The announcement earlier this week by the Government that nine English Regional Development Agencies are going to be axed has been heavily criticised by an economics expert from Coventry University.

Professor David Bailey from Coventry University's Business School said: "Vince Cable and Eric Pickles have written to council and business leaders inviting them to replace RDAs with Local Enterprise Partnerships (LEPs).

"While Pickles and Cable have technically left open the possibility that some partnerships could match existing regional boundaries, the lack of powers envisaged for these new LEPs has left many business groups worrying that policy and support for business and economic development will be fragmented."

This announcement comes at the time when the private sector is being expected to create new jobs in place of those lost in public services as a result of the deep government spending cuts announced in the budget.

Professor Bailey added: "When many have been calling for a rebalancing of the economy away from an over dependency on retail and financial services, one wonders how scrapping bodies which had been supporting manufacturing will actually help this along.

"While the new government may dress this up as decentralisation, the changes outlined so far involve a substantial degree of recentralisation to Whitehall, away from the regional level completely.

"This amounts to running an industrial policy from the centre and it's doubtful that policy can be finessed to the degree that it is now, and a centralised policy will probably miss all sorts of opportunities that at the moment can be spotted more easily as much of industrial policy is effectively delivered regionally."

It has been reported that Local Enterprise Partnerships (or LEPs) will have responsibility for transport, housing, employment, enterprise and supporting business start-ups and Professor Bailey said that there was a strong case for having some degree of regional planning otherwise there could be a fragmented and piecemeal approach to planning.

Professor Bailey said: "In reality we can expect a sizeable cut in funding for the regions and it is likely to come from existing budgets, notably the RDAs' current funding of £1.4bn a year.

"The new LEPs will have to bid for funding against other private and public-private bodies, with ministers deciding where the cash goes. It isn't clear as yet what funding LEPs will get other than what they can win from the growth fund.

"What is disappointing here is that the new government, after sending out hugely conflicting messages throughout and since the election campaign, has simply gone ahead and scrapped RDAs lock stock and barrel.

"Local business groups in the West Midlands have been supportive of the work of Advantage West Midlands and will be very sad to see it go. Of course, London gets to keep its Development Agency and will probably avoid the impending disruption in business support, industrial policy, planning and much more.

"So in other words, we have been told that it is all right to bail-out London based financial services, and hence the South East, to an incredible degree, but the mediocre long-term investment in the rest of England's regions will be scaled back even further.

"I'm not impressed with this policy as it could prove to be a very costly mistake both for the economy and for manufacturing in the West Midlands."

For more information about Coventry University, please visit their website here: www.coventry.ac.uk