Latest Public Sector News

09.09.16

‘Very disappointing’ that north east devolution deal to be withdrawn

Devolution plans in the north east have been thrown into further doubt as the government withdrew the legislation behind them after they were rejected by local councils.

The £900m scheme was rejected by the North East Combined Authority on Tuesday when four out of the seven member councils – Sunderland, Durham, South Tyneside and Gateshead – voted against the plans, saying they were not satisfied with reassurances over funding post-Brexit.

Sajid Javid, the new communities and local government secretary, has now announced that he is withdrawing the legislation to facilitate the decision.

He said: “Local leaders in the North East Combined Authority have made a clear decision not to proceed with this ambitious and far-reaching devolution deal for their region – while I am disappointed, it is a decision I respect and so that deal is now off the table.

“It is with regret that we have therefore withdrawn the legislation that would have brought this deal to life, which means local people will miss out on over £1bn of investment, and new powers on transport, planning, and skills.

“Handing power back to Northerners is a key part of our plans to build a Northern Powerhouse and our focus now will be on working to secure a new agreement for residents in those areas committed to progressing with devolution.”

Javid's announcement comes despite his predecessor Greg Clark, an advocate of devolution, promising a "much bigger role" for local government following the UK's vote to leave the EU.

Cllr Paul Watson, chair of the NECA, said it is “very disappointing” that the government has chosen to end current discussions over north east devolution in this way.

“Throughout this process, all of the seven council leaders in the north east have repeatedly and clearly stated their commitment to devolution and to creating a stronger regional economy,” he said.

“And, 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.”

The House of Commons was due to debate plans to create an elected mayor for the region in 2017 as part of the devolution deal, but this has now been cancelled.

Ross Smith, director of policy at the North East Chamber of Commerce, 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.”

(Image c. Andrew Matthews from PA Wire and Press Association Images)

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