Regional development agencies have failed to reduce the north-south wealth gap, create sufficient numbers of jobs or stimulate new businesses since they were founded in 1999, a hard-hitting report claims.
A study by the TaxPayers’ Alliance accuses the nine RDAs, including Advantage West Midlands, of squandering a total of £15 billion over the nine-year period in an "orgy of wasteful bureaucratic excess”.
Describing the bodies as unproductive, wasteful and unaccountable quangos, the TPA report urges the Government to abolish the agencies and use the money saved to cut corporation tax for businesses.
The study says the number of jobs created across England since 1999 has slowed, despite investment from the development agencies.
The West Midlands has the worst record for job creation, which has remained virtually static since 2000, and is lagging behind in VAT registrations for new businesses.
Advantage West Midlands is singled out for criticism after spending £118,000 on a one-day conference to discuss the region’s economic future, in November 2007, and for “lavishing” £3.6 million on the BizTV website.
The study reveals that in 2006/07 five AWM employees, including former chief executive John Edwards, were paid salaries of more than £100,000.
It also questions a decision by AWM to award a £7 million grant to the Horticultural Development Board, another quango.
The report adds: “Poor accountability encourages poor management, and RDAs are notorious for waste and ill-considered investments. A lack of transparency in RDA operations makes identifying problems difficult, but as all RDAs suffer from these abuses we can assume it is a problem with the RDA model as a whole.
“RDAs have roundly failed to close the gap between the richest and poorest regions and welfare dependency, entrenched unemployment and poor infrastructure are still all too common.”
The report makes the point that more jobs were created in the decade before RDAs existed than have been created between 1999 and 2007.
“Regional economic performance actually improved at a faster rate before RDAs were established. After a decade of activity, and £15.3 billion of public money, RDAs have little to show for it,” the document adds.
Ben Farrugia, policy analyst at the TaxPayers’ Alliance, said: “Regional Development Agencies have failed in their core mission to narrow the gap between the economic performance of England’s regions.
“At a time when businesses are increasingly over-regulated and over-taxed, RDAs have become a symbol of wasteful bureaucratic excess. They should be abolished before the Government hands them even greater powers.”
The call for abolition is unlikely to be heeded by the Government, which has announced plans to get rid of regional assemblies and hand more powers to RDAs.
A spokesman for Advantage West Midlands said: “The report contains information that is largely out of date, inaccurate and taken out of context.
“Since 1999, Advantage West Midlands has consistently delivered against the targets set for them by Government that support business, foster economic development and help to create and safeguard jobs in the region.
“Working with our partners, we have created or safeguarded over 17,600 jobs in 2007/08, with more than 12,200 businesses provided with the high quality advice and assistance they need to grow. More than 150 hectares of derelict land is back in productive use as key regeneration projects across the region take shape.
“In March 2007, the National Audit Office Independent Performance Assessment awarded Advantage West Midlands the highest possible rating of four out of four, concluding the Agency was ‘performing strongly.”