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RDAs axed

Coalition government shuts down regional development agencies.

The UK?s eight regional development agencies are to be closed down, with the loss of 3,400 jobs. 

The new coalition government has axed the RDAs due to the inefficient way it claims funds were used, with June?s budget documents saying the replacing of RDAs was about "improved co-ordination" of investment in the economy. Although a date has not been set yet, they are to be replaced with ?Local Enterprise Partnerships?. Not a lot is known about these yet, although a Treasury spokeswoman said "local leaders" would be involved as "they will have the advantage of understanding the particular needs of the area." More information is to be given in a white paper to be published late this summer.

Set up by the Labour government to work with local businesses to develop skills, employment, development and efficiency, the RDAs faced criticisms from several quarters. According to the Taxpayers Alliance, they were an "unnecessary and expensive layer of bureaucracy that stifle genuine private enterprise".

In his budget speech, Chancellor George Osborne said a new approach was needed that ?empowers local leadership, generates local economic growth, and promotes job creation in all parts of the country including Wales and Scotland."

He also announced a scheme to encourage businesses to go to regions other than the South East, East or London, where Osborne claims the private sector is "not nearly strong enough".  Those that do so in the next three years will be exempt from paying up to £5,000 of employer national insurance payments, for each of their first 10 employees.

Natasha Moore

Added the 24 June 2010 in category Innovation News

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