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One North East £33m budget cuts 'to cost 3,000 jobs'

Richard Moss | 13:48 UK time, Friday, 24 September 2010

North East tourism advert

Funding for adverts like this one for the North East have been cut completely

I'm not sure the board room of regional development agency was a fun place to be last night.

Over the last decade their meetings would have focused on which projects to support.

But last night's meeting was all about which ones they would have to cut.

The Government's told One North East to take £33m out of its budget, in advance of its abolition in 2012.

And today, as long as your arm have been announced.

, the Chairman of One North East, .

The cuts range from grants to companies, to specific developments which will no longer be funded.

Some of the areas being cut are striking, considering the North East is a region which needs to be have a bigger and more enterprising private sector.

A planned £700k Enterprise Laboratory which aimed to help individuals start "high growth businesses" has been cut altogether.

Another £900k fund designed to provide support for entrepreneurs setting out in business is another victim.

A further £3m is cut from the £19m fund for business investment and research and development.

Almost £2m is taken away from , which supports and advises companies.

And the entrepreneurs of the future won't be getting as much support either.

One North East has cut a £680k fund to provide business placements, and apprenticeships for 14-to-19 year olds.

A further £435k is cut from a programme designed to retain talented people in the North East.

One North East sign

And then there are specific projects which are cut.

£450k is cut from the budget to retrain former Corus workers from Redcar (although One North East is now hoping they'll be taken on by the Thai company looking to buy the steelworks).

The plan to turn the former site of the Lafarge quarry in Weardale in County Durham into the has lost all £1m of its funding.

The project to develop the have lost more than £1m - much of it cut from a plan to site shops, a hotel, a real snow ski slope and an ice rink there.

All £1m is also cut from plans to regenerate the High Street and Jackson Street areas of Gateshead town centre.

Another £850k is cut from the project.

A plan to develop the Linthorpe area of Middlesbrough loses £970k, and a £545k investment in is also cut.

We already knew that , but the scale of the cuts there also now become apparent.

£2m has been cut from the campaign to promote the region to tourists, £1.8m from the campaign to advertise it to businesses.

There's if you want it.

Catherine McKinnell

The cuts have already been condemned by Labour. has called it a "devastating blow" to the region's economy.

The Coalition though argues that these cuts are Labour's responsibility given the deficit they left behind.

They can also point out that Labour had planned to cut One North East's budget too, albeit not as sharply.

Both Lib Dems and Conservatives have also been keen to emphasise that the new £1bn Regional Growth Fund will be targeted at northern regions. And point out that despite 12 years of One North East, the North-South divide has not been bridged.

But with One North East and the other regional development agencies being run down, this could be just the first taste of what's to come.

One North East is becoming paralysed. Barred from spending large sums of money without government approval, and with little freedom to take long term decisions.

Their replacements - five Local Enterprise Partnerships and a proposed North East-wide economic partnership - have not been approved by government yet.

Labour say this is the worst possible time to run-down and abolish the Regional Development Agency, given the public sector cuts the region's facing.

They say the organisation which can best deliver vital private sector growth now looks toothless.

The key test though could be the reaction of individual communities affected by today's cuts.

Will they understand the Government's reasoning, or will they be wondering why their town and city has to suffer?

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