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In a move that makes a mockery of the Tory-led Government's commitment to localism, Ministers have blocked proposals from Regional Development Agencies (RDAs) to allow a transfer of hundreds of millions of pounds of their assets to local authorities after RDAs are abolished early next year.

The decision, snuck out on the Department for Business, Innovation and Skills website last Friday, means that every RDA asset will now go to the highest bidder and no longer be used as a strategic investment resource to promote growth and create jobs in the regions.   

Local authorities will have to find money now or risk losing the asset altogether – at a time when their budgets are already stretched.

Most of the RDAs, which have on the ground knowledge of the local economic circumstances, had asked Ministers to allow some assets to be transferred to local authority ownership under a deferred payment arrangement, allowing cash-strapped local authorities to continue to use strategic assets to promote growth in their regions but paying for the asset at a later stage. 

High profile sites include Wavertree Business Park in Liverpool; The Exeter Innovation Centre;  Pebble Mill Studios, Birmingham; The Wave Hub, Cornwall; Science Central, Newcastle; Waverly Business and Technology Park, Rotherham, Sheffield Digital Campus and Ansty Park Strategic Site, Coventry. 

Ensuring these assets were kept in local hands would have provided a real boost for communities about to be hit by cuts to public spending and looking for ways to get their local economies growing again. 

The ideological decision came under Treasury insistence that all RDA assets had to go, preferring a fire sale now rather than receiving the proceeds of successful investment in the future. 

Following the news 19 Labour Group Leaders from local councils across the country have written to Vince Cable, Business Secretary, calling on the Tory-led Government to think again on the proposals and give local communities the tools they need to successfully build a sustainable economic future for their areas.

John Denham MP, Labour’s Shadow Business Secretary, said: 

“It’s outrageous that Ministers have stepped in to block these sensible proposals. This is Whitehall knows best centralism at its finest.  Instead of building on the exceptional work of RDAs, which have been shown to provide a return of £4.50 for every £1 invested, the Government have butchered the infrastructure RDAs worked hard to build. 

“RDAs know their regions incredibly well, and are experts on how to achieve regional growth using their assets.  That the Tory-led Government are ignoring their advice shows a weak strategy to deliver investment and jobs throughout the country. The RDA replacement, Local Enterprise Partnerships, are in no position to take on these assets as they have no budget or legal standing to do so. The Government have given local authorities no option: buy now, or lose out. 

“This fire sale is typical of a Tory-led Government that prizes short term fixes over long term, sustainable growth and with no concept of the scale of the challenge the country is facing.“ 

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