Whitehall officials have been accused of trying to delay £760m of North East investment in a bid to find ‘election ready only’ spending projects.
Businesses and council leaders have jointly submitted a plan for growth as the region looks for a share of the Government’s £10bn local growth fund.
But after months spent compiling a wish list of jobs projects, including new railway lines and regeneration sites, ministers have now tried to force local enterprise partnerships to pick just a few priority schemes.
Cities minister Greg Clark has been told he risks setting back long term economic growth, with the leader of Newcastle Council Nick Forbes among those suggesting the move looks like an attempt to find an election boost.
If the Government insists on only funding schemes which are almost ready to go it would hand itself a list of ‘shovel ready’ projects that prioritise ministerial photo opportunities, city leaders have said.
Mr Forbes was among those who challenged the Government over its cash policy at a meeting with Mr Clark.
He said: “I raised the concerns when I met with Greg Clark last week. The Government haven’t just set a virtually impossible timetable for bids to the Local Growth Fund, they’ve changed the goalposts several times.
“Asking us, at the last minute, to prioritise schemes that are ‘shovel ready’ implies they are more concerned with projects that can be announced in the run-up to the election rather than those in the longer term interest of the region.”
The North East local enterprise partnership has refused to go along with the Government request, saying that it is wrong of the Government to ask businesses to spend months putting together a list of projects only to then change the criteria and ask for a new list with no clear indication as to how projects will be judged.
The region’s strategic economic plan will for now remain unchanged. Under the partnership’s preferred option, the Government would put £70m into a North East pot and let the region get on with building roads and clearing space for new firms. It would add to other cash for a North East Development and Investment Fund, handing the region £245m over five years to major developments.
If successful, the partnership says the overall plan could pave the way for an 11% increase in employment by 2024, suggesting some 10,000 jobs a year could be created.
Some £23m of local transport improvements are requested, including addressing traffic issues on the A185 and A19, work on the Lindisfarne Roundabout in South Tyneside and a Central Station Metro refurbishment.
Another £25m is asked for to pay for projects such as improvements to the A1 Scotswood Bridgehead, more work on the A19 near the Silverlink junction in North Tyneside and new funds to clear the way for roadworks behind Newcastle’s Central Station.
From 2016 onwards another £125m of funding is requested to help pay for the likes of a reopened Ashington, Blyth and Tyne railway, a new relief road for Durham City Centre, a link road for Newcastle Airport and Gateshead Town Centre regeneration.
Source – Newcastle Journal 12 May 2014
he Chancellor has been told his Budget today must address the North East’s unemployment record.
Businesses, house builders and unions have said the Government needs to start growing all parts of the UK economy, not just the South, and urged George Osborne to use his Budget to tackle the number of people out of work in the region.
At 10%, the region’s unemployment rate stands as the highest in the UK, remaining around that level even as unemployment falls in large parts of the rest of the country.
The North East Chamber of Commerce has already written to the Treasury calling for a renewed focus on tackling job creation in all parts of the UK.
Policy director Ross Smith said: “We have seen the recovery really accelerate over the past year. We now need to see measures that will sustain this for the longer term and make it better balanced – not a series of pre-election gimmicks.
“North East businesses are making a huge contribution to that recovery, but doing so within an economic system that is still skewed towards the South East. We need to see measures that will capitalise on the region’s export success, energy expertise and capacity for growth.
“That includes taking better account of the regional implications of taxes such as fuel duty and air passenger duty, better balanced delivery of infrastructure, and greater scope to ensure skills training matches the labour market needs in this region.”
The need for a regional focus was repeated by Beth Farhat, regional secretary of the Northern TUC.
She said: “Most people in the North East aren’t experiencing a real recovery and in fact for many here it’s getting worse, with unemployment for women rising 20% in the last year alone.
“We need a Budget focused on creating more North East jobs, with better quality work alongside with fairer pay. Ministers should end their ideologically obsession with cuts and privatisations to public services and focus much more on a thought-out approach to developing the economy, particularly in regions like ours.
“When eight out of 10 private sector jobs are being created in London it’s clear the current plan isn’t working and the economy is still geared towards London and the South East at the expense of everywhere else.
“There is a consensus across the region about what we need to do, so I’d urge the Chancellor to hand us the economic tools, powers and investment needed to enable us to contribute to regional success and balanced national growth.”
Newcastle Council leader Nick Forbes said house building was a key way of kickstarting the North East. He said: “What we need is a tax break to incentivise house building on brownfield development sites – this would help deal with the chronic shortage of housing and make it financially viable for construction companies to take on more apprenticeships.
> Would it ? Or are we just talking about more housing that the majority of us couldn’t afford even if we are working ?
“The Government has announced their intention on building a New Town at Ebbsfleet, but a tax break like this would help us rebuild areas like Scotswood and Walker Old Towns.”
And the North East-based Home Group has also had its say, calling on the Government to force through better use of public land, making it easier for firms to build.
The affordable housing group called for the creation of special Housing Zones in which, like the business-led enterprise zones, incentives would be offered to kick start the building process.
Source – Newcastle Journal, 19 March 2014