Regional Growth Fund cash to create 25,500 jobs in North-East

Business leaders and politicians in the region welcomed the £93m pledged to North-East businesses in the second round of the Regional Growth Fund (RGF) that was set up to create private sector jobs in areas hardest hit by public spending cuts.

But it was also announced that millions of pounds from the Government’s limited pot of money have also been promised to prosperous southern shires.

That prompted questions from the TUC about whether the North-East – which is losing public sector jobs at the rate of 2,000 a month – was being given a fair deal.

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Cummins Engines in Darlington, Newton Aycliffe based car chassis maker ThyssenKrupp Tallent, Hartlepool engineering firm Heerema and the Tees Valley chemicals industry were among 50 successful bids from the region set to create 8,500 direct jobs and 17,000 positions in the supply chain.

But fears that the fund is failing to keep pace with rising unemployment has prompted calls for the Chancellor to inject more cash into the controversial scheme.

About three-quarters of RGF bidders were disappointed, but ministers have declined to commit themselves to further rounds of finance.

Dr Neil Bentley, Confederation of British Industry deputy director-general, said the fund did not have the capacity to support business adequately and urged George Osborne to explore options, such as giving larger firms a tax break for investing in small companies.

The North-East was given about ten per cent of the total share-out from the £950m RGF spending pot while the North-West got £227m.

In total, over the two rounds of the programme, South- West businesses have received £96m and South-East and East of England bidders bagged £113m.

Supporters of the scheme said that, on a per head basis, the region had been one of the big winners.

But when the RGF was launched a year ago, Lord Heseltine, who chairs the independent panel that judges the bids, said areas like the North-East “would be at the front of the queue” to receive support.

At the time, Sir Ian Wrigglesworth, the panel’s deputy chairman, said “The North-East has the biggest imbalance between public and private funding in the UK, so you would expect it will be awarded a significant share of the RGF.”

Labour has criticised the Government for spreading over three years the total £1.4bn it had promised to invest in business in a single year, via the now abolished regional development agencies.

Neil Foster, Northern TUC spokesman, said: “The anticipated 8,500 direct jobs over three years is just half of the rise in unemployment in our region in the last three months alone.

“We have the highest unemployment in the UK and our region is being consistently hurt the most from the Government’s savage cuts to public services.

“When Nick Clegg said the RGF was to help rebalance the economy, some of us thought it might mean more for our region and not less. These figures will add to the sense our region is being short-changed by the Government.

“Ministers should now consider substantially increasing the winners’ pool by committing the same level of funding as previously received.

“Only then will job creation outstrip job destruction in the North-East.”

Deputy Prime Minister Mr Clegg hailed the RGF as a boost to business, which would “jump-start growth” and create sustainable jobs “in the places that really need it”.

He added: “It unlocks private investment and is helping to create jobs that last across the region. For too long, we have been over reliant on the City of London and the banks.

“The RGF is all part of the Government’s determination to rebalance our economy across the sectors and regions of this country.”

North-East Chamber of Commerce chief executive James Ramsbotham congratulated the successful businesses but expressed concern that a failure to invest in the region’s transport network could stifle long-term growth.

He said: “It is one thing to throw money at businesses and hope that it will stick, but we would rather see a more holistic approach where money was also allocated to boost our two airports and our road and rail links.

“Without the right infrastructure in place, in terms of transport and energy supply, then the superb businesses that we have in this region could struggle to realise their full potential.”

Stephen Catchpole, managing director at Tees Valley Unlimited (TVU), which supported 15 successful bids, said: “This is incredibly positive news for the Tees Valley and yet another clear indication from Government that we are on track and moving in the right direction. The high standard of bids has been recognised and the ambitions of TVU and our local companies acknowledged.

“This announcement, which supports projects throughout the Tees Valley sub-region, further puts in place the foundations that will underpin the growth of the area’s economy.”

Boost for Cummins

ENGINE maker Cummins said it will be able to bid for new business thanks to investment from the Regional Growth Fund.

The Darlington company, which produced its one millionth mid-range engine in September, will receive £1.16m as part of a £7.5m project to improve productivity and the quality of its low emissions diesel engines.

The factory upgrades include a new paint conveyor, robotic paint system and oven. The capital investment will help to safeguard 657 positions at the Yarm Road plant as well as jobs across the wider supply chain.

Mike McCabe, plant manager, said: “We are extremely happy to receive this grant, which will make a significant contribution towards plant and machinery and provide operational benefits across the whole manufacturing process. It is a recognition of our highly skilled, professional workforce who make a substantial contribution to the Darlington, Tees Valley and UK economies.”

North-East Chamber of Commerce chief executive, James Ramsbotham, said: “This is marvellous news for an exemplar business. Support from the RGF will enable them to get even better and continue to fly the flag for engineering excellence in our region.”

‘Cluster’ group is set to expand

NEPIC, a so-called “cluster”

organisation, which represents more than 500 chemical, pharmaceutical, biotechnology, energy and renewables businesses and their support companies across the North- East, receives £1.5m during the next three years to expand on a successful pilot project.

The project puts small and medium sized local companies (SMEs) in touch with larger businesses in the region which might want to buy their products. It is expected to create £3.3m of new business, along with 28 new jobs.

One success story from the pilot project was an electricity- saving device that one company had created which was then bought by another.

Stan Higgins, chief executive officer of NEPIC, said the new expanded project might be able to keep £30m worth of business within the region.

He said: “We will now involve about 200 SMEs. The money that is being invested into the region will also impact on all the supply chain companies involved.

“We have demonstrated in the past with our pilot project that we are well positioned to deliver business growth opportunities in this area.

“We look forward to working with our senior industrialists to help the SME community with specific and tailored activity streams for growth.”

Narec to get £6m windfall

THE National Renewable Energy Centre (Narec), which carries out research and development and testing on behalf of the offshore wind industry, will receive £6m. It will help fund seven different projects, totalling £11m. The remainder of the funding will come from the private sector.

Narec, based in Blyth, Northumberland, is the lead partner in a consortium which aims to bring together companies in the offshore wind sector with techology providers and academics.

Andrew Mill, chief executive officer at Narec, said: “This is another fantastic achievement for Narec where we are investing over £150m to establish a world- leading centre for accelerating the deployment of offshore renewable energy technologies.”

£6.2m for college apprenticeships

A TOTAL of £6.2m is being awarded to Gateshead College and partners to help create 1,500 apprenticeships in the electric and low-carbon vehicle sector across the region.

The college is the preferred training provider for Nissan UK and Smith Electric Vehicles.

The successful bid hopes to increase support for firms involved in the local supply chain to ensure they can access an estimated £80m worth of work in the sector.

Dr Colin Herron, a low carbon vehicle specialist based in the North-East, said: “This is a real boost to the region and cements our already international reputation in this field.

“As a region we have worked very hard to secure this investment which will bring massive long-term benefits to the region’s economy.”

Ready and Able as yard gets £2.25m

ABLE UK, based at Graythorp, near Seaton Carew, Hartlepool, is receiving £2.25m to support a £16m project to construct new dry dock gates at its yard.

Once built, they could help the firm secure new work in a number of areas including ship construction, repair and recycling, offshore oil and gas construction work and decommissioning and the construction of concrete foundations for the offshore wind industry.

Chairman Peter Stephenson said: “We have always recognised that, in order to exploit its full potential we needed to install new permanent dock gates [at the yard] which will greatly enhance our ability to move from wet to dry dock status and provide the flexibility our customers require.

“The news of the grant is, I believe, a welcome recognition from Government that Able Seaton Port can make a major contribution to the regional and national economy.

“We anticipate that the development will generate more than 230 direct jobs and boost the regional economy to the tune of almost £130m.

“It will mean, for instance, that we will be able to accommodate the largest aircraft carriers in the world and the largest heavy-lift vessels.”

MP not convinced

Stockton North MP Alex Cunningham

“In the face of rising unemployment, rocketing inflation and thousands of young people not in employment, education or training, it is far too little to make the huge difference necessary to help turn our economy around. I only hope that the Government, led by the Chancellor, will recognise the need for substantially more hard cash to create jobs and stop the devastating rise in unemployment we’ve seen over recent months.”

George Rafferty, chief executive of the business support organisation NOF Energy

“The RGF awards to ten of our members should act as a magnet to attract greater private sector investment to the region and further build the North-East’s global reputation for exceptional industrial skills, products and services.”

Lord Heseltine, chair of the RGF panel

“The independent panel and I have been impressed by the creativity and innovative nature of these projects, and I look forward to following their progress.”

Stan Higgins, chief executive of the North-East Process Industry Cluster (NEPIC)

“I am absolutely delighted to learn that NEPIC has a conditional letter of support for its small and medium sized enterprises bid. We have demonstrated in the past with our pilot project that we are well positioned to deliver business growth opportunities in this area.”

North East Chamber of Commerce chief executive, James Ramsbotham

“This investment will support the creation of long-term, high quality private sector jobs in the region and enable each company to further enhance their already impressive operations. The region has been incredibly successful in the first two rounds of RGF funding and if we are to rebalance the UK economy, then the North-East requires more investment of this kind into our innovative and pioneering businesses.”

Redcar MP Ian Swales

“These awards link to a wider confidence in the area. The more we promote the North-East, and especially Teesside, the more investment will come. We need to be positive about what we have to offer.

The support of our Local Enterprise Partnership is crucial to the success of our area, and they are a key player in the future of our region.

These really are exciting times. We are seeing a boom through manufacturing industry returning once again. I feel very proud to be part of it.”

Paul Woolston, chair of the North-Eastern Local Enterprise Partnership (LEP)

“This is fantastic news and I congratulate the successful bidders to the Regional Growth Fund. The LEP will work with business and partners to maximise more of these opportunities in the region, and will look to attract further private and public investment to deliver economic growth and create jobs.”

North-East MEP Fiona Hall

“Crucially, there is a snowball effect to this money. For every £1 the Government puts in, the private sector ends up investing £5.

That’s the smart way to invest when we’re having to make savings to reduce the deficit.”