Regional Development Agencies

What are Regional Development Agencies?

Regional Development Agencies (RDAs) are non-departmental public bodies, charged with driving economic development, business efficiency, investment and competitiveness, employment, skills and sustainable development in their regions.

In England there are nine RDAs: One NorthEast; the Northwest Development Agency; Yorkshire Forward; Advantage West Midlands; the East Midlands Development Agency; the East of England Development Agency; the South West of England Regional Development Agency; the South East England Development Agency; and the London Development Agency.

The principal duty on RDAs is to draw up and keep under constant review a 5 to 10-year Regional Economic Strategy. These set out detailed plans of how the RDA will pursue its various objectives and full analyses of the region's economy.

The Regional Economic Strategy is required to cohere with national economic development policy and to take account of Treasury economic forecasts. It must also be developed in partnership with regional interested parties and stakeholders, in the public, private and civil society sectors.

RDAs receive funding from a single resource pool, to which the DCLG, BERR, DIUS, Defra, DCMS and UKTI all contribute.

In addition to their Single Budget the RDAs have taken over the management of the European Regional Development Fund (ERDF) and the Rural Development Programme, which together add substantially to the amounts that individual RDAs can direct towards their Regional Priorities.

As well as their primarily economic duties, RDAs are expected to contribute to policy on transport, planning and land use, further and higher education, crime prevention, housing, public health, tourism, culture and sport.

RDAs are governed by a board of 12 to 15 members: these are principally drawn from the business community, but will also include figures from the voluntary sector, education and local government. Members are appointed by the Government, apart from in London, where they are appointed by the Mayor.

**Following the 2010 General Election, the new Conservative/Liberal Democrat coalition government announced its intention to replace RDAs with Local Enterprise Partnerships, described as "joint local authority-business bodies brought forward by local authorities themselves to promote local economic development". The creation of the LEPs is part of the government's commitment to build a new economic model. In the coalition's 'Programme for Government' published in May 2010, it was stated that the LEPs "may take the form of the existing RDAs in areas where they are popular".

Background

In December 1997, Labour Deputy Prime Minister John Prescott released the White Paper "Building Partnerships for Prosperity", setting out the Government's plans. These were put into law in the Regional Development Agencies Act 1998.

Eight of the nine RDAs were formally launched in April 1999, with the London Development Agency following in July 2000, along with the establishment of the Greater London Authority.

The White Paper was initially explicit in its casting of RDAs in the context of the devolution of political, as well as economic, responsibility to the regions. Indeed, the process took place at the same time as power was being devolved to the Scottish Parliament and the Welsh National Assembly.

At the time of the launch of the White Paper, Mr Prescott declared, "This Government is committed to move to directly-elected regional government in England, where there is demand for it." The first stage of this process was a declaration of support for the establishment of "regional chambers" (subsequently called "regional assemblies" in many areas), bringing together councillors from across the region and key business and civil society stakeholders.

However, following the 2000 Comprehensive Spending Review, the emphasis of RDAs' work was reaffirmed as economic development, and their funding was increased. This shift of emphasis was confirmed when the responsibility for RDAs was transferred from the dissolved DETR to the DTI after the 2001 general election.

While the primary responsibility for regional policy and regional governance rests with the DCLG, (which replaced the Office of the Deputy Prime Minister in 2006) it shares a Public Service Agreement target on regional economic performance with the Department for Business, Enterprise and Regulatory Reform (BERR), which is now responsible for the RDAs.

Controversies

RDAs have been controversial largely because opponents regard them as unnecessary duplicators of existing functions and part of an agenda to "regionalise" the UK.

After the 2001 general election, the Government revived its programme of regional devolution, culminating in the Regional Assemblies (Preparations) Act 2003, which provides for referendums to be held in the regions on the establishment of directly elected regional assemblies. RDAs and their attached regional chambers have frequently been viewed as "precursors" aimed at acclimatising the public to think of England in terms of regions.

Opponents of the regional agenda deny that all the regions are coherent areas with common interests and distinctive identities. For example, it is often argued that Wiltshire, Dorset and Gloucestershire have little in common economically or socially with Devon and Cornwall, yet all are lumped together in the "south west". Unlike historic counties or towns, opponents claim, the English regions do not command the loyalty of the public. Indeed, support for regionalisation is strongest in those areas where regional identity is well-developed, particularly the north east, north west and Yorkshire and Humber regions.

It is also argued that RDAs (and regional assemblies) unnecessarily duplicate the functions exercised by county councils. With local authority election turn-outs already very low, many suggest that another tier of governance is not only unnecessary but in fact positively harmful. The flip side of this argument is that many in local government remain convinced - in spite of the Government's denials - that county councils will be abolished once regional government is in place.

Defenders of the RDAs argue that many economic and public service questions are too large to be addressed at the county level, and require organisation at a more comprehensive level. They also point to the explicit remit imposed on RDAs (under the 1998 Act) to take the needs of rural as well as urban areas, and of small pockets of deprivation within otherwise prosperous areas, into account.

At the same time, RDAs have ambiguous relationships with existing agencies, most notably the Government Offices for the Regions. These act as central government's "eyes and ears" in the regions, but the future nature of the relationship remains unclear.

Regionalisation is a debate that also includes a European dimension. Increasingly, EU programmes are funded at the regional level, and opponents of EU integration have attempted to cast regionalisation as part of the process of dissolving the nation state in a "Europe of the regions".

Statistics

A YouGov survey for the LGA found that 54% of businesses aware an RDA existed in their region thought it should be abolished. More than a third of business respondents were not even aware an RDA existed in their region.
The poll also found that 57% of the public were not aware an RDA existed in their area. Of those who were, 37% thought it should be scrapped and 35% that it should be retained.
Support for RDAs was greatest in the North West, where 24% of respondents were aware of the RDA and thought it should be retained.
Support fell to just 11% in London and the South East, and 8% in the South West.

Source: LGA - July 2010

Quotes

"I know that a lot of argument and discussion is going on about regional development agencies. The figures about how much money has been wasted, however, should be more widely shared.

"The East Midlands Development Agency paid more than £300,000 for offices in north America. The Northwest Development Agency shared an office in Newport Beach. One NorthEast spent money on offices in China, Japan, Korea and Australia. The chairman of the South East England Development Agency spent £51,000 on taxis and executive cars in one year alone.

"We need proper control of costs and spending - there has not been any for the past 13 years, and there sure is going to be under this Government."

Prime Minister David Cameron, speaking in a Commons debate - June 2010

"The government's confirmation that town halls will play the lead role in local economic development, working closely with the private sector, is a victory for common sense. There is a real opportunity for councils to show the type of local leadership that our counterparts on the continent have been able to in the past and drive the economic growth of their areas."

LGA Group chairman Cllr Dame Margaret Eaton - July 2010