Government claws back cash from One North East

Jun 30 2010 by William Green and Adrian Pearson, The Journal

THE coalition Government was last night accused of dealing the North East economy a double blow by clawing back regeneration cash and snatching powers from the region.

Regional decision-makers have been told they may preserve an economic voice as asked for but that it will have much less influence.

The changes come as the Department for Businesses asks development agency One North East to hand back more than £32m earmarked for vital business support and confirmed plans to close it within two years.

The head of the development agency last night appeared to suggest already committed job schemes in the region would have to be reviewed and possibly scrapped as a result of the cuts.

Business Secretary Vince Cable and Communities Secretary Eric Pickles have written to council and business chiefs about how they plan to boost regional growth. Legislation will be unveiled in the autumn to axe regional development agencies – including One North East – and replace them with local enterprise partnerships (LEPs).

In the run-up to the General Election The Journal launched its Case for the North East to convince national decision makers of the need to preserve the strong regional voice seen as essential to maintaining a growing local economy.

Those concerns appeared to have been met head on in a promise from central government to allow the enterprise partnership to cover the entire North East.

But last night it was claimed the changes would mean there was no regional body strong enough to attract inward investment such as wind turbine manufacturers to the North East.

It is feared the Government will centralise these efforts in London, where it will be up to Whitehall civil servants will pick the best location for new investment. Business leaders have urged the Government not to damage the North East economy as the regional shake-up continues.

Andrew Sugden, North East Chamber of Commerce (NECC) director of membership and policy, said: “The message the Government has been putting out is that the private sector needs to take a leadership role.

“On first reading of this decision, to put a number of key functions at a national level against what the private sector in the North East wants is disappointing. We hope they will be true to their word by genuinely listening to the responses they get back and not pre-judge this decision.”