Talks over a proposed £3bn devolution deal for the North East appear to have stalled amid chaos in Liz Truss’ government.
A deal to bring major new funding and decision-making powers to the region and reunite councils on either side of the Tyne under a new mayor has been on the verge of being struck for months. But the change of government and the turmoil that has engulfed the Truss administration following the Chancellor’s Growth Plan being announced appear to have further delayed the long-awaited agreement.
Sunderland Council deputy leader Claire Rowntree told a North East Combined Authority meeting on Tuesday that local authorities still “await news” on what will happen to the deal under the Truss administration, with the details of a draft proposal having been finalised in the last days of Boris Johnson’s government. She added that councils would have to “wait and see what the government does or doesn’t want to do next”, but could not put a timescale on talks due to ministers being “occupied at the moment by the fallout from the mini-budget”.
Read More: Labour unrest as top councillors speak out against £3bn North East devolution deal
Her comments came after Chancellor Kwasi Kwarteng announced a U-turn on plans to scrap the 45p rate of income tax for high earners on Monday following a significant backlash and turmoil in financial markets, while the new Prime Minister faces mounting rebellion in her own party over a refusal to commit to increasing benefits in line with inflation.
Durham County Council’s deputy leader, Richard Bell, told the Local Democracy Reporting Service that he had written twice to the new government asking them to “engage constructively” in devolution talks but had yet to receive a reply. The Conservative councillor confirmed that no decision had been made on whether Durham will join six other North East councils in the devolution deal and that a mid-October deadline to do so, set by former levelling secretary Greg Clark, was now “perhaps no longer applicable” given the unrest of recent weeks, which also sees councils facing a budget deficit crisis.
Civil servants and local council officials have hashed out a devolution deal that would be worth more than £3bn over 30 years, with the package touted as the most generous of its kind in England per capita. It would hand regional leaders key powers in areas including transport, including the ability to bring buses under public control, and it is hoped it would create more than 17,000 jobs.
The plan has been to establish a new mayoral combined authority covering Newcastle, North Tyneside, Northumberland, Gateshead, Sunderland, and South Tyneside – but the Local Democracy Reporting Service revealed earlier last month that County Durham had been offered the chance to join too.
Labour MPs and opposition councillors in County Durham have spoken out against that idea, urging the council’s coalition leadership to instead pursue a single-county devolution deal that had been proposed by Mr Johnson’s government. City of Durham MP Mary Foy has claimed that a region-wide agreement to create an authority stretching from Berwick to Barnard Castle would “sell Durham short”, while Easington’s Grahame Morris said the county “cannot be marginalised and forced into a generic devolution deal”.
Were a deal for the seven council areas to be agreed, it would mark a return to regional alliance that was close to a previous devolution arrangement in 2016. That deal fell apart at the eleventh hour in 2016 amid a split among the area’s Labour-run establishment and Newcastle, North Tyneside, and Northumberland subsequently broke away to form their own North of Tyne Combined Authority (NTCA). The new £3bn settlement could grant the North East the “full suite of powers” already available to mayors in other parts of England that boast more substantial devolution deals than the North of Tyne.
That would include the ability to bring bus services back into public control and set their ticket fares at cheaper levels, a £900m transport funding package up to 2027, an investment fund of £35m per year, a yearly £44m budget for adult education and skills, and “major steps” towards the North East reaching net zero emissions. The mayor’s role could also be merged with that of the Northumbria Police and Crime Commissioner – though this will not happen if Durham is involved, as the two jobs would no longer cover the same geographic areas.
A DLUHC spokesperson said: “We want to see more areas with a high-profile, directly elected leader who will be accountable to local people and act as a champion for their areas.
“We continue to work at pace with leaders in the North East to deliver a devolution deal.”
Read More:
- Major six-storey apartment complex plans revealed for Ouseburn to replace industrial units
- 'The damage is already done' – Truss and Kwarteng branded 'incompetent' after 45p tax rate U-turn
- Warning over Newcastle social worker shortage as number of children in care escalates
- Eldon Square value plummets again – but 'five offers' to take over empty Debenhams store revealed
- North should be 'kicking the door in' to hold Liz Truss to rail pledge – including reopening Leamside Line
