North East Devolution and Levelling Up

Devolution: is a deal on the table, or isn’t it?

One can only imagine the words that must be getting exchanged behind the scenes in the North East’s town halls following this week’s evidence by North of Tyne Mayor Jamie Driscoll to the House of Commons’ Public Administration and Constitutional Affairs Committee.

A new devolution deal for the North East’s seven councils (the LA7) is ‘on the table’, Mayor Driscoll told the MPs, only to be flatly contradicted by his Labour Party comrade and Gateshead Council leader, Councillor Martin Gannon, who told regional newspapers: ’There is no deal on the table.’

This public ‘Oh yes there is’, ‘Oh no there isn’t’ exchange makes a mockery of the collaboration and shared vision for the region that is supposed to form the foundation of a devolution deal and one of the pillars of the levelling up agenda.

It is reminiscent of the divisions that wrecked the devolution deal offered by the government and provisionally accepted by the seven councils in 2015, only to be rejected in 2016 after a Labour Party and trade union campaign, in spite of the fact that a public consultation exercise – which turned out to be a sham – was ‘positive overall.’

Reaction by the four south of Tyne councils to Mayor Driscoll’s evidence shows they are still debating the same issues that held them back then – the powers to be handed down, the resources (funding) to be handed over and governance to be adopted (whether to accept a directly elected mayor).

Councillors know that failure to do a deal is already costing the region hundreds of millions of pounds. Driscoll, in his evidence to MPs, for example, reminded those who do not remember the small print of the 2020 Budget (which must be 99.9% of us, including this author) that £500m for improving North East transport is just waiting to be picked from the table in the shape of our share of the £4.2bn Intra-city Transport Fund.

Yet we hear constant complaints that transport in the region is under-funded. Maybe £500m on its own would not rectify that problem. But nor is it be sneezed at. In addition, failure to do a deal in 2016 has already cost five years’ devolution grants totalling £150m, only partially offset by the £60m received so far under the North of Tyne deal, and available of course only north of the river.

Mayor Driscoll, to his credit, has been trying to negotiate an LA7 deal for at least six months. This website reported his efforts in January. But the south of Tyne councils have always been wary. We reported in March that Mary Foy, MP for Durham and a former member of Gateshead Council, had said the four councils were unlikely to sign up.

Meanwhile, the public remains largely in the dark about this important matter of public policy. It was not a salient issue in the recent council elections and has not been debated by most, if any, of the four south of Tyne councils that will have to change their stance if an LA7 deal is to go ahead, though Durham County Council’s cabinet touched on the subject in March. The North East Combined Authority (NECA), representing the four, is supinely watching and awaiting the White Paper on levelling up and devolution expected – not necessarily with confidence – in the autumn, as reported here in May.

Mayor Driscoll has been open about his hopes for an LA7 deal, but south of the river the old Labour Party instinct for keeping their cards close to their chest and taking important decisions in the privacy of party groups seems to be alive and well.

In 2015-16 NECA prevaricated for 11 months until the government eventually withdrew its devolution offer in exasperation. The signs are that the south of Tyne four are going to repeat that exercise – quibbling over the terms of the deal, arguing with each other and their north of Tyne counterparts, making all important decisions in private, disregarding public opinion and finally letting a deal slip away.

While every other metropolitan area in England motors ahead with its deal, the North East  remains held back by its inability to unite in a common purpose. As this website argues, the present model of devolution may be far from perfect, but as long as it remains the only game in town the North East cannot afford not to be a player. Thank goodness we have Nissan, Britishvolt and the rest of the private sector to help level up our economy.