Agenda item

(i)         Report of the Corporate Director Regeneration and Economic Development.

(ii)        Presentation by Professor Steve Fothergill, Centre for Regional          Economic and Social Research, Sheffield University.

The Chair introduced the Head of Policy, Planning and Performance, Regeneration and Economic Development (RED), Andy Palmer and Professor for the Centre for Regional Economic and Social Research (CRESR), Sheffield Hallam University, Steve Fothergill who were in attendance to speak to Members on the Statistical Bias Against Unitary Counties (for copy of presentation, see file of minutes).

The Head of Policy, Planning and Performance, RED noted that Professor S Fothergill worked not only for Sheffield Hallam University, he also was a Director for the Industrial Communities Alliance and that his report was a piece of independent research. 

Members were reminded that at a previous meeting of the Committee, the Head of Policy, Planning and Performance, RED, together with the Customer and Services Intelligence Manager, RED, Graham Tebbutt had presented information relating to the Performance data for the “Altogether Wealthier” theme and that Councillors had noted and commented upon the use of “Countywide” statistics.  Members recalled that the Head of Policy, Planning and Performance, RED had mentioned that there was research being carried out on the potential impact of the use of moving to statistics that reflected the new Unitary Authority as a whole rather than the former “District” areas. 

Councillors noted that in the past, funding and grants were “area-based” (District areas) and that these areas were far smaller that the “countywide” area now used for statistics.  The Committee noted that the area-based system was “semi-dormant” as Government had withdrawn Area Based Grants (ABGs), however, if funding were to be based upon those smaller areas in the future that could mean that County Durham could be disadvantaged in relation to previous allocations.   The Head of Policy, Planning and Performance, RED added that the preferred methodology for Durham County Council (DCC) was to collect statistics on a small area basis and as government had used “District” data in the past, it would be beneficial to keep that level of data “ticking over” at DCC and with the Office for National Statistics (ONS).

Professor S Fothergill reiterated that he wore two hats, one as an academic, and one representing the Local Authorities (LAs) that were members of the Industrial Communities Alliance (ICA), of which DCC and Northumberland County Council were members, adding that Durham had been a member of the ICA in various guises, from the era of the Coalfield Campaign onward.

The Committee were informed that Professor S Fothergill believed that DCC had been discriminated against due to the move to Unitary status since the Local Government Reorganisation (LGR) in 2009, together with other LAs that moved to Unitary status.  Professor S Fothergill noted that this was not a call to go back to the previous arrangements, in the case of Durham a two-tier system, rather an acknowledgement that the LGR process in 2009 had created a problem.

Members noted that the move to Unitary status had meant that the “district level” statistics, that demonstrated which areas had acute problems with issues such as deprivation, were now hidden and this was not a direct comparison to the statistics still being gathered by other LAs still operating a two-tier “County-District” model.  The Committee noted that there was potential for this to affect resource allocation from Government in the long-term.

Professor S Fothergill explained that his report (for copy, see file of minutes) was a starting point to begin the discussion of the statistical bias and provided an independent set of key statistics / evidence in order to present to the Department for Communities and Local Government (DCLG).

Councillors were referred to a slide setting out the key numbers in terms of LGR were that 8 new Unitary Authorities were created in 2009, 36 District councils were abolished, with 201 District Councils being retained.  It was demonstrated to Members that there were several District Authorities that were of comparable size, by population, to the former District areas within County Durham and that those Districts were continuing to use data gathered at that level.  Members were reminded that statistics for the “Districts” within the new Unitary Authorities were disappearing, including the Indices of Multiple Deprivation (IMD) for former Districts and various benefit claimant statistics.  The Committee noted that there were statistics that continued to be gathered at a very local level, the Lower Super Output Areas (LSOAs), however, to “add up” the LSOA data to that of the former District levels required a degree of specialist knowledge, would take a certain amount of time and effort, and in the end may not be used by policy analysts who would likely use “off-the-peg” data.

Professor S Fothergill posed the question, “Does this Matter?” and referred Members to the changing rank of former County Durham Districts in comparison to the new Unitary DCC.  Members noted that in respect of the 2010 IMD ranking, the former Easington District ranked 8, with Sedgefield at 37, Wear Valley at 44 and the new DCC at 56.  Members learned that in relation to the “Worst 100 LAs” in terms of employment deprivation specifically, Easington had ranked as 1, Sedgefield as 5, Wear Valley as 12, Derwentside as 13, with the new DCC as 12.  The Committee also noted that for the “Worst 100 LAs” in terms of incapacity benefits, Easington was again ranked 1, Wear Valley at 8, Sedgefield at 9, Derwentside at 21, with the new DCC ranked at 21.  Professor S Fothergill added that in relation to the “Worst 100 LAs” in terms of health and disability, Easington had ranked 2, Sedgefield 4, Wear Valley 6 and the new DCC ranked at 27. 

Members understood that the trend was for the new Unitary DCC to have an “improved ranking”, however, some LAs that moved to unitary status that did not have the geographical diversity of County Durham, their ranking had not been as affected significantly by the move to Unitary.  The Committee noted that this would mean that potentially DCC could be disadvantaged in comparison to some other Unitary Authorities, not only those Districts LAs that remained. 

Councillors were asked to note that in terms of population, DCC was the 6th largest LA in England, larger than Manchester or Liverpool and in terms of geographical area, the average new Unitary Authority was 50 times larger than the average London Borough, 13 times larger than the average Metropolitan Borough and 8 times larger than the average size of the other Unitary Authorities in England.  Professor S Fothergill added that the new Unitary County Authorities covered several separate labour markets, unlike most other single-tier LAs.

The Committee were referred to the key conclusions of Professor S Fothergill’s report, that: disadvantage in parts of County Durham had been hidden as statistics moved from District level to Unitary; South East Northumberland was similarly affected; and other new Unitary Authorities were less affected as they were either substantially more prosperous or had less of an internal diversity in terms of economy or deprivation.  Members were informed that whilst Northumberland as a new Unitary Authority would now be unlikely to be eligible for funding targeted at disadvantaged areas, Durham as a whole had a better chance dependent upon how many LAs were targeted and which indicators were used.  Councillors were reminded that whilst ABGs had been abolished and that current Government was focused via “opportunities” rather than deprivation, there was potential long-term damage for DCC if District-level data was not used by Government as it was felt that it was inconceivable that disadvantage would not be used as a metric for resource allocation in the future.  Professor S Fothergill added that also deprivation was likely to be used to determine areas for pilot schemes, funding bids and mapping exercises and this could then create a disparity between the new Unitary Authorities and the two-tier Counties.

Members were asked to note the recommendations as set out within Professor S Fothergill’s report:

·        That Government should resume publication of statistics for former Districts

·        Noting that this resumption would be at no cost by the routine addition of LSOA data to that of District level

·        That Government amend the 2010 IMD to include the full range of figures for the former Districts alongside the ongoing “Shire Districts”

·        That the resumption is implemented across the full range of Government

·        That future decisions on resource allocation or prioritisation should use data for former Districts, on the same basis as for ongoing “Shire Districts” 

The Committee noted that the reason for recommending District level statistics was that there were already existing off-the-peg definitions, they would be directly comparable to other ongoing District LAs, they would be easy to implement and could be used across all new Unitary Authorities consistently. 

Members noted that the challenge, should DCC wish to challenge the use of whole Unitary Authority statistics in comparison to District level data, would be in leading and convincing the other new Unitary Authorities to come on board. 

The Committee also noted that there was no guarantee of success in convincing Government to take District level data into account from the new Unitary Authorities, however, Professor S Fothergill believed that in taking the long view, there was a lot at stake and the problem was the visibility of local issues and the parity of treatment with other two-tier areas, not Local Government structures. 

Professor S Fothergill concluded by outlining potential methods that could be employed to persuade Ministers to restore the publication and use of statistics at a District level for new Unitary Authorities including: release of the independent report to the media; use of national trade press; persuade Northumberland to come on board; get local MPs on side; seek meetings with Civil Servants to discuss the report; and arrange a ministerial delegation.

The Chair thanked Professor S Fothergill for his presentation and asked Members for their questions.

Mr T Batson thanked the Professor for his clear presentation and asked whether the sub-county divisions as created by the Area Action Partnerships (AAPs) could be used as a smaller unit of measure than the whole of County Durham.  Professor S Fothergill noted that data gathered at that level maybe useful for the Council and in principle could be used by Government, however, Government may not be familiar with the AAP set up, how those statistics compare to existing District Authorities and therefore the sum of the LSOAs may be a preferable approach.

Councillor N Martin acknowledged that a pragmatic approach was sensible to ensure DCC did not lose out in respect of any funding opportunities, however, he asked whether Government policy was solely to award on the basis of IMD ranking.  Professor S Fothergill noted that the current Government were moving away from awarding by deprivation and moving towards awarding to areas that demonstrated “opportunity”.  Councillor N Martin asked whether the label of “District” was the issue and was there not a better way of gathering the information.  The Head of Policy, Planning and Performance, RED cited the example that the former District area of Chester-le-Street in the past had accessed funding based on competitive application, using evidence gathered by the then District Council, however, it was noted that now Government had moved away from that type of funding allocation and therefore it was best to be able to provide evidence and statistics in a format that Government could easily digest.  The Head of Policy, Planning and Performance, RED added that whilst there may be some more preferable sub-county units by which to gather information, for example by AAP, this would not be easily comparable to existing District Authorities and that ensuring that DCC was treated on a “level playing field” as other Authorities should funding be allocated by IMD now or in the future.

Councillor P Stradling agreed with the points made by Professor S Fothergill, noting that in his particular area of Horden, within what was the Easington District, there was a clear need to ensure that the issues that affected those deprived communities was not masked by taking statistics from across the Unitary Authority as a whole. 

Councillor P Stradling added that it was evident that to ensure fairness, Government should use “District” level data in order to make fair comparisons, however, the difficultly was what Overview and Scrutiny could do to affect a change.

Councillor J Armstrong explained that he had noted the graphic change in the statistics relating to IMD, health and disability and benefits from pre-LGR data to the new Unitary figures for not only DCC, but Northumberland and the North East in general and agreed with Councillor P Stradling that how this was addressed was the issue.  Councillor J Armstrong added that he felt that the recommendations as set out were reasonable and that Northumberland County Council and M.P.s should be involved, however, he noted that perhaps one way of championing this approach would be by the relevant DCC Cabinet Member raising the issue with the Association of North East Councils (ANEC) in order for them to bring the issue to the fore.

Mr A Kitching explained that he appreciated the title of the report, “bias” towards new Unitary Authorities, however, he asked whether if DCC and others were to fight for Government to consider “District” level statistics when funding was being allocated, would this not result in other Authorities who’s ranking in the IMD had effectively been “improved” as a result of the abolition of 36 District Authorities arguing that they themselves would then be disadvantaged.  Professor S Fothergill acknowledged that some Authorities may argue that, however, whilst 36 Districts were abolished 201 continue and the call for Government to consider the new Unitary Authorities on an “even keel” with existing District Authorities would be difficult to argue against as it was comparing “like-for-like”.

The Overview and Scrutiny Manager, Feisal Jassat noted that there was a need to consider the national picture and also to ensure that Northumberland was identified as another key player, note that DCC was a member of the ICA and could input via that channel and, that the sub-county analysis and data be shared with Members.  Professor S Fothergill noted that the ICA represented 60 LAs, with the only two of the new Unitary Authorities being Durham and Northumberland and accordingly, with that only representing 2 out of 60 LAs, then it would not be fair for the ICA to lead on the matter, rather for DCC to lead using the evidence as reported.

Resolved:    

(i)         That the Chair of the Economy and Enterprise Overview and Scrutiny Committee discuss with the appropriate Cabinet Portfolio Holder the   issues raised in the report and the presentation to determine next             steps.

(ii)        That the Economy and Enterprise Overview and Scrutiny Committee   receive a report at a future meeting providing an overview of the work            undertaken on the geographical profiles at Area Action Partnership    level.