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North-east councils reject elected mayor and £4 billion devolution package

North-east councils reject elected mayor and £4 billion devolution package

🕔07.Sep 2016

There are fresh question marks over the Government’s devolution agenda after councils in the north-east of England rejected a £4 billion deal.

Four of the seven authorities voted against the proposals that would have guaranteed £30 million a year for the region to spend over 30 years as well as control of a £3.4 billion pool of investment cash.

Powers would have been transferred over transport, skills and housing – but the deal could only go forward if the councils agreed to have a directly elected mayor, a highly contentious issue in the north-east and in most parts of the country.

The final rejection after months of discussions with Ministers was not driven solely by the mayoral issue, although the councils are unhappy about having an elected leader imposed on them, but by the Government’s refusal to guarantee hundreds of millions of pounds of EU funding promised to the region before the Brexit vote in June.

Attempts by West Midlands council leaders to obtain guarantees about safeguarding EU grants have similarly been batted aside by the Government, but the region’s councils have already decided to accept an £8 billion devolution deal which is dependent on a metro mayor being elected next May.

Consultation on the powers to be given to the West Midlands mayor has recently finished and a statutory order paving the way for the election is expected to be tabled in Parliament before the end of the year.

The Liberal Democrats yesterday became the second political party to select a candidate for West Midlands mayor, choosing former CBI regional director Beverley Nielsen. Labour has chosen MEP and former Birmingham MP Siôn Simon. Meanwhile, the Financial Times is the latest media outlet to suggest that John Lewis chief executive Andy Street will be the Conservative candidate.

In the north-east, Newcastle, Northumberland and North Tyneside councils agreed to accept the devolution package, and the mayor. But Sunderland, Durham, South Tyneside and Gateshead voted against.

The decision represents a challenge for Theresa May’s Government. The Prime Minister has promised to devolve more powers to regions across England, and has even hinted that elected mayors may not be necessary in some cases, but in the north-east councils were given a firm deadline of the beginning of September to accept the mayoral deal or lose the devolution package.

There are signs however that the Government may be willing to compromise.

Communities and Local Government Secretary Sajid Javid said he was disappointed with the decision but indicated devolution could still go ahead in the north-east. A spokeswoman said: “It is disappointing that some north-east councils have been unwilling to support this deal, which would certainly have benefited local people. If councils in the region wish to discuss devolution proposals further, our door remains open.”

Paul Watson, chair of the North East Combined Authority (Neca) of the seven councils, said:

Extensive discussions and negotiations have taken place with government and within the region over recent months but unfortunately, despite our best efforts, it has not been possible to reach an agreement which all of the seven local authorities feel able to support.

Although this is disappointing we will continue to work together with government to achieve our ambition of a stronger regional economy with improved opportunities for residents and businesses.

Centre for Cities chief executive Alexandra Jones suggested the Government could take a fresh approach to devolution in the north-east:

It is deeply regrettable that local leaders in the north-east have been unable to agree upon taking forward the proposed devolution deal for the area, which could have boosted the region’s long-term economic prospects.

But this should not signal the end of devolution in the north-east. Now may be the time to think instead about devolving power on a different basis within the region: for example to a ‘Newcastle city region’, which would more closely reflect the geography over which people in that area live, work and access public services.

National and local leaders must continue to work together to explore these options, and to ensure that devolution in the north-east does not come to a standstill.

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