HUNTINGDONSHIRE businesses will have look to the European Union for funding because the region will be starved of investment by the UK Government, their leaders believe.

HUNTINGDONSHIRE businesses will have look to the European Union for funding because the region will be starved of investment by the UK Government, their leaders believe.

Whitehall has approved the creation of a Greater Cambridge and Greater Peterborough Local Enterprise Partnership to replace the East of England Development Agency, which is due to be abolished in March 2012.

But Ministers have made it clear that the region is unlikely to see any of EEDA’s £100million-a-year budget. Instead, it will go to depressed areas with little prospect of leading the country into post-recession prosperity.

John Bridge, chief executive of Cambridgeshire Chambers of Commerce and chairman of the LEP steering group, is baffled by the new Government’s failure to grasp basic economics, he told The Hunts Post.

The regional development agencies’ combined budget of £2.3billion-a-year – of which EEDA had less than its fair share, in spite of generating £5 of revenue for every £1 it spent – is set to become a ‘regional growth fund’ of £1.4bn over three years – and growing regions will be lucky to get any of it.

Instead, it will be given to basket-case economies in depressed regions, Mr Bridge fears, as happened with the Chancellor’s national insurance concessions on new jobs, announced in the June budget. The economic powerhouse of the South-East and East of England was specifically excluded, much as it will be from the growth fund.

“It doesn’t seem sensible that they don’t understand that areas like this can generate money for the exchequer that they could then use elsewhere,” Mr Bridge said. “There’s a danger of stopping that capability.”

Ironically, Whitehall inconsistency does not stop there. Although the Government has said LEPs should cover natural business boundaries rather than local authority boundaries, this means some firms in the Cambridgeshire LEP area – which includes parts of Rutland and Lincolnshire – will be treated differently from firms down the road, just over the Cambs and Peterborough border.

Those in the former East Midlands region will be entitled to the NI concession. Whether they will bring with them any prospect of growth funding remains to be seen.

This dilemma will be one discussed at a meeting on November 24 when the new LEP will try to unblock obstacles to regional prosperity as it determines how to deliver plans to double the size of the greater Cambs economy over the next two decades.

“We have to be realistic about the likelihood of Government funding and about what the LEP can achieve,” Mr Bridge said.

“Traditionally, we have been very poor at attracting EU money, and we need to get much better at that. There will be European money available for many different things.

“It’s a real opportunity for the private sector and businesses to work with the local authorities to deal with all these issues.”