LAST month, at a time when the UK and international economy is facing a low level of growth, a series of deals with core cities in the country – to help them invest in improving critical infrastructure, local skill sets, creating jobs, while crucially supporting local businesses – was announced by the Government.
With Newcastle being one of these core cities to receive the City Deal, the possible impacts, potential to unlock growth and help kickstart the economy in the region has meant the plans have been met with widespread optimism and enthusiasm ... not just for the city, but also for the wider region.
The Newcastle and Gateshead councils have agreed with the Government to create Accelerated Development Zones (ADZ).
The zones have been decided as Central Station and the Stephenson Quarter, Science Central and East Pilgrim Street; all of which are crying out for investment to overcome a number of constricting obstacles to development and could benefit significantly from this injection of funding.
The aim of the ADZ is to unlock growth in the urban core, and to return the area to its pre-recession economic course, which had seen more rapid employment growth in Newcastle than any other core city.
The deal allows the two councils to ring-fence and retain the business rates raised in these ADZs, covering 80 hectares, for 25 years, while also meaning Newcastle and Gateshead should benefit from Tax Increment Financing (TIF) powers.
The good news for the construction industry is that the councils are immediately initiating a £92m investment programme, financed through TIF, set to create a boost for the sector with 600 construction jobs and 1,500 permanent positions within five years - leading to an estimated 13,000 over the next 25 years.
That's not to say that the deal is a remedy for all the harm and hindrance of development in our region and the industry in general from the double-dip recession.
Nor have the calculations for job creation and £800m worth of private sector investment been immune to speculation.
However, ours is the only English region with a balance of trade surplus, and the plans for development – and the potential benefits – are long term.
For more on Constructing Excellence in the North East, telephone 0191 374 0233 or email firstname.lastname@example.org.
Catriona Lingwood is chief executive of Constructing Excellence North East