Economic revival hopes flounder on funding

Business Secretary Vince Cable has revealed that only a quarter of bids to set up Local Enterprise Partnerships – led by councils and businesses – to replace regional development agencies in 2012 are up to scratch, with others requiring "a lot of work".

Most regions "are hopelessly fragmented and will have to get their act together", Mr Cable told a fringe meeting at the party conference.

Five bids have been submitted across Yorkshire, with three based around Leeds, Sheffield, York and North Yorkshire and a battle over whether to have a single Humber organisation or separate ones for the north and south banks of the river.

Hull City Council leader Carl Minns has said local authorities were given too little time to develop their plans amid concern the Government has tried to push through the plans too quickly.

Meanwhile the man in charge of the 1bn Regional Growth Fund – a flagship coalition plan to ease the impact of cuts in areas heavily dependent on parts of the public sector, such as parts of Yorkshire – has warned the new partnerships are unlikely to get much of the "relatively small" amount of money he has available, raising questions over where they will get finance from.

Sir Ian Wrigglesworth, deputy chairman of the fund, said money was likely to go directly to the private sector instead and put himself at odds with business leaders by rejecting calls for the cash to be used to finance transport and other infrastructure improvements.

Businesses in Yorkshire had been hoping the fund would be a way of financing major transport improvements pushed down the pecking order by Government spending cuts.

Sir Ian also said the money would be targeted at areas likely to be badly hit by cuts, such as Hull and Barnsley, rather than places like Leeds which have successfully created private sector jobs, putting himself at odds with researchers at Centre for Cities who last week argued for most of the money to be directed at areas which had track records of success in the private sector.

He added: "It's not our job in my view to be building up roads and other infrastructure, that's someone else's responsibility. That might help the private sector but so will a lot of things.

"We need to be focused a lot more on individual businesses, developments and new businesses."

But David Frost, director general of the British Chambers of Commerce, said he was surprised the money would not be used on infrastructure and called for a rethink.