Written evidence from the Public and Commercial
Services Union
INTRODUCTION
1. The Public and Commercial Services union
(PCS) is the largest civil service trade union, with a total membership
of over 300,000 working in over 200 civil service departments,
non-departmental public bodies and related areas.
2. PCS represents staff employed in all
the Regional Development Agencies (RDA's).
3. PCS currently have 762 members in the
RDA's representing all grades from Executive Directors to clerical
support staff and all disciplines. This, we believe, enables us
to speak with a degree of authority on behalf of all RDA employees.
4. PCS members in RDAs have built up knowledge
and expertise in promoting local economic development and regeneration.
5. June 2010 the Government announced that
all nine RDAs would be abolished and replaced with Local Enterprise
Partnerships (LEPs).
6. The Secretary of State for Business Innovation
and Skills (BIS) originally said where RDAs enjoyed widespread
public and business support, the new LEP could take the form of
the existing RDA. This position has since changed.
7. PCS believe the changes in the structure
of the RDAs put the development of some regions and, of the country
as a whole, at risk.
8. PCS believe it is important some form
of regional government is maintained to make it easier to use
local knowledge and for information from local government and
areas to be communicated to central government. The closing of
RDAs and the Government Office Network put both of these at risk.
KEY FUNCTIONS
OF REGIONAL
DEVELOPMENT AGENCIES
9. The Regional Development Agencies were
established in April 1999 bringing together a number of economic
development structures that had been operating at sub-national
level. RDA's were assigned the following statutory purposes:
(a) to further the economic development and the
regeneration of [their] area,
(b) to promote business efficiency, investment
& competitiveness in [their] area,
(c) to promote employment in [their] area,
(d) to enhance the development and application
of skills relevant to employment in [their] area, and
(e) to contribute to the achievement of sustainable
development in the United Kingdom where it is relevant to [their]
area to do so.
10. RDAs are business-led bodies tasked
with bridging the gap between Whitehall and local areas, promoting
economic development.
11. The overall aim of RDAs is to bring
economic prosperity to all parts of England. RDAs analyse different
economic, social and environmental circumstances in each region,
and work with public, private and voluntary sector partners to
develop potential.
12. They have an important strategic region-wide
role. Founding legislation required RDAs to prepare and keep under
review a strategy relevant to their purposes. Regional economic
strategies were developed with the involvement of a wide range
of regional partners and they set economic development goals and
priorities. The Regional economic strategies also provided an
implementation framework showing coordinating different partner
bodies in setting up, within a national policy framework. Each
strategy has been supported by a comprehensive evidence base and
underpinned the RDAs' ability to take a long view of regional
economic issues.
REGIONAL DEVELOPMENT
AGENCIES AND
ECONOMIC DEVELOPMENT
13. The RDAs had a crucial role in using
their economic expertise to aid growth in regional industry sectors
and providing businesses with start up grants and loans.
14. If we are to grow our way out of the
current economic conditions some of the RDAs expertise in providing
help with new business start ups will be crucial. Not to maintain
these functions leaves the economy at risk.
15. RDAs work specifically in improving
the quality of public spaces and run down areas.
16. This coordination has been particularly
important for the development of new technologies and emerging
industries such as low carbon initiatives.
17. It is not clear at this stage how many
of these activities and functions the Government will wish to
retain as regional priorities for the future. As a result it is
also completely unclear if there will be any suitable delivery
mechanisms.
18. An independent report by Pricewaterhouse
Coopers (PWC) in March 2009 found that for every £1 invested
by an RDA, on average an additional £4.50 was put into the
regional economy by other sectors. This means that RDAs turned
their £5.1 billion of investment into an overall economic
benefit of £23 billion between 1999 and 2009.
CONCERNS ABOUT
THE REPLACEMENT
OF REGIONAL
DEVELOPMENT AGENCIES
WITH LEPS
19. PCS have concerns about the abolition
of the RDAs, the centralisation of funding and the creation of
LEPs, which could see 3,000 job losses by 2012.
20. The government has said that they will
review the roles of the RDA and some of those roles will be taken
over by LEPs. However, as yet there is no clear indication as
to what parts of the RDA functions will be taken over by LEPs.
21. The more of these functions that are
centralised the less able government will be to offer adequate
and appropriate support to business and areas that need it, and
the more area specific expertise will be lost.
Our concerns include:
22. The need for strategic governance at
a regional level to co-ordinate interventions in support of skills,
infrastructure, business support and supply chain management.
23. PCS believes that LEPs will lose the
expertise and experience of RDA staff particularly in the many
technical projects which are currently in delivery and have with
very complex funding streams (including European funding). We
do not believe staff within the Local Authorities and businesses
will have the necessary expertise to be able to manage such projects.
24. This means that there may well be significant
risks involved with an impact on local economies if this expertise
is not retained. A full mapping exercise should take place with
a commitment to retaining RDA staff where the need for such skills
are identified.
25. Fragmentation caused by the creation
of sub-regional partnerships competing for limited resources at
a time when clear and assertive regional coordination and leadership
is most needed.
26. Devolving powers to a more local level
risks losing sight of the benefits of the strategic, regional
leadership that is required to meet the large scale economic challenges
faced in regions.
27. There is a risk that LEPs will adopt
a narrow focus on local interests to the exclusion of key strategic
priorities such as the delivery of affordable housing, following
the abolition of regional strategies.
28. We question whether the process for
selection for LEPs will be transparent and open to scrutiny and
who will make the decisions on which LEP bids will be successful.
29. PCS shares business concerns about the
transfer of business support and financing to a national level,
creating further barriers to access. There is some confusion as
to how regional European Funding will be managed and co-financed
in the absence of RDAs.
30. There are concerns about the relationship
between the Skills Funding Agency, LEPs and the existing Regional
Employment and Skills Forums.
31. Opportunities for growth and jobs in
regional economies through the low carbon economy could be lost
with local authorities competing for funding.
32. The suggestion is that although LEPs
can bid from the "Regional Growth Fund" the running
of the LEP will need to be financed through existing LA budgets.
There is also a suggestion that LEPs may be funded by selling
the RDAs land and property assets. The Government is also introducing
a Public Bodies (disposal of Assets) Bill 2010-2011, which may
provide further detail of such proposals.
33. We are concerned whether LEPs will be
allowed to use proceeds from assets for their own use or whether
the money will be clawed back by central government.
34. The timetable for setting up LEPs is
extremely tight and the regional growth budget (£1.2 billion
over two years) cannot result in the amount of regeneration money
needed. An independent report (8 September 2010) states that the
North of England will be hardest hit by cuts in Government spending
from April 2011.
35. It has been made clear that there is
no requirement for all areas to have an LEP and that some will
be bigger than others. The Government has said that local choice
and capacity should play a big part in the particular range of
activities LEP's will undertake.
36. PCS believe that this local flexibility
could be wholly appropriate for some functions. However there
is a risk that too much variability could present difficulties
and add complexity for business, especially if LEP's in different
areas could be providing radically different services and functions.
37. PCS would therefore suggest that consideration
should be applied to the transition of functions to LEP's and
other arrangements in support of the Government's wider growth
objectives.
38. PCS believe that we should focus on
key areas such as using economic evidence to help decision makers
prioritise investment, co-ordination around investment, the scale
of resources required and have a clear understanding of business.
39. There is also a significant risk of
disruption to the pipeline of economic development projects. This
is extremely likely in high-growth sectors subject to intense
international competition and investment.
STAFF-RELATED
CONCERNS
40. There are approximately 3,000 staff
employed in RDAs at the present time, all of which will be made
redundant as things stand by 2012.
41. It is unclear at this stage whether
any staff will be transferred under TUPE to other bodies such
as local authorities to carry out functions previously done by
RDAs.
42. RDAs are reducing staffing levels both
as part of year on year savings (£23 million on administration
budgets this financial year) and because of immediate budget reductions
of £270 million by the end of the current financial year.
43. The vast majority, if not all, will
be affected by the proposed changes to the Civil Service Compensation
Scheme (CSCS).
44. PCS believe that one of the most important
issues as part of the process of abolishing RDA's is the risk
of RDA staff with valuable specialist expertise and knowledge
being lost ahead of a potential central involvement in alternative
arrangements.
August 2010
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