Budget signals the end of One North East

THE final blow has been dealt to the regeneration agency responsible for creating thousands of jobs in the North East.

One North East
One North East

THE final blow has been dealt to the regeneration agency responsible for creating thousands of jobs in the North East.

Development chiefs at the soon-to-be-abolished One North East have been handed a final budget worth just £61m – the basic amount needed to cover their bills and legal commitments.

There is now little hope of the region ever receiving a dedicated jobs fund again under the current government.

Agency officials were expecting the 73% reduction, but insist it could still rise to up to £90m with the sale of assets. Ever since Communities Secretary Eric Pickles legislated to abolish England’s development agencies earlier this year the North East has been told to look to the new regional growth fund for help.

But this fund, critics claim, is spread out across the UK and worth significantly less than the combined budgets of the various development agencies.

No new projects are likely to get the go-ahead, with the Treasury still to decide if it will even allow the agency to hand over cash for some existing schemes.

In September the agency made warnings of job losses as it announced £33m worth of in-year cuts. Further bad news will be passed on to the North East when the funding blow is finalised in March.

A spokesman for the agency said: “We have received our indicative budget settlement figure which we will take in a report to the next meeting of our board in January. With the value of receipts from our assets, the size of the final figure could be between £80m and £90m which we are confident will help us fulfil our legal commitments.”

As part of the strict winding-down settlement the agency has also being banned from promotional spending, meaning its successful tourism campaign Passionate People, Passionate Places, had to be scrapped last summer.

In a written parliamentary answer Business Minister Mark Prisk confirmed the “indicative” settlements.

He added: “Subject to the passage of the Public Bodies Bill, the Regional Development Agencies outside London are expected to close by March 31, 2012.

“No allocations are being made to them after that date.”

Last night former Newcastle Council leader Jeremy Beecham admitted the cash loss was “a sign of the times”.

Lord Beecham has tabled an amendment to legislation that would otherwise allow ministers to scrap the agency and a range of other quangos.

He said: “They are clearly in the business of burying One North East and this is the final nail in the coffin. We still have not heard anything about its assets and if the North East will retain some of these to the benefits of its economy.”

 

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