MINISTERS have demanded North East councils hand over millions of pounds now if they want to save key regeneration projects from a fire sale.
City leaders had been hoping they could take over ownership of sites – such as possible expansion land for Blyth’s world-leading renewable energy centre – with a final purchase much later as they struggle to cope with funding cuts and growing redundancy bills.
They want to safeguard 12 job-creating projects put at risk when the Government decided to scrap development agency One North East.
But instead of delayed payments over the next few years, Vince Cable’s Department for Business has insisted it needs the money now, and will only allow the assets to be handed over for cash up front.
The move could mean councils have to say goodbye to key assets which would let them build up city economies.
It is believed the Treasury eventually intervened to prevent the staggered sale.
Newcastle North MP Chi Onwurah said the result would mean both the region and Treasury lose out.
The shadow business minister said: “We are being dealt the worst possible hand here. A quick fire sale of assets held for the good of the region will see only the private sector buyers win.
“The Treasury will lose out because a quick sale means it will have to accept a lower offer, rather than holding the site and waiting for the market to grow.
“And of course we lose out because we as a region will not have a say in how best to use our assets.
“(Communities Secretary) Eric Pickles told the Commons yesterday he believes the budget is an example of his localism policy. But how can he say that when the views of the region are just being ignored?”
In the end the total number lost to the region could increase, as many assets had a back-up plan built into them in which councils could buy on deferred payment if no private sector buyer was found.
The full list includes land at Berwick’s Spittal, as well as possible deferred payment sites such as Westgate House in Newcastle and a possible hotel development next to Durham’s cricket ground.
A spokeswoman for the Department for Business said: “Business, Innovation and Skills, as the accountable department, held discussions with HM Treasury and the Department for Communities and Local Government on whether such an approach might be feasible within the requirements of managing public money and the rules governing local authority finance.
“It was concluded, however, that within the constraints imposed by the current fiscal climate it is not feasible for local authorities to delay payment for assets.
“Local authorities are able to purchase assets at the market value, and other options to allow local authorities to be involved with these assets are being considered.”
It is thought a separate bid to have empty land and offices saved for the region has also failed.
