Newspaper article The Journal (Newcastle, England)

Dramatic Delay for Pounds 900m Decision; Business and Council Bosses Dispute Location of Zone

Newspaper article The Journal (Newcastle, England)

Dramatic Delay for Pounds 900m Decision; Business and Council Bosses Dispute Location of Zone

Article excerpt

Byline: Adrian Pearson

ADECISION on an enterprise zone worth up to pounds 900m to the region was dramatically delayed by the Government last night after business and council leaders fell out over where it should be located.

Senior civil servants intervened following a heated board meeting of the North East Local Enterprise Partnership, an organisation at present predominantly made up of council leaders. It is understood that at the meeting five council bosses, from Sunderland, Durham, South Tyneside, North Tyneside and Northumberland backed a proposal which would have seen an enterprise zone created along the A19 corridor, worth pounds 200m over the next 25 years and creating 11,000 jobs.

But in doing so they turned down a bid involving Newcastle, Gateshead and Sunderland city centres which would have generated pounds 900m and which could create more than 32,000 jobs.

Those five leaders had believed that their preferred option would be sent to Government by Thursday, but following talks yesterday the Department for Communities and Local Government recommended the North East delay its bid until business leaders are appointed to the LEP later this week in order to balance out the views of council leaders.

LEPs were set up by the Government to oversee job creation. The North East one brings together seven council chiefs - the five in favour of the A19 proposal plus Newcastle and Gateshead - and from Friday it will include seven more private sector representatives.

The eventual enterprise zone will see firms enticed to the chosen area with a five-year reduction in business rates, and allow councils to keep a share of the increased rates over the following 20 years.

Last night's intervention follows serious concerns voiced by the business community that their preferred option was being overlooked for political reasons.

It is understood that interim chairman of the partnership Paul Walker last night emailed council leaders saying that in light of concerns raised by the business community he had approached the Government who suggested a delay.

In a statement to The Journal, Greggs chief executive Ken McMeikan, chairman of the CBI North East, set out the reason for the behind-the-scenes lobbying. …

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