Editor’s blog: funding under threat

Fears that Convergence match funding in Cornwall could be under threat are refusing to go away.

Speaking yesterday, South West RDA (SWRDA) chief executive Jane Henderson could offer me no guarantees in the wake of the English RDAs being called to cut £270 million from its budgets this year, under Government spending cuts.

Most of public match funding for the £567M European funded Convergence scheme comes from RDA. But if it’s not matched, it’s lost and goes back to Brussels.

“It’s quite a Substantial commitment from our budget,” Henderson told me, “simply because of the size of the ERDF programme. We’ve registered this point with the Government as one of considerable concern, and I know it’s concerning Cornwall Council as well.

“We need to make sure match funding is protected so we don’t end up sending European money to Brussels.”

Just to what extent SWRDA will be forced to slash its budgets this year remain unclear. Taking an average, it would mean a figure in the region of £23M. However, there are fears that this could balloon following Business Minister Vince Cable’s recent comments that RDAs in the north and midlands should be spared the brunt of the cuts.

Henderson said that Cable had spoken “very clearly” and conceded that SWRDA could face a bigger cut than average. A fact she clearly is not happy about.

“Does it mean that Vince Cable thinks we’re less dependent on the public sector than northern regions? The figures actually tell a slightly different story. If you look at the proportion of public sector employment in the region, which Vince Cable sees as a sign of weakness in the economy, then we’re not that far behind west midlands. We’re not as strong in our private sector employment as we would need to be if we are to come out of this recession and recover well.”

And she highlighted a classic anomaly with the south west as a single region. “The south west is very diverse,” she said. “It has successful areas like Swindon and Bristol, and then poorer areas like Torbay and Cornwall. You can’t just lump the region together and say it’s doing ok. You need to look at some of the disparities.”

Henderson was unable to say which specific RDA-funded projects could be under threat, but stressed she remained “very much focussed on the economy of the future”.

It is the second significant cost-cutting exercise SWRDA has been asked to carry out in a short time. Last year, the Labour Government demanded it cut £56M from its budgets, which carries forward to this year as well.

The precise extent of the cuts SWRDA will be forced to make should become clearer after the Budget on June 22.