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Struggling areas earmarked for assistance
MORE struggling parts of the North-East have been earmarked for an “assisted areas” map – but they may not receive any extra money, ministers admitted.
The list of areas proposed to be eligible for ‘regional aid’ has been extended to include extra wards in Darlington and western parts of County Durham.
But the Coalition was sharply criticised two years ago when it axed a key assistance scheme - called Grants for Business Investment (GBI) – for those areas.
Asked what extra help the wards would receive, the department of business (BIS) said: “It could mean bids to the regional growth fund are more likely to be successful.”
But the BIS guidance states: “Assisted area status is not a guarantee of any regional aid funding. Businesses in other parts of the country can still receive support, including from RGF.”
Scotland and Wales will continue with specific grant aid to persuade firms to set up in their assisted areas.
Tom Blenkinsop, Labour MP for Middlesbrough South and East Cleveland, said: “Awarding schemes with elaborate titles is meaningless without resources and finance.”
But Michael Fallon, the business minister, insisted being an assisted area could be “enormously beneficial” to companies.
It meant a bid for a grant for new premises or machinery could be looked on favourably, where it would be rejected outside the designated zones.
Mr Fallon said: “Key factories and sites ripe for development in areas where investment is most needed have been prioritised, reflecting advice from local enterprise partnerships and local authorities.”
The proposals - for the seven years from 2014 and 2020 – are likely to be confirmed, following a consultation running until February 7.
The GBI scheme dated back to the early Seventies under different names, including regional selective assistance – before it was axed in 2011.
Between 2004 and 2010, it was credited with pumping in £112m in grants to the North-East, creating or protecting 25,000 jobs.
Critics say the problem with the regional growth fund is that most successful applications are for £1m-plus, rather than for smaller amounts of investment aid.
Furthermore, the programme has been heavily oversubscribed and dogged by lengthy delays before the cash is handed over.
A final assisted areas map will be submitted to the European Commission for approval in March.
Mr Fallon added: “We are seeking views to ensure that the map is fair and support is particularly targeted where it can drive growth.”
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