Less than two months in and the new coalition government has made its first major mistake in the area of economic development, strategic planning and business support.
The announcement that Regional Development Agencies (RDA’s) are to be abolished and replaced by Local Enterprise Partnerships (LEP’s) has largely been lost in the noise around the VAT hike, 25% cuts to public expenditure and impending tax increases. However, the collateral damage of the decision on RDA’s, motivated more by political dogma than political pragmatism, will be enormous.
It is fair to say that RDA’s across the country have had mixed reviews. But the performance of the Northwest Development Agency (NWDA), and its reputation among the regions business community, is excellent. Indeed, this was confirmed by an independent report carried out by Ekosgen and Lambert Smith Hampton, published this week, that found that the NWDA’S return on overseas investment is on target to be £30 for every £1 spent by 2013. Between April 2006 and March 2009, the NWDA invested £3.5 million in overseas projects that have so far generated more than £56 million in GVA. The report goes on to suggest that the figure will be £104 million in three years when all the foreign direct investment activity has fully matured.
In the run up to the election, Conservative spokesmen consistently promised that there would be wide scale consultation before any decision was taken on the future of the NWDA. I’m afraid that is one pledge that has been broken.
The claim that this new arrangement will mean more decisions being taken at a local level does not bear much scrutiny. Many of the powers and responsibilities currently held by the NWDA; business support, Inward investment, Innovation and managing Venture Capital funds; will not be devolved to Liverpool, Manchester and Preston but, rather, centralised in the corridors of Whitehall, administered by faceless civil servants many of whom think that people up north wear cloth caps and keep whippets!
And even where responsibilities are to be transferred to LEPs, who within the business community can honestly say that we have confidence in the capacity of local authorities to think strategically, agree on policy and deliver initiatives that will help drive our economy forward?
Manchester can take great comfort in the governance structure that is the Association of Greater Manchester Authorities (AGMA). It is a model that is rightly held up as a blueprint of good practice, and here we have a group of local councils and private sector partners that are comfortable in co-operating and expert in co-ordinating. Even here though, the political leadership cautioned against the abolition of the NWDA.
It is elsewhere in the region, however, that is of major concern. One would hope that the new leader of Liverpool City Council Joe Anderson, in his additional role as Leader of the Liverpool City Region Partnership, will be able to quickly pull together a strategy and framework among a group of local authorities who have found it difficult in the past to agree what day it is. The Mersey Tram scheme and the proposed Everton FC move to Kirkby are high profile projects that fell by the wayside and head a long list of public spats among the Merseyside political fraternity.
And what of Preston? At loggerheads over the Tithebarn project with neighbouring authorities; operating within a two-tier government structure and in a county that boasts more local councils than most of us care to remember . The idea that this bunch will be responsible for economic development in the future is, frankly, a frightening prospect. One can only hope that the districts will let Lancashire County Council simply get on with it, but I already hear rumours of not two but THREE LEP’s in the red rose county.
Of course we have to deal with the cards we are dealt; but this is a poor hand and one that may yet come back to bite the coalition government on the proverbial.