Devolution agreement for the North East

22 October 2015

A devolution agreement that will transform the North East economy and bring new opportunities for businesses and residents will be agreed today (Friday 23 October).

Members of the North East Combined Authority and the Government will sign the agreement to devolve significant powers, funding and responsibilities to the region.

The move will represent a major change to the way in which decisions will be made in the future about transport, investment, funding, skills training, business support, housing and strategic planning.

The North East Combined Authority and a new elected mayor – to be elected for the first time in 2017 – will take control of the new devolved powers.

Cllr Simon Henig, chair of the North East Combined Authority, said: “This is an important day for the North East. The agreement being signed today will bring significant economic benefits and opportunities for businesses and residents.

“Those living, working and doing business here in our region represent our greatest asset – and through this agreement we will invest in the people of the North East and support business to grow and thrive.

“We want to enable people to get the skills and training needed to get jobs, we want to create reliable and efficient transport networks to provide access to those jobs and we want to ensure people have good quality homes in areas they want to live in.

“We will also invest in and work with the business sector to ensure we understand and meet business needs.

“And we will work to support competition on an international stage and attract new business and investment into our region to enable our economy to grow.

“This agreement marks the start of a new way of working in the North East which should not only benefit our regional economy but that of the whole country.”

The agreement will see:

Up to £1.5bn pumped into a new North East Investment Fund. This will be targeted towards boosting economic growth and supporting the region to compete in international markets. It will include an initial funding allocation of £30m a year over 30 years.

The creation of an Employment and Skills Board to manage an overhaul of post-16 skills training and employment support in order to get more people into work, increase productivity, improve the life chances of young people and address the skill shortages experienced by North East employers.

From 2017, a new devolved approach to business support, which will simplify and strengthen the support available for business growth, innovation and global trade in the North East in order to deliver the ambition set out in the North East Strategic Economic Plan to create 100,000 jobs.

The establishment, in partnership with the NHS, of a Commission for Health and Social Care Integration. This will look at the potential for further integration of health services – including acute and primary care, community services, mental health services, social care and public health – in order to strengthen services, improve outcomes and reduce health inequalities.

An ambitious target to increase the number of new homes in the region. This will include the creation of a North East Land Board to identify potentially suitable locations for housing or economic development and the devolution of some statutory planning powers.

Devolved responsibility for the region’s transport budget along with responsibility for transport delivery, including infrastructure improvements and the development of smart ticketing across public transport networks in the area.

The agreement is a first step in a progressive process of devolution, which paves the way for opportunities for further devolved powers and responsibilities to the North East.

Final agreement remains subject to the Government’s spending review and 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.  

Chancellor George 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.”

Northern Powerhouse Minister James Wharton said: “Our long-term economic plan seeks to rebalance growth and build a Northern Powerhouse.  By ending the ‘one size fits all’ approach of the past, we are giving local people the powers they need to boost jobs and skills.

“Today’s deal means the North East is leading the way, with significant new powers and nearly £1billion of Government investment over the next three decades. 

“This will enable the region to compete nationally and on the international stage. I look forward to seeing how a future Mayor and combined authority work with the business community to make their ambitions a reality.”

On behalf of all of the NHS Clinical Commissioning Groups in the region, the North East and Cumbria CCG Forum welcomed the opportunity to explore improving health outcomes of patients and reducing health inequalities by considering greater integration, deeper collaboration and devolution across the North East Combined Authority area.

Dr David Hambleton, chair of the NECCCG Forum said: “Linking with the broader plans for devolution of power to the North East Combined Authority area, we are keen to explore how the NHS can play its part in shaping our future locally”