Councils get ready to tackle the £30bn gap

COUNCILS in the region have been warned to “grow up” and put parochial squabbles aside after the Government handed them a central role in deciding the North-East’s future.

Ministers plan to axe the unelected regional assembly and overhaul the role of councils and development chiefs. But the implications are not yet clear, reports Political Editor William Green.

COUNCILS in the region have been warned to “grow up” and put parochial squabbles aside after the Government handed them a central role in deciding the North-East’s future.

An expert said yesterday that councils were well placed to address a £30bn economic gap between the North and South – as the Government plans to give them a bigger say over regeneration cash and funding for 14-19 education.

But it is not yet clear how local authorities will collaborate, with ministers who are seeking their views, following publication of a “sub-national” review aimed at boosting regional development.

Axing the unelected North-East Assembly by 2010 could cause expensive difficulties, as could the possibility of ministers ordering unitary councils to be set up in County Durham and Northumberland.

The assembly currently scrutinises regional development agency One NorthEast and draws up a development blueprint covering transport, housing and employment.

But under the new plans, the chamber’s planning role will be handed to One NorthEast, which will be tasked with creating a single regional strategy by merging the disjointed development and economic plans to set a clear direction.

Council leaders will monitor the agency and approve the document before it is sent for independent examination and agreed by Government.

Minister for the North-East Nick Brown, a Commons regional question time and a new committee of MPs are to provide Parliamentary scrutiny.

But the new planning process could take years to complete and ministers are pressing ahead with finalising the existing development strategy, despite fears that employment and transport pledges are being watered down.

Dermot Finch, director of the influential Centre for Cities think-tank, said the changes would probably not interest ordinary citizens, but the overhaul was important.

He welcomed the axing of regional assemblies and said the new system would be more efficient and improve scrutiny of the huge sums spent by development agencies.

“It means the people who elected local councillors and their MPs have a say and scrutiny role over that invisible quango called the regional development agency.”

He said it was now up to council leaders to work out how they collaborated, but warned that they had to “grow up” and avoid local “ding-dongs”.

North-East councils say they are in a good position to collaborate. Newcastle and Gateshead councils run a number of joint projects and city-region executive boards covering Tyne and Wear and Tees Valley are up and running.

The Association of North-East Councils (ANEC) brings together 25 authorities and could play a key role, not least in taking on the assembly’s job of monitoring RDAs.

ANEC chairman Mick Henry, leader of Gateshead council, said: “People don’t care about structures but they do care about improving services and we believe we can give that to them. We think this is a great opportunity and we think we deliver on it.” North-East assembly chairman Alex Watson said it would continue planning work, but warned that effectively putting its staff on three-years’ notice would hit morale and cause difficulties.

He said that it was not clear how the new system would work and feared that duplication could cost taxpayers more than the £2m annual running bill for the assembly.

Berwick MP Alan Beith said that rural areas must not be forgotten and expressed concern about the development agency.

“I am still anxious that it doesn’t have real democratic accountability and a lot of what the Government announced is a lot of top-down and central Government-directed,” the Liberal Democrat MP said.

One NorthEast chief executive Alan Clarke said the proposals would underpin stronger economic performance with a single strategy playing a key role, although central players needed to take them “seriously”.

Mr Clarke said that moves to give councils a bigger say on spending would build on existing regeneration partnerships, such as work on the South Shields riverside near the Customs House.

He said: “We really need to work on some high quality partnerships and then invest in all of them, rather than just get involved in a slightly sterile debate about just handing over money.”

Mr Clarke said that projects such as the demolition of Westgate House in Newcastle could still be done by the agency or could be taken over by the council under the new system, depending on the circumstances.

And the agency may still be responsible for business support, developing science and handing out specific government grants.

Spending on rural areas is also likely to continue with One NorthEast expected to receive between £250-280m a year despite tighter Whitehall spending.

Mr Clarke said the new planning structure would take a couple of years to develop, but the current economic and planning strategies could be a good start, provided some amendments were made.

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Specialist training ‘to grow by 50%’

THE next three years will see a 50% boost in the number of specialist training centres in the region, according to the Learning and Skills Council.

The news follows the publication of a Government report that is expected to play a major role in narrowing the North-East skills gap.

John Denham, Secretary of State for Innovation, Universities and Skills yesterday announced the release of the Leitch Implementation of Skills report which is aimed at turning the UK into a leader in skills by 2020.

Chris Roberts, regional director of the LSC, said it would have a major impact on the region’s economic future.

He said: “We have 20 centres of vocational excellence in the North-East and I would expect us to see a 50% growth in the next two to three years.

“I would also expect at least three national skills academies being built in the region in the next 18 months.”

The original report by Lord Sandy Leitch in 2006 recommended raising the age of compulsory education from 16 to 18.

In the implementation of the report, the LSC is looking to develop its Train to Gain initiative which gives independent advice on training to businesses.

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How the shake-up affects local government and quangos in the North-East:

Councils

Authorities set to win central role in deciding region’s future and boosting growth, with bigger say over regeneration cash and funding for 14-19 education.

Council leaders will monitor development agency One NorthEast and approve new regional strategy before it is sent for independent examination and agreed by Government.

Councils say they are well placed as they already co-operate in areas like Newcastle and Gateshead.

The Association of North-East Councils (ANEC) brings together 25 authorities and could play a central role, taking on unelected assembly’s role of scrutinising development agency.

Unelected regional assembly

Plans to phase it out by 2010

Currently scrutinises One NorthEast and draws up a development blueprint covering transport, housing and employment.

Planning role to be handed to development agency, but there are concerns that its job in the meantime could become more difficult with staff effectively put on redundancy notice.

Concerns also raised that the duplication in the new system could cost taxpayers more than the £2m annual running bill for the assembly.

Regional development agency One NorthEast

Tasked with creating a single regional strategy by merging the disjointed development and economic plans to set a clear direction for the future.

Agency says moves to give councils a bigger say will build on existing partnerships, but warns against a “sterile” debate about just handing cash over.

The agency is likely to still be responsible for business support, developing science and handing out specific Government grants.

Read more on page 2

Cooperation will make this work

Nick Brown - Minister for the North-East .

Nick Brown MP

THE recent announcements from Gordon Brown’s government will lead to the biggest shake-up in regional and local government in England since Labour came to power.

No region stands to benefit more from the changes than the North-East of England. We are uniquely placed to take early advantage of what is on offer.

Our region has a strong team of members of parliament and elected councillors who are capable of co-operating to deliver effectively for the region.

The new focus on local government’s leadership role should enable us to clearly decide our priorities and find ways of delivering on them.

Crucial to our region is the economic base, jobs and prosperity. Key factors in delivering this are our transport strategy and the priority we give to education, learning and skills.

Our region has travelled a very difficult journey from the days when heavy industry and mining provided the employment base.

We should respect the past and plan for the future – creating prosperity for our region, and learning from what has worked for others.

As the new Minister for the North-East I will do my best to see that nobody is left out.

I intend to embark on a whole series of meetings across the region to hear what others have to say and listen to others’ views about priorities. Crucial to making what is now on offer work for our region is cooperation and collaboration between different local authorities and parliamentarians.

So much of our region’s history is bound up with trade unionism, the cooperative movement, friendly societies, and community groups, where citizens band together to achieve by their united endeavours more than they ever could by the sum total of their individual efforts.

Future generations will regard us with despair if we let the present opportunities slide because we kept quarrelling among ourselves.

This is a testing time for the public life of our region. I believe that we can rise to the challenge.

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‘Brown shows his preference for central control’

Alan Duncan MP - Shadow Minister for Tyneside, Conservative Party

Alan Duncan

THIS week the Government announced that they were going to scrap regional assemblies.

It was the North-East who struck the killer blow to regional assemblies by voting against John Prescott’s plan for regional government, so you would have thought that the announcement would be good news for the region and local democracy, but rather than listening to the reasons for the North-East’s rejection of regional government, the Government have ridden roughshod over local concerns.

They have simply rebranded their plans to impose regional government on the region.

Rather than listening to the fact that voters rejected regional assemblies because they realised that an expensive extra layer of regional politicians would be distant from the concerns of local communities, the Government have ignored these concerns and devised a new system of regional government which is even less democratic and more distant from local communities than John Prescott’s failed scheme.

Most of the most important powers held by the North-East Regional Assembly are going to be transferred to One NorthEast, the development agency. RDAs’ record on ensuring that taxpayer money is spent effectively is woeful. RDAs’ boards are appointed and are not accountable to local communities. Their original role was to act as a business-focused catalyst for regeneration, but Labour have now made them an arm of Government without allowing local people a say over what they do.

The proposal to give Government ministers additional responsibilities over RDAs represents a massive shift of powers from local communities to Whitehall. The abandonment of regional assemblies gave the Government a great opportunity to return power to local communities in the North-East, but they have flunked it.

Despite only being Prime Minster for three weeks, Brown has already reverted from his promise to listen, back to his preference for central control from Whitehall.

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Neighbours are quick off mark in race for jobs

THE North-East is pioneering a twin-city scheme to boost the economies of Newcastle and Gateshead – which are run by two councils and two political parties.

The new city development company would be the first in Britain to span two council areas – and represents a new level of co-operation between Labour-run Gateshead and Liberal Democrat Newcastle.

The authorities are joining forces with development agency One NorthEast, each proposing to invest £500,000 a year for three years, to fund the company.

A key role of the organisation would be to draw up and implement an “economic masterplan” to accelerate development and regeneration.

It would encourage entrepreneurialism, improve regeneration and give the power to bid for bigger commercial and public projects.

The councils have agreed to recruit a chairman with top-level private sector experience and a chief executive to set up a small highly-skilled team to run it.

Council chiefs want to set up a formal partnership to oversee the new outfit, marketing agency the Newcastle Gateshead Initiative, and Bridging Newcastle Gateshead – the body funding extensive housing regeneration. Reports detailing the plans go to the councils’ executive bodies next week and One NorthEast’s board is backing them.

The news comes within days of the Government urging councils to work across boundaries to boost growth and raising the prospect of handing over more powers, should such schemes be successful.

Gateshead council leader Mick Henry said strong democratic oversight had been agreed. Newcastle Council leader John Shipley said: “We will achieve more in partnership with Gateshead than either of us would gain through competition with each other.”

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