In the Limelight: North of Tyne devolution

December 1, 2017

Alison Cowie reflects on North of Tyne devolution and asks if it is good news for the region?

North of Tyne devolution was announced by Chancellor Philip Hammond in his Autumn Budget, promising £600 million of new government investment to boost the local economy by £1.1 billion, create 10,000 new jobs and attract £2.1bn of private investment.

The deal – forged by the government and Newcastle, North Tyneside and Northumberland councils – has been 14 months in the making, after the previous wider North East agreement fell apart when the councils to the south of the region (Gateshead, Sunderland, Durham and South Tyneside) failed to agree on its terms.

This latest deal will mean the direct election of a North of Tyne Mayor (earmarked for May 2019). He or she will become chair of a newly formed North of Tyne Combined Authority that will take charge of a £20 million per year allocation of government revenue funding, for the next 30 years, to invest in local economic priorities.

In addition, the North of Tyne area will get full control over its adult education budget, an Inclusive Growth Board that will coordinate skills and employment, while more collaboration will take place with government to boost trade and investment, digital infrastructure and rural growth across the area.

A launch event for North of Tyne devolution took place at the Urban Sciences Building in Newcastle on November 24, where the minded-to deal was signed by the Exchequer Secretary to the Treasury, Andrew Jones MP, Minister for the Northern Powerhouse and Local Growth, Jake Berry MP, the leaders of the three respective councils and Andrew Hodgson, chair of the North East LEP.

Speaking at the launch, Andrew Jones MP maintained “the government is delivering for the North East”, while Jake Berry MP described the deal as creating “a new golden era” for the region.

Norma Redfearn, elected mayor for North Tyneside, alluded to her frustration at the previous deal’s collapse by exclaiming “at last!”, before focusing on the benefits the new deal will bring young people in North Tyneside.

Cllr Nick Forbes, leader of Newcastle City Council, said the deal gave the opportunity to “confirm our place at the heart of modern Britain” while taking the “next step towards a North East economy with above average wages and below average unemployment”. Cllr Peter Jackson, leader of Northumberland County Council, then told the audience the deal would “make the North of Tyne an even better place to live” before reflecting on how it would leverage private investment.

The North East’s business community, too, seems to have welcomed the North of Tyne devolution announcement.

Speaking after the launch event, Jonathan Walker, head of policy and campaigns for the North East England Chamber of Commerce, said: “It’s no secret that many businesses wanted a deal that covered a much bigger geography but it’s still a significant step forward. “Devolution is an ongoing conversation and we want to ensure all parts of the region stand to benefit from the deal.”

Sarah Glendinning, CBI regional chair for the North East, said it was a “great week for the North East” in reference to the devolution deal as well as the £337 million Tyne & Wear metro investment that was also announced in the Budget. She now hopes that people will get behind the “ambitious, aspirational and outward-looking” devolution deal.

“If you look to [Tees Valley elected mayor] Ben Houchen who came into the role in May, and the speed and the opportunities that he’s been able to drive forward – working with the business community – it’s incumbent upon us to make this happen in the north of the region too,” Sarah added.

But the devolution deal is not without its challenges, especially as it effectively divides the wider North East region. This is particularly worrying when economically – particularly on a national and international level – it is said that the North East must act with one voice.

This division is perhaps most starkly evident between Newcastle and Gateshead, which for a number of years have been marketed as one domain.

Speaking after the launch event, Nick Forbes is adamant that North of Tyne devolution will not affect the “strong relationship” between the two councils.

“We have a very strong partnership with Gateshead and this will not change with the deal,” he said, before echoing that the focus of the deal will be on delivering the North East LEP’s strategic economic plan, which incorporates seven local authority areas.

Many of those involved in North of Tyne devolution are also open about their hope that the deal – which adds to the existing agreement well under way in the Tees Valley – will encourage the south of the Tyne region to embrace devolution. Whether it does force the hand of these councils, though, remains to be seen.

That said, the North of Tyne deal has helped to put the region firmly back on the government’s radar – at least in the short term – and could curry favour.

As Sarah Glendinning points out: “If you look at the funding that was put for transport in the [Autumn] budget, half went to areas with metro mayors.”

While the launch event, unsurprisingly, had an air of positivity and celebration, there is also recognition of the difficult task that lies ahead for the North of Tyne region: not only to integrate the deal within the local community, but to deliver on its promises of better productivity, investment and more jobs while ensuring the whole of the North East can work effectively together.

Time will tell whether the deal manages to achieve these things and does bring significant benefits to those living and working in the North of Tyne – and wider region. Personally, I join with others in the business community in welcoming the deal – albeit ‘devolution lite’ for the North East – and I do believe it is step forward for positive economic change in our region.

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