Memorandum by London Development Agency
1. The London Development Agency (LDA) is
one of the nine Regional Development Agencies that have been established
in England. The LDA is London's business-led economic development
agency, working to the Mayor to deliver the economic aspects of
a programme for renewal. The LDA, as the Mayor's economic development
agency, is democratically accountable to the people of London
through the Mayor. The main purposes of the LDA are defined by
the Regional Development Agencies Act as:
To further the economic development
and regeneration of its area;
To promote business efficiency, investment
and competitiveness in its area;
To promote employment in its area;
To enhance the development and application
of skills relevant to employment in its area;
To contribute to the achievement
of sustainable development in the United Kingdom, where it is
relevant to do so.
2. There are four policy objectives for
economic development in London:
Supporting London's economic growth,
both as a world business centre and as a balanced regional economy.
Developing London as a city of knowledge
and learning in order to fulfil the potential of its people and
Working to support London's continuing
renewal as a vibrant and inclusive city, acknowledging the ethnic,
cultural and linguistic diversity of London's people as an asset.
Ensuring that London's growth respects
the need for social progress, environmental protection and conservation
of scarce resources.
The LDA plays a key role in delivering and co-ordinating
activities to achieve these objectives. However, the LDA is not
a universal service provider. The LDA works with its Charter partners
and other public and private agencies to deliver the objectives
for economic development in London.
3. The LDA strongly supports the role of
area-based initiatives in government policy. The work of the Social
Exclusion Unit, for example, demonstrates how market and co-ordination
failures tend to be cumulative and to manifest themselves geographically.
The geographical dimensions of market and government failures
require geographicalie area-basedsolutions.
4. The LDA also agrees with the well-rehearsed,
general criticisms of past central government area-based initiatives
(ABIs) that they have tended to be:
expensive in terms of limited local
capacity and personnel;
often pursued in ignorance of other
relevant local initiatives;
short on sustainability and policy
lacking rigorous processes for lesson-learning.
5. The Single Regeneration Budget (SRB)
was an improvement on previous ABI regimes. Created to overcome
some of these problems by bringing together a range of separate
funds, it was a "single pot" of its day. Through a lightly
directed bidding process, it gave local interestsassumed
to have the local knowledge essential for effective ABIs(limited)
influence over how and where projects should be located and funded.
6. The flexibility and broad scope of SRB
also represented, we believe, a step forward in combining the
land and property objectives of many previous ABIs with a more
comprehensive, partnership-based, regeneration approach. Consequently,
SRB has proved very flexible and "holistic" in its approach
to regeneration. Of the 170 SRB programmes (involving 3000 individual
projects) that LDA inherited, we have many that are very well
designed and very effective.
7. However, the very flexibility of SRB
has proved to be one of its drawbacks; "flexibility"
has often been a euphemism for a degree of randomness. The process
of the SRB fund allocation, with awards made by central government
(DETR) to a small local partnership, has meant that they have
often failed to reflect wider, regional, needs. This is the case
even when SRB projects have been led by local authorities: the
scale of the problems they sought to address have often extended
beyond local authority boundaries.
8. LDA believes that ABIs are necessary.
They are needed in order to address the spatially concentrated
problems created by the workings and failings of market forces
in the urban system; to address social exclusion through spatial
targetting of additional resources; and to supplement mainstream
programmes in areas of severe deprivation. But experience shows
that they need to be:
set in the context of regional economic
linked into national policies and
informed by community participation
on a consistent basis;
underpinned by a rigorous and relevant
subject to a degree of local democratic
9. Area based activities devised by the
regional development agencies (RDAs) fit that bill. By acting
as an intermediary between national and local policies and agents,
RDAs are well placed to:
identify localities which the markets
and government have failed but which can be of strategic significance
to the region;
select from a wide range of targetted
physical and human capital interventions;
co-ordinate strategy with national
and local governments;
and co-ordinate delivery with local
partners in the public, private and third sectors.
10. The "London Plan", the Greater
London Authority's draft spatial development plan to accommodate
the expected future growth of the capital, has taken an area-based
approach by identifying areas of (i) regeneration, (ii) intensification
and (iii) opportunity. LDA has created a consistent set of "Priority
Areas" in London. This year we have concentrated on three:
Wembley and Park Royal, the City Fringe and London Riverside.
In future years we will include: Lower Lee valley, Upper Lee Valley,
South Central area, King's Cross/Finsbury Park and Woolwich/North
Bexley. We have done this through a systematic process of:
consulting widely on the production
of a London-wide economic development strategy;
drawing on regeneration research
and best practice through the RDA network, Best Value reviews
and other sources to identify prime areas and cross-cutting themes;
designing sub-regional strategies
for each priority area;
signing up key regional stakeholders
to a Charter for London;
setting up "matrix groups"
for each of the priority areas which include members from external
stakeholder groups to agree priorities and propose specific interventions.
11. We have specified LDA's role as:
leadership with ideas, providing
strategic leadership by building consensus around London's priorities
and co-ordinating the collective efforts of those involved in
London's economic development;
direct impact through our own resources,
focusing them on areas of greatest opportunity and need;
leveraging the resources of our partners,
attracting public and private sector resources to address shared
priorities and maximise our combined impact.
12. We have experienced some difficulties
as a result of the exclusion of key elements of economic development
from the remit of the RDAs, eg transport, housing, delivery of
business support. The value we have found in our abilityunique
amongst the RDAsto work closely with our GLA family member,
Transport for London (TfL), highlights this gap for others. We
welcome the recent announcements from HMT as a result of the SR2002
spending review which begins to redress the omission.
13. There are also continuing issues with
DTI's performance monitoring and targets regime for the RDAs.
Whilst we acknowledge the attractions of a few clear and measurable
targets for accountability and transparency, the range of problems
we have to deal with and the range of possible delivery mechanisms
we can use means that the "simplicity" of the monitoring
regime does not reflect the complexity of the regeneration problem.
14. It follows that Government should leave
decisions on new ABIs to its regional strategic bodies: the RDAs.
Even new ABIs that cross regional boundaries can, we believe,
remain the responsibility of the relevant sub-set of RDAs, since
we have a well-developed network which is increasingly enabling
us to work together, to share strategies and co-ordinate work
15. We do acknowledge that central government
will of course take the lead in selecting and managing ABIs of
perceived national significance. However, wealong with
all the other RDAswould equally expect to be consulted
fully on the regional and local implications of such decisions.
16. While new endogenous growth theories
and evolving policy approaches such as "economic inclusion"
give the RDAs an ever-widening canvas on which to paint, we accept
that there are many policy issues that continue to fall outside
our remiteg fiscal policy, health sector policy, law and
orderfor which an ABI approach might conceivably be considered.
In these cases we welcome the role of ODPM's Regional Co-ordination
Unit in acting as the "gatekeeper" for the regions in
relation to departments, providing them with guidelines on whenand
when notto consider introducing an ABI.
17. Other support for RDAs, such as the
piloting of truly innovative policy vehicles, and guidance on
agreed project appraisal methodologies or on how to interpret
EU directives is also valued.