This week saw the final parliamentary approval for a new ‘combined authority’ to deliver economic prosperity for the North East.
Bringing together the seven North East local councils – Durham, Gateshead, Newcastle, Northumberland, North Tyneside, South Tyneside & Sunderland – into this new structure does not replace existing local authorities, but it does give us the stable, democratically accountable regional leadership we need to plan for and deliver economic growth.
Given the enormous effort and commitment it has taken to get us to this stage, it is misguided to claim that this will be yet another ‘talking shop’.
These new arrangements will allow us to have a single conversation with government, national agencies and business leaders, and ensure that we collectively align the decisions we make on transport, skills and infrastructure investment for the good of the whole region.
We need to hit the ground running, and plans are already well advanced to establish a single Investment Gateway, coordinate promotion of the region, draw together a range of funding sources (including EU funds) and jointly address a range of common issues and challenges in the context of reduced budgets. As joint shareholders of Newcastle International Airport, the seven local authorities have already shown what we can achieve by working together, and we are now working hard to secure a transatlantic route from Newcastle.
‘City-regions’ like ours can be the engines of growth, rebalancing the UK economy away from the over-heated South East; but to do this requires a huge shift in decision making away from the capital.
That’s why I welcome Ed Miliband’s commitment that a future Labour government will devolve further funding and decision-making to combined authorities, working closely with private sector led Local Enterprise Partnerships (LEPs).
It is revealing that Michael Heseltine’s review called for a massive devolution of funding from Whitehall to the regions, but David Cameron and George Osborne allocated just £2bn for a Local Growth Fund in their most recent Spending Review.
This needs to go much further. Leaders from across the country agree with me that devolved funding needs to increase radically to at least £20bn over the next parliament to deliver a step change in economic growth.
It is absurd and unsustainable that Boris Johnson should be given a range of additional powers on infrastructure investment, stamp duty and business rate levies (and that on transport projects alone, Londoners benefit from public investment of £2,731 per head compared with £5 for every citizen in the North East), whereas local authorities in the North East still handle relatively small and fragmented pots of money.
Now is the time to devolve all local infrastructure funding – from transport and housing to skills and employment – to those who know the region best. Whitehall civil servants still insist that local councils jump through bureaucratic hoops to be given freedoms and access to resources.
Yet it is no surprise that where strong and effective regional government does exist, as in Germany, they have seen the highest levels of prosperity in Europe - evenly spread right from Hamburg to Munich.
These new regional governance arrangements for the North East are only a means to an end. To achieve the prosperity we all want we must work hand in hand with the wealth creators in the private sector, and that is why our ongoing relationship with the business-led North East LEP is so crucial.
And we have a great track record to build on: with the only positive balance of trade of any UK region and major successes at attracting inward investment this gives us the platform to deliver the outcomes in the region’s two City Deals, and negotiate an negotiate an ambitious Growth Deal for the whole region.
This will create the best possible conditions for growth in jobs, investment and living standards, and make the North East an outstanding place to do business.
Local authorities and local businesses are certainly rising to this challenge, but if we are to end the ‘century of centralisation’ and deliver prosperity for our communities, then the politicians and civil servants in Whitehall will have to learn to let go.
Cllr Iain Malcolm is leader of South Tyneside Council
