Devolution deals for the North East and Tees Valley are set to be announced later this week, following the resolution of disagreements between central government departments, LGC understands.
Disputes over exactly what could be devolved are understood to have derailed the announcement of a deal for the North East earlier this month, despite local leaders and Treasury officials having largely reached agreement.
Chancellor George Osborne is expected to announce both deals, which will include elected mayors, on Friday.
LGC revealed last month how the North East Combined Authority was on the cusp of concluding a deal with a view to it being announced ahead of the Conservative party conference.
However, LGC understands the Treasury agreed to some devolution demands without the say-so of the relevant ministers and agreement could not be reached in time with all the departments involved.
Control over European funding, the running of bus services, and elements of the skills agenda are still understood to be included in the package covering Durham and Northumberland CCs, Newcastle and Sunderland city councils, Gateshead, North Tyneside and South Tyneside councils.
However, the Department for Business, Innovation & Skills was “extremely unhappy” about a proposal to reform the local enterprise partnership and integrate it into the combined authority, according to a source close to the negotiations. Another complication has been finalising the terms of reference for a commission examining the long-term viability of health and care services in the region, as well as finding someone appropriate to chair it.
Logistical difficulties of getting officials and leaders together for negotiations have also held up progress, LGC understands.
Sources have told LGC departmental in-fighting has also delayed the agreement of the Tees Valley deal, along with a reluctance among the Labour authorities to see their deal announced at the Conservatives’ conference.
The region includes Darlington, Hartlepool, Redcar & Cleveland and Stockton-on-Tees BCs and Middlesbrough Council, containing the Stockton South constituency of northern powerhouse minister James Wharton.
One source close to those discussions told LGC: “There’s supposed integration within government to [devolve] but in practice there’s still warfare going on between the various departments. It’s not as joined-up as the government is making out to the public.”
LGC understands the deal council leaders are due to agree to will be similar to the one announced earlier this month for the Sheffield City Region.
This included access to a pot of money worth up to £900m over 30 years to boost growth and responsibility for franchising bus services. Members of the city region’s combined authority will also oversee a review of 16+ skills provisions and get control of funding for 19+ adults skills funding from 2018-19.
The Tees Valley source said there would be a “comparable” pot of money for the region, taking into account its smaller size, but a proposal to run bus services was “in the balance”.
A government source close to the negotiations acknowledged there were sometimes “differences of opinion” between departments but said that was “acceptable” given what was at stake and the complicated nature of the deals.
“This has never been done before… No one would deny it’s a difficult process but what we’re finding is everyone’s willing for it to happen. Some departments are taking a little bit longer than others to buy into it because they’ve never done it before whereas the Treasury’s been involved in devolution policy for a while now.”