AWM swings axe as budget cut by £40m
BUSINESSES and public organisations across the West Midlands face the withdrawal of key funding as Advantage West Midlands looks to make stringent cutbacks.
The RDA is examining grants it promised to hundreds of bodies across the region to see where savings – thought to total almost £40m – can be made.
The move follows the Government’s decision to cut funding to the body as part of a £270m reduction of RDA grants.
In an attempt to ease the impact on deprived areas, the Goverment yesterday announced a £1bn fund aimed at helping businesses and communities which are at risk due to cuts in the public sector.
The Regional Growth Fund, which will operate in 2011/2012 and 2012/2013, is set to help areas most dependent on public sector employment.
The coalition Government, following the trend set by Labour, is taking its Cabinet meetings out into the regions.
Yesterday was the turn of Bradford and the location was deliberately chosen because similar to the West Midlands, Yorkshire has been identified as an area requiring special support in order to protect its economy in the wake of public sector cutbacks.
Under the new fund, both private bodies and public-private partnerships will be able to bid for funding by demonstrating that their proposal will bring in private investment and support sustainable increases in private sector jobs and growth in their area.
Launching the fund, Deputy Prime Minister Nick Clegg said: “While we sort out the nation’s finances we can also help to foster a thriving and more balanced economy so that no region or community gets left behind.
“The Regional Growth Fund will create the conditions for growth and enterprise in the regions by stimulating investment and create sustainable private sector jobs.
“Alongside our commitment to waive some employment taxes for new businesses starting up in targeted regions of the country, this fund can make a real difference to companies during difficult times.”
Mr Clegg also set out plans for the controversial Local Enterprise Partnerships that are set to replace Regional Development Agencies (RDAs), including Advantage West Midlands.
In a joint letter sent to councils and business leaders, Business Secretary Vince Cable and Communities Secretary Eric Pickles have asked them to consider forming new LEPs which the government believes can provide strategic leadership in their local areas and create the right environment for business success and economic growth.
Mr Cable said: “We are determined to rebalance the economy towards the private sector, so it’s important we create a more effective structure to drive economic growth and development across the country.
“We want a structure that reflects the genuine interests and commitment of enterprise, local councils and other stakeholders like universities and colleges.
“Local enterprise partnerships will provide that vision and then take on the task of renewing local economies and tackling local barriers to growth.”
Mr Pickles said: “If you want to rebuild a fragile national economy you don’t strangle business with red tape and let bloated regional quangos make all the decisions. Urgent action is needed to rebuild and rebalance local economies so that new businesses and economic opportunities spread across the country.
“The solution needs to be local – we know that when councils and local business work hand in hand they can drive economic growth together and places can be transformed. Local Enterprise Partnerships are central to this vision which is why we are asking them what they need.
“By giving up central control we will put democratic accountability back into the local economy making it responsive to the needs of local business and local people.”
LEPs will tackle issues including planning and housing, local transport and infrastructure, employment, enterprise and supporting business start-ups.
Other roles currently carried out by the RDAs will be led nationally, such as inward investment, sector leadership, business support, innovation and access to finance, the government has said.
Further details of the Regional Growth Fund, and the creation of LEPs, will be set out in the forthcoming White Paper on local and regional growth.
Meanwhile, Ministers have also announced plans for a Green Paper on business finance.
The Green Paper will consider whether more can be done to encourage bank finance, and also look at other possible sources of finance – such as growth capital and equity finance.
