Denise Craig: Cost cutting requires care

Jun 10 2010 By Denise Craig

Since the election there have been a lot of announcements from the coalition government, usually of the cutting, axing or reviewing variety.

This should not come as a surprise given the size of the public finance deficit.

It is also entirely predictable that a new government will want to change many of the things set up by the previous administration.

However, caution should be taken to ensure that in the rush to save money, we do not throw out any babies with the proverbial bathwater.

Take RDAs for example. In some parts of England, news of their possible demise is being warmly welcomed.

But here in the West Midlands, we recognise that whilst AWM isn’t perfect, the FSB would like to see it remain as it has achieved some notable successes for the region.

For example, it was the driver behind the Rover Taskforce, a model that was useful again when the recession hit, in helping to protect supply chains and within them the small businesses and the jobs they provide.

It has provided strategic leadership with a number of regeneration projects that benefit the wider West Midlands, not just Birmingham. And it has been a very useful channel for EU funds, many of which have directly or indirectly been very helpful for small businesses.

This last point should not be underestimated. RDAs have some key functions; they provide information about EU funds, they are a legally recognised entity that can apply for them and they have a management role for the funds that they obtain. Currently, councils undertake a few of these activities to some extent, but they don’t always have enough staff or the expertise required to access the funds. So what will happen in those regions that abolish RDAs?

The West Midlands has benefited significantly from EU funds and in these straitened times, the Government should not be too quick to cut costs, without understanding the long-term implications, especially for this region with our particular set of problems.

Let’s hope that in next week’s emergency budget, the Chancellor has worked out what can be cut safely and what is worth keeping.

* Denise Craig is the West Midlands policy manager for the Federation of Small Businesses