Business leaders have condemned the collapse of a North East devolution deal.
Communities Secretary Sajid Javid pulled the plug on the plans after four of the seven councils involved in the proposed North East Combined Authority (NECA)- Durham, Gateshead, Sunderland, and South Tyneside - voted against the deal on offer.
“It is with regret that we have withdrawn the legislation that would have brought this deal to life, which means local people will miss out on over £1 billion of investment, and new powers on transport, planning, and skills,” said Mr Javid.
But NECA chairman - and Sunderland City Council leader - Coun Paul Watson condemned the move and said the region remained committed to devolution: “Although we were not able to reach a majority agreement to proceed to public consultation at this present time, we have reaffirmed our commitment to working together with the Government to achieve the right devolution deal for our region.
“Leaders in the North East will continue to fight for our region, to build our economy and create jobs and investment.”
“I’m acutely aware of the budget cuts that Central Government has continued to impose on Sunderland and other authorities in our region.
It’s extremely disappointing and bad news for the North East and UK economy. We sincerely hope something can be salvaged and will play whatever part we can to help.Ross Smith
“Since the referendum in June, Sunderland and others in our region are also concerned about uncertainties over EU regional funding and guarantees from Government that these can be replaced.
“Adequate assurances were not forthcoming on regional funding from the Government as part of the devolution discussions.
“While the City Council remains committed to the principle of devolution, we could not move forward without those adequate reassurances from Government on regional funding.
“There were also concerns for local Council Tax payers who would face an additional precept for a North East Mayoral Office and have to pick up the bill for this extra tier of regional government.
“We all want to raise our health, wealth and prosperity with more regional decision-making, but this was not the best deal for the people of Sunderland or the North East.”
North East England Chamber of Commerce director of policy Ross Smith said: “We’re at a loss to understand why, after a year of negotiations, it has not been possible to strike a deal.
“It’s extremely disappointing and bad news for the North East and UK economy. We sincerely hope something can be salvaged and will play whatever part we can to help.
“It’s positive a deal is going forward in Tees Valley though and we look forward to continuing our constructive relationship with the combined authority there as that’s implemented.”
Liz Mayes, North East Region Director at manufacturer’s organisation EEF, added: “This is disappointing for North East businesses, including manufacturers, who wanted to see key local decisions being taken at a local level where we are best-placed to determine the right levers for growth.
“As powers are devolved to other regions, North East businesses could be left at a disadvantage.”