COUNCILS in the North-East are being urged not to cut investment in areas that may restrict economic growth.

The region's largest business membership organisation has called on local authorities to help companies fill the economic gap caused by the Government cuts to public sector funding.

The North-East Chamber of Commerce believes one way to mitigate their impact is to encourage greater private sector investment and job creation.

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NECC head of member relations, Jonathan Walker, said: "Reduced local authority spending means difficult choices must be made, but we strongly urge not imposing damaging cuts on services which will enable and support vital investment, such as planning and development."

He said the organisation was asking councils to support business confidence in a time of economic uncertainty.

Durham County Council’s head of strategy, programmes and performance, Andy Palmer, said there have been significant reductions in funding and the removal of special grants.

He said: “The council has continued to support regeneration and economic development activity in the county.

“The council is being asked to approve a £208m capital programme for 2013/14, including housing and a £470m capital programme over four years while using its major assets, such as the city of Durham to help stimulate additional investment and bring lasting prosperity to the county.”

Darlington Borough Council is reviewing all services to find further budget savings of £14.5m for the current calendar year.

A spokeswoman added: “At this stage the council is not proposing any budget reductions that will hinder economic growth.”

Newcastle City Council must find around £100m in savings and cut approximately 1,300 jobs over the next three years.

NECC members also raised concerns over the wider economic impact of proposed cuts to arts and cultural institutions.

A spokesman for Newcastle City Council said: “We recognise the economic value of our cultural institutions and we are having constructive discussions with the sector about how we can support them into the future.

“We also recognise the importance of the voice of business and we welcome NECC’s positive and active support, helping us create a working city that will bring investment and jobs.”