There was bad news for regional development agencies this week.
There was bad news for regional development agencies (RDAs) this week.
The new government has announced its aspiration to scrap RDAs and announced an immediate cut in their funding of some £270 million, part of the total £836 million that is being cut from Vince Cable’s business department. There has been a suggestion from Cable that RDAs in the more prosperous regions of England — the South East and the East — may face more painful cuts than their counterparts in the North, but no area is ringfenced.
It was left to Sir Harry Studholme, chairman of the South West RDA, to respond to the announcement on behalf of all nine agencies. With masterful understatement, he comments that slicing 20 per cent off spending will ‘not be easy particularly as we are already six weeks into the current financial year and RDAs will have already committed substantial parts of their budgets.’
Studholme adds, ‘We will work with our partners across the country to make these reductions quickly and efficiently while still continuing to support hard-pressed businesses, help re-balance the economy and invest in a low carbon future.’ It sounds like a tall order.
It would be good to hear more about the proposals for local enterprise partnerships (LEPs), described as ‘local authority-business bodies’, because it sounds like these would be even less effective and accountable than the RDAs they replace.
My local authority does a great job of getting the bins emptied on time and running local leisure facilities (well, they did, let’s wait and see how they cope with the cuts). But I’d have hesitations about giving them the job of driving business in the area forward.
Apparently, the government itself shares this lack of conviction, because it has declared that LEPs ‘may take the form of the existing RDAs in areas where they are popular’. Which raises the obvious question, why bother to change the name?
Without wanting to judge LEPs before we’ve heard the full plans, I’m concerned that they will lead to even more fragmentation and inconsistency in the support offered to ambitious businesses. While hairdressers and sole traders may be adequately assisted by a grass-roots organisation, building an economy with some oomph requires centralised planning to ensure that the industries with real potential – renewable energy, digital media, high tech manufacturing, to name a few – are encouraged to spread their wings.
There’s also the question of funding. Is it really more efficient to have hundreds or thousands of local bodies across the UK, treading on each other’s toes and duplicating each other’s initiatives? On the evidence of the calls we get from businesses every week, the answer is no. There is already too little communication and cohesion between the many bodies established to give enterprise a leg up. LEPs, on the face of it, would multiply the confusion.
I’m not saying we shouldn’t question the RDAs’ record. But the businesses which will drive the UK’s economic growth in the future won’t be limited by local, regional or even national boundaries. Those responsible for supporting them should also be given the remit to think big.