Key projects such as West Bromwich town centre, Edgbaston cricket ground and Ansty Park are among those targeted by spending cuts which have hit the regeneration of the West Midlands.
The schemes are among 121 to be cut back or axed by regional development agency Advantage West Midlands (AWM) after it was told by the coalition Government to find £37.1 million worth of savings from its 2010/11 budget.
The All Saints development in West Bromwich took the biggest single hit – £7.4 million – while advice service Business Link sees £5.2 million of its funding wiped out. A further £4.3 million has been saved by scrapping a grant for the Agriculture and Horticulture Development Board (AHDB).
The cuts – which account for almost 15 per cent of AWM’s £250 million budget for the next financial year – come ahead of the Government’s spending review later this month which could herald even more bad news for the region.
However, other crucial developments have been unnaffected by the cuts, including the £24.4 million investment in Birmingham New Street and the £17.3 million going towards the Manufacturing Technology Centre at Ansty Park.
A total of 11 schemes were scrapped altogether, with the AHDB creating the biggest saving along with £1.15 million from scrapping the Advantage Growth Equity Fund.
Mick Laverty, chief executive at AWM, said: “The collective efforts of our agency staff and our partners have delivered all the savings that the Government asked of us.
“The scale and pace of the cuts required meant that inevitably some difficult and unpopular decisions had to be made.
“Our joint focus has always been to safeguard priority projects – the ones that create most jobs and the greatest growth and support the most competitive businesses across the West Midlands.
“The Government intends to abolish RDAs at the end of March 2012 and is putting in place new economic delivery bodies such as Local Enterprise Partnerships.
“We still have a significant portfolio of project investments and assets that may transfer to successor bodies. We are awaiting Government clarification on this and a range of other matters.
“In the meantime, we are doing our utmost to ensure a smooth transition to the new arrangements. Our main task remains to support economic recovery and future growth through the effective delivery of our remaining projects.”
Tim Gebbels, corporate director for strategy and skills at AWM, said the agency set out criteria to establish which schemes to commit to, including those with the highest possible economic benefit, and those which were deliverable within the timeframe – as schemes which go on past 2012 would be out of its control.
He admitted there was still uncertainty about budgets going forward as the end of RDAs looms and talks take place about establishing smaller Local Enterprise Partnerships.
Mr Gebbels said: “It is entirely within the bounds of possibility that the spending review will come to a level below our future commitments.
“We have no idea yet what our budget for next year is going to be and we won’t know until the spending review is published. We expect still to have a significant budget for next year, although significantly below this year’s budget.
“We will continue to strive to get the best possible value out of our investments and negotiate the greatest possible economic return for this region.”
AWM’s budget was previously as high as £330 million, administered by 330 people, and the agency says it has had a return as high as £8.14 for every £1 spent.
However, RDAs across the country saw £270 million wiped from their budgets by Government cuts revealed in a statement earlier this year, with AWM seeing a £37.1 million hit, as well as an additional £2.3 million cut to its running costs
The £7.4 million cut to the West Bromwich Town Centre development comes as a blow to the region, as the £75 million project is at the heart of plans to create 1,000 jobs.
The budget reduction was realised by BT taking a 75,000 sq ft office, rather than 120,000 sq ft as planned, and Sandwell Council retaining the land. AWM will now be investing a total of £6.5 million in the scheme.
Elsewhere, the £1.1 million of the total £9.7 million committed to Edgbaston cricket ground was earmarked for land acquisition. That means the agency’s total spend on the development will stand at £8.6 million.
Warwickshire County Cricket club chief executive Colin Povey said development plans would go ahead regardless.
He said: “We have been aware of the project review for some time and have been kept fully informed by AWM. The bulk of the money covered by the club’s funding agreement with AWM remains secure. We continue to work with our advisers and with AWM to minimize the impact of this decision. The club already has a number of initiatives in train to ensure that the overall funding for the project is not compromised.”
A total of £1.5 million has been wiped from AWM’s expenditure on Ansty Park, although the £17.3 million investment into the Manufacturing Technology Centre has been ring-fenced.
And £5.2 million has been axed from the Business Link budget – although funding has not been cut completely.
Mr Gebbels said: “We are continuing to fund that but the future of Business Link is uncertain. The Government hasn’t said what it is going to do with Business Link.”
And, as well as the reductions to the 121 schemes AWM was legally committed to prior to the Government-enforced cutbacks, several other schemes that the agency planned to invest in have been culled.
They include funding to go towards the £282 million University Quarter to create a state-of-the-art learning facility in Stoke–on–Trent.
The long-anticipated transformation of Dudley Zoo has also taken a hit from the cuts, as about £5 million expected to come from AWM for the scheme has had to be withdrawn.
Mr Gebbels confirmed the agency is not currently working on any new projects funded directly by the Government.