Eric Pickles’ department has been hit with a near £1bn bill to soak up the cost of abolishing the regional development agencies.
As first revealed in LGC, the total cost of the RDA’s liabilities, including legal contractual commitments and redundancy payments is set to hit £1.4bn and could yet rise as high as £2.5bn.
The figure must be absorbed by RDAs sponsoring departments, under the terms of the legislation that created the agencies, and was a key stumbling block in the finalisation of the spending settlements of the Department for Business Innovation and Skills (DBIS) and the Department for Communities & Local Government (DCLG).
As revealed yesterday, the DBIS is to contribute £435m over the next four years to the package, with DCLG now confirming it will contribute £923m.
Meanwhile, DBIS has confirmed that it will not be contributing money to the Regional Growth Fund, worth £1.4bn over the next three years, despite its role in managing the fund.
DCLG, with a £890m share is the largest contributor, with the Department for Transport and the Department for Environment, Food & Rural affairs also expected to contribute.