A brand new start
What was flagged up as a D-Day for regional development agencies turned out to be something of a damp squib.
The Con-Lib coalition government’s announcement of where £6bn worth of public sector cuts would come said very little about the future of the RDAs or other business support agencies, above and beyond cutting £270m by getting them to cease engaging in “lower value” activity, whatever that might be. Across the RDAs that would amount to about £25m each and the East Midlands Development Agency is already looking at how it can put cuts of that magnitude into practice.
If these are all the cuts that are implemented, the RDAs would probably be relatively relieved given the widespread predictions of their demise.
But they can’t rest easy just yet.
One of the pieces of forthcoming legislation announced in the Queen’s Speech was the Public Bodies Bill. To be introduced after the summer recess, it is a fairly wide ranging bill which will give ministers the power to abolish, merge or transfer all public bodies.
And if that gives government the powers to change things, here’s what it wants to achieve. By next year, the £46bn annual cost of the country's 766 quangos will be reduced by £1bn, with reviews held every three years; the overall number of quangos will also be cut.
Given such a threat hanging over them, there is nothing regional economic support agencies can do other than press on with their plans – in as much as they are allowed to – and hope for the best.
It means – on the face of it, at least – that there will be some degree of business support continuity for the rest of what is sure to be a difficult year for the regional economy. And it gives support agencies an extended period of time to prove their worth and to lobby for their continued existence.
Elsewhere, the high-speed rail plans have been given the go ahead, which is a major boost for the region. Work isn’t due to start until 2017 and the project will be completed around 2025, by which time I’ll be within reach of my OAP railcard. But the region should be able to leverage off the potential of a 40-minute commute between Birmingham and London well before the start date. It could have all sorts of positive ramifications in terms of property prices, inward investment and the growth of Birmingham Airport. It is genuinely good news and should be celebrated as such.
Overall, given the pre-election talk of savage cuts to frontline public services, it must be said that things haven’t started off too badly. I was one off those who argued that cutting too quickly and too deeply could force us into a double dip recession, and I still believe that. But perhaps that message has got across, or maybe the Lib Dems have been able to put a brake on the Conservatives’ instinct to take an axe to public spending. Either way, cuts are being handled in a more restrained way than many of us expected.
Let’s see how it continues.
Any comments? Email Andy Coyne, editor, Midlands Business Insider
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