Catherine McKinnell, Member of Parliament for Newcastle North, has criticised the Coalition Government’s short-sighted slashing of regional development funding with the abolition of the Regional Development Agency, One North East, following a damning regional analysis report into UK public expenditure by ERS.

The report highlights a massive disparity in spending between different regions in the United Kingdom, and specifically between the North East and Scotland, with Scotland spending 37% more than the North East on Enterprise and Economic Development.

Catherine commented: “This isn’t about casting envious eyes at Scotland, which itself has enormous economic challenges.  This is about the Coalition government taking away the North East’s main way of levelling the playing field when competing for inward investment to the region.”

“Whilst in no way perfect, One North East co-ordinated regional efforts to attract business investment and growth. For every £1 of public money spent through One North East, £4 was secured in private investment. 

“The Coalition government scrapped Regional Development Agencies overnight with nothing established to replace them. The alternative Regional Growth Fund took months to get underway and still only provides a third of the money that was previously available for economic growth. Even now it is red tape, delay and confusion that dominates the distribution process.”

“We desperately need strong private sector growth in this region and the Government needs to get a grip and do more to ensure there is better support to businesses in the North East.”