Are the Government really going to scrap RDAs?

In the Emergency Budget report, the message on RDAs was pretty clear:

"Regional Development Agencies will be abolished through the Public Bodies Bill."


TPA Chief Executive Matthew Elliott wrote for Conservative Home that there was "good news on the RDAs".  It was good to see our campaign for their abolition, running since August 2008, bear fruit.  Scrapping them would save billions of pounds of taxpayers' money and end the absurdity of thinking we can help businesses by taxing them and then giving some of their money back, to some businesses, in grants.


Earlier this week, we revealed that around 62 per cent of their grants don't even go to businesses but to other predominantly public sector organisations and projects.  Some of that money might eventually wind up in the hands of actual businesses who do the old fashioned work of producing goods and services for customers, but only after yet more has been wasted maintaining the labyrinthine regional development industry.  And many of the grants that do go to private enterprises don't go to the small and medium sized businesses that you would expect to be the targets for support, but to big multinational corporations.  JP Morgan got more than half a million pounds, for example.


Unfortunately, the Left Foot Forward blog reports that RDAs might not be scheduled for abolition after all.  Apparently, Vince Cable has said that the new "local enterprise partnerships" might "take a similar form to existing RDAs".  The author of the Left Foot Forward article, Kevin Meagher - a former Head of Communications at Advantage West Midlands, says that what "seems to be emerging is a decision to reprieve the RDAs in the North and Midlands, albeit with a tighter remit and a new name."


So what we're actually going to get might just be the closure of some RDAs and a round of moving chairs and drawing new logos.  Advantage West Midlands could become the West Midlands Enterprise Partnership.  Nothing would really change.


It is incredible that this comes so soon after the coalition hiked VAT despite neither party having a mandate.  Here is our video again on the increase in VAT:




Some of their moves to introduce transparency and cut spending have been excellent.  But how exactly are we supposed to trust the coalition if there is such a gulf between the rhetoric and the reality?


There are some points in the rest of the article that it is worth responding to.  First, the allegation that opposition to RDAs comes from people who don't like the decentralisation of power:

"Philosophically, the Conservatives see RDAs as a Trojan horse for wider regionalism, which they abhor in their marrow. Despite themselves setting up Government Offices in the regions in 1994, their instincts remain resolutely centralist."


No, the TPA for example is ardently in favour of fiscal decentralisation.  It's just that we want those exercising that power to be accountable to those using the services or local voters.  We want schools accountable to parents and councils accountable to their voters, not unaccountable regional bureaucracies.  There is every reason to abhor regionalism which artificially and unnecessarily supplants the local tier of government.


Then we had a defence of the RDAs' record:

"Yet, despite their bickering and lack of political nous, RDAs have a good story to tell. Last year a report from PwC found that every £1 spent by the RDAs, saw a return of £4.50 ploughed back into regional economies. The report also found that, from 2002 to 2007, the nine RDAs together created or safeguarded 472,900 jobs; created 17,900 firms and supported 90,600 more; improved the skills of 403,500 people; and remediated more than 800ha of land."


These figures should be taken with a massive bucket of salt.  Ben Farrugia wrote a response to that PwC report for the TPA, and the verdict (pg. 108) of Henry Overman at the LSE Centre for Economic Performance was just as damning:

"Estimating the ‘additionality’ of government interventions is difficult. But it would be fair to say that the approach adopted by most evaluations of RDA expenditures (asking project managers or recipients) is close to the bottom of the ranking in terms of rigour."


Our original report showed that the RDAs aren't achieving their objectives and an Institute of Directors survey has reported that most businessmen, the people the RDAs are supposed to help, think they should be cut sharply or abolished (the survey is reported in the IoD's journal Big Picture, Q2 2009).


Finally from Mr. Meagher, we had this:


"RDAs should use this chink of light as a final opportunity to try and
shape their destiny. They need to move rapidly to mobilise their many
partners and supporters to herald their substantial achievements. And
given their boards contain numerous well-connected Tories and business
figures, RDAs are guilty of having woefully under-employed their
own resources for the purposes of self-preservation."


That is a really telling paragraph.  A former Head of Communications at a Regional Development Agency sees nothing wrong with the agencies using their "own resources" (i.e. taxpayers' money) to fight for the organisation's budget.  He even thinks RDAs should lean on "partners and supporters" (other people on the RDA gravy train) to make their case.  Our money being spent lobbying and campaigning to get hold of more of our money!

That is a classic case of taxpayer funded lobbying.  It is the kind of mentality that has seen them spend a fortune attending party conferences to press their case.  It is an outrageous infringement on a free and fair democratic debate as people who don't want the RDAs have to pay for them to make their case.  Those who want RDAs scrapped can't raid the pockets of ordinary families to pay for their campaigns.

The RDAs should be abolished, if they aren't it will be another serious blow to the coalition Government's credibility.





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