Government has clearly robbed Peter to pay Paul

Sep 17 2008 by James Ramsbotham, The Journal

THE Government announced a package of measures this month aimed at re-energising the housing market. It was a move welcomed on face value by the North East Chamber of Commerce which saw the economic benefits that would keep the wheels turning for the construction sector and associated industries.

What has since emerged is the very worrying news that one of the measures, a £300m shared equity plan to help 10,000 first-time buyers get on the housing ladder, has a sting in the tail. The Treasury has dipped its sticky fingers into the single pot budget of the regional development agencies (RDAs) to fund the HomeBuy Direct proposal.

For anyone with a vested interest in the future health of the regional economy, this is cause for concern as the Government has clearly robbed Peter to pay Paul.

This will stunt the ability of RDAs to do their job, and it comes at an interesting time for them. In Westminster, the Business & Enterprise Select Committee is currently undergoing an investigation into the role of RDAs – an exercise that elicits mixed responses from across the country. In our region, One NorthEast has become firmly established at the heart of the economic regeneration agenda and, while we believe there are areas in which it can work differently, NECC is supportive of its work to improve economic growth.

The Government raid on RDA budgets to fund HomeBuy Direct focuses the mind ahead of this Friday’s consultation deadline for people to give their thoughts on these bodies.

NECC’s response will stress the importance of retaining One NorthEast as a strategic body. Additionally, it will highlight the need to keep a tight brief around its remit so that its focus is solely on economic development and to ensure that the Government is not tempted to bolt additional, unrelated activities onto the side of desks in Stella House. Its focus must remain strategically on how to improve the North East economy and not get dragged in to service delivery. The role of the RDA is expected to expand under plans in the Sub-National Review to hand it additional responsibilities for planning. NECC is keen to see private sector individuals with proven experience of delivering successful developments incorporated into this process.

Finally, greater consideration should be given to the make-up of the RDA boards. The Government currently has the final say on who is and who isn’t allowed to serve on these bodies. It would be far better to put the final veto in the hands of the regional ministers who have a greater grasp of their patch. Having a regional body with a single pot to use to greatest effect when addressing regional regeneration is a must. We should neither abandon that policy, nor raid it when it is politically expedient to do so.