Regional development agencies (RDAs) in the south of England are to suffer the biggest cuts from central government, business secretary Vince Cable said today.

Speaking in Yorkshire this afternoon, Cable said the south east, south west and London did not need RDAs to assist with economic growth, warning that “big cuts will come”, and so-called Local Enterprise Partnerships between councils and local businesses would replace ineffective RDAs.

Cable, who was speaking alongside prime minister David Cameron on how the new coalition planned to rebalance the UK economy, said northern RDAs would remain largely intact, but pledged to review and reform the model.

He said: “Where RDAs work well and deliver, they will continue as they are at present. We’ve made it very that this is the case in the north east, north west, Yorkshire and Humber, and the Midlands. They are very popular and work well.”

RDAs have been asked to find savings of £270m in the current financial year, meaning they are being forced to delay and renegotiate contracts that have already been signed-off, as reported by Public Property UK yesterday.

In his first major speech since becoming prime minister, David Cameron said reforming RDAs would be an “early task” for the new government. He said: “An early task will be to reform and refocus regional support and the RDAs. And Yorkshire is a priority.”

Cameron also reinforced his pledge to devolve more power to councils and the private sector. He said: “Regeneration only works through public-private, central-local partnerships – the coming together of business, government and councils.

“I will be assigning ministers and senior MPs to some of our biggest cities, with responsibility to work with local communities to help drive forward economic development by making sure blockages in Whitehall are dealt with.

“We will give our biggest cities the opportunity to elect executive mayors, powerful local politicians who know the area, who have real clout to drive projects through. And we will give much more power to local councils.

“A new general power of competence will make it easier for them to set up banks, develop property, run new services and own assets. And we’ll also give them the power to get together with local businesses to form their own local enterprise partnerships, to create the right environment for business investment and chart their economic future.”

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