More than £26 million needs to be spent to put the South-East among the most productive regions in Europe.

The TUC said the money should be allocated by the Government to the South-

East England Development Agency (Seeda) in its strategic spending revue.

In a report on regional development agencies, the TUC said an extra £26 million would be needed to tackle the region's productivity gap and create a world-class economy for the future.

The report said the UK has lower productivity and higher regional inequality compared with its European competitors. It is second only to Mexico in regional productivity variations.

TUC regional secretary Mick Connolly said: "Manufacturing in the region is under pressure due to the slow down in the international economy, while skill shortages are adding to the problems. The region needs the £26 million to fund basic training and learning opportunities and to ensure the valuable skills of those workers made redundant are not lost to the sector."