Newspaper article The Journal (Newcastle, England)

Anger over Plan to Take Fund Away from North East

Newspaper article The Journal (Newcastle, England)

Anger over Plan to Take Fund Away from North East

Article excerpt

Byline: Rachel Wearmouth Regional Affairs Reporter

SCORN was poured on George Osborne's Northern Powerhouse when it emerged a huge chunk of dedicated North East investment cash could be wrested from the regional leaders' control.

The PS160m Finance for Business North East or 'Jeremie 2' fund was to offer risk finance to small and medium-sized enterprises (SMEs) - who the Chancellor calls the "lifeblood of the economy" - and the fund is to be managed by a North East board.

But it is understood the Treasury has intervened and wants PS80m of the vital European cash to be channeled into a specially-created 'Northern Powerhouse Fund' available to SMEs from across the North and allocated from Sheffield.

The North East Local Enterprise Partnership and the North East Combined Authority have written to the Government to underline their strong opposition to the plan.

The Chancellor, who has made devolving power and funding central to his Northern Powerhouse agenda, was forced to deny the move during a trade mission in China.

He said he was "not aware" the North East Jeremie fund allocation would be halved, and added: "I would not want to see money leave the North East."

But Newcastle East Labour MP Nick Brown said any such move would underline the Government's failure to grow the North East economy as figures show a loss of public sector jobs since 2010 (61,000 in the North East) had not been offset by those created in the private sector (42,000).

He said: "The Government's post-2010 economic development policies for the North East have failed the region," he said.

"They aren't bidding to make projects and now the money is being taken away to be spent in other parts of the UK. It is a grotesque admission of failure on their part.

"They are not taking economic development seriously and yet their own figures show a marked decline in public sector employment in the North East and no equivalent increase in private sector employment.

"This is a specific North East problem that they are failing to deal with. The original Jeremie fund was a North East idea and focused solely on the North East. …

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