Pressure group slams development agencies

QUANGOS set up to boost England's regional economies award almost two-thirds of all grants to other public sector groups, according to new research by a political pressure group.

The TaxPayers' Alliance said out of a total of 2.9bn in grants paid out by regional development agencies (RDAs) in 2007-08 and 2008-09, 1.8bn (62 per cent) went to public sector organisations or projects, an investigation by the TaxPayers' Alliance revealed.

Regional figures showed Yorkshire Forward awarded 259m out of 451m to the public sector but the TaxPayers' Alliance was last night accused of carrying out "crude analysis" which didn't reflect the real picture.

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Yorkshire Forward chief executive Tom Riordan said: "Independent evaluation of our work has shown that for every 1 we invest, around 4.50 comes back into the economy and for business investment it's 10."

Mr Riordan said that most funding which goes to the public sector is to help back joint public-private sector projects, such as the regeneration of Sheffield city centre.

"Ask any business in Sheffield what they think of what's happened in the city centre over the last 10 years and whether it makes a difference to the economy and I would be amazed if they said anything other than it's made a real difference."

However, TaxPayers' Alliance chief executive Matthew Elliott said the findings called into question the RDAs' claims to be focused on supporting local business as he accused them of lacking "either success or legitimacy".

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The coalition Government has pledged to replace RDAs with "local enterprise partnerships", bringing councils and business together.

Previous calculations by the Liberal Democrats estimated that scrapping the bodies would save 2.3bn a year.