Shadow business secretary uses party conference speech to hit out at coalition’s abolition of Regional Development Agencies

Labour’s shadow business secretary has hit out the coalition’s decision to scrap the eight Regional Development Agencies and replacement them with a regional growth fund.

Pat McFadden said in a speech to Labour conference that the decision to abolish the agencies, which supported regional growth and invested in regeneration developments, would hurt attempts to rebalance the economy between north and south and between service sector jobs and manufacturing.

The eight RDAs spent £1.4bn a year and are to be replaced by many consortiums of local authorities set up to champion economic development, called Local Economic Partnerships. These will receive just £500m a year in the form of a regional growth fund.

McFadden said: “You don’t rebalance the economy by abolishing the Regional Development Agencies that are providing support for business up and down the country. Eight organisations abolished. Fifty-eight bodies chasing to replace them. More bodies chasing less money. That’s what they call the bonfire of the quangos.”

McFadden’s comments follow the admission by business secretary Vince Cable last week at the Liberal Party conference that only 10-15 of the groups bidding for LEP status has a realistic chance of getting government approval in the first round.