Businesses in the West Midlands are being neglected by a Government quango set up to boost the region’s economy, a Commons inquiry has been warned.
Regional Development Agencies such as Advantage West Midlands are being forced to take on extra responsibilities instead of focusing on supporting industry, the Commons Business and Enterprise Committee heard.
The British Chambers of Commerce, which represents employers across the country, also warned there was no mechanism for holding the agencies to account when they failed to deliver.
Bromsgrove MP Julie Kirkbride warned agencies such as Advantage West Midlands, which spends £300 million of taxpayers’ money each year, had become sprawling “mini-empires” accountable to nobody.
The committee, chaired by Peter Luff (Con Mid Worcestershire) is conducting an investigation into the work of the agencies, which were created by Labour to boost regional economies.
Their role has expanded, and a strategy published by AWM last December covered a range of issues including transport, cutting carbon emissions to tackle climate change, and reducing “economic exclusion”, or people living off benefits, in deprived areas.
Advantage West Midlands officials argue that these are all important factors in creating a thriving economy.
But business leaders called for a firmer focus on the needs of industry, as they gave evidence to the committee.
Chris Hannant, Head of Policy for the British Chambers of Commerce, said: “One of our concerns is that what we have now is quite a long way from the original model.
“They acquire a whole range of non-economic responsibilities to deliver Government policies, because they happen to be something that can deliver policy below the national level.”
The Government wanted some policies to be delivered on a regional basis and had given regional development agencies more responsibilities as a result, he said.
Mr Hannant also warned there was no way of forcing regional development agencies to improve when they failed to perform effectively.
He said: “Where their performance is below what it should be, there is no real mechanism to pull them up by their bootsraps.”
Karen Dee, Head of Infrastructure with the CBI, said Regional Development Agencies should be allowed to concentrate on supporting local economies but they were being given new functions by central government.
“What would help is things like making sure they focus on what they are intended to deliver, and not trying to do too much or spread themselves too thinly.”
The concern was echoed by Worcestershire MP Julie Kirkbride (Con Bromsgrove), a member of the committee, who commented: “In the past 10 years they have evolved into mini-empires.”
Ms Dee also warned that the agencies tended to be successful when they covered an area with a distinct regional identity, such as the North-east.
And she called for RDAs to work together, warning that many businesses operated on a national rather than a regional level.
She said: “Often companies are big, they see themselves as national, they don’t see themselves as regional.”
But Steve Radley, of the Engineering Employers Federation, warned that regional assemblies played an important role.
He said: “This is probably the best available strategy we have got so far.
“It is closer to the customer than a national delivery body, but you have the critical mass that you wouldn’t get at a local level.”
Officials in Advantage West Midlands have themselves privately complained that the Government is giving them increasing responsibilities which move them away from their original mission of supporting industry.
But they also insist that economic development covers a range of topics. One said: “You need to have the people to work in the jobs, and the roads to get them there.”