THE redundancy bill for axing regional development agencies including One North East will top £100million.
Easington MP Grahame Morris has called for a debate on the future of the region’s regeneration and has issued a challenge to the Government over what he has branded the agencies’ “wasteful scrapping”.
The Minister for Business and Enterprise, Mark Prisk MP, confirmed that it is unlikely staff from the agencies will transfer to the new Local Enterprise Partnerships (LEPs), which are seen as replacements.
Mr Morris says the new organisations will not have any guaranteed funding and will have to compete against other bids for funding from the £1.4billion Regional Growth Fund.
The MP, who put questions on the issue forward in the House of Commons, said: “It is now becoming clear that the abolition of One North East and Regional Development Agencies across England will not only adversely affect our ability to attract new investment and jobs to the North East, but it will cost the government over £100 million in redundancy payments alone.
“Not only has funding for regional development been cut by two-thirds, but the Government is wasting money that could otherwise have been spent on creating new jobs.
“There is no coherent policy from the Tory-led Coalition to take advantage of the wealth of knowledge and experience of the 3,000 staff. LEPs will have no guarantee of funding and are not expected to recruit outgoing staff from the RDAs.
“Taxpayers will undoubtedly feel that their money is being wasted.”
Mr Prisk said the spending review settlement for RDAs provides £464 million over four years and said this would cover various salaries, redundancies, transition and closure costs as well as pension liabilities.
However, Mr Prisk said it was not possible to be certain about the costs of the closures because the number of staff who will be working on continuing programmes, such as the European Development Fund, had not been finalised.
He added that some staff would leave through resignation.
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