1. 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

2. 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?

3. The motivations underpinning the Regional Funding Allocations
Regions were invited to prepare advice on spending priorities in each policy area up to & 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

4. 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

5. 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

6. 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

7. 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