Hopes of a £3 million Government cash boost for York's troubled Kingsway North were dashed today with the news that the City of York Council failed in its bid to secure the money.

Trade and Industry Minister John Battle announced the 14 winning projects, chosen from 20 bids in Yorkshire and Humberside, at a press conference in Bradford today and York's bid for £2.99 million for the Kingsway North area of Clifton was not one of them.

Council leader Rod Hills said he was "gobsmacked" by the news especially after council officers had been told the application had a good chance of success.

"I'm extremely disappointed. I thought we'd put in a good bid which would do a lot for the local community and I thought it had been received.

"I think the people of Clifton will also be disappointed."

Police and community leaders expressed sadness at the failure of the bid, part of an £8 million scheme to transform the area in a five-year period in line with the transformation of Bell Farm.

Other money would have come from private sector and public organisations like the council, housing associations and the police.

It was hoped to provide new homes for sale and rent, job training and cash to help small business start-ups, improvements to houses, more sports and leisure facilities, including some for young people and extra policing.

Council officers will now be meeting with Government officials to find out why their bid did not succeed, but Coun Hills said it was too early to say whether they would put in another bid for the area.

Bob Towner, director of Community Services, said: "Clearly our next step will be to talk with our partners including the police to assess which of our plans for regenerating the area can still go ahead."

Inspector Howard Harding, of York Police, whose area includes Clifton, said he was also very disappointed.

"This was something we were all hoping to achieve because of the obvious benefits it would have put into the community but we will continue to work together to try and improve the quality of life in the Clifton area," he said.

Caroline Lofthouse, co-ordinator for one of the neighbourhood watch groups in Kingsway North, said: "This would have been a boost for the people in Clifton - but we will have to keep on trying to get some improvements. It has been a disappointment for us."

Meanwhile, two North Yorkshire bids were successful, in Filey and Catterick.

Scarborough Council was awarded £1.3 million for a four-year scheme to halt the decline brought about by the change in tourism and fishing industries in Filey, involving investment in key tourism, business and environmental initiatives.

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