BACKGROUND

  1.  CPRE welcomes the Select Committee's decision to hold an inquiry into the issue of regional disparities, coming as it does at a crucial time for national and regional planning. The Government's Sustainable Communities Plan, the Planning and Compulsory Purchase Bill and the wider planning review of the planning system all have important repercussions for regional prosperity and disparities.

  2.  We have taken an active interest in the issue of regional disparities over a number of years. Our report Even Regions, Greener Growth (2002) sets out our views in some detail; copies of the Report and Summary are enclosed. It highlights critical issues for the countryside in regional development and suggests how these should be addressed to achieve a more even pattern of economic development across all the English regions, taking full account of each region's environmental capacity.

  There have been welcome indications over the last year, eg in the Deputy Prime Minister's statement in July 2002, of a greater willingness on the part of the Government to address the issue of regional disparities. Prominent among these is the SR2002 Public Service Agreement of the Office of the Deputy Prime Minister (November 2002). This includes a joint performance target (with HM Treasury and DTI) to: "Make sustainable improvements in the economic performance of all English regions and over the long term to reduce the persistent gap in growth rates between the regions . . .". We are therefore very disappointed that the Government's Sustainable Communities Plan Sustainable Communities: building for the future, published on 5 February 2003, shows so little sign of recognition of the need for a coherent regional policy at national level. Our key concerns in relation to issues of regional disparities, along with proposals to address them, are set out below.

THE PROBLEM

  3.  There appears to be little likelihood of the disparities between in prosperity between the English regions narrowing without a clear shift in approach on the part of national Government. In 2001, economic output per capita in the North East was about two-thirds of that of London and the South East. The leading regions gain advantages which become self-reinforcing, as they draw in the largest part of available skills, investment and research and development. Similarly, that reverse applies elsewhere, with lagging regions tending to lose an increasing stream of people and resources.

  4.  On the evidence so far, the Government's insistence on a undiscriminating approach to all regions is likely only to exacerbate regional disparities. Crucially, it misses the opportunity to link patterns of investment and prosperity to land use and environmental goals: focussing development where it best meets urban renaissance and countryside protection objectives. Examples from two very different regions, the South West and the North West, are described below and illustrate some of the issues which need to be addressed.

Housing and prosperity in the South West

  5.  The housing numbers in Regional Planning Guidance (RPG) for the South West, which imply a significant increase in the population, are based on an assumption that there is a need for net. inward migration in order to support the region's economy. Little, if any, evidence has been presented to support this assumption, however. In fact, the Cornish experience over the last 20 years would seem to indicate the opposite. Despite large-scale population increases through inward migration in recent years, the county has seen considerable economic decline.

Employment sites, accessibility and the role of the RDA in the North West

  6.  Plans for economic growth in the North West are often based on a crude assessment of land-take: ensuring a "balanced portfolio of employment sites" is one of the North West Development Agency's (NWDA) objectives, and has brought it into serious conflict with the RPG in the North West. When draft RPG for the region named 11 "strategic regional investment sites", the NWDA proceeded to add 14 more of its own to the list in its draft Regional Economic Strategy (RES) a few months later. In its report on the issue: Strategic Regional Sites and Economic Growth in North West England: a sustainable approach to development, CPRE's North West Regional Group identified problems with 10 of the named sites in the RES, ranging from particular aspects of use to the whole site's location, eg on greenfield land away from good public transport links.

  The NWDA has complained that draft RPG referred to the investment sites in terms of attracting inward investment only, which it says too severely restricts their use. NWDA refers to the sites as regional employment sites. The NWDA has also objected to RPG policy EC9, which directs Class B1 and A2 office developments, which generate significant travel, to sites in or adjacent to town/district centres well served by public transport. The RDA states that its research shows that the bulk of inward investment is now in (overwhelmingly office-based) knowledge-based industries. It assumes that knowledge-based industries will not wish to use expensive town centre locations, and that therefore such sectors should be able to use the regional investment sites, regardless of transport issues

A NATIONAL STRATEGY FOR THE REGIONS

  7.  CPRE believes that among the most important reasons for the failure to redress regional imbalances over the last few decades has been the absence of a strong, coherent regional policy at national level.

  8.  Such a policy should aim to ease development pressure in the most congested regions (especially London and the rest of the South East, including parts of the East of England region) and promote investment in urban renewal in other regions. Any such policy should take as its starting point the differing environmental capacity of the regions to accommodate development; the need to value beauty, tranquillity, diversity and remoteness as economic and social, as well as environmental, assets; the importance of prioritising urban regeneration over greenfield development; and the need to support and reinforce land use patterns which minimise the use of natural resources, including land, and help reduce the need to travel.

  9.  We welcome the Government's attention to the continuing issue of gap funding for regeneration projects—essential to make up the difference between actual land value and economic viability of development, at least in the initial stages of regenerating run-down areas. The Sustainable Communities Plan promises substantial funding for regeneration. This will be useful, especially in helping to unlock the potential of previously developed land and buildings. We note the apparent disparity, however, between the amounts of funding allocated to the prosperous greater South East and the rest of the country. Money for housing in London, the East and South East, together with the Growth Areas, from 2003-04 to 2005-06 totals £5,346 million; in contrast, funding for the nine Market Renewal Pathfinder Areas and housing in all other regions comes to £3,158 million-over £1,200 million less. This would seem likely to exacerbate, not reduce, regional imbalances.

  10.  CPRE believes that funding is only likely to deliver the desired effects in the right policy context, which is currently conspicuously lacking. The potential influence of a major shift in policy on its own—including, crucially, its coherent application across all Government departments over a sustained period—should not be underestimated.

REGIONAL AND PLANNING REFORMS

  11.  The reforms set out in the Government's Planning and Compulsory Purchase Bill will do little, if anything, to improve the capacity of the land use planning system to help reduce regional disparities. Additionally, the notion that greater regional autonomy in the shape of elected regional assemblies will improve the chances of more even regional prosperity in the absence of a national framework is not supported by existing experience. It seems more probable that greater independence will increase, rather than diminish, inter-regional rivalries.

  12.  CPRE is particularly concerned at the continuing reluctance of the Government to address the ambiguity in the status of Regional Planning Guidance (RPG) and Regional Economic Strategies (RESs), the latter prepared by the RDAs. We believe this ambiguity, and the consequent tendency of the regions to be driven by their RESs (which in turn are largely focussed on maximising inter-regional competition), is an important contributing factor in the persistence of regional disparities. The same tension could undermine the effectiveness of the welcome announcement in the Sustainable Communities Plan of Regional Housing Boards, to co-ordinate housing investment with planning strategy at the regional level.

  13.  In debate during the Committee stage of the Planning and Compulsory Purchase Bill in the House of Commons, the Government has shown little no sign of readiness to remove the main scope for confusion and conflict by giving Regional Spatial Strategies (RSSs, the proposed replacement for RPG) overarching status over other regional strategies, including RESs. While acknowledging that "The comment that there must be greater co-ordination and integration of all the strategies at the regional level is fair", Tony Nulty MP, the Minister for Housing, Planning and Regeneration, added that "We want to ensure a two-way relationship between the regional spatial strategy and other strategies, with the regional strategy informing the others as well as taking account of them." (Standing Committee G on the Planning and Compulsory Purchase Bill, 9 January 2003, Col 29).

THE ROLE OF REGIONAL DEVELOPMENT AGENCIES

  14.  With some exceptions, the Regional Development Agencies' progress in fulfilling their sustainable development duty has been disappointing. In the absence of a coherent national framework, RDAs have competed against one another, vying to be more competitive and failing to reduce disparities, both within regions and between them. RDAs need to acknowledge the usefulness of planning, for example in identifying environmental capacity, promoting sustainable development, engaging with communities, setting objectives and securing prosperity in a way which delivers enduring improvements in people's quality of life and conditions for economic investment.

MEASURING PROSPERITY: BEYOND GDP

  15.  There is a danger that consideration of regional disparities, and action to address them, will focus exclusively on Gross Domestic Product (GDP) or other conventional economic measures. On a very basic level, as has been pointed out in the Select Committee's recent Report Planning and Competitiveness, an attractive environment is a great asset and assistance to a successful economy.

  16.  The implications of assessing prosperity more widely go much further. By ignoring the wider issues which contribute to the quality of life (or, broadly defined, "prosperity") of communities and individuals, a conventional GDP-based assessment may reach misleading conclusions. Beautiful landscapes, local food economies, good air quality, tranquillity, minimisation of the need to travel, all play important roles but are unlikely to feature in conventional GDP-based calculations of relative prosperity. CPRE's report What You Measure Matters (copy enclosed) illustrates how different the ranking of the English regions is against different criteria.

  17.  Using a broader measure than GDP, two important conclusions emerge:

—  the shortage of environmental capacity for development means that yet further expansion in already-pressured regions like the South East is likely to diminish, rather than improve, the quality of life of those who live and work there and, in the long run, conditions for economic investment; and

—  if it is to deliver maximum benefit, development in the less-pressured regions needs to take similarly careful account of environmental assets and objectives. Otherwise it will risk simply transferring development pressure on greenfield land in the South to greenfield land in other regions.

  18.  To avoid the issues in the second bullet above, ie, boosting GDP involving a reduction in other measures of quality of life, CPRE advocates application of the principles of discerning development. This requires a finer-grained understanding of the issues, and application of policy and investment, than is evident in the regions now. Disparities between different parts of the same region (eg the contrast between parts of Surrey and Hastings in the South East, or between Cheshire commuter country and parts of inner-urban Liverpool and Birkenhead) can be as stark as those between regions. For a region to achieve discerning development, it is vital for it not only to secure development, but to harness the right sort of development. This should be designed to:

—  provide employment, services and housing suitable for, and close to, those most in need of them;

—  make best use of existing environmental capacity (eg previously developed urban land and buildings);

—  focus on the benefits of indigenous growth, not just inward investment;

—  reduce the need to travel;

—  improve the quality of the urban and rural environment;

—  minimise the use of natural resources; and

—  protect and enhance existing environmental assets, such as tranquil countryside and dark skies.

CPRE

February 2003

REFERENCES:

1  ODPM SR2002, Public Service Agreement Technical Note.

2  The Technical Note proposes measurement of regional growth in Gross Value Added over the period 1989-2001 and comparing these with average GVA growth in each region 2003-12. Allowing for data lags this implies that performance figures will not be available until 2014. This very long assessment period is justified by (a) need to compare over an economic cycle and (b) the long term nature of any policy impact. In the meantime business surveys, unemployment rates, earnings and VAT registration will be used to provide six-monthly interim assessments.

3  DETR (1997) Building Partnerships for Prosperity.

4  eg Panel Report on the Public Examination of the Draft RPG for the South East ("the Crow Report").

5  IPPR (2002) A new regional policy for the United Kingdom—Interim Report.

6  Regional Trends 2002.

7  HMSO Govt Expenditure Plans 2001-02 to 2003-04; DTI, Chapter 5, paragraph 5.11 "The Department helps all regions to compete successfully and to maximise their contribution to the UK economy and employment."

8  HMSO Govt Expenditure Plans 2001-02 to 2003-04; DTI, Chapter 5.

9  I have been unable to discover the current budgets of all nine RDAs on any of the Govt websites, so I am going on West Midlands (GDP £63 billion, RDA budget c £150 million).

10  Office of the Deputy Prime Minister (2002) Sustainable Communities—Delivering through Planning.

11  Report of the Royal Commission on the Distribution of the Industrial Population.

12  M Baker, I Deas & C Wong (1999).

13  Industrial Development Certificates were required for developments over 10,000 sq ft outside the Assisted Regions—which blighted crucial new investment in areas like Birmingham with results still suffered.

14  North of England County Councils Association.