NATIONAL > No tumbrels in the streets for RDAs
Published: Tuesday, 29 Jun, 2010
So now we know the extent of this coalition government ambitions in turning around the UK economy and, ignoring the predictable protests from those who sense that their gravy train may be about to be rerouted into a siding, the responses seem fair. To be honest, given
So now we know the extent of this coalition government ambitions in turning around the UK economy and, ignoring the predictable protests from those who sense that their gravy train may be about to be rerouted into a siding, the responses seem fair. To be honest, given the appalling state of the UK's public finances and the eye-watering levels of debt already incurred, and likely to be incurred even under more stringent fiscal management, fair is probably as good as its likely to get until after the autumn spending review; but there are a few straws in the wind.
The pound sterling is moving in a positive direction against the Euro and, while the BBC could only muster shadowy 'business leaders' to express concerns about the potential downside of George Osborne's proposals, The Times today (29 July 2010) reported the upbeat assessments of a number of named leaders of real businesses as to the efficacy of a forceful change in economic direction. But in the Budget there was change with the potential to impact significantly on the inward investment sector.
It was reported as the 'abolition of RDAs', and more panicky commentators read this as if Osbourne had proposed the immediate execution of all those worthy souls engaged in the activities that have become the hallmarks of regional development and regeneration to create a climate conducive to inward investment. Of course, on sober reflection, nothing could be further from the truth. The proposal is to establish a new structure with a more focused 'business' approach to encourage enterprise and inward investment through the activities of more local organisations with a stronger commercial pedigree than some RDAs can claim. Whereas the social engineering, community and other indirect regeneration activities in which some RDAs have indulged will either be abandoned or passed back to local authorities. As part of that shift, RDAs will become redundant although, no doubt, many of their staff will move to the bodies taking on the various roles. But, importantly, RDAS have not universally condemmed the proposals and some, like Yorkshire Forward, plan to work constructively with the change mechanisms. This makes sense for, in the coming years, the UK will still need to encourage significanrt levels of inward invest until such time as UK funds are available to invest in UK businesses again. Which brings us to another encouraging sign.
After years of decline under the Brownian philosophy that a person who saves to stand on their own feet is a person who won't need the state's support and therefore a person who can't be bribed to vote for a big state, we are seeing the first glimmerings of a return to the real prudence that made Britain great - the prudence of ordinary people who save. That should mean some significant UK investment capability being built in the coming years but whether the great pension funds that used to be the backbone of UK investment will ever recover from the last government's wholesale theft of their value to fuel its own illusory economy is another matter. In truth, the damage done may be irreparable, so this country will need to be a net recipient of inward investment for the foreseeable future. Combine that with what people who need to put their money where their mouths are consider a moderately positive economic outlook and value seekers might think that the UK is a good place to invest.
And to return finally to the RDAs; this publication, having worked with RDAs since their inception, has always had a positive view of the good work they do but a critical view of the uncommercial but increasingly necessary (to meet targets on equality, community cohesion and all the other social engineering concepts that were needed to justify one's existence under the old order) activities into which their resources had to be diverted. We would not have wished to see RDAs abolished but the manner in which this is happening and their retention until at least 2012 by all accounts plus the likelihood that many of their greatest strengths, people, will continue into the new order, makes us hopeful about the future of inward investment support in the UK.
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