What is the role of central government in MAA creation and how are they funded?

CLG has emphasised that it will not impose a top down approach, but instead that progress should be based on a “dynamic and evolving policy”. Sub-regions determine the shaping of their own MAAs with support rather than regulation from central government. As a result, there is no ‘blue print’ for MAAs, and there is no single approach that is preferred. Consequently, although MAAs broadly focus on economic development and face many similar issues, they have unique priorities and strategies according to the circumstances of the area in question.

Despite the lack of central government interference in the creation process, CLG has published guidance (http://www.communities.gov.uk/publications/localgovernment/laaoperationalguidance), which conveys the general principles guiding the initiative. The fundamental point is that MAAs will be voluntary, based on a functional economic area, and that their creation must be based on evidence showing their potential for added value.

When MAA partners set down their targets, the partnership should consider how delivery of the targets will be financed, either through pooling or alignment of funding resources. Partners may individually allocate proportions of their mainstream resources to support the attainment of targets and priorities. Central Government has increased individual authorities flexibility in resource allocation, through movement towards non ring-fenced grants. This is intended to allow greater autonomy to increase the potential for success in achieving the priorities of the MAA.

Subject to appropriate arrangements (and primary legislation), there is potential for sub-regions to create a ‘statutory sub-regional authority’, which would herald a move towards a permanent responsibility pooling.

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Capital Finance: opportunties and obstacles at the sub-regional level

(Tuesday 23 March 2010)