A HARD won £60m industrial war chest for the Tees Valley, which was thought to have fallen victim to Government cuts, is safe, it emerged last night.

 

But a further £1.5m pledged by Labour to match fund steel giant Corus’ investment in 200 jobs at its Teesside Cast Products plant is under review.

 

The partially spent Tees Valley Industrial Programme cash, awarded in the wake of Corus’ crushing decision last December to mothball its TCP works, was a major coup for the region, which persuaded Government to cough up £30m from the Treasury to encourage new investment and new jobs.

 

A spokesman for the Department at Business last night confirmed that the TVIP programme would not be part of the £6.2bn of cuts annnounced yesterday by Government - at least £270m of which will be culled from regional development agencies.

 

Among them is One North East, which has already used £20m of the fund to offset losses in the chemical and steel sectors on Teesside.

 

Alan Clarke, chief executive of One North East said the funding cuts being faced by his agency were “a challenge but it is one we will meet. We await finer detail from Government of how the budget reductions will impact individual RDAs.”

 

He said ONE had channelled “as much investment as we can into frontline support to help companies through the recession”, but with more cuts looming, the race will be on to distribute what remains of the TVIP pot as soon as possible. A raft of further awards to Tees Valley companies is expected soon.

 

But those lobbying for £1.5m previously promised to buy time for Corus employees left facing redundancy were less pleased.

 

The Teeskills bursary programme appeared to have passed scrutiny by Whitehall mandarins looking for potential conflict with European state aid rules earlier this year.

 

But the incoming administration appears to have had a last minute change of heart.

 

If it fails to honour Labour’s pledge, Corus will be left to shoulder the full cost of the programme on top of the £7m its investment arm has committed to start-up businesses in and around Redcar, many of them fronted by former Corus employees. Geoff Waterfield, chairman of the multi union committee for TCP urged Government to sign off the cash.

 

“The Liberals and Conservatives battered Labour about letting the steel industry go. The simple question for me is you got votes out of it, what are you going to do now? This scheme will falter if they don’t put the money into it and in real terms it’s pocket change. The worst that could happen is they would have to pay it back”

 

A Department of Business spokesperson said an early meeting was on the cards between new departmental chief Vince Cable and Corus, but no date had been set yet.