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28 Connecting EnglandA potentially powerful institutional capacity in several key areas has therefore been created:■ Fiscal and formal arrangements:● the use of fiscal mechanisms for redistributing wealth, notably through EuropeanCommunity Structural Funds;● regional and trans-regional oriented programmes (for example the Northern Way, theLyons Review to decentralise government functions); and● sectoral/departmental programmes (for example led by the DTI, the Department forEducation and Skills, the Office of Science and Technology).■ Governance:● intra-departmental co-ordination (for example PSAs and the Regional Co-ordinationUnit);● regional networks and co-operations (for example the Northern Way, the Midlands Way,the Core Cities Group, regional planning bodies and regional assemblies); and● voluntary sector networks.■ Spatial planning:● influencing sectoral policy by offering rules, services and information (through PPGs(planning policy guidance notes)/PPSs (planning policy statements), the Academy forSustainable Communities etc.);● the designation of pathfinder, enterprise and other priority areas; and● the identification of growth areas.These moves towards more regional- and local-level decision-making represent a development inthe UK’s traditionally pragmatic approach to economic policy-making and are welcomed by theCommission. This is particularly important in developing more effective governance structureswithin England, being the largest territory in the EU where planning powers lie essentially withthe national government. The importance of the regional and sub-regional (i.e. the county)dimension is particularly important because it shows sensitivity to the functional areas withinwhich people work, live and invest.Sometimes the outcome has amounted to little more than a scattering of unrelated initiatives indifferent fields (training, investment support, infrastructure development etc.) which react toimmediate economic problems or to short-term political pressures. The Commission heardevidence in Cornwall that there were a bewildering array of more than 100 different regionalbodies and strategies for the area. Entrenched professional silos and institutional rivalry have oftenreinforced this fragmented approach. But it is accepted that the changes made to date have yetto have their full impact. In particular, the institutional mechanisms have yet to take effect.3.2 Regional Development and Productivity – Current TargetsThe aspiration towards higher levels of productivity across the regions is currently articulated bythe Treasury and by the PSAs between itself and the other Government departments. TheGovernment has acknowledged that the UK has suffered poor levels of investment essential tothe delivery of a growing economy. Through its Public Service Agreement 2 (PSA2) (2004) theODPM stresses the role that the English regions should play in advancing levels of economicgrowth. Its aim is to:‘Make sustainable improvements in the economic performance of all English regions by 2008, andover the long term reduce the persistent gap in growth rates between the regions, demonstratingprogress by 2006.’