In what are becoming frequent bursts of candour about the government’s deeply-flawed regional policy, business secretary Vince Cable told the annual dinner of Birmingham’s Lunar Society that his plans to scrap regional development agencies and replace them with local enterprise partnerships (LEPs) have been “a little Maoist and chaotic”.
In what are becoming frequent bursts of candour about the government’s deeply-flawed regional policy, business secretary Vince Cable told the annual dinner of Birmingham’s Lunar Society that his plans to scrap regional development agencies and replace them with local enterprise partnerships (LEPs) have been:
“… a little Maoist and chaotic.”
Cable’s remarks follow a leaked letter from his deputy, business minister Mark Prisk, earlier this month noting that:
“There is a strong view amongst the business community that many LEPs lack the ambition to make significant economic impact, undermining our agenda for growth.”
But the government’s regional growth policy has sunk deeper into confusion and incoherence with the revelation that it has yet to establish a means of allocating European regional funding once regional development agencies are abolished.
Prisk confirmed last week that the department of business “has had no recent discussions” with the European Regional Development Fund (ERDF) about how grants will be dispersed. Neither has Cable met with communites secretary Eric Pickles (who will oversee LEPs) to discuss the matter. Given England is set to receive £2.7 billion between 2007-13, such tardiness over vital funding is scandalous.
£1.6 billion of this money is yet to be spent. The consequences of losing this investment would be calamitous. Yet the Financial Times recently quoted a department of business official who said:
“With the absence of RDAs we will look to increase private sector participation in matching of European funds.”
So the government is gambling that hard-pressed businesses will cough up to replace the match funding that would have come from regional development agencies – in effect subsidising the government’s 80 per cent budget cuts to English economic development. No doubt the much heralded £1.4 billion regional growth fund, overseen by Michael Heseltine, will also be raided to make up funding shortfalls.
As Gordon Marsden, shadow regional minister put it:
“This European regional development fund money should be being used now in the regions to offset the negative effect on regeneration coming from the spending cuts. Instead of that it has been frozen and there has been no consultation with the [Commission] about how the money could be used.”
Back to the Lunar Society. It was founded in the mid-18th century as a dinner and discussion club for intellectuals of the day, holding its meetings to coincide with the full moon to afford attendees a safer journey home before street-lighting was common; an apt setting, therefore, for Mr Cable who is, figuratively speaking, barking at the moon with his regional growth policy.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.
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