NEMCA will come into being in May. Credit: DLUHC

Councils sign trailblazer devolution deal

The arrangement agreed with government will hand the incoming North East Mayor and cabinet more control over transport, housing and skills, and make available more than £100m of new funding.

Announced in Chancellor Jeremy Hunt’s spring Budget, the seven leaders of the region’s local authorities have now put pen to paper on the deal.

The devo deal sets a clear route for the region to take on the core powers agreed with West Midlands Mayor Andy Street and Mayor of Greater Manchester Andy Burnham.

Potentially, it could go further yet, with the use of innovation, technology and delivery to improve public services and a new North East Coastal and Rural Taskforce being set up to strengthen the region’s rural and coastal communities.

This deal builds on commitments the government has already made to North East devolution following the £1.4bn investment fund signed by Secretary of State Michael Gove in January 2023 and the £160m North East investment zone for advanced manufacturing.

The leaders of Northumberland, Newcastle, North Tyneside, Gateshead, South Tyneside, Sunderland and County Durham came together at St Chad’s College in Durham to sign the agreement with Levelling Up Minister Jacob Young.

The minister said: “I’m delighted to sign this landmark deal which will deliver transformational change across the North East.

“This is a significant step forward in our mission to level up, and I want to thank all the leaders who have come to together to make it happen. Devolution is all about handing local communities the keys to their own future, with decisions taken by the people who know their areas best. Today the North East takes back control.”

The first devolution deal, signed by the seven local authority leaders in December 2022, established the North East Mayoral Combined Authority (NEMCA) which will come into operation from May’s elections.

This will in theory allow one mayor to champion the region and unlock the benefits of devolution for around 2m people living in the area. Currently, more than 64% of England is covered with a devolution deal including nine in 10 people in the North.

This second ‘deeper’ devolution deal gives local leaders new tools to drive growth and deliver for their communities. The region will receive £37m of flexible funding for the remediation of brownfield sites and acceleration of regional projects.

Subject to business case, NEMCA intends to use £25m of this funding to remediate the prospective Crown Works Studios site, laying the ground for development of the studio facilities, £10m to accelerate plans for a Health Innovation Neighbourhood, combining research and living facilities to promote healthy ageing, in Newcastle, and £2m to support projects such as the North East Green Superport and the inclusive innovation deal, catalysing collaboration across the region.

A joint statement from seven council leaders in the North East said:

“Today’s event marks another welcome shift in power from central government to the North East. This trailblazer deal will help us deliver on our ambitions, working with our communities on the things that matter most to them.

“As the people who represent our communities, we are better placed to make decisions on local priorities.

“We are strongest when we all work together and we are already seeing the benefit of that collaboration.”

Alongside this, government will work towards the designation of a specific ‘growth zone’, in which North East local authorities will be able to retain 100% of business rates growth for the next 25 years. Subject to business case approval, NEMCA plans to designate the prospective Crown Works Studios site as a ‘growth zone’. This will enable 100% of business rates growth to be reinvested in the development of the site and project.

At the next Spending Review, NEMCA will receive a consolidated single pot for housing, regeneration and local growth funding as a stepping-stone for a full single departmental-style funding settlement.

Along with projects such as the Grainger Market, further investment includes providing £20m of long-term investment through plans for towns such as Jarrow, Washington, Spennymoor and Blyth.

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