CEM OCCASIONAL PAPER SERIES THE FUTURE OF RDAs An information paper by Gethin Edwards - The College of Estate Management

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THE FUTURE OF RDAs An information paper by Gethin Edwards - The College of Estate Management

Introduction The future of England’s Regional Development Based on the analysis of a questionnaire sent Agencies (RDAs) was a hot topic of debate in the to approximately 2,000 of the College of Estate year leading up to the 2010 general election. In Management’s (CEM) current and former students, 1999 and 2000, nine RDAs were set up by the this paper presents the property sector’s view then Labour government, charged with driving on the future of regional governance in England. economic development in their regions. In 2009, The next section provides a background to the the PricewaterhouseCoopers evaluation of the establishment and responsibilities of RDAs, and organisations reported that every £1 that they charts the political debate surrounding their future had spent had added £4.50 to regional gross in the lead-up to, and since, the May 2010 general value added. Several business groups have also election. Section 3 then summarises the results recently expressed their support for the agencies. of the CEM Research questionnaire, identifying a However, in the lead up to the election, the Labour strong preference for an assessment of RDAs on a party remained the only major party committed to region-by-region basis. the RDAs’ continued existence. Both the Liberal Democrats and the Conservatives proposed to at least consider the option of abolishing some, if not all, RDAs, on grounds of local democratic accountability and potential financial savings; and since being elected to government have stated their intention to replace many, if not all, RDAs 1. with joint local authority–business partnerships.

3. England’s regional development agencies 2.

1. One North East 5. 2. Northwest Regional Development Agency 4. 3. 9. 4.

5. East Midlands Development Agency 8. 6. South West RDA 7.

7. South East England Development Agency 6.

8. London Development Agency

9. East of England Development Agency

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The rise and fall of the RDAs England’s RDAs, as non-departmental public have representation from the voluntary sector, bodies (or quangos), were first launched in education and local government. 1999, with the London Development Agency The organisations are funded through a pool (LDA) following in July 2000 along with the of money from a number of government Greater London Authority. These business-led departments, namely the Department for organisations were set up with a brief to foster Communities and Local Government, the sustainable economic growth, inward investment Department for Business, Innovation and Skills, and competitiveness, employment and skills the Department for Energy and Climate Change, to redress regional imbalances. They were the Department for Culture, Media and Sport, promoted as a way of making regional policy more the Department for Environment Food and Rural responsive to each locale (Thornley 2003). Affairs, and UK Trade & Investment. Between Under the Regional Development Agencies Act 1999/2000 and 2006/07, the RDAs collectively 1998, each agency has five statutory purposes, spent around £15 billion, and their total which are: annual expenditure in 2006/07 was £2.3 billion (Pricewaterhouse Coopers 2009). In addition, • to further economic development and the RDAs manage the European Regional regeneration Development Fund and the Rural Development • to promote business efficiency, investment Programme for England, which together amount and competitiveness to approximately £9 billion. One of the main duties of RDAs is to draw up • to promote employment and review a 5- to 10-year Regional Economy Strategy, which provides an analysis of the to enhance development and application of • region’s economy and sets out the plans for each skills relevant to employment RDA. This has to be developed in partnership with regional stakeholders in the public, private and • to contribute to sustainable development. civil society sectors, but must also be coherent RDAs are accountable through their chairs to with national economic development policy. the Secretary of State and through their chief Opposition to the RDAs largely concerns their lack executives to Parliament (through the Department of democratic accountability and value for money for Business, Innovation and Skills). They are (see, for example, Local Government Association also accountable through a number of other 2009). Several commentators also cite the RDAs’ mechanisms, including regional select and lack of flexibility to respond to local aspirations grand committees, the National Audit Office’s and needs, given the strong central government Independent Performance Assessment and control over their operation (see, for example, Independent Supplementary review processes Jones 2001). Goodwin (2004) suggests that, in and the publication of corporate plans and setting up the RDAs, little thought was given to annual reports and accounts. The LDA is also the potentially problematic relationship between accountable to the Mayor of London and the the unelected organisations and city councils London Assembly. (which may have different investment priorities, The government appoints the RDAs’ boards of for example), or at least the government did not 12 to 15 members, except in London where they believe it to be a problem (see also Syrett and are appointed by the Mayor of London (who also Baldock 2001). It is also argued that the regions sets the LDA’s targets). Members are principally are not coherent areas, and that the organisations drawn from the business community, but also duplicate the functions of county councils.

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However, in March 2009, Pricewaterhouse Business leaders and the regeneration sector Coopers, which was appointed by the Department have also spoken in support of the RDAs, for Business Enterprise and Regulatory Reform with the CBI, and the British Chambers of and the RDAs to provide an independent Commerce arguing that any attempts to abolish assessment of the impact of the spending by the organisations could be harmful to business each of the RDAs and assess their achievements, (Hayman 2009; Wilner 2009). Carpenter (2009) reported that all RDAs have generated regional also reported a ‘very good relationship’ between economic benefits which exceed their costs if the European Commission and the RDAs, and allowances are made for the expected long-term concern among Brussels officials that any move impacts, with every £1 spent by the agencies to scrap the agencies would cause disruption and adding £4.50 to regional gross value added. Their a loss of expertise. report concluded that: Despite this, in the lead-up to the May 2010 ‘… there is credible evidence that all RDAs general election the Labour party remained the have generated regional economic benefits only major party committed to the RDAs. The which exceed their costs. This is especially so Liberal Democrats called for the work of all RDAs if account is taken of the potential persistence with local support for them to be refocused on of the benefits and of future potential benefits, enterprise support and economic development, although there are inherent uncertainties in and the others to be scrapped, with Vince Cable, these estimates.’ (Pricewaterhouse Coopers now Business Secretary, describing them as 2009: x). of ‘questionable relevance’ (Finch 2009). The Conservative party proposed to review each More recently, the National Audit Office also RDA, and to only retain those that command the praised the work of the RDAs: support of local councils and businesses. In an ‘For every pound of RDA spending, an open letter to their Conservative colleagues in estimated additional £2.80 is secured from March 2010, Caroline Spelman MP and the Rt other bodies of which £1.51 is from the Hon. Ken Clarke MP said: private sector. While some of this spending ‘The Regional Development Agencies (RDAs) may have occurred without the RDAs’ are the remains of John Prescott’s failed involvement, their engagement can ensure experiment of regional government. Since that regionally important projects proceed they were formed in 1999 they have spent with more speed and confidence than they £17 billion, yet the gap between the greater otherwise might. The added value of the south east and the rest of the English regions RDAs’ strategic role and support to partners has widened. So, whilst we recognise the in delivering physical regeneration projects RDAs have had some local successes, we is an important benefit to the regions, but it believe that the current arrangements can be is difficult to measure.’ (National Audit Office improved.’ (Spelman and Clarke 2010) 2010: 5) Since being elected to power, the new UK The report did, however, highlight ‘… a government has already said that the RDAs will considerable range in the success of individual have to save £270 million in the current financial projects both within individual agencies and year. The coalition has also strongly indicated that between types of intervention’ (p. 6). The report some RDAs may be allowed to continue, although also stated that ‘… we are unable to conclude that in a different form. According to the coalition the regional wealth benefits actually generated agreement: were as much as they could and should have been, and are therefore value for money’ (p. 7).

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‘We will support the creation of Local the government to allow employers a real voice Enterprise Partnerships – joint local authority- in discussions over the RDAs’ successors (Turner business bodies brought forward by local 2010). authorities themselves to promote local Currently, there is no detail on what funding economic development – to replace Regional streams the LEPs will be given, or what areas of Development Agencies (RDAs). These may activity they will take on from the RDAs. However, take the form of the existing RDAs in areas LEPs are likely to be afforded smaller budgets where they are popular.’ (HM Government than RDAs, and Business Secretary Vince Cable 2010: 10) has indicated that future resources for regional According to Vince Cable, ‘RDAs are not economic development will target the North East, satisfactory. They are wasteful, and have been the North West, Yorkshire and Humber and the doing things they shouldn’t. We want to change West Midlands (Carpenter 2010a; Finch 2010). them fundamentally. So we will set up local Garlick (2010) argues that ‘[t]o cut economic enterprise partnerships. This will be a very radical development activity by ditching [the RDAs] change’ (quoted in Finch 2010). without creating alternatives with equivalent levels of funding would be completely irresponsible’. The government has indicated that local councils would have the opportunity to present proposals Carpenter (2010b) also highlights the lack of for new local enterprise partnerships (LEPs), clarity over the transitional process from RDAs to including defining their areas, with government LEPs, particularly in terms of timeline. There is, for approval (see Conservative Party 2010; example, likely to be a delay in getting proposals Regeneration and Renewal 2010). In Caroline from local authorities, and then to dismantle Spelman and Kenneth Clarke’s joint letter to the old agencies and establish the new ones. colleagues (Spelman and Clarke 2010), it was According to Vince Cable, the RDAs are unlikely to stated that the Mayor of London will determine transform into LEPs until after April 2011, perhaps the future of the LDA. The government has even 2012 (Finch 2010). There has also been no already made it clear, however, that at least apparent discussion of how the knowledge and half the membership of the boards of the new expertise of the RDAs’ staff will be utilised. partnerships will come from local commerce and industry, and that a local business person will be appointed as chair of each. The CBI has called on

River Medway, Chatham, Kent

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The view of CEM’s property professionals

Approximately 4,000 property professionals, • only 3.7% argued that the RDAs should be of which around three quarters are UK-based, retained in their current form study with the College each year, and they are widely represented in the real estate and • abolition was favoured more by those who construction sectors. In May 2010, CEM’s have had dealings with an RDA than by those Research department sent a questionnaire to who have not. all the College’s students currently or previously registered on courses and/or modules that In other words, based on the views of CEM’s include elements of real estate development, in students, the coalition government’s review of order to capture the views of those specialising the future of RDAs is backed by property industry in real estate, planning and investment about the professionals, especially those who have had future of the RDAs. The questionnaire generated dealings with an RDA. a 13.8% response rate. For the purposes of Arguments against RDAs centred around their this paper, only the UK-based responses were poor value for money and bureaucratic nature, analysed. A slightly higher response rate of 14.4% criticising them as a whole tier of regional was achieved for UK-based students. government that ‘is an unnecessary layer of Of the 54% who expressed an opinion: bureaucracy that the country can do without, and most of their work is repeated at [the] local level’. • 49.5% believe the future of the RDAs should be addressed on a region-by-region basis Some respondents argued that their functions ‘should be reviewed and, where appropriate, • 35.5% think the RDAs should be retained, but incorporated into district and county council their focus revised organisations with a remit for councils workers to work collaboratively on a regional basis’. However, • 11.2% said all RDAs should be abolished transferring responsibilities down to the local

Albert Docks, Liverpool

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level was not universally supported. For example: Certainly, several respondents argued that the ‘RDAs are able to force reticent councils into performance of the RDAs varies. Many also allowing large scale planning applications to move argued that there is a stronger case for their forward and are able to assess these applications retention in the north of England, which ‘don’t from a regional perspective rather than just a have strong economic working relationships’, local perspective, the only way that these types of although possibly with a revised focus. As one schemes can be addressed.’ respondent explained: ‘I think, particularly in the North and less prosperous regions, RDAs have Many respondents provided examples of how the an important strategic role as well as a role in RDAs have done well, particularly with regard to assisting small businesses’. their role in maximising private sector investment and providing a strategic overview across their There was no explicit support for the coalition region’s economic development. Conversely, it government’s proposed LEPs, which ‘are was argued that they need to work more closely surely just another version of what is already in and more effectively with the private sector to existence’. As one respondent argued: fully exploit the skills and expertise available: ‘I am opposed to change for change’s sake ‘My experience of the RDAs is that they have and think the more efficient way forward is grown too large and become wasteful “gravy to review what is already in existence and trains” for a large number of staff who have refine where necessary to avoid unnecessary little experience of the private sector.’ As one expenditure and time wasting.’ respondent commented, they are a ‘good idea poorly executed’. The results of the questionnaire featured in Estates Gazette (2010), as well as in articles in both Property Week (Johnstone 2010) and Estates Gazette online (Norman 2010).

MediaCityUK, Salford Quays, Manchester

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Conclusions References It appears that England’s RDAs, in their current Carpenter J (2009) ‘EC source: RDA cull could form at least, are to be abolished, something cause “disruption”’, Regeneration & Renewal, supported by a significant number of the 12 October, www.regen.net/bulletins/Economic- questionnaire respondents, especially those who Development-Bulletin/News/944553/EC-source- have had dealings with an RDA. Fewer than 4% RDA-cull-cause-disruption/?DCMP=EMC- of the respondents believe that RDAs should be Economic%20Development%20Bulletin retained in their present form, while over a tenth [Accessed 20 October 2009]. of the respondents believe that RDAs should be Carpenter J (2010a) ‘RDA resources to be abolished. Fifty per cent think their future should “rebalanced” towards the North, says Cable’, be assessed on a region-by-region basis. Regen.net, 4 June, www.regen.net/bulletins/ There was no explicit support for the proposed Regen-Daily-Bulletin/News/1007953/RDA- local authority–business LEPs among the resources-rebalanced-towards-North-says- questionnaire respondents, although many Cable/?DCMP=EMC-Regen%20Daily%20Bulletin were in favour of engaging the private sector [Accessed 04 June 2010]. more, in order to exploit the skills and expertise Carpenter J (2010b) ‘Opinion: The unanswered available. The government has indicated that questions on local enterprise partnerships’, local commerce and business will have a strong Regeneration & Renewal Blog, 1 June, http:// representation within the partnerships, although regenandrenewal.blogspot.com/2010/06/unans there is concern from the CBI that the role of this wered-questions-on-local.html [Accessed 2 June sector in discussions of the RDAs’ successors has 2010]. not been promoted. Conservative Party (2010) Invitation to Join Local councils will be invited to make proposals the Government of Britain: The Conservative for LEPs, and will, reportedly, have a strong Manifesto 2010. Available at: role within the new partnerships. While some questionnaire respondents argued that the RDAs’ http://media.conservatives.s3.amazonaws.com/ functions should be incorporated into local manifesto/cpmanifesto2010_lowres.pdf authorities, others felt that local councils do not England’s Regional Development Agencies (2010) have the necessary regional focus to allow for this. ‘Who we are’, www.englandsrdas.com/who-we- There is a lack of clarity over the time frame for are [Accessed 09 June 2010]. the abolition of the RDAs and the instigation of Estates Gazette (2010) ‘Industry cold-shoulders the LEPs, how the knowledge and expertise of RDAs’, Estates Gazette, 12 June, 44. the RDAs’ staff will be captured, and what levels of funding will be made available for the new Finch D (2009) ‘Vince says scrap RDAs’, arrangements. However, Vince Cable, a key figure Centre for Cities, 21 September 2009, http:// in the new coalition government, has indicated centreforcities.typepad.com/centre_for_ that funding is to be focused on certain regions cities/2009/09/vince-says-scrap-rdas.html in the north of the country, something that many [Accessed 21 April 2010]. of the respondents to the questionnaire were in Finch D (2010) ‘Vince Cable on RDAs’, Centre for favour of. Cities, 3 June, http://centreforcities.typepad.com/ centre_for_cities/2010/06/vince-cable-on-rdas. html [Accessed 14 June 2010].

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Garlick R (2010) ‘Gauging RDAs’, Regeneration Pricewaterhouse Cooper (2009) Impact of RDA & Renewal, 7 April, www.regen.net/bulletins/ spending, United Kingdom: Pricewaterhouse Regen-Daily-Bulletin/Opinion/994890/Gauging- Cooper LLP RDAs/?DCMP=EMC-Regen%20Daily%20Bulletin Regeneration & Renewal (2010) ‘A primer on [Accessed 7 April 2010]. sub-regional working’, Regeneration & Renewal, Goodwin M (2004) ‘The scaling of “urban” policy: 7 April, www.regen.net/bulletins/Regen-Daily- Neighbourhood, city and region’, in M Whitehead Bulletin/News/994866/primer-sub-regional- and C Johnstone (eds) New Horizons in British working/?DCMP=EMC-Regen%20Daily%20 Urban Policy: Perspectives on New Labour’s Bulletin [Accessed 2 June 2010]. Urban Renaissance, Aldershot: Ashgate. Spelman C and Clarke K (2010) ‘Strengthening Hayman A (2009) ‘Tories under fire over local economies’, Letter to Conservative MPs. RDAs’ future’, Regeneration & Renewal, 30 Available at: www.ied.co.uk/images/uploads/ November, www.regen.net/bulletins/Business- Conservative_Party_Letter_81_3_10.pdf Bulletin/News/970088/Tories-fire-RDAs- Syrett S and Baldock R (eds) (2001) ‘Changing future/?DCMP=EMC-Business%20Bulletin times, changing styles: New forms of economic [Accessed 30 November 2009]. governance in London’, in Governing London: HM Government (2010) The Coalition: Our Competitiveness and Regeneration for a Global Programme for Government. Available at: www. City, London: Middlesex University Press, 1–22. cabinetoffice.gov.uk/media/409088/pfg_coalition. Thornley A (2003) ‘London: Institutional turbulence pdf but enduring nation-state control’, in W Salet, Johnstone N (2010) ‘Estates managers back A Thornley and A Kreukels (eds) Metropolitan scrapping of RDAs’, Property Week, 7 June, Governance and Spatial Planning: Comparative www.publicpropertyuk.com/2010/06/07/estates- Case-Studies of European City-regions. London: managers-back-scrapping-of-rdas/ [Accessed 8 Spon Press June 2010]. Turner D (2010) ‘Business appeals for voice in Jones M (2001) ‘The rise of the regional state RDAs’, Financial Times, 11 June. Available at: in economic governance: “partnerships for www.ft.com/cms/s/0/d7658c90-74f5-11df-aed7- prosperity” or new scales of state power?’, 00144feabdc0.html Environment and Planning A 33(7), 1,185–1,211. Wilner T (2009) ‘Business backs under-threat Local Government Association (2009) Who’s in RDAs’, Regeneration & Renewal, 28 September, Charge? The Quango Report Cards, London: www.regen.net/bulletins/Regen-Daily-Bulletin/ Local Government Association. Available at: www. InDepth/941111/Business-backs-under-threat- lga.gov.uk/lga/aio/5592215 RDAs/?DCMP=EMC-Regen%20Daily%20Bulletin [Accessed 1 October 2009]. National Audit Office (2010)Regenerating the English Regions: Regional Development Agencies’ Support to Physical Regeneration Projects, London: The Stationery Office. Norman P (2010) ‘UK property backs major overhaul of RDAs’, EGi, 8 June, www.egi. co.uk/718839.nw [Accessed 8 June 2010].

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