Labour's Jeremy Beecham says Vince Cable 'should be ashamed' of £320m RGF cash

Peer says Coalition has failed North East as region still has highest unemployment rate, but Lib Dems brand his analysis 'selective'

Business Secretary Vince Cable
Business Secretary Vince Cable

The Coalition stands accused of failing to invest in the North East as figures reveal funds for economic development have been stripped back since 2010.

The Regional Growth Fund (RGF), set up when the Regional Development Agency One North East was scrapped, has seen 94 awards handed out to business-led projects in the North East worth a total of £320m.

But Labour peer Jeremy Beecham said One North East enjoyed Government support three times higher throughout his party’s time in power.

In 2009-10, just before the RDA was scrapped, the RDA was handed a budget of £340m, and the year before ONE had around £217m.

Jeremy Beecham, Labour peer and former leader of Newcastle City Council, said: “This Government has sold the region with the highest unemployment in the country short.

“Vince Cable, the Lib Dem Business Secretary, should be ashamed of his part in the abolition of ONE and the cut in desperately-needed funding.”

But Coalition politicians insist the region has seen significant economic development cash via the Local Enterprise Partnerships and highlight how Newcastle is one of the fastest growing cities in the country.

Sir Jeremy Beecham at Newcastle Civic Centre
Sir Jeremy Beecham at Newcastle Civic Centre

A Lib Dem spokesman said: “Our view is that the key issue for economic development is maximising bang for the buck. Whereas ONE did have a higher spend, it had a much higher spend on overheads, staff salaries, and consultancy whereas the RGF is having much greater impact investing directly in job creation in manufacturing, rebalancing the North East economy and creating a resurgence in exporting as shown by the recent trade figures.

“Any assessment of economic development investment also needs to take into account direct Government funding for LEPs, Enterprise Zones, and transport infrastructure in the North East.

“Taken as a whole, rather than Lord Beecham’s selective comparison using only RGF, we are confident that the North East has seen extensive investment in economic development and greater job creation than Labour and ONE managed between 2005 and 2010, when net employment in the region fell considerably.”

A Conservative Party spokesman said: “Since 2010, we have been tackling the economic mess left behind by Labour’s Great Recession. Some of those problems were caused by the likes of Regional Development Agencies, which delivered extremely poor value for money from their inflated taxpayer-funded budgets. They were distant and remote from local business and had boards packed with ‘quangocrats’ and trade unions, rather than entrepreneurs.

“However, the Conservative-led Government is supporting local businesses and enterprises, helping them to expand and create long-term skilled jobs. As a result, total funding to the North East from the Regional Growth Fund is at £320m attracting £2.1bn of private investment and projecting to support 84,000 jobs and will help local firms fulfil their ambitions for growth and boost jobs and prosperity.”

Nick Brown MP
Nick Brown MP

Nick Brown, former regional minister and Labour MP for Newcastle East, said the RDA was expensive to scrap, and added: “I’m sure that Jeremy Beecham is right in highlighting this issue.

“The present government has let the North East down. They are spending a third of the monies on economic development compared to the amount spent by previous Labour Government.

“It is crucial to strengthen growth and deepen the private sector economy in the North East of England, and they are just not making sufficient effort.

“The new Local Enterprise Partnership structures are confusing and deprive us of European Commission funding and are ineffective when compared to the scale of the problem.”

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