Agency budget cut is criticised

A council has criticised plans to cut the budget of the East of England Development Agency (EEDA) by £21m.

Suffolk Coastal District Council has written to the government expressing "serious concerns" about recently announced cuts to development agencies.

The council is worried regional funding is being diverted to support action to help people facing mortgage problems.

The Department for Business said the government still remained committed to development agencies.

"The £1bn Homeowners Support Package sets out new measures to help people who are struggling with their mortgages and to strengthen confidence in the housing market more generally," said a spokeswoman.

'Diverting money'

"The Government believes that investing in housing will have a direct benefit for struggling homeowners in regional areas and to help stimulate local housing markets."

Councillor Colin Hart, cabinet member for economic development, said: "The government is diverting money away from the important work of regional development agencies to finance its package of support to those facing problems because of the downturn in the housing market.

"The loss of capital for initiatives in the area would be extremely damaging at a time of national growth, but is all the more regrettable when it appears the economy may now be in decline."

Richard Ellis, EEDA chairman, said: "While we fully understand that the government has to make tough decisions, we're very disappointed with this unexpected cut in funding.

"The impact of a major reduction in EEDA funding will be significant for businesses, communities and people who live in our region.

"For every pound we invest - we draw in an additional 90p from elsewhere to support our region."

The Department for Business spokeswoman added: "As strategic leaders of economic growth in their regions, the Regional Development Agencies will be working with Government to support the most critical regeneration schemes with the most potential to transform their communities."

EEDA provides business support in Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Norfolk and Suffolk.