The aspirations and limitations of Regional Funding Allocations: Sarah Ayres & Ian Stafford School for Policy Studies, University of Bristol, UK The aspirations and limitations of Regional Funding Allocations: A Whitehall perspective 10th January 2008

Promoting policy co-ordination through long-term funding allocations In July 2005 the Government published indicative regional funding allocations (RFAs) for economic development, housing and transport policy This paper explores the perception of the first round of RFAs from participating Whitehall departments. Research Qs: What motivations underpinned the Government’s decision to introduce RFAs? What have been the main implications of the RFAs for inter-departmental and Whitehall – regional relations? What is Whitehall’s perception of regional decision-making capacity?

The motivations underpinning the Regional Funding Allocations Regions were invited to prepare advice on spending priorities in each policy area up to 2007-8 & indicative planning assumptions up to 2016 In 2006/7 RFA funding amounted to £4.1bn - only 14% of public expenditure in the 3 policy areas in regions RFAs underpinned by previous prioritisation exercises - Whitehall officials confirmed improvements over rounds RFA advice to be developed in partnership - build regional capacity, develop realistic & joined-up priorities tailored to local circumstances Different interpretations of RFA design – clear rationale vs a good start vs Whitehall turf wars

Evolving inter-departmental relations Lack of new inter-departmental structures apart from an ‘ad-hoc’ cross-departmental steering group Primary coordination role of the Treasury, limited role of the Regional Coordination Unit within RFAs Lack of coordinated Whitehall response to regions’ RFA advice Limited resources and funding streams included within RFA exercise Inter-departmental coordination hampered by existing commitments Impact of regions decision not to vire funding

Relations between Whitehall and regional actors Formalisation of centre-region relations in funding sphere, built upon past initiatives Limited impact on DTI & DCLG due to existing arrangements Significant new structures within DfT for engaging regional actors RFA advice filtered into departmental CSR submissions Lack of conflict between levels, RFAs actually reduced tensions in transport policy sector

Whitehall’s perceptions of regional capacity Region’s use of consultants ‘disappointing’ and highlighted lack of decision-making capacity DfT argued that consultants reinforced the rationale underpinning the RFAs enabling stakeholder buy-in Regions’ failure to vire funding ‘disappointing but understandable’ Whitehall departments lacked robust arrangements to analyse RFA evidence & procedures Variations in regional performance

Conclusions Overall Positive perception of the RFA process within Whitehall Delivered a more rigorous, realistic spending between regions & Whitehall but limited interdepartmental dialogue Number of constraints on RFA process: Variable enthusiasm within Whitehall Mechanisms for engaging regions underdeveloped Limited levels of funding involved in process Confusion over RFA guidance Policy priorities still identified in isolation SNR announced expanded second round of RFAs Second round may be constrained by SNR reforms