£20m black hole for city regen firms

The regeneration companies responsible for large redevelopment schemes in Manchester and Salford are set to lose almost £20m through the collapse of the Northwest Regional Development Agency (NWDA).

New East Manchester will have to deal with an £11.4m black hole in its budget and Central Salford URC will lose £8m as the NWDA closed its doors to former funding partners.

Those are the amounts received by the organisations for 2009/10 and cover projects and operational costs. For New East Manchester, it means a reduction in its operational budget of a third, or £600,000.

The loss of funding may force New East Manchester to reassess staffing levels – it currently employs around 120 people – although there is no suggestion of redundancies.

New East Manchester staff are employed on Manchester City Council contracts, which has no formal redundancy policy. Redeployment into other roles could be a more likely outcome.

A spokesperson for New East Manchester said: "Currently we're in discussions with Manchester City Council with regard to future funding arrangements beyond 2010/11”.

Other quangos to lose out in the spending cuts, which will kick in next March, include Manchester’s inward investment agency, MIDAS, which will lose £1.5m, and Manchester Knowledge Capital, which received £282,000 from the NWDA for 2009/10. Pro.Manchester, the organisation for Manchester professionals will lose is £280,000.

Sources close to the NWDA also suggested that Marketing Manchester, which promotes the city as a tourism destination, could see its budget cut by the agency, despite escaping in yesterday’s announcement.

Manchester City Council criticised the cuts as “short-sighted” although would not comment further on how the loss of funding might be replaced.

Nobody at Marketing Manchester was available for comment.