REGIONAL development agencies which lavished £220m a year in funding on the North East will be confined to the history books if Labour win the next election, a party official has disclosed.
Shadow chief secretary to the treasury Rachel Reeves said they had no intention of re-introducing the system as enough “upheaval” had been done to the North East’s economy.
Instead Labour say they would continue to work with local enterprise partnerships (LEPs) introduced in their place in 2011 by the Coalition Government.
Her announcement comes as she reveals her party’s vision for the North East economy with hopes for a new British Investment Bank to help the region’s businesses, a North East specific industrial policy and a greater emphasis on vocational training.
The shadow minister said: “We have already had one upheaval in terms of regional architecture so we wouldn’t come in and rip up Local Enterprise Partnerships and bring back the regional development agencies.
“We need to get on with making sure they deliver the changes that they need to.”
However she said she was keen to see the LEPs, which have been criticised for having less influence and a smaller budget than their predecessor, imbedded with greater strengths to set their own agenda.
“Whitehall is never going to make the best decision for the North East, or Manchester, Liverpool or Cumbria,” she added.
The North East’s Regional Development Agency One North East was one of eight organisations set up in 1999 by the Labour Government across the country and had a £200m budget to help the region’s industry and economy.
The Coalition Government replaced them in 2010 with 39 scaled-back enterprise partnerships made up of members of businesses and local authorities to set the region’s economic policies.
Speaking at a major conference on how to boost the Northern economy in Leeds, Ms Reeves said One North East had done a huge amount to deliver jobs but that ability ‘had been taken away’ by Local Enterprise Partnerships.
Under Labour’s policy One Nation Economy, she believes the North East should be given greater support by central Government as startling figures show people claiming Job Seekers Allowance for more than 12 months in the region has risen by 123%.
She said: “We can’t rely on just one sector in one part of the country for growth, trade and tax revenues.
“If you build a One Nation economy you need to make sure every part in the country plays their part in developing prosperity.”
Moving economic growth away from London and the South will require a British Investment Bank to deliver long- term finance to the region’s hi-tech manufacturing and energy businesses, she argues. “Those industries are being starved of cash because banks are refusing to lend. There is a severe absence of long-term funding.”
“A proper industrial policy working with communities in the North so we can make the most of our regional strengths is also key.
“Part of this will also be a revolution in vocational education to make sure people leaving school have the qualifications businesses need.
“The reality is we have a huge potential in our economy but it doesn’t all rely on a university education.”