RDAs investments cost-effective, even though returns on physical projects long term

Every pound spent by regional development agencies contributes £4.50 to the economy, according to a new study. But the figure could be as high as £8 for every £1 if future job projections are realised. Research carried out by PricewaterhouseCoopers (PwC) on behalf of the government shows the £5bn of funds poured into RDA budgets from 2002-2007 that has been evaluated has generated £23bn of economic output.

Business secretary Lord Mandelson has asked RDAs to use the research to identify the most effective projects and programmes and report back by the end of May. Calling on RDAs to prioritise business support in the short term, Lord Mandelson said their medium and long-term focus must be on stimulating recovery and growth and the restructuring of regional economies.

PwC found differential impacts across the regions, but the findings were generally positive. Some projects and programmes have already achieved regional benefits in excess of costs, notably in the area of business support, but some interventions have not yet achieved regional economic benefits in excess of their costs, although the majority of these have the potential to do so if the expected benefits arise. This is especially true of many physical regeneration projects/programmes where the investments are expected to deliver longer-term benefits.

The first volume provides an overall assessment of the RDA network. The second volume provides a summary of the evidence for each of the nine RDAs.

BERR PwC, Impact of RDA Spending

Vol1, National report

Vol2, Regional annexes