Newspaper article The Journal (Newcastle, England)

Job Hopes Left Hanging by a Thread as Deadline Nears; Seven Deals Worth PS11m Not Yet Finalised

Newspaper article The Journal (Newcastle, England)

Job Hopes Left Hanging by a Thread as Deadline Nears; Seven Deals Worth PS11m Not Yet Finalised

Article excerpt

Byline: William Green Political Editor ? 0207 219 4389 ? william.green@ncjmedia.co.uk

THE North East could lose out on PS11m of funding within days, the Government has warned.

Business Minister Michael Fallon has revealed that several projects allocated cash from the Government's regional growth fund (RGF), set up to boost the private sector and job creation in areas like the North East, are yet to finalise the deal with the Government.

If they do not agree terms by the end of the month, funding will be lost and hundreds of hoped-for jobs will not be created.

"Seven awards worth a total PS11m have not yet agreed terms," said Mr Fallon.

"Officials are working closely with these bidders and have informed them if they are unable to progress their offers by the end of September 2012 their RGF allocation will be withdrawn."

The news brought a stinging response from Newcastle East MP Nick Brown, who was the regional minister in the last Labour Government.

He said: "This is very serious. The sum of money is large and the projects are therefore bound to be significant.

"Without knowing the reasons for the delay, which may well relate to the Government rather than the private sector, it's difficult to form a final view.

"But to threaten to take the money away is destructive, stupid and cruel."

Mr Brown claimed that the Department for Business, Innovation and Skills (BIS) had become known as a "bottleneck" in Whitehall, adding such schemes would have been dealt with by the nowaxed regional development agencies in the past.

The developments also come after the Commons public accounts committee published a report earlier this month attacking the "scandalous" delays in distribution of money from the regional growth fund.

Mr Fallon said PS160m has been awarded to projects in the North East from the first two RGF bidding rounds ahead of announcement on third round allocations next month.

"At September 14, 2012, 19 companies from the North East who have submitted their claims have had PS20.5m paid to them," added Mr Fallon in a written Parliamentary answer to a question tabled by Teesside Labour MP Tom Blenkinsop. …

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