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What does the North East devolution deal mean for the region?

Labour candidate Kim McGuinness, independent Jamie Driscoll, and experts from the region discuss the largest devolution agreement to date.

By Spotlight

Yesterday (2 May), the inaugural election for the new North East Mayoral Combined Authority (Nemca) took place. The largest English devolution deal to date, Nemca covers two million people. It will unlock £1.4bn of new government funding and give crucial powers over transport, housing and skills to a new mayor. The body will bring together seven local authorities – Newcastle, Gateshead, North Tyneside, South Tyneside, Sunderland, Durham and Northumberland.

That is an impressive feat in itself. It’s easy for Westminster to instinctively lump “the north” together as if it’s one homogeneous and harmonious monoculture. But politically, it’s as fractious and divided as anywhere else, with perhaps even more ancient rivalries between close neighbours.

In 2016, talks on a devolution agreement broke down, as authorities on the north and south banks of the River Tyne split over funding and the mayoral model. Two combined authorities were created, with the North of Tyne electing Labour candidate Jamie Driscoll as the new mayor. The authorities south of the river continued without an executive representative. Now, all will be united.

The drama doesn’t stop there. Driscoll, despite being the incumbent of the North of Tyne Combined Authority, was excluded from the shortlist of Labour candidates for mayor earlier this year without official explanation. He has stood as an independent, with bookmakers offering 13/8 odds on him beating Labour’s candidate, Kim McGuinness, who was the clear favourite.

This afternoon, the results will be announced. The Nemca mayor will take office, attempting to implement the kind of regional governance agenda that has benefited Greater Manchester and the West Midlands. Whatever the result, the victor will be hoping to ensure the north-east isn’t held back any longer. To discuss the implications of the new deal for the region, Spotlight has gathered experts, including the two frontrunners, for our north-east devolution symposium.

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Kim McGuinness, Labour candidate for mayor of Nemca

Devolution here is long overdue. I’m standing to be the first mayor so our region can continue taking powers out of Westminster and let people here make the decisions affecting their lives.

We see the need for more localised decision-making powers, as well as the funding to deliver. This is a vibrant, growing region but it faces challenges. I want the north-east to be known as the home of real opportunity. That means tackling child poverty by investing in the foundational economy; it means putting our ports and rivers at the forefront of the green energy jobs boom; and it means turbocharging our cultural economy so writers, musicians and artists know there’s a career in the north.

The deal we have doesn’t go far enough. Tory deals tend to be focused on business development while ignoring public services. Some areas need a mayor who will create offshore energy jobs, but some parts need a mayor who will bring back Sure Start. The establishment of Nemca is a unique opportunity for our region to regain a sense of autonomy.

Jamie Driscoll, former mayor of the North of Tyne Combined Authority and independent candidate for Nemca mayor

Devolution has to be about results. When I was elected North of Tyne Mayor in 2019, Theresa May was prime minister. Since then we’ve had Brexit, Covid, Ukraine, Gaza, energy price hikes, four PMs and six chancellors.

Despite that, we created: 5,377 full-time, permanent jobs (three times our target); 2,133 homes on brownfield sites; mental health and child poverty programmes across 240 schools; and increased skills training enrolments from 22,000 a year to 35,000 a year. But we needed transport powers, so I began negotiating with government. I want to integrate the buses, rail and ferry into a single system, with free transport for under-18s – opening opportunities and tackling emissions.

The real gamechanger is fiscal devolution. Control of our finances gets us more independence. A Regional Wealth Fund investing in local firms will grow our economy. It’s already succeeding, and the proceeds come to us, not off to hedge funds in tax havens. I want to increase this fund to £500m, creating 15,000 extra jobs.

Add in land value capture and the windfalls can fund rail expansion. But it needs a mayor capable of turning that trailblazer commitment into a reality.

Andy Haldane, former chief economist at the Bank of England and chief executive of the Royal Society of Arts

As someone who was born in the north-east more than half a century ago, this is the first time in my lifetime when there is the prospect of the entire region converging in its leadership, economic, social and environmental planning. That makes this a once-in-a-generation moment. The key to success will be specialising, rather than jam-spreading, focusing on the region’s strengths. One of these is the way it combines city, coast and rural; another is its distinct industrial and cultural heritage.

It is by specialising around these strengths that the benefits of clustering emerge, benefits that would then spill over across the entire region in the fullness of time. From a potentially long list, one of those missions should be to have the region become the first energy-self-sufficient one in the UK. That could generate massive spillover benefits for jobs, skills, energy bills and exports.

Nick Kemp, leader of Newcastle City Council and Nemca economy lead

With large cities, a stunning coastline and expansive rural communities, our region has a mix of strengths we can build upon. A robust economic strategy built on the foundations of opportunity and inclusivity will be at the heart of that, and we’re already making great progress before the inaugural mayor takes office, not least through the country’s first regional industrial strategy.

Seven local leaders have worked with officers to secure the very best deal for Nemca and we’ve achieved some excellent results already. We secured a £160m investment zone to focus on clean energy and advanced manufacturing. We’ve also signed a trailblazer deal to deliver more funding and powers for our decision-makers to secure new capital programmes, create high-quality jobs, improve our skills mix, deliver more clean and sustainable housing, and improve our transport to make our region greener and more accessible than ever.

Katy Shaw, Professor at Northumbria University

The past decade has witnessed a remarkable new wave of English devolution, and universities have had a key role to play as a delivery mechanism.
The sector can enhance profile and drive partnership by stepping up to reap both the responsibilities and the rewards that devolution affords. Universities can attract talent, share best practice, draw inward investment and return agency to a place and its people. If devolved bodies can harness innovation, then by working together combined authorities and higher education institutes can boost inclusive growth in partnership.

At Northumbria University we have worked with Newcastle University and Nemca to build capacity and share expertise through secondments and collaboration. Civic mission cannot be achieved in isolation: universities need to engage with devolution. With combined authorities, we can invest in meaningful place-making through civic strategy, ensuring that our graduates, research and cross-sector relationships are fit for purpose now, and into the future.

This article first appeared in a Spotlight print report on Economic Growth, published on 3 May 2024. Read it in full here.

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