Response to the Sub-National Review

The government published its response to the public consultation on the SNR earlier this week.

Despite the current economic situation, government still needs to make progress on fundamental questions about the future of urban and regional policy. Indeed, for local policy makers, because there is little they can do that will affect the impact of the economic downturn, it is doubly important not to lose sight of medium to long term issues.

So, then, to the SNR. There is more detail on how the local authority economic assessment duty will be implemented and the form that sub-regional collaborative agreements might take. There's also confirmation of the move to integrated regional strategies. As I have discussed elsewhere, these strategies will need to make a decision on the extent to which efforts to deliver regional growth rely on the spatial concentration of resources as opposed to "jam spreading". Sign off by a "local authority leaders' forum" (the original plan) would tend to favour the latter. In the new proposals, a "local authority leaders' board" will have joint responsibility with the RDAs (with disputes resolved by ministers). This will, in principle, allow more concentration and less jam spreading.

From the view point of achieving regional economic growth, current evidence suggests this may make sense. The problem, of course, is that this reduces democratic legitimacy. In the absence of elected regional bodies, squaring that particular circle will require careful thought about how to provide local authorities with incentives to sign up to integrated strategies that concentrate resources. I have talked about this in the past with relation to housing targets. Successfully agreeing (rather than imposing) integrated regional strategies will require far more work to tackle this difficult issue.

SERC launch

Over the last few days, we've held a series of events in London, Swansea and Newcastle to mark the launch of the Spatial Economics Research Centre.

Professor Ed Glaeser, from Harvard University, gave the inaugural SERC lecture on Our Urban Future. If you missed Ed's fascinating talk you can hear what he had to say by listening to the podcast.

If you want to make sure that you don't miss our events in future, then please sign up to our mailing list.

I'm now off to New York for the 55th Annual North American Meetings of the Regional Science Association International. I'll try to post next week on the most recent research findings from this gathering of some of the world's leading urban and spatial economists.

Greener Homes?

The Environmental Audit Committee has undertaken an environmental analysis of the government's house building plans. They published their report yesterday.

Let me comment on a few of their recommendations. First, they question whether the 3 million housing target is justified given current economic conditions. Note two things (i) this is a target for 2020 - unless the recession is very deep and long you wouldn't expect much to change on that time horizon (ii) recent figures suggest that we are some way from meeting this target.

The credit crunch does raise a question about the timing of house building. The report argues that more should occur after stricter carbon targets are introduced in 2016. This may be sensible, but in the absence of government policy to the contrary (a large social house building programme for example?) it will happen anyhow as the housing market turns down.

Finally, there's the issue of the size of new houses and gardens and where we should build them. I'll deal with the issue of green versus brown field another day when I have taken a closer look at the numbers (my back of the envelope calculation translates CPRE's 36,000 football pitches between now and 2020 in to about 1.5% of green belt land in England; and far under 1% of all undeveloped land). For now, just consider the Committee's suggestion that government should stop trying to address people's aspirational demand for bigger houses and gardens because these don't reflect urgent need. That kind of logic works in a centrally planned economy where government allocates housing to people. However, last time I checked, we still allowed people to buy and sell houses freely (even if they are not choosing to do so). If we don't increase the supply of space as the demand for space rises, then the price of space and thus of housing will rise again once the economy recovers. Cue complaints about housing affordability long after the current problems have been forgotten ...