North-West Economy

Debate between Roberta Blackman-Woods and Yvonne Fovargue

Tuesday 20th July 2010 Westminster Hall

[Roberta Blackman-Woods]

My hon. Friend makes an excellent point, and I will shortly address how the abolition of the RDAs is being handled. In response to comments made by my hon. Friend the Member for Blackley and Broughton (Graham Stringer), I do not think that we are framing the discussion around the retention of a particular structure, but we have to question whether LEPs will be capable of taking on the roles previously performed by RDAs.

It is also worth asking whether the Government have a democratic mandate for abolishing the RDAs, because the Liberal Democrats stood on a platform of keeping them in areas where they were deemed to be successful. Indeed, the coalition agreement, on page 10, states:

“We will support the creation of Local Enterprise Partnerships—joint local authority-business bodies brought forward by local authorities themselves to promote local economic development—to replace Regional Development Agencies (RDAs). These may take the form of the existing RDAs in areas where they are popular.”

However, that does not seem to be happening in practice. We have been told that all the RDAs are going, but no legislation is yet in place for that to happen and we expect a White Paper on the matter to be produced only in the autumn.

The issue is about creating a structure that will deliver regional economic investment and growth. We know that the Northwest Regional Development Agency returns about £5.20 of economic benefit for every £1 spent, and in terms of foreign direct investment the programme delivers £30 for every £1 spent. That is a substantial record that will have to be met by any new structure.

I have several questions for the Minister and would appreciate specific answers to them. How will the economy of the north-west be affected by the removal of current funding streams from the RDA, such as the European regional development fund, and the absence of an effective system for disbursing funds and managing the bidding process? That is particularly important, as we currently need investment in green businesses. The RDAs have been successful in bringing together venture capital funds through European money and money from the private sector to create substantial funds.

How will businesses supported by the RDA cope with the reduction in funding when the £1 billion regional growth fund replaces the RDA budget of £1.5 billion a year over two years? That was an excellent question asked by my right hon. Friend the Member for Salford and Eccles. There are other questions on the advisability of moving key functions from the RDA to the Department for Business, Innovation and Skills, such as responsibility for inward investment and for fostering innovation. Surely there is a need to go the other way and to devolve those functions to local areas and enable them, particularly regions, to set their own priorities.

Several Members referred to the development of a regional skills strategy. That, as the Minister will know, was a function undertaken by RDAs. Without that, how will we know what the skills shortages are at a regional level, how they are to be addressed and what partnerships will need to be developed locally to deliver them? We know that local businesses need to work with education suppliers to increase the number of apprenticeships and to get more employers on board, and we know that universities are critical to the development of regional skills. However, it is necessary to have an overview at regional level, as the hon. Member for Wirral West (Esther McVey) noted in an excellent point. How will universities interact at a regional level without a body to encourage them to do so?

[Yvonne Fovargue (Makerfield) (Lab)]

Does my hon. Friend agree with me that, with the Government office for the north-west also under threat, there are concerns about the partnerships not only with businesses, but with the voluntary sector, which has been so well supported by that body?

[Roberta Blackman-Woods]

My hon. Friend makes an important point. The key question concerns the partnerships already in place and delivering at the regional level. How is what they are doing to be continued, and developed, by the new structure? We do not know the answer to that question.

The regional bodies are also working to address the number of NEETs—those not in education, employment or training—and to encourage all local education providers to come together and continue improving aspirations. Again, it is simply not clear how LEPs will achieve that.

We suggest that now might be the wrong point at which to get rid of RDAs, when we are not clear how LEPs will take on their functions. The degree to which the Government are centralising the RDA tasks is also not clear. I am not sure that that is a sensible way forward either.