Trade and Industry Committee Press Notice PN33

PN 33 of Session 2003-04


Publication of Report

Inquiry into Support to Businesses from Regional Development Agencies

The Trade and Industry Select Committee publishes its Fifth Report of Session 2003-04, Support to Business from Regional Development Agencies HC 118, on Wednesday, 9 June 2004 at 11.00 a.m.

It concludes that the Regional Development Agencies (RDAs) can make a valuable contribution to the economic development of their region and to providing support for businesses located there.

However, despite recent budget increases and the greater autonomy that the introduction of single pot funding has seemingly afforded them, their ability to focus on implementing their Regional Economic Strategies is being constrained by the system of targets which they must fulfill. Whilst the RDAs' performance must be assessed against regional and national priorities, the Committee is concerned that the current system of targets is unnecessarily narrow and prescriptive. There is no link between each RDA's targets and its Regional Economic Strategy, which were drawn up after extensive consultation with stakeholders. Fulfillment of many of the targets is not within the remit of the RDAs, instead lying with other public bodies, such as Learning and Skills Councils, Jobcentre Plus, Government Offices of the Regions, and Universities, over which the RDAs have no control. Efforts to have the RDAs collaborate more closely with other public sector bodies have, to date, had mixed results.

The RDAs can provide the impetus to rationalise the plethora of business support schemes currently available. Too many business support schemes have been set up without sufficient regard to existing provision, resulting in numerous different schemes and confusion for the businesses they were designed to help. Action by the RDAs to rationalise the number of business support organisations operating in their regions and a commitment by all relevant public bodies to channel their business support funds through the RDAs, can reduce the number of schemes available, avoid unnecessary duplication of resources, and help target business support where it is needed most.

The Committee is concerned that the RDAs are required to place too much emphasis on identifying and developing clusters of business activity. Where there are established or strongly growing industries that are highly concentrated geographically, then it makes sense for the RDAs to find ways of helping them. However the danger is that RDAs are concentrating too heavily on creating clusters in fashionable, high technology industries that have little chance of success. Focusing on regional clusters also risks losing overall, national focus. And it also neglects those industries that are more geographically dispersed.

Committee Chairman, Martin O'Neill, said that "the RDAs can play a useful role in the economy. But there have been recent changes to their role, and their relationship to Government and other public bodies is still evolving so we will be watching further developments with interest"

For further information please contact the Committee Office on 020 7219 5777/ 5779.

9 June 2004