Government admits £65m is not all new money

Feb 24 2010 by Sue Scott, Evening Gazette

THE Government admitted yesterday that nearly £65m of so-called “new investment” for regional development agencies, including One North East, to help industry recover from recession was not in fact new but previously allocated cash, much of which had been re-prioritised.

Announcing a package of measures, which saw £5m released for grants for Tees Valley companies to cut energy costs, Business Secretary Lord Mandelson said it made no difference where it came from so long as companies were helped to recover quickly.

“If that means prioritising, switching, and doing less here because you can get a bigger bang for your buck elsewhere.

“I’m not going to say the only money worth spending is that in addition to what we have already devoted to industrial activity.”

The £5m was part of December’s £60m Tees Valley industrial programme.

His admission, however, vindicates those who previously accused Lord Mandelson’s department of “pure spin” over the handling of millions of pounds awarded to the Tees Valley just days after Corus decided to mothball the Teesside Cast Products plant at Redcar.

The majority of that cash for the Tees Valley industrial programme had already been agreed for the process sector after months of work.

When the announcement was made last year, Middlesbrough Mayor Ray Mallon blasted the Government for cynically manipulating the Redcar steel crisis, accusing it of an act of pure spin.

He accused Lord Mandelson of “fobbing off” Teesside with old money.