North East Devolution and Levelling Up
Penshaw Monument

Political turmoil could delay North East devolution

Political turmoil national and local could set back hopes of an expanded North East  devolution deal, and with it the chance to make the most of levelling up, for years.

This website normally focuses solely on devolution and levelling up and avoids commenting on wider political issues and events. But this month and this week have seen events which could directly affect those interests and demand a response.

At national level, the results of yesterday’s by-elections in Tiverton & Honiton and Wakefield with their crushing defeats for the Conservatives by the Liberal Democrats and Labour respectively have raised the hopes of both opposition parties of getting rid of Boris Johnson and his Tories at the next general election, probably in 2024.

This may well encourage North East local politicians to delay doing a devolution deal until they see what the next election brings. A Labour government, they may be hoping, would bring a new form of devolution with greater powers and, crucially, higher levels of funding, to the region.

The three councils south of the Tyne whose decisions on devolution are critical because they are the ones who voted against a deal in 2016 and must be persuaded to change their minds – Gateshead, South Tyneside and Sunderland – are all still controlled by the Labour Party and would much prefer to deal with a Labour government.

But a wait-and-see policy on devolution would be a mistake – first, because the North East has already wasted six years when it could have been sharing the advantages already being enjoyed by the likes of Greater Manchester and Tees Valley.

The second reason this would be an error is that the Tory by-election defeats by no means guarantee a Tory defeat in the general election. It looks likely at the moment, but two years is a long time in politics.

The third reason is that we don’t yet know what a Labour government’s policy on devolution would be or how much it would be willing to spend. Lisa Nandy, the Shadow Levelling Up Secretary, has promised £28bn a year during the next parliament  which, as this website said on March 13, is certainly a lot of money. But we don’t know how it would be distributed around the country or what the North East’s share would be. Details of Labour’s policy will have to await its manifesto.

The final reason why delaying a devolution deal for the North East would be a mistake is that whatever occurs during the period up to the next general election, and whatever the outcome of that election, places with deals will be in a better position to take advantage of new developments than those which have not even left the devolution starting blocks.

Turning to local events, this month has seen turmoil at Northumberland County Council, where unlawful expenditure, as well as ‘strained relationships within the Council resulting in legal and reputational risk’, have been officially revealed and widely reported.

These issues are likely to distract the county council from other matters, like devolution, for a considerable time. At first glance, that may not seem to matter too much as far as expanding North East devolution is concerned. Northumberland is already part of the North of Tyne Combined Authority (NCTA), which has a devolution deal, and that deal could probably be expanded with nothing more than passive acquiescence on the county council’s part. As mentioned above, it is the three south-of-the-river councils which are critical because they must reverse their rejection of a deal in 2016.

However, if Northumberland appears unready to play a full part in devolution this could provide an excuse for the south-of-Tyne councils to delay, if they so wish. This is particularly so as the three, all being Labour, could place the political blame on Northumberland, which is Conservative.

More seriously, however, Northumberland’s troubles could undermine the government’s confidence in councils in the area as custodians of public funds. This is an essential of devolution, and the main reason the government favours directly-elected mayors as identifiable accountable individuals.

As Professor Philip McCann, in one of the most highly-regarded books on economic geography of recent years, and the respected Institute for Government, have argued: ‘Resistance to devolution from the centre arises from the fact that central government lacks trust in sub-national government competence or accountability’.*

If either of these factors, national or local, hold back the expansion of North East devolution there are plenty other councils ready to jump in ahead. The Levelling Up White Paper invited councils in nine other parts of England to open negotiations for deals and some are already pressing ahead with enthusiasm.

Derby and Nottingham city councils and Derbyshire and Nottinghamshire county councils wasted no time in putting proposals to the government after being identified as pathfinder areas in February and their leaders have already held a ‘very positive’ meeting with Levelling Up Minister Neil O’Brien, assisted no doubt by the fact that the Conservative MP Ben Bradley is leader of Nottinghamshire County Council.

The four councils boasted in a joint statement on March 25 that: ‘‘The councils are now at the front of the queue and are looking to secure the earliest possible deal to bring more decision-making power into the hands of local people. If agreed, this could create a new East Midlands Mayoral Combined Authority, leading to more major decisions being made locally and more funding for services in the region.’

* McCann, P. (2016) The UK Regional-national Economic Problem. Abingdon: Routledge, p. 501.