North East Devolution
Back on the Agenda
What next for the North East?
Updated on 18 April 2022
To facilitate devolution in the North East, we need two deals as fast as possible, consistent with transparency. One deal should cover the six local authorities in Tyne & Wear and Northumberland (the North East, or LA6) and the other should be a go-it-alone county deal for Durham. Both would see the creation of mayoral authorities and should include at least devolution of powers and funding in the following areas:
To enable the new mayoral authorities area to carry out these responsibilities they should receive at least the following:
from the UK Shared Prosperity Fund to replace European structural funds lost when the UK left the European Union
in devolution grant to give it approximate per capita equivalence with Tees Valley
to replace the Local Growth Fund,
which expires in 2021
Not everyone will agree with these priorities. Some may not want a deal at all, objecting in principle to the current model of devolution. There is room for their views on this site.
There should be an open debate in the North East region, engaging the public in meaningful consultation, not a behind-closed-doors deal between council leaders and civil servants followed by a decision in private party groups in the town halls and only then a sham public consultation after the real decision has been taken.
It’s probably too late now for a transparent process to be carried out and a deal done by this summer (2022), to be followed by parliamentary approval and the election of a mayor in May 2023. But a start should be made as soon as possible, as a signal of intent, with the aim of a mayoral election in May 2024.
Councillors cannot afford to wait for something better to come along in a few years time. But that appears to be what the North East Combined Authority (NECA) has been doing since 2016, when it turned down a previous devolution offer. Urgency, which is what is needed, seems to be the last thing on its mind. In 2021, not long after the website went live, NECA’s March meeting was cancelled and the next was not held till June. When this website asked why there were no meetings for four months we were assured: ‘Dialogue continues between NECA members and as part of the North East LA7 group [then including Durham].’ This is a group that meets in private and publishes no agendas, reports or minutes: not a good omen (see blog: LA7: a case of mission creep).
Now another year has passed and events outside the North East are leaving the region further behind. West Yorkshire has signed a devolution deal and elected a mayor, meaning all six former metropolitan counties are covered comprehensively by devolution – except Tyne & Wear, which remains split along the line of the Tyne following its rejection of a deal in 2016. So only north of the river is there devolution and a mayor. Meanwhile the the government published its Levelling Up White Paper on February 2, including offers to talk to Durham about a go-it-alone county deal and to the LA6 group (Northumberland and Tyne & Wear) about an expanded North East deal.
The LA6 are at least talking to each other, as we know from the draft minutes of the North East Local Enterprise Partnership (NELEP) for March 2022 but they seem to lack both urgency – neither NECA nor the North of Tyne Combined Authority is scheduled to meet again until June – and inclusiveness: NELEP, the forum where local political and business leaders are supposed to meet to plan the region’s economic development, has not held a quorate meeting this year because not enough councillors have bothered to attend. Meanwhile engagement with the public is almost completely lacking; with important council elections coming up on May 5, devolution has had hardly a mention in party political literature or media coverage that this author has seen.
The History: Devolution and Division
Devolution to the English regions started well after that to Scotland, Wales and Northern Ireland and is much less extensive. In 2010 the new coalition government of Conservatives and LibDems abolished the nine regional development agencies (RDAs) set up by Labour and replaced them with 39 local enterprise partnerships (LEPs) – since reduced to 38. These are led by local business people, with council leaders making up a minority.
LEPs published strategic economic plans (SEPs) for their areas in 2014 and were allocated growth funds to carry them out. The North East LEP (NELEP) got £270m. In the ensuing years councils were encouraged to get together in combined authorities (CAs) to operate some services across boundaries. The North East Combined Authority (NECA) was established in 2014. It was made up of the five councils in Tyne & Wear plus the counties of Northumberland and Durham.
Devolution: North East Deals
As a next step, CAs were offered devolution deals under which they would receive extra powers and responsibilities devolved from Whitehall and extra annual grants for the next 30 years to support investment in their economies. NECA was offered £30m a year – a total of £900m. But there was one important string attached: CAs had to accept directly-elected mayors – so-called metro mayors – to be accountable to both the government and local voters.
TEES VALLEY and the North East (NECA)
The five councils in Tees Valley, which had been split from the rest of the North East in 2010 and given its own LEP, formed a CA in 2016 and accepted a devolution deal worth £15m a year for 30 years plus £500m for investment in local projects over five years. A Conservative mayor, Ben Houchen, was elected in 2017. But the seven NECA councils, after provisionally accepting a deal in 2015, changed their minds after months of disagreement and rejected the government’s offer by four votes to three.
NORTH OF THE TYNE
The three councils north of the Tyne – Newcastle, North Tyneside and Northumberland – which voted for the deal, left NECA, formed their own North of Tyne CA (NTCA) and did their own deal, worth £20m a year. A Labour mayor, Jamie Driscoll, was elected in 2019. The other four councils – County Durham, Gateshead, South Tyneside and Sunderland – remained in a rump NECA without a deal, a devolution grant or a mayor.
DURHAM and EXPANDED NORTH EAST DEALS?
On 2 February 2022 the government published its Levelling Up White Paper in which, among many other things, offered devolution talks to Durham for a county deal and to the Tyne & Wear and Northumberland councils (the LA6) for an expanded North East deal.
NECA - Left Behind
When West Yorkshire elected a mayor and started implementing its devolution deal in May 2021 Tyne & Wear became the only one of England’s former metropolitan counties without a deal covering its whole area and a single mayoral voice like that of Andy Burnham in Greater Manchester or Ben Houchen in Tees Valley to drive and co-ordinate economic regeneration and make the area’s case nationally and in the global competition for investment.
The North East is in the worst of all institutional worlds: its economy is being run by one LEP, one mayor, two CAs and seven councils. The Tyneside economy is split, with enhanced powers, a devolution grant and a mayor on the north bank and none of these to the south. Worst of all, there is no unity, no common sense of purpose and little collaboration except when it cannot be avoided, as with the joint committee that runs the Metro light railway and, since 2020, in dealing with the coronavirus pandemic through the secretive LA7 group.
It is not clear whether relations between the seven North East council leaders have improved since 2016, and the business community was alienated by the failure of the deal at that time. With devolution talks now in prospect again, the same mistakes must not be repeated. If the government fulfils its promise to level-up left-behind areas – admittedly a big if – the North East cannot afford to miss out. But without a deal there is a real danger that it will.
When Chancellor Rishi Sunak delivered his Budget on 3 March 2021 that is exactly what happened. Tees Valley got the freeport and economic campus it had been hoping for, as well as some other investments, while the North East got virtually nothing. Since then the North East has continued to receive relatively little from funds like the Levelling Up Fund and is missing out on £600m for local public transport that it could get from the City Region Sustainable Transport Settlement – if it had a devolution deal. This cannot be allowed to go on. The LA6 must get their act together and take advantage of the government’s offer of an expanded North East devolution deal as fast as they can, while Durham presses ahead with a county deal.