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£1.3bn North East and Tees Valley devo deals confirmed

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Devolution deals for the North East and Tees Valley which come with “guaranteed” funding worth a combined £1.35bn are set to be signed by the chancellor today, it has been announced.  

Both deals include elected mayors who will oversee the spending of a devolved multi-year transport budget and chair new land commissions. In addition the North East mayor will have responsibility for overseeing bus services and, working with Rail North, franchised rail services across the region.

The mayoral models are expected to replicate the one adopted in Greater Manchester whereby leaders can veto certain decisions if there is a two-thirds majority.

The combined authorities in each area will also set up investment funds, bringing together funding for devolved powers to boost growth. The North East fund will include £30m of “guaranteed” funding a year over 30 years while the Tees Valley fund will be worth £15m a year over the same period, the government said.

The Sheffield City Region’s most recent devolution deal, announced earlier this month, also included an agreement for £30m of funding over 30 years. However, the fine print of the deal said: “The fund will be subject to five-yearly gateway assessments to confirm the spend has contributed to national growth.”

Both the North East and Tees Valley will play a central role in reviews of education and skills provision in their areas and from 2017 will take on responsibility for business support services. These elements are also all common to existing deals in Greater Manchester and the Sheffield City Region.

In addition the North East Combined Authority will take joint responsibility for the rollout of broadband and “increased devolved responsibility for rural growth”.

Working with the government it will also establish a Health and Care Commission for the North East to review the scope and basis for further integration.The North East Combined Authority area is home to Northumbria Healthcare Foundation Trust which provides acute community and social care services and is in talks about taking on responsibilities from its two main clinical commissioning groups.

LGC reported on Tuesday how devolution deals for the North East and the Tees Valley were expected to be announced today.

Simon Henig (Lab), chair of the North East Combined Authority and leader of Durham CC, told LGC it was a “very significant moment” for the region.

“It’s exciting to be involved in this process but there’s still some way to go,” he said, referring to the fact the final agreement remains subject to the spending review, the legislative process, and is also conditional upon further public consultation and the agreement of the seven local councils which make up the combined authority. 

Mr Osborne said: “This announcement shows that our revolutionary plans for devolution are gathering an unstoppable momentum. The civic leaders of the North East have worked incredibly hard to reach this point and as a result today we are signing this historic agreement which will give the area significant new powers and investment.”

“Once again the Northern Powerhouse is leading the way in our ambition to take power out of London and give it to the people who know their areas best.”

Darlington MBC leader Bill Dixon (Lab), a member of the fledgling combined authority for the Tees Valley, told LGC: “I think this is as good a deal as everybody else has got and it’s a good deal for the Tees Valley, which is more important.”

Northern Powerhouse minister James Wharton, whose Stockton South constituency is Stockton-on-Tees  in Tees Valley, said: “We have listened to local people and are devolving significant resources and powers from the banks of the Thames back home to where they belong on the banks of the Tees. As a proud Teessider, I very much look forward to seeing how we use this deal to make our ambitions a reality.”


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