HUGE cuts in the public sector will pave the way for the revival of West Midlands manufacturing, Chancellor George Osborne said last night.

He warned that this week’s announcement of the closure of regional quangos with the loss of 800 jobs will not be the last and added: “The answer is not more public money being poured into bureaucracy.”

Mr Osborne was on a visit to the Black Country and Staffordshire to launch the government’s new £1 billion regional growth fund.

The scheme will pay for Local Enterprise Partnerships between businesses and councils in place of huge quangos like Advantage West Midlands which spends £300m a year will be axed in 2012 with the loss of 326 jobs.

He said: “People feel very distant from the government, they don’t see how all this bureaucracy relates to them.The public sector has to change if we’re to have a country that can live within its means.”

Problem

“Our fund will be up and running and looking for bids by December. We want small manufacturers to grow bygiving them direct help and making the tax burden less.

“We want to move away from the economy being reliant on the south east.

On a visit to Bri-Mac engineering on Dudley’s Thornleigh Trading Estate Mr Osborne said he wanted public sector job losses to be replaced by growth in private firms.

Managing director Paul McCairn, aged 44, and his wife Gail, 43, bought the firm three years ago.

He said: “The problem with bodies like AWM was there was always a catch with the grants.

“By the time I had waited after filling in all the forms it was simpler to buy my equipment second hand at an auction.”

By Daniel Wainwright