Yorkshire flagship projects in limbo as cuts bite

Ministers have confirmed they will slash the budget of regional development agency Yorkshire Forward by 40m, putting thousands of jobs at risk and leaving flagship developments in limbo.

The cuts will hit projects across the region, from major schemes such as Scarborough Spa, Huddersfield Waterfront and Leeds Tower Works to digital technology and employment projects, tourism advertising and university programmes.

There are hopes some projects can continue – but political leaders have warned the package could still lead to job losses "on a scale never seen before".

Yorkshire Forward, which itself is set to be abolished, had been ordered to identify up to 44m of savings and was given just 10 days to list where the axe could fall.

Ministers offered a reprieve of 4m after deciding southern regions should shoulder the burden of the most cuts.

Yorkshire Forward has already said at least 7,000 prospective jobs will no longer be created and last night it emerged that the future of more than 350 others was uncertain after Business Minister Mark Prisk said he would scrap the taxpayer-funded support service Business Link, which costs 35m a year in Yorkshire.

Yorkshire Forward chief executive Thea Stein said: "The cuts we are making will have a significant impact on employment, business growth and regeneration – how could it be otherwise?

"If we had cut 40m from our projects and not had an impact, then we would not have been doing our job properly.

"Our aim is to ensure that we do not leave empty building sites anywhere – we are doing everything we can.

"We will use what money we have to try and make sure that in our towns and cities, there are no gaping holes in the ground."

The agency will be abolished by 2012 and the Government is pushing for local authorities to join with businesses and form Local Enterprise Partnerships as a replacement.

Business Secretary Vince Cable and Communities Secretary Eric Pickles have written to councils asking them to consider forming new partnerships to provide "strategic leadership in their local areas and create the right environment for business success and economic growth".

Mr Pickles said: "If you want to rebuild a fragile national economy you don't strangle business with red tape and let bloated regional quangos make all the decisions.

"Urgent action is needed so that new businesses and economic opportunities spread across the country."

Mr Prisk's plans to scrap Business Link come after he criticised the organisation for failing to spend enough time advising businesses.

Among the 100 projects Yorkshire Forward is taking or deferring funding from, is a 4.5m cut from Barnsley-based Business Link Yorkshire this year.

The regional service has been beset by problems since its launch in 2008, including complaints over its procurement process, a 1.4m misfiring computer system, fluctuating customer satisfaction levels, recruitment issues and changes to its senior management team.