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Local councils fear RDA cash raid

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Local councils and politicians in the North East of England fear a raid on cash allocated to regional development agencies.

According to The Newcastle Journal, the Government may take money allocated to the region because of the economic downturn.

Business Minister Pat McFadden told the paper the Government was being deluged by requests for help from ailing companies and signalled another cash raid on regional development agencies was possible.

The paper says the government has already taken£34m from One North East to pay for a housing scheme mostly benefiting the South.

Blyth Valley MP Ronnie Campbell said any similar move would be a “disaster” for the region and Newcastle City Council leader John Shipley warned the region needed all the money it could get to withstand a recession.

Mr McFadden is quoted as saying the Government had to take “careful judgments” on aid and signalled further cash could be taken from RDAs to pay for Whitehall’s response to the economic downturn.

He told MPs: “Whether I am going to go back on the formulas we used previously to fund RDAs, I am not sure. But obviously when it is all hands to the pumps, yes you need to be flexible in your decision-making.”

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