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A historic trailblazer devolution deal signed in the North East yesterday between the Government and the seven leaders of the region's major councils.

An historic transfer of power and money from Westminster to the North East was confirmed yesterday following the signing of a landmark devolution deal between the Government and the leaders of the region’s major councils.

The North East ‘trailblazer’ devolution deal will hand the incoming North East Mayor and Cabinet more control over transport, housing and skills, and makes available over £100 million of new funding that can be invested in the North East’s priorities. It sets a clear route for the region to take on the core powers agreed with West Midlands Mayor Andy Street and Mayor of Greater Manchester Andy Burnham, and in places it goes further with the use of innovation, technology and delivery to improve public services and a new North East Coastal and Rural Taskforce being set up to strengthen the region’s rural and coastal communities.

This deal, announced recently by Chancellor Jeremy Hunt at the Spring Budget, builds on substantial commitments the government has already made to North East devolution following the £1.4 billion investment fund signed by Secretary of State Michael Gove in January 2023 and the £160m North East investment zone also announced at the Spring Budget.

To mark the historic moment, seven leaders from across the North East – across Northumberland, Newcastle upon Tyne, North Tyneside, Gateshead, South Tyneside, Sunderland and County Durham – have come together at St Chad’s College in Durham to sign the agreement with Levelling Up Minister Jacob Young. With the deal signing completed, it ensures the area can hit the ground running when the Mayor for the whole area is elected for the first time in May. 

Levelling Up Minister Jacob Young yesterday said:

I’m delighted to sign this landmark deal which will deliver transformational change across the North East. 

This is a significant step forward in our mission to level up, and I want to thank all the leaders who have come to together to make it happen. Devolution is all about handing local communities the keys to their own future, with decisions taken by the people who know their areas best. Today the North East takes back control.

The first devolution deal, signed by the seven local authority leaders in December 2022, established the North East Mayoral Combined Authority (NEMCA), where one mayor will champion their region and unlock the benefits of devolution for around two million people living in the area. Currently, over 64% of England is covered with a devolution deal including nine in 10 people in the North.

This second ‘deeper’ devolution deal gives local leaders new tools to drive growth and deliver for their communities. The region will receive £37m of flexible funding for the remediation of brownfield sites and acceleration of regional projects. Subject to business case, NEMCA intends to use £25m of this funding to remediate the prospective Crown Works Studios site, laying the ground for development of the studio facilities, £10m to accelerate plans for a Health Innovation Neighbourhood, combining research and living facilities to promote healthy ageing, in Newcastle, and £2m to support projects such as the North East Green Superport and the inclusive innovation deal, catalysing collaboration across the region.

A joint statement from seven council leaders in the North East yesterday said:

Today’s event marks another welcome shift in power from central government to the North East. This trailblazer deal will help us deliver on our ambitions, working with our communities on the things that matter most to them.

As the people who represent our communities, we are better placed to make decisions on local priorities.

We are strongest when we all work together and we are already seeing the benefit of that collaboration.

Alongside this, government will work towards the designation of a specific ‘growth zone’, in which North East local authorities will be able to retain 100% of business rates growth for the next 25 years. Subject to business case, NEMCA plans to designate the prospective Crown Works Studios site as a ‘growth zone’. This will enable 100% of business rates growth to be reinvested in the development of the site and project. This combination of capital funding and business rates retention will get the development off the ground in the short-term and ensure NEMCA and Sunderland City Council can continue to support the project in the long-term.

This has unlocked a £450m investment from FulwellCain, a joint venture between Fulwell 73 and Cain International and backed by Sunderland City Council, to build Crown Works Studios (CWS), which will be one of the largest in Europe and will create over 8,000 jobs in the region.

The Department for Levelling Up, Housing and Communities aims to secure devolution deals by 2030 for every part of England that wants one. This is one of 12 levelling up goals set by the department in its flagship Levelling Up White Paper in February 2022.

At the next Spending Review, NEMCA will receive a consolidated single pot for housing, regeneration and local growth funding as a stepping-stone for a full single departmental-style funding settlement.

The legislation implementing the devolution deal signed in 2022 will establish the new North East Mayoral Combined Authority on 7 May 2024. The new Mayor for the North East will take up post on the same day following the inaugural mayoral election on 2 May 2024. This will also 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.  NEMCA will also have control over the multi-million pound Adult Education budget from August 2024, so local leaders, colleges and training providers can work together to arm local people with the skills needed to drive local growth.

But this newer, deeper deal will additionally help to build on long-standing sector strengths in green technology and advanced manufacturing, through government support for the Green Superport, bringing together the ports of Newcastle, Blyth and Sunderland, and prepare the ground for emerging strengths in creative industries and health innovation, via new developments on the Sunderland Riverside and a health innovation neighbourhood in Newcastle.

This devolution deal is part of a plan to bring long-term change, delivering a brighter future for Britain and the North East of England, improving economic security and opportunity for everyone whilst building on our existing levelling up interventions in the region, including the £20m awarded to Newcastle upon Tyne for the restoration of the historic Grainger Market and public realm improvements.

Further investment includes providing £20m of long-term investment through the Long-Term Plan for Towns in Jarrow, Washington, Spennymoor and Blyth - building on an existing ‘deep dive’ already in place in the latter to upgrade poor housing, tackle health inequalities, boost access to jobs and cut crime.