Devo North East no more?

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Almost 12 months ago, the North East looked set to get a new, elected mayor, and a billion pounds of investment as part of a devolution deal agreed with the then Chancellor of the Exchequer, George Osborne. Fast forward to now, and that vision couldn’t be much further from reality. The new Communities and Local Government Secretary, Sajid Javid, who appears to have picked up the mantle for devolution, has said the deal is now ‘off the table’. So what’s gone wrong?

For a start, there have been internal disagreements for some time between councils on the North East Combined Authority, and Mr Javid had given the group until Tuesday 6 September to come to a final agreement. The Combined Authority members voted four to three to reject the deal, worth £30m per year.

The four – Sunderland, Durham, South Tyneside and Gatehead – sought assurances from Theresa May’s government that the level of investment the region received in EU funding would be maintained following the referendum result, in addition to concerns over an elected mayor.

There have already been rumblings from Westminster that Number Ten is not a fan of the Osborne model of devolution, especially the need for elected mayors, but nevertheless, officially the Government has continued to support it. Commenting on the North East Combined Authority’s failure to agree a deal, Mr Javid said he was ‘disappointed’. Some will wonder whether he is – and whether his boss is, too.

If the North East councils opposed to the deal really wanted to hold out until they got assurances over funding, then it is interesting that Mr Javid put such a stringent deadline for a deal to be agreed, especially with the Autumn Statement just around the corner. The North East’s failure to come to an agreement could give the Government the opportunity to rework future deals. If the plans had been passed, it would have put pressure on other stalling regions, such as West Yorkshire and North Yorkshire, to agree their own on similar terms. Its failure to be agreed, however, could allow the Government to start from scratch on a new deal, possibly more in line with what the new it would like to see, and this could become the new devolution template.

On the other hand, the request for assurances could have been a stalling tactic from the various local authorities, which the Communities Secretary has ignored as a lesson for other areas dragging their feet. Whatever the case, it is likely to have serious ramifications for the devolution agenda going forward, and we will be keeping a close eye on developments in the coming months to see if a new model of devolution begins to appear.

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