Memorandum submitted by English Regional
Development Agencies
The English Regional Development Agencies (RDAs)
welcome the opportunity to submit evidence to the Committee's
Inquiry into the role and effectiveness of RDAs. This submission
is made by the East Midlands Development Agency on behalf of all
RDAs, excluding London, and represents their collective response
to the key areas of the BERR Select Committee Inquiry. This joint
submission is complemented by individual submissions from each
agency and, taken together, they provide a comprehensive picture
of the unique role and achievements of the RDAs. In addition,
it should be noted that an independent evaluation of RDA impact
is currently being undertaken by Pricewaterhouse Coopers, on behalf
of BERR, and is expected to report at the end of November. Findings
from this study will be provided to the Committee once available.
RDAs have transformed economic development in
the English regions over the last decade, increasing focus and
prioritisation and promoting a longer-term economic aspiration
for their cities, towns and rural areas.
RDAs have therefore been successful in catalysing
urban and rural regeneration, in marshalling billions of pounds
worth of investment behind new drivers of economic growth and
in directing effective support services for business.
RDAs have effectively translated and tailored
national Government economic initiatives to meet the specific
needs of each region and brought coherence to fragmented public
sector investment plans.
RDAs place the voice of business at the heart
of public decision making on economic planning in order to maximise
private sector investment and leverage.
RDAs have led master-planning and investment
brokerage for places that the market has failed, turning them
into economic success stories.
RDAs have successfully unlocked the benefits
of leading edge research and innovation, driving collaboration
between industry and academia.
RDAs are proud of their business-led approach—allowing
them to be flexible, fleet of foot and take managed risks.
RDAs have tailored successful emergency help
to local companies and their workers hit by unexpected economic
shocks.
RDAs are excellent value for money, delivering
efficient and effective services for businesses.
RDAs have consistently met their goals. Since
2002 the 8 RDAs have:
— Created or safeguarded 521,375 jobs;
— Created 65,765 businesses;
— Assisted 1,402,701 people with their
skills development needs; and
— Remediated 6,274 hectares of brownfield
land.
1. OVERVIEW OF
RDA ROLE AND
RESPONSIBILITIES
1.1 The RDAs (excluding London) were established
under the RDA Act 1998 and were formally launched on 1 April 1999—their
express purpose is to drive economic performance and growth in
the English regions, through a range of prescribed statutory functions.
The RDAs were established as Non Departmental Public Bodies (NDPBs),
but bring a very real business focused approach to their operation
and investments through their private sector Chairs and the composition
of their Boards. The RDAs' budget (excluding London) for 2008-09
is £1.86bn.
1.2 The RDAs' key role in providing strategic
economic leadership centres on the development and championing
of their respective Regional Economic Strategies (RESs). These
long term strategies are based on comprehensive evidence and identify
the challenges and opportunities ahead. All RESs command significant
levels of support from (public and private sector) partners in
the regions—this has led to a high degree of coherence between
the RESs and a range of regional and local implementation / delivery
plans. Increasingly, regional partners (including Local Authorities
and groups of Local Authorities) are prioritising activity and
aligning resources behind agreed, regional priorities, thereby
increasing impact.
1.3 The RDAs are at the centre of partnership
working in the regions—utilising their investment and influence
to ensure that regional partners work effectively together in
support of key economic priorities. The RDAs, because of their
capacity and expertise, often spot the opportunities, kick-start
activity, and bring the right people together to ensure that more
is delivered through working together than would otherwise be
achieved in isolation. In addition, the business-led nature of
the RDAs means that they have a pre-disposition towards operating
flexibly and remaining fleet of foot.
1.4 Whilst RDA budgets are comparatively
modest in comparison to other public spending in the regions,
and indeed the size of individual regional economies, they do
make important and often catalytic investments across a range
of economic development and regeneration activities. RDA investment
priorities are set out in their three-year Corporate Plans—these
Plans are drawn up in accordance with guidance issued by BERR
and are consulted upon with regional stakeholders. In line with
their statutory responsibilities, RDA investment can be categorised
under the three broad headings of Business, People and Place.
RDAs utilise their funding, resources and know how to:
— Deliver business support services,
and promote enterprise activity and business growth/competitiveness;
— Foster innovation and scientific
advance;
— Attract inward investment and promote
the region as a tourist destination:
— Support employment, learning and
skills needs;
— Deliver regeneration activities including
physical infrastructure;
— Promote environmental sustainability
and climate change adaptation measures:
— Develop local strategic capacity
to lead economic development;
— Influence wider infrastructure support
(including transport); and
— Respond to economic shocks.
1.5 The RDAs are the natural leaders to
bring regional partners together to respond to economic shocks—these
may be related to company-specific closures or other crises such
as the outbreak of Foot and Mouth in 2002 or the floods in the
summer of 2007. The RDAs provide regional leadership at these
times—helping businesses re-orientate and survive with a
range of support packages and funding assistance. Examples of
RDA activity include the role of Advantage West Midlands following
the collapse of MG Rover in 2005 and Yorkshire Forward's response
to the floods in 2007.
Following the collapse of MG Rover in April 2005,
and building on earlier work in 2000, Advantage West Midlands
established and led the MG Rover Task Force to co-ordinate assistance
to the members of the workforce who had been made redundant and
to mitigate the impact on suppliers. By May 2006 almost 70% of
former MG Rover and supply chain employees were back in work.
By the end of the year, fewer than 500 people were still seeking
work, out of more than 6,300 who had lost their jobs. The Agency's
success in this role was commended by the Prime Minister and by
the Public Accounts Committee investigating the closure of MG
Rover.[137]
It has also been acknowledged by the National Audit Office,[138]
which commented that "Public bodies should draw on the
lessons that have been learnt, and documented, by those involved
in the MG Rover Task Force|." The NAO's subsequent Independent
Performance Assessment[139]
of the Agency went on to state, "The work undertaken to
manage the collapse of the MG Rover Longbridge plant is universally
seen as a major success for AWM."
The floods in the summer of 2007 affected over
6,000 businesses in Yorkshire and the Humber. Yorkshire Forward
co-ordinated a swift and decisive response, shaping a clear policy
position and deploying funds to minimise the negative repercussions
on the regional economy. Yorkshire Forward ensured a clear message
of support and commitment was sent to the business community,
mobilising support from a partnership of agencies and deploying
its own resources in a flexible manner across a number of clearly
defined schemes to meet the needs of business. In total, 1,387
claims were approved with a value of £4.22m. Through its
Key Account Management processes, Yorkshire Forward was able to
gain an immediate understanding of the impact of the flooding
across some of the largest regionally significant companies. Constant
dialogue between Yorkshire Forward, Government Office, and Government
allowed for clear updates on the immediate situation and as recovery
commenced. This intelligence highlighted the economic impact of
the floods informing action and longer term policy making. The
effectiveness of the response was recently verified by an independent
evaluation.
1.6 In addition, RDAs administer a number
of grant programmes on behalf of Government including: Selective
Finance for Investment in England (formerly Regional Selective
Assistance (RSA)), Grants for Research and Development, the socio
economic elements of the Rural Development Programme for England
(RDPE) and, more recently, the European Regional Development Fund
(ERDF). These programmes are governed by their own rules and regulations,
but giving the RDAs direct responsibility for the funding streams
has ensured greater strategic alignment of the funds with regional
priorities and has reduced bureaucracy. This, in turn, will improve
the overall contribution and impact of these programmes to regional
growth goals.
2. THE NEED
FOR A
LEVEL OF
ECONOMIC DEVELOPMENT
AND REGENERATION
POLICY/DELIVERY
BETWEEN CENTRAL
AND LOCAL
GOVERNMENT
2.1 Critical mass and cross-boundary working
The regions of England are sizeable economies
with significant levels of population and business stock—this
makes them functioning economic units (often larger than many
small European countries) for business and Government. However,
it is also recognised that many economic development, regeneration
and infrastructure-related issues (including labour markets, housing
and transport) do not respect administrative boundaries—these
key issues are often most effectively pursued on a cross-boundary
basis. A flexible approach to considering functioning economic
areas and working through appropriate partnerships is therefore
vital. The RDAs have responded to this by working together on
major pan-regional initiatives including the Thames Gateway and
the Northern Way.
2.2 Tackling market failure at the most appropriate
level
It is clear that market failures occur at different
geographic levels and the Government's productivity framework[140]
identifies a role for public sector intervention to address market
failures at national, regional and local levels. Where market
failures occur at sub-national levels, the most efficient policy
response is also likely to be sub-national.[141]
The RDAs provide strategic leadership to promote a shared approach
to long-term economic goals and deliver a tailored response in
their respective regions, working with and through sub-regional
partners including city region partnerships, Local and Multi Area
Agreements, and Urban Regeneration Companies. This means that
delivery, whilst orchestrated by the RDA, is often undertaken
close to the ground at a sub-regional level and is responsive
to local needs and interests.
2.3 RDAs ensure a tailored and flexible approach
There is a need to ensure that national policy
is appropriately informed by regional and local input in order
for it to be suitably flexible and to reflect the diversity of
England's economy. The RDAs' unique understanding of the impact
of external economic drivers on their regional economies allows
them to act as key intermediaries between Government and the front
line delivery of economic development and regeneration policies,
informing and shaping tailored and flexible approaches. The RDAs
also place the voice of business at the heart of public decision
making on economic planning. RDAs recognise that they cannot deliver
economic growth without partners, but the flexibility of their
funding allows them to catalyse activity and lever in other funders.
2.4 RDAs deliver economies of scale and provide
specialist resources
Intervention at the regional level also allows
for economies of scale in terms of deploying greater and more
specialised resources, for example in support of inward investment
activities and work to promote innovation and R&D. RDAs have
proven success in driving collaboration between industry and academia
and have unlocked the benefits of leading edge research and innovation.
This is illustrated by the South West of England Regional Development
Agency's role in supporting the development needs of the aerospace
sector in the region.
The South West has one of the largest concentrations
of aerospace companies in the world, with up to 800 supply chain
companies. Over the past three years the South West RDA has invested
approximately £20 million in aerospace technology programmes,
contributing to major industry-led national projects in conjunction
with other RDAs and the Devolved Administrations (DAs). One example
is the £103 million private-public partnership to develop
the Next Generation Composite Wing which will develop low-cost
composite manufacturing technologies enabling high volume wing
manufacture for next generation single-aisle aircraft. The South
West RDA has committed £8 million to this public private
partnership, to ensure that the South West region maintains its
competitive position, retains its world class technological capabilities,
continues to drive collaboration between industry and academia,
and continues to develop its highly skilled workforce. The South
West RDA is working very closely with regional stakeholders to
support the objectives of the project and to enable South West
companies to respond to future market opportunities. The South
West RDA is also the lead Agency in relation to all Aerospace
related activities providing a forum for national/regional dialogue
in collaboration with all RDAs and DAs. This work is essential
to ensure the future success of the industry not just in the region,
but in the UK.
In addition to technology investments, the South
West RDA also supports skills and supply chain initiatives, in
partnership with industry and with the West of England Aerospace
Forum. Here the Agency provides strategic added value by undertaking
the critical role of translating the national agenda to "end-user"
SMEs.
3. THE EFFECTIVENESS
OF RDAS
AND THEIR
ROLE IN
ADDING VALUE
Individual RDA submissions to the Committee
set out in some detail the regional effectiveness, achievements
and added value of each RDA. The section below therefore aims
to provide an illustration of the RDAs' effectiveness in terms
of strategic leadership and the main investment and delivery areas
of Business, People and Place.
3.1 RDAs provide strategic economic leadership
Section 1 above sets out the strategic leadership
function played by the RDAs, which centres around the RES and
associated economic planning and investment prioritisation, drawing
on a strong evidence base. Through the establishment of a clear
vision for the region, and with effective partnership working,
the RDAs drive economic performance and growth in the regions.
The North West Development Agency's (NWDA) role in Salford's Mediacity:UK
provides a good example of this type of activity.
The NWDA played a pivotal role in helping bring
the BBC to Salford. As well as ensuring that the move was supported
by £30m funding for vital local infrastructure, the Agency
was responsible for working above the competing local partners
to ensure that the BBC found a site to suit their needs at the
heart of a new media cluster for the North and indeed the UK.
The Mediacity site is a transformational action
in the Regional Economic Strategy but it is not all about the
BBC—they are an important part of it, but the Agency quickly
recognised that the opportunity afforded by the Salford Quays
site was to generate a critical mass of creative and digital businesses
as a hub for the North. Mediacity promises £300m of private
sector investment in the first phase alone.
NWDA demonstrated decisive leadership and took
a lead role with local partners, chairing the task group and using
its financial clout and leverage to facilitate confidence for
both the move and the future of Mediacity (by securing investment
in transport infrastructure and public realm on the site). The
development will ultimately span a 2000 acre site providing jobs
for over 15,000 employees. The initial BBC move is expected to
provide around 2,400 new jobs. Opportunities for over 1,000 businesses
will be provided.
3.2 RDAs provide effective support to businesses
to start and grow (Business)
One of the RDAs' primary roles is to get more
people to set up businesses and to make existing businesses more
competitive and productive (through business improvement and innovation).
Since 2002, RDAs have helped create over 65,000 businesses. It
is critical, therefore, for businesses to have easy access to
information, assistance and appropriate financial support to enable
them to fulfil their potential. In 2005, responsibility for Business
Link services was transferred to the RDAs. The case study below
highlights the improvements that have been achieved as a result.
Through the RDAs, the Government provides £140m
per annum to support the core Business Link service. Prior to
the RDAs' involvement, Business Link operations were delivered
by a number of providers across each region. The services offered
varied from locality to locality generating confusion amongst
end users. The focus of many of the services also lacked strong
coherence with agreed regional priorities to improve regional
productivity.
Following the transfer of responsibility for
Business Link services to the RDAs in April 2005, new streamlined
regional delivery models have been adopted reducing the number
of sub-regional service providers. As a consequence, there has
been consolidation of back office costs.[142]
Over the past three years, these costs have come down from 31%
of the total annual funding to 23% per annum with plans to reduce
these even further. These efficiency gains are being reinvested
in front line delivery resulting in improved performance. Since
RDAs took over the responsibility for the management of Business
Link (BL) network the number of customers using BL service has
increased by 29% to over 856,000 customers and those receiving
in-depth support has increased by 73% to over 65,000 businesses.
At the same time customer satisfaction results have remained consistently
high at around 90%.
The new structures, alongside the implementation
of the Business Support Simplification Process, have provided
clarity around the support available to businesses, and are helping
to improve the consistency in the service both across and between
the regions. Better linkages are being made between Business Link
services and bespoke regional programmes of support for enterprise,
innovation, skills, manufacturing advice, resource efficiency
priorities and inward investment. This is supported by the creation
of a single small grant programme, the Business Transformation
Grant, (BTG) that provides a financial contribution to activity
identified through the Business Link diagnosis and action planning
process to make a step change in the performance of a business.
3.3 RDAs champion skills and employment opportunities
(People)
The RDAs play a key role in promoting employment
and enhancing the development and application of skills relevant
to employment. Other partners (including Job Centre Plus and the
Learning and Skills Council) have more significant budgets for
skills and employment related activities than the RDAs, however
the RDAs directly invest in a range of skills-related activities,
as well as influencing the priorities and spending of others in
line with regional priorities. In addition, RDAs have played a
significant role in bringing a stronger business focus to addressing
skills issues. Since 2002, RDAs have assisted just over 1.4m people
with their skills development needs. One example of RDA activity
includes the East of England Development Agency's (EEDA's) role
in addressing local economic development via Higher Education.
The results of an EEDA-led, region-wide analysis
of Higher Education (HE) capacity and demand with all the region's
universities showed that the region was under resourced in terms
of HE places. It also highlighted five specific areas where there
were particularly low levels of graduates in the local labour
market and very little HE being delivered. Discussions across
the universities, local authorities, LSC and HEFCE led to a specific
plan for five new HE centres to be developed in Southend, Ipswich,
Peterborough, Harlow and Thurrock which together will increase
available HE places in the region by 8%.
The University Campus Suffolk (UCS) project has
been the most significant of all EEDA's investments in HE, benefiting
from £18.75m EEDA investment against a total funding package
of £137m. The UCS project is delivering a dedicated higher
education institution (HEI) in Ipswich.
EEDA's regional approach allowed difficult decisions
to be taken which individual (and competing) universities would
not have been able to take. It also raised the profile of universities
role as drivers of their local economies.
3.4 RDAs regenerate cities, towns and rural
areas (Place)
The regeneration of cities, towns and rural
areas in each region is an extremely important element of RDA
activity and investment—ensuring that the regions are great
places to live, work and invest. The RDAs spearhead significant
swathes of urban regeneration, using the development of property
and public spaces as important tools in supporting business growth
and regenerating communities. RDAs also focus on providing access
to employment and business opportunities for rural communities.
In addition, a number of RDAs have responsibility for managing
sites in the National Coalfields Programme, which brings significant
challenges in terms of land remediation and bringing very complex
sites back into economic use. Since 2002 the RDAs have remediated
over 6,000 hectares of brownfield land. Examples of RDA activity
include the role played by the East Midlands Development Agency
(emda) in remediating and redeveloping one of the most
polluted sites in Western Europe, and the South East England Development
Agency's (SEEDA's) regeneration of Chatham Maritime.
In 2001 emda took on responsibility for
remediation, reclamation and redevelopment of the site of the
former Avenue Coking Works in Derbyshire. This was one of the
most highly polluted sites in Western Europe—with contaminants
covering over 650,000 cubic metres of the site. Reclamation of
this scale has required emda to lead the most complex on-site
remediation treatment ever undertaken in the UK. New methods of
remediation were pioneered to avoid the need to transport highly
contaminated materials. This has attracted considerable interest
from outside the UK (including China and others), with the site
now used to demonstrate best practice in sustainable technologies.
On completion, in 2014, three quarters of the
site will become sustainable ecological habitats and wetlands—all
created with the advice of the Land Restoration Trust and Derbyshire
Wildlife Trust. The remaining quarter of the site is designated
for mixed use redevelopment. The agency's approach to community
consultation and involvement in this project is also recognised
as best practice, with regular newsletters, events, a bespoke
website, contact with affected households, and involvement of
local schools.
To date, the project has received numerous accolades.
The remediation strategy for Avenue won the Best Conceptual Design
category at the Brownfield Briefing Remediation Innovation Awards
in late 2006 and also picked up the Institute of Civil Engineers'
East Midlands Merit Award in 2007 for engineering innovation,
partnership working and sustainability.
SEEDA took over ownership of the 140-hectare
Chatham Maritime site in 1999, which had lain derelict for over
20 years since the closure of the dockyard with around 14,000
job losses (7,000 direct and another 7,000 indirect), and embarked
on a major regeneration programme. Over £400m of public and
private sector investment has transformed the area into a vibrant
new quarter in the Medway Towns. Now two-thirds complete, over
1,000 new homes have been built in a joint venture with Countryside
Properties, 3,500 new jobs created and three universities brought
together with a further education college on a new campus for
4,000 local students.
SEEDA was able to catalyse an effective partnership
for change, highlighting the need for an innovative approach to
development. The "Fishing Village" phase of the scheme
received various design awards and is one of only a handful of
schemes in the country comprising over 100 houses to meet the
BREEAM EcoHomes sustainability standards.
The Agency now showcases work on the area to
share the practical lessons learnt, eg how to manage complex engineering
contracts and the heritage implications of brownfield regeneration.[143]
Partner organisations, through the Regional Assembly, have commented
that without the input of SEEDA they would have been hard pressed
to make any substantial progress on such a challenging site—part
of which has now been nominated to become a World Heritage Site
in 2011.[144]
4. RDA EXPERTISE
4.1 RDAs understand business and the importance
of private sector leverage
As set out above, the Boards and activities
of the RDAs are business-led. Through the composition of their
Boards and the RDAs' contacts with business organisations and
individual businesses, they are able to understand and act on
the concerns of business.
The business structure and expertise of RDAs
enhances their ability to recruit high calibre individuals and
to work effectively with both the public and private sector. Among
other things, this enables the RDAs to attract and draw in both
public and private sector investment—since April 2005 RDAs
have levered £6.7bn public and private regeneration funding.
4.2 RDAs have specialist economic development
and regeneration capacity
RDAs employ a range of professionals with specialist
knowledge and expertise to enable the delivery of the agencies'
responsibilities. This includes specialist expertise in terms
of research and analysis in order to ensure that strategies and
policies are based on robust evidence. The RDAs' capacity is also
exemplified through their role in physical development, de-risking
regeneration sites to a point where the regeneration becomes attractive
to the private sector. This may be through intervention where
there is market failure, or where barriers to physical regeneration
exist that other public sector agencies cannot remove. This will
often involve galvanising public and private sector partners to
work together to deliver complex projects that may well cut across
individual areas of responsibility or local authority boundaries.
The RDAs therefore have highly skilled and qualified teams of
physical regeneration professionals and project management staff,
focused on delivering agreed regional priorities.
4.3 RDAs manage complex activities efficiently
and effectively
The National Audit Office's (NAO's) Independent
Performance Assessment reports confirm that the agencies are competent
and efficient programme managers and that effective project appraisal
processes have ensured that better value for money is achieved.
The reports also highlight that the agencies have clear and accountable
decision making processes and are led by competent Boards and
Executive Officer teams. As set out in section 8.2, the NAO found
that all RDAs were performing well or strongly.
4.4 RDAs therefore have a unique mix of public
and private sector expertise
RDAs have a unique statutory economic development
and regeneration function and are multidisciplinary bodies, bringing
together a unique mix of economic development experts, through
their Board Members and staff. In addition to private sector expertise,
many RDA staff have extensive experience of the public sector
(including local and central government). This mix exists nowhere
else in the economic development and regeneration field, and is
what makes RDAs innovative as public bodies with a duty to drive
sustainable economic growth in the regions.
5. THE EXTENT
OF, AND
NEED FOR,
RDA OVERSEAS ACTIVITIES
When the RDAs were established in 1999, they
took over regional inward investment budgets and have continued
to work in partnership with UK Trade & Investment (UKTI) to
attract Foreign Direct Investment (FDI) to their regions and to
work to retain and expand existing foreign investment. To help
promote inward investment, RDAs have offices or representation
in key overseas markets. They are an integral part of UK's sales
force, adding significant value to the activity of UKTI and the
UK's offer and helping to maintain the UK's position as the number
one destination in Europe for inward investment.
5.2 RDAs provide effective, well coordinated
overseas representation
In 2008, an independent study published by UKTI
reviewed the contribution of RDAs to the UK's overseas representation
and delivering inward investment promotion overseas. A market
survey of overseas companies found that the service provided by
RDAs was regarded as good and well coordinated. The study highlighted
the key role played by RDAs in winning a large proportion of the
UK's FDI. This is borne out by the 2007-08 inward investment figures
published by UKTI in July 2008:
— RDAs directly secured 296 inward
investment projects (36.5% of total UKTI/RDA successes into the
English regions) and an associated 23,270 jobs (52.3% of the total
jobs from UKTI/RDA successes); and
— RDAs played a part in 604 (74.6%
of UKTI/RDA successes in the English regions) and an associated
37,307 (83.9%) jobs created or safeguarded.
The One NorthEast (ONE) example below demonstrates
the support available from RDAs.
"We decided to pilot our first Micro-CHP
unit in the North East because there are a lot of bio-fuel industries
located there, which was an important factor in terms of procuring
the bio-diesel required. Also, One NorthEast in the UK and One
NorthEast's Tokyo office offered us a great deal of support. With
excellent R&D links now established with Newcastle University
and the New and Renewable Energy Centre (NaREC), we now have a
strong base from which to develop our technology in Europe."—Makoto
Yasuda, Head of UK Operations, Yanmar Co Ltd, Japan
5.3 RDAs and their overseas representatives
have an important role in managing the relationship with existing
investors in the regions, who represent the main source of all
inward investment into the UK. A key part of RDAs' activities
is building the long-term relationships that are essential for
winning new business and, in the process, identifying opportunities
for follow-on investment.
5.4 The independent study nevertheless concluded
that more could be done to strengthen existing arrangements and
drive better co-ordination. As a result, Ministers have agreed
a new model for overseas representation and delivering inward
investment promotion overseas. UKTI will lead the co-ordination
of a fully integrated overseas network, which will involve joint
planning of promotional activity and common UK branding. This
is already being rolled out in three "pathfinder" markets
(France, India and Canada) with full implementation in all overseas
markets by April 2009. The new model will be closely monitored
and evaluated during 2009-10, to ensure that it delivers effective
alignment of national and regional resources and best value for
money.
6. THE CONSEQUENCES
OF EXPANDING
RDA REMIT TO
INCLUDE NEW
FUNCTIONS AS
PROPOSED BY
THE SNR INCLUDING
THE DELIVERY
OF EU FUNDING
6.1 RDAs continue to deliver "more with
less"
The RDAs' remit has progressively expanded as
part of the Government's policy to put in place regional architecture
and to co-ordinate policies and actions at national, regional
and local levels in order to promote growth in the regions. A
chronological summary overview of the RDAs' expanding role and
responsibilities is at Annex 1. It should be recognised that,
lately, this has been set against a backdrop of reducing RDA budgets
(through the most recent Comprehensive Spending Review).
Whilst it is appropriate to review the agencies'
role and function as envisaged under SNR, it should be recognised
that RDAs have consistently demonstrated a capacity to assimilate
new responsibilities efficiently, providing cost savings in administration
budgets at the point of transfer and delivering more effective
services.
For example, the changes made to the delivery
of Business Link branded services by the RDAs, and their role
in leading on Business Support Simplification, illustrate significant
efficiency savings on administration costs and improvements in
the quality of services, bringer a stronger regional coherence
and providing better value for money.
6.2 RDAs will deliver greater alignment and
impact from EU funding
The transfer of the management of the ERDF programmes
from the Government Offices to the RDAs is not part of the SNR
proposals, but was part of a general push to improve the alignment
of European and domestic funding in support of regionally agreed
priorities. This new responsibility came into force in January
2008 and the RDAs are focused on ensuring that the programmes
fully align with regional priorities and support increased competitiveness
and productivity. It should be noted, however, that the regulations
that guide ERDF funding, and its associated governance structures
(including separate Programme Monitoring Committees), provide
a significant challenge to the effective integration and alignment
of the programmes with RDA process and practice—an issue
that the RDAs are working to address.
6.3 RDAs are keen to ensure the economic focus
of SNR implementation
The Government first published its "review
of sub-national economic development and regeneration" or
SNR in July 2007. This was followed in March 2008 by a consultation
document entitled Prosperous Places. The consultation period
closed in June 2008 and the Government's response is currently
anticipated in the autumn.
The RDAs welcome the opportunity to play a full
and proactive role in the implementation of the SNR. In their
response to Prosperous Places, they reiterated their support
for the move towards a Single Integrated Regional Strategy (SIRS),
bringing together for the first time both economic and spatial
priorities—something that the RDAs had been highlighting
as a critical issue for some time. Within a changing economic
context, RDAs are keen to ensure that SNR implementation retains
a clear focus on its original objective, which is to improve sustainable
economic growth in all the English regions. Reform for its own
sake would bring little benefit to regional economies, particularly
in the current economic circumstances.
RDAs are already working closely with partners
on SNR transition planning in order prepare for implementation
in their regions. This includes initial scoping work on the evidence
base to support the new SIRS, forging new partnerships with groups
of Local Authorities (through Multi Area Agreements) and developing
joint investment plans.
6.4 RDAs must remain business-led, flexible
and fleet of foot
RDAs believe that it is imperative that SNR
implementation protects and enhances the benefits of the business-led
RDA model. As set out elsewhere in this submission, business leadership
of RDAs, clear decision making based on capacity and expertise
in key areas, and flexibility have been critical factors in developing
regional economies to date. The role and contribution of private
sector leverage was significantly underplayed in Prosperous
Places, and the identification of opportunities and
incentives for private sector engagement is extremely critical,
especially in these more challenging economic times.
There are also challenges within the governance
model described by the SNR, central to which is the pivotal relationship
between the RDAs and local government. It is accepted that these
arrangements should be agreed region by region but clarification
of the relationship between the RDA Board (including the role
of the RDA as the Regional Planning Body) and the Local Authority
Leaders' Forum will be required.
6.5 RDAs have the capacity to plan for and
take on new responsibilities
The RDAs fully recognise that implementing the
SNR (as articulated in Prosperous Places) and developing
the SIRS will entail significant new responsibilities and challenges.
SNR will, of course, require the RDAs to review and enhance their
capacity (including the areas of planning, transport and housing,
where all agencies have resources appropriate to the role they
currently play in this area).
As demonstrated above, the RDAs have been extremely
adept and successful in taking on new responsibilities and there
is no reason to believe that they would not be able to do so again
in terms of SNR implementation. In fact, they have already begun
to address this issue through close working with planning, transport
and housing colleagues at the Regional Assemblies. The Government
also recognised that any transfer of responsibilities from the
Regional Assemblies to the RDAs would need to be accompanied by
the associated resources—this will be critical in order
to ensure that effectiveness and impact in other areas of RDA
delivery are not compromised by these new additional responsibilities.
7. THE ACCOUNTABILITY
OF REGIONAL
DEVELOPMENT AGENCIES
7.1 RDAs are accountable to Ministers and
Parliament
As set out in the RDA Act 1998, RDAs are directly
accountable to the Secretary of State for BERR and through him
or her, accountable to Parliament.
The Secretary of State for BERR signs off each
RDA's Corporate Plan, as well as laying each RDA's annual performance
report and annual accounts before Parliament. RDAs complement
these sources of national accountability by submitting evidence
to, and appearing before, Parliamentary Select Committees. RDAs
are subject to a further, ongoing, level of Parliamentary accountability
through the process of answering Parliamentary Questions. A similar,
non-Parliamentary, route of accountability originates from ongoing
Freedom of Information requests. RDAs are subject to Independent
Performance Assessments carried out by the National Audit Office
(which also signs off each RDA's annual accounts).
7.2 RDAs are held to account by their Boards
and partners in the region
RDAs are held to account by their Boards, which
include local authority, community, trade union, business and
academic leaders. RDAs consult extensively with a wide range of
local, regional, sectoral and national stakeholders to help them
shape, inform and ultimately agree their respective Regional Economic
Strategy. Agencies also consult with regional partners on their
Corporate Plans and other key strategies or action plans. Each
agency must hold an Annual Public Meeting, which provides a forum
for open and transparent accountability with regards to its annual
performance. This provides an opportunity for partners in the
region to question and challenge the RDAs.
7.3 RDAs are currently scrutinised by the
Regional Assemblies
In each region (outside London) RDAs are scrutinised
by Regional Assemblies—partnership bodies that bring together
representatives from the public, private, voluntary and community
sectors, with a specific role in delivering scrutiny of the RDA
in each region. On average, each Regional Assembly conducts around
3-4 scrutiny reviews per year, which assess and examine RDA performance
in delivering the aims and objectives set out in the Regional
Economic Strategy.
7.4 RDAs welcome new parliamentary scrutiny
but care should be taken in terms of duplication and over-burdening
regional and local bodies
In their evidence to the Modernisation Committee's
inquiry into regional accountability, the RDAs welcomed proposals
for greater parliamentary scrutiny through Regional Select or
Grand Committees. However, they also highlighted a number of challenges
including the risk of duplication (both in terms of other departmental
select committee business and regional level scrutiny) and overburdening
regional and local bodies and distracting them from core activities
and delivery. Many of these issues were also recognised in the
Committee's report and the Government's response (summer 2008).
NDPB status enables RDAs to manage risks; to
maximise private sector investment and leverage; to make tough
choices on investment priorities; and to operate over economic
and political cycles while remaining subject to a rigorous accountability
regime and external scrutiny. Any changes to the accountability
and scrutiny of RDAs should not inhibit the agencies' ability
to operate in this way.
8. HOW RDA PERFORMANCE
HAS BEEN
MEASURED IN
THE PAST
AND WILL
BE MEASURED
IN THE
FUTURE
8.1 RDAs have delivered their targets year
on year
RDAs have delivered or exceeded their targets
year on year, contributing to the growth of the regions' economies.
A table summarising the outputs achieved by the agencies is at
Annex 2—the RDAs (excluding London) have, therefore, since
2002:
— Created or safeguarded 521,375 jobs;
— Created 65,765 businesses;
— Assisted 1,402,701 people with their
skills development needs; and
— Remediated 6,274 hectares of brownfield
land.
The RDAs' performance has been measured against
a framework, primarily based on operational outputs set by Government,
which has evolved over time. Whilst the definitions of these output
indicators have been amended over time, RDAs have always been
required to report on a range of targets such as businesses created
and supported, jobs created, skills opportunities supported, brownfield
land developed and private sector funding levered.
8.2 RDAs are assessed by the National Audit
Office
The National Audit Office has undertaken an
Independent Performance Assessment of each RDA. The IPA process
is an in-depth assessment of the RDAs and looks at the areas of
Ambition, Prioritisation, Capacity, Performance Management and
Achievement. All RDAs were assessed as performing well or strongly
by the NAO. It is expected that the RDAs will continue to be independently
assessed by the NAO moving forward.
8.3 RDAs are sharpening their focus on outcomes
and impact
To assist RDAs in making assessments, both individually
and collectively, of their direct contribution to regional outcomes
and the Regional Economic Performance Public Service Agreement
target, the RDAs and BERR have adopted a common Impact Evaluation
Framework. As set out above, the RDA Impact Evaluation Study currently
being delivered by Pricewaterhouse Coopers on behalf of BERR will
provide an assessment of the impact of the RDAs and is expected
to report at the end of November 2008. Findings from this study
will be provided to the Committee once available.
The focus on outcomes and impact has been further
strengthened with the introduction of the new Sponsorship Framework
in April 2008, which more explicitly recognises the full range
of RDA activities. Moving forward performance will be judged on
the basis of overall impact, measured through evaluation; progress
in contributing to enhanced regional economic performance;[145]
and effectiveness as a strategic leader and influencer.
There is, therefore, a significant suite of
measures in place to assess the contribution of the RDAs to their
regional economies.
In summary, the RDAs represent excellent value
for money, delivering efficient and effective services. They have
consistently met their goals and their business-led approach allows
them to be flexible, fleet of foot and take managed risks.
The RDAs provide economic leadership in order
to drive the key long term priorities for sustainable economic
growth in their cities, towns and rural areas. They support places
that the market has failed, turning them into economic success
stories.
The RDAs have, therefore, been successful in
catalysing urban and rural regeneration, in marshalling billions
of pounds worth of investment behind new drivers of economic growth
and in directing effective support services for business.
137 The closure of MG Rover, Fifty-seventh Report
of Session 2005-06, House of Commons Committee of Public Accounts,
12th July 2006. Back
138
NAO report 7th March 2006-Closure of MG Rover Back
139
Independent Performance Assessment of Advantage West Midlands,
National Audit Office, February 2007. Back
140
Productivity in the UK series, HM Treasury Back
141
Review of sub-national economic development and regeneration-
HMT, BERR, CLG-July 2007 Back
142
back office costs for these purposes include all non-customer
facing costs including Chief Executive; Finance; Human Resources;
Accommodation and ICT infrastructure costs. Back
143
SEEDA (2006), Annual Report 2005-06 Back
144
SEERA (2004), Findings of the Select Committee on SEEDA and Urban
Renaissance Back
145
The SNR set out a revised regional framework that requires each
region to set an overarching regional growth target-to increase
sustainably the region's trend rate of growth (measured in terms
of GVA per head) in comparison with the region's trend growth
over the most recent full economic cycle. Back
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