Work of regional development bodies criticised
BYLINE: By JOHN WILLMAN
Regional development agencies are spending too much time on hitting Whitehall targets and not enough on improving economic growth in their regions, according to the leading manufacturers' organisation.
In a report published today, the EEF says the agencies, which will spend Pounds 2.3bn in the nine English regions this year, havedone little to improve the competitiveness of the regions since they were created in 1997.
Targets set by the Treasury encouraged the RDAs to focus on outputs such as jobs created and business start-ups helped, rather than on raising regional productivity to create sustainable economic growth into the future.
"While the RDAs have made a difference in some key respects, so far there has been little significant impact on our regional economies," said Martin Temple, EEF director-general.
The report says there was little sign of improved regional growth between 1999 and 2005 in comparison with the previous sixyears, apart from in the north-east.
Given the sustained growth in the economy since 1992, regions that lagged behind the UK average might have been expected to benefit in the later stage of the economic cycle as the south-east became overheated - but there was no evidence of this.
Much of the growth outside London, the south-east and the south-west had been driven by the public sector, particularly in the northern regions.
The report says the low rates of increase in private sector investment in the two Midlands regions, Yorkshire and the Humber and the north-east, showed they had not yet created a basis for sustained strong economic growth.
Employment had ex--panded faster since 1997 in the northern regions, and unemployment was down in all regions. Yet the failure to establish a healthy entrepreneurial culture in the north and Midlands had left these regions unduly dependent on public sector jobs.
The report acknowledges that it may be too soon to judge the success of the RDAs in reversing decades of regional decline, given structural differences in their economies.
However, efforts to regenerate such regions should focus on the factors that could raise productivity such as innovation, technology, skills, transport infrastructure and planning.
The report says RDAs should work more closely together to avoid duplication in activities such as trade promotion and attracting inward investment.
Mr Temple said: "We cannot continue with the status quo . . . the government must now be clear what we want from them, set out how their performance will be measured and then give them time to deliver."