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North-east big loser in final RDA budget allocations

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The north-east and east of England are the biggest losers in the cuts to the regional development agencies budgets for their final year of operation, government figures have revealed.

The figures, published by business minister Mark Prisk in response to a parliamentary question, show that the East of England RDA (EEDA) is hit with a 76% cut to its budget for 2011-12, compared to its 2010-11 budget - a reduction of £78.6m. One North East is hit with a 73% cut, which amounts to a reduction of £161m.

Yorkshire Forward and Advantage West Midlands are the least badly hit, sufferring cuts of 53% and 51% respectively.

Overall the figures, which Mr Prisk said were at this stage indicative and would be finalised in March 2011, show an overall reduction in the RDAs budgets, excluding London, of £914m - or around 64%, with £515m allocated for their final year.

Regional Development Agency

2010-11

£ (m)

2011-12 (reduction in brackets)

£(m)

%cut
Figures for 2011-12 are indicative allocations.
Advantage West Midlands20397.5 (-105.5)51
East of England Development Agency       10324.4 (-78.6) 76
East Midlands Development Agency12541.7 (-83.3)67
North West Development Agency289108.3 (-180.7)63
ONE North East22261.0 (-161)73
South East England Development Agency12637.5 (-88.5)70
South West of England Regional Development Agency   14542.6 (-102.4)71
Yorkshire Forward217102.6 (-114.4)53
Total1,430515.6 (-914.4)53

 

As first revealed in LGC, the total cost of scrapping the RDAs put a £1.5bn black hole in the budget of the Department for Communities & Local Government and the Department for Business, Innovation & Skills (DBIS) after ministers failed to take into account the cost the agencies’ liabilities.

In the October spending review, ministers set aside around £1.4bn to meet the costs of scrapping the agencies, with DCLG contributing nearly £1bn and DBIS contributing the remainder. With £515m now allocated to the agencies for next year that means around £1bn remains in Whitehall to cover the transition and closure costs of the agencies.

LGC understands the allocations for each RDAs wind-up budget has been made not according to the usual RDA formula, but based on each agency’s level of commitment to projects and programmes.

Mr Prisk said an indicative allocation for the London Development Agency would be decided “in due course”. He added that, subject to the passage of the Public Bodies Bill, all the RDAs outside London were expected to close by 31 March 2012.

He said: “No allocations are being made to them after that date. It is expected that legal commitments remaining at the time of closure will transfer to successor bodies and that resources to enable project completion will be provided from the spending review settlement.”

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Readers' comments (2)

  • What a misleading headline! The North East is neither the biggest loser in %age terms (that's the East of England) nor in absolute terms (that's the North West). So where did this bias towards showing how bad it is in the NE come from then?!!!

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  • Thanks for your feedback Anon, the headline doesn't say the north-east is the "biggest" loser, it says "big" loser, which is then clarified in the teaser, which says north-east and the east were the biggest losers. Cheers.

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