Report looks at regional development agencies

13 March 2009

There is broad support for a public body operating between national and local level on economic development issues. There is also a strong view that the regional development agencies (RDAs) now filling that role must be ‘business-led’. Those are the two key findings of the Business and Enterprise Committee in its Report on RDAs published today

The Report also looks in detail at the implications of the Local Democracy, Economic Development and Construction Bill for RDAs and the delivery of economic development policy. In this context, the committee warns that the Government must respect the democratic interests of local communities as well as the concerns of business in any changes to the structure of regional government.

The Chairman of the Committee, Peter Luff MP, said:

"The inquiry found widespread support for a regional level of government for economic development purposes although we do have concerns about the structure, work and responsibilities of regional development agencies. In particular we are concerned about the tendency of governments to add responsibilities to RDAs that may distract them from their core tasks and then to cut – or "dip into" – their budgets to address other short-term funding difficulties.

"We also retain our long-held concern about the duplication of work in overseas markets caused by competition among and between RDAs. While, the Committee has been impressed by many of their achievements, we have not been able to reach the firm conclusions about RDAs we would have liked because of the delay to the PricewaterhouseCoopers report.

"A single integrated regional strategy will impact on many aspects of peoples’ lives and it is important that all these interests are represented during the drafting process. The Bill is well-intentioned, but good intentions may not be enough. Business focus is important and we agree RDAS make an important contribution. But if business-led RDAs are to have a greater role in regional strategy, the Government needs to be clearer about how local democratic interests will be protected. We are disappointed that these details have not been available during the Bill’s passage through the House of Lords and call on the Government to provide this information before the Bill is considered by the House of Commons."

The Bill sets out to reform the way regional policies are agreed and delivered, with agencies and local authorities working in partnership to set the regional agenda.

The four main proposals relating to economic development in the Bill are:

  • merging the existing regional economic and spatial strategies into a single integrated regional strategy, with local authorities and regional development agencies being jointly responsible for its drafting and agreement
  • giving local authorities the duty to undertake an economic assessment of their areas
  • devolving funding to local authorities to enable them, rather than RDAs, to deliver economic development policies
  • encouraging collaboration between local authorities in delivering these policies.

The Committee supports the overall principles of the Bill, but it also highlights a serious lack of clarity in a number of the key proposals and urges the Government to provide more information as soon as possible. In particular, the Committee calls for more details about the crucial relationship between regional development agencies and local authorities to ensure that community and business interests are both properly reflected in the new integrated regional strategies.

The report also highlights the lack of clarity about the status of the economic assessment in relation to the integrated regional strategies; the membership and flexibility of the proposed Economic Prosperity Boards; and the degree to which delivery of policies will really be devolved to local authorities.

The Committee expresses surprise that the Government has introduced the Bill in the Lords before publishing an independent review of the RDAs by PwC. The Committee is also disappointed that the frequent delays to the publication of this review means its conclusions were not available to the Committee as it conducted the inquiry.

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