62% of grants from Regional Development Agencies don't go to business but to other public sector bodies

New research from The TaxPayers' Alliance shows that 62% of the £2.9 billion awarded by Regional Development Agencies from 2007 to 2009 did not go to private businesses but to public sector organisations.

The report also argues that RDAs failed to deliver on their key objective of closing regional imbalances. Gross Value Added (GVA) in the North East increased from £10,758 per head in 1999 to £15,887 in 2008 (+48%). Over the same period, London’s GVA increased from £22,150 per head to £34,786.3 (+57%). The chart below summarises the changes in all regions:

Matthew Elliott, Chief Executive of the TPA, commented:

"The Regional Development Agencies are hugely wasteful and ineffective, and they should all be abolished. These quangos have claimed for years to be focused on business, but in reality the majority of their grants have been going to other bodies in the public sector. With a huge budget deficit, the RDAs should be at the top of the list for abolition to save money. We simply can't afford to spend billions on organisations that fail to fulfil their mission, and the RDAs lack any claim to either success or legitimacy."

A PDF of the full report is here.

Within the Coalition, resistance to abolition of RDAs is being led by Business Minister Mark Prisk MP. A critic said: "Mark has gone native in his department faster than any minister I've ever known."