ECONOMIC migration - the seemingly inexorable movement of the population to the south of England - was one of the key reasons Joel Barnett came up with his infamous funding formula 27 years ago.

The then-Chief Secretary to the Treasury figured, quiet correctly, that the only way to stem the tide was to create favourable economic conditions in those areas most at risk. That's why more Government money flowed into Scotland and has continued to do so ever since.

Scotland stills receives almost £750 per head more than the North-East even though it has long since outstripped the region in terms of output and prosperity. Our region has been forced to deal as best it can with the demise of old industries like mining and shipbuilding.

No wonder there has been an outflow of people to the more affluent South.

But latest figures paint a different story. Families are no longer leaving the area because they think they can find a better life elsewhere.

Maybe quality of life has become more important? Certainly the overcrowded and congested South does not look anywhere near as attractive any more.

Nor should we under-estimate the efforts of the regional development agency One NorthEast which has put in place the foundations for a brighter future.

So it's sad to see the North-East facing yet another slap in the face. If a new funding formula goes ahead, money for services will be based on historical population trends.

This will cost the region around £250m and could put £100 on council tax bills.

How can this be fair?

And how does it sit alongside the Government's "Northern Way" policy - a growth strategy that's supposed to help close the £3 billion North-South productivity gap? Key to the strategy is dealing with skills shortages and improvements to infrastructure. Achieving these will be all the harder if much needed funds are diverted to other parts of the country.

If the Northern Way is to succeed then this region needs to hang on to its greatest asset - its people.