One North East axes projects to meet £50m budget cut

Oct 21 2009 by Peter McCusker, The Journal

REGIONAL development agency One North East is axing a number of projects to meet a budget cut of nearly £50m.

The agency has cut 40 jobs in the last year through natural wastage and voluntary redundancies, reducing its workforce to around 400.

It has seen its budget for the 2010/2011 financial year cut to £195m from the £249m it will spend in the current year.

The main casualty next year will be the City Region and rural programmes which are set to lose £28m for regeneration.

The Journal reported last year how the Government had decided to take this money from ONE to subsidise social housing schemes in the South.

Other areas of the agency’s work which are now set to suffer are tourism, culture and skills, which will lose around £8m between them.

Speaking yesterday, One North East chief executive Alan Clarke said: “Like all other parts of the public sector, we have been asked to find efficiencies and to do more with less. We are not specifically proposing any further cuts in our staff as a result of the budget reduction.

“We expect to be able to achieve the efficiency savings we have to make by not filling some vacancies within the agency.”

Support to North East business is also being cut by over £11m, but this will be partially compensated by the launch of the new Jeremie scheme, which will provide £125m of support to more than 850 businesses over the next five years.

A One North East spokesman said the cuts in the City Region and rural programmes will not affect its major projects like Science City in Newcastle and Middlehaven, on Teesside.

Andrew Sugden, director of membership and policy at the North East Chamber of Commerce, said: “We are very supportive of the work which has been done by the regional development agency and we would hate to see that affected by the salami slicing of its budget.

“There are some key public sector-led regeneration programmes in the pipeline and we would hate to see these compromised. Our fears are for those long-term regeneration programmes which rely on key public sector support.”

The agency said the £195m to be spent in the next financial year is already £10m light after it had borrowed £10m from next year’s budget to support North East businesses during the recession.

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