Ministers accused of reneging on aid for steel regions

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The Government was accused yesterday of reneging on a commitment to pump £50m into regions of England hit by heavy job losses in the steel industry.

Local councils in Teesside, South Yorkshire, Scunthorpe and Corby, the areas worst affected by the job cuts at Corus, are meeting the Industry minister Brian Wilson next week to demand to know what has happened to the "forgotten" money.

The cash is part of a £135m aid package announced in the Commons last May by the then Secretary of State for Trade and Industry, Stephen Byers, after Corus confirmed it was going ahead with 6,000 job losses in south Wales and England.

The Government offered £32m in lump sum payments of £2,500 each to redundant steelworkers and a further £96m for regeneration programmes in England and Wales.

At the time Mr Byers assured MPs he would not not walk away from workers, families and communities hit by the cutbacks. "With the programme of action I have announced today, we bring hope to individuals and economic regeneration and job creation to those areas involved. Today we deliver on that commitment," he added.

But SteelAction, the group representing the local councils, claimed last night that virtually none of the £50m earmarked for the steel closure areas in England had materialised.

The Rotherham councillor Roger Stone, SteelAction's chairman, said: "We know that £50m is being spent in south Wales on clearly identified specific projects.

"But in England it's a different matter ­ £50m destined for the English steel regions has been forgotten. If the money is not to be provided, why did the Government announce this massive aid package to the steel industry?"

He said that all that had been announced so far was a £1.5m project to promote broadband and digital networks in Teesside and North Lincolnshire.

A spokesman for the Department of Trade and Industry strenuously denied the money had not been forthcoming. "To suggest that the money is not there or has been forgotten is ridiculous," he added.

The DTI said £20m was being spent on a business park and campus at Stockton for Durham University while a further £16m was going into the next stage of a regeneration project at Middlesborough docks.

However, SteelAction said DTI officials had told it that the £20m for the Stockton business park wasannounced before the Corus steel closures were confirmed last May.

A DTI spokesman conceded that much of the £48m was not new money but he insisted Mr Byers had never claimed it was. "The money was in the budget but it had not been allocated to any specific projects and it is entirely possible the money could have gone to other regions."