Value of regeneration schemes is questioned

THE value for money of regeneration projects across Yorkshire over the last decade is questioned today in a new report by the National Audit Office.

The study of 5 billion worth of regeneration programmes by England's eight Regional Development Agencies outside London said it was "unable to conclude that the regional wealth benefits actually generated were as much as they could and should have been".

The report by the controller and auditor general assessed work since 1999. It examined how priorities were determined, funds were targeted, projects were appraised, outcomes evaluated and lessons learned. For every pound of RDA spending, an estimated additional 2.80 is secured from other bodies of which 1.51 is from the private sector, the report said.

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The document stated that before 2009, RDAs reported to Parliament on the number of gross jobs they had created (413,000), but concluded the number of net additional jobs made by the RDAs in fact provided a sharper picture of their impact on the regional economy.

It said: "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.

"An independent evaluation of RDA expenditure suggested the RDAs had helped create 375,000 gross jobs from 2002 to 2007, but that only 178,000 jobs were additional. On this basis the public sector cost of each of the net jobs created so far would be 60,000."

The report said using the measure of jobs created by the RDAs to estimate generated gross value added, there was evidence that the projects had helped to generate growth. It added that projects up to 2008 subject to independent evaluation were estimated to have generated gross value added of 3.30 for every 1 spent, with a potential return over the lifetime of the projects of 8 for every 1 spent.

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However, the report also concluded the success of individual projects varied and RDAs were unable to demonstrate they had consistently chosen the right projects "to maximise growth and value for money" due to weaknesses in project appraisal and consistent evaluation.

It noted during the current economic climate, 15% of such projects involving the private sector had stalled or slowed as developers encountered difficulties in obtaining finance and uncertainty over future yields.

NAO head Amyas Morse said: "The RDAs' 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."