Advantage West Midlands has no idea if £300,000 it spent at this year’s MIPIM property event in the south of France attracted a single penny of inward investment for the region.
The regional development agency made the admission during a grilling by Government officials looking into how it spent taxpayers’ money this year.
During an inquiry into the agency’s annual expenditure, the West Midlands Regional Committee questioned AWM chairman Sir Roy McNulty and chief executive Mick Laverty over how it had invested £330 million in the region during 2008-09.
Officials raised a number of key issues, including the ill-fated West Bromwich arts centre The Public as well as the hundreds of jobs currently at stake in the Ericsson plant at Coventry.
Questioned about £300,000 it spent on a property “speed dating”-style event in Cannes last year, Mr Laverty said he was unable to quantify the amount of return from the investment in the annual property event.
AWM representatives attended the MIPIM World property event in France with some 200 public and private sector professionals to promote the West Midlands.
It funded an executive apartment used for industry officials to network and try and attract investors to the region.
Mr Laverty said: “We showcase what the West Midlands has to offer against fierce competition from all over the globe. I don’t think you would expect us to sit at home and not showcase [it].”
But he admitted measurement of the initiative’s success was “qualitative”, adding: “It’s very difficult to track exactly what’s happened as a result of thousands and thousands of conversations.”
The agency said in light of the recession it has cut down expenditure for next year’s event to £200,000.
The inquiry heard that AWM also invested £8 million into The Public, which ended up costing £54 million to complete.
Mr Laverty called the incident “an isolated failure”, adding: “I think it was one of those projects where there’s lots of lessons to be learned for all partners – probably around having a clearer, more thorough idea around how strong the business plan will be.”
The agency has invested £100 million of the £600 million regeneration of New Street Station, plans for which are said to be “on time and to budget”.
It is also set to provide a further £43 million in loans supporting local businesses from next year.
The authority invests around £2 million a year on inward investment in conjunction with UK Trade & Investment, which it says created 2,000 jobs in the region last year.
An independent study indicated the agency achieves a return of £4.20 for every £1 invested.
It plans on raising this to £7.45 per pound.
Sir McNulty defended the future of regional development agencies stating they played a key role in coordinating local and national initiatives and linking people to “the man in Whitehall”.
He said: “Everybody recognises we have a really difficult economic challenge in this region. It seems extraordinary to me that we sit here in the West Midlands with these enormously capable universities but at the same time with the lowest level of innovation in the local economy in Britain.”
He conceded more work needed to be done on successfully aligning priorities between partner agencies, but added: “We believe that the RDAs do fulfill a very useful and important function.
“We need someone that knits things together and makes sense of something that is otherwise a very unclear picture.”