North East Devolution and Levelling Up

North East on low road to devolution

The full extent of the uncertainty into which the future management of the North East’s struggling economy has been allowed to fall by negligent councillors as it battles to recover from the Covid-19 pandemic is revealed in official documents (item 3) to be discussed by business and political leaders next week.

The board of the North East Local Enterprise Partnership (NELEP) will meet at a time when progress towards meeting its jobs and productivity targets has, by its own admission, gone into reverse (item 9).

Yet local council leaders, who are both the representatives democratically accountable for the region’s economic governance and are primarily responsible for the dysfunctional state in which it finds itself remain virtually silent and invisible on the subject.

Six years after the North East Combined Authority (NECA) voted 4-3 to reject a devolution offer from the government and split the region’s economic governance along the line of the Tyne, council leaders have still failed to heal the wounds.

The result is that now the government is planning the implementation of its levelling-up agenda, using devolution, combined authorities and local enterprise partnerships (LEPs) as its vehicles, the North East finds itself on the lowest rung of the ladder, at a probable immediate cost of more than £1bn to the region.

THREE PATHWAYS TO INTEGRATION

Following a review of LEPs, which are business-led bodies tasked with planning economic development, the government has declared its intention of integrating LEPs with democratic local government. In a letter to England’s 38 LEPs (item 3) it has come up with three possible pathways for achieving integration:

  1. Integrating LEPs into (mayoral) combined authorities (MCAs); or into institutions with devolved powers for the purpose of hosting a county devolution deal [such as, prospectively, Durham County Council];
  2. Maintaining LEPs until a devolution deal is agreed; and
  3. Finding a local solution where one or more (M)CA, [such as North of Tyne Combined Authority – NoTCA] or institution with devolved powers for the purpose of hosting a county deal covers only part of the LEP area, leaving part(s) of the LEP area outstanding.

‘Government have confirmed that the North East LEP is on Pathway 3 and will progress to Pathway 2 once/if a further devolution deal has been agreed’, says a report to be discussed by the NELEP board on Thursday.

‘Pathway 3’, the report adds by way of explanation, ‘is where a devolution deal has not yet been agreed and where LEP geographies do not match mayoral combined authority areas [as in the case of NoTCA].

‘As discussed at the last Board meeting [as reported here on April 10], the region’s political leaders and mayors are progressing discussions with government around further devolution to the region, which the LEP is very supportive of.

‘The LEP has offered our experience and expertise to not only inform the devolution plans, but also to help shape them and bring the business voice to the table. The letter from government is clear that the business voice should be integral to informing the development of devolution deals.’

Whether NELEP’s offer of its experience and expertise has been accepted is not clear.

The NELEP report also says that ‘the executive team are fully briefed that the LEP will transition into a local institution in the future.’ That presumably means that NELEP will eventually move to Pathway 1 and seems to assume that the six councils in Northumberland and Tyne & Wear will settle their differences and do a new joint deal, almost recreating the original NECA that split six years ago.

‘Almost’ but not quite, because Durham has been invited by the government to negotiate a go-it-alone county deal (p. 235). So NELEP would still have to work with two authorities, NECA and Durham, unless Durham got its own LEP as part of its separate deal, which seems unlikely.

Even this is not the end of the confusing possibilities. If Durham does a deal but NECA and NoTCA can’t agree to get together again, NELEP could be required to work with three authorities – NoTCA and Durham with devolution deals and the rump NECA separating them without one. But whether ministers would tolerate such chaotic arrangements is doubtful. 

Where the North East seems to be heading at the moment – notwithstanding the government’s statement that the region is on Pathway 3 and will move to Pathway 2 if and when a new deal is done – looks more like Pathways 2 and 3 simultaneously: NELEP will stay in business (Pathway 2) while councillors try to find a local solution to the mess they have created over how many new MCAs they want, if any (Pathway 3).

If anyone thinks that describing this situation as ‘chaotic’ and a ‘mess’ is too harsh they should remember this comment made in April 2018 when NECA gave its formal consent to the three North of Tyne councils to break away: ‘At some stage some future government…will have to do something to pull this governance together. It’s dysfunctional to say the least’.

The speaker was Councillor Martin Gannon, leader of Gateshead Council, the man who led the movement to reject the government’s devolution offer in 2016, the only one of the four council leaders who voted against that deal to be still in post, and the current chair of the most important region-wide governance body – the North East Joint Transport Committee.

Now, six years on from NECA’s rejection of a deal, the government is trying to ‘pull this governance together’. But it cannot do the job alone; it needs the co-operation of councillors, and particularly of those in the South of Tyne authorities: Gateshead, South Tyneside and Sunderland. As the most influential politician south of the river and probably now in the entire region, following the enforced departure of Newcastle leader Nick Forbes after deselection by his ward Labour Party, a heavy responsibility lies of Councillor Gannon’s shoulders.

The North East needs to move not just to Pathway 2 but to Pathway 1 as fast as possible, giving it an MCA covering Northumberland and Tyne & Wear (probably with a separate deal for Durham). This would give it access to the City Regional Sustainable Transport Settlement, already handed out to other MCAs including Tees Valley and potentially worth around £600m to the North East.

It would also give it an investment grant worth perhaps £10m for 30 years on top of the £20m already going to NoTCA. £10m may not sound a lot, but with a virtual government guarantee behind it could be turned into a capital investment fund of around £500m.

These sums would enable the new MCA to go ahead with priorities such as re-opening the Leamside rail line to connect Ferryhill and other parts of County Durham’s former coalfield communities (with Durham’s co-operation) with the Metro at Pelaw, including a new Metro link to Sunderland via Washington.

But the public doesn’t know what is really going on because councillors aren’t saying. It is a scandal of North East local politics that this mix of information and speculation has to be gleaned from the obscurity of NELEP’s website. The debate which council leaders, plus the North of Tyne Mayor and for some reason the Northumbria Police and Crime Commissioner are having among themselves in their secretive LA7 group about these vital issues for the North East economy is not one in which the public is engaged.

‘Levelling up is a whole of society endeavour’, says the Levelling Up White Paper (p. 144). ‘The private sector is essential to levelling up’. And again: ‘Local leaders will be asked to work with a diverse range of local stakeholders to improve outcomes in their areas, using local insight and expertise to assess local need and develop the right solutions. This includes civil society organisations, businesses and employer bodies responsible for identifying local skills plans.’ (p. 243).

The Local Government Association (LGA) agrees. It says that civic and democratic engagement should be integrated into the process of developing and implementing devolution agreements, and even provides online resources to support the engagement process. It wants to see a ‘new democratic infrastructure’

Yet councillors do not seem to be committed even to working wholeheartedly with NELEP, where they have six representatives on the board. They cannot be relied on to turn up regularly for meetings, as a result of which the board has not held a quorate meeting this year, as this website revealed on April 10.  

Instead debate seems to be confined to the shadowy LA7 group. ‘Seems to be’ because the group meets in private and publishes no agendas, reports or minutes, as this website has complained on numerous occasions. It was back in July 2021 that the council leaders last said anything significant publicly about devolution plans, and that was to deny a suggestion by North of Tyne Mayor Jamie Driscoll that a deal was on the table. He was slapped down in no uncertain terms

A search of the NECA website – the obvious place to look as it is the four remaining NECA councils that will have to move on from their rejection of devolution in 2016 if a new deal is to be done – reveals nothing more recent on the devolution situation than a rose-tinted interview in June 2019 with a NECA board member who is no longer in post.

Serious public engagement should be starting now, with the whole of North East society being given the chance to contribute to debate about what sort of devolution deal the region wants, and not just being offered a sham consultation afterwards on a deal already done. As a minimum of transparency regular reports on progress towards devolution should be presented to meetings of NECA, NoTCA and Durham County Council and published on their websites. ‘Engagement should begin early and enable the public to shape not only answers to problems, but the questions asked and the topics considered’, says the LGA.