November 10, 2011

‘Localism’ Is Doomed Unless Whitehall Can Change

The Government's commitment to 'localism' is likely to fail unless Whitehall departments can shed a deep-rooted culture of centralism, a new study suggests.

The Regional Funding Allocations (RFAs) were introduced to enable English regions to have more control over spending decisions and to co-ordinate key policies better. The scheme failed to deliver the flexibility regional economies need to become more competitive the evidence, based on research funded by the Economic and Social Research Council (ESRC) at Bristol University, shows. However, the experience of RFAs can help Government understand the barriers to the current 'localism' agenda.

The research team, led by Dr Sarah Ayres, conducted interviews with senior Whitehall officials in which they found a growing awareness of the need to boost the competitiveness of England's economically weaker regions and to improve services through decentralization and empowerment. Whitehall officials viewed the first round of RFAs in 2006 as generally positive - in particular, the main beneficiary had been the Department for Transport and transport policy. But the researchers said RFAs were 'tinkering at the edges' rather than achieving a major transfer of funds or power.

They also found that central Government departments were not in agreement about which functions should be handed to regional bodies. Local disputes between regional bodies continued to weaken the confidence of Whitehall officials during this process. Many regional officials outside London felt there was still too much central control.

Most respondents agreed that Labor´s tentative step towards establishing regional budgets had failed to deliver the discretion and flexibility required to develop policies at a local level. However, budget allocations were a powerful way to motivate different regional bodies to work more closely together.

The coalition Government stopped the regional level of control after coming to power in May last year, saying bodies such as Regional Development Agencies and Government Offices lacked legitimacy. Nonetheless, the Coalition has acknowledged a need for greater local control over budgets as a means of achieving economic growth and more effective use of resources.

Respondents to the research, both at national and at regional level, agreed there was a longstanding culture of centralism in Whitehall which would be hard to overcome. "Given this, it remained to be seen whether the Coalition's plans to empower local areas would be realized", said Dr Ayres, who is based at the University of Bristol's School for Policy Studies.

"Given the severity of the economic challenges facing the UK, a more robust approach to promoting sustainable economic development and managing England's territories will need to be found. At the best of times Whitehall is reluctant to relinquish control, and at a time of financial crisis departments are likely to become even more risk-averse. This has the potential to hamper efforts towards localism", she said.


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