Plans to secure Government support to build on Nissan’s success with a new North East business park could be halted as one council leader has withdrawn support for a combined authority.
Sunderland Council has written to the Government asking it to delay plans to merge some of the functions of the region’s seven local authorities.
City leader Paul Watson has said he cannot sign up to a new organisation stretching from the Scottish border to Durham because, he claims, few people want it and as yet it has no clearly defined limits on what power it will take from Sunderland and other councils.
His decision yesterday prompted a panicked round of calls from senior officials and North East advocate Lord Adonis in an effort to rescue their plans.
The Government had asked the region’s seven councils for their response to a combined authority. Five put forward a positive joint reply while South Tyneside is believed to have given their own qualified approval.
The Sunderland response, however, has dashed hopes for now of a new Government-backed City Deal for Wearside which would in theory see a new automotive business park linked to Nissan, bringing thousands of jobs and allowing increased tax receipts to be poured back into the city centre.
It is understood council leaders in Northumberland, Newcastle, Gateshead and Durham are considering their position now amid fears a once in a generation chance to take back powers from Whitehall is about to be missed.
Both Sunderland and South Tyneside decided not to join the five other councils in a joint response to Government welcoming the opportunity to form a new super council.
While the combined authority would not abolish any local councils, it would create a new leadership board with the legal power to invest in job creation.
Greater Manchester currently has the UK’s only combined authority, and was handed a say over £1.2bn of city investment and is said to have a level of influence in Whitehall beaten only by London.
Sunderland’s concern, shared by South Tyneside, is that the public has not backed the need for a new layer of governance in the region, although other leaders and business chiefs say there is a desperate need to strengthen the region’s leadership.
Mr Watson said that while he agreed with the theory that the North East needed to solve its regional leadership issues and project itself better nationally, this was not, as it stood, the right way forward.
Speaking to The Journal, Mr Watson said: “I have serious concerns about the cost of this.
“We are being asked to support a new act of parliament that creates this with no idea if it will have a new multi-million pound head office needed in say Newcastle, if it will have an expensive chief executive or what other costs.
“And it could build up a lot of debts, which every tax payer will be responsible for.
“I just cannot agree to something when we have no idea of what it is we are agreeing, and we cannot afford to just let this become another North East Assembly.”
Asked about the threat to his city deal, Mr Watson said: “We have already being told that at the present stage of negotiations the city deal will not see us gain any extra funds, there is no money we have been told, and we will not get the borrowing powers Newcastle got.
“I don’t know what the city deal is then, really. We will still try and secure something for the automotive park.
“This is a centre for advanced manufacturing, Nissan quite simply is the biggest means of recovery for the region and the Government would be foolish to turn its back on that.”
The fear now is that Sunderland will lose out on a boost to employment as ministers seek to punish it should the council fully withdraw from the plans for a combined authority for the North East.
Sunderland is seeking the go ahead for a plan to invest and keep back some increased tax rates.
But one source has told The Journal that the Government, including Cities Minister Greg Clark, have made it clear that it’s ‘no combined authority, no City Deal’. Durham leader Simon Henig is the shadow chair of the proposed combined authority and questions remain over what he can now do to keep the plans together.
Behind the scenes talks are set to continue next week, both between the local leadership and the civil service and Sunderland.
What are city deals?
The City Deal was the carrot in the combined authority package.
Across the country, councils are calling out for more powers and more cash. Meanwhile, the Government wants a bigger focus from local leaders on job creation.
The City Deal sees the two agree changes in order to grow jobs.
Newcastle secured a City Deal on the promise it would sign up to a combined authority when appropriate.
In exchange it was handed permission to borrow millions of pounds and pay this back through business rates generated by new building projects.
are currently negotiating a City Deal which would see a new automotive business park built near Nissan, with some taxes from the new supply chain firms held by the council and reinvested in a new wave of
city centre regeneration,
creating thousands of jobs.
Their deal is also based around bringing in wider benefits to the region, such as support for offshore wind investment. South Tyneside Council is backing the project with land and officer time as the two pair up.
The latest issue between Tyne and Wear councils centres on plans for a Combined Authority
What is a Combined Authority?
This is the Government’s preferred method of handing out more powers. It sees councils merge some roles, such as transport and economic investment.
Will this mean I lose my local council?
No, you still elect leaders, they just come together to decide stuff on a regional rather than local basis.
Why do we need one?
They’re the only game in town for any area wanting to control its own future. The Government says it will hand, for example, bigger control of transport cash for new roads to combined authorities.
The Government has said it will not repeat the hugely important City Deal funding agreements without one.
Who has one?
Greater Manchester at the moment is the area to have one, and it came with a Government promise to free up millions of pounds in cash currently controlled by Whitehall.
Will this not just be another North East Assembly?
That’s the fear for some but the assembly was to be a large body of elected members – a diluted Scottish Assembly – while the combined authority would be an assembly of council leaders.