Implementing Regional Development: Paper 1
[ Last Updated 11 February 2006 ]
Office of the Minister for Industry and Regional Development
DEV (00) 28
29 May 2000
To: The Chair
Cabinet Economic Development Committee
Contents
Proposal
1. This paper seeks Cabinet approval of implementation details for a nation-wide regional development programme to promote sustainable regional development.
Executive Summary
2. The Government's goal for regional development is for sustainable, inclusive development in each region that sees economic growth that can be maintained over the long term without compromising the environment and which helps to meet the social needs of people.
3. The regions of New Zealand are at various stages in terms of mobilising people, local institutions and regional resources, to build and implement coherent strategies for sustainable, inclusive development. Some are well advanced while others are not as far down the track. Government commitment to and promotion of sustainable development on a regional basis can assist this development process.
4. Two major vehicles are proposed to deliver the Government's part in regional development:
- A nationwide Regional Development Programme (LEAF) with Industry NZ, working in partnership with local regions, providing investment in the strategic regional development process. This programme is the focus of this paper.
- More focussed efforts on areas with particularly acute problems. This will be addressed in a paper to the next meeting of DEV.
5. The Regional Development Programme will see Industry NZ working in partnership with local regions (in particular local government and economic development agencies) by:
- enabling access to advice or expertise to assist in strategic planning for sustainable regional development
- assisting local agencies build the capacity to deliver sustainable regional development projects
- providing funding for specific initiatives.
6. The Regional Development Programme will be funded through the Budget allocation for industry and regional development policy development, programmes and administration in Vote: Industry and Regional Development (CAB (00) M 16/6(29) refers).
Background
7. On 22 May Cabinet (CAB (00) M 17/1D refers):
- agreed that key principles on which to base government involvement in regional development include:
- an approach based on making the most of what the region has rather than solely a vehicle for transfers from prosperous regions to less prosperous regions
- engagement with the local community that allows and facilitates the development of local strategies to respond to local opportunities, and that integrates social, environmental and economic concerns
- a "whole of government" response where the activities of central government are integrated into regional strategies together with local players;
- agreed that the Government's regional development strategy include:
- facilitating and supporting a bottom-up approach to develop a local or regional strategy
- building regional capability and developing regional infrastructure
- acting as a catalyst to harness or create major opportunities (investments or events)
- co-ordinating the development and delivery of a coherent government response for delivery of tangible benefits for regional development;
- agreed in principle to the development and implementation of a Regional Development Programme to support the regional development strategy by providing funding for:
- developing local and regional economic development strategies and for undertaking strategic `audits'
- human capability building at the regional level in developing and implementing the strategies
- implementing demonstrator or flagship regional development initiatives.
8. This paper is the next step in implementing those decisions.
Regional Development Programme (LEAF)
9. Regional development facilitates sustainable economic development on a regional scale. The overall objective is to assist individuals, business and communities within regions to identify local opportunities, develop capacity to respond to opportunities, and exploit opportunities. It is an approach based on local regions, in partnership with central government, creating sustainable local competitive advantages, making the most of available resources, businesses and people, rather than providing a vehicle for transfers of resources from prosperous to less prosperous regions.
10. Government, through Industry NZ, will work in partnership with local regions particularly local government as well as other representative community groups. Regions are at various stages in terms of mobilising people and local institutions to build and implement coherent strategies for sustainable, inclusive development. In the absence of central government interest in economic development it has been local government who have been pro-active and in many cases it will be central government that has to come up to speed.
11. Government contribution to the partnership needs to be flexible enough to enable local solutions to local problems to be developed and implemented. Both short and longer-term development initiatives are needed. For example, a region may require immediate assistance from external facilitators for strategic planning, while also needing support for leadership capacity building of key local individuals.
What Is A Region?
12. For the purposes of the Regional Development Programme a region is not simply a local or regional government area. It is a geographical concentration of communities with similar economic, social and environmental characteristics and objectives. Such regions may cut across existing electoral and local body boundaries, or Maori governance boundaries. Regions may include major cities, or parts of major cities. The geographical boundary of a region will be defined in consultation with local communities to ensure that in terms of size regions are neither unwieldy nor too small for the development of a sensible strategy.
The Government Contribution to the Partnership
13. The Regional Development Programme will be in place by 3 July 2000. Initially it will be established by the Ministry of Economic Development with a view to the programme being administered by Industry NZ once it is established. In administering the Regional Development Programme, Industry NZ will work in partnership with leaders in regions to:
- Provide financial support for the development of local and regional economic development strategies and for undertaking strategic audits, including pre-engagement support for building local partnerships
- Assist capability and capacity building at the regional level in developing and implementing the strategies
- Provide grants to assist in implementing regional development initiatives consistent with the strategies developed and the government's goal of sustainable development.
Strategy Development and Capability Building Criteria
14. The broad criteria for funding of both strategy development and capability building is:
- the proposed approach is consistent with national vision and policy objectives
- local commitment to a partnership approach between key stakeholders for bringing about change
- a cap of $100,000 for the government contribution to any single strategic planning or audit initiative in any single region
- local part-funding or in-kind contribution available of no less than 30% of estimated initiative total cost. This is consistent with the partnership principle, encourages local ownership of initiatives, and provides a check for keeping regional initiatives in line with the priorities of local communities. The proportion of local funding will be determined on a case by case basis with the level of poverty and disadvantage in a region taken into account.
Major Regional Initiatives
15. The broad funding criteria for any proposed regional initiative will be:
- it is a major regional/community initiative that involves a number of community groups
- the initiative emerged from an inclusive process and is consistent with the region's development strategy
- consistency with Government strategies, policy objectives and priorities
- consistency with sustainable development
- consistency with international commitments
- a cap of $2 million for central government contribution to any single initiative in any single region with local part-funding or in-kind contribution of no less than 25% of requested funding amount. This is consistent with the partnership principle, encourages local ownership of initiatives, and provides a check for keeping regional initiatives in line with the priorities of local communities. The proportion of local funding will be determined on a case by case basis with the level of poverty and disadvantage in a region taken into account.
16. Operational criteria are being drawn up and the Minister for Industry and Regional Development will inform Ministers of final programme and implementation details prior to the launch date.
17. Consistent with the principle of partnership, in some instances issues will arise from the development and implementation of regional strategies that can best be dealt with through a response from other parts of government. For example, some of the priority initiatives could receive financial assistance (for example, Topoclimate in Southland) from sources other than Regional Development Programme funding. Others could require a Government response to work through that particular issue with the region (for example, roading in Northland).
Monitoring and Evaluation
18. As with industry development programmes, it is important to evaluate the effectiveness of different regional development methods and instruments. The aim is to ensure accountability, demonstrate the value for money of public spending and adjust the initiatives in line with what works best. Evaluation is particularly important in the process of policy exchange because it allows regions using the programme to assess the extent to which approaches have been successful elsewhere and to gauge why. In this way regions can make informed choices on what initiatives to adopt.
19. The Ministry of Economic Development will be responsible for monitoring and evaluating the Regional Development Programme. This will include assessment of (a) the effectiveness of the programme, and (b) whether the need for the program still exists. All parts of the programme will be reviewed within two years of establishment.
Consultation
20. The following agencies have been consulted during the preparation of this paper: The Treasury, the Ministries of Education, Agriculture and Forestry, Youth Affairs, Women's Affairs, Maori Affairs, Pacific Island Affairs, Environment, Fisheries, Foreign Affairs and Trade, Health, Housing, Justice, Research, Science and Technology, Transport, Cultural Affairs, Defence, Social Policy; the Departments of Prime Minister and Cabinet, Labour, Conservation, Inland Revenue, Internal Affairs, Corrections, Statistics, Courts, Child, Youth and Family, Work and Income; the State Services Commission, Audit Office, New Zealand Customs Service, Land Information New Zealand, National Library, Public Trust Office, and the Education Review Office.
Fiscal Implications
21. The cost of the Regional Development programme initiative will be met out of the $33.750 million approved in the Budget for 2000/2001, $73.125 million for 2001/2002, $112.500 million for 2002/2003 and outyears (all GST inclusive) for industry and regional development policy development, programmes and administration in Vote: Industry and Regional Development, with no corresponding impact on the Government's operating provisions. It is proposed that this programme be delivered through a new Non-Departmental output class "Regional Development Programme", from 2000/2001 in Vote: Industry and Regional Development.
Legislative Implications
22. There are no legislative implications associated with this proposal.
Regulatory Impact Statement
23. There are no additional compliance costs associated with this proposal.
Publicity
24. A communications strategy for the launch of the Regional Development Programme will be prepared in consultation with my office.
Recommendations
25. It is recommended that the Committee:
- Agree there be a nation-wide Regional Development Programme (LEAF) administered by Industry NZ.
- Note that a paper outlining the efforts focussed on areas with particularly acute problems will be discussed at the next DEV meeting.
- Agree that Industry NZ will administer the Regional Development Programme to work in partnership with local authorities and other representative local groups to support local regional development efforts by:
- Providing financial support for the development of local and regional economic development strategies and for undertaking strategic audits, including pre-engagement support for building local partnerships
- Assisting capability and capacity building at the regional level in developing and implementing the strategies, including pre-engagement support for building leadership capability
- Providing grants to assist in implementing regional development initiatives consistent with the strategies developed and the government's goal of sustainable development.
- Agree that the criteria for financial support for both strategy development and capability building be:
- the proposed approach is consistent with national vision and policy objectives
- local commitment to a partnership approach between key stakeholders for bringing about change
- a cap of $100,000 for the government contribution to any single strategic planning or audit initiative in any single region
- local part-funding or in-kind contribution available of no less than 30% of estimated initiative total cost, determined on a case by case basis with the level of poverty and disadvantage in a region taken into account
- Agree that the criteria for funding of any proposed regional initiative will be:
- it is a major regional/community initiative that involves a number of community groups
- the initiative emerged from an inclusive process and is consistent with the region's development strategy
- consistency with Government strategies, policy objectives and priorities
- consistency with sustainable development
- consistency with international commitments
- a cap of $2 million for central government contribution to any single initiative in any single region with local part-funding or in-kind contribution of no less than 25% of requested funding amount;
- Note that the Regional Development Programme will be in place by 3 July 2000, and will be administered by the Industry NZ Establishment Unit in the interim while Industry NZ is established;
- Note that as part of the 2000/2001 Budget Package $33.750 million has been approved for 2000/2001, $73.125 million for 2001/2002, $112.500 million for 2002/2003 and outyears (all GST inclusive) for industry and regional development policy development, programmes and administration from Vote: Industry and Regional Development (CAB (00) M 16/6(29) refers);
- Note that Cabinet agreed that funding will not be released for specific initiatives within the Vote Industry and Regional Development Non-Departmental Output Class until Cabinet has approved the details of specific policies, costs and output class structures (CAB (00) M 16/6(29) refers);
- Approve the establishment of "Regional Development Programme" as a new Non-Departmental Output Class from 2000/2001 in Vote: Industry and Regional Development for the delivery of the Regional Development;
- Approve the following changes to appropriation to establish the Regional Development Programme, with no corresponding impact on the Government's operating provisions:
| | $m - increase/(decrease) |
|---|
| Vote Industry and Regional Development | 1999/
2000 | 2000/
2001 | 2001/
2002 | 2002/
2003 | Outyears | GST |
|---|
| Non-Departmental output class | | | | | | |
Regional Development Programme
(funding source : N/A) | | 5.625 | 11.25 | 16.875 | 16.875 | (incl.) |
| Non-Departmental output class | | | | | | |
Delivery of Industry and Regional Development Programmes
(funding source : N/A) | | (5.625) | (11.25) | (16.875) | (16.875) | (incl.) |
- Agree that the changes referred to above, relating to 2000/2001, be included in the 2000/2001 Supplementary Estimates and in the interim be met from imprest supply.
Jim Anderton
Minister for Industry and Regional Development
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