North projects look likely to be turned down for funding

DOZENS of North regeneration projects will go unfunded as figures reveal the region has asked for £339m from the Government's vastly oversubscribed growth fund.

DOZENS of North regeneration projects will go unfunded as figures reveal the region has asked for £339m from the Government's vastly oversubscribed growth fund.

Ministers have hailed the regional growth fund as the key to keeping the economy going after business secretary Vince Cable decided to scrap development agencies such as One North East.

But with just £250m available across England it is likely Dr Cable will have to turn down many projects which would have created thousands of jobs.

Last night critics said the figures showed how the demise of the regional leadership provided by One North East had made it more difficult to fund important projects.

Details of which of the region’s 69 bids have been successful are expected next week. While bids such as two linked to the offshore industry on the banks of the River Tyne are thought to stand a good chance, many other groups are still waiting for an indication of their likely success.

This includes Newcastle and Gateshead Council’s city development company 1NG, which put in bids worth around £50m, 20% of the nationwide fund, including a request for £40m to build a new conference centre adjacent to the Sage Gateshead.

The £338m requested by businesses and councils in the North East, including a bid connected to Nissan, is the second highest in England. The North West wants more than £500m.

The area covered by the North East local enterprise partnership, taking in businesses and councils from Durham to Northumberland, put in requests for £203m. In the Tees Valley bids worth £136m were submitted.

Last night Newcastle Central MP Chi Onwurah said the figures undermined the Government’s claim the growth fund was an adequate substitute for the soon-to-be-abolished development agencies.

The shadow business minister said: “We know from the economic figures there is a big need for this level of investment in the region, and that these projects would go a long way towards rebuilding the regional economy.

“Some of these are projects which were already on the drawing board before the abolition of One North East and will face question marks over their future as a result.

“It is not surprising that we have put in so many applications but there is going to be a huge amount of disappointment for the North East.

“It does seem highly unlikely that we will have the chance to push ahead with many of the bids.”

Some 464 bids have gone in nationally, asking for £2.78bn. The North East Chamber of Commerce has agreed with the caution but insisted it is not the only way for the region to succeed.

Ross Smith, head of policy, said: “The first thing to say is that the fund was set up to help business in regions where there is a need to grow the private sector so we would hope to see the funding decisions reflect that aim.

“It is right hat there will be a fair few disappointed teams, but hopefully the decision made will help us be more focused on future bids.

“And it is worthwhile saying that the examples of Hitachi and SSI show that this fund is not the only way for this region to succeed.”

A spokesman for the Department for Business said the first round of the regional growth fund is likely to exceed the initial £250m target.

Eventually the fund will hand out some £1.4bn and bidders who fail in the first round will not be ruled out of bidding in the next two rounds.

 

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