The reform of the delivery of economic development in England was one of the key commitments in the coalition agreement, and the Government have given a public commitment that the eight regional development agencies (excluding London which is being dealt with separately) will cease activities by March 2012, pending final abolition, which is subject to the passage of the Public Bodies Bill.
The closure programme is now well advanced, including substantial work to scale back the expenditure of the RDAs, in line with the spending review settlement which provided funds for legal commitments and closure costs only, representing about 18% of the amounts spent in the four years to March 2011. On the current timetable, by autumn 2011 there will be a skeleton level of staff left in each RDA and RDA activity will reduce significantly, well before March 2012.
While a number of RDA activities will cease completely, certain functions undertaken by RDAs will transfer elsewhere. Transfer of staff delivering the UK Trade & Investment foreign direct investment service to a new national contractor, PA Consulting, was completed at the beginning of May, and the transfer of about 300 staff delivering European regional development fund projects, and the rural development programme for England to the Department for Communities and Local Government and the Department for Environment, Food and Rural Affairs respectively scheduled for 1 July. The plans for the transfer of certain RDA functions were set out in the White Paper “Local growth: realising every place’s potential” (Cm 7961), published on 28 October 2010. There has been significant engagement with stakeholders about the plans to cease RDA activities.
As drafted, the Public Bodies Bill provides powers for Ministers to make changes to public bodies via secondary legislation, following a consultation process and appropriate parliamentary procedure. As the closure (and transfer) programme for RDAs is now well advanced, the Government have concluded that it would not be appropriate for the RDAs to be subject to this process. Delaying this programme would not be beneficial for the economy or the future of economic development and would risk jeopardising the more cost-effective delivery of economic development provision we are putting in place.
The Government have therefore decided to bring forward an amendment to the Bill, which will provide for the abolition of the RDAs on the face of the Bill and will therefore exempt RDA abolition from the order-making process in the Bill. The necessary amendments are expected to be tabled before Committee stage in the House of Commons.