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Future of RDAs confirmed

July 2010

At the Budget last month the Government confirmed it would replace RDAs with Local Enterprise Partnerships (LEPs) and that this process will begin with a White Paper to be published later in the summer.

The White Paper will address detailed issues, such as the mechanism for creating LEPs, how their boundaries will be decided and the roles for local authorities and business. There is also the question of which economic development functions currently undertaken by the RDA Network will be led at national level in future.

It is clear that funding available for economic development work will be more limited in coming years given the need to tackle the deficit.

The funding cuts for each RDA for this financial year were also confirmed last month. The South West will receive a reduction of around 20 per cent in its budget. The programme budget for projects and initiatives across the region has been cut from £142,482 million to £114,686 million - a reduction of £27,796 million. This is in addition to the £2.3 million cut in ‘back office’ costs which also needs to be made this year.

The Secretary of State for Business Innovation and Skills (BIS) confirmed that the South West is one of four regions to bear a greater proportion of the reduction in RDA funding nationally, relative to their original budgets.

Jane Henderson, chief executive at the South West RDA, said: “The majority of the £28 million cut in our programme budget will be managed by delaying existing work or reducing some of our planned investments. As a point of principle, we will not unilaterally break any existing contracts. We will have to review our investments with our partners and expect that this exercise will be completed in the next few weeks.

“Local authorities and business leaders now have the opportunity to propose where and how LEPs should be created. We are keen to work closely with these key partners to help them understand functions, projects and activities, which we currently manage and deliver, to ensure this transition is handled efficiently and for the maximum benefit of local and regional economies."

Treasury Team  Picture courtesy of HM Treasury