Investing back into the North East

CITY leaders responsible for budgets worth £400m a year have backed The Journal’s think first campaign as they promised to do all they can to invest cash back into the region.

Coun Peter Allen of Newcastle City Council

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CITY leaders responsible for budgets worth £400m a year have backed The Journal’s think first campaign as they promised to do all they can to invest cash back into the region.

Newcastle council is calling on other authorities to follow its lead and make a series of subtle changes to spending and planning rules which would see a region-wide jobs boost.

City councillors want to ensure any large contracts awarded by the authority come with a clause insisting businesses invest in trainee and apprenticeships, where possible.

In effect, it would mean any national or regional company awarded millions of pounds in taxpayers’ funds are forced to invest in at least some local staff.

At present Newcastle Council spends just over £200m a year in the region.

Finance chiefs say a few changes to spending and building policies could see this increase dramatically during the downturn.

Peter Allen, the councillor responsible for overseeing council spending, said he wants other authorities to follow his lead and look at how they too can work within strict Government rules to see more cash spent in the North East.

He said: “We are looking at a variety of ways of ensuring we get more investment in the region from companies we deal with. There is a lot that can be done to benefit North East businesses and it is important that when councils go out to procurement they do not inadvertently make the recession even more difficult for local businesses.”

Government procurement rules mean councils cannot show any favouritism, regional or otherwise, when deciding who wins council contracts. But officers can legally change a contract to make it easier for local firms to bid for council cash. For instance, grass cutting contracts can be sold on a smaller scale making it possible for a small firm to bid for a local contract instead of county-wide deals which would often mean only larger national companies stand a realistic chance.

It is these small changes which business leaders say could add millions of pounds to the North East economy.

Officers are also considering using planning rules known as Section 106 agreements to force companies building large developments to put some staff through apprenticeships, a move likely to see more local staff hired.

But some North East councils have backed away from the innovative use of planning laws, warning they could do more harm then good during difficult economic times.

Mike Parker, spokesman for the North East Chamber of Commerce, said that at the very least simple procurement changes and trainee schemes being backed by Newcastle Council were a “win-win situation”.

“Businesses know all about the rules governing public sector procurement but there is nothing to stop councils finding innovative ways of agreeing contracts that benefit the North East.”

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