A leading business expert at Coventry University is concerned
what proposed cuts would do to Regional Development Agencies should
a Conservative government get into power.
Professor David Bailey from the University's Business School
said that the Leader of the Conservative Party, David Cameron, has
identified RDA's as prime targets for funding cuts and wants them
to be reformed in some way.
Professor Bailey commented: "I would support the reforming
of RDAs to make them more accountable, but scrapping RDAs to cut
costs could lead to a fragmented local authority approach along
with a recentralisation of policy making and delivery in London. It
isn't clear to me how any of this would actually help the West
Midlands economy.
"RDAs have already had pretty swingeing cuts. Advantage West
Midlands, for example, have had their 'single pot' funding cut by
£50 million this year and has seen around £20 million
less in receipts from other activities. Any further cuts will
remove what strategic discretion they have left and could well
start impacting on services, especially for business."
Professor Bailey citied the decline, and ultimate collapse of MG
Rover, as just one reason why RDAs are needed. He said:
"Whilst the MG Rover collapse was a very substantial shock to
the West Midlands economy, the impact would have been much greater
if the firm had collapsed in 2000. In the five years up to the
collapse of Rover, RDA Advantage West Midlands worked with
suppliers to diversify firms away from Rover, helping them to
supply other car firms and to move into new growth sectors such as
medical technologies."
The response after the collapse was also a major effort that
minimised job losses. This was a genuine 'success' for policy as
around 10 - 12,000 jobs and critical engineering skills were saved
in the process before Rover went bust.
Professor Bailey thinks that there is a role for the national
coordination of regional strategies, especially when sectors like
the car industry often extend well beyond a single region.
He concluded: "Rethinking what RDAs do by making them more
accountable is one thing but getting rid of them altogether would
be a mistake. Many of their functions would have to be provided by
some agency and RDAs provide strategic oversight at the regional
level. This is especially important during the current
recession."