Public Bodies Bill [HL]

My Lords, I shall speak to Amendment 16A tabled in my name and in the names of several of my noble friends. Like my noble friend Lord Kennedy, I am not against reform—I welcome it—but I am against the abolition of the RDAs in a wholesale way. I raised a number of questions on the abolition of the RDAs in our debate at the Committee stage and the Minister was kind enough to write to me with a detailed response. I have to say at the outset that I still have very deep concerns about the abolition of the RDAs, both in terms of the impact on economic growth and the process itself. I turn first to the Government’s response to the report of the Public Administration Select Committee entitled Smaller Government: Shrinking the Quango State. The response is brimful of bravado, which I would say is misplaced in this context, but I digress. I refer to paragraph 6 of the response, which deals with the £2.6 billion that will flow from savings on public bodies over the spending review period and the estimate of a reduction of at least £11 billion per year by 2014-15. It has been estimated in some quarters that it could cost as much as £1.4 billion to wind down the RDAs and complete existing programmes. Yet in his letter, the Minister tells me that it is not possible at this stage to quantify the costs of RDA closure. I am sure he is correct, but if so, how can the Government state categorically that total savings as a result of this legislation will be at least £2.6 billion during the spending review period? It would be helpful to have a more detailed breakdown of the savings, especially after the extraordinary hyperbole we heard at the beginning of the process—not, I hasten to add, from the Minister. I turn now to the issue of consultation, which I raised in Committee. I welcome the increased consultation that is now a part of the Bill thus far, although my noble friend Lord Hunt will move further amendments on consultation in due course. But in relation to RDAs, the Minister told me in his letter that: "““We have not so far undertaken a formal consultation on the abolition of the RDAs””." I hope that as a consequence of this Bill consultation will in future take place at the appropriate time—before announcements are made and legislation is introduced. I note from the Minister’s letter that the Government are obliged to consult before laying any order to abolish the RDAs, assuming that they remain part of the Bill, and that they will meet this requirement. Personally, I think that such a consultation is far too late in the process. I also asked in Committee about the role of government offices. The Minister told me that BIS is working to put in place a new economic development delivery landscape and that this is the role that the network of small BIS local teams will be designed to fulfil. This is reinventing the wheel. In the main, the government offices do an excellent job at the moment. They may well need reforming but reform should not mean abolition; it should mean just some readjustment of the process which we have had thus far. In relation to assets, I have one further question for the Minister. In his letter he said that the reasons for getting rid of RDA assets include, "““maximising value for money from these assets, ensuring liabilities follow assets, and passing control down to the local level where possible””." But what happens to the money if the assets are sold? The noble Lord told me what is going to happen vis-à-vis inward investment and UK Trade and Investment, which intends to procure a single national contract to co-ordinate and manage foreign investment propositions on behalf of the UK. That may be very good; I am not in a position to say. But the role that the RDAs played in inward investment as one-stop shops was truly invaluable and I should like reassurance from the Minister that there will be that sort of one-stop-shop process in any new system. That was instrumental in bringing industry and jobs to regions such as the north-west, the West Midlands and many others. The regions must be the motors for economic growth in our country. I am sure that the Minister will remind me that the policy of the Government is to have local economic partnerships, and indeed his right honourable friend the Chancellor of the Exchequer announced 11 new LEPs today. But I am still concerned that great swathes of the country will still not be covered, that not enough money will be available to support the LEPs, and that not enough attention will be given to strategic growth. I refer again to the letter from the Minister. He said: "““We appreciate the work they””—" the RDAs— "““have done, but these are difficult times and we need to be clear that our limited resources have to be used in the most efficient manner. This requires a total reform of the current system””." We all recognise that not all RDAs are as effective as they might be but that should not require the demolition of the whole system. On all sides of the Chamber there is clear recognition, for example, that the RDA in the north-east does a splendid job and has made a huge contribution to the economy and, consequently, to the fabric of society in the north-east. So why get rid of it? Like my noble friends, I continue to oppose the abolition of RDAs. I believe that innovation, employment, inward investment, new business, training and economic growth will all suffer, notwithstanding the creation of the LEPs and the additional LEPs which were announced today. Our economy and our society will suffer as a result.