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North East and Tees Valley devo cash subject to growth test

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Funding for the North East and Tees Valley worth a combined £1.35bn will be subject to the areas contributing to national growth, it has emerged.

When the government announced devolution deals for the two regions on Friday it said funding totaling £900m for the North East and £450m for the Tees Valley over 30 years was “guaranteed”.

However, the fine print of the deals say the money will only be released subject to five yearly assessments of each areas’ contribution to national growth, in common with similar arrangements that form part of the Greater Manchester and Sheffield City Region devolution deals.

LGC understands the term “guaranteed” referred to the money not being subject to the current spending review discussions, unlike the other budgets which the government has agreed to devolve such as transport and skills.  

The Tees Valley agreement states the combined authority will “jointly commission an independent assessment” of the economic and social benefits with the Cities and Local Growth Unit “including whether the projects have been delivered on time and to budget”.

The deal document said each five-yearly tranche of funding would only be “unlocked” if the Cities and Local Growth Unit and Treasury were “satisfied” objectives had been met. There is little detail in the North East deal on how the “gateway assessments” will work.

Bill Dixon (Lab), leader of Darlington BC which is a member of the Tees Valley’s fledgling combined authority, told LGC he was “relaxed and quite comfortable” about having assessments.

“I would rather there was an agreement about what we were going to do with the money,” he said. “It makes it plain and clear to everyone involved when the deal has been satisfied, so targets are not an issue.”

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