Responding to regional priorities

A package of measures to promote economic development in the regions, address regional priorities and significantly increase the funding flexibilities and responsibilities of the Regional Development Agencies (RDAs), was announced by the Chancellor today.

The Spending Review maintains significant funding for the RDAs in real terms and transfers an additional £200 million from central departments to the RDAs’ single pot, increasing the size of the pot by 10 per cent from 2005-06.

This will enable the RDAs to take on significant additional functions, including responsibility for the delivery of Business Links and new responsibilities for research and development grants, delivery in rural areas, inward investment and the promotion of collaborative research between businesses and universities.

Commenting on the regional dimension to the Spending Review, Economic Secretary to the Treasury, John Healey said:

“We are committed to making sustainable improvements in the economic performance across all regions, while reducing the gap in growth rates between them. To achieve that, we will provide each region with the flexibility to harness its indigenous strengths and tackle its specific needs, meeting our commitment to devolve decision making to allow people to take decisions on local priorities.”

Secretary of State for Trade and Industry, Patricia Hewitt said:

“This is an excellent settlement for the RDAs, enabling them to drive economic growth across the country and promote enterprise, regeneration, skills, innovation and employment in every region."

Details

As a contribution to the 2004 Spending Review, all English regions were asked to provide an assessment of their priorities in Regional Emphasis Documents. A full response will be published later this month.
The RDAs are funded from a ‘Single Pot’ based on contributions from central departments. The Single Pot, which currently stands at £1.8 billion will rise by 10 per cent from 2005-06 and will be £2.3 billion by 2007-08.
To enable an integrated approach to business support at the regional level, the RDAs will have responsibility for the delivery of Business Link services from April 2005; new responsibilities for dispensing Research & Development grants, and for focusing on enterprise in deprived areas.
As part of its response to the Lambert Review, the Government will task the RDAs to help a wider spectrum of businesses develop productive links with universities in each region.
As part of the Modernising Rural Development Programme, resources will be devolved to the RDAs to meet the Government’s socio-economic objectives in rural areas, previously the responsibility of the Countryside Agency.
The UK Trade International (UKTI) contribution to the RDAs’ Single Pot for inward investment will be increased and RDAs and UKTI will jointly sign-off plans for UKTI’s locally-delivered trade development services.
The three Northern RDAs – Yorkshire Forward, ONE North East and Northwest Development Agency – also worked together to develop a Northern Way Growth Strategy, and produced an interim report as a contribution to the 2004 Spending Review.
In addition to the other measures to benefit the regions announced today, the Spending Review responds to this interim report by:
- announcing that the Government will consider favourably proposals for further integration of planning and funding of adult skills and workforce development at the regional level including, in those regions where the RDA and Learning and Skills Council desire it, a “dual key” approach to the management of adult skills budgets operated by the RDA Chief Executive and the regional LSC Director;
- welcoming the plans for the three northern RDAs to spend over £100 million by 2010 on strengthening business-university collaboration and technology transfer across the North;
- endorsing the proposal to develop a pan-Northern cluster policy; and
- recognising the important role that the North’s city regions play in boosting the North’s overall economic performance.
Recognising that regional choices on transport, housing, planning and economic development cannot be taken in isolation, the Government is examining new ways to integrate RDA strategies with regional transport and spatial development strategies, within a framework of indicative long term funding guidelines. The Government will consult on these proposals later in the year.
On housing, a 50 per cent increase in new social house building is announced, delivered through increased direct investment, significant efficiency gains and an expanded PFI programme, along with a trebling in investment to regenerate areas suffering from low housing demand with funding of over £450 million per annum by 2007-08, compared to £150m in 2004-05, enabling an expanded programme for the North and Midlands.
Following Sir Michael Lyons’ 15 March report on public sector relocation, government departments have been developing relocation plans and are on course to relocate around 20,000 posts from London and the South East to other parts of the UK, as set out in the Spending Review.
The settlement for the Office of National Statistics provides for the implementation of the Allsopp Review, to ensure that there is accurate regional data available to support the regional policy framework and delivery of the regional economic performance target, with reliable regional baseline Gross Value Added estimates by 2006, and statisticians to be working with devolved administrations and regional bodies by 2007.
A formal response to the Regional Emphasis Documents (REDs) referred to above will be published later this month. However, as indicated above, a number of recommendations have already been agreed as part of the spending plans announced today.

Regional Development Agencies (contributions to single pot) £ million 1	2004-05	2005-06	2006-07	2007-08
Department of Trade and Industry	234	463	476	483
Office of the Deputy Prime Minister	1,511	1,568	1,633	1,676
Department for Environment, Food and Rural Affairs	46	72	73	74
Department for Education and Skills	42	43	44	45
UK Trade International 2	13	13	13	13
Department for Culture, Media and Sport	2	6	6	6
TOTAL	1,847	2,163	2,244	2,297
1- Note: Figures may not sum due to rounding 2- It is expected that UKTI’s contribution to the Single Pot will increase by 2007-08.

Notes for editors

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Responding to regional priorities

Details

Notes for editors

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