North West projects hit by funding withdrawal

The Government has announced plans to replace Regional Development Agencies with Local Economic Partnerships.

The North West Development Agency (NWDA) said it had now essentially "closed for new business".

The government revealed it was scrapping the nine RDAs last month.

Update on Northwest Regional Development Agency funding:

• All un-committed projects will not receive NWDA funding in 2010/11
• No new financial commitments in 2011/12
• Admin cost reduction achieved
• Operational funding for many partner organisations will end next year
• Additional project reductions being negotiated with partners
• Regional Growth Fund announced by Government – available from April 2011 onwards

Steven Broomhead, Chief Executive of the Northwest Regional Development Agency (NWDA) said: “We are facing a challenging situation as we have to save £52 million from this year’s NWDA budget. We have made a start by cutting non-contracted projects and reducing our own administration budget but we now need to re-examine all existing projects and programmes to identify where further savings can be made. We are now involved in very careful and sensitive discussions with our partners about this. We will use all available flexibility to try to meet these challenging reductions but the reality is that this is a substantial reduction to our in-year budget and there is bound to be an economic impact on the partners, businesses and communities with whom we work.

In addition, the size of the cuts means that we have little flexibility in our future budgets and the Agency will not be able to make any new investments or renew partner contracts before our dissolution in April 2012. The new Regional Growth Fund announced by Government will offer opportunities for the private and public sector for potential new projects from April 2011 onwards.

I recognise that this is a very difficult time for both our partners and our staff across the region and I sincerely hope that many of these projects and partners will be able to find alternative sources of funding and will continue to support the growth of the Northwest economy for the years to come.”

It has been widely reported that the Coalition Government has reduced the NWDA’s budget this year by £52million, plus an additional £3.7m of administration reduction. Following this, the Agency has agreed an approach to making this budget reduction which has been approved by the NWDA Board.

The break down of the cuts being made includes:

Administration
The Agency has stopped all discretionary spend in areas such as marketing and recruitment. We have also reduced spend in areas such as IT, consultancy and facilities to achieve the reduced administration budget in 2010/11 and introduced a voluntary redundancy scheme.

Non-committed projects and programmes
As a result of this imposed cut, any Northwest programme or project that has not had NWDA funding contracted for 2010/11 will not now secure funding from the Agency and the Agency is essentially closed for any new business. All project applicants affected by this are being informed.

Current programme commitments
The Agency must now focus on reviewing existing programme commitments with delivery partners to assess the scope for reductions or refocusing projects on a case-by-case basis. We will use all flexibility available to meet the budget reduction that we are forced to make. In some cases it may be possible to discuss various options. Therefore we are working quickly with all partners across the Northwest to assess which projects and programmes will be affected and by how much.

Stakeholders and delivery partners are being fully consulted, engaged and informed in this process and of course we will look to make this process as smooth as possible, but the size of this budget reduction will mean that there is bound to be some impact on the businesses and communities with whom we work across the region.

Partner Funding and Existing programmes for 2011 onwards:

In addition to the implications for the 2010/11 budget, the Agency can also confirm that operational and capacity funding for many of our partner organisations will end in March 2011. The NWDA will no longer be able to contribute to the day-to-day running costs of over 30 partner organisations across the region.