In the warm up to the 2010 election campaigns, the future of Regional Development Agencies (RDAs) is becoming a hot issue. If the Conservatives win, the future looks cold for these supposed drivers of economic development and even under a Labour government serious reform and funding cuts seem certain.

So what are RDAs?

The eight original RDAs were established in 1999 (with the London RDA being established in 2000) with stated purposes of:

• furthering economic development and regeneration

• promoting business efficiency, investment and competitiveness

• promoting employment

• enhancing development and application of skills relevant to employment

• contributing to sustainable development

The RDAs’ agenda includes regeneration, taking forward regional competitiveness, taking the lead on inward investment and working with regional partners to ensure the development of a skills action plan so skills training matches the needs of the labour market (source: www.bis.gov.uk).

The impact of RDAs

In 2008 PriceWaterhouse Coopers released the ‘Impact of RDA Spending’ report, which showed that between 2002 and 2007 RDAs had:

• created or safeguarded 213,000 net additional jobs, which would not have come about without their involvement

• Inward Investment, which generated £13.50 for every £1spent

• investment in generation activities projected to generate future potential economic output of £8 for every £1 spent

• brought more than 570ha of contaminated or disused brownfield land which would have otherwise stood derelict

• supported the development of educational infrastructure in the ‘people theme’ which generated £5.20 for every £1 spent.

But… what the sceptics say

Some people hold the opinion (the Conservative party included) that RDAs are a waste of time, inefficient at best and in some cases causing economic damage. Another negative point that is made is their lack of accountability for their strategy and funding. The London RDA is the only RDA that is operated with an elected mandate, so there are many questions about the legitimacy of the other RDAs.

What do IoD members think?

In March 2009 the IoD released its paper ‘Big Picture, Recession: Are we on the Mend?‘.

The feedback was varied:

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

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

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

ed quickly in areas such as Lloyds or Corus we coul a spiral of decline

What could the future look like for RDAs post election?

In a recent letter the Conservatives stated:

‘We want to re-focus regional economic agencies back onto the things that matters, namely renewing local economies.

‘So, we will reform the system by enabling your local councils to replace the existing agency with a new partnership between themselves and local business, to focus on things like regeneration and jobs. This will mean elected councils and local businesses deciding local economic priorities.

‘Secondly, the boundaries of the partnerships will reflect natural economic areas. If a clear majority of local authority and business leaders decide that the current boundaries of their RDA genuinely reflect their local economic area, then we will respect their view, under the new arrangements.’

However a recent memo suggests that reform rather than recyle is the new Conservative approach, possibly a response to the CBI and British Chambers expressing concern about devolving regional strategic policies to ‘local town halls’.

On a Regional basis – Yorkshire Forward

Tom Riordan, the Chief Executive of Yorkshire Forward for the past four years, has given the IoD the opportunity to contribute a strong business voice for the region ensuring its position as a key partner in any ongoing strategy.

The IoD report released last March also stated: ‘Slicing by region, IoD members’ views on the success of the RDAs in furthering economic performance delivers some interesting results. Most telling is the fact that the dissatisfaction with RDA performance is lowest in South West, North East, Yorkshire and Humber and North West’ confirming that all agencies should not be tarred with the same brush and that Yorkshire Forward has been consistently outperforming some of the other regions.

In an interview Tom Riordan commented on the challenges during the recession:

‘For me, like many people, the past year has been the most challenging of my career. We almost stared into an abyss a year ago, facing thousands of job losses in Halifax, thousands in financial services in this region, a virtual meltdown in manufacturing orders and regeneration grinding to a halt. But we have not suffered as some people thought we would. We still have a financial services sector that is growing again. At Yorkshire Forward there has been a Dunkirk spirit about the place. We have been on a war footing and it has worked.’’

Certainly the future looks uncertain, but ensuring economic success for the Yorkshire and Humber region is still the key focus for both teams. The IoD is keen to ensure that, whatever happens, it maintains the strong voice for business in the area, and if the RDA continues in any form, it hopes to work with Tom and his team to help promote sustainable economic growth.

Have your say – what are your experiences of your RDA?