Three quarters of economic development projects axed in last 12 months
New research by the Local Government Chronicle demonstrates that the full impact on regional economic development resulting from the Government’s abolition of RDAs.
Using Freedom of Information requests, LGC have revealed that, across eight RDA regions, 2,841 separate regeneration, economic development and business support projects have ended in the past twelve months as a result of £1.36 budget cuts. In addition, over 1,800 RDA staff have lost their jobs.
This represents a reduction in economic development activity of 73% from 2010.
In place of this, the Government has announced 50 projects worth £450m as part of the first round of the Regional Growth Fund, with a further £1bn available over the next three years.
Local Enterprise Partnerships, expected to fill the gap left by RDAs, remain largely unfunded and with question marks still lingering over their capacity to deliver. The 21 enterprise zones to be created within LEPs do provide some levers but these will not be in place until 2012.
The shadow business minister Gordon Marsden is therefore correct to warn of a hiatus created by the RDA abolition that is harming regional growth prospects.