Another business survey; more bad news for RDAs

However hard one trawls the web, it's hard to find an independent analysis of RDAs that gives them a RDA Map really good review. Journals dedicated to regional issues - a natural home for pro-RDA opinion one might think - struggle to present a case beyond "they're better than nothing". Most studies settle with: "some might be doing ok, most could be done away with". The TPA's assessment, published last year (see here), was undoubtedly one of the most critical out there, but even the Government sponsored review, carried out by PwC, had to rely on 'projections of potential future benefits' to find anything positive to say.

But whatever academics, economists or campaign groups might say about them, the real acid test must be business opinion. After all, RDAs are supposed to be 'business lead', 'business focused', tasked with improving their regional business environment. Even though the Government has now ditched the RDAs original objectives (a sure sign that even the Government felt RDAs weren't cutting it), business remains the RDAs primary focus.

So the latest survey of IoD members, carried out in March 2009, is not good news for RDAs:


    •  Only 18 per cent of of IoD members state that RDAs perform well when rating delivery against target.


    • Around 60 per cent say that their region would have achieved the same growth rate without RDAs.


    • There is a clear North-South divide in the perception of the contribution of RDAs to economic performance.


    • Members support deep cuts in RDA expenditure.

Assessing the RDAs against their priorities (increasing inward investment, building an enterprise environment, etc) the results were stark, with "a very poor assessment of overall performance". No area of RDA activity commanded a positive response of more than 18%.

Another metric, how businesses felt their region would have grown without RDA input, again "showed weak business confidence in the effectiveness in RDAs". 58% felt that their region would have grown exactly the same without the RDAs presence, with a further 7% suggesting that without RDA input the region might have grown even faster. Only 14% championed the role of RDAs in assisting regional growth.

IoD chart 1  

Considerable regional differences were an interesting feature of the IoD survey, with the North and South West expressing significantly stronger approval for RDAs than the East and South East. Such a disparity may not be surprising, considering the relative economic strengths of the regions; i.e those regions with lower GVA support RDA activity more than those regions that are doing relatively well. Such differences can be over done though; in the North-East, the region with the strongest support for RDAs, only 37% expressed a positive opinion (as opposed to 30% who express a negative); in the South East, the region one might expect to have the least support for RDAs, 20% were positive, 43% negative. Surprisingly, considering the visibility of its RDA, support was lowest in the West Midlands. Only 14% were positive, while 44% were negative.

The most revealing section of the survey concerned RDA funding. As the write up notes, the RDAs "might argue the the findings ... reveal a need for greater resources in order to improve delivery.The survey results should not be interpreted in this way".

Those surveyed expressed strong support for reductions in expenditure on RDAs. Only 1% favoured an increase; 15% support maintaining levels; 42% favoured a 100% reduction. Three quarters of members favoured a reduction of between 25% and 100%. "Results only fall marginally short of an overall majority of IoD members calling for the effective abolition of RDAs." 

IoD chart 2

It should be, as the IoD write, "a wake-up call" for the Government and RDAs. The IoD and business, it should be noted, are not intrinsically anti-RDA; few rational people object to organisations that willing throw money at them. So members must be particularly disenchanted with RDAs to express the firmly negative opinions they did. It's fair to say that in this acid test, as in so many others, RDAs have not come out well.   

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