THERE is no doubt that North East England is now entering the most challenging economic time it has faced in nearly 20 years. Global financial problems, national economic growth now having ground to a halt and rising unemployment are realities that every region in the UK has to face up to and tackle.

One North East has a key leadership role to play at this time, helping businesses address short term difficulties while remaining clearly focused on the long-term goals to seize the opportunities that will arise once economic good times return.

The region’s broader, more diverse business base makes it more able to withstand this economic downturn than in years gone by.

The switch from a reliance on heavier, labour-intensive industries to knowledge-led business has put the regional economy on a more sound footing.

Working closely with our partners in the private, public and third sectors, we are all too aware of the immediate difficulties firms are having, for example, in accessing finance to address cashflow issues and deal with rising fuel bills.

In response, One North East is channelling its resources into frontline activities to help companies feeling the economic squeeze.

One North East has a credit crunch support package in place to assist firms during the economic downturn:

:: An extra £2.5m pumped into the Grant for Business Investment – helping small and medium-sized firms expand, create new jobs and safeguard existing posts

:: An additional £6.25m into the North East Investment and Co-Investment Funds to give vital access to finance for growing firms

:: A further £250,000 to extend the Company Rescue Pathfinder programme to help firms struggling with tax and credit issues

:: An extra £1m into the innovative Energy Resource Efficiency scheme to help firms cut rising fuel bills.

:: A £1.8m support package into Business Link to provide free business health checks and a series of workshops to help firms take practical steps to deal with some of the issues they are facing.

We have also ring fenced an additional £1.5m to assist firms who may be affected by future natural disasters, such as the floods which recently hit Morpeth.

This is on top of the £500,000 we have already pledged to the Northumberland market town to help flood-hit businesses get back on their feet.

Accessing finance at this time is crucial for businesses looking to trade through tough conditions with a view to being in a position to take advantage of the opportunities that will arise when the economy recovers. It is important that we not only do everything we can to assist businesses through this downturn, but also concentrate on making sure we strive to achieve the longer term economic goals set out in the Regional Economic Strategy.

Getting 70,000 more people into work, creating up to 22,500 new businesses and raising GVA per head to 90% of the national average, all by 2016, is certainly a challenge but one that we still believe is achievable.

It is essential that we continue to put in place the building blocks for mid and long-term growth and that is why we are working with the European Union (EU) and European Investment Bank (EIB) to seek to secure major funding for a new venture capital fund.

The £125m Jeremie fund – the Joint European Resources for Micro to Medium Enterprises Initiative – is the prize we are seeking to win for the region.

One North East and the EU plan to channel £62m into the fund, and then work with the EIB to secure match funding totalling £63m.

The prize for the region is to provide medium to long-term finance for smaller businesses. If successful, Jeremie would be the first venture capital fund of its type in England. It will provide loan and equity support.

Our aim is to have this fund in place by the end of 2009 and we will spend much of next year working closely with venture capitalists at North East Finance to make this happen.

At a time when traditional lenders are less likely to assist firms with loans, Jeremie will provide a valuable additional avenue of support.

By Malcolm Page, One North East deputy chief executive