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South West RDA confirms scale of budget reductions

29 June 2010

The South West RDA confirms today (Tuesday June 29) that it will receive a reduction of around 20 per cent in its budget for the current financial year as a result of the Government’s spending cuts, announced in May.

The programme budget for projects and initiatives across the region has been cut from £142,482m for 2009/10 to £114,686m - a reduction of £27,796m, or almost 20 per cent. This is in addition to the £2.3m cut in ‘back office’ costs which also need to be made this year.

The Secretary of State for Business Innovation and Skills (BIS) has confirmed that the South West will be 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: “We have understood for some time that these cuts were coming but have only now received confirmation of how they will be apportioned across the country.

“The majority of the £28m 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 now have to review our investments with our partners and expect that this exercise will be completed in the next few weeks.

“We still have more than £114m this financial year to invest in the economy, and we will continue to work with businesses, local authorities and other partners to ensure our investments have the maximum impact on the region.”

The announcement comes on the same day that the Government has confirmed plans to replace RDAs with Local Economic Partnerships (LEPs), and announced the launch of a Regional Growth Fund.

Further details will be set out in a White Paper to be published later in the summer. The Government is seeking outline proposals from partnerships of local authorities and businesses before September 6 on how they wish to form the new LEPs.

Jane Henderson continues: “Today’s announcement gives a broad framework, but there is still a range of important detail to be clarified.

“There is uncertainty over precisely which work will be carried out locally, which nationally and which not at all, while it is not clear how future arrangements will be funded. The Regional Growth Fund, for example, seems to be targeted at ‘areas particularly affected by cuts in public spending’, which may or may not include the whole of the South West.

“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."

For media enquiries, contact Paul Harris at the South West RDA on 01392 229589 / paul.harris@southwestrda.org.uk or James Harper on 01392 229547 / james.harper@southwestrda.org.uk

Notes to editor

The South West RDA works for and promotes a modern, stronger and more resilient economy across South West England. Our work involves creating better jobs, successful businesses, more prosperous cities, towns and villages within an economy that uses less carbon and will still be thriving in 20, 50 and 100 years time. More information can be found at www.southwestrda.org.uk

The table below shows how cuts are apportioned across the country (excluding London). It does not take account of the £23m that the nine RDAs (including London) have to find from their administration budgets.

RDA Budget (£000) Prorata reduction (based on CSR 07 allocation £000) Cut (£000) Revised budget 2010/11 (£000) Percentage cut
AWM 199,674 41,204 37,083 162,590 18.57
EEDA 101,910 19,418 23,325 78,585 22.89
EMDA 124,285 23,563 28,305 95,980 22.77
NWDA 286,688 57,821 52,039 234,649 18.15
ONE 219,988 36,590 32,931 187,057 14.97
SEEDA 124,641 23,519 23,251 96,390 22.67
SWRDA 142,482 23,140 27,796 114,686 19.51
Yorkshire Forward 214,645 11,745 40,270 174,375 18.76
Total 1,414,313 270,000 270,000 1,144,312