Cutbacks risk growth to region’s economy

THE £6.2bn programme of cutbacks announced by Chancellor George Osborne will have a damaging impact on the private sector’s ability to drive forward the economy in the West Midlands, business leaders have said.

Stringent cutbacks to the network of regional development agencies have raised concerns about the ability of Advantage West Midlands to continue delivering the region’s economic development agenda.

Mr Osborne announced that he would be reducing funding to RDAs by £270m – equivalent to almost 20% of their running costs.

Paul Bassi, president of Birmingham Chamber of Commerce, said:  “Our greatest concern is the government’s stance on regional development agencies with £270m cuts proposed.

“In the past, the success of government efficiency savings has been questionable.  The new Efficiency and Reform Group should learn from the experience of industry to deliver the savings as successfully and as painlessly as possible.”

Lord Kumar Bhattacharyya, head of Warwick Manufacturing Group, was another to speak out in support of the RDA.

He said: “I am pleased that funding for Advantage West Midlands appears to be being maintained by the Government.
“AWM has done a fantastic job – a body such as AWM is critical for the regional economy.”

On the cutbacks generally, Mr Bassi said: “We welcome the commitment to limit the National Insurance rise for employers as well as the government’s commitment to freeze business rate payments in 2010-11. 

“However, the size of the cuts proposed for business related programmes is daunting.

“We welcome the focus on apprenticeships which are really important if we are to make our future workforce work-ready but we are concerned about the apparent demise of the Future Jobs Fund which we believe has been successful.”

The chamber said its employs four people on this scheme and there were now fears about their roles.

Lord Bhattacharyya added that overall the cutbacks were quite reasonable and he welcomed the reduction in consultancy spending claiming Britain had become a “consultancy culture” and it was high time people were made to take control of their own destiny.

James Watkins, executive director of Business Voice WM, praised the Government for putting more money into further education but queried some of the proposed cutbacks.

He said: “More vocational courses and dealing with the skills gaps which business is faced with every day are obviously critical to getting the West Midlands out of the economic downturn.”

But, of the £100m Network Rail cutback for rolling stock and the upgrade of stations, he noted: “We are concerned about this development. Stations like Birmingham International are in dire need of improvement while older trains will do nothing to reduce the delays many commuters experience across the West Midlands.”