Cridland: RDAs are being held back

Regional Development Agencies should be reformed to promote economic development more effectively, the CBI has said.

The employers' organisation has identified failings in the agencies which it says need to be rectified to ensure they carry out the their intended role.

The remit of RDAs, launched in England April 1999, is too broad and Whitehall interference is reducing their effectiveness, the CBI claimed in its report "RDAs: Getting Down to Business".

Calling for an overhaul of the framework in which the agencies operate, the CBI suggested a series of reforms including a new image and stronger leadership as well as greater autonomy from government.

"Business thought it was promised a lion but the initial reality was closer to a mouse. The obstacles that stand in the way of RDAs can, and must, be swept away," said CBI deputy director general John Cridland.

The RDAs should focus on economic development with transport, planning and skills high on their agenda says the CBI.

On the relationship between the RDAs and government, the CBI argues they need to be given more freedom to deal with issues such as appointments, salaries and contracts without reference to central government.

"The CBI wants to see the RDAs succeed. It is right that they should be set tough targets, that are clearly based on results and it is important that they address some of the essential issues which currently hold them back," said Cridland.

Businesses should also have increased influence over the work of the RDAs. Agency chairs and 60 per cent of board members should be from the business community compared to the current average of below 50 per cent, the report says.

There should also be more work avoid duplication of effort. "The current proliferation of bodies at regional level leaves businesses confused about who is doing what," says the report.

The economic strategies produced by RDAs should also be followed by other local bodies, including government offices for the regions and regional assemblies.

The report argues the reforms are necessary to ensure the limited RDA budgets have maximum impact, even though they are tiny compared to the size of regional economies.

The East Midlands economy is valued at £49 billion while the RDA budget for the area is £81 million, of which only 12 per cent is unallocated to existing programmes. "£10 million to influence a £49 billion economy is not much," says the report.

The RDAs have business leaders, trade unionists and local politicians on their boards and are responsible for attracting inward investment, promoting training and launching regeneration projects.

The RDAs cover the North East, North West, Yorkshire and the Humber, the east Midlands, West Midlands, South East, South West and the Eastern region. A separate London Development Agency is responsible for the mayor's economic and regeneration strategy for the capital.