Coalition Policy May Set Region Way Back; Minister Admits Possible Failure of Partnerships

Article excerpt

Byline: William Green

FEARS are growing that the region could be put back a generation after a minister admitted a key economic policy of the coalition Government could fail.

Some MPs in the North East have accused the coalition of "playing fast and loose" with the region after it emerged Business Minister Mark Prisk warned colleagues in a letter that local enterprise partnerships - LEPs - could be a "failure in large parts of England".

Ministers have previously insisted LEPs will be more effective in boosting growth than regional development agencies, which are being axed, by bringing local council and business chiefs together. But a lack of funding and clarity over powers has dogged the proposals.

However, South Tyneside Council leader Iain Malcolm said the region had moved on since Mr Prisk's letter was written. He said: "For us it has always been important to have businesses on board when submitting our bid.

"We know now that the seven councils coming together will submit a partnership bid which we expect will be enthusiastically welcomed by ministers because we recognise the need to push for economic growth in the region."

Yesterday the Chartered Institute of Personnel and Development - CIPD - predicted nearly 1.6m jobs would be lost across the United Kingdom by 2015-16 as a result of public spending cuts and a rise in VAT to 20% in January.

It said 725,000 public sector jobs would go, compared to the Government estimate of 490,000 which had already sparked warnings the North East would be hard hit because of its heavy reliance on the public sector. The institute added that the private sector would be even harder hit, with 650,000 jobs going because of cuts, with an additional 200,000 lost because of the VAT rise. …