In October 2015, George Osborne wrote to the leaders of seven councils in the Newcastle area, congratulating them for agreeing a “historic devolution deal”. The then-Chancellor gushed that with the signing of the North East devolution deal they were “starting to make the government’s vision for the Northern Powerhouse a reality.”
The celebrations were short-lived. The deal fell apart in September 2016 when four of the councils – Sunderland, County Durham, South Tyneside and Gateshead – voted against putting the plans out to consultation, citing concerns over funding insecurity post-Brexit. They asked the government to confirm that European Structural and Investment Funds, aimed at job creation and economic development, would be “sustained beyond 2020, for as long as needed”. Paul Watson, the chairman of the North East Combined Authority, wrote to communities secretary Sajid Javid in the wake of the collapse to reiterate the region’s commitment to the “principle of devolution”, but Javid’s curt reply signalled the government’s patience had officially run out. “You made an unambiguous decision not to proceed with the deal, and as a result, the deal is now off the table.” This was just two years after Osborne’s original Northern Powerhouse speech in 2014, which fired the starting gun for devolution negotiations with regions across the North, including the North East.
“Out of the ashes of that disaster,” explains Newcastle council leader Nick Forbes, the North of the Tyne devolution deal was born. Irritated but undeterred, the three remaining councils – Newcastle City, North Tyneside and Northumberland – set about making devolution a reality, without their four neighbours south of the river. Following in the footsteps of Greater Manchester, the West Midlands, Liverpool City and other regions, the deal was confirmed in the Chancellor’s autumn budget, releasing £600m of government investment. A metro mayor will be elected in 2019. The Chancellor also committed £337m to replace the ageing regional Metro rail fleet; new trains are expected to arrive by 2021.
Does this mark the start of a new era for the region? Forbes has big plans for his city; he hopes that the deal will put Newcastle on an international stage and raise its profile as a “modern, vibrant, outward-looking city”. “People still think of us as a place with smoking chimneys, flat caps and whippets – a kind of 1970s sitcom. We’re not like that, we haven’t been for nearly 40 years.”
For the North of the Tyne devolution deal, jobs are a major focus. “The North East is the area in England with the highest unemployment rate and the lowest average wage levels” explains Forbes. “We want to flip that.” Newcastle council has been peddling this agenda for some time; Forbes claims when he became leader in 2011 he turned it into “a job-creation machine”. He is confident that the deal will massively accelerate progress in this area. “Our initial assessments are that the £600m will leverage in £2.1bn of private sector investment and we expect that to create, over a lifespan of the current deal, 10,000 jobs.” Complementing this employment drive is an ambitious push on housing, which wasn’t part of the previous plan. “This [deal] is much more focused on investing in people,” summarises Forbes.
When the combined authority elections took place in 2017 the UK devolution project really kicked into gear. “When we first started talking about mayoral combined authorities they were an academic concept,” says Forbes. As newly elected metro mayors took up their positions in six regions around England, Forbes and his fellow council leaders north of the Tyne looked on with concern; “the North East was in real danger of being left behind.”
Nick Forbes is pleased to finally have a North East package in action, four years after regional leaders started discussing the possibility, but he’s not convinced of this government’s commitment to the Northern Powerhouse project. When Jake Berry was reappointed as Northern Powerhouse Minister after the January reshuffle, Forbes was relieved that the post still existed at all. Although he speaks well of Berry – “I get on well with Jake; I don’t doubt his personal commitment” – he warns that commitment can only take you so far without the funds to match. “We need people in the Treasury and No. 10 who take this seriously and so far, the jury is still out.”
Nowhere is this funding gap more visible, or more complained about, than within transport. Northern authorities have big plans to improve the ageing, or in some places, non-existent transport infrastructure, but don’t have the money. On the 16th January Transport for the North, for which Forbes is a partnership board member, published its ambitious 30-year Strategic Transport Plan, which asks for £60-70bn of investment to transform transport in the North with seven strategic “corridors” connecting key locations. John Prescott stormed out of the launch, calling the whole event “a bloody fraud” as the body lacked the budget to execute their plans, rendering them no more than a wish list. “Transport for the North gives us the first real opportunity to start shaping a pan-northern transport agenda of our own, but the control is only part of the picture – we need the resources to go with it,” concedes Forbes.
So what about the other four councils? Sunderland, County Durham, South Tyneside and Gateshead – a stone’s throw away from their regional partners – are now experiencing a relative gulf in funding, powers and attention from Westminster. It is plausible that certain policies, for example those aimed at Newcastle city centre, could have widespread benefits that will be felt beyond the mayoral authority border; “there’s nothing stopping [people from surrounding areas] going to access the jobs if they are created,” explains Paul Swinney from the Centre for Cities. He thinks that the deal is far from ideal, but doesn’t blame the three councils for getting on with it. “It is a victory for pragmatism, but not an ideal geography.”
Swinney says the way the region is made up economically and geographically makes it hard to disentangle the city of Newcastle from the surrounding area. Over one in three people from the Gateshead area (not part of the deal) commute into the Newcastle area every day, and one in four from South Tyneside (also not part of the deal). “The authorities of Gateshead, South Tyneside, North Tyneside and Newcastle are actually a continued urban fabric; there’s no break to suggest that the city stops. A line has been drawn pretty much through the centre of that city area.”
As such, the mayoral authority creates an artificial divide, which means that even if the proximity does spread some of the benefits to the neighbouring councils, when it comes to policy areas like transport and skills, only covering half the region might make it less effective, and worsen the river divide. Will the other councils change their mind and come on board? Swinney isn’t sure, but is particularly hopeful that Gateshead, practically a part of Newcastle, might have a change of heart.
Wounds are not yet healed from the debacle of 2016, and regional politics, thought by many to be the real reason behind the decision of the four councils to walk away, are still prickly. “Gateshead, in particular, has been quite vocal about its differences with Newcastle,” explains Swinney. “I think that’s a real shame for the people that the politicians represent, because this is an opportunity to improve the job opportunities and the amount of money in people’s pockets,” he laments. “Politics, both small p and large P, has been used to get in the way and that seems a big missed opportunity.”
Despite the glaring imperfection of this latest addition to the devolution club, Forbes is very optimistic about what this deal will do for his city and the wider Northern Powerhouse effort, having received support and advice from his close acquaintances metro mayors Andy Burnham and Steve Rotheram. “[They] have got a very clear commitment to working collaboratively across the whole of the Northern Powerhouse area. It feels as though we’ve got a renaissance in civic leadership.” If a renaissance is taking place, three councils north of the Tyne have done their best not to miss out.
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