate to use as the basis for analysis;

—  the changing interaction of social, economic and environmental issues which make it increasingly important to have an integrated perspective within which separate sectoral polices and programmes are prepared. The success of the RDA agenda is as dependent on other agencies' transport, environmental and inclusion national agendas as it is on the RDAs own programmes;

—  the need to ensure that the aggregate effort that is rightly given to a devolved approach to economic and planning policies is sufficient to meet the overall development needs of the UK and does not result in excessive over bidding or under-delivery; and

—  the emerging need to apply European Spatial Policy thinking at a UK level.

  Moreover, there is currently an implicit national spatiality in Government Policies. For example, the table below shows the distribution of public expenditure by region per head of population. This is a crude measure but it does at least indicate that there is a differential spatiality of public spending—albeit that the spatiality is more usual a consequence of other factors rather than an input to them—and that this requires further study and articulation in order to assess the impact of national spending plans on different parts of the country.

Source: www.hm—treasury

	NE	NW	Y&H	EM	WM	SW	E	Lndn	SE	Total
Education	746	747	742	700	744	674	696	767	668	719
Health + social services	1,196	1,190	1,139	1,024	1,077	1,081	1,014	1,384	1,031	1,132
Roads and transport	172	128	118	141	127	149	159	189	146	148
Housing	51	68	48	26	21	21	11	155	6	48
Other environmental	199	182	154	141	144	136	119	171	130	151
Law, order	331	338	314	285	306	293	285	454	286	326
Trade, industry,   energy, emp	113	106	120	109	111	104	109	111	109	110
Agric, fish, food and   forestry	44	48	86	91	72	72	108	33	58	66
Culture, Media and Sport	109	76	145	72	93	84	76	102	72	90
Social security	2,126	1,960	1,764	1,648	1,755	1,658	1,518	1,636	1,450	1,692
Central admin + misc	61	46	39	44	41	42	47	65	44	47
Total	5,148	4,888	4,669	4,280	4,491	4,312	4,142	5,067	4,000	4,529

  It also is necessary to consider the differential impact of ODPM initiatives on different parts of the country. The new ODPM report, Sustainable Communities: Building for Future (February 2003) contains a valuable map in this context (p 67) which shows the locational distribution of different grant regimes and policy programmes.

  From this analysis follows one of the key ways in which the ODPM target can be achieved. Regional planning and economic strategies in England must be co-ordinated bother horizontally and vertically and co-ordinated through the application of a United Kingdom Spatial Development Framework (UKSDF) which will enable issues of national significance can be dealt with openly and objectively. Spatial planning is already being applied at a sub UK level in Northern Ireland, Wales and Scotland, and at a European level through INTERREG IIC (several UK regions have devised spatial strategies with other European regions, for example, NorVision for North Sea Region). In Europe—Germany, France, the Netherlands, Denmark and most other EU nations have some kind of national spatial framework or strategic planning process, although not necessarily a statutory national plan.

  A national Spatial Development Framework would allow:

—  a perspective on the mismatches between trends and aspirations in terms of the pattern of economic development and the implications for action in terms of spatially sensitive targets (eg translating the 60% brownfield target into regional sensitised formats);

—  national "growth poles"—which will be supported nationally reflecting the particular role of the separate regions;

—  the identification of national economic resources that need safeguarding—in terms of key locations and infrastructure and future network developments;

—  the locational priorities for the development of industries which have a national "market"—eg energy and minerals;

—  the approaches to achieve a better balance in the pattern of development between regions; and

—  a better understanding of the differential impact of differing public and private sector policies and, therefore, a greater ability to guide and modify these.

What lessons can be learned from past regional policies?

  The Barlow Report of 1940 emphasised the need for national, regional and local planning and addressed the overheating of the South East of England and the need to disperse industry and population to other areas. Such Regional disparities clearly still prevail.

  Research into past regional policies in the UK has shown that the development of regional strategies has been inconsistent; regional planning has historically centred around economic concerns and that there has been a tendency for regional strategies to be successful in times and places of distress. 12

  It would be inappropriate to expect past regional strategies to have a similar impact in today's context, given changes to the social economic and political setting. It may be more appropriate to look towards our European counterparts, for example Germany and Holland where regional and national spatial planning frameworks are in place.

  However, a more imaginative model of regional development is required than either current "equal diligence" or the 1960s and early 70s attempts to direct industry to depressed areas while subjecting new investment in more prosperous areas to controls13. There are alternative conceptualisations possible, both from past experience and the "new economic geography".

  The Strategic Plan for the Northern Region (SPNR—1977) made ambitious proposals for both economic policy and resource allocation. Such intervention would be for a limited period, and would be targeted on creating the economic base that would allow the region to manage thereafter without continuing resource transfers from the rest of the country. Previous regional policy had tended to focus on social welfare support and the transfer of activity from more successful areas, but SPNR gained the support of regional partners in spite of challenging this dominant culture of regional dependency. Ironically, given its impeccable market orientation, SPNR was overtaken by the election of the first Conservative administration, which was ideologically opposed to state economic interventions. The then Government refused to respond to SPNR, and without central government support SPNR lacked sufficient means of implementation.

  One of SPNR's key proposals was publication of full "regional accounts", identifying all regionally relevant expenditure by region. This provided a benchmark for assessing the regional inputs and activities of all Departments, and a starting point for accountability for the regional impact of proposed changes at budget time. The feasibility of this was demonstrated both by SPNR itself and by subsequent monitoring ("State of the Region" reports from 1979 onwards14).

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 focus of this evidence is the on the need for a national Spatial Development Framework and this is covered above.

How much additional funding is needed in the poorest performing regions?

  It is impossible to put a figure on additional funding until there is a proper strategy which articulates inter-regional priorities. The debate on resource allocation can only follow on from debate on the nature of a National Spatial Planning Framework, which irrespective of an increase in resources could help deliver more equitable competitive and environmentally friendly outputs.

  The Institute would be plesed to clarify or amplify any of the points made in this evidence during the hearings for this important inquiry.