Ed Miliband is facing a damaging revolt by North-East Labour MPs who believe his economic rescue plans for the region are feeble and doomed to fail.
Senior MPs argue a ‘growth review’ – led by Lord Adonis, the former transport secretary – will repeat the Coalition’s blunders and fail to deliver the power and money badly needed.
They are urging Mr Miliband to bring back a slimmed-down development agency and, crucially, install a powerful figure in Government to “drive forward” key North-East revival projects.
But they also fear their pleas are being ignored by the Labour leader’s top team – condemned as a “Corpus Christi Oxbridge crowd” by Nick Brown, the former ‘Minister for the North-East’.
Mr Brown, the Newcastle East MP, said: “It will end up with the councils simply asking for money for specific projects – and that’s the worst possible position to be in.
“What’s needed is a development agency that can identify specific projects and drive them forward, working with a figure in the government with specific responsibility for that.”
Mr Brown said his concerns were shared by the majority of North-East Labour MPs, but added: “I’m not convinced our message is being listened to at the top level of the party.”
The criticism was echoed by Kevan Jones, the North Durham MP, who said: “The Adonis review lacks vision and ambition.
“The problem is that it is all about structures, when we need direct action and a minister at a senior level. We can’t expect councillors to pick it up, when their budgets are being squeezed as well.”
The revolt follows Mr Miliband’s acceptance, in April, of Lord Adonis’ draft growth report, with a final set of proposals due to follow next month.
The blueprint adopts the Coalition’s strategy of devolution to ‘combined’ authorities – such as the one covering Durham, Tyne and Wear and Northumberland – and poorly-funded local enterprise partnerships (LEPs).
The pill was sweetened by a pledge to devolve twice as much cash – £4bn a year – as well as extra responsibilities for welfare, apprentices and housebuilding, but not over inward investment.
Mr Brown said the key weakness was that the structure lacked a focus on economic development, as well as an ability to ensure key projects go ahead.
Recently, the outgoing head of the North-East LEP warned it had just six core staff yet it had responsibility for six, mainly £100m-plus projects.
Similarly, the Tees Valley LEP has warned it may have to abandon economic growth initiatives, because funds are not available.
Mr Brown said: “The means has become the ends. We have got the structures, but it is not delivering for the region – and nor is it likely to.
“If Labour simply picks up from where we are with the existing structures, we will continue to see the poor outcomes for our region that we currently see.”
He said he was not arguing for reviving the One North-East development agency, but a smaller body, chaired by a minister, “so the civil service takes it seriously”.
Mr Miliband has promised to bring back regional ministers – axed by David Cameron in 2010 – after MPs and councils protested they had nowhere to go, to raise crucial issues.
However, Mr Miliband’s office rejected the criticism, insisting there were significant differences with the Coalition’s approach.
A spokesman said: “The key difference is that Andrew Adonis is looking at devolving significant cash and economic powers. This would mean people don’t have to beg ministers for cash – as they have to now.”
Source – Northern Echo, 17 June 2014
The economic development agency responsible for backing 40,000 businesses across the North East has been criticised for not having a chief executive three months after its previous leader announced he was leaving.
The lack of leadership at the North East Local Enterprise Partnership (LEP) means it is “barely functional”, an MP has claimed.
City of Durham MP Roberta Blackman-Woods told the Commons that the failure of the LEP was undermining efforts to bring more jobs to the region, though it last night insisted it was working hard to create more and better jobs.
The agency has not begun considering candidates to replace Edward Twiddy, a former deputy director at the Treasury who became the LEP’s chief executive but announced in mid-April that he was quitting in order to join a new digital bank.
The LEP is currently overseen by Helen Golightly, the chief operating officer, and chairman Paul Woolston, a former senior partner at PwC North East.
Along with neighbouring LEP Tees Valley Unlimited, the North East LEP was set up by the Coalition government to replace the regional development agency.
Ministers said the new organisations would be more local and led by businesses, allowing them to help the local economy.
But Labour MPs such as Mrs Blackman-Woods opposed the abolition of the regional development agency, and warn that the new bodies lack resources.
Speaking in the House of Commons, she also criticised a flagship Government scheme called the Regional Growth Fund, which provides grants to businesses. Up to £109m in funding allocated to the North East has not yet been handed over to firms,
The last Labour Government had encouraged firms such as Hitatchi to invest in the region, she said, adding: “There is a real contrast between all that under Labour and having a local enterprise partnership in the area that is barely functional – it does not have a chief executive or even a deputy chief executive at the moment – and a regional growth fund that operates a scattergun approach.
“Most of the money allocated to the region is not drawn down in any case. According to a recent report by the National Audit Office, most of the funds remains unspent, while the cost of creating jobs has increased considerably, but Ministers are taking no action to tackle this set of concerns.”
LEP chair Paul Woolston said: “Creating more and better jobs for the North East remains our top priority. We have set some ambitious targets and are working hard to achieve these.”
He added: “Through our North East Investment Fund we have provided around £38m loan funding to projects across the North East with an additional £30m of funding anticipated in the next year.
“We were chosen to develop one of three skills pilots in the country which will implement a new skills funding model, and we are currently recruiting for innovation board members to help establish the North East as an exemplar in smart specialisation and open innovation.
“Whilst we are in the process of recruiting for a new chief executive, following the departure of Edward Twiddy last month, our chief operating officer Helen Golightly is providing strong leadership, working closely with board members and partners to drive forward our plans for economic growth.
“We recognise there is still a lot to do, but we are on the right track and I am confident that we will succeed.”
Source – Newcastle Journal, 12 June 2013