Baroness Royall of Blaisdon
Main Page: Baroness Royall of Blaisdon (Labour - Life peer)
Baroness Royall of Blaisdon
My Lords, it is clear from the amendment that these Benches seek to remove RDAs from Schedule 1, which legally enables their abolition. This debate on the chaotic and misguided abolition of RDAs announced by ministerial fiat comes at a time when there is clear evidence that economic growth has flat-lined and that the economic recovery has ground to a halt. Now, more than ever, we need the regions to be motors of economic growth in our country, instead of which the RDAs, which provide the architecture for regional economic development, are being dismantled.
As we have heard at Second Reading and throughout this Committee stage, the Conservative-led Government have failed to follow a satisfactory process or procedure for evaluating the efficiency and effectiveness of the bodies scheduled for abolition. The rushed decision-making and lack of consultation is nowhere more blatantly obvious than with the abolition of the RDAs. The White Paper outlining the Government’s plans came after the decision to abolish RDAs had been announced, and it was a real surprise to these Benches to see their inclusion in Schedule 1. The House of Commons Public Administration Committee concluded that the Government did not consult properly on their proposals. It welcomed the Government’s agreement to allow for further consultations and said that it expected,
“these consultations to have real effect on the outcome of the review; even if this means reversing decisions that have already been made”.
What consultations have taken place since the abolition of RDAs was announced, and how have the conclusions of those consultations been taken into account?
Even if the Government did not make a proper assessment of the value of RDAs, an independent evaluation by PwC found that since their inception RDAs helped to create thousands and thousands of jobs, well in excess of their target; assisted nearly 57,000 businesses—again, well in excess of their target; enabled £5.7 billion of funding to be levered in from the public and private sectors; and created over 8,500 new businesses. The evaluation also demonstrated that every pound spent by RDAs added approximately £4.50 to the regional economy. Other strengths of the RDA model include the ability to pursue a coherent vision for the region that could be turned into a strategy for economic development and investment.
So why are RDAs being dismantled with no credible alternatives? I am sure that the Minister will tell me that they are being replaced by local economic partnerships, which will see business and civic leaders work together to bring economic development, shifting power away from central government towards local communities, which really understand the barriers to growth. But it is not the case that all the RDAs are being localised. Some functions, such as inward investment, innovation, key sector development and response to economic shocks are going to be transferred to the national level. Inward investment is one of the real big successes of RDAs, offering one-stop shops in a region, with fantastic results—for example, Toyota in Derby or Nissan in the north-east. So how does centralising such a function square with the much-vaunted localism agenda? Are the Government really committed to devolving powers and functions when there is clear evidence that they are currently being well managed at regional level? I am more than a little confused about the role of regional government offices, and would be grateful if the Minister could help me. Is it true that Mr Cable is reversing elements of Mr Pickles’s Maoist revolution by rebuilding parts of the regional infrastructure that were scrapped last summer? I very much hope that six regional government offices are being reinstated and that that will foreshadow other changes in regional policy.
I think that it will be clear from debates later this afternoon that some RDAs are more effective than others and that there are weaknesses as well as great strengths, but just because reform or change is necessary in some areas, why take the radical step of abolition, especially when it is apparent that the LEPs will not be able to provide the same impetus for regional development as the RDAs? In many areas of the country, there are simply no local economic partnerships; I think especially of my own region of the south-west. Could the Minister update us on how many LEPs have been approved and where the gaps are? How are the gaps going to be filled? It would be, or should be, unthinkable at any time, but especially when economic growth must be the means to kick-start and sustain recovery, that any part of the country should be without proper regional development.
There are many grey areas relating to funding. Can the Minister confirm that it could cost as much as £1.4 billion to wind down RDAs and complete existing programmes? Could he also confirm that funding from the regional growth fund will amount to £1.4 billion over three years, and that that is nowhere near the sum given to RDAs? If that is true, the money available is not adequate, and it suggests that the Government do not take regional growth seriously enough. I also wonder why the Government are approving only projects based on short-term job creation for the first £250 million of funding from the regional growth fund. Job creation is critical, of course, but what about strategic, long-term projects, which are essential for the economic well-being of any region? I would suggest that, by focusing on short-term job creation, the Government are being short-sighted, neglecting the potential for long-term economic growth as well as jobs.