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May 21, 2009 12:01 AM

Newcastle East Liberal Democrat Parliamentary Spokesman Greg Stone has warned of the impact of further "stealth cuts" to key Government regeneration budgets covering Newcastle.

The challenger to North East regional minister Nick Brown spoke out in response to speculation that Bridging Newcastle Gateshead is set to see a further cut in funding from the Government's Housing Market Renewal Pathfinder programme on top of a

10% cut announced earlier this year.

It has been suggested that a further 10% cut in the annual budget is anticipated imminently, potentially threatening the viability of a number of local housing improvement schemes.

One high profile example could be the bid to Government for £80m of PFI credits to support a major refurbishment of the 1970's Byker Wall estate, which is increasingly in need of renovation.

A council-led bid to secure investment with private partners to allow major refurbishment, environmental improvements, 100 new homes, and refurbishment of Byker Primary School is reportedly in doubt due to Government belt-tightening.

Greg Stone said: "Important regeneration schemes in Newcastle are being put at risk because the Government is rapidly running out of money. I am greatly concerned that every few months the Government is salami-slicing another 10% off regeneration budgets, with an inevitable effect on delivery.

"I am particularly concerned by rumours that much-needed improvements to the Byker estate may have to be put on hold indefinitely because the Government is not prepared to financially support it.

"This would be very bad news for people in Byker and a major failure to deliver by the local MP and regional minister, Nick Brown.

"I understand the problem is not the quality of the plans, but the shortage of funds. I fear this problem may also affect other projects, with a knock on effect in terms of construction jobs and availability of new housing."