Changing deckchairs on the economic development Titanic? Smoke Mirrors and Disjointed incrementalism

The Tories are planning further changes to the decentralisation (as distinct from devolution?) of economic development powers even before the provisions of the Local Democracy, Economic Development and Construction Bill have been implemented, even although there is little evidence of any economic dividend or performance improvements as Prof Kevin Morgan set out at the 2008 IED conference and even although the current recession looks like being deep and lengthy.

Recognising that the UK is one of the most centralised states in the western world (but not the contribution Conservative governments have made to that) a February 2008 policy paper on decentralisation favours moving powers and funding to a sub-regional level as a priority in the party@apostrophe;s first year of power. The whole regional tier will go, RDAs will be phased out and their budgets transferred to clusters of councils covering real economic areas and local authorities would be expected to engage more with local firms (at a deeper level than the non-domestic rates consultation process it is to be hoped!).

A Conservative government would also consider under-writing loans to jobs brokers to enable them to invest in schemes helping the long term unemployed find work because the economic downturn is making initial funding less viable for Flexible New Deal contracts which pay by results. Longer term contracts to welfare providers to help them adapt to market conditions may also be introduced.

The shadow work and pensions secretary has been quoted as justifying these changes to build capacity in the system because the long term savings in benefits payments will more than offset any initial underwriting. So hypothecation and trade-offs may become relevant to economic development funding even although they have always been rejected by The Treasury.

These are exactly the conditions that local projects and VCOs have had to accept in delivering welfare and regeneration programmes, so this looks like subsidy and centralisation for welfare delivery while economic development is decentralised? And what about the costs already committed to MAAs and City Partnership strategies at sub-regional scale?

Seems like agencies and potential beneficiaries could remain confused for another few years at least.