UNION leaders are calling for an extra £45m in Government cash to close the productivity gap and boost the region's economy.

The Trades Union Congress (TUC) makes its appeal in its report on regional development agencies (RDAs), which is published today.

It says action must be taken to tackle a situation that means the UK has lower productivity and higher regional inequality than its European competitors.

It proposes that £45m should go to One NorthEast as part of £375m in extra cash the TUC believes the Government should give RDAs across England as part of this month's spending review.

TUC northern regional secretary Kevin Rowan said: "The North-East needs at least an extra £45m for regional development. With the worst basic skills problem in the country, One NorthEast will need extra funding in order to face the future with confidence."

The TUC wants the money to be used to tackle the productivity gap and "create a world class manufacturing sector for the future".

Other recommendations include a clear responsibility for RDAs on economic development issues, greater control over Department of Trade and Industry budgets and fresh guidance on the promotion of partnerships in the regions.

Welcoming the TUC report, Dr John Bridge, chairman of One NorthEast, said: "We are continuing to press Government for more resources and to have an ally in that respect is very good."

Mr Rowan added: "One NorthEast has one of the best records on encouraging unions and employers to solve problems in partnership.

"I've been personally involved in some of the excellent work that One NorthEast is doing on boosting productivity in the river industries of Tyneside, Wearside and Teesside by bringing employers and unions like the GMB together."

Kevan Jones, MP for North Durham, said: "I would support any extra resources for the North-East, but One North-East have to demonstrate first that they have actually spent what they have got effectively. I want to see it spent properly."