Rt. Hon. Richard Caborn - Former Minister for Trade (Jul 1999 - Jun 2000)

"Can RDAs in partnership regenerate the English regions?"

• Pleased to have opportunity to address this meeting. Subject of the debate goes to heart of Govt's policies for increasing prosperity for all.

• Many of our regions are under-performing compared with the rest of Europe. There are areas of prosperity and pockets of poverty within regions.

• Only 2 regions currently above European average on GDP per head. In 1998 North East was 79% of the European average, lower even than Northern Ireland. South Yorkshire in Yorkshire and the Humber just 75%.

• Latest Regional Competitiveness Indicators (13 March) show (provisional figures for 1999) GDP per head in every region above £10,000 per head for the first time. But still a large gap between best and worst performing regions.

• Moser Report and National Skills Task Force Report show lack of basic skills, especially technical skills, in several regions.

• Must adjust to changing industrial demography, increasing globalisation and rising skills needs.

• Last month David Blunkett and Stephen Byers published a White paper on enterprise, skills and innovation. This set out further measures to build regional capabilities - investing in skills, making the most of new technology, supporting industries of the future, raising innovation in every region. Builds on work already done in Govt and by the RDAs. Set out our new approach to regional policy.

• Challenge is therefore a big one . Set up RDAs in April 1999 to stimulate regional economies so that each region can reach its full potential.

• RDAs business-led.

• They are strategic bodies. Role is to take forward the regions' performance at a strategic level. Can only do this by involving the key regional and local players.

• We asked each RDA to develop a new strategic vision for their region, working with their partners - a Regional Economic Strategy.

• Strategies were published in October 2000. They cover employment, skills, innovation and regeneration.

• Look forward to seeing results as they are implemented. Again this must be in partnership but with strategic leadership from the RDAs.

• Since their creation Government has underlined important role its sees for RDAs as the challenge has increased.

• In July 2000, following the Spending Review we announced an enhanced role for RDAs as strategic drivers of economic development and regeneration.

• We are giving them resources:

RDA budgets will increase from £1.2 billion this year to £1.7 billion in 2003-4

Includes new funds for regional innovation. Will be a threefold increase in DTI funding for the RDAs - from £19 million this year to £54 million next (2001/2)

• We are giving them flexibility:

We have said that from 2002-3 the Government will deliver the maximum flexibility it can to RDAs within the fiscal framework for public money.

From 2002-3 we have given RDAs a single combined budget, bringing together separate funding streams from DTI, DETR and DfEE. From nine budgets today to one in 2002. A Single RDA Budget subsuming current admin budgets and departmental programme budgets

RDAs can decide own spending priorities within single budget, subject to usual rules on propriety and value for money.

• We are untying the RDAs hands and allowing them both the strategic and financial muscle to make a difference.

• At same time we are setting new and challenging objectives and targets for the RDAs. There will be four objectives:

To promote economic development and regionally balanced growth.

To promote social cohesion and sustainable development through integrated local regeneration programmes.

To help those without a job into work by promoting employment and enhancing the development of skills relevant to employment

Promote enterprise, innovation, increased productivity and competitiveness

• These will be underpinned with related targets.

• RDAs will need to work with other regional and local partners to deliver targets, providing the strategic framework which will allow them to be met.

• Regional Chambers are key link between the RDAs and regions. Will have critical role to play in ensuring RDAs plans for meeting their new targets and using flexibilities consistent with regions' needs. Need to be fully involved in the process of developing plans and monitoring performance against them.

• We have allocated £5 million new resources to Regional Chambers and assemblies to help them achieve this and to expand their scrutiny of RDAs' activities.

• We have given RDAs' maximum financial flexibility in return for increased accountability including at the regional level. Hope this will help them make substantial progress in delivering their regional strategies in order to improve regional performance and quality of life for all in our regions.

• Also doing our bit to get structures right to help create successful partnership working to link the national, regional and local levels:

British Trade International regional directors and Small Business Service regional managers now co-located with the RDAs.

International Trade Directors have been working closely with the RDAs to develop International Trade Strategies for each region.

RDAs and SBS are developing a strategic partnership so that local and regional business support is knitted together properly. Essential that public support is complementary not competitive.

• RDAs have an important part to play in Government's efforts to win inward investment for the UK.

• Last year's inward investment figures highest ever recorded - 757 projects - expected to create over 25,000 new jobs. But even best locations in world are not immune to restructuring, due to regional or global market conditions and technological change.

• As Trade Minister, talking to potential inward investors, I always hear this message: grants not the key factor but part of whole package on offer, skills of the workforce the business infrastructure, transport facilities. With their regional economic leadership role RDAs are playing an important role in improving each region's ability to retain and attract new investment.

• Inward Investment is all about partnership. National, regional and local organisations and individuals from the private, public and central government organisations all working together to provide a quality service for inward investors. To keep winning projects and new jobs for the regions, the links between Invest.UK, the RDAs and local partnerships are the key to success.

• I've talked a lot about structures and enablement - Government has now set out its stall.

• We've given RDAs the flexibility and most of the means they need. The challenge now is to seriously attend to the nuts and bolts of how they discharge their responsibilities.

• That is the level of debate we are now having with them.

• The RDAs are still relatively new - they have made huge strides but there is still a way to go.

• We are looking at every aspect of our interaction with them. Let me give one example - clusters.

• Government acknowledges importance of industrial clusters. Report "Business Clusters In the UK : A First Assessment" published on 13 February shows that the UK is not a strongly clustered economy by international standards and, moreover, that there are significant regional variations in the number and strength of clusters.

• RDAs are best placed to deliver Government policy on the ground in the regions. They all already have clusters strategies.

• We set out in the White Paper "Opportunity For All" that we would ask the RDAs to produce Strategies for Success to build on their clusters strengths. We are currently discussing with them how to take that forward. We held a conference on 8/9 March to discuss the nuts and bolts of clusters policy.

• This event is organised by Networking For Industry and by the Associate Parliamentary Manufacturing Industry Group. Lastly therefore, I should like to say a few words about manufacturing.

• Manufacturing is a key component of the national economy but we need to improve our productivity as a nation.

• White Paper and Budget both showed that we are very conscious of the pressure that manufacturing is under. We are helping manufacturing in a number of ways.

• We need to extend manufacturing excellence - investing in skills, making the most of new technology, supporting industries, raising innovation in every region.

• We have boosted investment in UK science - to keep the UK at the cutting edge of research and ensure the science base is linked to industry.

We are putting £1 billion into science on top of the £1.4 billion we have already invested.

• We are creating a modern regulatory framework that drives innovation and encourages growth and increased productivity:

enhanced capital allowances since 1997 and new tax credits to encourage investment and innovation have saved businesses over £1 billion with a third of a billion pounds being saved by manufacturing.

we are seeking views on a new tax credit aimed at boosting R&D and innovation in larger companies - particularly manufacturing businesses. Designed to complement R&D tax credit for small companies introduced in April 2000.

• We are improving support for business:

Providing world class, forward-looking business support for manufacturers to expand at home and overseas

DTI is working with a wide range of industry sectors to see how they can take advantage of the opportunities of e-commerce

• We announced last year that in each region we would establish a Manufacturing Centre of Excellence to respond to the needs of small manufacturing firms.

• We will now build on that proposal to establish a new Manufacturing Advisory Service (MAS), providing practical "hands on" help for smaller manufacturing firms who want to introduce world class manufacturing practices and technology.

• DTI and the RDAs are developing the concept of the MAS in collaboration with the SBS.

Other speeches by Rt. Hon. Richard Caborn - Former Minister for Trade (Jul 1999 - Jun 2000)

(the following are available from the archive)
• Southern Manufacturing 2001 (28/02/01)
• Launch of the Invest in Britian Bureau Annual Review (05/07/00)
• Steel Industry National Training Organisation (NTO) Conference on Careers in the Steel Industry (14/04/00)