Sunderland's Crown Works Studios and Tyne and Wear Metro set to benefit from Budget

A “shift in power” to the North East will allow the development of a major film and TV studio in Sunderland, investment in public transport upgrades, and new housing.

Jeremy Hunt confirmed in his Budget on Wednesday that the region will be given a new “trailblazer” devolution deal that delivers more decision-making powers to the incoming North East mayor and, the Chancellor said, potentially be worth more than £100 million.

It is expected to result in an initial £25m investment into the redevelopment of the Sunderland Riverside, enabling the building of the Crown Works Studios – a massive project that it is hoped will create thousands of jobs.

Hear from the team behind the film studios

A further £10 million is set to be put towards a new “Health Innovation Zone” in Newcastle.

The commitment to the “trailblazer” comes on top of powers and funding within the multi-billion pound North East devolution deal which has already been agreed, ahead of an election in May for a new mayor who will represent around two million people across Northumberland, Durham, and Tyne and Wear.

Its enhanced powers, versions of which have already been given to mayors in Greater Manchester and the West Midlands, also include a single funding pot for housing and regeneration.

That is described in the deal as “a stepping stone” towards the North East Mayoral Combined Authority (NEMCA) being awarded a full single department-style funding settlement, that would offer the region much greater freedom over how it spends the money devolved from the Government.

The “deeper” devolution deal also confirms £58.4 million of funding for maintenance and renewal works on the Tyne and Wear Metro between 2025 and 2027, though that is money that has been brought forward from the region’s previously-announced City Region Sustainable Transport Settlement from 2027 to 2032.

The agreement was described by local councils chiefs on Wednesday as a “shift in power and influence from central government to the North East on key drivers of local growth”.

The leaders of Newcastle, Gateshead, Sunderland, South Tyneside, North Tyneside, Durham, and Northumberland councils added: “From enabling investment for Crown Works Studios to securing essential transport funding to a taskforce to tackle rural and coastal issues, this is a deal we have custom made for the North East.

"Today’s announcement will help us to do more and is rightful recognition that we are better placed to identify the priorities for our region.”

The 'trailblazer deal' is expected to result in:

- A £25 million investment to support the development of the Riverside Sunderland site along with creation of a ‘Growth Zone’ to attract investment, with Sunderland Council and NEMCA ultimately expected to invest up to £120 million towards the creation of Fulwell 73’s Crown Works film studios “using the tools provided by the deal”;

- £10 million to “accelerate progress on a Health Innovation Zone” in Newcastle, including developments at the Forth Yards and the Newcastle University’s Health Innovation Neighbourhood on the city’s former Newcastle General Hospital site;

- The creation of a coastal and rural taskforce to “strengthen quality of life, biodiversity and the natural environment”;

- From 2026, NEMCA will be able to set the overall strategic direction of theregion’s Affordable Housing Programme, in partnership with Homes England;

- £58 million of funding brought forward to cover the maintenance and renewal of the Tyne and Wear Metro system for the next two years;

- A single funding pot for housing and regeneration, as a precursor to a future departmental-style funding settlement;

- A new rail board being set up involving NEMCA, the government, and the rail industry to develop plans for improvements to train services;

- A commitment from the Government to help expand the use of the Metro’s Pop pay-as-you-go travel cards on rail services “as soon as viable”, subject to the outcome of trials in Greater Manchester and the West Midlands.

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know...

Sharon Hodgson, the Labour MP for Washington and Sunderland West, said that the “long overdue investment” in the city’s riverside development meant the Government had “finally put their money where their mouth is for the people of the North East”.

Prof Jane Robinson, pro-vice-chancellor of engagement and place at Newcastle University, said the £10 million funding for the Health Innovation Zone would pay for “time critical works” in the regeneration of the former hospital site in the West End.

She added: “The Health Innovation Neighbourhood (HIN) builds on our world-leading expertise in healthy ageing and will be the first of its kind in the UK, tackling major health and social challenges with the aim of identifying solutions that will benefit people here in the North East and beyond.

“Our long-term development will include housing, green spaces, healthcare, commercial spaces, and educational facilities that will sit alongside important research and innovation projects.”

The Treasury also confirmed further details on Wednesday of a new “investment zone” in the North East, which it said would support new investment and innovation in electric vehicle manufacturing, battery production, offshore wind and low-carbon materials.

That will see businesses offered tax incentives at Blyth Energy Central in Northumberland and the International Advanced Manufacturing Strategic Site in Sunderland and South Tyneside, plus a £20 million investment fund set up to help create jobs on the banks of the Tyne and at the NETPark in Durham.

It is hoped the zone will leverage at least £3 billion of investment and create more than 4,000 jobs over the next 10 years.

Have you heard our new podcast Talking Politics? Every week Tom, Robert and Anushka dig into the biggest issues dominating the political agenda…