Anger over George Osborne's promise of £22.5m for North East rural businesses

The Northern Landowners and Farmers Group has called for an update on £22.5m funding for the Rural Growth Network, announced by the Chancellor in July

Martin Rickett/PA Wire Chancellor of the Exchequer George Osborne
Chancellor of the Exchequer George Osborne

Business leaders have hit out after multi-million pound support for rural companies announced in a high profile visit to the North East by Chancellor George Osborne failed to materialise.

The lack of progress on the £22.5m Rural Growth Network has angered the Northern Landowners and Farmers Group (NLFG).

The promise of more cash was made by the Chancellor on an unannounced visit to Berwick in July that prompted protests from political opponents.

With the Tories targeting Berwick as a key marginal and one of the few seats it could gain in the North, Liberal Democrats and Labour members accused the Chancellor “electioneering” with the multi-million pledge.

Now Angus Collingwood-Cameron, of NFLG, has accused the Government of false promises which are harming the North East rural economy.

Mr Collingwood-Cameron said: “Announcing funding several times over is hardly a new political trick, but announcing it and then saying nothing for four months is a novel approach that is harming the rural economy.

“It was back in the summer that George Osborne visited Berwick and announced additional substantial funding for the Rural Growth Network approach to regenerating the rural economy.

“This was piloted here in the North East and has been a great success, particularly in providing flexible workspace for rural businesses. We were looking forward to a Defra announcement on the details of the funding in early August, but we have still heard nothing.”

The new Rural Growth Network was piloted in the North East with funding of £3.2m. Two initial growth hubs were opened in Alnwick and Wooler.

Mr Osborne’s summer announcement detailed extra cash available over five years from 2015 - aimed at developing workspaces, including refurbishing existing buildings, bringing redundant buildings back into use, and new developments.

The tranche is made up of £6m Government funding, private sector investment of £9.5m and £7m of European funding.

Ray Browning, the North East Rural Growth Network programme manager, confirmed to The Journal he was awaiting a decision from the North East Local Enterprise Partnership (LEP) on the funds, which are to be delivered through the Local Growth Funding allocation.

A spokesperson for the North East LEP said: “Following the announcement in July, all of the identified 22 projects that are part of the North East growth deal (including the RGN project) require the applicants to formally provide a full business case to the LEP. These are then required to go through due diligence on the project before the public funding is formally allocated by Government.

“Since the announcement we have been working with partners to support them through this process. At present the RGN, alongside other projects, is being technically appraised and a formal decision is due by the end of the month.

“This decision will be conditional as the formal allocation of funding has not yet been received from Government - we are not expecting this to be received before mid - December.”

Mr Collingwood-Cameron added: “In parts of the region, there is no work space available in rural areas and there is significant demand. There are projects ready to go, but they have been put on ice as people do not know how far they can proceed before they risk jeopardising their eligibility for grant funding.

“All that I am asking is that Defra provides some clarity on the situation, so that people can decide whether or not to convert buildings to provide work space, rather than being in limbo. The ‘jam tomorrow’ approach is helping no-one.”

The Journal contacted both Defra and the Treasury for comment, but was directed in both cases to the North East LEP.

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer