Historic £1.4 billion devolution deal for North East

The Levelling Up Secretary has announced a landmark devolution deal for the North East that will see a new elected mayor given fresh money and powers to level up the region.

New money and powers over skills, transport and housing will be devolved to local leaders in the North East, the Levelling Up Secretary has announced today (28 December 2022).

If approved following a local consultation, people across Northumberland, Newcastle, North Tyneside, Gateshead, South Tyneside, Sunderland, and County Durham will also be given the power to directly elect a Mayor of the North East. This person can act as a local champion who can help attract investment to the area and act as a powerful local voice in discussions with central government and other bodies.

The government will guarantee the new North East Mayoral Combined Authority (MCA) more than £1.4 billion over the next 30 years which will enable the new Mayor and the councils to plan for the long term, with certainty, and unlock the benefits of devolution for 2 million people living in the area.

The historic deal will also devolve the MCA control over the multi-million pound Adult Education budget so they can shape provision in a way that best suits the needs of local people; give control to the region of over half a billion pounds to upgrade public transport through a new City Region Sustainable Transport Settlement; and provide immediate support to build new affordable homes on brownfield sites. There will also a funding pot available to help place based regeneration across the region.

The North East is the sixth area to agree a devolution deal this year and means that government has now made devolution agreements with areas representing over 7 million people since the Levelling Up White Paper was published in February. The new deal also reaffirms the government’s commitment in the White Paper to offer a devolution deal to any area that wants one by 2030.

Levelling Up Secretary Michael Gove said:

I’m proud to have agreed a historic new devolution deal with the North East that gives local leaders more power, more money, and an even greater say on how their areas are run.

Devolution is all about letting leaders who live and breathe the region decide what is in their best interests, for their people and for their businesses.

A new mayor will ensure local priorities in the North East are at the heart of decision-making, while our billion-pound funding boost will provide the financial certainty needed to level up the area right now and for years to come.

Local leaders and mayors across the whole North East today welcomed the news in a joint statement:

This is a significant step towards securing important decision-making powers and investment for our region. This would allow us to make decisions that reflect local needs and invest wisely into projects that will make a difference for all our residents, communities and local economy.

There remains a process for all councils and combined authorities to consider the details and a public consultation before a final decision is made.

We are pleased that we have successfully negotiated a proposed deal which is a step towards reaching our ambition for this region. This is an important milestone in our journey and we will now engage with stakeholders to move the deal to the next stage.

The proposed deal sets out the government’s plans to devolve more power to the North East through:

  • Education and skills: The deal provides the region with powers to better improve local skills through full devolution of the Adult Education budget and a greater say over the Local Skills Improvement Plan, which brings together local businesses, colleges, and training providers to identify the skills needed to support local growth.
  • Housing and regeneration: The North East will receive £17.4 million to support and accelerate the building of new homes on brownfield land, as well as £20 million to level up and kick start regeneration, delivering new affordable homes and green economic growth across the region.
  • Transport: A new City Region Sustainable Transport Settlement with government will give the North East control of up to £563 million to help shape and improve local rail services across the region, as well as the ability to introduce bus franchising.
  • Local leadership: From 2024, the North East will have a directly elected mayor who can champion the area, help drive investment to the region, and can represent local people in conversations with national government.

Building on existing collaboration across the region and with central government, the new North East MCA will replace the existing North of Tyne MCA and Mayor, as well as the non-mayoral North East Combined Authority. This will bring the region together and provide a more strategic economic geography, which encompasses the whole Tyne and Wear region, as well as Northumberland and Durham. These changes are subject to the statutory processes, including local consultation and Parliamentary approval. The deal is being published today to allow necessary governance steps to proceed and will be signed in in the early new year.

If agreed, this will ensure the North East has more funding, power and flexibility to make important decisions based on what is best for people across all seven local authority areas.

Lucy Winskell OBE, Chair North East Local Enterprise Partnership, said:

This devolution deal is a hugely positive move for the region and marks a step change in our levelling up journey.  The region has come together and is committed to seeing the North East succeed.

The development heralds new funding and decision-making powers that will unlock the creation of more and better jobs, allow us to seize new opportunities, address issues that are holding us back and critically, to compete where we have strengths on a national, sectoral and global stage, and most importantly to do this in partnership.

As things progress, the North East LEP will come together with the new mayoral combined authority, allowing for a co-ordinated approach with one strong voice and a laser focus on delivery of everything this proud region and its diverse communities need to thrive.

The North East deal follows landmark devolution agreements earlier this year with York and North Yorkshire, the East Midlands, Cornwall, Norfolk, and Suffolk. This means that the government has now agreed devolution deals with 8 of the 11 areas that were prioritised for devolution in the Levelling Up White Paper.