Science City project could be hit in the slump
NEWCASTLE’s Science City project could be one of the biggest losers as the recession continues to take hold.
Staff at the groundbreaking development have admitted they face the double threat of a fall in UK investors alongside a sudden availability of cash for American projects.
Some of the UK’s leading scientists have warned a recent decision by US president Barack Obama to allow Government money to be spent on stem cell research will make it even harder to attract money to Newcastle. The president’s recent backing of stem cell research is also predicted to spark a UK brain drain as scientists previously denied the chance to work in the world’s richest country move to the US.
Science City leaders have promised their long-term aims are still on course despite admitting that Newcastle Council’s financial difficulties are probably "bad news".
One of the key aims of the project is to physically transform the city with a £700m development on the former Scottish and Newcastle brewery site. Business development manager Estelle Chatard recently told a trade magazine that "productivity has slowed down" and that the organisation is looking for new investors. And maintaining interest in the site will not be easy this year, Ms Chatard said.
"That’s going to be one of the challenges. It will not be as easy as it may have been 12 months ago when potential investors were calling us all the time."
Newcastle Council leader John Shipley said the Government may have no choice but to free up councils to borrow millions of pounds at record-low interest rates as businesses turn away from supporting expensive schemes.
Coun Shipley said: "This is why the public sector and its ability to borrow cheaply and invest is going to be crucial in the future.
"It is going to be very difficult for the private sector to borrow at all over the next year or two. Developers will not be able to contribute in the way they previously have and the responsibility will increasingly fall not just on councils but on the entire public sector to take on the risk and find funds."
