It is not unusual for politicians of opposing parties to disagree. It would be strange if they did not. However, in the case of regional development agencies (RDAs), a Tory/Labour dispute represents a significant divide in opinion on whether the public bodies that are charged with overseeing regional regeneration in England are actually any good. Ten years ago nine RDAs were set up as a flagship new Labour project to support the regeneration of their areas and receive about £2.2 billion a year to deliver housing, transport and jobs.

In September this year Eric Pickles, the shadow communities secretary, described RDAs as a terrible waste of money; in October Lord Mandelson, the Business Secretary, hailed RDAs as crucial. In Yorkshire they are credited with making planning more coherent; in the Midlands council leaders attack them as lacking in accountability. The website for RDAs in England boasts that “since 2002, the agencies have created or saved 500,000 jobs, created over 56,000 new businesses and brought over 5,600 hectares of brownfield land to life.”

Who is right? This month a report argues that RDAs are useful, but that their funds are not all being spent in the right places, which means that they are not delivering on reducing the gap in economic growth rates among England's regions and promoting growth in all areas. A radical rethink is needed, according to the Centre for Cities, a think-tank that tries to solve the problems facing Britain’s urban areas.

Not every area needs an RDA, The Future of Regional Development Agencies states, arguing that the money could be better spent by concentrating investment in certain areas only, primarily in the North. This is because economic development is, by and large, far healthier in the South East. Across the South East region, the economy generated £22,657 a head in 2006 – £6,000 more than in the rest of England.

Replacing the three northern RDAs with a single development agency for the North of England would build better links between Greater Manchester and Leeds, the two biggest city regions, while cities such as Liverpool and Sunderland would benefit from being part of a unified northern “brand”, it says. This single agency would be able to take on more powers while the new Homes and Communities Agency, the national regeneration body, would be able to take the lead in the South East.

Lastly, the Government should abandon its “confusing” economic performance target and stop obsessing about the rest of England catching up with the South East. Instead, it should set clear targets for creating jobs in the Midlands and the North, the report concludes.

Dermot Finch, the director of the Centre for Cities, said: “There is great uncertainty about the future of RDAs. The Government says they are all crucial, but the Tories say they are terrible. The truth is somewhere in between. RDAs are needed more up north, less in the South East.

“We will not need an RDA in every English region for the next ten years. RDAs should be streamlined and focused on boosting growth in lagging areas.”

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