Budget casts doubt over future of AWM

DOUBTS remain over the future of regional development agency Advantage West Midlands following the Budget.

When the coalition took power it indicated it would scrap RDAs in favour of Local Enterprise Partnerships – comprising local authorities and the private sector – to spearhead economic development in the regions.

However, there was ambiguity as it said some of the RDA structures would be retained in areas where they were popular.

In his speech Mr Osborne said full plans would be announced later in the summer but there were indications a major overhaul was in the offing.

He said: “Over the past decade the British economy has become deeply unbalanced.

“Nowhere are these disparities as marked as between the different regions of Britain.

“Between 1998 and 2008, for every private sector job generated in the North and the Midlands, 10 were created in London and the South.

“We need a new approach.

“One that empowers local leadership, generates local economic growth, and promotes job creation in all parts of the country.”

A spokesperson for AWM said: “The creation of Local Enterprise Partnerships arose during the pre and post election debates nationally and formed part of the coalition Government’s manifesto. While the LEPs are being discussed and developed we will continue to work towards creating a stronger, more sustainable and balanced West Midlands economy.

“We remain passionate about working with our partners to do all we can to encourage innovation and enterprise and to support emerging industries to help grow the regional economy.

“Our focus now must be on playing our part in helping to reduce the burden on public finances; delivering the efficiency and project savings asked for by Government.

“There’s much work to be done. Together, our challenge is to ensure the region can remain competitive in the future, particularly in key sectors such as advanced manufacturing and low carbon technologies. We will be working with all our partners to ensure the best outcomes for the West Midlands.”

Many business organisations within the region have urged the government to retain the agency claiming its business networks are too effective to dismantle.

The exact structure of Local Enterprise Partnerships has yet to be established, however, they are planned to be equal pairings of the public and private sectors within a defined area, each chaired by a leading business figure.

They are more likely to be mapped out over existing local authority boundaries but Business Secretary Vince Cable said during a recent visit to Birmingham this was by no means certain.

He said councils could band together to push the case for an part but then so could other bodies such as chambers of commerce.

However, concerns have been expressed that local authorities lack the necessary expertise in terms of business networks and economic development in order to make the new bodies effective, while others claim many authorities are attracted to the LEP idea merely because it will mean additional funding heading their way.

Addressing regional strategy, Mr Osborne said: “We will publish a white paper on how we intend to deal with these issues later in the summer.”

However, affirmative action was pledged on the future of one of the region’s major infrastructure projects, the redevelopment of Birmingham’s New Street Station.

“Even when money is so short, we will commit to these important regional transport projects,” said the Chancellor.

He also committed the Government to creating a large Regional Growth Fund to provide finance for regional capital projects over the next two years.
“We will announce the details shortly but priority will be given to projects that have the greatest impact on innovation and jobs,” added Mr Osborne.

For the next three years anyone who sets up a new business outside London, the South East and the Eastern region will be exempt from up to £5,000 of employer National Insurance payments, for each of their first 10 employees hired.

“We aim to have the scheme up and running by September, but any qualifying new business set up from today will also receive help,” he said.

The Treasury has estimated that around 400,000 businesses will benefit from this.