KEY regeneration schemes in Merseyside will have their funding cut to help pay for Gordon Brown’s recent housing market rescue scheme.

The North West Development Agency (NWDA) has been told to hand over £50m earmarked for regeneration schemes to help pay for the £300m Homebuy Direct scheme. Chief executive of the NWDA, Steve Broomhead, last night said he was “disappointed to say the least” and was now working to establish exactly which schemes would lose money. Business leaders last night condemned the Government’s “raid” on the Agency’s budget, which has previously helped fund large projects like the Cruise Liner Terminal and Liverpool’s new Echo Arena and BT Convention Centre.

Liverpool council leader Warren Bradley said the money was crucial to growing the city’s economy, and called for the hous-ing rescue scheme to be paid for by cutting government waste and scrapping the identity card plan.

Last night, the Government insisted it was committed to the NWDA, but said it was the right thing to do to help struggling homebuyers.

Earlier this month, the Govern-ment announced a £1bn raft of measures intended to reinvigorate the housing market.

Around £300m will be used to fund Homebuy Direct, a new shared equity scheme aimed at helping up to 10,000 first-time buyers on to the property ladder.

The nine regional development agencies (RDAs) have been told they will have to foot the bill through budget cuts.

As the NWDA is one of the largest agencies, it has been told it will be contributing £50m.

Of its £386m budget in the next financial year, it will contribute £4.6m, and, in the following year, it will be forced to hand over £46m out of its £377m government allocation for that year.

Mr Broomhead said: “It’s very disappointing. The Agency wants to help in a wider sense the situa-tion in the housing market, but we don’t directly look after hous-ing matters. It does mean now I have got a job to re-prioritise schemes in 2010/11.

“There are some schemes that are being developed at the mom-ent by our partners, but it is too early to say [which will suffer]. I respect the right of the Government to change the Agency’s budget, but I am dis-appointed.” He said the NWDA acts as spokesman for all RDAs, and would negotiate hard with the Government over the issue.

There is also concern about the ability to attract European money, as it has to be match-funded by the UK. With less money coming from the Whitehall-funded NWDA, Merseyside may not attract as much Euro cash. Cllr Bradley said: “The Government should be looking to other areas to find the money. It could easily divert billions from government waste or the ID card scheme.

“Regeneration for a city like Liverpool, that is evolving, is crucial, particularly at a time when we are seeing a downturn.”

Jack Stopforth, chief executive of the Liverpool Chamber of Commerce, said the move was completely contradictory.

“The fact the Agency does not have a housing function makes it doubly ironic – it just rubs the salt in. The housing issue is too little too early. I don’t think it’s a particularly well thought through policy, but what I am more concerned about is how they are funding it.”

Frank McKenna, chairman of lobby group Downtown Liverpool in Business, condemned the move, saying the Government was “robbing Peter to pay Paul”.

“As far as regeneration of the overall Liverpool city region econ-omy this is concerning, because a cut of £50m will have an impact on regeneration schemes.”

He said there were better ways to inject life into the housing market, like using housing asso-ciations who have access to credit because of large asset bases.

A spokesman for the Depart-ment for Communities and Local Government said: “It is right that we deal with the immediate pressures in the current housing Šmarket,Š supporting vulnerable families in all regionsŠ toŠ avoid repossession, and help peopleŠ who wish to buy a home.

“Our £1bn package will support jobs and businesses, as well as first-time buyers.”

davidbartlett