the disposal of RDA assets may have an adverse impact on the region. He expressed concern over the loss of the regional development agency One North East, and Government Office for the North East. He was concerned that this had taken place due to political decisions taken in the south east rather than the economic needs of the north east. Without central funding Local Entreprise Panels will find it impossible to fill the gap

A rise in youth unemployment is critical problem. The North East GVA in 2010 was the same as it was in1999 but without the RDA we would have fared worse. We must grow the private sector, the two Local Enterprise Partnerships must come together to contribute to the region, and there needs to be more spending on sectors, rather than place.  Lord Shipley also warned the audience, to watch out for the impact of the Localism Bill now going through Parliament. He said this will 'up end' the planning system and give neighbourhoods much more power over the development in their areas.

UK business is the most heavily regulated in the world but we need to promote enterprise to achieve growth, we need account management of new and existing business and to bid better for European Regional Development Funding and Rural Funding, develop finance for business growth and other economic grants. There needs to be a realistic, pragmatic, innovative and ambitious approach to enterprise growth.  As interim head of the North East Economic Partnership, he said: "I don't think we understand the big picture yet because it is still developing. Is the system going to be perfect - no. Would we like to understand more about how the new set up will work - yes. But if we wait until all the i's are dotted and t's are crossed then it will be too late."

The five universities contribute £1 billion+plus to the region’s economy, with an added value of £1.30 for every £1.00 spent. There are 16,310 international students because Newcastle is a good place to come. Making the point that all cities by their very nature are unsustainable, he highlighted that the economic strategy of 1NG (the 1Plan) is compatible with the university’s ‘Vision 2021’ plan, which seeks to make Newcastle/Gateshead a sustainable city. The university is in partnership to achieve this change in terms of investment in Science Central, contributions in Ageing and Vitality, Sustainability and Regenerative Medicine and stem cells.

The banks are seeking to improve balance sheets but there are moth balled developments on the balance sheet which are rolling up interest. There is distressed property lending which are storing up problems which will be eventually sold and are storing up problems for the future; and there are some banks which are a lot stronger and active in the development market but with care and attention requiring a degree of equity investment by the borrower.

The level of public sector cuts has returned us to the level of public sector expenditure of 2007; in August/December 2009, over 2000 jobs created with £2.2 billion investment, the north east was the least hit region outside of London; the region has restructured over the last 15 – 20 years, with the result that Newcastle is one of the top ten cities creating private sector jobs in the last three years; a different approach is needed to avoid being too dependent on public sector  funding, there is a need to marshal dynamism, energy and enthusiasm; the Regional Growth Fund (‘RGF’) seeks to offset government cuts, and is not seeking to replace the RDAs; it is to give support on jobs and businesses in regions over dependent on the public sector; only the private sector can apply; the process will be as simple as possible on a competitive  basis and the best bid will win; there is a £10 billion investment hoped for; where the bids are less than £1 million the bids will be collated by agents such as North East Access for Finance and others; and the decision on bids will be announced in March 2011. Funding from the Regional Growth Fund is specifically for those regions that are heavily reliant on the public sector - that means primarily the North East, North West, Yorkshire and the West Midlands. Some areas will struggle to meet the RGF criteria because they are private sector dominated. The RGF is a competitive process so those bids which leverage in the highest amount of private sector funding (a must), create the highest number of jobs and are sustainable will have the best chance.

The economy is ‘so far, so good’, being better than could have been expected, with GVA approx. 1.75% in 2010; there have been some early wins and making it more sustainable to progress the boosting of demand; construction looks more confident in the north east region but tenant demand remains flat; the non-financial corporate sector is in pretty good shape, which is lending money and acquiring assets; business spending and investment is cyclical replenishment will happen; the risks are government borrowing, tightening with fiscal policy, jobs, lost growth in the private sector and mainly part-time employees; the credibility of the Bank of England is under threat with the inflation target of CPI 2% rising mainly in the food and commodity prices, with wage growth around 2%.  Reuters economist poll indicates that the base rate will be perhaps 0.25% higher by the end of the year; and house prices are under review with demand outstripping supply, since there is a shortage of stock.

Maths for development do not work, lack of occupiers and lack of funding identified as the main challenges in carrying out development in the region. Tenant incentives are also critical in terms of capital rather than rent free and the level of the incentive. Yields are weak and there is unpredictability and uncertain covenant strength. It is difficult to progress developments at present due to construction costs, rents, tenant demand, tenant incentives and yields. There has been about 140,000 sq. ft. of enquiries for space in Teesside recently for which there is no supply. The challenges faced by developers include uncertainty in the economy, a lack of occupiers (since easier not to move), the market still falling; poor availability of funding, high construction cost. There needs to be a ‘community’ approach, with real partnership between public and private sector and a strong vision of what needs to be achieved. The north east will come out of the recession stronger than when it went in but it will require all to play their part.

Key issues are location, reducing capital costs to improve returns, logistical efficiency of operation, better response from utility suppliers. Occupancy costs are important, with renewal inflation at less than 1%, monthly rental payments desirable, prefer net rents as incentives prop up the insecure, empty property rates are a disincentive, upward only change to up/down rents geared. In the north east perspective, the RDA was helpful in developing sectors – but what now? Dualling the A1 would be good for north east and good for Greggs.

Promoted the development of the key sites in Newcastle and Gateshead with an overview of the programme and capacity of the sites at Gateshead Quays, Science Central and Ouseburn. The development of an international standard conference centre at Gateshead Quays would be vital to encourage growth and create jobs in the tourism, conference and hospitality sectors.

In a review of the regeneration and development plans post-recession and its impact on the Tees Valley economy, there emerged ‘reasons to be cheerful’ from the strengths and opportunities in Tees Valley. TVU has two objectives, a high value carbon economy and a more diversified and inclusive economy. The investment plan will maximise public sector and European funding, innovative financial mechanisms and private sector investment, with an ‘open for business’ approach, to deliver exceptional support with real confidence about securing a prosperous future.

Summit chair Kevan Carrick summed up: “There were a number of words that came through in today’s presentations, which despite the challenges we face in the region were very positive, they were vision, enthusiasm, relationships, optimisim, effective business engagement, competitiveness and leadership. The message is clear; we need each other to be successful. Teesside needs Tyneside to succeed and vice versa, indeed the North of England needs the North East as a whole to be successful. We must work together and focus on the objectives which benefit the region as well as each other.”