Alan Clarke, chief executive of One North-East and "chief executive of chief executives" representing all nine of England's RDAs including SEEDA in the south east, said the agencies are unwilling to hand over funding to councils unless they can retain control over the cash.

Rather than just handing money over, Clarke maintains that RDAs and councils should first agree priorities and targets. Councils will then agree to have their performance assessed by RDAs against delivery of those targets.

Clarke's views are not likely to be welcomed by local authorities, which have long campaigned for more freedom to control regeneration projects locally.

Clarke said: "If we all agree at a high level what we want to achieve, how we can all align our funding, you end up with councils involved, very significantly, as full partners, with ... performance management frameworks in place. But it's a million miles from a very raw unsophisticated view where RDAs just give money to people without that strategic framework."

Clarke also said that local authorities should not have the veto proposed by government over the contents of the new integrated regional plans that RDAs will be asked to produce. He said there were adequate existing democratic checks and balances in the system without giving individual councils the right to block a regional plan.

ECONOMIC PARTNERSHIP COMMENT

The framework requested by Alan Clarke already exists in the form of Local Area Agreements (LAAs). These are potentially radical, (quite) new three-year agreements between councils and central government and they set out how local priorities will be met by delivering local solutions at the same time conributing to national priorities set out by the Government.

The basic idea of LAAs is simple. Previously councils were given streams of funding (that all came with their own strings) to deliver central government targets. There was little or no flexibility to address issues that were specific to the local scene.

The LAA obliges councils and partner agencies e.g. police, health authorities etc, to pool at least part of their income streams to be spent on mutually agreed projects that can tackle local issues prioritised by agreement with the partners and via negotiation with central government.

Despite being supported in the recent Local Government White Paper and the sub National Review of Economic Development & Regeneration not all government departments are signed up to the concept of LAAs.

RDAs will not "pool" their funds but have agreed to "align" them to individual LAA projects that they support. However they still want to retain some control over the budget and the performance management of their own funds.