The government demolished regional development agencies in the blink of an eye after announcing their abolition last year. But its Regional Growth Fund, revealed at the same time, is still struggling to get off the ground 15 months later
The Regional Growth Fund was announced in a blaze of publicity in June last year. Deputy Prime Minister Nick Clegg said the fund would ‘create the conditions for growth and enterprise in the regions by stimulating investment and creating sustainable private sector jobs’.
It was announced the same day that Business Secretary Vince Cable and Communities Secretary Eric Pickles wrote to councils and business leaders about plans for Local Enterprise Partnerships to replace the regional development agencies.
Clearly the government was responding to concerns about the loss of the RDAs in the regions, sending out the message that it wanted to liberate enterprise and had a plan for growth that understood the importance and complexity of our economies in the regions.
However, while the RDAs were dismantled with disarming velocity, the RGF has been slow to get going, as Opposition leader Ed Miliband highlighted in Prime Minister’s Questions in September. Although the government had issued 22 press releases about the RGF in the previous 16 months, only two firms had received any money for it. At present, only 14 of the 169 approved bids have been given funds. And those 169 bids were out of a total of 464 applications.
Even businesses have said it is too slow and ‘needs more urgency in the machine’.
The Department for Business, Innovation & Skills and the Independent Approval Panel, headed by Lord Heseltine, have clearly struggled with the high demand, the complex assessments and the weight of expectation. Has this whole process been too centralised and too cumbersome?
The government itself has put great emphasis on the end of the ‘Whitehall knows best’ era. Yet this programme aimed to do from one department what the integrated machinery of the RDAs did all over the country.
The business department has already had to recreate ‘local offices’ in recognition that without RDAs there was no regional framework for information exchange. As the LEPs slowly start to emerge, there is a belated recognition that partnership only works when there is the specific incentive of money or devolved power; the second round of bidding has established a £25m fund that brings together four of the business-led LEPs for the first time.
This is not an argument for recreating RDAs. But it is a criticism about the way coalition ministers were so ideologically gung-ho in tearing down the framework for regional growth without a proper, regionally led plan for stimulating it in future. This was particularly important at a time when it was clear that the implications of the deficit reduction plan would be far-reaching.
More power and money must be devolved as quickly as possible to RGF bids, the LEPs, local authorities and local businesses to kick-start our stagnating economies.
While I hope the RGF money really starts to drive growth soon, it is hard not to feel that there has been 18 months of stagnation at the centre, and the true consequences of that for our intricate regional economies might only be seen over time.
Anna Turley is director of the Progressive Localism network
