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Setbacks in North East devolution

Posted by
27 Feb 2017
North EastIn recent years, local authorities in the North East have made enormous strides to ensure the region continues to develop and evolve. The devolution of the North East was to be the first step in this innovation and allowed central government to delegate powers to local government in the North East. However in September 2016, plans for the devolution of powers were suspended. Since then, numerous MPs and council members in the region have expressed their outrage regarding the delay of the agreement. But what are the origins of the North East Devolution Agreement and how has this delay occurred? 

2014’s referendum on Scottish independence found that 55.3 percent of Scottish voters wished to remain part of the UK. This led to several regions in England to call for devolved powers in line with what was promised to Scotland during the referendum’s campaign, resulting in the creation of The Cities and Local Government Devolution Act of 2016. The Act was designed to introduce elected mayors to combined local authorities with powers over housing, planning and transport.

However, in September 2016, it was announced that plans for a regional mayor and £900 million fund had been scrapped due to concerns from four of the seven North East’s councils over potential post-Brexit funding from the government. 

South Tyneside, Sunderland, Durham and Gateshead councils have been revealed as the culprits, stating they were not satisfied with reassurances over funding following the UK’s decision to leave the European Union. There were also a number of concerns about an increase in council tax to pay for a directly elected major, which has proven to be a sticking point in negotiations.

Whilst this means there will be no election for a North East mayor next year, plans remain in place for Birmingham, Liverpool district, Greater Manchester and Tees Valley to vote on Thursday 4 May 2017.

The deal would have included a variety of new powers and £30 million of funding a year for the next 30 years, in return for electing a regional mayor. The infrastructure fund was due to be run by the North East Combined Authority, led by the seven council leaders, with chairman responsibilities falling to the mayor, who would specifically oversee other areas such as control of bus services.

Local Government Secretary Sajid Javid, said he was “very disappointed” with those who voted against the devolution package which “means local people will miss out on over £1 billion of investment, and new powers on transport, planning and skills”.

“Handing power back to Northerners is a key part of our plans to build a Northern Powerhouse and our focus now will be on working to secure a new agreement for residents in those areas committed to progressing with devolution”.

North East Chamber of Commerce’s Ross Smith was scathing about the indecision saying “We’re at a loss to understand why, after a year of negotiations, it’s not been possible to strike a deal. It’s extremely disappointing and bad news for the North East and UK economy”.

There has even been suggestions that Newcastle could look to agree there own ‘regional’ devolution deal, similar to that of the Liverpool district. Other recent reports have suggested that a devolution deal for the North East is back on after Newcastle, North Tyneside and Northumberland have come together for negotiations with the government over a new deal. Gateshead, Sunderland, Durham and South Tyneside who voted to postpone the previous proposal will not be involved in these new talks.

George Osbourne had championed the idea of the devolution schemes previously and the idea of a ‘Northern Powerhouse’, so this comes as no surprise to most people that there is still a deal on the table.
A name for the three areas has yet to be decided but reportedly the money set aside for the failed deal is still available. If the information is to be trusted, a deal is unlikely to be signed until mid-2017, however there could be an announcement from the government imminently on its future.

In my opinion anything that will bring economic benefits to the North East, as well as new opportunities for businesses and residents has to be a positive. If the rumours of Newcastle, North Tyneside and Northumberland authorities combining are correct, then I fully support their determination to get this deal over the line.

Only time will tell if they manage to resurrect a once thought dead in the water agreement.

What are your thoughts? Can the North East continue to evolve after this setback? I’d love to hear your thoughts in the comments below. Alternatively, browse through our latest roles in the North East. Browse Roles

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