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Yesterday, the North East Combined Authority finally pulled the plug on a regional devolution deal for the area, with Sunderland, Durham, South Tyneside and Gateshead all voting against taking the proposals out to public consultation. This means it is now all but impossible for a deal to be agreed, and the necessary parliamentary orders passed, ahead of the proposed May 2017 Mayoral elections.
On the one hand, this is certainly regrettable. For the second time in twelve years the North East has stepped back from the opportunity to build a pan-regional institution capable of taking more control over the area’s economic future. With other devolution deals agreed for places like Greater Manchester, Merseyside and the Sheffield City Region, the likelihood is that the North East and its cities will slip further behind other parts of the country in the years to come, as local leaders remain unable to take some of the big decisions that could boost growth, create jobs and raise wages locally.
However, on the other hand, should we really be surprised that the deal has fallen through? The result of the EU referendum has caused much uncertainty across the region given the implications for funding and investment across a range of sectors, which has led some local politicians already deeply concerned with the impact of austerity to make securing guarantees from national government on future funding a red line on agreeing to the devolution deal. In addition, many Labour politicians in the area have consistently opposed the agenda, either because they are long term sceptics of the mayoral model, or because they fear the erosion of their own political power under the proposed arrangements.
But most of all, the idea of a devolution deal and a directly elected mayor that would be responsible for an area stretching from Sunderland to Berwick (some 74 miles apart) has always seemed a challenging proposition – particularly given the long-standing tensions that have existed between many of the areas involved. While Greater Manchester and Greater London are city-regions which span several local councils and are made up of a number of joined up town centres and settlements, the North East is demonstrably a region. It encompasses seven times more land than either Greater Manchester or Greater London, and large tracts of which are rural. It also includes many more individual towns and major cities, each with their own distinct identities and far fewer economic links.
The truth is that, as in some other parts of the country, a devolution deal process that was initially designed to boost the economies of major urban areas and city-regions has been stretched to encompass a far larger, more multi-polar and less densely populated area than it was originally designed for. This is in part due to the quirks of the current local government map of England – for example, the unitarisation of Durham and Northumberland make sense for many reasons, but do make defining more finely tailored geographies for devolution deals more difficult. Nevertheless the net result is that as things stand, Newcastle and Sunderland – the two most important drivers of growth in the North East – will not now see important powers over transport, skills and jobs devolved in 2017.
There will undoubtedly be many fingers pointed across the region and towards Whitehall in the days and weeks to come, as to why exactly the negotiations have failed. But whatever the particularities of the local history, politics or economics, the collapse of the North East Devolution Deal shows that taking a pan-regional approach to mayoral devolution is inherently fraught with difficulties. While in some places it may represent the pragmatic way forward, it is not the optimal way to improve the economic performance of major cities and their surrounding areas.
And although hopes of securing devolution for the North East in 2017 may now be over, now is the time to think again about devolving power to city-regions within the area, where political agreement may be easier to reach, and which would better reflect the geography over which people live, work and access public services. Indeed, it’s worth noting that Newcastle, Northumberland and North Tyneside all voted in favour of proceeding with the devolution deal today. Although still not perfect, perhaps this would be a good basis to start thinking about some kind of ‘Greater Newcastle’ deal, to ensure that devolution for the North East does not come to a standstill entirely.
Director of Communications and Development
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