Member Article

North East Regional Growth funding at risk

The Government is putting £125 million in North East Regional Growth Funding at risk by failing to allocate the money which could provide a much needed economic boost to the region.

No mechanism to share out the funds has been put into place, and European Commissioners are now raising concerns that this could jeopardise the much-needed financial support. This funding would previously have been allocated by One North East, which is set to close in March.

Across England, a total of £1 billion has yet to be allocated

The Labour shadow minister for Further Education, Skills & Regional Growth Gordon Marsden MP has criticised the “shambolic and chaotic” way the government disbanded the regional development agencies, and is now calling on them to take fast action.

“It beggars belief that when the North East is crying out for cash and investment to boost jobs and growth, this Government’s actions is putting £125m of potential funding at risk, and over £1billion across England,” Mr Marsden commented.

“There are real concerns that if the Government drags its feet longer, the money could be clawed back centrally by the Treasury.”

He also accused the government of “dithering and delaying”, which is having a damaging effect on UK businesses in need of a cash injection.

The North East Labour MEP Stephen Hughes echoed his sentiments, calling the government’s decision to axe One North East “short-sighted and reckless”

He added: “This funding from the Europe Union is vital for the North East and I amazed that the government doesn’t seem to have any real plan on how to access it or how to use it to help the North East economy.

Under the EU regional development fund 2007-13, the UK was allocated £2.97 billion. However, this must be spent within a designated period, or funding could be lost.

Last month the Business Innovation and Skills Minister Mark Prisk urged local business leaders to consider national matched funding opportunities given the slow progress on allocating funds.

Commenting on the findings, North East Conservative MEP Martin Callanan said: ““We are on target with the current European Regional Development Fund programme, are two thirds of the way through it and have invested some two-thirds of the money.

“The deadline for the funds to be spent under the seven-year programme is 2015, so this Labour Party press release is petty political scaremongering.

“Under Labour, the European Regional Development Fund was plagued by a legacy of poor administration, and the Coalition Government has overhauled the management of these schemes.

“As a result of these measures, the European Commission lifted an interruption on the programme which it had ordered.

“These steps will also protect taxpayers from the prospect of EU fines being levied due to poor administration, as happened under the Labour-run 2000-06 programme.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .