£92m city deal will see North get more funding power

NEW Government finance powers will pave the way for a combined council authority stretching from Northumberland to County Durham.

Newcastle City Council leader Nick Forbes with Paul Woolston
Newcastle City Council leader Nick Forbes with Paul Woolston

NEW Government finance powers will pave the way for a combined council authority stretching from Northumberland to County Durham.

Newcastle Council yesterday unveiled its £92m city deal which will see Government support to create 13,000 jobs.

The deal comes with a series of conditions including a promise from Newcastle and Gateshead to consider a North East Combined Authority with a statutory basis.

Such a move would then be used by cities minister Greg Clark to hand over more funding powers.

Transport minister Theresa Villiers made clear during a visit to the region yesterday that a combined authority would pave the way for multi-billion- pound transport decisions to be devolved down to council level.

Any move to a combined authority would be dependent upon support from Sunderland and South Tyneside. It is thought Sunderland will consider a bid for its own city deal in the next wave of Government announcements, and that this too would be dependent upon creating a combined authority.

Informal talks on the issue have already started between the seven North East councils, with broad support in principle to the plans.

Last night South Tyneside leader Iain Malcolm said he would welcome the moves, which he said would not involve a watering down of an individual council’s powers.

He said: “I do not agree with a lot of what this Government is doing, but on this I think their plans will be welcomed across the region.

“It is wrong to think jobs and skills and transport are issues which do not cross boundaries. The transport issues facing Newcastle face us as well, and yes, we do have to start working now on the same structures which other city regions have adopted.”

As part of the eight city deals announced yesterday, Leeds and Sheffield confirmed they will each form combined authorities, bringing their existing local authorities together so they can make more strategic decisions about how money is spent.

It follows the example already in place in Manchester.

Speaking at the Newcastle launch, council leader Nick Forbes said land behind St James’ Park would soon be the site of the long-awaited Science Central office block. Claiming the city deal handed Newcastle control of its own economy, Mr Forbes added: “We take very seriously our responsibilities for creating the right climate for jobs, and are delighted in this vote of confidence.

“Our top priority has always been to make Newcastle a working city – and the creation of up to 13,000 jobs will go a long way to achieving that. These jobs will improve the lives of thousands of families and give many young people the chance to start their careers.”

Cities Minister Greg Clark is due in Newcastle today. In a statement released by the Department for Communities and Local Government he said: “This innovative deal is a fantastic step forward for Newcastle and Gateshead.

“When we said ‘make us an offer’ the city really stepped up to the challenge and will now reap the benefits of having new financial powers and investment opportunities handed down from Government.

“Today’s deal will bring thousands of jobs to Newcastle and make the city centre one of the most attractive places in the country to invest in.”

Page 2 - I’ve taken the shackles off... it’s over to you now >>


THE city deal sees Newcastle and the Government agree to work together in a number of key areas.


Newcastle will: Invest £92m of borrowed finances into city regeneration and work with businesses and investors to bring in £800m of private sector investment over 25 years. In addition to the £92m of investment, Newcastle and Gateshead Councils will invest about a further £100m.

Government will: Agree to the retention of all business rate growth for 25 years in the 80 hectares outlined. UKTI to work with local partners to promote economic opportunities within the Accelerated Development Zone, in relevant key sectors.


Newcastle will: Create a city-wide alliance of businesses, research and educational institutions involved in research, development and technology and work with UKTI and others to provide dedicated inward investment resource.

Government will: UKTI will work with the city and others to develop an internationally competitive proposition to accelerate investment in the Tyneside offshore manufacturing cluster with the objective of securing £500m in private sector investment in the next five years, creating 8,000 jobs.


Newcastle will: Set up a central Newcastle Skills Hub, both physical and virtual, to help disadvantaged groups into the labour market and upgrade the skills of the low-qualified in employment. Newcastle and Gateshead Councils will work together to provide support to 16 to 17-year- olds, helping find them work or training.

Government will: Provide funding of around £1.7m over three years for support for 16 to 17-year-olds.


Newcastle will: Create a joint board between the Homes and Communities Agency and the council to establish and oversee a Joint Investment Plan. This will deliver 15,000 new homes in urban areas, creating over 30,000 new jobs and generating direct economic benefit of £4bn.

Government will: Minister will hand the board a say over future use of a range of city buildings and land previously held by the regional development agency.


Newcastle will: Work with Gateshead Council and the Highways Agency to address congestion problems on the A1 Western Bypass and invest £2.5m in Tyne and Wear’s Urban Traffic Management and Control system to improve management of traffic. It will also work with Newcastle Airport to commission an updated economic study of the benefits of a transatlantic route and make the necessary investment from local resources to help in the introduction of that route.

Government will: Finalise an updated business case for the Lobley Hill scheme ahead of the next spending review period, and to consider this in the prioritisation of future strategic road investment proposals for the next Spending Review.


Newcastle will: Invest in super-connected broadband infrastructure, through £4-6m investment from the Urban Broadband Fund, matched by a commitment from Newcastle Council.

Government will: Match this commitment.

I’ve taken the shackles off... it’s over to you now

YESTERDAY I announced new powers that will unshackle Newcastle from London and give it the freedom to thrive.

Newcastle has a proud history of economic strength and innovation that helped to make the UK what it is today.

A powerhouse in the industrial revolution, made prosperous by shipbuilding and heavy engineering and the home of Stephenson’s Rocket.

But since the decline of these industries, Newcastle – like so many other cities in the UK – has lost out to London and been overtaken by booming economies in cities across Europe, North America and the East. It’s lagging behind because we haven’t adapted quickly enough to the changing economy and global demands on trade.

It is my top priority to correct this – to rebalance our economy so that Newcastle and other major cities get a fair crack of the whip.

So that it’s not just Whitehall that controls the country’s purse strings, and so that great cities across the UK can take back huge chunks of power from Whitehall. To restore cities like Newcastle to powerhouses.

The deal Newcastle has struck is a box of tricks that will set the city free to be innovative and unique.

A billion pounds worth of investment will create 13,000 jobs as a result of new financial powers, alongside an additional 8,000 jobs in the marine and offshore sector.

Business rates in four growth sites in Newcastle and Gateshead will be retained locally. Initiatives on transport, broadband, employment, skills and housing will boost prosperity.

But I’m not going to do the work to make this investment fly – you are. I want to free everyone in Newcastle of the ties that bind you to decisions made by politicians in Whitehall, to give you control of budgets and decision-making – and I want you to do it your own way.

With more control and freedom, Newcastle will thrive – it’s in your own interests to make it work, spend the money wisely, get the best bang for your buck, and reinvent yourself.

But at the moment, the only tax cities generate for themselves is just 5%, from council tax. What if you could keep the taxes that local companies pay? What if that cash could be spent on building better roads for more deliveries and easier access to the city? If that pot of gold could be spent on improving education and keeping young people off benefits and in work?

Well it’s not “if” any more, it’s happening. We’re cutting the ties, you’re taking control. But more power comes with greater responsibility. We will be looking for giant leaps. I have high hopes.

Over to you.


David Whetstone
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Graeme Whitfield
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