Talks stall over £3 billion North East devolution deal

Newcastle Quayside PA stockshot
If approved, the deal would see the region take in £3 billion in funding over a period of 30 years. Credit: ITV Tyne Tees

Talks over proposals for a North East devolution deal worth £3 billion appear to have stalled, local authority leaders have heard.

The deal - which would give new funding and decision-making powers to the region under an elected regional mayor - has been on the verge of being struck for months.

However, an agreement has now been delayed as a result of the fallout from the Chancellor's Growth Plan.

Claire Rowntree, Sunderland Council's deputy leader, told a meeting of the North East Combined Authority on Tuesday that local authorities will have to 'wait and see' what the new government's plans are for the proposals - but says no timeline has been fixed as Ministers are "occupied at the moment by the fallout from the mini-budget".

Liz Truss is set to address the Conservative Party Conference in Birmingham today (Wednesday 5 October) in a keynote speech, following a period of political turmoil over her economic plan.

Earlier in the week, her Chancellor Kwasi Kwarteng reversed his decision to scrap the 45% top rate of tax for the highest earners - though the Prime Minister refused to rule out the move in the future.

Now, the Prime Minister faces a fresh row within her own party over whether to increase benefits in line with inflation.

Meanwhile the deputy leader of Durham County Council Richard Bell told the Local Democracy Reporting Service that he had made contact with the new government twice to invite them to "engage constructively" in devolution talks, but had not yet received a response.

He said that there had not yet been a decision on whether Durham will join the other six councils in the region as part of the devolution agreement - saying an October deadline to make that decision, set by former Levelling Up secretary Greg Clark, was "perhaps no longer applicable".

Durham has been invited to join the proposed devolution deal. Credit: PA

If approved, the deal would see more than £3 billion of funding for the region over a period of three decades, with the new regionally-elected mayor handed powers over areas including transport.

It would encompass Newcastle, North Tyneside, Northumberland, Gateshead, Sunderland, and South Tyneside - though County Durham has also been offered the opportunity to join. That move has faced opposition from a number of MPs in Durham, who feel the county would be 'sold short' by being a member.

A DLUHC spokesperson said: "We want to see more areas with a high-profile, directly elected leader who will be accountable to local people and act as a champion for their areas.

"We continue to work at pace with leaders in the North East to deliver a devolution deal."

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