"The Regional
Development Agencies' efforts to encourage economic growth through
a programme of physical regeneration have delivered real benefits.
It is questionable, however, whether they could not have achieved
even greater benefits from the £5 billion they have committed. It
is important that the RDAs establish better appraisal and
evaluation methods to identify the projects which are most
beneficial and then target their funding
accordingly.”
Amyas Morse, head of the National Audit Office, 30 March
2010
The Regional Development Agencies' physical regeneration
programmes have helped to generate additional regional wealth.
However, because of Agency weaknesses in identifying the projects
which would maximise regional economic growth, the National Audit
Office is unable to conclude the Agencies have secured as much
benefit as they should have.
Since 1999, the eight RDAs outside of London have spent £5
billion on physical regeneration programmes. For every pound of RDA
spend on physical regeneration, an estimated £2.80 is secured from
elsewhere, including £1.51 from the private sector.
Using the measure of jobs created by RDAs to estimate generated
Gross Value Added, there is evidence that physical regeneration
projects have helped to generate growth. Independent evaluation
suggests they have generated Gross Value Added of £3.30 for every
£1 spent. Many of these projects will not realise their full
benefits for many years and there is potential for a return over
the lifetime of the projects of £8 for every £1 spent.
However, the National Audit Office has reported that RDAs have
not been able to demonstrate they have maximized economic growth,
because weaknesses in project appraisal and evaluation mean the
Agencies might not have identified and backed the most effective
projects for generating regional wealth.
The Agencies' more direct support to business generates greater
economic wealth, both in the short and long-term but physical
regeneration projects generate other social and environmental
benefits which are more difficult to measure.
Before 2009, RDAs reported to Parliament on the number of gross
jobs they had created – 413,000. Attributing jobs that would have
happened anyway or which have transferred from elsewhere within the
region to the activity of the RDAs does not provide an accurate
reflection of their impact on regional growth. Independent
evaluation estimates the number of net additional jobs created by
the RDAs was 178,000.
During the economic downturn, approximately 15 per cent of
physical regeneration projects involving the private sector have
stalled or slowed because developers are struggling to get finance
or because of concerns over future yields.
Publication details:
HC: 214, 2009-10
ISBN: 9780102963229