Regional Development Agencies

Part of the debate – in Westminster Hall at 1:44 pm on 12th February 2002.

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Photo of Alan Johnson Alan Johnson Minister of State (Employment Relations, Industry & the Regions) 1:44 pm, 12th February 2002

I was referring to the 1997 election. The 2001 election resulted in a 100 per cent. increase in the number of Conservative Members of Parliament from Scotland; there is now one, instead of none.

The decentralisation programme is founded upon an analysis of what happened in Scotland and Wales. Scottish Enterprise and the Welsh Development Agency have been around for a long while, and they still play an integral part in promoting economic development in those countries, despite devolution and the establishment of the Scottish Parliament and the Welsh Assembly. The principle of one nation and one Principality has been upheld in those countries, and that will also be the case in England. None of the White Paper's proposals will involve the replacement of the RDAs. We are talking about regional assemblies—or the subject of democratic accountability, which featured in the contribution of the hon. Member for Bridgwater.

It is worth reflecting on why we established the RDAs. In 1996, Bruce Millan, the former European Commissioner, examined the successes and failures of regional policy. He found a piecemeal and fragmented picture. There was much useful activity in all the regions, including the south-west, but different elements were unconnected to each other, and individual regions lacked ownership of their various activities. Disparities between regions had widened, and no region's performance was as good as it could have been.

A White Paper entitled "Building Partnerships for Prosperity" was published in December 1997. It built on the Millan report by clarifying the roles and functions of the RDAs. It also separated out the RDA for London—which would form part of the structure beneath the newly elected Mayor and Assembly—from the RDAs in the eight remaining English regions. The RDAs outside London were given legal status by the Regional Development Agencies Act 1998, and became fully operational in April 1999. In the ensuing period, the RDAs have, by necessity, merely been the channel through which funding streams that were previously set in place have been distributed. Over 90 per cent. of their funding comes from land and properties and the single regeneration budget. Therefore, in those early years, the RDAs' roles were to establish their economic strategy and to work with the stakeholders, and, as the CBI report before Christmas recognised, when we move to the single pot in April, the RDAs will have the flexibility that they need.

We have followed a consistent policy in relation to the RDAs. They are intended to be powerful bodies, which understand and have real roots in their regions. With regional partners, they have drawn up regional economic strategies which will guide their activities. Their close engagement with local partners means that they are able to direct resources to the real priorities in their regions. If hon. Members believe that an RDA has not identified those needs correctly—which was the gist of much of what Opposition Members said—they need to engage with them closely as they revise and refine their strategies.

Irrespective of the position of the Conservative party, which may or may not change, it is important that all MPs engage fully with the RDAs. They have an important role to play. It is worth reflecting for a moment on the impressive successes that the South West RDA has already achieved. Regeneration plans that the RDA is supporting will protect over 400 jobs at the Lister Petter site in Dursley and enable that long-established company to continue operating. Investment of £15 million in the Eden project, which funded much of the infrastructural work to kick the project off, is already seeing excellent returns. Recent research shows that Eden generated £111 million extra spending in the south-west in its first eight months of operation. The RDA has also invested £1.5 million in the combined universities in Cornwall project, and has committed a further £10.5 million. That crucial project for Cornwall will owe much to the RDA's support.

I was interested to hear the concerns of the hon. Member for Bridgwater that RDAs concentrate excessively on urban areas at the expense of the countryside. I have heard that criticism in reverse: that urban areas get a raw deal. I assure both tendencies that we expect RDAs to address difficulties in both town and country. We have set them urban targets to reduce social exclusion in the most deprived wards in towns and cities, and rural targets to regenerate market towns, and come up with their own targets for action in identified rural priority areas in the light of last year's rural White Paper. We have asked them to address both aspects in their corporate plans.

The hon. Gentleman expressed the view that the South West RDA should have done more in response to the foot and mouth crisis. I know how difficult conditions have been in the south-west. However, the South West RDA has done a great deal to help firms suffering as a result of foot and mouth. The RDA was instrumental in setting up the regional taskforce formed after the crisis broke. Through the business recovery fund, the RDA has committed £14 million to assist business recovery in the region. Phase 1 of the fund involved the allocation of business support of up to £15,000 for affected businesses. In all, 1,200 businesses in the south-west region received grant support totalling more than £8.5 million, of which more than £5.5 million has been claimed already.

We made further business recovery funds available in November and a further £3 million was allocated to the south-west. Following discussions involving partners in the region, it was decided that the funds should support the regional priority sectors most affected by the outbreak, and most closely associated with rural areas. On 28 January, the RDA announced that more than £2.3 million of funding would be earmarked to support sub-regional and regional initiatives in the food and drink, and leisure and tourism priority sectors. Initiatives that are being supported include an extension of the successful tourism promotion run by the RDA and South West Trains last summer to run until late spring, and the setting up of a dedicated south-west food and drink promotional organisation.

One would always want to do more in such circumstances. I hope that the real achievements will satisfy the hon. Gentleman that the South West RDA is taking the need to support the rural economy seriously and is acting effectively to do so. In that context, I think that the hon. Gentleman's call for Sir Michael Lickiss to resign is unfair and unwarranted. Accountancy is a noble profession, and I would not condemn someone because he happens to be an accountant.

Without having the statistics, I believe that RDAs are business led and, as far as I know, the hon. Gentleman is right to say that there is no more than one trade unionist on every RDA board. The latest refreshment of those boards has emphasised and underlined the need for them to be business led, which means that a majority of people on the RDA boards should be business men or business women, but it is obviously important for other stakeholders also to be represented. I agree with him that in the main business people should sit on RDA boards. Sir Michael Lickiss has done an excellent job with his board and staff in launching the RDAs and establishing their priorities, and a call for his resignation is unwarranted.

I understand that the South West RDA has actively supported economic development projects in the hon. Gentleman's constituency. It has contributed £2 million towards the £5 million cost of the Watchet marina development to which he referred. Minehead is part of the coastal and market towns initiative, and the RDA is working up plans with the local community to assist in regeneration. In Bridgwater town, the RDA contributed £3.4 million to a successful multi-stranded single regeneration budget project at Sydenham, and will be supporting another project in Hamp ward. It is also involved in discussions regarding the possible relocation of the cattle market in Taunton to a motorway junction location, which would benefit the town and the farming community. The RDA has also given outline agreement to help fund the Foyer project aimed at homeless young people. Significant funding has been provided to Bridgwater college for its heavy goods vehicle school.

The hon. Gentleman also mentioned the Moorlands site in Glastonbury, and he asked what the RDA is doing. The RDA purchased the site in March last year, health and safety work has been carried out to make it safe and secure and a steering group has been formed with 14 interested organisations to monitor and advise the consultants who have been engaged. I am advised that a public consultation on the use of the site will be undertaken shortly.

Those are all examples of valuable activities carried out by the RDA, and they are the kind of activities that RDAs throughout England are carrying out for the benefit of the communities that they serve. The hon. Gentleman was concerned that the regional assembly has too much influence over the South West RDA. There will be a legitimate argument about that when the White Paper is published, because the question of democratic accountability is fundamental to that debate. We have strongly encouraged assemblies to take a leading role in scrutinising RDA activities, and I congratulate the South West regional assembly on its initiative in setting up "select committees" to inquire into the RDA's corporate plan. Assemblies can play a key role in scrutinising the plans and work of the RDA in their region. Although they are not directly elected, they contain a significant majority of local authority members, who are, of course, elected, with the rest of the membership made up from social and economic partners in the region.

The fundamental aim of the RDAs is socially inclusive sustainable wealth creation. That is the role with which nothing should interfere. We set their targets centrally because they are using taxpayers' money, and it is clear that even under the single-pot regime central Government should set output targets and ensure that taxpayers' money is well spent. It is, however, a matter for the RDAs in each region to work with their strategic partners to develop their own strategies.

RDAs are increasingly effective, and are supported by the Confederation of British Industry, the Trades Union Congress and most people who are interested in balanced and effective regional development in England. Their role is increasingly well understood by regional stakeholders who have inputted effectively in the regional economic strategies that guide their activities.

I would be the last person to say that there are no problems. RDAs are less than three years old and, as I explained, they have been working in difficult circumstances in this early period. Abolishing them would mean that the work that they have done, which has led to an impressive strategic focus, would be lost. I hope that even Opposition Members who are sceptical about the matter will come to appreciate the benefits of regional decentralisation as we move into the brave new world of the single-pot regime later this year.

Question put and agreed to.

Adjourned accordingly at Two o'clock.