Regional Development

Briefing Paper 2014

EDANZ is the voice for New Zealand Regional Development

Our Members are the regional Economic Development Agencies from across New Zealand. Their focus is on enabling and supporting growth in the regions.

Our Goal is to see regional prosperity across New Zealand. We believe that to achieve our goal there needs to be a greater understanding of the drivers for regional growth and that central government, local government, Iwi and the private sector all need to work together. It is important that both central government and local government take strong leadership roles in facilitating a process of change to enable growth across all of New Zealand. Equally important is our encouragement of high standards and best practice across regional development. Taking note of international trends and creating an environment that works well for New Zealand.

ABOUT the Regional Development Briefing Paper EDANZ has written this briefing paper as the basis for a discussion with government officials on how regional development policy and delivery might be reinvigorated - potentially with a view to establishing a new regional development model for New Zealand. We believe that the time is right for a change in thinking and a much stronger focus on the regions of New Zealand.

ABOUT EDANZ

ACTIONS for Government

1. Development of a national regional development policy

2. A partnership model developed between central and local government

3. On the ground regional coordination of government agencies

4. Review of funding into the regions with an outcome of greater collaboration across agencies and with local government and private sector.

Growing regions for the benefit of all

The government’s strategic focus to date has been on policies that enhance New Zealand’s competitive advantage. However, while the country as a whole is doing well compared with many other OECD economies, many of our provincial cities and surrounding regions have had either static or declining growth. It is evident that encouraging the growth of Auckland and the re-vitalisation of Christchurch are absolutely vital for national growth, however, there is also a strong case to see all regions in New Zealand prosper. EDANZ believes that enabling all the regions to fully exploit their comparative advantage is the best way to maximize economic growth at the national level. We know the government recognises this. In his forward to the Regional Activity Report 2014, the Hon Steven Joyce commented that “to understand the New Zealand economy we need to understand its regional parts”. The report goes on to highlight that each region provides a different contribution to the New Zealand economy and all have the potential to generate high-value economic growth. There are also inter-regional synergies and opportunities for growth to be found. However these need a higher degree of coordination and collaboration than is currently possible. The primary challenge is in implementing regional development strategies not in developing them. Local government has a vital part to play in the development of their regions; they own important assets, they plan and regulate economic activity, they have a vested interest in increasing their own revenue to support a better quality of life for their residents, they are the most visible and closest form of democracy to local communities, they play a role in forming opinions and shaping communities in their development and they negotiate continually with central government in advocating for their region. This is critical for a nation that has significant regional differences in economic performance and where the forces of urbanisation, technological change, youth unemployment and an aging population threaten to increase these gaps further. Recent OECD research emphasizes that a one-size fits all approach cannot work. Regional development approaches involving national, regional and local governments and the private sector have increased in importance, compared to previous approaches dominated by central government. Comprehensive regional policies are increasingly regarded as complementary to national policies in helping to generate growth in the regions and in aligning efforts. This paper provides the basis for a discussion on possible changes to regional development in New Zealand. EDANZ believes a better partnership between local and central government is essential for better regional outcomes.

EXECUTIVE SUMMARY

Development of a national regional development policy Government intervenes in many ways at a local level, but rarely are these interventions co- ordinated effectively across agencies or with local players. Understanding where regional development fits within a broader policy framework and enabling delivery in the regions is key. EDANZ believes that greater growth will occur through: o Encouraging closer inter-agency working to enable limited resources to be used

more effectively at the regional level o A greater focus on combined action between services and different government

programmes under a regional policy framework and strategy o Action based on comprehensive local economic intelligence combined with

national and international market intelligence; which is more than just data. A more validated approach to actions.

o Supporting regional development agencies to coalesce resources, align and implement strategies, address market failures and seize opportunities.

ACTIONS FOR GOVERNMENT

company

name

Delete text and place photo here.

Delete text and place photo here.

Place logo

or logotype here,

otherwise

delete this.

june

2008

S M T W T F S

1 2 3 4 5 6 7

8 9 10 11 12 13 14

15 16 17 18 19 20 21

22 23 24 25 26 27 28

29 30

A partnership model developed between central and local government Identifying and addressing the governance bottlenecks that impede smooth co-ordination across levels of government can make a significant contribution towards reaching economic growth. In a recent OECD publication “Investing Together - Working together across levels of Government” they focus on how public investment is not only a major strategic activity, it is also a shared responsibility across levels of Government, and in which all levels play an important role. Through the development of partnerships we can overcome fragmented structures and clarify the assignment of responsibilities across levels of government.

On the ground regional coordination of government agencies Multiple government agencies in one area that are not working together or connected to the local agency cannot achieve what is needed for the region. It is important that there is a coordinated effort across those agencies that have a local presence and are tasked with supporting New Zealand’s economic growth. Equally it is important that these agencies are connected to what happens in the region through local agencies. Sustainable economic outcomes are built from the strength of a regions asset base and focus on cross regional connections. The connections between people, infrastructure and innovation and integrated policies facilitate growth. However these activities are relatively ad hoc and unconnected across agencies and within regions at present. Regional Development Agencies are ideally placed to deliver these services but are not funded or mandated to do so.

A review of funding into the regions with an outcome of greater collaboration across agencies and with local government and the private sector is required

Defining Regional Development Successful regional development is a process that fills different needs for different communities at different times. It is the sustained, concerted actions of policy makers and communities working together to promote the standard of living and economic health of a defined geographic area. It is a policy intervention that involves councils, the community, business, education, health and central government. It can combine local intelligence and market knowledge with national and international intelligence to take advantage of evidence-based comparative advantages and market opportunities, and it is at a level where agencies are not too big to be distant and not too small to lack capacity and capability. Central and local government efforts can be aligned with, business, Maori and third sector efforts in, for example, business development, investment, Maori economic development, skills and education. It aims to increase the wealth of people and advance current lifestyles so that communities become a better place to live. By coordinating efforts and achieving greater alignment between national and regional policies and aspirations, the wider aims of increasing the health and well-being of communities can be addressed. Regional development is “place-based” but it also requires a deep understanding of the dynamics and economic geography of the region, of what is possible and how to garner resources to implement policy. What happens in one region impacts on another and regions can have complementary and competing specialisations and opportunities. A silo approach, with duplication, different interpretations and approaches at either a national or regional level is sub-optimal. A better partnership between central and local government would create efficiencies and more effective policies.

The Rationale for Government Involvement in Regional Development

International Evidence OECD research (2012) confirms that all regions make a vital contribution to national growth. It shows that place-based factors can make an important difference in the successful growth of a region, and that regions that have a strong sense of identity will help to build a more sustainable economy. It highlights the fact that the specific needs of individual regions are best met through the building of broad based partnerships with strong local leadership and that the private sector has an important contribution to make to regional growth leading to increased private sector growth in confidence and investment. Today in most OECD member countries, policies are focusing on the growth potential of all regions. Whereas the focus was once on peripheral and lagging regions, and then moved to a focus on cities and city-regions, it is now recognised that enhancing the potential of all regions and understanding inter-regional complementarities, value chains and economic relationships can yield greater cumulative effects.

Many international models have highlighted the need for a wider funding pool to enable regions to develop. The literature search showed that across the OECD there are numerous models of decentralised funding for regional development. This is highlighted in the UK model where recently there has been a substantial review of local development (Heseltine Report). The basic model for the UK is central funding down to Local Enterprise Partnership’s (LEPs) to enable development plans specific to their region. The LEPs invest in programs and strategies to drive sustainable regional growth and development.

Following both the recent Heseltine review, and the report of the Business, Innovation and Skills select committee, there is an emerging consensus around resources: ‘if LEPs are to function effectively, they need the money to do the job. Expecting the resources to come from increasingly cash-strapped local authorities, or from businesses, is unrealistic.’ The reports concluded that LEPs need both assured revenue funding to meet their running costs, and access to capital or project funding to support major schemes. The Heseltine report has received overwhelming support from the British Government and will see a further devolvement of funding to the LEPs to develop economic strategies and create the foundations for their implementation.

Australia has also been making inroads into regional development with the introduction of the Regional Australia Institute as well as a continued focus and funding to Regional Development Australia (RDA). In February 2012, with seed funding from the Australian Government ($6.5m), the Regional Australia Institute was created. Its focus: to create a vibrant future for regional Australia – for the benefit of all Australians. It is an independent, not-for-profit organisation developing real solutions to key policy issues for regional Australia through research and an on-going conversation with the community. The Regional Australia Institute actively engages with policy makers at all three levels of government on issues that impact on regional Australia. At the same time there has been continued support for the national network (55) of RDA committees (bringing together all levels of government and private sector) which were established to enhance the development of Australia's regions. Local evidence (through a number of regional workshops) has also highlighted there needs to be a focus for New Zealand on building strong collaborative partnerships that take advantage of the knowledge both locally and nationally. Each has their place in the system and avoiding duplication of effort must be at the forefront of our thinking.

WHERE TO FROM HERE?

We have identified three actions that both Central and Local government can work

together on to build a greater focus on regions and their ability to grow the New

Zealand economy.

1. Overarching regional development policy. There needs to be a specific policy

developed on how Government works with the regions. It is not enabling or efficient for either central or local government to have ad hoc and or non-aligned agencies, policies and programmes. Having good policy is one thing, smart strategy and robust implementation is also critical.

2. Ability to decide. Connecting what happens in the regions through national agencies with the local agencies is a must. Achieving good quality public investment needs to involve both central and local government and the two must be aligned. This is true across and within industry sectors and regions and will build private sector confidence. Some decisions and actions should be devolved to regional agencies. Some decisions should remain with central government agencies. The optimal decision-making arrangements should be thought through. EDANZ supports the development of a taskforce to address this issue and a delivery mechanism below.

3. Ability to implement. The task force should also identify potential partnership models for regional development delivery

EDANZ Executive Director – Samantha Seath Independent Chairman – Michael Bassett-Foss

Place logo

or logotype here,

otherwise

delete this.

Delete text and place photo here.

Delete text and place photo here.

Place logo or logotype here, otherwise delete this.

january

2008

S M T W T F S

1 2 3 4 5

6 7 8 9 10 11 12

13 14 15 16 17 18 19

20 21 22 23 24 25 26

27 28 29 30 31

ECONOMIC DEVELOPMENT AGENCIES NZ

L3 116 Lambton Quay, Wellington

04 978 1292 www.edanz.org.nz