MPs Committee Warns RDAs Must Keep Strong Business Focus

The House of Commons Business and Enterprise Committee has published its latest report on England’s Regional Development Agencies and has given its “broad support” for a public body which operates between national and local economic development issues. But if RDAs are to fill this gap, the report warns, they must continue to be “business-led”.

The Committee’s report also looks in detail at the implications of the Local Democracy, Economic Development and Construction Bill for RDAs and the delivery of economic development policy. In this context, the committee warns that the Government must respect the democratic interests of local communities as well as the concerns of business in any changes to the structure of regional government.

The report proposes that local authorities should have responsibility for economic assessments of their areas - and that councils rather than RDAs should control devolved funding for local financial policy.

The Committee expresses its “surprise” that the Government introduced the Bill in the Lords before publishing an independent review of the RDAs by accountancy firm PricewaterhouseCoopers.

Peter Luff MP, the Chairman of the Committee, commented:

“The inquiry found widespread support for a regional level of government for economic development purposes although we do have concerns about the structure, work and responsibilities of regional development agencies. In particular we are concerned about the tendency of governments to add responsibilities to RDAs that may distract them from their core tasks and then to cut - or “dip into” - their budgets to address other short-term funding difficulties.

“We also retain our long-held concern about the duplication of work in overseas markets caused by competition among and between RDAs. While, the Committee has been impressed by many of their achievements, we have not been able to reach the firm conclusions about RDAs we would have liked because of the delay to the PricewaterhouseCoopers report.

“A single integrated regional strategy will impact on many aspects of peoples’ lives and it is important that all these interests are represented during the drafting process. The Bill is well-intentioned, but good intentions may not be enough. Business focus is important and we agree RDAS make an important contribution. But if business-led RDAs are to have a greater role in regional strategy, the Government needs to be clearer about how local democratic interests will be protected.

“We are disappointed that these details have not been available during the Bill’s passage through the House of Lords and call on the Government to provide this information before the Bill is considered by the House of Commons.” 

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