Local government and local economic development in Britain: an evaluation of developments under Labour

This paper assesses the emerging impact of the British government's modernisation programme on the economic development role of local government. New survey and interview evidence is used to compare with earlier surveys, dating from the 1980s. In addition surveys of local government relations with other partner bodies are used to assess how governance has developed in the new institutional setting of devolved institutions in Scotland and Wales, and regional bodies in England. The paper demonstrates that local economic development has stabilised in the level of dedicated staff, with resource of about 2.5% of local budgets, representing a national contribution of approximately £360m. Central government's modernisation programme is, as yet, only a minor influence on these changes. The Community Strategy and new well being powers have as yet had only limited impact on activities. Best Value has, however, induced major change in approach in the majority of areas, especially by focusing on targets. The development of a complex network of regional, sub-regional and local partnerships evidences a complex multi-agent environment for local government in which its role has remained important, but in which its inter-links with other bodies have multiplied and complexity has significantly increased. The paper demonstrates the emergence of a closer inter-linkage of economic and social agendas within the new governance regime since 1997, which continues to be inclusive of private sector concerns, but has also sought greater social inclusion. This appears most evident in areas with access to well-funded urban regeneration programmes, rather than systematically across the system, which tends to confirm the continuing dominance of central government roles in local and regional governance