All North East councils will begin within days the process of ratifying the region’s new devolution deal announced by Levelling Up Secretary Michael Gove on 28 December and detailed in North East Bylines on 11 January.
In a co-ordinated move, the cabinets of all seven councils in Northumberland, Tyne & Wear and County Durham will be presented with similar, if not identical, reports on the “minded to” deal, starting with North Tyneside and Newcastle on Monday 16 January and ending with Sunderland on 19 January.
At that point, if as expected all agree, the governance scheme for establishing the new mayoral combined authority (NEMCA) will go to public consultation.
The governance scheme explains how NEMCA will be constituted, who will be appointed to it, what functions it will have and how it will make decisions on the exercise of those functions.
If all goes plan Gove will then make the necessary order for the establishment of NEMCA in time for the first mayoral election in May 2024.
The report going to cabinets next week is unremittingly positive about the deal, stressing the new funding of £4.2bn it says it will bring to the region over 30 years. The report says:
“The deal would see a significant shift of powers, funding and responsibility which would enable the councils to pursue their ambitions for inclusive growth”.
On the other hand is a dire warning:
“[F]ailure to establish NEMCA risks the region falling behind other major city regions such as Greater Manchester, Liverpool City Region and Tees Valley, which have received new powers and funding.”
The report being presented to Durham’s cabinet on 18 January differs from the others in recognition of the fact that the county council at one stage considered doing a go-it-alone county deal instead of joining a deal of all seven council (LA7 deal).
A county deal is the option still favoured by the Labour opposition on the county council. It failed to secure that option at an extraordinary county council meeting on 7 December, and instead the council agreed to recommend the cabinet “puts County Durham first by securing a devolution deal that is best for County Durham residents and businesses.”
The new report going to the Durham cabinet next week explains why leaders believe the LA7 regional deal is best for the county:
- It will give the North East the status of one of the largest mayoral combined authorities (MCAs) in the country;
- It will offer new opportunities, funding and powers, including potentially a “trailblazer” deal not available under a county deal;
- Durham will receive an annual investment fund of £13mn in the case of the LA7 deal compared with about £9mn from a county deal. The LA7 deal is thus worth £120mn more [over 30 years] than could be achieved within a stand-alone county deal and has more flexibility as 71% of the fund can be utilised as revenue compared to 50% in a county deal;
- Economic estimates suggest that 6,500 new jobs could be created in Durham within the LA7 deal, 2,000 more than in a county deal;
- It is estimated that the LA7 deal will attract £1.34bn private sector investment into the county, some £400mn more than that estimated in a county deal;
- More investment to support housing development is available in the LA7 deal enabling 730 more homes to be built in the county;
- Although not accessing the new City Region Sustainable Transport funding in the first three years of the LA7 deal, County Durham will have access to this funding for the remaining 27 years of the LA deal. This significant funding is not available in a county deal;
- The LA7 deal will see an elected mayor with responsibility for the devolution deal but no responsibility for the services delivered by Durham County Council. A county deal would require the introduction of an elected mayor with executive decision-making powers covering all aspects of council services.
All seven councils will be recommended next week to endorse in principle the “minded to” deal, agree that the creation of NEMCA to replace the existing combined authorities (North East and North of Tyne) will improve the exercise of statutory functions across the region, agree to publish the governance scheme (described above) and agree to undertake public consultation. After that there will be a further report to cabinets.