Motion made, and Question proposed, That the sitting be now adjourned.—[Jonathan Shaw.]
It is a delight to be in the Chamber speaking on this subject. I extend my thanks and gratitude to Mr. Speaker for selecting the subject of regional development agencies today.
This is an interesting subject, and as RDAs have been in existence for a number of years, it is timely not only to take stock of their performance, but to offer the Government an opportunity to hear about the changes that might be implemented in the near future.
The regional political landscape has changed significantly in the past eight years. We have seen the evolution of the Government offices for the regions and the RDAs, and the growth of the dreaded regional assemblies. I shall do my best not to wander down that road and talk too much about assemblies, but those bodies are undemocratic, unaccountable and unrepresentative. Unfortunately, when talking about RDAs, it can be difficult to dissociate them from regional assemblies, because they are expected to work so closely together.
In preparing for the debate and in speaking to colleagues in local government and in businesses throughout the south-west, a constituency of which I am honoured to represent, it was interesting to find out how little people know about the role of RDAs. That is not to say that they are necessarily in favour of them or against them, but I was surprised by the level of ignorance. It is surprising, considering that RDAs were based originally on the 1997 White Paper, “Building Partnerships for Prosperity: Sustainable Growth, Competitiveness and Employment in the English Regions”, which was followed by the Regional Development Agencies Act 1998.
Although the debate is entitled “Regional Development Agencies”, I shall focus on concerns in the south-west. Other hon. and right hon. Members will want to pitch in to discuss their corner of the world. RDAs have a common mission statement, no matter where they are:
“To transform England’s regions through sustainable economic development.”
The south-west has added to the statement that its mission is
“to increase sustainable prosperity and productivity for the region and all our people.”
It has three simple objectives:
“To raise business productivity. To increase economic inclusion. To improve regional communications and partnership.”
It is useful to take stock of how the regions are faring. Conveniently, the Department of Trade and Industry published RDA output results only last week. The data show the progress of RDAs between April and September last year.
The hon. Gentleman may be surprised to hear that our constituencies are in the same Government zone; I represent west Cornwall and the Isles of Scilly. He keeps referring to regions, but could not he refer to them as Government zones? “Regions” implies internal integrity and a community of interest, and although we all love Bournemouth and Cornwall, I am not sure that Cornwall feels any more association with Bournemouth than it does with Bradford, Basingstoke or anywhere else.
I am grateful for that intervention. The hon. Gentleman illustrates one drawback of regional government: what happens in one neck of the woods does not necessarily apply to another. Whether the issues in his constituency compare with those in Bournemouth, they are different and perhaps that is one pitfall of regional government; one size does not fit all.
Looking at the core output targets that the DTI has imposed on the RDAs, and looking back at some of their achievements, we see that four RDAs throughout England have achieved less than half their minimum annual employment creation targets. Two RDAs achieved less than half their minimum annual employment support targets, and two RDAs achieved less than half their minimum annual business creation targets. Only one RDA achieved more than half its minimum annual public and private generation infrastructure investment levered target. I do not even know what that target is, but the fact that it is listed as a target and we are debating it shows that it is obviously of concern to someone.
Somebody has produced those targets, but I am not sure how many people in Bournemouth or in Cornwall are aware of the amount of money that has been put into those organisations, or indeed what they are supposed to achieve.
In support of that observation, is my hon. Friend aware that when the South West of England Regional Development Agency bought the Morlands site at Glastonbury, it turned down applications by local businesses to move to the park on the ground that they were not high-tech enough, even though one firm made automotive parts in a very competitive environment? Does not that completely undermine the claim of regional development agencies to support local enterprise and to boost local employment?
My right hon. Friend makes a valid point and illustrates one pitfall. We should promote certain unique aspects of the south-west, but the problem is that one blueprint, written centrally, has been imposed across the board. Where initiatives are taking place in the south-west, they should be promoted, and I should be curious to know who made the decision not to support my right hon. Friend’s concerns.
Returning to the stock-check of the regions, we see that business employment fell between 1998 and 2005 in the north-east, north-west, west midlands and London, despite RDAs spending £5.5 billion in those five regions. In five northern regions, the north-east, north-west, Yorkshire and the Humber, the east midlands and the west midlands—no net change whatever was measured in business employment, again despite £5 billion being spent by the respective RDAs. I could go on illustrating other targets that have not been met.
We could say that, had the money not been put in, the measurements would have been even lower than those I have just illustrated. Astonishing sums of money are being spent, however, and are the Government, local government, businesses, stakeholders and all those interested in how the money is spent able to scrutinise where it goes?
If we consider the range of stakeholders in RDAs, we see that there is a blurring and a dilution of RDA accountability. The Government are a stakeholder, but myriad Departments—not only the DTI, but the Department for Culture, Media and Sport and even the Foreign and Commonwealth Office—give money to various RDAs. Perhaps the Minister will enlighten us as to how they account for the money,
The Government offices for the regions, in my case the Government office for the south-west, are other bodies whose decision-making local government and MPs find difficult to influence. The regional assemblies influence the role of RDAs and I mentioned how unaccountable the assemblies are. I have attended regional assembly meetings and I have found them very unproductive. A number of councillors from throughout a region are brought together under one roof, they often do not know each other, they lack knowledge of the subjects under discussion and decisions often go through on the nod without a full appreciation of their scale.
Is not the truth about regional assemblies that they are a jolly good day out? Councillors enjoy a Thermos and a sandwich all together, they have a chat and they cost the council tax payer £2 million or £3 million a year. Is not that a good idea?
My hon. Friend makes a very valid point. I did not have such a good day out as he suggests. To me, it seemed like a huge talking shop and I would like such regional bodies to be disbanded and power to be returned to a more local level where decision making is more manageable.
The accountability of RDAs is important and I draw a line between my view of regional assemblies and RDAs. The jury is still out as to the contribution that they can provide to regions. I would like the Minister to explain how they can become more accountable—I really do question that. We had a meeting in the south-west, at which my hon. Friend the Member for Totnes (Mr. Steen) was present, with representatives of the RDA for the south-west and it was very productive, but it was acknowledged that there is little accountability. It was also acknowledged that we are not able to fight the Government and press our case in a unified manner, which is something that we decided to try to rectify. It is very difficult, however, when there is no formal structure other than simply saying, “Let’s have a gathering of south-west MPs with members of the RDA.”
Since 2002, all RDAs have received their money from a single budget, but that comes from several sources to which I have alluded: the DTI; the Office of the Deputy Prime Minister, as it formerly was; the Department for Education and Skills; and the Department for Culture, Media and Sport. Once allocated, it is available for the RDAs to spend as they see fit, unless they want to pay for something that costs more than £10 million, in which case they need to get approval from the Government.
I am pleased to say that we live in a unique and beautiful area in the south-west. We are the most popular region in Britain for tourism, with 26 million visitors a year, and we are the largest region, with a population of more than 6 million. Our economy is worth £18 million a year and we have 171,000 businesses. It is the most rural region in England, and 25 per cent. of our businesses are involved in the aerospace sector. Unemployment is well below the national average. That is a unique set of data, but I am afraid that if we look at the objectives, plans and strategies of the RDA, we find that they are far too similar to those of the eight other RDAs in the country. For me, that shows exactly the drawbacks that we face with the whole RDA structure. We are duplicating initiatives and priorities.
How can it be, for example, that eight out of the nine regions labelled biotechnology or health sciences as priority areas? Where does that leave us when we are trying to compete in a global market with the growth of places like India, China and so forth, when eight out of nine of our regions are all putting their hands up and saying, “Choose me”? That is not a unified approach, it is not working together and it is not cohesive. The regional economic strategies are also far too similar with no recognition that certain areas of the country will focus on some subjects and other areas will focus on others. We should be complementing each other, not competing against each other on the scale that we are at the moment.
Speaking to local government, representatives of business and MPs in the south-west, I find that there is a single priority for our region: transport. We have one of the most appalling public transport systems in the country and one of the most appalling road systems. If we had any large-scale sums of funding to invest, the unanimous opinion is that we would invest it in our road structures to help businesses. Of course, there are other initiatives and individual cases that we would like to continue promoting, but in general it is the lack of transport infrastructure that prevents businesses from developing and prospering in the south-west. I have a problem with the regional development agency’s position because it is prevented from spending money, whether it is European or UK funding, to help key hubs, ports or businesses to expand their footprint.
I question the Government’s strategy in the south-west, and I know that the problems I have with it are reflected across the country. In the south-west, targets have been placed on us to build a phenomenal number of houses, which has followed on from the various reports relating to the Barker review. Houses are being built, and there is then an aim to place businesses in the area as well, but no consideration is given to infrastructure. I mentioned that unemployment is low. We would like businesses to grow, but the order in which we are doing things and the structure that we are pushing forward makes no sense whatever.
The cost to the south-west is phenomenal. The cost of RDAs in the whole of Britain has increased during the past five years from £81 million to £194 million a year. The average cost of regional government offices has gone up from £95 million to £132 million and the average cost of regional assemblies has risen from £5 million to £17 million. To put it another way, we are spending more than £1 million a day on regional government. That is a huge amount of money considering what we are trying to do or our current achievements.
I question the caveats that are placed on the RDAs. Why do they not have the freedoms to exploit the challenges unique to the individual areas? I mentioned the European funding that comes through, and there are structural programmes. The Isles of Scilly is one of the beneficiaries of that funding; I believe that my hon. Friend the Member for Totnes has some comments to make on it. There is objective 1, 2 and 3 funding, which comprise the various scales of European funding, but it all comes with caveats. Countries such as the Czech Republic are free to spend the money as they like because they do not have to deal with such caveats, but we have them in the UK because the European Union feels that the money should be ring-fenced, and that the UK Government should come forward with money for certain projects.
I worry about the duplication, overlap and confusion among the myriad organisations that exist. Myriad bodies have been created in relation to the RDAs, or were already in existence, such as: Equality South West; an organisation called RISE, which is the voice for south-west social enterprise; Sustainability South West; www.oursouthwest.com, which provides news, information and environmental data; Culture South West; Beacon South West; Business Link; Expert Solutions South West; the Federation of Small Businesses, with which we are all familiar; the Institute of Directors; Dorset Business; the various chambers of commerce and industry; UK Trade and Investment; the Small Business Service; the South West Ventures Fund; Foresight; the Defence Diversification Agency; EUREKA; Gate2Growth; www.innovation.gov.uk; the innovation relay centre; LINK; and “Make Your Mark—start talking ideas”. I have no idea what the last one does, but it is something to do with enterprise and enlightenment.
Myriad operations and organisations receive funding from RDAs in the south-west. I am not going to deny that they probably add value in some way or another, but I put it to the Minister that there is a phenomenal amount of overlap and money wasted. Can we not reconcile some of the organisations and bodies that are designed to support business to provide a more cohesive and cost-effective way of getting our message across and promoting business?
In conclusion, I ask the Minister to take stock of where the regionalisation project is going. The UK has not only internal markets, but external ones. We had a very interesting debate on UK trade and investment in this room only a week ago, when my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) made the point that we are falling behind nationally. A glance at the recent table issued by the International Monetary Fund shows that Britain is the only country in Europe where exports have fallen consecutively during the past five years. We have a huge challenge ahead of us and it is now time to take stock of where the regionalisation project is going. I hope that we can simplify the process and simplify government, and in that way we can support our businesses in the south-west, and the country as a whole, much more efficiently.
Order. I have nine right hon. and hon. Members seeking to catch my eye. I remind the Chamber that it is the Chair’s responsibility to call the first of the three winding-up speeches at 30 minutes before termination at 11 am. That leaves us only 40 minutes to get those remaining hon. Members into the debate, so I appeal to all to make their comments pertinent and as brief as possible, to try not to accept too many interventions and not to take too long in answering those interventions that are accepted. I hope that I make myself clear.
Thank you, Mr. Cook, I shall curtail my remarks. I offer my congratulations to the hon. Member for Bournemouth, East (Mr. Ellwood) on securing this important debate. I have not had the pleasure of hearing him speak before, but he is clearly a moderate man. As part of the jury on RDAs and unelected regional assemblies, I do not think that the jury should be out; it should be in and say that those bodies are pretty worthless and ought to be finished.
The genesis of those bodies was in two papers that my right hon. Friend the Deputy Prime Minister produced in 1982, while in opposition, when the understanding of the economy was completely different. The ideas behind those papers went through the 1998 White Paper, the Regional Development Agencies Act 1998 and the referendum in the north-east a couple of years ago. At that point, when 80 per cent. of people voted against devolution in the north-east, which was chosen for the referendum as the strongest supporter for regional devolution, the Government should have taken that on board and the whole of the regional agenda should have gone out of the door.
One of the reasons that that has not happened is that the Government have always had an ambiguous attitude to local democracy and local government. Is it part of the solution or part of the problem? I do not accuse my right hon. Friend the Minister of that, because she had a distinguished career as the leader of Islington council, but that runs through the rest of the Government.
We are left with the regional development agencies, which spend a huge amount of money, as the hon. Gentleman said. They are wrong in principle and what they do in practice is often not very helpful. In principle, most of the funding for regional development agencies came from other programmes in local government. That money and those resources have been removed from local democratic control, which is a mistake. Regional development agencies meet behind closed doors, and they accrue more and more power.
In principle, the task that regional development agencies have been given is almost impossible to achieve. Not only do RDAs not represent the economy as it is now—they are modelled on bodies such as the Greater London enterprise board and similar bodies that many of the old metropolitan counties put forward—but they are rather arthritic. They do not respond quickly, in the way that the economy responds now. They have been set up to increase regional wealth and to close regional disparities, but we cannot have all the regions trying to do that at the same time. It is intellectually impossible to follow both those aims together. That leads one to conclude that there is an absence of serious thinking on such matters at the centre of Government. One sees those contradictions coming out in the policies.
Those are the general reasons why I am against RDAs, although I cannot resist going through one or two specifics, because it is not just that there are problems in principle. When the RDAs try to come to decisions without a democratic forum, they come to lowest-common-denominator solutions. There is no real understanding of where the engines of the regional economies are and where money needs to be spent because areas are poorer.
The two engines of the economy in the north-west are the centres of Manchester and Liverpool. About 43 per cent. of gross domestic product in the north-west is produced within a small circle around Manchester city centre, and there is a similar process in Liverpool. Between them, the two areas produce about 75 to 80 per cent. of the gross domestic product. However, when it comes to marketing the north-west, the regional development agency suppresses the Liverpool and Manchester brand. It believes that people in north America or Japan will have some understanding of what the north-west is, but they clearly will not—to them it is a point on the compass. Liverpool and Manchester are very well understood as cities that compete internationally, but there is a suppression of that.
I am aware of your advice, Mr. Cook, but I should like to finish with three quick points. The first is about the casino decision by the independent advisory panel. That is an area where angels fear to tread at the moment, given that there is to be a vote in both Houses on the issue. The Northwest Development Agency did a disservice to Blackpool, Manchester and the whole north-west. I wish Blackpool well and I want it to develop. It has had a bad time over the past 25 to 30 years and it needs conference facilities, but what did the regional development agency do? It said, “We will basically decide where the best place to put this huge casino in the north-west is.” What arrogance. What mattered most was where in the north-west was most likely to beat the dome or Glasgow, not the RDA saying, “It will be Blackpool.” The RDA chose the wrong town, which was not going to win, but not only that—it made its decision on the basis that Blackpool was going to be a conference centre. At the same time, the RDA was putting a second conference centre in the north-west in Liverpool.
Where is the intellectual coherence in an RDA that does that? The people who do that are playing games. They have odd views about the world that simply do not stack up. If I were the chairman of an RDA that had made such a profound mistake—trying to suppress investment in Manchester, while making a huge error with Blackpool—I would consider my position. I would be off—I would be resigning today. The episode has done a disservice to the whole north-west.
That was not the first time, however. The Northwest Development Agency has tried to pick winners and said, “We need to subsidise air routes out of Carlisle and Blackpool.” What the north-west needs is more international routes to Japan and China, to compete with Heathrow, so that business people in the north-west can get out of the north-west as easily as people in the south-east or in Denmark can get out of their areas. But that was not a priority.
I could go on for a long time, but I will not. Our regional development agency is undemocratic and is trying to suck the lifeblood out of local democracy. It is doing badly and not serving the people of the north-west very well at all.
Briefly therefore, in an intervention on the hon. Member for Bournemouth, East (Mr. Ellwood), whom I congratulate on securing the debate, I made the point that what we are talking about is government zones, not regions. A region implies internal integrity and a community of interest, but the regions in question were created for bureaucratic convenience, not to reflect areas with any internal integrity. The only region for Cornwall is Cornwall.
The Standing Committee on Regional Affairs was set up by the Government in 2001, apparently to deal with the problems that the Government perceived to have been created as a result of devolving powers to Wales and Scotland, and to ensure that the House of Commons had an opportunity to scrutinise the Government’s regional policy properly. The only times that the Committee sat, it discussed relatively flimsy and rather unimportant issues that the Government had tabled for debate. Interestingly enough, since the result of the north-east referendum two and a half years ago, the Committee has not met. I have requested, on the Floor of the House and of various Ministers, that it should meet to ensure that the Government’s policy is properly scrutinised—particularly at this time, as it is clear that their plan to establish regional assemblies has fatally failed. Surely the support of right hon. and hon. Members is required to assist the Government in trying to find a way forward in the vacuum of policy left as a result of the failure of the north-east referendum.
I seriously question the role of RDAs in relation to planning. I have been corresponding with the area manager of the RDA for Cornwall and the Isles of Scilly about conversations that it has had with ING, which owns Hayle harbour in my constituency. The RDA strongly recommended that the company develop 1,000 houses on that site. The developer was proposing a lower number, but the RDA decided that about 1,000 houses would be a jolly good thing.
Of course, in providing that advice to the developer, the RDA was entirely usurping the democratic process. It gave that advice without consulting Penwith district council or its councillors on whether the proposal was at all sensible. I have closely questioned the RDA about the assessments that it has made about the impact of the proposal and the rationale for it. It has not been able to give me anything other than the most flimsy assessment and basis on which the advice was given and the decision taken.
In a letter to me dated 18 August 2006, the regional manager stated:
“We suggested to ING that higher housing numbers might be appropriate with the idea that this could give the town a greater critical mass and help make it a more sustainable community as a whole.”
I asked him for reasons why that assessment had been made. No discussion has taken place with Penwith district council. If the councillors so much as catch the eye of a developer, they find themselves fettered. Yet in this case, the RDA is effectively usurping the development process by deciding—as a statutory consultee, ultimately—that it is able to dictate, over the heads of local democratic decision makers, how the whole thing should operate.
I have serious concerns about the role of the RDA in respect of the future of objective 1 and convergence funding. It has been given a significant role, but it is not democratically accountable. As far as the future of convergence funding in Cornwall and the Isles of Scilly is concerned, it should recognise that it can provide some professional assistance and secretarial support, but that executive decision making is not a matter for the RDA. It is there to advise and support, not to do anything else at all.
Apart from creating problems in the Government zone of the south-west, the fundamental question that needs to be addressed today is what added value RDAs bring.
Thank you, Mr. Cook. I welcome the opportunity, created by the hon. Member for Bournemouth, East (Mr. Ellwood), to talk about RDAs. Arguably, in our region of the south-west, we face one of the greatest challenges in addressing regional disparities. Such disparities are greater internally, within our region, than between our region and others. On average, the gross value added per head is 93 per cent. of the UK average. Devon’s is only 82 per cent., and Cornwall’s 69 per cent. Bournemouth’s is above the regional average at 96 per cent. My hon. Friend the Member for Plymouth, Devonport (Alison Seabeck) and I inherited some of the poorest wards in England. In fact, I inherited the poorest ward in England from my Conservative predecessor.
I was present at the launch of the South West of England Regional Development Agency in Exeter in 1998. The idea was to get every region’s economy firing on all pistons and that that should be business-led. Others have made it sound as if RDAs were large unelected local authorities, and they have talked of their confusion about all the organisations that the RDAs sponsored. I was a little confused about the arguments of the hon. Member for Bournemouth, East because that sponsorship is a response to a strong agenda that our regional development agency has set out.
In the early years, I had criticisms of the agency. People in Plymouth felt that it was not engaging with the big challenges that we faced because of the reasons I outlined. However, the hon. Gentleman is probably aware of December’s National Audit Office report, in which our regional development agency was assessed to be performing well. The report particularly noted that our RDA had “good vision” for developing the regional economy and had taken a “bold step” in articulating how the region can work together to make sure economic growth takes place within the very important environmental limits particular to our region. In reaching its findings, the NAO assessed the agency under a number of headings: ambition, prioritisation, capacity, performance, management and achievement. As I say, the agency came out of that very well.
Perhaps that is not surprising. I am sure that the hon. Gentleman had the same briefing from the RDA as I did; I was pleased that he was able to attend the meeting hosted by my hon. Friend the Member for Plymouth, Devonport last week. The briefing lists exactly the RDA’s added value that Members were saying they could not see: strategic added value and influence in developing the regional economic strategy and making a powerful case on our behalf in respect of the comprehensive spending review 2007.
The hon. Members for St. Ives (Andrew George) and for Bournemouth, East had an exchange about how they could not see what bound our region together. I should like to mention our strong coast; we probably have the strongest geographic identity outside Wales and Cornwall. There is also marine engineering and marine science, and we have the largest defence industries of the whole United Kingdom outside the south-east. The hon. Member for St. Ives said that there was no distinct identity. In fact, our region takes the lead on defence issues in relating the interests of the various regions to national Government. I should also mention that we have the marine skills network. The Plymouth marine centre supporting skills and development in that key regional sector opened in December and the agency is investing about £3 million in it. Given the money available to the regional development agency, the list that it provided for us in that briefing is impressive.
I should like particularly to mention the Tamar science park in Plymouth, which the RDA has consistently supported from the beginning. It is recognised as one of the leading science parks in the country, on both health and marine sciences. Furthermore, SWRDA has built links in China. It has an office in that country, which is one of the most important markets in the world and is developing rapidly.
The one-sided picture given by Opposition Members so far has been a poor reflection of their understanding and reading of the briefings provided for us. I shall finish on this note. I congratulate the hon. Member for Bournemouth, East on his choice of topic, which is important to all our constituents’ prosperity and quality of life, particularly at our end of the region. As I say, I inherited the poorest ward in England from my Conservative predecessor. The hon. Member for St. Ives and all Members with constituencies in Cornwall inherited great poverty after virtually 20 years of Conservative Governments. We will not take any lessons from the Conservatives on regional regeneration.
Thank you, Mr. Cook. I very much support the observations made by my hon. Friend the Member for Bournemouth, East (Mr. Ellwood). I find regional development agencies incredibly old-fashioned. They remind me of the National Enterprise Board, for which I briefly worked. In those days, people thought that Governments produced economic success, but surely we have moved away from that. The concept of picking winners and giving certain sectors privileged access to Government funding belongs to another age, but the attitude is alive and well, certainly in the South West of England Regional Development Agency, as I found over the issue of Morlands business park, which I mentioned in an intervention.
The site was nationalised—in other words, we all own it now, in theory at least—some six years ago, and the press release at the time was encouraging. It stated that the site would be
“brought back into beneficial use for the local community…this site will meet the needs and demands of local businesses.”
That turned out to be completely untrue. The RDA said that it wanted the site for high-technology businesses. Several local firms wanted to relocate to the site but were told that they were not good enough. Such a snobbish attitude towards local employment is absolutely repellent. All right, some of the firms are not in the top league, but they provide valuable local employment.
I took the matter up with the RDA and was told that the problem was that the firms did not fit into certain key sectors such as emerging environmental technologies, creative industries or aerospace. Of course, Glastonbury would love to have a rocket factory, but we are a little more modest. However, we did have—and still do, I am glad to say—a plastic extrusion company that makes products for the automotive industry. I call that high-tech, but it was not thought good enough. I understand that the RDA has had a rethink, but it did not give an inch in the initial correspondence. It was absolutely adamant that it knew what was best for my constituency and the region.
Does my right hon. Friend agree that one of the reasons for that attitude is that the RDA exists to distribute cash from the European Union, and the causes that it espouses are decided in Brussels rather than locally? That means, for example, that south-east Dorset gets nothing from the RDA under its current programme.
My hon. Friend makes a telling point. In other words, the decision making is getting further and further away from the market. In my case, it moves right away from Glastonbury up to the RDA, then probably to Brussels. The officials and officers think that they know best, and we must fit in with their key sectors rather than their fitting in with what market signals tell us about future investment priorities.
All that is reflected in the reports that we get, which are all about strategic catalysts, scenarios, partners and stakeholders. This is a quote from one report:
“The Agency will continue to work with all funding stakeholders in the region…to build an integrated cohesive business support infrastructure”.
I do not know what that means.
On funding, perhaps the Minister will explain what happened to the regional venture capital fund, which was set up by the Treasury. We never hear about it now. I understand that it has very few viable projects, and that a great deal of public money is being wasted. I gather that the one for the south-west is run from somewhere in the north of England. That Government money is supposed to be part of the integrated, cohesive business support network, but no businessman that I have spoken to is aware of it.
In conclusion, we need rather less of the old-fashioned approach and rather more attention given to cutting taxes and reducing regulation. My positive suggestion is that we shut down all the RDAs and use the hundreds of millions of pounds that they are spending to reduce corporation tax and at least halve the burden of business rates on small businesses.
I congratulate the hon. Member for Bournemouth, East (Mr. Ellwood) on securing this debate. I would like to make a contribution in support of the work of the nine regional development agencies in England.
I am perhaps in the unique position—I am sure that someone will put me right if I am wrong—of being the only Member of this House to have served as an RDA board member.
I thank the hon. Gentleman for putting me right. There are now two of us. It was an honour to have been a deputy chairman for the East of England Development Agency between 1998 and 2001. Indeed, it would have been an honour to have served the further three-year term that the Secretary of State had directed, had I not been elected to this place.
What also gives me a key insight into the work of RDAs was being there at their establishment, and seeing what they replaced and the progress that has been made since their creation. It was enormously helpful that the Government set it out in primary legislation that the purpose of RDAs was to effect regeneration and regional development within an overall context of sustainability, that the social, economic and environmental dimensions of developing our regions were to be wedded and that the composition of RDA boards was to reflect that. Boards were to be business-led, and include local government representation and other stakeholders such as those from the voluntary, trade union, ethnic minority, rural and other communities.
The diversity of board membership was a strength in its representation of the region’s communities, but it could also be a source of tension. Business board members had their prejudices about other sectors and vice versa. I sometimes felt that it was the local authority members of all parties who felt that it was their role to bridge the differences of perspective and to ensure that progress, albeit at times compromised, could be made.
While the agency was being established, I took it on myself to visit the pre-existing work forces that comprised the Rural Development Commission, English Partnerships and the single regeneration budget team within the Government office for the east of England. That was hugely informative in identifying that the agency with the smallest budget had the largest staff and vice versa. However, it was also interesting to discover the cultural isolation within which Government agencies had existed, and the lack of leadership. Indeed, I was positively encouraged that some civil servants were looking forward to working for an agency that had a board with a purpose. That purpose would be set out in the regional economic strategy and would frame the work that they did in allocating support to businesses in communities, but which until that time had had no coherence or direction.
Clearly, it was right to bring physical and social regeneration perspectives together as part of the purpose of establishing RDAs. As EEDA set about establishing itself in an organisational sense, the regional economic strategy was the board’s primary focus. The east of England is a significant area with a rapidly growing population of some 5.5 million and a gross domestic product of more than £81 billion. The region has a significant concentration of internationally important businesses that are engaged in research and development, and it houses more than 30 of the world’s leading research centres. The region is dominated by small and medium-sized enterprises. It boasts high wages and skill levels in the counties nearer London, but wages are lower in the former agriculture-dominated areas.
That is the varied and complex environment in which the RDA must develop its regional economic strategy, which is a comprehensive plan for the economic development of the region. The plan risks being everything to everyone, but at the same time it must be bought into by as many as possible in the region. Is that an impossible task, as my hon. Friend the Member for Manchester, Blackley (Graham Stringer) suggests? Perhaps, but that may be why not every MP is universally taken with RDAs. As the saying goes, they cannot please everyone all the time—nor should they try.
If the first RESs were imperfect, I think they can now be seen only as having improved. Most have been through at least three iterations. The basis for developing a RES is core to the ethos of every RDA: it must be inclusive. Even the RDAs with the largest budgets—those with several hundred millions of pounds at their disposal—cannot directly drive the regional economy from their own spending. Their power comes from their ability to influence through their programmes the mainstream spending of others in the public and private sectors in a coherent and planned approach consistent with the objectives of the RES.
Development of the RES must be an open and consultative process, and EEDA’s engagement has been open and consultative. There are of course key relationships such as those with the voluntary regional assemblies, which are indirectly accountable and largely made up of elected councillors. The East of England regional assembly has played its role positively through periods of differing political leadership, and is crucial in working to align the RES with other statutory plans for which it has responsibility, such as the regional spatial strategy and the regional transport strategy.
EEDA’s RES is based on a robust analysis of the region’s strengths and weaknesses. The regional observatory, established in the early days of EEDA’s existence, supplies much of the data to provide evidence for policy formulation, and sub-regional partnerships enable the RES to be fed with local sensitivities. The board’s policy of holding board meetings in the headquarters of various regional businesses and other organisations gave its members the wider perspective necessary to engage in preparing such a wide ranging and important document, and all the board papers were publicly available on EEDA’s website—it was open and accountable.
As I suggested earlier, it was critical that the Government placed the sustainability criteria at the heart of what the RDAs do. I am encouraged that that has led EEDA to support a number of sustainability objectives. EEDA can rightly expect, resource and support the best of sustainable development in spatial development, it can encourage green industrial development and it can promote energy efficiency through the projects it supports. I would have talked about a couple of those, but I do not think that I have time.
Let me bring the role of the RDA up close and personal and talk about its contribution in my constituency, Ipswich. Our global economic competitiveness sits close behind global warming as a priority for our nation and our region, so that our businesses can work smarter and be competitive on the strength of the intellectual value that can be added to goods and services we market. We recognise that we lack a university in Ipswich and that is something that I have worked to correct for the past decade. EEDA, with its role in setting a skills agenda for the region, has rightly supported the campaign for University campus Suffolk—I believe it did something similar in Cornwall. Its £18.7 million contribution to a new £150 million campus located on the Ipswich waterfront has been catalytic. The facility is a joint venture between the university of East Anglia in Norwich and Essex university in Colchester, showing a truly regional role of the RDA that I am not sure could have been achieved by efforts at a more local level.
University campus Suffolk will be on the Ipswich waterfront, aiding its regeneration. That regeneration has already been supported by £5.5 million of EEDA investment, including the purchase and decontamination of the Cranfields Mill site, which kick-started the multi-million pound investment in the area that will see 330 apartments, an 80-bedroom hotel, restaurants, bars and a dance house for the regional dance agency DanceEast. That can be added to the investment of £8 million in IP-City, a high-tech incubator for start-up businesses, and £1.25 million in the Centre for Integrated Photonics at nearby Adastral park.
I unashamedly end on the role that our RDA has played in leading and co-ordinating regeneration in my constituency. I may be biased, but it has recognised that Ipswich has deprivation and potential and has invested in dealing with both. In conclusion, RDAs have demonstrated a strategic overview that provides a context for the investment of regeneration activity and coherence in that investment. Physical and social regeneration have been brought together to improve the quality of life for all in our region. Different regions have different needs and that is why it is right we each have our own RDA.
RDAs have developed their own approach. They have sought to be dynamic and responsive, and that is why they are business-led. In the east of England, EEDA was able to react rapidly to major employment restructuring in Luton following the closure of the Vauxhall plant and to respond to the needs of local business following the fire at Buncefield. RDAs are a different breed of agency and the Minister should encourage them to stay so. I could have made the case for more investment in RDAs through the comprehensive spending review 2007, and in EEDA in particular, but I shall rest the case as self-evident and only encourage the Government to continue to support RDAs wholeheartedly.
I congratulate my hon. Friend the Member for Bournemouth, East (Mr. Ellwood) on securing this excellent debate. Although some hon. Members have taken advantage of the time that they have had, I hope to finish within three minutes.
I have had few dealings with the South West of England Development Agency, but I am having dealings with it now. I shall tell the Minister about it, and I want her help. Dartington college of arts has been on the Dartington estate for 45 years, and the agency is funding a report on its future and paying one third of the cost. The report, which will be out by the end of February, will deal with whether the college, which has 700 students, teachers and postgraduates, should stay on Dartington or whether it should move to Falmouth, where it can get objective 1 money, Plymouth or Torbay. That is because the buildings, which are owned by the Dartington Hall Trust, are at the end of their life and a sum of about £15 million or £20 million is needed to renovate the whole place for the college. It is one of the best colleges in the country, and one of the most innovatory—everybody knows the Dartington college of arts—and it is at a crisis point.
I want to ask two questions, and I would be grateful if they could be answered, even though I might not be here to hear those answers because I have to go to the Electoral Commission. First, in view of the fact that the regional development agency paid for a third of the report on the future of the Dartington college of arts, will the Minister ensure that since public money is involved, the report will not be kept secret and will be available to the public? The director of the college has indicated that he will keep it secret, that it will be given only to the college governors and that no one else will see it. Bearing it mind that I chaired a meeting last Friday of some 300 concerned people in Totnes who were shouting from the rafters that they wanted to be involved in the decision-making process, there is no point in a regional development agency giving money for a report that is then kept secret.
Secondly, is it correct that the Government give the South West of England Development Agency some £110 million a year? Is it within their terms of reference to give £5 million a year for the next four years to ensure that Dartington college of arts stays in Dartington and is not forced to go to Falmouth because of objective 1 money? I am now involved with the regional development agency, and this is its chance to prove to me that it is worth while and should continue. It is up to the Minister to help me to find a way to save the art college for Dartington and to ensure that whatever the RDA does is kept public and not private. That took three minutes.
I shall be brief. I congratulate the hon. Member for Bournemouth, East (Mr. Ellwood) on securing the debate. I am glad that the official Opposition are warming towards RDAs, although I am seriously worried if he is still wedded to the idea of road building, which is a concern of mine.
I wish to make just one point. To me, the key role of an RDA is site compilation. In my area, that includes the Littlecombe site in Dursley and Cam, and the work that the agency has done in acquiring sites for the Cotswolds canal and the Stroudwater canal. If the RDA was not there, who would take those sites on? My worry is that although the sites would be taken on, it would be by avaricious developers who would come and put market-oriented housing there. With the Littlecombe site, I am pleased to see that we have kept to the line of providing jobs, affordable housing and environmental improvements. I wish my right hon. Friend the Minister well in ensuring that the RDA delivers on its commitments and, in the case of the canal, that we work in tandem with British Waterways and the voluntary sector to deliver results. If we can do that, RDAs will have proved their worth.
I congratulate my hon. Friend the Member for Bournemouth, East (Mr. Ellwood) on securing the debate. I did indeed serve as a member of the London Development Agency board for four years.
The one thing that has struck me about the setting of national targets for regional development agencies is that they are often irrelevant to the areas concerned. In London’s case, targets were set for national vocational qualification level 2, when London needed the provision of basic and higher skills training, reflecting the great division in the London economy when it comes to job opportunities. The job targets that were set were often the responsibility of other organisations, such as the Learning and Skills Council and Jobcentre Plus. I would like to hear what work is being done to give development agencies more discretion to set their own targets.
I am pleased that the Government are giving European social fund discretion to London government, but there is a complication in that there is a reluctance to take on responsibilities because of liability risks and to let go, which means that European social funding in London is overseen by the European Union, Departments, the Government office for London, city hall, the London assembly, the London Development Agency and sub-regional partnerships. I am surprised that money manages to get down to those who need it when so many people have oversight.
I have concerns as a south London MP about the amount of money that comes to south London. In many ways, the LDA could be dismissed as the east London development agency. My constituency is 14th in terms of the number of lone parents seeking benefits claims, which raises some issues when the LDA has delivered only 94 child care places across the whole of south London.
My main concern is to ask what the Government are doing in the comprehensive spending review to give RDAs more discretion. Perhaps London is different and sits in some sort of democratic accountability that is different from the obscurity that many hon. Members face when dealing with their local RDAs.
I shall make a modest speech, Mr. Cook—a view from God’s own county. A speech that I gave on this subject to the Selby Labour party—it is the highlight of my parliamentary career—features in the House of Commons Library briefing, so hon. Members can read that. I make one point to the Minister.
I follow my hon. Friend the Member for Manchester, Blackley (Graham Stringer) in praising city regions. Yorkshire and Humber saw their rise. Selby is a member of the Leeds city region, which deals with economic development, transport and skills development. Indeed, one of the great drivers of economic development in the north-west has been the strength of the Greater Manchester city region. If city regions are successful in Yorkshire and Humber, should not they be making decisions on the spending of £300 million for the Yorkshire and Humber regional development agency, Yorkshire Forward?
I bring news to the House today that, following my modest speech to Selby Labour party, which was reported by the Yorkshire Post, the agency decided last Friday to consult on whether councils should restructure the single pot, and instead of doing it for West, North and South Yorkshire, to use city regions. The local authorities have to respond by 23 February. If they say yes, should they not be deciding how the money is to be spent? The logic is that city regions would be best because democratic decision making is better than bureaucratic decision making.
I thank you for allowing me to speak, Mr. Cook, and I finish on this point. I have a great deal of time and respect for Mr. Tom Riordan, the chief executive of Yorkshire Forward. I tipped him for the top many years ago, but in his heart of hearts I think he realises that he should be accountable not to Ministers in Whitehall once or twice a year, but to local politicians. The quality of his decision making would be so much the better if he were to be so.
I am grateful, Mr. Cook, for your excellent chairmanship, which has secured me such an abundance of time. I am aware that other hon. Members have had to make do with much less time than me, so if there are points that they have not had the chance to make and they wish to intervene on me, I would welcome it. I shall also seek to ensure that the Minister has as much time as possible to sum up and to answer the questions that have been raised today.
I congratulate the hon. Member for Bournemouth, East (Mr. Ellwood) on securing this important debate. We heard a wide range of views across all parties on how well individual regional development agencies are working and whether the project has been a success. The hon. Gentleman hit the nail on the head when he said that the accountability and scrutiny of RDAs is fundamental—something that I am sure we all agree should be addressed. We heard many different views, including from my hon. Friend the Member for St. Ives (Andrew George), to which I shall return.
The Liberal Democrats have long supported the work of regional development agencies. Indeed, we are far more supportive of the concept of regional organisations than Conservative Members are. RDAs are more accountable than some quangos, their administration costs are minimal in comparison with those of the average county council, for example, and they have the potential to deliver strategic change at a regional level. However, as the hon. Member for Bournemouth, East said, those costs are rising.
Perhaps arbitrarily, given the RDAs’ significant role in many areas, but especially planning, their responsibility to the Department of Trade and Industry has meant that although the business voice is clearly represented, other organisations in local communities feel that they are not fairly represented on RDA boards. The Liberal Democrats support the current system of a 2:1 ratio of non-elected and elected members, as far as it goes, but the composition could be looked at more carefully.
The viability and credibility of RDA boards is also undermined by a perception among those in the community that because the agencies represent such large areas, as we heard from Labour Members, they have to reflect communities of interest within those regions. As my hon. Friend the Member for St. Ives said, that can cause conflict. It does so in the area of Cornwall that we represent, about whether the south- western area is a recognisable region.
The systemic considerations and problems about which we have heard ought not to detract from the very real achievements of RDAs. For example, in the south-west, the regional broadband access project has ensured that 99.8 per cent. of exchanges in the region are enabled for broadband internet access. That, of course, is a vital lifeline, as has been echoed in the work done in Cornwall by actnow under the objective 1 programme.
Other success stories from the South West of England Development Agency that I have been discussing with local government colleagues include the Royal William yard at Gloucester docks and the science park in the Bristol area, which I understand is progressing. The agency has also taken the subject of challenges to the environment as one of its main driving forces for the coming years. With that in mind, it has taken the brave step of investing in research and development for a wave hub alternative energy project off the north coast of Cornwall. If I am not careful I shall be accused of focusing too much on Cornwall, but I should also mention that the RDA rather than the Government office for the south-west will now deal specifically with the delivery of the Cornwall convergence programme; it is crucial that we monitor closely how it delivers that new role.
The work of regional development agencies is too often undermined by a combination of factors. First and foremost is credibility—or the lack of it in terms of make-up and lack of democratic accountability. As to their relationship with local government, we heard from my hon. Friend the Member for St. Ives how that can impact on planning matters, and how relationships that ought to be positive and driving forward economic regeneration for their regions can be soured by the introduction of different agendas. Local authorities consult widely and heavily, and have democratic accountability when determining their strategies; it could be argued that the lack of an elected form of scrutiny affects RDAs in that regard.
Regional development agencies have a vital role in delivering big-picture projects and other such initiatives that do not fall neatly into the remit of other organisations, including projects such as that mentioned by the hon. Member for Stroud (Mr. Drew). RDAs are taking steps to invigorate regional economies and communities, but all too often they are thwarted by an understandable lack of faith in their democratic accountability and sometimes by a lack of transparency in their aims and objectives on particular projects. To deliver regional objectives, we desperately need bodies that have real power because they are constructed along democratic principles.
I add my congratulations to those given by other right hon. and hon. Members to my hon. Friend the Member for Bournemouth, East (Mr. Ellwood), who kicked off the debate extremely well. I hope that the leaders of the regional development agencies were listening, because although some positive points were made, language such as “arthritic”, “old-fashioned”, “unaccountable” and “remote” will not, I trust, have passed their notice.
This is a timely debate. It comes as concerns are increasing about widening variance in the national economy, not least between the greater south-east and the rest of the United Kingdom. Although some less competitive regions are becoming more prosperous, the gap between the most and the least successful is growing. The most recent figures show that that gap widened by 25 per cent. between 2004 and 2005. Numerically, that means that the London economy, at £165 billion, is now worth five times that of the north-east of England. That is not good for the north-east, and it is not sustainable for the UK economy. Our goal should be to understand why that gap is so large and still growing, and to consider why, after nearly 10 years, the Government’s policies are failing.
A welcome contribution to the debate came only two days ago, when the Local Government Association published a report entitled “Prosperous communities”. Some hon. Members alluded to the fact that it has analysed the sub-regional markets in goods, labour and services. It found that all too often the regional boundaries and agencies do not reflect those markets. I know that a number of colleagues are concerned about that issue.
The Local Government Association has suggested that it is now time to consider the issue in the context of the devolution debate. Hon. Members from all parts of the House share that agenda, apparently, and it is important that we debate the issues raised in the context of the agencies themselves. It is clear that local communities and authorities want to play their part, and that is why the LGA report is an important contribution. I hope that the Minister will set out the Government’s view and response to that report and their view on the role of sub-regional economies.
As hon. and right hon. Members have mentioned, the nine regional development agencies of England were established in 1998 and their original aims, to quote the Department, were to
“co-ordinate regional economic development and regeneration, enable the regions to improve their relative competitiveness and reduce the imbalance that exists within and between regions.”
Over the past nine years, however, the RDAs have increasingly become the Government’s primary vehicle for an ever-widening range of different economic functions, such as economic regeneration, business promotion, employment, skills and sustainable development. However, established Government agencies are already engaged in many of those functions—for example, urban regeneration task forces or the sector skills council—and there is a genuine danger of overlap, duplication and confusion. That is something that hon. and right hon. Members have referred to in this debate. Can the Minister tell me how many different executive agencies in Departments are engaged in the skills arena and are independent of RDAs?
Duplication and waste are not the only problem. By constantly widening their remit, RDAs can become unfocused and lose sight of their original role. The South East England Development Agency, for example, wanted to tackle social exclusion, which seems a reasonable idea until one discovers that it set a target of reducing coronary heart disease by 40 per cent. in its region. However worthy or desirable reducing coronary heart disease may be, it is not the job of an RDA. It is the job of the NHS. I hope that the Minister will respond to that concern.
The most important yardstick in measuring an agency’s performance is what it does for businesses and jobs. The RDAs have claimed that they have managed to lever in roughly £2 billion for the £2 billion that they spend, and that the result is the creation or safeguarding of about a quarter of a million jobs. If that is true, it is something that we should and can celebrate. However, many economists are beginning to question the basis of those claims and have pointed out that the evidence is not independent empirical data, but is based, in part, on subjective consumer surveys. Given the importance of that information, which will be used to debate the issue, will the Minister explain how figures relating to RDAs are calculated? When she quotes the results of their work, as I am sure she will do, can she tell us what proportion of that information is based on consumer evidence and not on measurable facts?
It is equally important that performance figures are measured against what the RDAs spend. For example, since 1998, overall private sector employment in this country has risen, although only slightly. The Minister will be aware that in four regions private sector employment has fallen. That is despite RDA spending in those four regions nearly doubling; it is now at 178 per cent. Given that, why does the Minister believe that a spending increase has failed to work in those regions? What, if any, correlation can she show between the RDAs’ spending and local private sector labour markets?
Alongside the issue of performance is that of value for money. Overall, RDAs have spent roughly £12.5 billion since their inception—thousands of millions of pounds rather than hundreds of millions. Indeed, last year they spent £2,157 million. What proportion of that money goes on front-line services and what goes on administration? I looked at the figures before this debate, and found that the average spend on administration is said to be about 8.48 per cent., but within that there is considerable variance. Some agencies are spending at 6 per cent., but the South West of England Development Agency—about which we have heard a considerable amount during this debate—manages to spend 13 per cent. Why is there such a wide variation when agencies carry out the same function? Has the Minister discussed that with the agencies and is she satisfied with their performance? I appreciate that it is a tricky question for her because the Department of Trade and Industry’s own central administrative costs are 17.9 per cent. of its entire budget. I understand if that is an issue that she might wish to avoid, but I hope that she will respond to it in this debate.
A classic example of the disparity in the way that agencies are run is how money is spent on producing and publishing corporate plans. Since 2002, Yorkshire Forward has produced its corporate plans without any extra publishing costs by using the internet. In London, the picture is very different. Since 2002, the London Development Agency has spent more than £100,000 on publishing such reports. Why is that the case? If that method of publishing is good enough for businesses in Yorkshire, why does the LDA feel that it can waste that money when there are thousands of small firms that need help in London? Does the Minister agree that the LDA needs to get its house in order? I understand that figure may be a small proportion of its total budget, but to many people in London it speaks volumes about the LDA’s priorities.
In conclusion, ensuring that all parts of the UK have a healthy economy is vital to the national picture and to millions of people on the ground. We need to recognise the gap in job and wealth creation within and between the regions and to be honest about what is working and what is not. I look forward to hearing the Minister explain why the gap between the regions is growing and what she plans to do about it. I also hope that she will tell us how the RDAs’ performance is measured, what reliance is placed on survey information as opposed to facts and why there is often little correlation between what the agencies spend and their achievements. The Government have had nearly 10 years in office and it is time that they explained why the economic gap between the regions has widened and not narrowed as they have claimed.
I congratulate the hon. Member for Bournemouth, East (Mr. Ellwood) on securing this timely debate. As he will probably know, we are, as part of the comprehensive spending review, having a sub-national review of all our structures to ensure that they are appropriate and fit for purpose as we move into a period of greater globalisation and technological change. We are considering whether the incentives, governance and accountability are right.
This has been a good debate in which important issues have been raised; some are tougher to grasp than others. I will respond to some of the issues and, if time permits, will then move on to our wider objectives. The right hon. Member for Wells (Mr. Heathcoat-Amory) has reflected the old Tory attitude. When we set up RDAs the Conservatives opposed them; in their 2001 election manifesto, they said that they would scrap them and by 2005 their policy was a bit vaguer and they suggested that RDA powers should be reduced. In today’s debate the majority of hon. Members from all parts of the House—with the exception of a couple of hon. Members from our side—understand and appreciate the role of RDAs. We have come a long way.
No, I will not give way because I am short on time.
I say to the hon. Member for Bournemouth, West (Sir John Butterfill) that he is mistaken in suggesting that the moneys that the RDAs dispense come from Europe; they do not. However, the decision that we have taken is that from 2007 onwards in the next period of the European structural funds those moneys will be managed at a regional level. That is because we want to decentralise to a more appropriate tier the decisions on how to dispense that money.
I say to the hon. Member for Totnes (Mr. Steen) that the report will be made public and will be available to the public. I wish him well in his battle to ensure the continuation of Dartington art college.
My hon. Friends the Members for Ipswich (Chris Mole) and for Manchester, Blackley (Graham Stringer) know that I visited both RDAs. I will discuss in more detail the issue of city regions and their role in relation to RDAs. My hon. Friend the Member for Stroud (Mr. Drew) talked about site reclamation, which is very important. My hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) also made a point that is important to the RDA debate. She emphasised the role that the RDA is playing in the defence industry down in the south-west region. That shows the difference between regions, which is one reason why we have gone for the sub-regional structure. This is not old, Stalinist, central Government prescription, as one or two Opposition Members suggested; it is a decentralisation of power and of implementation of economic policy, which I think has worked.
Let me deal with one of the points made by the hon. Member for Hertford and Stortford (Mr. Prisk). He is just wrong on the figures. I do not know which figures he looked at, but he is wrong to suggest that the gap between the regions—one of the tasks that we set the RDAs was to narrow that gap—has widened. It has not. The most recent statistics that I have show that the employment rates in every region have increased and the gap has narrowed.
On a point of order, Mr. Cook. The Minister is citing a different statistic. I made it clear that the value was the differential between the most successful and the least. The Minister is now talking about employment. They are two different things. Do you agree?
The statistics that I am citing are the figures from the Office for National Statistics. We can examine employment rates across the piece. I do not want to go into the broader statistics, but any statistic on the economy demonstrates a massive improvement. That includes employment, inflation and productivity. It covers the whole range, and certainly the gap between performance in the regions has—
The gap between the performance of the regions has narrowed. I am sorry that the hon. Gentleman finds that a difficult fact. He ought to be joining the rest of us in celebrating an achievement in the regions.
May I deal with some of the broader issues that have been raised? Regions are different. We cannot respond quickly or sensitively to regional differences and variations if we try to do all that from central Government. The range of issues that are best addressed at regional level is a matter for debate. The hon. Member for Bournemouth, East raised transport infrastructure. That is something that we are considering. Extending the impact of the RDAs could be considered, because the effect that they could have on regional logistics and transport infrastructure could be enhanced by decisions taken at that level. That is one area that we are considering.
Another issue is technology transfer and innovation, and I come now to the issues raised by my hon. Friend the Member for Manchester, Blackley. Interestingly enough, one of the achievements by his local RDA is the bringing together of the universities in Manchester to develop a much stronger capacity that can challenge some of the other centres of research excellence, which have tended to be concentrated in the south-east. There are also the combined universities in Cornwall, and in Cumbria there has been another attempt to establish a centre of academic excellence and innovation. That is something that the RDAs have done well.
Skills have been talked about a lot. The RDAs oversee the regional skills partnerships. There is a plethora of agencies and voluntary organisations that try to tackle the skills challenges that we face, but all those bodies are brought together under the skills partnership. Can we do more to make that simpler and more coherent and to achieve better joint working? Yes, and that is one of the challenges that we are considering in both the sub-national review and the structures that we put forward for the future.
Catalysing sustainable environmental regeneration projects of the type that my hon. Friend the Member for Stroud alluded to is another important function that is best carried out at regional level. Attracting investment to the area is another function. A number of regions have been extremely successful at attracting inward investment, particularly from the Asian economies.
No, I have only five minutes left, so apologies to my hon. Friend.
Since we set up the RDAs, their responsibilities and functions have increased. That shows that their performance is becoming ever more effective and that we have growing confidence in their ability to deliver for their regional economies. They now have greater flexibility with the single pot of money; they did not have that when the money was much more tightly controlled by the various Departments from which it came. The regional economic strategies are much better. They are more evidence based, there is more buy-in from all the partners in the region, and they are much more focused. I do not accept the argument that they are all the same. Compared with the South West of England Regional Development Agency, the RDA in the north-east has to deal with a very different environment—it is raw, an ex-industrial economy. There is nuclear energy up in the north-east. That is not an issue for the south-west, so the two areas are very different.
Business Link is now administered, appropriately, at regional level, as are housing allocations. That is one of the areas that we devolved most recently. The regional housing allocation budgets were determined through the RDAs, which I think was a very successful exercise in decentralisation. As we reflect for the future, of course we want more simplification of business support. A number of hon. Members raised that issue. I agree also that we need to streamline and simplify some of the existing regional strategies, to try to bring them together. Again, those are some of the challenges that we are considering.
May I deal quickly with the relationship between cities and regions? That issue was raised in particular by my hon. Friends the Members for Manchester, Blackley and for Selby (Mr. Grogan). Cities are utterly crucial to the economic well-being, prosperity and growth in their regions. That is why we have done all the work that we have on developing the role of city regions in economic activity, but cities are inter-dependent. If we put all the authority, power and economic drivers into cities, we would find that cities alone would not succeed in increasing the potential and prosperity in regions. Even Manchester and Liverpool, two huge cities in their region, have some inter-dependencies and specialisations. If we are to compete globally, we must ensure that that inter-dependence is well realised, whether it is on transport, innovation, academic excellence or regional skills needs. Those are all issues on which city regions, working together in their wider regions, will be best at closing the gap in economic performance between the regions.
My final point relates to the accountability of RDAs, which is often raised by hon. Members on both sides of the House. The RDAs are accountable to Ministers and Parliament. Indeed, much of the information used by the hon. Member for Bournemouth, East came from the RDAs’ annual report and accounts, which are audited by the National Audit Office and then laid before Parliament. The figures that he chose to use were the half-year figures. Had he chosen last year’s total figures, he would have seen that the targets were met.
RDAs do hold public meetings. Regional assemblies have their friends and their foes, and we are considering whether and how we can strengthen that capacity for democratic accountability without introducing massive bureaucracy, which inevitably arises given the number of, for example, local authorities or MPs in every region. However, we have had the independent performance assessments done for five of the eight regions outside London. The performance of all those regions was in the top two categories. All were seen to be fit for purpose and to be maturing as agencies. All were felt to have the ability and the capacity to secure real economic prosperity for the UK, focused on the regional strengths and regional challenges that every region has.