North of Tyne: Deal, not much Devolution

November 7, 2018   By Charlotte Morgan, Policy Researcher, NLGN

Blink and you might have missed it. Amid the fireworks of last week’s Budget, we had some positive devolution news. On Friday 2nd November, the North of Tyne devolution deal was formally signed off.

This development must be seen as positive news because there has hardly been any progress to shout about on English devolution since Theresa May became Prime Minister in 2016. Indeed, the North of Tyne deal represents the first new devolution deal to be agreed under May’s premiership.

The problem with the deal, which somewhat taints the positivity of the development, is that it does not contain much devolution.

Part of the reason for this is the awkward geography of the North of Tyne Combined Authority area. In an ideal world, a combined authority’s borders should capture the area in which a significant proportion of the local population live and work. This means that neighbouring councils working more closely together as a combined authority can make joint decisions on transport, economic development and housing projects to support economic growth in an area where many people travel between home and work (known as a Travel to Work Area – TTWA).

Owing to local disagreements over a North East deal, a large section of the North East TTWA is missing from the North of Tyne Combined Authority. North of Tyne only covers Newcastle, North Tyneside and Northumberland councils. 35 per cent of residents in Gateshead travel across the Tyne to and from work, but as Gateshead is not part of the deal, the new North of Tyne Mayor will not have the power to improve infrastructure covering all parts of their journey. It is perhaps for this reason that the North of Tyne deal does not grant any transport powers to the Mayor. But, with only some housing, planning and skills powers at their disposal, the North of Tyne Mayor will be one of the weakest of England’s combined authority mayors.

The paucity of the devolved powers contained in the North of Tyne deal cannot only be put down to difficult geography. Last week’s Budget provided further evidence that this Government’s strategy to promote economic development in the English regions is to make a pot of central funding available for a specific purpose and invite councils to bid for the money. The North of Tyne might receive £20m each year for the next 30 years from the Government under the new deal, but this funding will come with strings attached. The Government’s press release on the deal indicates that the £20m per year will be used to develop digital skills, science and rural growth in the North of Tyne Combined Authority area rather than given to the Mayor to spend on any other priorities. Making ringfenced grant funding available to local authorities is not devolution.

The Government’s reluctance to engage with the devolution agenda has implications beyond existing combined authorities and areas such as Solent, whose bid to form a new combined authority was recently rejected by MHCLG. There is still no news on the UK Shared Prosperity Fund (UKSPF), a consultation on which is due to be published before 2019, and whether councils will have full control over how UKSPF is allocated in their area. There is also radio silence from the Government on its progress to publish a ‘devolution framework’, a 2017 manifesto commitment intended to set out guidelines for devolution to non-urban and non-mayoral areas of England.

The ‘Brexit bandwidth’ excuse for domestic policy inaction does not wash in the case of devolution. Devolution sits firmly within the Brexit bandwidth, as demonstrated by the Government’s lengthy (if turbulent) engagement with the devolved administrations on the post-Brexit repatriation of powers from Brussels to the UK. It is a choice on the part of the UK Government not to have used Brexit as a catalyst for discussions with combined authorities and councils in England on more and deeper devolution to the English regions. The product of this choice is the North of Tyne devolution deal: definitely a deal that will bring more money and growth to the North East, but a deal that involves minimal devolution.

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