North East Devolution and Levelling Up
Penshaw Monument

North East’s new devolution deal: first details emerge

North East council leaders are trying to negotiate a new devolution deal with the government that would give them at least £35m a year, financial support for the Tyne & Wear Metro and no unfunded liabilities.

These first details of the expanded deal being sought for the six local authorities in Tyne & Wear and Northumberland (the LA6) emerged this afternoon at a question-and-answer session between North of Tyne Mayor Jamie Driscoll and the Institute for Government. You can view the event here.

A new deal would replace the current agreement covering only Newcastle, North Tyneside and Northumberland after the councils south of the river – Gateshead, South Tyneside and Sunderland – as well as County Durham, rejected a previous offer in 2016.

The new proposal is to bring the LA6 back together in a new devolved mayoral combined authority (MCA), though County Durham is pursuing its own go-it-alone deal.

Mr Driscoll said the LA6 had three red lines for a new deal. One is that they should receive an annual investment grant for 30 years worth no less per capita than the £20m a year now going to North of Tyne. Though he did not mention a figure, given the LA6 population of 1,470,400 compared with the North of Tyne population of 839,500, the clear implication is a grant of no less than £35m.

This is more than the £30m that councillors rejected in 2016 and more than the £30m going to Greater Manchester, Liverpool City Region and South Yorkshire, more than the £15m for Tees Valley but less than the £36.5m to the West Midlands and £38m to West Yorkshire.

The second red line, said Mr Driscoll, is that the new MCA must not be handed any unfunded liabilities. He did not give examples, but it is known that one fear of councillors who voted against a deal in 2016 was that they would be landed with new responsibilities but not the funding to support them. Mr Driscoll said he had no intention of adding a levy (precept) to council tax to fill the gap.

The third main issue is financial support for the Metro. Mr Driscoll explained that most people travelling by train in most city regions used rail networks that were not the financial responsibility of local authorities. That was not the case with the Metro, and the Tyne & Wear councils should be in the same position as their counterparts.

Two other significant points emerged from Mr Driscoll answers, including the possibility of a devolution deal leading to the re-opening of the Leamside Rail line linking Ferryhill in County Durham with the Metro at Pelaw to passengers and the linking of the Metro to South Hylton via Washington.

Contrary to the expectations of some, including this website, he does not see these developments being financed by the approximately £600m that will come to the North East from the City Region Sustainable Transport Settlement (CRSTS) if there is a deal. He envisages that money being used to introduce an app that all passengers in the region will be able to use to plan and access the cheapest and most convenient public transport for their journey, making public transport more attractive to all.

The Leamside Line and Metro link through Washington would instead have to wait for a fresh source of funding, such as a land value uplift tax which would give the new MCA access to a share of any increase in land values flowing from planning decisions, such as the construction of a new station.

Council leaders also want greater control over education and skills. North of Tyne Combined Authority already controls the £23m. adult education budget north of the river.

A final substantive point to emerge is that Mr Driscoll did not sound at all enthusiastic about the new mayoralty being merged with the role of police and crime commissioner (PCC), as is the case in Greater Manchester – not, at least, without much stronger powers, such as over probation, though not police operations. The PCC, he said, was ‘on the hook for raising council tax’.

COMMENT

Mayor Driscoll’s answers, coming during a question-and-answer session at Newcastle University, were by far the most revealing remarks about the North East devolution negotiations to have been given by any regional politician so far.

He said the talks were active and had been going on for about 20 months. Progress was slow – and also by implication difficult – because council leaders had to bring their residents and their political groups with them. Political debates may well be going on behind the closed doors of the region’s town halls, but there has been little or no public engagement that this author is aware of. Council leaders, as well as the mayor, should open up to the voters about what is going on.