'Kick in teeth' for region as Ministers axe £150m plans
The decision to pull an 80m loan to steelmaker Sheffield Forgemasters, scrap a 13m plan to buy a site for a business park and suspend 12m of city centre regeneration funding prompted a furious political row.
Across the country 2bn of projects were either cut or suspended – including 50m for a "well-being centre" in Leeds – as Ministers blamed Labour for making unaffordable spending pledges in the run up to the election after revealing the outcome of their review into projects signed off since January 1.
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Hide AdThe Government said the Forgemasters loan – to fund a giant press which promised to turn the company into a world leader in manufacturing components for new nuclear power stations – was being pulled because the money should be raised privately rather than provided from the public purse, although critics questioned whether Liberal Democrat opposition to nuclear power was a factor.
Energy Secretary Chris Huhne told the Yorkshire Post: "This had absolutely nothing to do with our nuclear policy whatsoever. It has to do with the constraints that this government is under.
"That particular deal seemed to me to be a very strong commercial deal and I don't see any reason why it should not be able to be financed from the financial markets. I believe that company can go ahead with that project if it's prepared to talk to people in the City."
Forgemasters said the decision was a "huge disappointment" and Labour politicians turned their anger on Deputy Prime Minister Nick Clegg, questioning why the Sheffield Hallam MP had not fought on behalf of the city. Rotherham's Denis MacShane even suggested Mr Clegg would not be welcome back there.
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Hide AdSheffield South East MP Clive Betts said: "The Liberal Demo-
crats in the coalition Government have kicked the city and people of Sheffield in the teeth today, with their triple whammy."
Former Cabinet Minister David Blunkett, MP for Sheffield Brightside and Hillsborough, said it was a "massive kick in the teeth for Sheffield" and a "breathtakingly backward-looking decision".
But Mr Clegg said he "regretted" that the Government could not afford to support the company's expansion and claimed the loan had been offered as "a calculated ploy to win support in Sheffield just ahead of the election". He accused Labour of raising false hopes in a "breathtakingly cynical way".
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Hide Ad"In front of TV cameras Labour made all sorts of lofty promises, but behind closed doors they left notes telling this Government that there was no money left," he said, promising the Government would do "all it can" to help to secure private funding for the company to expand.
Chief Secretary to the Treasury Danny Alexander said 2bn of projects were being cut altogether, with another 8.5bn being suspended pending further examination of their value. He also warned of more cuts after finding a 1bn black hole in Labour's spending plans.
The biggest commitment put on hold was a 7bn Private Finance Initiative deal for a new generation of search and rescue helicopters operated by the Ministry of Defence and the Coastguard.
Projects axed include money for free swimming for children and pensioners, job and training guarantees for the unemployed, library upgrades, a new hospital in the north east and a visitor centre at Stonehenge.
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Hide AdBut the Government did give the go-ahead to most of the 217 schemes – totalling 34bn – which had been reviewed, including improvements to buses on the A65 in Leeds.
Graham Honeyman, chief executive of Sheffield Forgemasters, said: "The Government announcement to overturn the loan offered to Sheffield Forgemasters' plans to install a 15,000 tonne press is a huge disappointment to all at the company."
Shadow Cabinet Minister Rosie Winterton, MP for Doncaster Central, claimed the region was being subjected to "Thatcher-style 1980s cuts".
OUT OF FAVOUR
Axed
Loan to Sheffield Forgemasters, below – 80m
Outukumpu, Sheffield business park – 13m
Stonehenge Visitor Centre – 25m
Regional quangos – 16m
Fixed term jobs for young and unemployed people – 290m
Recruitment subsidies – 30m
Extension of guarantee of job training for unemployed young people – 450m
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Hide AdGuarantee of job or training for umemployed after two years – 515m
North Tees and Hartlepool hospital – 450m
Free swimming for pensioners and children – 5m
British Institute Film Centre – 45m
Projects suspended
Search and Rescue helicopters – 7,014m
Leeds Holt Park Well-being Centre – 50m
Sheffield Retail Quarter – 12m
Libraries upgrades – 12m
Kent Transport project – 23m
Fund to develop university inventions – 25m
Scholarships to retain best research students – 25m
Support for health research – 73m
Birmingham Magistrates' Court – 94m
A14 road - 1,114m