LA7 Devolution Update

Plans to bring billions of pounds and more power to the North East have progressed, with Government today releasing a press notice outlining a deal on the table for the seven local authorities in the North East.

Local Leaders and Mayors have been in positive discussions with Government in recent months and following successful talks have now been offered a provisional deal which would unlock over billions of pounds of investment and see additional powers transferred from Whitehall to local people.

Negotiations with government over the devolution deal have now reached the stage where all councils and combined authorities can consider the details, before a final decision is made.

The new deal would see the formation of a new combined authority, headed by an elected 'Metro' mayor and cover the LA7 area of Newcastle, Gateshead, North Tyneside, Sunderland, South Tyneside, County Durham and Northumberland.

The deal, which is subject to a governance review and public consultation, offers a potential £4.2bn of investment into the region, made up of elements including:

• An investment fund of £1.4bn, or £48m a year, to support inclusive economic growth and support our regeneration priorities
• An indicative budget of around £1.8bn, or £60m a year, for adult education and skills - to meet local skills priorities and improve opportunities for residents
• A £900m package of investment to transform our transport system, with £563m from the City Regional Sustainable Transport Fund, on top of funding already announced for our buses and metro system
• £69m of investment in housing and regeneration, unlocking sites to bring forward new housing and commercial development

It is expected to create 24,000 extra jobs, deliver 70,000 courses per year to give people the skills to get good jobs, and leverage £5.0 billion of private sector investment.

Once established the new authority, covering an area which is home to around 2 million people, will have the power to make decisions on areas such as transport, skills, housing, finance and economic development. The potential deal does not involve any changes to existing councils.

A public consultation will take place from early 2023 on the new arrangements which the government have confirmed they are 'minded to' approve.

It is expected a Mayoral election would take place in May 2024 and a new authority formed.

The North of Tyne Combined Authority (NTCA), which was set up in 2019 covering Newcastle, North Tyneside and Northumberland, and the separate North East Combined Authority (NECA) covering Sunderland, South Tyneside, Gateshead and Durham would no longer exist.

Full details of the deal can be found here.

Local Leaders and Mayors today welcomed the news in a joint statement. They said: 

"This is a significant step towards securing important decision-making powers and investment for our region. This would allow us to make decisions that reflect local needs and invest wisely into projects that will make a difference for all our residents, communities and local economy.

"There remains a process for all councils and combined authorities to consider the details and a public consultation before a final decision is made.

"We are pleased that we have successfully negotiated a proposed deal which is a step towards reaching our ambition for this region. This is an important milestone in our journey and we will now engage with stakeholders to move the deal to the next stage."

Levelling Up Secretary Michael Gove said:

"I'm proud to have agreed a historic new devolution deal with the North East that gives local leaders more power, more money, and an even greater say on how their areas are run.

"Devolution is all about letting leaders who live and breathe the region decide what is in their best interests, for their people and for their businesses.

"A new mayor will ensure local priorities in the North East are at the heart of decision-making, while our billion-pound funding boost will provide the financial certainty needed to level up the area right now and for years to come."

Lucy Winskell OBE, Chair North East Local Enterprise Partnership, said:

"This devolution deal is a hugely positive move for the region and marks a step change in our levelling up journey.  The region has come together and is committed to seeing the North East succeed.

"The development heralds new funding and decision-making powers that will unlock the creation of more and better jobs, allow us to seize new opportunities, address issues that are holding us back and critically, to compete where we have strengths on a national, sectoral and global stage, and most importantly to do this in partnership.

"As things progress, the North East LEP will come together with the new mayoral combined authority, allowing for a co-ordinated approach with one strong voice and a laser focus on delivery of everything this proud region and its diverse communities need to thrive."