In the limelight: Devolution

December 1, 2015

October 23 this year saw proposed devolution agreements signed by the Government and the combined authorities of the North East and the Tees Valley. But what does this mean for the region?

Recent devolution agreements for the North East Combined Authority and the Shadow Tees Valley Combined Authority set out measures for transferring significant powers away from Whitehall in key areas such as skills, transport, planning and investment.

On the day the agreements were announced, Chancellor George Osborne hailed the “unstoppable momentum in the drive to strike devolution deals with cities and regions.”

Northern Powerhouse minister James Wharton said: “By ending the one-size-fits-all approach of the past, we are giving local people the powers they need to boost jobs and skills.”

The North East and Tees Valley join Greater Manchester and Sheffield in seeking greater local and regional decision making. With final agreement still conditional on the upcoming Spending Review, public consultation, agreement by the constituent councils and endorsements by the Leadership Board and ministers, it is expected in the new year.

Similar deals for the North East and Tees Valley outline significant financial commitment for both areas. The North East Combined Authority will receive £30 million a year over the next 30 years for an investment fund to boost local growth.

Tees Valley Combined Authorities will receive £15 million a year over the same period for its investment fund. Both organisations will also be able to grow their funds through further investments.

In addition, mayors will be elected for each area in 2017, and subject to local democratic scrutiny.

Each mayor will have responsibility for a devolved and consolidated transport budget, and strategic planning powers to decide which areas of land should be developed.

The mayors will be chair of a leadership board (or cabinet) of their respective combined authorities and will work to deliver benefits to their regions through the investment funds.

There will also be a more devolved approach to business support from 2017, with more powers given to local UKTI export advice services.

The North East and Tees Valley mayors will have the power to place a supplement on business rates (up to a cap) to fund infrastructure, with the agreement of the local business community through the local enterprise partnerships (LEP).

The Government and both combined authorities will work together to align national Business Growth Services to meet specific needs of businesses in the region. Alongside this will be a major assessment of the systems for investing in skill among adults, at a more targeted, regional level.

Chair of the Shadow Combined Authority and leader of Redcar and Cleveland Borough Council, Sue Jeffery, said: “There is no doubt [the Tees Valley devolution agreement] will enable us to do more locally to strengthen our economy and secure a more sustainable future for the Tees Valley.”

Councillor Simon Henig, chair of the North East Combined Authority and leader of Durham County Council, said: “Not only does [the North East devolution agreement] demonstrate the level of our ambition, it also underlines the key role the North East has to play in re-balancing the national economy.”

Despite positivity from the Government and the combined authorities, there remain concerns.

Eleven years ago there was resounding ‘no’ vote to the idea of a North East regional assembly, proposed by the Labour government.

Past mayors in the region have also proved controversial, with Middlesbrough electing independent candidate Ray Mallon and Hartlepool choosing a football mascot, H’Angus the Monkey!

There are also concerns as to whether local authorities will have the capacity to manage more devolved decision-making powers, with the Government’s continued commitment to reducing public sector spending.

Councillor Henig, who has attended a number of public consultation events since the announcements of the deals were made, maintains that there is still “a lot of positive discussion and that people want to be involved in devolution.”

For many, including Councillor Henig, these deals are an opportunity to even secure more devolved powers in the region.

“[The devolution agreements] are very much a starting point, from where hopefully we can move to a situation where we are taking more decisions at a local and regional level.

“But we do have to accept that this is a long-term process in terms of bringing about change for the region.”

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Burning Issue: Will elected mayors for the North East and Tees Valley be good for the region?