The report, submitted to the Treasury as part of its own review of regional economic performance and regeneration, shows that the performance of RDAs has been mixed. Whilst there have been some successes, tackling urban regeneration and on specific issues such as Rover, there has been little measurable impact on regional economic performance.
Most regions have recorded similar increases in GDP in the eight years since the RDAs were established compared to the previous eight years. However, this has been largely based on growth in employment rather than gains in productivity and, outside the southern regions, it has been highly dependent on the public sector. As such, there is little evidence so far that the RDAs have laid foundations for stronger economic growth in the regions outside the greater South East.
Commenting, EEF Director General, Martin Temple, said:
“Whilst the RDAs have made a difference in some key respects, so far there has been little significant impact on our regional economies. However, this must be balanced against the fact they have only been in existence for a relatively short period of time and only latterly had discretion over their own budgets.
“Given the resources at their disposal, it is clear that the agencies have the potential to make a serious impact on the economies of the nine regions but we cannot continue with the status quo.”
In its submission, EEF has made recommendations in three key areas which need to be addressed in any revamp:
Firstly, there is a pre-occupation with measuring outputs such as the number of jobs created and looking to close regional disparities, rather than focusing on achieving a sustainable impact on regional productivity and competitiveness.
EEF believes the RDAs’ aims and objectives need to be re-cast with a clear focus on maximising economic performance in the regions with ‘outcome’ measures established to assess their impact.
Secondly, whilst RDAs have delivered much effective support to business, for example through the Manufacturing Advisery Service, much more needs to be done to deliver sustained benefits. The focus on reducing disparities has also made RDAs too inward looking, operating within strict geographical boundaries which is not necessarily in the best interests of the region.
To address this EEF believes there should be a more flexible approach with better national co-ordination leading to greater collaboration across boundaries. This would avoid agencies competing against each other and add value through combined approaches to issues such as the promotion of clusters and industry sectors, technology and research collaboration, trade support and attracting inward investment.
Finally, three key elements of regional economic development, transport, planning and skills are currently separated from the responsibilities of the RDAs. EEF believes that there should be better co-ordination between local, regional and national bodies in delivering improved economic performance and that business should have a voice in the production of their strategies.
In response, EEF is calling for a review of the role of Regional Assemblies in planning and transport, as well the relationship with national bodies such as the Highways Agency, Network Rail and the Department for Transport. With respect to skills, EEF re-iterated its call for the rationalisation of the number of bodies involved and the swift introduction of a demand-led system with the RDAs monitoring delivery.
Martin Temple added:
“Despite scepticism in some quarters, we believe there is a role for RDAs to play in promoting regional competitiveness. However, government must now be clear what we want from them, set out how their performance will be measured and then give them time to deliver.”
ENDS
Notes to Editors
The report, Improving performance? A review of Regional Development Agencies, was submitted to HM Treasury’s review of sub-national review of economic development and regeneration, part of the Comprehensive Spending Review.