Little resolved by Commons enquiry into RDAs

March 16, 2009 5:23 PM

The TaxPayers' Alliance has a clear line on Regional Development Agencies (RDAs): abolition. In the absence of any real data showing that RDAs have had a positive economic impact on England's regions (despite this being their express purpose) we concluded that much simpler, cheaper ways of incentivising business could be found, principally in the form of tax cuts.  We argued that organisations in which senior staff were predominantly career civil servants could not be called 'business led', and we suggested that RDAs duplicated the work already done by other expensive quangos, both at home and abroad. (To read our full investigation into RDAs, click here).

While we did not expect the House of Commons Business and Enterprise Committee to come out in full throated support of abolition, we had hoped that its enquiry into RDAs (launched last June) would open up the issue to broader political debate. Unfortunately though, the Committee's investigation appears to have been severely hamstrung, and its subsequent conclusions (published last week) are rather unedifying. Critically, it does little to address the main problem with RDAs, which is the question of their effectiveness and value for money.

This enquiry was to be
underwritten by an analysis of the RDAs impact by PriceWaterhouseCooper
(PwC). This had/has the potential to be a genuinely independent assessment, unlike
BERR's annual efforts. And it was the conspicuous absence of this
PwC report (whose publication has been delayed by BERR for almost 5
months) that hamstrung the Committee's investigation. The absence of the report - noted by the Committee as particularly problematic - is highly suspect, as BERR sources confirm the report was completed on time (November 2008). We can only suspect that it does not provide the thumbs up hoped for by Government. BERR
officials are no doubt busy deciding to how to spin or bury it.

Without
this PwC report the Committee's enquiry was rather limited to general
discussion, although its report does give some detailed consideration of the Government's future plans for RDAs. They express strong disappointment that the Government is pressing ahead with its plans before the publication of the PwC report. They also note the considerable support for a
level of governance between central government and local authorities expressed by business groups. However beyond this the report recycles many of the concerns raised in earlier investigations. And not just the TPA's, but the many studies that came before and after. From left and right, groups and organisations are concerned about the cost, impact and democratic implications of RDAs. The Committee's conclusions reflect this; being 'business led'  is important, but are RDAs genuinely so (in terms of expertise and personnel); has the incremental accrual of powers by RDAs diverted them from their central aim; etc (to see all the conclusions see the full report, pages 50-55).

In short, the Committee's report poses many important questions, but provides very little in terms of answers. Rather limp in its critique, it 'notes' the various different areas of concern, but in the end gives the RDAs a tentative pass, largely it seems because people see the virtue in a regional tier of government; "they don't necessarily think this one is very good, but it's the one we have, so it's better than nothing" seems to be the general idea. The unfortunate consequence of this report is that some will see it as an endorsement of RDAs, when in fact the Committee makes it quite clear that it has serious concerns about the "structure, work and responsibilities" of RDAs. 

Hopefully the PwC report will be published soon, giving some answers to the Committee's questions. It is a shame this enquiry could not fulfil its remit, properly investigating the utility of RDAs. But then again, if the PwC findings are anything like ours, one can understand why the Government didn't want it to.

The TaxPayers' Alliance has a clear line on Regional Development Agencies (RDAs): abolition. In the absence of any real data showing that RDAs have had a positive economic impact on England's regions (despite this being their express purpose) we concluded that much simpler, cheaper ways of incentivising business could be found, principally in the form of tax cuts.  We argued that organisations in which senior staff were predominantly career civil servants could not be called 'business led', and we suggested that RDAs duplicated the work already done by other expensive quangos, both at home and abroad. (To read our full investigation into RDAs, click here).

While we did not expect the House of Commons Business and Enterprise Committee to come out in full throated support of abolition, we had hoped that its enquiry into RDAs (launched last June) would open up the issue to broader political debate. Unfortunately though, the Committee's investigation appears to have been severely hamstrung, and its subsequent conclusions (published last week) are rather unedifying. Critically, it does little to address the main problem with RDAs, which is the question of their effectiveness and value for money.

This enquiry was to be
underwritten by an analysis of the RDAs impact by PriceWaterhouseCooper
(PwC). This had/has the potential to be a genuinely independent assessment, unlike
BERR's annual efforts. And it was the conspicuous absence of this
PwC report (whose publication has been delayed by BERR for almost 5
months) that hamstrung the Committee's investigation. The absence of the report - noted by the Committee as particularly problematic - is highly suspect, as BERR sources confirm the report was completed on time (November 2008). We can only suspect that it does not provide the thumbs up hoped for by Government. BERR
officials are no doubt busy deciding to how to spin or bury it.

Without
this PwC report the Committee's enquiry was rather limited to general
discussion, although its report does give some detailed consideration of the Government's future plans for RDAs. They express strong disappointment that the Government is pressing ahead with its plans before the publication of the PwC report. They also note the considerable support for a
level of governance between central government and local authorities expressed by business groups. However beyond this the report recycles many of the concerns raised in earlier investigations. And not just the TPA's, but the many studies that came before and after. From left and right, groups and organisations are concerned about the cost, impact and democratic implications of RDAs. The Committee's conclusions reflect this; being 'business led'  is important, but are RDAs genuinely so (in terms of expertise and personnel); has the incremental accrual of powers by RDAs diverted them from their central aim; etc (to see all the conclusions see the full report, pages 50-55).

In short, the Committee's report poses many important questions, but provides very little in terms of answers. Rather limp in its critique, it 'notes' the various different areas of concern, but in the end gives the RDAs a tentative pass, largely it seems because people see the virtue in a regional tier of government; "they don't necessarily think this one is very good, but it's the one we have, so it's better than nothing" seems to be the general idea. The unfortunate consequence of this report is that some will see it as an endorsement of RDAs, when in fact the Committee makes it quite clear that it has serious concerns about the "structure, work and responsibilities" of RDAs. 

Hopefully the PwC report will be published soon, giving some answers to the Committee's questions. It is a shame this enquiry could not fulfil its remit, properly investigating the utility of RDAs. But then again, if the PwC findings are anything like ours, one can understand why the Government didn't want it to.

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