PUBLIC finances are so tight it is like councils are “scrabbling down the back of the sofa for loose change”, a conference has been told.

Margaret Eaton, chairman of the Local Government Association (LGA), said councils would be “desperately short”

of money in 2010 and efficiencies would not be enough.

Dame Margaret was speaking to hundreds of North-East politicians and officials at The Summit, an Association of North East Councils (ANEC) conference held at The Sage Gateshead yesterday.

The former Conservative leader of Bradford Council said: “Whatever your politics, I think we all agree the financial situation is going to require great changes in the way we deliver public services.

“We know that things are going to be very tough indeed and I know this region is feeling the economic downturn very keenly.

“We all know it’s going to be very, very difficult in terms of finance.

“It’s rather like the time when you’ve got to scrabble down the back of the sofa for loose change at the moment.”

Dame Margaret’s comments come as councils across the region are grappling with drawing up budgets for 2010-11, amid falling incomes, lower returns on investments and increased demand for public services.

Durham County Council may have to cut spending by more than £60m over the next three years, while Darlington Borough Council is considering cutting £4.7m and 77 jobs next year, in an effort to freeze council tax.

Nick Brown MP, the Minister for the North-East, said 2010 would be the most difficult year for councils and regional development agencies for more than a decade.

He told The Summit the region was doing very well before the recession hit, boasting the country’s fastest growth rate. But he added that management of the economic downturn would dominate 2010, with debates about efficiency savings, tax rates, asset sales and cutting council activities.

Mr Brown warned against procrastination and parochialism, calling on councillors to show leadership and make their New Year resolution to be to work together.

David Harker, of accountancy firm Deloitte, said councils were facing possibly their biggest ever step-change over the next three years, with predictions of budget cuts reaching 20 or 25 per cent.

Dave Prentis, general secretary of the Unison trade union, said taxpayers were paying twice for the “sins of the city” – in bank bail outs and savage spending cuts.

North-East is ‘can do’ region, says Prime Minister

GORDON BROWN sent a surprise video message to The Summit yesterday, calling the North-East a “can do” region.

The Prime Minister said: “These have been tough times but, as this conference shows, the North-East is a ‘can do’ region and your spirit, your resilience, your creativity is already enabling you to benefit from and in turn to drive the economic recovery.”

Mr Brown said the region was moving beyond traditional heavy industry to become a European centre for excellence in low carbon manufacturing, highlighting Nissan’s £200m investment in a new factory to make electric car batteries on Wearside.

He welcomed a commitment by leaders of the North-East’s 12 councils to bring political leadership and collective support to the issues that matter most for the region and thanked conference delegates involved in local government for their “tireless working in serving our communities and for delivering the services on which we depend”.

“Local authorities and national government - in partnership - can build a recovery that will secure the future of the North-East,” he said.

The unexpected contribution, which Mr Brown recorded at Downing Street, was played to delegates at the end of a speech by North-East Minister Nick Brown, who said the Prime Minister and Business Secretary Peter Mandelson had gone out of their way to help the region.

Salvaging Corus ‘a long shot, but there’s no giving in’

A SEARCH is on to find someone prepared to buy the threatened Corus steel plant as a going concern, a Government minister has said. Nick Brown MP, the Minister for the North-East, said the salvage scheme for Teesside Cast Products was a long shot but this was not a reason to give up.

He told The Summit the potential loss of 1,700 jobs was devastating for Redcar and the east Tees Valley and he did not want to raise false hopes. But he added: “Absolutely everything I can do as the regional minister – working with every single person with a vested interest in this – I’m going to do.

“I know that determination is shared by the other public representatives for the area.”

Mr Brown was part of a delegation of North-East MPs which travelled to Scotland between Christmas and New Year to raise the issue with Gordon Brown. He said the Prime Minister was taking a close interest and the issue was being discussed at the heart of the Government.

Mr Brown, a close ally of the Prime Minister, also said the region must maximise the benefits of a £60m aid package announced for Teesside.