Recovery within region stalls as Whitehall holds back money

MP Rachel Reeves
MP Rachel Reeves
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THE Government has been accused of stalling Yorkshire’s economic recovery after it emerged tourism bosses are being advised against any attempt at winning funding from the coalition’s flagship regional investment programme.

Tourism is worth nearly £8bn to Yorkshire and is one of the few industries to have continued to grow despite the financial crisis.

However the Yorkshire Post has learned that despite the success of Welcome to Yorkshire – credited with boosting jobs by dramatically increasing visitor numbers and spending in the region – the agency has been advised by two of the country’s “big four” accountancy firms not to attempt a funding application from the regional growth fund.

Sources have claimed that funding bids to the scheme will not be successful as Yorkshire’s more affluent communities “balance out” areas of deprivation. The news comes amid further claims that, so far, only one company in the region has seen its funding actually materialise following a successful bid.

A spokeswoman for the Department for Business (BIS) hit back stating that four – out of 31 – Yorkshire bids had now got their money, but refused to confirm or deny the claims that Yorkshire’s affluent areas were preventing funding for tourism being released.

The regional growth fund has been beset by criticism over the speed that funds have been made available. Labour has claimed that as many as 40 per cent of successful first-round applicants are still waiting for funding.

Rachel Reeves, Leeds West MP and Shadow Chief Secretary to the Treasury, said: “The regional growth fund is beset by chaos and confusion. It seems that just one of the businesses awarded funding in the last round in Yorkshire has seen any money so far.

“The Government’s decision to cut spending and raise taxes too far and too fast has cut off support for Yorkshire’s businesses, who used to look to the regional development agency Yorkshire Forward for strategic support.”

It was announced this week that the fund is to be boosted with an additional £1bn, taking the overall total in the scheme to £2.4bn. Deputy Prime Minister Nick Clegg said there have been more than 170 successful bids so far.

When asked if an area’s deprivation or affluence were criteria when considering tourism funding, a spokeswoman for BIS said: “The regional growth fund is open to bids across England from all businesses and organisations including those in the tourism sector.

“For any bidder to be successful, they need to submit a project which meets the criteria by showing it will create new jobs in an area dependent on the public sector, and can lever in private investment for the project as well.”

The Yorkshire Post’s Give us a Fair Deal campaign is lobbying Westminster for a fairer distribution of public funds. The Government – which gives more than £50m a year to Visit Scotland and a £13m grant to London – is already under pressure from the region’s MPs after apparently snubbing a deal to match-fund £3m raised locally for a Yorkshire “attack brand”.

Taxpayer support for Welcome to Yorkshire, credited with creating up to 4,000 new jobs, is due to cease entirely from April. The agency has moved to a local membership funding model. The value of tourism in the region has rocketed from £5.9bn three years ago to £7.2bn now.

Welcome to Yorkshire chief executive Gary Verity said: “The Government is investing millions of pounds in Visit England and Visit Britain but we think now is the right time to invest in the attack brand of Yorkshire too.

“At present the only attack brand being funded is London, which is not going to help the Government achieve its aim of rebalancing the economy away from the South East. We think the internationally-recognised brand of Yorkshire already offers a credible alternative to the capital.