Jamie Carpenter,
Regen.net,
5 September 2008
Regional development agencies have warned that government plans to remove £300 million from their budgets to pay for measures to stimulate housebuilding will force them to reduce their support for regeneration initiatives.
In a letter to business secretary John Hutton, Bryan Gray, the chair of the North West Development Agency – and the current chair of chairs for England’s nine RDAs – said: “RDAs will now begin work to identify which future programmes need to be reduced.”
The letter, seen by Regen.net, says that the RDAs will now have to work with the nascent Homes and Communities Agency quango to determine how programmes such as those in the East Midlands coalfields and Thames Gateway growth area are affected by the raid.
Funding for urban regeneration companies and regeneration work in other towns and cities is likely to be reduced, the letter says.
Major capital investment in manufacturing, science, technology and skills provision will be affected, the letter adds. And it says that the RDAs’ ability to match fund European Regional Development Fund projects will be hit, “increasing the risk of this funding being lost to the UK”.
The Government announced on Wednesday that up to £300 million of the RDAs’ approximate £6.6 billion budget for 2008-11 would be used to fund Homebuy Direct, a shared equity scheme designed to enable first time buyers to purchase homes that have not been sold due to the credit crunch.
Shadow regeneration minister Stewart Jackson told Regen.net: “This short-termist approach designed to get the Prime Minister out of a political mess of his own making is to be funded not by new money but by cutting important regeneration initiatives across the country - at a time of economic difficulties.”
He added: “It will have serious long term implications for local businesses, employment and the financial viability of many key schemes.”
