City transport may go to pot

Dec 29 2008 by Adrian Pearson, The Journal

REGENERATION bosses have been told they could solve the region’s transport problems by pooling resources and setting up a huge funding pot.

City leaders in Newcastle have called for a dedicated cash source which will fill in funding gaps holding back major projects such as the much-needed improvements to the Western bypass.

It is one of a number of city schemes being looked at as a way of increasing funds available during the economic downturn, although staff at cash- strapped development agency One North East are unlikely to support the spending plans.

Another more likely option is for councils to be allowed to borrow against future earnings in the same way businesses borrow money from banks based on how well they are expected to perform.

Council bosses are desperate to find new ways of attracting cash into city centre developments and many think the Government should change borrowing rules and let councils act much as businesses do.

Newcastle Council leader John Shipley has ordered his treasury department to look at all options as they seek to reduce a £20m blackhole, the largest cash problem in the city’s history.

Last night Mr Shipley said: “Borrowing money we know we can pay back when the economy improves is an eminently sensible scheme that will free up money to invest in Newcastle.

“This money would give us the chance to make the city an even better place to do business by investing in the infrastructure work we know we need to look at.”

Newcastle Council is part of a group known as the Core Cities which brings together eight leading authorities across England.

They are looking at plans to bring together cash from a variety of public bodies to form the Regional Infrastructure Fund (RIF).

Once established the pot could open the way for millions of pounds more from a dedicated European city funding project.

In a sense the RIF pot would allow regeneration chiefs to act as bankers, paying up front for the cost of city centre developments and allow the North the chance to spend its way out of a recession.