Cutting funds 'will be fatal for region'

Sep 17 2009 By William Green and Adrian Pearson

CUTS to the public sector could deliver a "fatal blow" to the North East's economic recovery, it was claimed last night.

The warning comes as the Liberal Democrats admit they want to see cuts to regional development budgets, cash for skills training and a vital export scheme.

Lib Dem shadow chancellor Vince Cable has suggested he would cut money used to support One North East and other regeneration groups while at the same time slashing the budget for the export guarantee credit department.

The export office has been described as having huge importance to the region, which still has a large manufacturing base dependant upon the guarantees offered in case foreign companies fail to pay up.

It effectively safeguards job in the North East by ensuring companies do not have to lay off staff if they do not receive payments.

Dr Cable said he would look to hand some regeneration cash to councils but warned of deep cuts as part of "a radical programme of reform".

In a speech yesterday Dr Cable said: "Regional development agencies no doubt perform some useful tasks in support of business activity and they will argue that they ‘create jobs', though whether this is the best way to create employment is doubtful."