Partner Article

North East growth 'robbed' to pay for Southern housing

England’s only regional chamber of commerce has attacked Government plans to raid economic development budgets to pay for headline grabbing housing initiatives.

The North East Chamber of Commerce (NECC) has accused John Hutton, Secretary of State for Business, Enterprise and Regulatory Reform, of robbing North East regeneration to fund the southern housing market.

In a letter to Mr Hutton, NECC chief executive James Ramsbotham claims that plans to take £300m from the single pot budget for regional development agencies to pay for a new HomeBuy Direct scheme will have a disproportionate impact on the region.

Mr Ramsbotham said: “Our chief concern is the impact on One NorthEast. As a result of the North East’s historic economic performance relative to other regions, One NorthEast receives a high proportion of RDA funding. That means this region will be disproportionately affected by this raid on budgets, which we believe will predominantly support the housing market in the South of the country.”

Mr Ramsbotham also warns that the long-term impact on the strength of the region’s economy will be far-reaching.

The letter says: “The impact on the North East of this loss of funding will be damaging. It will lessen One NorthEast’s ability to implement its 10-year economic strategy, which addresses issues going beyond the short-term economic slowdown.

“There is a real danger that reducing funding available from the RDA for regeneration schemes will have a deeper impact by damaging confidence among partner organisations. The effect of this could be to slow down the capacity improvements that will be needed to ensure the North East economy can swiftly return to the high growth levels of previous years once the present downturn is over.”

The letter ends with a call for assurances from the Government that this will be the last assault on essential budgets to feed short-term, popularist initiatives.

It states: “We hope you will be able to assure us that no more raids of this kind will be made on funding to meet short-term central Government priorities.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .