Advantage West Midlands - will it be missed when the axe falls?
After the Government confirmed plans to scrap regional development agencies, we hear two different opinions on how effective and successful Advantage West Midlands has been.
Lord Kumar Bhattacharyya, founder of Warwick Manufacturing Group, said Advantage West Midlands has helped the region’s progress - while Mark Wallace, campaign director of the TaxPayers’ Alliance, said he would not miss AWM.
Lord Kumar Bhattacharyya: If Local Enterprise Partnerships are to replace regional development agencies then so be it. I am not against change and maybe more centralised policy-making could indeed cut waste.
I am not for bailing out failed companies; I am not for supporting things for the short term. And it is right that the new Government should evaluate everything especially in such a difficult economic climate.
But delivery has to be in the region.
My concern is about growth. There needs to be a mechanism for delivering growth locally, regionally and nationally.
If Advantage West Midlands had never existed, this region would be in a terrible state.
We would have seen even more factories closing than the ones we have lost – the likes of Rover, Massey Ferguson, GEC, Peugeot, Metro-Cammell and LDV. And with that would have come all the associated impact on jobs. Worse than anything we have known.
Only last week this was illustrated by a Centre for Cities report.
It found that in Birmingham more than 61,000 private sector jobs disappeared between 1998 and 2008. The West Midlands is the only region in England to record a net loss during the same period, with 65,600 jobs going.
The report emphasised what AWM has been saying for a long time – there is a £10 billion or more productivity gap between the region and the average for England and it is getting worse.
For years and years prior to the establishment of AWM there was no mechanism for helping the private sector or for helping different parts of the region and doing it in a totally inclusive way.
Now, I don’t know how Local Enterprise Partnerships, the Government’s proposed new model, will end up working in practice.
But I will say this. This is not a village. We are not talking about people getting together in a church hall and deciding what to do.
The West Midlands is a complex region with complex problems.
You have to give AWM time. We are talking of the need to re-work the region’s whole economic basis – skills to entrepreneurship; education to start-ups; regeneration of industrial wasteland to promoting high technology.
And all the time facing knock-backs as another big employer collapses. Almost constant fire-fighting. I am not saying that the politicians should not be involved, I am not saying that enterprise should not be involved… but with AWM they are already involved.
They might change the name, maybe they hive off elements of what AWM does … but there has to be something to replace it. Many people who have worked hard to try and turn round this region would despair if AWM were to be ditched.
The new Government must not abandon the West Midlands and I am sure that is not their intention.
Mark Wallace: So it seems the regional development agencies, including Advantage West Midlands, are finally going to be consigned to the dustbin of history. The wailing and nashing of teeth emanating from AWM’s highly-paid executives and their fellow quangocrats is entirely predictable, but will the agency really be missed?
I think not.
The first thing to note is that the very concept and function of the RDAs was flawed from the outset.
The regionalisation agenda has never possessed any real legitimacy or mandate. People’s identities – and their economic problems – vary locally, not regionally. Having been drawn up on arbitrary regional lines, the agencies have always been a square peg in a round hole.
In practical terms, AWM and the rest of the RDAs have failed. Their remit was to encourage the creation of jobs, stimulate the growth of the private sector and close the inequality gap between the regions.
Despite having spent a huge amount of money, the agencies have not succeeded on any of those measures. On some measures, the regions were actually doing better before the RDAs were founded than after they arrived on the scene.
It is important to note that these observations are based on actual economic facts, gathered by reputable organisations like the Office for National Statistics. By contrast, the RDAs’ only evidence of value for money is a PricewaterhouseCoopers report based on RDA data that researchers at the LSE described as “close to the bottom of the ranking in terms of rigour”.
If AWM had such a big budget, why were there so few benefits to show? A research note published by the TaxPayers’ Alliance on Monday goes some way towards answering that question: behind all the rhetoric, AWM actually paid a whopping 47.3 per cent of its grants between 2007 and 2009 to other public sector bodies, not to business.
We’ve all seen the regular stream of newspaper stories about the quango’s failings and wasteful indulgences, too. Only last weekend we revealed through Freedom of Information requests that AWM’s £4.8 million “Graduate Advantage” had failed to find jobs for more than 80 per cent of the graduates it was meant to help.
Another less than shining example of their performance was the confession by chief executive Mick Laverty last December that he simply didn’t know whether the region had got any benefit at all from the £300,000 jaunt AWM took to the swanky MIPIM property fair in sunny Cannes.
Some waste may be inevitable in any organisation, but it is telling that just about the only news about AWM is of its latest wasteful or failed enterprise. That is a strong sign of a failing organisation.
To be fair to them, Advantage West Midlands was on a sticky wicket from the start. With no real demand, no democratic legitimacy or proper oversight and the absurd job of doling out grants to business when the businesses themselves would have preferred to have lower taxes and be allowed to keep their own money in the first place, they were never a serious going concern. Now is the right time to put them out of their misery.