The North East (excluding Tees Valley) has been awarded more than £54mn in the latest allocation from the £4.8bn Levelling Up Fund (LUF). Three grants will go towards the redevelopment of Gateshead Quays, new electric buses in the North East Combined Authority (NECA) area and cycling and pedestrian infrastructure in Northumberland.
The grants are among 111 nationally, totalling £2.1bn, from the second round of the LUF. Tees Valley is also receiving three grants worth a total of £54mn.
Gateshead Council is getting £20mn towards the regeneration of Gateshead Quays and The Sage, which will include a new arena, conference and exhibition centre, hotels, and other hospitality. The development is expected to attract up to 1,000,000 visitors a year and create more than 1,150 new jobs.
Councillor Martin Gannon, leader of Gateshead Council, said:
“It’s great that government has recognised the benefits of The Sage development, especially during the current economic climate.
“As a Council we are dedicated to ensuring The Sage is delivered; so that we can deliver employment opportunities to our residents of Gateshead and beyond. The economic benefits of The Sage will radiate out as local businesses and hospitality benefit from the increase of trade.”
The Sage development has been struggling with rising costs, but following the LUF announcement the council said:
“The government has recognised the economic impact the development will have, how it is a vital piece in the jigsaw for increasing opportunities for residents to secure long term sustainable jobs, promoting local business, restoring civic pride in the borough and bringing millions of pounds of investment to Gateshead and the North East.
“The Sage is a visionary project which will transform the region’s visitor economy and drive international presence. Like many other major schemes, the project has been impacted by escalating construction costs and international crises.
“However, the developer has carried out a full review of project budgets to ensure cost efficiencies while the government has been deciding on the LUF allocations. As part of the cost efficiencies, two hotels have been relocated to vacant land within Baltic Quarter, directly opposite The Sage development.
“A planning application has been submitted by the developer for approval to relocate the hotels. The land occupied by the hotels in the original design will be opened up as an urban park, bringing valuable green space into the area and enhancing biodiversity.”
£2bn riverside regeneration
The council also said The Sage would act as a catalyst for the regeneration of Gateshead, with a wider riverside renaissance unlocking a potential £2bn of investment, which will be fundamental in transforming the riverside from Gateshead Quays to the Derwent Valley.
“The Sage is projected to drive an additional 1,000,000 visitors to the Quayside which will lead to a rising footfall through Gateshead town centre impacting positively on local business, plus driving tourism and the visitor economy in the North East,” said the council
It added that it was also working closely with the private sector to attract investment to the borough. The Metro Centre Partnership was working closely with the council to understand the impact The Sage would have on them and was focusing on the regeneration of the Metro Centre and surrounding area to coincide with the opening of the new arena, conference, and exhibition centre.
Martin Healy, chair of the Metro Centre said:
“We have a Metro Centre masterplan coming forward which is a driver of economic activity within Gateshead and we want that masterplan to be part of the levelling up agenda.”
Another LUF grant is going to the North East Combined Authority NECA), which will receive nearly £20mn to buy more than 50 new electric buses, as well as chargers. According to the Department of Levelling Up, Housing and Communities, this will provide more than 3,000 seats for passengers, improve air quality, reduce congestion and support businesses in the region.
A third grant of almost £15mn will go to Northumberland County Council for new cycling and pedestrian infrastructure in Tynedale and Bedlington. Council leader, Councillor Glen Sanderson told The Journal:
“This is incredibly good news for the county and especially communities in Bedlington and Tynedale.
“[T]his is exactly the kind of investment which will make a real difference. A considerable amount of work was carried out to develop a suite of local cycling and walking plans for the county and we’re delighted these two schemes were successful in securing levelling up funding.”
Prime Minister Rishi Sunak said:
“Through greater investment in local areas, we can grow the economy, create good jobs and spread opportunity everywhere. That’s why we are backing more than 100 projects with new transformational funding to level up local communities across the UK.”
Levelling Up Secretary Michael Gove said:
“We are firing the starting gun on more than a hundred transformational projects in every corner of the UK that will revitalise communities that have historically been overlooked but are bursting with potential.
“This new funding will create jobs, drive economic growth, and help to restore local pride. We are delivering on the people’s priorities, levelling up across the UK to ensure that no matter where you are from, you can go as far as your talents will take you.”
It’s marvellous what agreeing to a devolution deal will do for a region’s chances of winning levelling up funding from the government, which is what the North East is in the process of doing at the moment.
Analysis by this author a year ago found that levelling-up grants to the North East (including Tees Valley) had gone disproportionately to areas that had signed devolution deals with the government and to Conservative constituencies.
Examining three major funds, the £4.8bn LUF, £3.6bn Towns Fund and £1bn Future High Streets Fund, I found that the region as a whole had received £370.5mn, of which only £124.1mn had been given outside the devolved combined authorities of North of Tyne and Tees Valley, and £73.1mn of that had gone to the “red wall” constituency of Bishop Auckland.
Yet today, in the week when the North East’s seven councils are in the process of agreeing a new, expanded and long-delayed devolution deal, the bulk of the allocations go to as-yet un-devolved Gateshead and NECA.
As to the national distribution, the BBC reported today that London boroughs will get more from the latest allocation than both Yorkshire and the North East, and that Labour had claimed the North East was “one of the big losers” from a funding model it said was unfair.
Shadow levelling up secretary Lisa Nandy told the BBC:
“It takes an extraordinary arrogance to expect us to be grateful for a partial refund on the money they have stripped out of our communities.”
She criticised the funding model and said her party would end the “competitive-style bidding” process but would not cancel projects that had already been given the green light.
But the prime minister said the north had received the most in terms of funding per person, and the government has also argued that parts of the south are deprived and need investment too..
While this is true, it confirms that levelling up is not – as many believed – a regional economic development policy to help lagging regions catch up, but an anti-deprivation policy for the whole nation.
However justified the criticisms, they do not make today’s grants for the North East any less welcome.