North east devolution plans in chaos following council leaders’ vote

Are the lights about to go out on plans for North East devolution?

The government is insisting that “the door remains open” for North East devolution despite council leaders in the region last week voting against plans to move forward with the deal.

By four votes to three, members of the North East Combined Authority - which covers local authority areas for Durham, Gateshead, Newcastle upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland - decided not to put the devolution plan out to public consultation despite a deadline from the government to do so by 6 September. Concerns over funding in the wake of the Brexit vote is believed to be the reason for the council leaders voting not to proceed with the deal at this time.

Communities secretary Sajid Javid warned that the region will miss out on more than £1bn of investment and powers over transport, strategic planning and skills and said that the deal was now “off the table” following the combined authority’s vote. Four councils – Durham, Gateshead, Sunderland and South Tyneside – voted against the deal, with Newcastle, Northumberland and North Tyneside voting in favour.

Javid said that the legislation that would have implemented the devolution deal had now been withdrawn, leaving one of the biggest regions in the country without a devolution plan. Commenting on the decision, Durham council leader, Simon Henig and Sunderland council leader Paul Watson said that while they were in favour of devolution, they had not been given enough reassurances from the government over funding after the Brexit vote.

Back in May, Gateshead Council walked out on negotiations saying that the government’s financial settlement for the region was “not good enough” and following concerns over future funding in the wake of June’s Brexit vote last week Sunderland, Durham and South Tyneside joined Gateshead in opposition to the deal as it currently stands leaving the whole devolution process for the north east in limbo.

The decision by the combined authority is significant for the government as the devolution deal for the north east was seen as a key part of the Northern Powerhouse initiative. With concerns growing in other areas of the country about funding promises in the wake of the UK’s vote to leave the EU, there is a possibility that the vote by one of the largest regions in the country could have a knock-on effect.

Commenting on the decision, Paul Watson, chair of the North East Combined Authority, said: “Each of the seven councils which make up the NECA has always made clear that they support the principle of devolution for the North East. Following the outcome of the EU referendum and the subsequent changes within government, council leaders have been equally clear that to move forward, the new government must provide assurances regarding the terms of the region’s devolution deal. 

“Extensive discussions and negotiations have taken place with government and within the region over recent months but unfortunately, despite our best efforts, it has not been possible to reach an agreement which all of the seven local authorities feel able to support. Although this is disappointing we will continue to work together with government to achieve our ambition of a stronger regional economy with improved opportunities for residents and businesses.”

"The decision of the North East Combined Authority not to proceed with their devolution deal is not only disappointing, it risks eroding the credibility of the region to drive the devolution agenda."

Marc Davies, chair of ACE Northern Region 

Marc Davies, chair of ACE Northern Region and a director at WYG in Leeds, said: "The decision by the North East Combined Authority not to proceed with their devolution deal is not only disappointing, it risks eroding the credibility of the region to drive the devolution agenda, especially against a backdrop of ongoing discussions and disagreements within Yorkshire. Voting patterns in the EU referendum were rightly seen by many as symptomatic of a disconnect between citizens and those making decisions and the poor state of education, housing, and employment experienced by some voters in their communities - the very same issues that the Northern Powerhouse is looking to address. More than ever, the north needs the Northern Powerhouse agenda to be progressed and devolution is a key step to ensure its successful delivery.”  

The independent think tank, Centre for Cities, said the decision was regrettable. Chief executive Alexandra Jones said: “It is deeply regrettable that local leaders in the North East have been unable to agree upon taking forward the proposed devolution deal for the area, which could have boosted the region’s long-term economic prospects.

“But this should not signal the end of devolution in the north east. Now may be the time to think instead about devolving power on a different basis within the region – for example, to a ‘Newcastle city region’, which would more closely reflect the geography over which people in that area live, work and access public services. National and local leaders must continue to work together to explore these options, and to ensure that devolution in the north east does not come to a standstill.”

It remains to be seen whether a Newcastle city region deal is even possible or desirable and what the effect of the north east decision will be on the government’s devolution plans elsewhere. Communities minister Sajid Javid and his boss Theresa May certainly have much to contemplate as they look to get the government’s devolution programme back on track following this latest setback.

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