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Government must not let Northern Rock Foundation fail

August 10, 2009 11:10 PM

Lib Dem Parliamentary Spokesman for Newcastle East Greg Stone has warned that the region cannot afford to be let down by the Government over the future of the Northern Rock Foundation.

The Northern Rock Foundation's future viability has been described by senior Labour ministers as "very tricky", and Newcastle East's Labour MP has admitted that he does not have a solution to the organisation's cash crisis.

The Foundation has been long established as a major funder of arts and community projects in the North East, but has been badly affected by Northern Rock's difficulties. A short-term funding package has helped to temporarily secure the organisation's existence but the grant funding pot has been massively reduced from its previous level of £190 million. There are concerns that pressure on the Treasury to fund a pre-election quick sale of the bank could threaten the viability of Rock jobs in Newcastle as well as the future of the foundation.

Greg Stone said "The Northern Rock Foundation is a significant force for good in the region and there is no doubt that a huge swathe of community and arts infrastructure would be hit if the Foundation cannot continue. I was disappointed to hear a senior North East Conservative state that there should be no open-ended funding commitment, as this is clearly a very special case, but I am also concerned that the Minister for the North East appears to have admitted the Government doesn't have a plan either.

"Nationalisation of Northern Rock must mean that the Government has inherited the responsibilities of funding the Foundation, and the Government must act to make protection of the Foundation a condition of sale if and when the bank returns to the private sector."