Policy Conflict in Intergovernmental Relations: The Changing Role of Local Authorities in the Goverance of Local Economic Development in Post-Devolution Scotland

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Abstract

This paper explores the impact of devolution on Local Economic Development with specific reference to the role of local authorities, and locates this study within broader debates about policy change. We explain the institutional framework for Local Economic Development in Scotland inherited by devolution and we consider the process of devolution to date and recent policy change in this area, including Community Planning and reform of the Enterprise Network. Throughout the paper looks at issues of fragmentation, divergence and power in inter-governmental relations between key actors and institutions. The findings of original research into the attitudes and perceptions of local government actors are located within this context and compared with existing data. The analysis outlines the main area of conflict between central and local government in this area and suggests that economic development activity is becoming increasingly centralised post-devolution. In conclusion we offer suggestions as to what this tells us about broader inter-governmental relations ands the impact of constitutional change.

Introduction

In 2001, the authors (1) received funding from the Joseph Rowntree Foundation to research the impact of the new Scottish Parliament on local government. One strand of the project focused on the impact of the Parliament on the roles of local authorities in economic development.

Much of the recent literature on the nature of policy making and policy change has focused on the relationships between different institutions and actors in various policy communities. The key issues that arise from this literature concern the fragmentation and conflict within and between different levels of government. This "differentiated polity" (Rhodes 1997). The differentiated polity concept is used to describe the interdependencies between different institutions and actors including policy making and implementation agencies, specialised bureaucracies and different levels of government. Rhodes, for example, drawing on Wright, emphasises bargaining and dynamic exchanges between actors within structured political contexts. This emphasis on bargaining has recently been seen in the debate about the "dialectic" in policy networks in which agents interact with and change, yet are constrained by, their structural context (for example Marsh and Smith 2000; Dowding 2001; Marsh and Smith 2001).

The value of this description is that seems to take account of the agonistic (Mouffe 2000) nature of policy making in which policy values, conflicts over status and resources are all essentially contested. It is this understanding of power, conflict and politics between groups with different interests which informs our explorations of governance and change in the following sections.

In this context the paper explores the impact of devolution on Local Economic Development with specific reference to the role of local authorities, and locates this study within broader debates about policy change. We explain the institutional framework for Local Economic Development in Scotland inherited by devolution and we consider the process of devolution to date. We also consider key policy developments, including Community Planning and reform of the Enterprise Network. Our research into the attitudes and perceptions of local government actors is located within this context and compared with existing data. The analysis outlines the main area of conflict between central and local government and suggests that post-devolution economic development activity is increasingly centralised. In conclusion we offer suggestions as to what this tells us about broader inter-governmental relations and the impact of constitutional change.

Local Economic Development in Scotland

There is a long history of Local Economic Development in Scotland. By the mid-1960s, Scotland was developing a distinctive set of institutions for economic development (Fairley and Lloyd 1995 and 1998). …