The five-year project, to be launched in the autumn, will cost £10m but Newcastle City Council's private sector partner, internet firm Digitalbrain, has a target of two years to find 800 long-term unemployed people jobs - and so save £12m a year in Jobseeker Allowances alone.
There are 10,000 people without jobs in Newcastle, according to the latest statistics, and 81,000 in the North-East.
It is also hoped the plan will combat last week's Census 2001 report which showed that the North-East had the highest proportion of people who were economically inactive and begin to tackle the North-South prosperity divide.
The scheme, the first of its kind in Europe, will involve the creation of a new website - offering businesses and job-seekers four key services:
- A virtual labour market;
- Geographic information service;
- A business to business market place;
- On-line business "clusters" for firms in complementary sectors.
"It is the first time in Europe that a local authority has enlisted the support of a private company in this way to deliver a range of services for people and businesses. It is also the first time that such a package of applications has been put together for both business and social benefit."
The project is envisaged as being of particular benefit to people who are long term unemployed and single parents - allowing them greater access to jobs and skills advice on-line - even allowing them to post CVs and apply for jobs electronically.
Mr Harkins said returning 800 people to work could save taxpayers up to £12m a year in Jobseekers Allowance.
He said: "There is also extra value in that these people, once in work, will no longer be claiming housing benefits or full or partial exemption from Council Tax."
Dave Wood, Newcastle's cabinet member for e-government, said: "Our partnership will establish Newcastle as Europe's first Digital City.
"It will help our region's businesses work more effectively and attract economic interest nationally and within the EU."
At yesterday's briefing on the project, Digitalbrain Europe managing director Brian Doherty said North-East companies and workers were failing to make the most of modern information and communication technology and that both needed to get involved in the new scheme to make it work.
He said: "This project is a giant technical leap forward for Newcastle which will retain local prosperity and drive economic development."
Amicus engineering union regional secretary Davey Hall said: "It is essential that we encourage people throughout the North-East to engage in new technology in order to be at the forefront of the knowledge-based economy.
"Newcastle can be the first true digital city, which will be a great achievement and Amicus will play its part by involving members in the region, linking them up to the Internet and, in particular, providing job opportunities."
Last week's census showed that 38.7pc of people in the North-East were economically inactive, more than 5.5 points above the national average.
Union launches last-ditch bid to save jobs
Union leaders at a closure-threatened North-East factory last night accused the Government of failing the region's manufacturing industry.
The Akzo Nobel resins plant at Dunston, Gateshead, will close in the next year with the loss of around 90 jobs following the sale of part of the company's business.
The AEEU, which is due to meet company bosses today, said it would launch a last-ditch bid to save production at the plant.
AEEU regional secretary Mel Barras called on the Government to aid the beleaguered manufacturing industry and said subsidies offered by other countries meant there was no longer a level playing field.
He said: "It is devastating to see yet another manufacturing site in the UK going to the wall. We would like to see the Government assist manufacturing instead of leaving it open to the market where it has been attacked by the low-cost labour countries."
Dutch-based Akzo Nobel Resins sold one of three chemical businesses based at the plant to competitor DSM Composite Resins which will move production to its factory in Liverpool. Akzo will move production for its two other businesses currently served by the plant to factories in London and Holland.
Akso Nobel European operations manager Doug Smith said the cost-cutting move was to make the firm more competitive in overseas markets and the plant did not fit with the firm's long term plan to concentrate on European markets.
He said the firm would fund measures to help workers find alternative employment and raised the possibility of workers being offered jobs at Akzo Nobel's 30 other UK factories.
Gateway to sites
The project involves the establishment of a new web address - www.newcastle.com - which is a "gateway" to four key interactive sites designed to boost North-East economic development and reduce social exclusion.
By entering the Virtual Labour Market, users will have greater access to the region's jobs online. Currently only about 20pc of available posts are advertised at all but it is hoped the new portal will provide greater job opportunities.
People will be able to post CVs, apply on-line and set-up personal user information. Companies will be able to advertise vacant positions.
The Geographic Information Service will be an electronic directory of information about Newcastle and the North-East allowing potential inward investors to access information about the region. It will also be a public resource.
The Business Market Place will allow buyers and suppliers to trade electronically online. Business advice and management tools will also be available.
Finally, the Business Cluster Forums will aim to make the market place more efficient by placing firms into "clusters" of complementary traders.
It will pave the way for combined tender submissions for contracts and allow companies to collaborate in procurement and purchasing.
Pump is printed
Newcastle City Council is putting £300,000 into the five-year scheme.
And the money has been used to help lever an additional £700,000 from development agency One NorthEast - making the public contribution to the Digital CVity project £1m.
Digitalbrain's share of the start-up bill is £2.5m while another £1.5m has been added in, based on council officer hours and help in support.
Over the first five years of the scheme - which is being planned as a sustainable project which will last well into the future - it is estimated that another £5m will be generated in revenue from companies signing up to the service.
This will make the project a £10m scheme in total.
Tory leader set to take fight to Labour's heartland
Iain Duncan Smith will today take the fight to Labour in its North-East heartland by delivering a damning verdict on the Government's record in the region.
In a speech on Tyneside, the Tory leader will blame recent job losses in the region on Tony Blair's failure to address the problems of manufacturing industry.
Mr Duncan Smith will underline his recent calls for big tax cuts by arguing that a low-tax economy is the best way to revive the troubled sector.
He will dismiss as a "Labour lie" the claims that his tax-cutting plans will mean an across-the-board 20pc reduction in spending on vital services.
Today's speech comes in the wake of yesterday's announcement of 90 lost jobs at the Akzo Nobel resin plant at Dunston, Gateshead, and last week's figures showing North-East unemployment up to 6.9pc.
The North-East was deliberately chosen by the Tory leader for today's speech on account of the region's economic difficulties.
A senior Conservative source told The Journal: "Iain Duncan Smith will address the problems of manufacturing and he will address the need for a low-tax economy."
The speech comes as the Tories step up their efforts to win a bigger foothold in the region's town halls in May's local government elections.
Top of their list of targets is North Tyneside where their candidate Chris Morgan won the mayoralty last year.
The Conservatives need only one more seat in the council chamber to deny the opposition parties of the crucial two-thirds majority needed to defeat Mr Morgan's future budgets.
Tynedale in Northumberland is another key battleground where the Conservatives are hoping to win the four seats needed to give them overall control.
Today's speech also represents an attempt to shift the focus away from Tory infighting and back on to policy issues following the recent turmoil at Conservative Central Office.
Mr Duncan Smith's decision to sack the party's chief executive Mark Macgregor without consulting chairman Theresa May has led to rumours that Ms May is herself for the chop.
There is now intense speculation at Westminster that she will be replaced in a spring reshuffle with right-winger John Redwood, the twice-failed leadership contender.
Mr Redwood yesterday fuelled that speculation with a radio interview in which he called on the party to speak up for a public disillusioned with New Labour.
Asked about a return to the Tory front line for himself, Mr Redwood said: "If the leadership want me to serve in some capacity, I'm very happy to talk to them."
Quelle: ic Newcastle
