Scrap Regional Development Agencies and cut other business spending – 2/5

January 20, 2015 4:09 PM

Shortly before the last General Election, the TaxPayers’ Alliance produced a manifesto. Here is the latest in our series of posts looking at how the Coalition Government has performed in relation to our recommendations.

The full TaxPayers' Alliance manifesto can be found hereClick here to see the full series of posts.

The TPA produced extensive research on Regional Development Agencies, the organisations set up at the start of the millennium. Their stated aim was to develop the economies of England’s nine EU regions. But they were a bureaucratic nightmare – their funding peaked at around £2.3 billion so they were also hugely costly to taxpayers.

Our research demonstrated that the Regional Development Agencies (RDAs) didn’t contribute all that much to the economic development of England's regions. With our detailed and comprehensive analysis of regional economic development over the last fifteen years, we showed that in almost every measure regions performed better in the seven years before the Agencies were established than in the years after they were set up.

So it was welcome news when the Coalition Government abolished these organisations.

The Government has introduced Local Enterprise Partnerships in their place. They are arguably preferable in structure to the RDAs – more localised and seemingly more involvement from the private sector.

But both should be scrapped. The Government shouldn’t pick winners by choosing businesses to give grants too. Instead it should cut taxes and remove the regulations that stop small businesses from growing and from new competitors entering the market. We should also look at allowing Councils more flexibility with Business Rates so that they can attract companies to locate in their jurisdiction.

We have scored 2 out 5 because although the RDAs have been scrapped, we continue to hand out corporate welfare.

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