Report: Abolish failing RDAs and cut SME tax
Regional Development Agencies (RDAs) have contributed so little to England's economic development that they should be scrapped with the money saved used to slash small business corporation tax, a pressure group has demanded.
In a scathing report, The TaxPayers' Alliance said although the groups, established by the government in 1999, have cost taxpayers £15bn or £600 per household, they have failed to boost the English economy.
Growth in most regions has actually slowed since the RDAs were set up in 1999, the study claimed, while employment figures have also declined.
The government-funded organisations are also plagued by "waste", the group said, with "trips to the south of France, ludicrous taxi expenses and lavish one day conferences...all commonplace". South East England Development Agency chairman James Braithwaite, for instance, spent £53,803 on transport in 2006-07, while Yorkshire Forward forked out £20,000 to send staff to a film festival in Dubai in 2006.
In addition, The TaxPayers' Alliance criticised the fact that many of the RDAs' responsibilities are duplicated by other organisations. English Partnerships, another group focusing on redevelopment, costs taxpayers £628m a year, while the RDAs provide businesses with "inexpert advice" despite the existence of Business Links, the government sponsored network of business guidance centres and websites.
Ben Farrugia, policy analyst at the TaxPayers' Alliance, said scrapping the RDAs would have "no negative impact" and the money saved could be allocated to a 4p cut in the small business rate of corporation tax which was increased from 20% to 22% in 2007.
He added: "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."
Responding to the report, Steven Broomhead, chief executive of the Northwest Regional Development Agency, told BusinessZone.co.uk it contained "out of date, inaccurate and out of context" information. He claimed that the RDAs have actually "made a real and tangible difference to regional economies" adding that government targets have been "consistently" met.
"We are fully accountable to government through the secretary of state for business and enterprise, and there continue to be a number of robust measures in place to monitor our performance and investments," Broomhead said.
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BusinessZONE - 15-Aug-2008
Categories: News
Story read: 2488
