Why change a winning formula?

Jul 3 2009 by Iain Laing, The Journal

Only a month or two ago, the agencies set up to develop and regenerate the region were facing the possibility of big changes themselves.

Tees Valley Regeneration has now confirmed that it will cease business in March 2010 and a new body – Tees Valley Unlimited – will take over. Sunderland ARC’s future is apparently ‘being kept under review’ – not the most upbeat of statements.

Regional development agencies such as One North East were the focus of a call by the Local Government Association to force them to hand over money and power to councils.

City-region “compacts” looked as though they would clip the powers and resources of regional development agencies countrywide when rolled out. Council leaders would be given control of millions of pounds from RDAs’ budgets.

Then along came Lord Mandelson and the whole outlook for One North East and other RDAs did a quick about turn. He made it crystal clear that he would not allow spending control to pass to councillors. RDAs’ powers would remain centralised.

One North East has undoubtedly achieved a huge amount for regional businesses. A recent PricewaterhouseCoopers report says that over the past five years, the agency directly created 24,400 jobs, helped to create 1,140 new businesses, 1,710 companies to improve their business performance and more than 6,300 people into employment.

These are impressive figures. If, as Lord Mandelson said, RDAs “drive regional economies, create jobs, help businesses and boost skills” then why slow the momentum by handing over control of the purse strings to local government?

He believes they “can do even more” by “relentlessly focusing on economic recovery and growth.”

The argument for strengthening the powers of local government by giving them the significant regeneration funds currently held by RDAs has some vocal support. Smoother, speedier delivery of projects by councils who are accountable and do not have to adhere to central government processes and accounting controls would be extremely effective post-recession, say its supporters.

One North East, however, has proved that its commitment to the economic priorities of business creation and development, and its fleetness of foot during the recession to support companies is effective.

It is far from perfect, but it has a focused, experienced team who have achieved much.