Committee of Public Accounts

Press Notice No. 51 of Session 2003-04, dated 7 December 2004


Mr Edward Leigh MP, Chairman of the Committee of Public Accounts, said today:

"Regional Development Agencies were hampered in their early years by poor relationships with the government departments that fund and oversee their important work. I am very disappointed that RDAs have had to tangle with the bureaucracy of overly complicated funding and delays in decisions. They have been given too little freedom to respond to regional priorities, and have had too little influence over spending on skills and transport which are so vital to regional development.

The rejection of the establishment of an elected regional assembly in the North East in the recent referendum underscores the need for existing regional structures to deliver. As key players in regional development it is vital that the RDAs are given the breathing space they need to address local needs and drive through successful development and regeneration.

It has taken central government too long to recognise the problems. ODPM should do more to streamline the funding sources available, cut unnecessary red tape, and determine the respective responsibilities of the various players at regional and national level."

Mr Leigh was speaking as the Committee published its 51st Report of Session 2003-04, which examined how government departments could be more responsive to regional issues and how regional development initiatives should be co-ordinated.

The nine Regional Development Agencies (RDAs) were set up to promote economic development in the regions. Their combined budget is rising steadily from £1.1 billion in 2000-01 to £2.3 billion by 2007-08 - the majority of funding comes from the Office of the Deputy Prime Minister (ODPM), and the RDAs are overseen by the Department of Trade and Industry (DTI). There is a tension between the RDAs' need to respond flexibly and promptly to regional issues, determining and addressing their own priorities, and the demands and constraints that government departments place on RDAs in helping to deliver and implement national policies.

The Committee found that targets developed by the DTI with RDAs led to conflicts between regional priorities and national policies while departments' delays in approving RDAs' projects damaged relationships with regional stakeholders. ODPM should take the lead in spelling out clearly the different roles responsibilities and authority of RDAs, departments and, should this come to pass, any elected regional assembly.

Current RDA targets concentrate too much on short-term contributions to Whitehall objectives and too little on longer-term regional impact.

The DTI should measure RDAs' impact on regional economic performance by means of improved regional data recommended by the Allsopp review of statistics for economic policymaking. The DTI, RDAs and the Office of National Statistics need to work closely together to improve the availability, timeliness and comparability of regional economic performance data.

RDAs have too little influence over public expenditure on skills and transport, even though these activities are vital components of regional economic development. The DTI and ODPM should pursue vigorously the 2004 Spending Review commitments about improving the regional integration of skills and transport funding streams with RDAs' activity.

ODPM should further streamline the array of funding sources available to support regional development. The need to make repeated applications and to satisfy a range of monitoring regimes, often with different requirements, creates a bureaucratic burden on applicants and is highly wasteful. The DTI, ODPM and RDAs should expand their work in developing single application and monitoring arrangements where multiple funding sources persist.

The DTI should specify which organisations are empowered to decide when there are disagreements among local, regional and national bodies. Local authorities have on occasions received the impression that previous funding decisions might be overturned if regional bodies and national bodies disagree. Such lack of clarity strains relationships between organisations that need to work together.

ODPM should adopt a presumption against establishing new organisations unless its policy objectives are not achievable through existing bodies.

Notes for Editors

1. The nine regional development agencies are: Advantage West Midlands, East of England Development Agency (EEDA), East Midlands Development Agency, London Development Agency, Northwest Regional Development Agency, one North East, South East England Development Agency (SEEDA), South West of England Regional Development Agency, Yorkshire Forward.

2. The six government departments which fund RDAs are: Office of the Deputy Prime Minister, Department of Trade and Industry, Department for Education and Skills, Department for Environment Food and Rural Affairs, UK Trade and Investment, Department for Culture Media and Sport.

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