Secretary of state Michael Gove agreed the 'minded to' deal with regional leaders

Next step for £4.2bn devolution deal

Seven local authorities will be asked to rubber-stamp a request to government in the coming weeks that will ease the passage of the North East’s deal.

The deal is expected to include a £1.4bn investment fund alongside significant funding for transport, education and skills, housing and regeneration.

The cabinets of the seven local authorities involved in the North East deal – County Durham, Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside and Sunderland – will hold meetings in the coming weeks where members will be asked to move ahead with the plans.

Each of the council cabinets will be asked to give their consent for an order to be made in Parliament to abolish the existing North of Tyne Combined Authority and North East Combined Authority and for them to be replaced with the new North East Mayoral Combined Authority. The NTCA and NECA will also be asked to take this decision.

In a joint statement, council leaders said: “We are incredibly proud of the deal we have agreed that we believe will help the North East realise its full potential.

“The feedback from residents, businesses and other stakeholders across the region has been very positive, and we look forward to taking this opportunity to improve the lives of the two million people who are proud to call the North East of England their home.

“This is an important step towards our vision of establishing a new combined authority that gives the North East control over its own future and we look forward to working with Government to achieve that outcome for our region.

“We remain ambitious to secure even more for our region and we are already in negotiations with government on a trailblazer deal for even more investment.”

The deal, greeted warmly at consultation this spring, was agreed in principle with government in December 2022.

  • The £4.2bn investment package includes:
  • An investment fund of £1.4bn, or £48m a year, to support inclusive economic growth and support regeneration
  • An indicative budget of around £1.8bn, or £60m a year, for adult education and skills – to meet local skills priorities and improve opportunities for residents
  • A £900m package of investment to transform our transport system, with £563m from the City Regional Sustainable Transport Fund, on top of funding already announced for our buses and metro system
  • £69m of investment in housing and regeneration, unlocking sites to bring forward new housing and commercial development.

It is also expected to lead to an extra 24,000 jobs in the region and unlock an additional £5bn in private sector investment, the councils said. The deal also included scope for the region to enter into ‘trailblazer’ negotiations to enable the North East to play a leading role in further devolution of powers and investment in the future.

The establishment of a new combined authority would not impact the services that local councils are responsible for delivering. The functions of the North East Local Enterprise Partnership, Transport North East and Invest North East England will be delivered by the new combined authority.

Once cabinets have agreed to the Parliamentary order being made, the chief executives of each of the councils will also need to approve to proceed before the government can then make the order.

This is expected to take place in early 2024, with elections to appoint a new elected mayor for the North East in May. That election has already caused ructions this year, with Jamie Driscoll, incumbent NTCA mayor, quitting Labour after being sidelined in the nomination process – he will stands as an independent.

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