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Analysis: North East considers taking control of health budgets

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The creation of the new Health and Care Commission for the North East could lead to the region taking control of devolved health and social care budgets, the combined authority’s chair has told LGC.

The commission which has a remit to “review the scope and basis for further health and social care integration” is one of the key components of the region’s devolution deal, announced today.

However, the North East Combined Authority’s chair Simon Henig (Lab) said council leaders and health chiefs did not want to follow in Greater Manchester’s footsteps without fully understanding the implications.

Cllr Henig, who is also Durham CC’s leader, told LGC: “We think [a commission] is a better way of doing it than to just announce the Manchester-style big change. It’s better to have this commission and take that evidence.

“Everyone accepts this is an area that needs to be looked at, particularly in an era of declining budgets, but it’s how we do that and making sure everybody is involved in that process.”

He added: “We want to bring health and social care together but we feel this is a sensible way of going about that.”

The North East’s devolution deal includes £900m “guaranteed” funding, spread over 30 years, which will be used to boost economic growth. A comprehensive review and redesign of the region’ post-16 education, skills and employment support system will also be conducted, and Cllr Henig said that could be chaired by the Treasury’s commercial secretary Lord O’Neill.

The deal also includes adopting an elected mayor who will oversee a multi-year transport budget, chair a new land commission, oversee bus services and be responsible for, working with Rail North, the region’s franchised rail services.

Cllr Henig said the government made it “very clear” that a mayor was a “red line” for any devolution deal. However, adopting the model is likely to prove controversial as voters in Newcastle rejected an elected mayor in a referendum in 2012.

The devolution deal is still subject to public consultation and Cllr Henig suggested leaders could still walk away from the agreement if residents overwhelmingly rejected the proposals.

“That consultation is one of the conditions that’s set out on the first page of the agreement and it is there for a reason,” he said. “It’s not going to be a consultation that will then be ignored.”

Meanwhile, a devolution deal for the Tees Valley, which is on a smaller scale to that in the more northernly area, has also been announced today.

In a statement, the chair of the Tees Valley’s shadow combined authority Sue Jeffrey (Lab) said there was “no doubt” the deal would help to “strengthen our economy and secure a more sustainable future” for the region.

However, Cllr Jeffrey, who is also leader of Redcar & Cleveland BC, added: “We must not lose sight of the fact that while this is good news, there is still an immediate need to focus on actions to help the shock to our borough and our people which has been caused by the current crisis at SSI [the owners of the borough’s steel works].”

The Tees Valley’s deal also includes the adoption of an elected mayor. Darlington BC’s leader Bill Dixon (Lab) previously said that would happen “over my political dead body”. He told LGC that adopting an elected mayor was “not my preferred choice” and added he thought residents would “not be over the moon with it”. However, Cllr Dixon said the deal negotiated was “worth it”.

This is despite the fact the deal does not include powers over the running of the region’s bus services – something the shadow combined authority had previously sought.

Cllr Dixon said leaders had changed their mind about wanting to franchise bus services as he said there was “potential for it to be very expensive for local authorities”. He added: “There are other ways to skin that particular cat.”

LGC reported in September how a voluntary partnership between South Yorkshire councils and local bus operators had been struck which the Sheffield City Region Combined Authority said had achieved almost everything that franchising could.

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