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'Wrong' Newcastle to pay back £1m 'Wrong' Newcastle to pay back £1m
(5 days later)
A council wrongly given £2m when the government mixed up two Newcastle authorities, is to pay back £970,000.A council wrongly given £2m when the government mixed up two Newcastle authorities, is to pay back £970,000.
The money, a reward for promoting local firms, was given to Newcastle Borough Council in Staffordshire instead of Newcastle upon Tyne City Council.The money, a reward for promoting local firms, was given to Newcastle Borough Council in Staffordshire instead of Newcastle upon Tyne City Council.
The Department for Communities and Local Government described the payment last month as a "regrettable error".The Department for Communities and Local Government described the payment last month as a "regrettable error".
But the council has now agreed to pay the money back over the next two years, the first instalment due in April.But the council has now agreed to pay the money back over the next two years, the first instalment due in April.
Money could also be taken from future payments the government makes to the borough council.Money could also be taken from future payments the government makes to the borough council.
This is fantastic news Councillor Simon Tagg, leader of Newcastle Borough Council,This is fantastic news Councillor Simon Tagg, leader of Newcastle Borough Council,
It was given more than £2.5m by the government instead of just £600,000 as part of a local authority business growth incentive which started in 2005.It was given more than £2.5m by the government instead of just £600,000 as part of a local authority business growth incentive which started in 2005.
Councils are given back some business tax that local firms pay, in return for promoting them.Councils are given back some business tax that local firms pay, in return for promoting them.
Newcastle upon Tyne City Council said at the time that because the funding for the incentive is so complex, it only realised its share was missing at the start of this year.Newcastle upon Tyne City Council said at the time that because the funding for the incentive is so complex, it only realised its share was missing at the start of this year.
Simon Tagg, leader of the borough council, said the money was taken in good faith and the first officials knew about the error was when, in a letter last month, the government asked to discuss repayment methods.Simon Tagg, leader of the borough council, said the money was taken in good faith and the first officials knew about the error was when, in a letter last month, the government asked to discuss repayment methods.
But he described the agreement as "fantastic news".But he described the agreement as "fantastic news".
"After negotiating with the Department of Communities and Local Government we are now able to retain a total of over £1m for the economic regeneration of our area," he said."After negotiating with the Department of Communities and Local Government we are now able to retain a total of over £1m for the economic regeneration of our area," he said.
In a statement, a local government department spokesman said the council had outlined a "full and imaginative programme of economic development" for the area.In a statement, a local government department spokesman said the council had outlined a "full and imaginative programme of economic development" for the area.