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NAO questions value of £5 billion regeneration cash

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The National Audit Office has questioned the value added to English regions by the £5 billion spent on regeneration projects over the past decade

The NAO’s study, which looked at the physical regeneration programmes completed by England’s eight Regional Development Agencies (RDAs) outside London, said the projects had created new jobs and wealth – with a possible return over the lifetime of the projects of £8 for every £1 spent.

However, the NAO report went on to say it was ‘unable to conclude that the regional wealth benefits actually generated were as much as they could and should have been’, due to weaknesses in project appraisal and consistent evaluation at some sites.

The report by the controller and auditor general – entitled Regenerating the English Regions: Regional Development Agencies’ support to physical regeneration projects – assessed work since 1999.

It examined how priorities were determined, funds were targeted, projects were appraised, outcomes evaluated and lessons learned.

For every pound of RDA spending, an estimated additional £2.80 is secured from other bodies of which £1.51 is from the private sector, the report said.

The document stated that before 2009, RDAs reported to Parliament on the number of gross jobs they had created (413,000), but concluded the number of net additional jobs made by the RDAs in fact provided a sharper picture of their impact on the regional economy.

It said: ‘Attributing jobs that would have happened anyway or which have transferred from elsewhere within the region to the activity of the RDAs does not provide an accurate reflection of their impact on regional growth.

‘An independent evaluation of RDA expenditure suggested the RDAs had helped create 375,000 gross jobs from 2002 to 2007, but that only 178,000 jobs were additional. On this basis the public sector cost of each of the net jobs created so far would be £60,000.’

The report said using the measure of jobs created by the RDAs to estimate generated gross value added, there was evidence that the projects had helped to generate growth.

It added that projects up to 2008 subject to independent evaluation were estimated to have generated gross value added of £3.30 for every £1 spent, with this possibly reaching £8 for every £1 spent over the lifetime of the projects.

However, the report also concluded the success of individual projects varied and RDAs were unable to demonstrate they had consistently chosen the right projects ‘to maximise growth and value for money’.


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