Thursday, 30 June 2011

Why the Council leaders are right and big business is wrong on LEPs

I was disappointed to read the news that the chair of the North East Local Enterprise Partnership (LEP), the former chief executive of the Sage computer software company, went to government to stall a decision of the board which went against his views. He seems to have persuaded the government to postpone a decision until the board becomes dominated by colleagues from the tiny circle of North East business titans, including Greggs pasty tycoon Ken McMeikan, who back the alternative plan.

The difference between the Sunderland Echos take on this to the Newcastle Journal is striking. The LEP has to propose plans for an enterprise zone. New businesses in the zone will get five years of free business rates if they start up in the area in the next five years. After that the business rates will be given to the LEP to spend on regeneration.

The choice was between a Newcastle Gsteshead dominated scheme or an A19 corridor bid that ran through much of the North East (excluding Newcastle Gateshead). The COuncil leaders, including our leader in Northumberland, voted for the A19 bid apart from, guess who, the leaders of Gateshead and Newcastle.

The business leaders want to make sure the LEP gets the most tax revenue in the future. The Newcastle dominated zone claims to generate 32,000 jobs and generate £900m in tax take. The A19 bid was projecting 11,000 jobs and £200m. So you can see why businesses were miffed that what they perceived to be parochialism from local council leaders against a greater number of jobs and income.

Leaving aside the fact that I have learnt never to trust outlandish predictions of job generation (if all the jobs that were claimed would come from regeneration projects had done so, the North East would be thriving), I think business leaders are being naiive and do not have the best interests of the North East at heart.

The A19 zone was generating the types of jobs the UK and the North East needs. A zone in Seaham for components manufacturers supplying Nissan UK, money for port regeneration in Sunderland and a new business district, off shore wind turbine manufacturing in North Shields and 1000 jobs in green energy manufacturing in Blyth. Manufacturing jobs in things we can export and take a lead in new industries. 

And the Newcastle Gateshead supported bid? A new shopping district in Newcastle, a new Gateshead town centre and conference centre, a four star hotel in Newcastle, new homes in Sunderland and sports and leisure facilities at the Stadium of Light. Now I would like to see many of those schemes but they are re runs of lots of other residential and leisure dominated regeneration we've seen in the North East. But lot's of new shopping units are not generating new jobs when there is no wealth being generated. And concentrating all development on our city centres repeats the faults of previous "trickle down" models of regenerations where we have sparkly town centres but massive poverty outside of our city centres.

Neither of these proposals will benefit Prudhoe, my home town, much but I want to see us prioritising sustainable manufacturing jobs. That is real growth rather than leisure jobs that rely upon more personal debt fuelled spending and hen parties coming to our towns. This may generate less jobs overall and less money for LEPs to spend on yet more gentrification of our towns but it is what people keep telling me they want. The elected leaders of our councils got it right this time but the unrepresentative scions of big business look like they will get a chance to repeat the mistakes of the past 30 years on regeneration and overturn that vote. That's a shame.

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