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
Alarm bells should sound for the region’s economy as the North East drops behind Wales for average pay.
For the first time in years people in Tyneside, Northumberland and County Durham are taking home a lower average salary than those in Wales.
The drop in pay is proof that the region needs a dedicated economic steering group, argues policy experts from the Trade Union Congress.
“The figures are significant because Wales is better equipped as a region economically. I do worry about the North East with what’s going on in Scotland in that we will be left with no real tools to make the level of difference that we need and that people in this region deserve,” said Neil Foster, policy and campaigns officer for the TUC Northern Region.
Figures from the Office of National Statistics (ONS) show that the North East was the worst paid region in the UK in 2013 with an average salary of £24,084. In London pay is £35,238 a year, and the UK average is £27,017.
Average pay in Wales is just £100 more a year on average at £24,182, however the country has regularly been used as an economic indicator to judge the North East’s progress.
Mr Foster said: “There’s lots of similarities between the North East and Wales so the fact that we have gone behind them should ring alarm bells.
“The fact that we have slipped behind Wales is significant because they have got an assembly with the economic powers to stimulate the economy and provide good quality jobs in the most productive sectors.
“The fact that we don’t have a Regional Development Agency means we should be saying to Whitehall that they must devolve economic powers to our regions. If you are given the tools you can create economic prosperity.”
The TUC said the latest pay figures show a rise on paper, however inflation meant a real terms cut.
The statistics show that in the North East the average wage was £17,430 in the year 2000, rising to £24,084 last year. This 38.1% increase in wages was the slowest percentage increase anywhere in the UK.
In 2000 a North East resident earned £1,418 less than the national average, but by 2013 this had grown to £2,933, demonstrating a cut people’s spending power.
Pay in London has continued to rise faster than almost anywhere in England, however Scotland has risen the fastest with their average annual wage up 46.8% from £18,029 in 2000 to £26, 472 in 2013.
Reintroducing a regional economic governance body is the only way to put the North East back on track, Mr Foster argues.
“I don’t think it’s inevitable the North East has to be the lowest paid region but unless there is change, it will be very difficult to predict with any confidence that things will be getting better soon,” he said.
Earlier this week TUC Northern Secretary Beth Farhat said ONS figures also revealed a worrying trend for women in the North East as there has been a 20% rise in female unemployment in the last 12 months – from 49,000 up to 59,000.
Source – Newcastle Journal, 28 Feb 2014