Reaching Out

Reaching Out – the Government’s own report dismisses the current tier of regional government as confused and uncoordinated (Executive Summary February 2000)

Chapter 1: Introduction

1. This study was one of the first to be conducted by the Performance and Innovation Unit. It took place during 1999.

2. The objective was to ascertain how central Government can provide better and more efficient delivery of policy and services to people and organisations at local and regional level. In particular, it examined the way that central Government works with local authorities, local business and the voluntary sector. It focused particularly on issues that cut across the responsibilities of different Government Departments. The coverage was confined to England. The study complements other PIU studies: on accountability and incentives in Government, on the effectiveness of policy-making, and on the rural economy.

3. The study was triggered in particular by:
the establishment of a large number of separate area-based initiatives (ABIs) or zones, targeting particular local areas;
the establishment of Regional Development Agencies (RDAs) and designated Regional Chambers.

4. The problems are: firstly, how should central Government relate to other institutions at the regional and local level; secondly, how does it ensure integration between both the organisations for which it is responsible and also with those for which it is not directly responsible? These difficult issues have been exacerbated by the creation of new regional institutions and programme initiatives.

5. The study looked at how the Government policies on economic development, employment, health, education, crime reduction and the environment are delivered. The Government has indicated a clear intention for services and decisions affecting local communities to be made at the level which is closest to the people and areas to be served, where this is consistent with competence, practicability and cost-effectiveness. But how in practice do we decide on the appropriate level of variation to suit local circumstances? And how do we co-ordinate policies whose direction is set nationally but which are delivered locally?

6. The study took place against a background of other significant change, including increasing emphasis on cross-cutting issues of competitiveness, sustainable development and tackling social exclusion. Within this last, the study needed to factor in strongly how any changes it proposed could contribute to the objective of neighbourhood renewal.

7. A range of reforms being introduced for modernising local Government emphasise the need for central Government to relate to local Government in a holistic way, including in relation to the provision of mainstream financial allocations.

8. The study involved substantial research, through formal and informal consultation both within Whitehall and with regional and local organisations across the country. It also included comparisons with the role of préfectures in France. Consultation took place with businesses, the voluntary sector and local authorities. Particular weight was given to the views of local authority chief executives who are responsible for making connections at local level between different policy agendas.

Chapter 2: What is the Problem?

9. There is widespread welcome for the policies and programmes directed at improving local levels of service in key areas, such as education, health and crime, and establishing clear mechanisms for achieving this. The establishment of Regional Development Agencies and Regional Chambers are receiving strong support as providing a focus for better strategic planning at the regional level. In addition, the steps which have already been taken to improve co-ordination in other ways – through some additional staff being posted to Government Offices for the regions from a wider range of Departments – are also welcomed.

10. People recognise that in a period of rapid policy development, some of the problems are likely to be transitional. They also see that the changes needed to be set in a longer term perspective; and that some of the difficulties which are now seen as significant may not be seen in the same way when the new policies have settled down. The points of criticism below in no way undermined the broad level of support for the Government’s policies and programmes.

11. Nevertheless, the clear evidence from those on the ground and from the PIU’s own analysis is that there are too many Government initiatives, causing confusion; not enough co-ordination; and too much time spent on negotiating the system, rather than delivering.

12. Delivery of Government’s priorities may be slowed down as a result. In particular:
Area-based initiatives, conceived and managed separately by individual central Government Departments, have created a very substantial bureaucratic burden for those on the ground.
Local players believe that fewer more broadly focused area-based initiatives, would improve the current situation. Also that their implementation could take better account of local capacity.
Local players suggest that mainstream programmes could provide greater flexibility to allow innovative solutions.
The number and extent of narrowly focused plans required by central Government from local authorities is inhibiting their ability to take joined up co-ordinated action where applicable.
The variety of public funding regimes, particularly in the field of regeneration activity, is not helpful to local stakeholders nor does it help Government to make clear judgements about the value of expenditures either in the short term or the longer term.

13. The tiers of central Government that impact on the regional level are highly fragmented, not able to deal with cross-cutting issues well, and generally do not have sufficient influence over central policy design and implementation:
Local players said it needs to be clearer who within central Government is in the best position to tackle social problems. In particular, Government Offices in the regions provide only partial representation of the interests of three central Departments.
There is no remit for any Government official or body at regional level to ensure integration of central Government policies and services in their region.
Regional influence over policy development within central Departments needs to be strengthened.

14. The Government needs a more coherent presence at regional level to deal with social exclusion as a whole, particularly in relation to neighbourhood renewal. The respective roles of the different regional players in this area, especially Government Offices and RDAs, need to be clearly defined.

15. There was also concern that Government Offices did not seem to have been adequately consulted before a number of new initiatives had been introduced with a significant regional or local impact.

16. Better integration; better ways of ensuring that Government service delivery is fitted to local circumstances; and better understanding of the local and regional issues in the design of national policy are needed. This suggests that the Government’s future aims should be to move to a situation in which:
local and regional players have clear roles in delivering well-run strategies for their communities, focusing on locally owned outcomes and taking account of central Government priorities;
individual Ministers are able to use integrated central and regional structures to deliver their own programmes better and with greater clarity of purpose;
central Government is able to engage with local players not just on specific programmes but across the board, with a good understanding of local successes and failures;
central Government is fully sensitive to the local and regional dimension in creating new policies.

Chapter 3

Part One: Changes in the Regions
Part Two: Regional Networks

17. There are a number of separate roles for central Government at regional level. Executive and inspection functions occupy the majority of staff. But other important jobs are:
planning and prioritisation across the region;
the delivery of central Government programmes at a regional and local level;
the provision of funding to local players;
support to and oversight of local performance on strategic issues.

18. Planning and prioritisation involve establishing priorities for each region – and associated delivery of programmes, where decisions need to be taken at regional rather than local level – typically where there is a choice over where in a region new investment, or new infrastructure, should go. The role is being taken forward by RDAs and Chambers. This has been warmly welcomed. But improvement is required in a number of areas – strategy, support and the oversight of local performance – all of which are becoming increasingly important.

19. Current regional networks are complicated and fail to give a clear means of communication down to or up from the local level and fail to provide a clearly identifiable accountable body for Government action across the region on issues where different policies interact.

20. There is an urgent need to reform the current central Government regional networks in order to address the problems identified in the previous Chapter. We have looked at the regional role of central Government in other countries to inform the required overhaul of our system. In particular, central Government needs to provide:
a single focus for all central Government’s regional networks;
clarity over the respective roles of those in the regional tier;
sufficient influence for the regional tier in headquarters policy discussions;
mechanisms to co-ordinate and integrate Government programmes and policies implemented at regional level or locally.

21. Government Offices are best placed to be the starting point for creating this new role. This is based on an appreciation of their current roles in representing Government Departments at regional level, of their existing links with regional and local players (including bid appraisal, funding and monitoring) and involvement with European, national, regional and local strategies. No other Government regional body fits the new role as closely; and there would be constitutional difficulties in interposing bodies with an independent remit (like RDAs) between democratically accountable local authorities and central Government.

22. The current role of Government Offices needs to be built up to enable them to be the principal representatives of central Government in their regions, including:
acting as a source of advice and support to local authorities and other local partners in relation to their cross-cutting strategies;
holding local partners to account in delivering central Government programmes on behalf of Ministers;
providing a strong focus for neighbourhood renewal;
integrating central Government input to local and regional strategies, including those of regeneration;
administering cross-cutting programmes on behalf of central Government;
integrating the contributions from different Government Departments, including enabling a shared vision and understanding of regional and local issues;
acting as a first point of contact for any regional or local player who needs to relate to central Government; this includes business and the voluntary sector as well as local authorities;
arbitrating when necessary in disputes;
representing a broader interest in central Government to regional and local players, including in public;
communicating the Government’s messages to the media;
influencing Government policy at headquarters.

23. Government Offices should continue, however, to be responsible for delivering the programmes of individual Departments where this makes the best operational sense.

24. The effect of these changes will be to make Government Offices accountable for ensuring:
that there are well-developed cross-cutting strategies for local areas and that the central Government input in relation to each local area sufficiently reflects these strategies;
that any action by one Government Department affecting the region or local areas within it adequately takes account of the implications for other Departments’ policies;
the delivery of programmes for individual Departments (as now).

25. In parallel, each main Department whose policies impact at regional and local level should review its own arrangements for relating those affected, particularly with the aim of securing closer linkages with Government Offices. (In a number of cases these reviews are already being carried out). This particularly applies to:
the Department of Health, including both Health Services and Social Care, with particular account needing to be taken of the public health dimension;
DfEE, with particular account of the case for establishing closer links between the existing outreach services in education and Government Offices;
the Home Office, with particular emphasis on crime;
MAFF, with the aim of securing integration between its own policy agenda and regional network and Government Offices.

26. But all other Departments also need to consider the case for closer integration, including DSS, MOD, and the Lord Chancellor’s Department. Unless there are very strong reasons otherwise, all Departments should second at least some staff to Government Offices.

27. The changes proposed for the role of Government Offices mean that their management and reporting arrangements need to be significantly changed. In particular, the current joint management by three Departments should be changed to management by a single co-ordinating unit. Government Offices need to include within them the full range of staffing expertise to cover their new role. This will require strengthening especially in the areas of education, health, social care, crime and agriculture. Their public profile also needs to be raised.

28. The scope for increasing the discretion and financial flexibilities of both Government Offices and RDAs should be considered in the 2000 Spending Review, which has now begun. This should consider how far such flexibilities would provide better mechanisms for GOs to incentivise cross-cutting behaviour by local players.

29. Appropriate Public Service Agreement targets should be drawn up in the 2000 Spending Review for individual Government Offices and for the co-ordinating unit setting out clearly the cross-cutting objectives against which they will be judged.

Chapter 4: Changes at Whitehall

30. Changes at the regional level are not sufficient to improve the effectiveness of Government and changes are also needed in Whitehall. These include the creation of a new unit working on behalf of Government as a whole, superseding the Government Office Management Board, the Government Office Central Unit and the Interdepartmental Support Unit for Area-Based Initiatives. Its main functions would be to:
manage Government Offices;
ensure better co-ordination of policy initiatives with a regional or local impact;
ensure better collective consideration of proposals to change regional or local networks.

Area based initiatives should be rationalised in the 2000 Spending Review by:
focusing initiatives more clearly on outcomes;
considering linkages between them;
pooling budgets in some cases;
considering cross-cutting regional budgets.

Thirdly, changes in budgetary arrangements should provide greater linkages between Departmental spending programmes, European Structural Funding and National Lottery Awards.

Finally, there should be rationalisation of requirements for plans by local authorities.

31. In each of these areas a number of improvements have already been made. But they have been largely on a piecemeal basis and have failed to tackle the problems already identified in a sufficiently thoroughgoing way.

32. Key managerial functions of the new unit should include:
ensuring the accountability of Government Office regional directors; including drawing up Public Service Agreements for them;
co-ordinating action on any Public Service Agreement targets and pooled expenditure budgets agreed on in the 2000 Spending Review;
co-ordinating the establishment of agreements on objectives and targets between Government Offices and individual Whitehall Departments, including on cross-Departmental functions;
responsibility for common issues concerning Government Office management; holding a central Government Office running cost vote and allocating this between them;
researching and disseminating best practice relevant to Government Offices’ functions.

33. Key criteria for determining the best organisational arrangements for locating and overseeing the new unit should be to enable them to provide:
a forward-looking and strategic dimension;
sufficient authority;
sufficient ‘ownership’ of its remit and work by other Departmental Ministers;
clarity in the arrangements;
additional value to other Departments’ programmes;
speedy improvements, while avoiding unnecessary disruption.

34. One important function of the new unit is to ensure that new area based initiatives are properly cleared interdepartmentally before being introduced, including considering the impact on existing initiatives and that new initiatives are related to Departments’ PSA targets both for national improvement and for improvement in deprived areas. The Treasury’s role in monitoring PSA implementation more generally means it will be well placed to help here. Similarly, the creation of new Departmental regional networks will need to be cleared with the new unit. The aim should be to avoid creating separate and uncoordinated structures. A ‘double key’ arrangement should operate, under which both the new unit and Government Offices are consulted in advance.

35. There is a strong case for further action to create better linkages between area-based initiatives, and between ABIs and related mainstream programmes. It is not reasonable to achieve full pooling between all programmes, since often different or partly different objectives are involved. The highest priority for linkages should be where:
there are several programmes affecting the same client group, e.g. children;
there are separate broadly-based horizontal programmes with strong overlaps.

36. This also allows for linkages to be established between both area-based initiatives and mainstream programmes, which is important if the aims of better integration are to be achieved.

37. The best mechanism for looking at a scope for linking budgets in more detail, is through the 2000 Spending Review.

38. There need to be closer links between both the European Structural Funds and the National Lottery programmes on the one hand and other regeneration programmes on the other. Full linkage will not be possible, because of the separate arrangements with administration in Brussels and by the independent lottery distributors respectively. These programmes are both highly significant for local regeneration in many areas.

39. There should be a further examination of the scope for rationalising the range of plans which local authorities are required to provide.

Chapter 5: The Impact of Elected Regional Government

40. The proposals in the earlier chapters should be robust against reasonable assumptions about elected regional Government in England. They neither require nor preclude this. The impact of the Greater London Authority has already been considered in a review by the Government Office for London (GOL). The conclusions of this review are consistent with the thrust to this study, namely that more emphasis will need to be put by GOL on cross-cutting issues. But the implication of our conclusions is that GOL will also need to develop an enhanced cross-cutting role to cover issues where there needs to be an integrated central Government input, especially in relation to the London boroughs, on issues which have not been devolved to the GLA.

41. One effect of elected regional Government could be to involve closer oversight of regional agencies by the elected body. But this does not affect what needs to happen in the shorter term.

42. More broadly, elected regional Government is not likely to be introduced for some time. The changes proposed in this study should sensibly be introduced at an earlier stage.

Chapter 6: The Conclusions

43. The main responsibility for implementation should lie with the new co-ordinating unit proposed above. There should be a process of six-monthly reports to the Prime Minister on progress. Action in relation to the 2000 Spending Review is for the Treasury to lead on. Individual Departments will need to carry out reviews of their regional and ‘virtual’ regional networks as indicated. These will need to involve the co-ordinating unit closely.