SUCCESSFUL firms rather than Government agencies will drive the region’s future success, Vince Cable told North-East business leaders yesterday as he defended the decision to scrap regional development agency One North East.

The Business Secretary, speaking at an awards ceremony in Newcastle, said he rejected any stereotypical views of the North-East being overly dependent on Government support and public sector jobs, saying “fashionable London talk about this region being a basket case is not true”.

York-born Mr Cable defended the Coalition’s controversial Local Enterprise Partnerships (LEPs), which will replace regional development agencies (RDAs), including One North East, in 2012, from accusations they would fragment the North-East business community and weaken its ability to attract inward investment.

Mr Cable highlighted a report published this week by the Royal Mail that listed Sunderland and Stockton as two of the top three cities in the country with the most number of business start-ups over the past six months.

Mr Cable said: “I reject the premise that the success of the North-East depends on the configuration of what Government agency you get.

“What will determine whether this region succeeds economically are its successful businesses.”

Mr Cable said he believed the way out of the recession was private sector growth led by exports.

He called for a rebalanced country no longer fuelled by a property bubble centred in the South-East and the financial services sector.

The Government has not set a date to announce which of the 57 bids from local councils and business leaders to establish LEPs have been approved, although there is speculation that the first announcements are imminent.

Mr Cable refused to accept the scheme would damage the crossregional co-operation that One North East had encouraged.

He said: “We haven’t damaged anything.

We have put it to the businesses and councils of the region to propose from the grassroots what it is that they want.”

But there is growing concern that the structure of the LEPs is flawed.

Gerald Russell, president of the Institute of Chartered Accountants in England and Wales, voiced his concerns on a visit to the region this week.

He said: “The RDA model in my view was not broken but it is being changed. It’s clearly a political move rather than one based on sound business principles.”