EF News
Addressing the issue
At the Forum we know that business is the backbone of the economy and entrepreneurs its lifeblood. In this issue we explore what the recently announced devolution deal means for the north of our region, and what the elected mayor will need to understand in order to effectively represent our business community.
What is the devolution deal, who will run it and other questions?
On 28 December 2022 the local authorities of County Durham, Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside, and Sunderland agreed the Level 3 devolution deal with the government. Then, on 27 January 2023, the council leaders officially signed off on the deal at a ceremony at the Baltic Centre for Contemporary Arts attended by The Rt Hon Michael Gove, Secretary of State for Levelling Up, Housing and Communities.
In simple terms the promise is £48 million in government funding to the North East part of the region every year for three decades - which is where the much publicised £1.4bn figure comes from. The deal will also involve a £563m transport budget, as well as money for adult education and skills.
An eight week public consultation on the deal began on 26 January and the seven councils will review the responses received then prepare a report to Michael Gove, after which legislation to establish the new North East Mayoral Combined Authority can be taken through Parliament. At that point the process to elect a metro mayor in May 2024 can begin.
At Forum we want the voices and views of business, and particularly entrepreneurs, being represented and heard. It’s clear that our region needs to be more vocal than it has to date in the existing ‘Northern Powerhouse’ space. It is only by sharing the views, ideas and asks of the North East’s entrepreneurs that we can balance the more established and vocal mayors of the North West.
What are metro mayors?
Also known as ‘combined authority mayors’, metro mayors are directly elected leaders of city regions that span a number of local council areas. Each metro mayor chairs a mayoral combined authority (MCA) which includes the region’s council leaders.
Metro mayors were introduced by the 2010 and 2015 Conservative governments as part of their devolution agenda, designed to create a new tier of government, between Whitehall and the town hall, to take on some economic and public service responsibilities too large for individual councils to deal with. The logic being that - in having a closer understanding of local needs and opportunities - these new institutions would improve productivity in the areas lagging behind London.
Metro mayors hold powers over spatial planning, regional transport, the provision of skills and training, business support service and economic development.
“This is good news. Whilst there are many good things happening across the region, including the work on Sunderland's riverside, the burgeoning science and tech hub in Newcastle and the development in and around Durham City, a stronger collective voice can only give us a greater chance of investment in the infrastructure we need to attract new business and new talent. It's also extremely important to make sure we keep our great people in the region by providing high quality, sustainable jobs. It's essential that we have bold, clear, business focused leadership that sells the North East nationally and internationally.” John Duns, Director, North East Times
Who are the notable mayors of the devolved authorities and what are they achieving?
Northern metro mayors of note include Andy Burnham in Greater Manchester and Steve Rotheram in Liverpool - who campaign for the North of England to receive a fair share of the government’s investment in UK plc. Recent highlights include the £460 million awarded to Liverpool to invest in major upgrades to the Merseyrail network, and winning the Eurovision Song contest hosting rights - though Burnham is vocal in his argument that the South of England continues to receive more than its fair share of investment, at the expense of the north.
Since being elected metro mayor in the south of our region in 2017, Ben Houchen has focused on large scale investment into the Tees Valley and been instrumental in the development of the Teesworks site and bringing the airport back into public ownership.
Electing the right metro mayor for the north of our region is critically important, and entrepreneurs should be engaging in the debate - ensuring that whoever is elected represents our needs and secures opportunities and further investment, in the same way Ben, Andy and Steve are doing in their regions.
What makes this devolution deal different to previous attempts?
Michael Gove said the historic £4.2bn deal will be "bigger, better, and bolder” than failed past attempts to unite the region. He added that the deal is an “investment of hope and trust in the region and its people” and advised that the North East “presents, as it so often does, a confident face to the rest of the UK and the rest of the world.”
What are seen as the key issues for the north for devolution to address?
At the ‘Convention of the North’, held in Manchester on 25 January 2023, assembled politicians and business leaders agreed in a vote that the key issue for the north is transport - specifically provision of a realistic alternative to cars that connects northern cities by a reliable train service, supported by local infrastructure including buses, lightrail (metro) services and cycle routes.
The government’s Levelling Up White Paper makes clear the case for devolution as “the engine room of improved productivity and reduced regional disparities”, adding that “devolution will be critical to delivering our twelve headline Levelling Up missions, strengthening local leadership to act more flexibly and innovatively to respond to local need, whether on transport, skills or regeneration”.
How will devolution affect our region’s governance?
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 the 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.
In addition to the 30 year investment fund, the deal will devolve the MCA control over the 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 be a funding pot available to help place-based regeneration across the region.
So does everyone think that the deal is a good one?
While council leaders who negotiated the package agree devolution is the way forward, some have called for realism. After all, £4.2bn shared across seven local authorities over 30 years will be a stretch.
Ammar Mirza CBE said: “The North East Devolution Deal has been frustratingly discussed for years and it is fantastic to see it eventually coming to fruition. Offering a unique and exciting opportunity to galvanise the region both socially and economically, providing additional and much needed investment, but more critically bringing together the two Combined Authorities, North East LEP and Transport Authority.
“Any elected Mayor will need to truly represent the interests of the whole region. Ensuring that the strengths of our region are showcased globally and helping create an economic environment through inclusive growth that empowers all to prosper. Focusing on enabling people and places to thrive through policy development and delivering programmes of support that make a meaningful impact.”
