Sheffield fury as Leeds Arena goes ahead with £10m funding package

THE future of the Leeds Arena has been saved from the brink and will now go ahead, after almost £10m of funding pledged this summer by Yorkshire Forward was approved by central government.

Both Yorkshire Forward and Leeds City Council have welcomed the decision as the 12,500 capacity Arena can now move into the first phase of development in 2010.

But Sheffield businesses were furious with the decision, calling it an absolute outrage that will undermine jobs.

Councillor Andrew Carter, leader of Leeds City Council, said: "I'm delighted, though I do need to remind everybody, however, that we were promised 18million – that's what Yorkshire Forward and ourselves agreed four years ago – and that's what we should have got.

"It is going to be a very successful venture and a massive asset not just for the city of Leeds but to the whole of the city region. It will mean that the three million people who live in the Leeds City Region will have a music venue to visit without having to go to Manchester or Sheffield."

The whole project was thrown into jeopardy earlier this year after an initial bid of 18m from economic development agency Yorkshire Forward was turned down because government officials said it did not provide "the best value for money".

The agency last month re-assessed the scheme and put forward a new proposal for 9.88m of taxpayers' money.

Business Minister Pat McFadden said the 12,500-seater venue will make a "big contribution" to the city's future and create more than 500 jobs, as he announced the investment could go ahead

Mr McFadden said: "This investment in a landmark development for Leeds will help the city secure hundreds of jobs. It's only being made possible because of Government funding.

"Leeds is a great city and the arena should make a big contribution to the city's future.

But Steve Brailey, chief executive of Sheffield International Venues, one of the north's largest entertainment, leisure and sport groups, said the decision was an inappropriate use of YF money.

He added: ""It is an absolute outrage that the government is providing this funding to a scheme that will undermine jobs in Sheffield."

"It is particularly disappointing as the announcement comes in the same week as the pre-budget report, during which the government pledged to reduce spending, yet they see no problem with using taxpayer's money to support this project."

Planning permission has already been submitted for the proposed multi-use arena at Clay Pit Lane and SMG Europe, the company chosen to operate the venue, has signed a 25-year lease agreement with the council.

The total cost of the development is expected to be 55m and will open in November 2012.

The venue will have a stage with two tier seating and will include bars, restaurants and shops.

The project is expected to create 528 jobs and inject over 25m into the local economy.

Leeds Labour MPs today welcomed the announcement.

Environment Secretary and Leeds Central MP Hilary Benn said: "I am delighted and I want to pay tribute to Pat McFadden on the work he has done on this.

"As Labour MPs we worked really hard on lobbying and this is the Labour government building the creation of jobs in Leeds and a great new facility in the city."

Leeds North East MP Fabian Hamilton said: "The government has risen above the petty bickering and recognised the merits of the project itself and how it can deliver economic benefits and regeneration for the city of Leeds as well as a first class venue."

Leeds East MP George Mudie said: "It brings hundreds of jobs and also brings a first class entertainment venue with big acts that people have had to travel out of the city to see."

The project initially provoked a cross-Yorkshire spat after Sheffield MPs lobbied against the bid fearing it would affect the Sheffield Arena.

Government sources downplayed the impact on Sheffield and said that ministers were satisfied the Leeds venue will not have affect the arena which will host the BBC's Sports' Personality of the Year Awards this Sunday.