Vince Cable: Abolition of development agencies was 'Maoist and chaotic'

Published Friday, 12 November 2010
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Business secretary says he still supports transfer of power from Whitehall to regions, but admits it has been poorly executed

The abolition of regional development agencies by the coalition was a "little Maoist and chaotic", business secretary Vince Cable told a gathering in Birmingham last night.

Cable admitted to his audience at the annual dinner of the Lunar Society in Birmingham that scrapping the RDAs had been poorly executed, though he said he still supported the transfer of power from Whitehall to the regions that they represented.

His comments come as questions are raised about the government's chosen growth agenda. Cable has designed the local economic partnerships (LEPs) – designed to replace RDAs – but a leaked letter from Mark Prisk, the junior business minister, to Cable, showed that the LEPs could be "in danger of failing to aid economic growth". Cable himself admitted at a recent appearance before parliament's business select committee that LEPs would not be able to access any central government money to help them start up but would instead have to solicit funding from councils.

Last night Cable said: "We're investing heavily at a local and city level to reverse years of terrible over-centralisation in London that has led to a lack of independence for cities. Getting rid of the RDAs and bringing in LEPs has perhaps been a little Maoist and chaotic, but overall we're giving back to councils and local authorities the powers and incentives they need to see a resurgence in civic pride."

He went on to pledge that the coalition would galvanise British industry, making it central to a forthcoming white paper on growth. He said: "This economy has become horribly unbalanced over the past 10 years in particular. We became over-reliant on sectors such as the financial industry while allowing manufacturing to decline."

"We mustn't lose sight of the fact that the UK remains the sixth largest manufacturing economy in the world. In the white paper, manufacturing will be top of the list because we need to rediscover the industrial brilliance this country was built upon."

The letter from Prisk to Cable, sent on 14 September, notes that there has been "considerable friction" with the business community on the government's move from RDAs to LEPs and how this policy is implemented.

LEPs are clusters of business chiefs and local politicians, meant to encourage growth by giving local businesses access to public funds.

Prisk wrote: "Key messages I have been made aware of include: a lack of credible business representation negotiations dominated by local politics and a lack of a clear focus on economic growth.

"They also report different messages coming from government ... John Cridland [the CBI's deputy director general] specifically was concerned that the process has not been transparent, business engagement was poor overall and exacerbated by a tight timescale. He and other senior business leaders from Tesco and Ford have expressed their concern that in their view, the policy is in danger of failing to aid economic growth.

"At worst, the danger is that the CBI and others become detached from this policy heralding likely failure in large parts of England."

guardian.co.uk © Guardian News and Media 2010
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