A FUNDING gap that destroys the dreams of entrepreneurs will be the first issue explored by a controversial new inquiry system for the region.

The North-East Regional Committee – a body set up to bring the “unaccountable”

heads of powerful regional quangos under control – has announced a probe into Industry and Innovation.

The inquiry will, in part, focus on the problems facing small business leaders trying to secure small, but vital, sums to kickstart their ideas – perhaps up to £15m.

Evidence sessions will be held around the region from next month, with the One North East regional development agency, Government officials, the Learning and Skills Council (LSC) and business people.

But the inquiry gets under way only after the Conservatives and Liberal Democrats announced a boycott of the new regional committee system, triggering claims that it is in disarray.

The Tories argued they were “a complete waste of time”, while the Lib Dems stormed out after accusing the Government of “stuffing the committees full of Labour MPs”.

It means the North-East committee has just five members – all Labour. They are; David Anderson (Blaydon), David Clelland (Tyne Bridge), Sharon Hodgson (Gateshead East and Washington West), Dari Taylor (Stockton South) and Phil Wilson (Sedgefield).

However, Ms Taylor, who was elected chairwoman, denied the protest had stripped the regional committee of legitimacy and insisted it still had an important role.

She said: “It would have been better if someone like Alan Beith (Lib Dem MP for Berwick-upon-Tweed) was involved, but there is no chance of it stopping us doing our job effectively.

“In our first inquiry, we will be looking at the role played by One North East, the Government office and others in helping companies, particularly smaller companies, get venture capital to develop their good ideas.

“The money seems to flow to big schemes, but what about investment up to £15m for smaller companies – the two or three man bands? We know the banks are not much interested so how do we bridge that gap?

“Our message to our people is that, if you have any involvement in these areas and believe you have something to say, we would like to hear from you.”

The inquiry will focus on key industry clusters, including biofuels and renewables on Teesside, the NETPark development in Sedgefield and hopes for “clean coal” technology in Northumbria.

Written evidence should be sent by email to regionalcommittees@ parliament.uk and marked North-East Regional Committee Inquiry, to arrive by May 15.

Gordon Brown first announced the idea of regional committees, to scrutinise quangos that spend millions of pounds of taxpayers’ money, within days of entering No10.