Newspaper article The Journal (Newcastle, England)

It's a Struggle - but We Can Still Crack It; Warning as the Recession Starts to Bite

Newspaper article The Journal (Newcastle, England)

It's a Struggle - but We Can Still Crack It; Warning as the Recession Starts to Bite

Article excerpt

Byline: Adrian Pearson Regional Affairs Correspondent

ECONOMIC experts have warned the North East that the gains made in the last 10 years will be wiped out by the recession unless regional leaders act now.

A hard-hitting look at the economy of the North East has suggested there will be thousands more job losses still to come as public sector spending, which accounts for a third of the region's employment, is cut back.

In a stark warning to the region's businesses leaders and regeneration groups, experts studying the region on behalf of Gordon Brown's favourite think tank The Smith Institute said the recession will make all previous ways of growing the region's economy obsolete.

It is understood senior civil servants in Whitehall have already indicated that the impressive funding streams previously handed over to English regions for regeneration are likely to be "substantially reduced" in coming years.

City leaders last night admitted they were already looking at new ways of attracting more cash to Newcastle and the North East which they hope will be in place before the Government begins a round of expected funding cuts.

Newcastle Council leader John Shipley said that for the next 12 months at least councils will likely need to borrow millions of pounds to prevent major regeneration schemes, such as Science City, from collapsing as Government cash and business investment dries up.

Professor John Tomaney at Newcastle University, who edited the think tank's report, said the North East was yet to feel the full impact of the recession. In his report Prof Tomaney warns of increased hardship for families in the region as it becomes obvious that the impact of the millions of pounds spent creating jobs in the region could be short lived.

He points to unemployment figures which show that despite confidence that the region is well placed to "weather the storm" the recession has actually given the North the fastest rising unemployment in the UK. …

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