THE region's chamber of commerce has welcomed much of the spending plan outlined by the Chancellor earlier this week.

The Chamber of Commerce Herefordshire and Worcestershire praised the extra funding for education and measures to raise productivity outlined in Gordon Brown's Comprehensive Spending Review.

But the employers' body, which represents 2,500 small and medium-sized businesses in the two counties, said the increase in the transport budget was unlikely to deliver the real improvements needed by the business community.

"Extra cash for services is welcome but there needs to be reform of delivery in many areas," said Christopher Harvey, head of membership and representation at the chamber.

Required result

"It is clear that the Chancellor is keen to see much closer monitoring of government expenditure to ensure that the extra money delivers the required result.

"This is welcomed by the chamber providing it does not lead to stifling bureaucratic intervention."

He said Mr Brown's spending plans went "a long way" to comforting businesses that had lost confidence in the Government following the Budget.

"We applaud the extra investment into education to raise standards and help equip the next generation of employees with relevant skills.

"In particular, we welcome the additional 12 per cent of expenditure in transport over the next three years but we are still very concerned that the government's 10-year Transport Plan will not produce the desired results for the West Midlands without a radical rethink.

"Much needed expenditure to deal with rail and road congestion needs to be brought forward otherwise it will apply a brake on the economy of the West Midlands."

Meanwhile, the region's development agency, Advantage West Midlands, welcomed its new responsibilities and increased spending power announced by the chancellor, saying it was "good news" for the West Midlands.

Outlining spending plans for the next three financial years, the Chancellor built on the additional £185m already allocated to the regional development agencies (RDAs) for 2003-04 by providing them with an additional £82m in 2004-05 and £204m in 2005-06.

This will see total RDA spending grow from £1.6bn this year to £2bn in 2005-06.

The Chancellor also devolved responsibility for key regional priorities to the nine Regional Development Agencies.