The Observatory has been established to facilitate co-ordination and partnership working that will add value to the existing regional data and intelligence activities. A key factor in this is providing impartial, robust and evidence-based intelligence that informs policy development, implementation and review. The government's 2004 Spending Review reinforced this:
"Reflecting the increasing strategic policy responsibilities being devolved to the regions, the RDAs are being asked to build further their policy-making capacities, applying best practice in evidence gathering, economic analysis and regional policy-making"[p143].
More recently the Sub National Review re-emphasised the importance of an integrated evidence base linking regional and local analysis:
"Improvements in data need to be matched by an increase in the quantity and quality of local and regional policy analysis. Following the Review of Government Offices, the Offices will bolster regional capacity by building their analytical and economics teams. In addition, the RDAs have an ongoing need to increase their analytical and economic policy-making capacity" [p34]
It is essential therefore to create the conditions for rigorous consistent analysis across all levels of the region and to promote high standards in analytical modelling.
There are two main benefits of the Observatory housing a single integrated policy model, accessible by regional and sub-regional users (public, voluntary and private sector). The first of these relates to cost, the second to the Observatory's objectives and its role in the West Midlands.
The cost argument is simply the reduced potential of cost duplication across the region. Initial research conducted has identified that different partners have adopted economic modelling to enable them to review policies; however each has adopted one of a number of different models. By housing the model centrally, individual users' costs would be reduced through spreading the centralised costs over a wider constituency.
A result of this is that with different models being based on different variables, reflecting the modellers' ideas and beliefs, the models will obviously generate different projections.
The impact is that responses to regional strategies will potentially vary across the region as organisations adapt individual responses to reflect their models' projections.
The Observatory is well placed to provide a modelling tool that will generate consistent regional and sub-regional outputs to inform partners of the potential impacts of regional interventions.