Regional Development Agencies will have to delay and renegotiate contracts in order to meet the £270m savings demanded by the Treasury, according to the RDA National Secretariat.

Sir Harry Studholme (pictured), chair of the South West Development Agency and spokesman for England’s RDAs, said today that all RDA funding for 2010-2011 projects had already been committed to projects, making delays and renegotiations inevitable.

On Monday, chancellor George Osborne announced £6.2bn of in-year cuts, including £270m of savings on RDA programmes, or 20% of their budget. The chief secretary to the Treasury, David Laws said they would have to cut projects which have “the lowest economic impact.”

Today, Studholme said: “We do not yet know which individual projects and areas of RDA work will be affected, but each RDA is likely to have to find a share of the overall reduction in the next few weeks.  We cannot rule out at this stage looking to delay or scale back on some projects to which we are already committed.”

This will come as another blow for the regeneration sector, following Tuesday’s announcement that funding for existing Homes and Communities Agency programmes would be cut by £230m, with a further £610m of project funding being put on hold.

“Savings will not be easy particularly as we are already six weeks into the current financial year and RDAs will have already committed substantial parts of their budgets.

“We will use all available flexibility to try to meet these cuts – in some cases it may be possible to discuss options with partners, to delay projects or, as a last resort, renegotiate contracts.”

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