Business-focused Regional Development Agencies must stay

Release Date: 15 December 2009

Regional development agencies must stay, Business Voice WM has insisted.

But it wants the private sector to have a greater influence on how Advantage West Midlands is run.

In a policy paper being distributed to the political parties, BVWM says:

“The potential for AWM to be business-led is still to be built upon. For example, delivery of business support via Business Link has been extremely difficult and the service is not yet stabilised.

“The interference in the RDA from central government has been a real barrier to the organisation being truly business led.

“The RDA, for example, cannot even appoint its own board or chairman. An RDA needs budgets that are long-term and protected; we have seen too many examples of RDA budgets being raided by central government.”

The comments come despite pledges by both the Conservatives and Liberal Democrats to abolish the organisations.

BVWM says the development of economic strategy needs to happen at a level that crosses local authority boundaries. “We require a business-led regional economic body (RDA) to achieve this.”

But delivery should be via urban development corporations, city regions and local partnerships like the Black Country Consortium.

The document warns that, with so much power still concentrated in Whitehall, regional strategies are largely decided by civil servants and Ministers in London.

“At best, these strategies are influenced by the strength of local representation. At worst, the region has to accept services designed for it as part of a national strategy which might be totally unfit for purpose locally.”

Only a tiny percentage of the billions spent in the region was subject to local control.

BVWM states: “Until and unless central government re-visits regional boundaries, the West Midlands must be treated as an economic entity. By chance, travel to work and supply chain patterns demonstrate a region that is often well integrated.

“In practice, however, there are areas of natural economic geography that place a strain on the concept of the ‘West Midlands’. Stoke probably has more natural economic ties to Derby or Crewe or indeed Greater Manchester than it does to Birmingham.”

There was also a sub-regional economic issue to be considered – for example, the possibility of a Greater Birmingham and Black Country area and a Coventry/Warwickshire area.

RDAs, says the report, should focus on skills, planning, transport and infrastructure, science and technology, business support, inward investment, and co-ordinating responses to exceptional economic events and crises.

The report highlights how little money AWM has – a budget of around £300 million a year.

“It must be recognised that the RDA resources are tiny compared to the size of the regional economy it is supposed to move – an oil tanker with an outboard motor. An RDA is only significant to the extent that it can influence the much larger volumes of private sector and central/quango activity.”

The report questions whether local authorities would do as good a job.

It states: “Local authorities have combined to make choices about the £100 million spent annually via the Regional Funding Advice mechanism. Authorities also combined in deciding not to implement road-pricing.

“On the other hand, would New Street Station have been achieved without the £100 million contribution of the RDA? It is also a matter of debate as to whether other transformational projects such as Stoke’s University Quarter and the redevelopment of Fort Dunlop would have happened without the RDA.

“It is the view of some of the region’s largest manufacturing businesses that the West Midlands science agenda would never have advanced as well had the RDA not been involved – the Science City project and the redevelopment of the site at Ansty being two good examples.

“From the perspective of the private sector, the capability of local authorities in the region varies hugely and is generally worse in those places where the region is underperforming the most. It leads us to conclude that regeneration progress would have been slower without the input of the RDA.”

BVWM says there is a need for the private sector to have greater influence on RDAs through contributing to the creation of strategy, and driving implementation via chairing delivery bodies and scrutinising performance.

Board places should be made available to representatives of business bodies such as the chair of BVWM and the president of the West Midlands Chambers of Commerce.

The report goes on: “It is recognised that an RDA is a more efficient vehicle for articulating the voice of the region’s businesses into Whitehall than is the alternative, which is to develop multiple links via local authorities.

“However, we must reflect on initiatives which, collectively, the public and private sectors have struggled to maximise. For example, the slow pace of progress around the City Region initiative.

“We need to find ways of inspiring our most senior business people to prioritise civic leadership and we must grab the opportunity to exploit the voice of business via membership of the Joint Strategy and Investment Board.

“We need to hold onto the best, settle on the improvement opportunities and then resist any interference in our regional, sub-regional and local agendas.”

Jerry Blackett, chief executive of Birmingham and Solihull Chamber of Commerce and Industry and Business Voice WM Board Member said: "It is important to have a business-led body to agree our economic priorities. The RDA has shown it can pull together and deliver complex projects. The capability to do this via other public sector bodies is simply too variable in quality.”

Ends
(893 words)

Notes to Editors:

a) Business Voice WM is an umbrella organisation for the whole West Midlands region – covering Herefordshire, Shropshire, Staffordshire, Warwickshire, & Worcestershire together with Birmingham/Coventry/Wolverhampton and the West Midlands conurbation.

b) The member organisations of BVWM are:

Asian Business Forum
Association of Colleges
Birmingham Law Society
British Ceramic Confederation
Business in the Community
Chartered Institute of Building
Civil Engineering Contractors Association
Confederation of British Industry
Co-operatives West Midlands
Country Land and Business Association
Engineering Employers’ Federation
Federation of Small Businesses
Institute of Chartered Accountants in England and Wales
Institute of Directors
Institution of Civil Engineers
Midland Association of Restaurants, Caterers and Entertainment
National Farmers' Union
National Federation of Retail Newsagents
National Housing Federation
Royal Institution of Chartered Surveyors
UK IT Association
West Midlands Chambers of Commerce
West Midlands Developers Alliance
West Midlands Higher Education Association
West Midlands Minority Ethnic Business Forum

For further information, please contact:
Business Voice WM Executive Director, James Watkins, on 0121 245 0138/0776 5803582
Fax: 0121 245 0141

Prepared and issued by John Duckers of ASAP PR, 01527 892004, or mobile, 07791 978705