North East Devolution: Multi-million pound deal takes another step closer to reality after bid to derail progress stalled

A proposed agreement to unite the region’s seven council areas under a new combined authority has been edging closer for several months, paving the way for a major shakeup of the region’s political landscape.

Leaders in Sunderland, South Tyneside, Newcastle, Gateshead, North Tyneside, and Northumberland have been united on the proposals for several months, but were “blindsided” in October when County Durham announced its intention to join the scheme.

The county council’s joint Liberal Democrat, Conservative, Green and independent leadership has faced opposition from Labour opposition councillors and MPs, who have argued instead for a solo deal for the county.

But the bid for a single-county devolution agreement was rejected this week (Wednesday, December 7) as politicians elsewhere in the region appeared back Durham’s addition to the deal on the table - something which Government ministers are also known to be keen on.

Leaders now hope that a major announcement could be made before Christmas on a proposed deal that, with Durham’s involvement, could be worth more than £4 billion over 30 years and see a mayor elected in May 2024.

The race is now on to get a North East-wide devolution proposal agreed in principle, so it can be put out for an eight-week public consultation before next year’s local elections.

While details have not been confirmed, it is thought that the Government has offered to increase the value of the deal’s yearly investment fund from £35 million to £48 million if Durham is part of the arrangement.

It could also grant the North East the same ‘trailblazer’ status as Greater Manchester and the West Midlands.

If a deal between the seven is agreed, it would reunite the councils who almost signed a previous devolution deal in 2016..

Newcastle, North Tyneside, and Northumberland subsequently broke away to form their own North of Tyne Combined Authority (NTCA), with Labour’s Jamie Driscoll elected mayor in 2019.

He has already confirmed he would seek Labour’s nomination for a North East mayor role, with Northumbria Police and Commissioner Kim McGuinness also rumoured to be eyeing the job.

A draft deal being worked on before Durham’s involvement included:

*A £900 million transport funding package up to 2027

*A yearly £44 million budget for adult education and skills

*New decision-making powers, including over bus services

Mr Driscoll said: “It’s still a “minded to” deal at the moment – but much of what’s on the table has been negotiated.

"Each individual council still has to make its own, formal decision – that’s how democracy works.

“I said that if the Government was serious about levelling up, it’d need to write a cheque.

"Well, after years of under investment in our region, it’s finally time for the people of the North East to cash in what’s due to us.”

In a heated debate at Durham County Hall on Wednesday lunchtime, Labour opposition leader Carl Marshall accused the authority’s Tory-Lib Dem coalition of being “incompetent” and “absolutely out of touch with the community and completely out of its depth”.

Coun Marshall claimed that a county deal would deliver more power and money to Durham and make them “masters of our own destiny”, with Labour councillors fearing their massive county being left as a minority part of a large, metropolitan-focused authority with a mayor who would likely based in Newcastle.

He urged the council to follow Cornwall’s lead in securing its own devolution deal and elected mayor, warning it would be passing up a “once in a lifetime” chance to do so.

But the council instead voted by a tight margin of 63 to 56 to back an amendment to Labour’s motion by Lib Dem council leader Amanda Hopgood, which committed the council to securing a deal that is “best for County Durham residents and businesses” without specifying whether that would be a solo deal or going in with its six northerly neighbours.

Coun Hopgood told colleagues that she was “willing to get the best deal for County Durham, whatever that looks like”.

But the council’s deputy leader, Conservative Richard Bell, confirmed that an ‘LA7’ deal was the administration’s preferred option.

He said the region-wide package offered “significantly more money than a county deal” and is “resourced better than anyone could have expected”, as well as being the Government’s preferred choice for Durham.

Coun Bell added: “As it stands, it is the best deal on the table and what cabinet has been supporting.”

Labour councillor Olwyn Gunn said it was “not a good deal” to have a mayor based outside the county making decisions about investment in Durham, while colleague Eddy Adam added that he did not want to hand power to a mayor who would “not have an interest in the south of the region”.

But Liberal Democrat Mark Wilkes accused Labour of trying to hoodwink the public and likened their proposition of an elected Durham mayor to a “dictatorship”.

After the defeat, Coun Marshall told the Local Democracy Reporting Service that Durham Labour “won’t give up the fight for what we think is best”.

However, he admitted that there will come a time when the party must “accept that we are in opposition”, having lost control of the council for the first time in a century last year, and said he would be willing to back an LA7 deal if it could be proven to be in the county’s best interests.