THE bill for the coalition’s plans to encourage elected mayors in Newcastle and other English cities will top £11m despite officials being unable to put a price on the benefits.
The Journal can reveal the total cost could reach £15.9m over 10 years if voters in all 12 cities required by ministers to hold mayoral referenda in May 2012 back the proposals.
Government assessments have put the “best estimate” of the total cost at £11.5m – based on just eight cities backing elected mayors. Elections for the job would be held in May 2013.
In Newcastle, the price tag for the referendum has been estimated at £84,000.
The impact assessment of the plans says key benefits are “potentially substantial” but cannot easily be given a monetary value.
It suggests money could be saved by the mayor taking on roles currently performed by the council chief executive, with the new post “likely” to have a lower salary and associated costs.
But there could also be redundancy costs as a result, while mayoral support staff may be needed. And the assessment warns it is unclear how other costs and savings differ between existing council structures and the mayoral model.
Turnout at elections may also rise and decision-making be more effective, the study says, although the evidence is “inconclusive” on this second point.
Senior Labour Newcastle councillor Jeremy Beecham, also a peer, said: “The whole thing is a fiasco, particularly the whole idea about the mayor being the chief executive.
“It is a waste of money. There is clearly no appetite for this on behalf of the electorate.”
Attacking ministers, he added: “They simply have no idea. They have taken the decision first and then asked the financial questions after, if at all. And months after they still don’t know.”
North East Tory peer Michael Bates said the costs were a “significant” consideration in financially straitened times, but insisted directly elected mayors offered good leadership that would boost local areas and save money.
“Our experience in the North East of elected mayors has been a very positive one,” he added, pointing to North Tyneside, Hartlepool and Middlesbrough.
“It has raised the profile of the areas. It helps attract investment. It gives a serious figurehead.”
Lord Bates also said there was an opportunity to axe costly council chief executives by merging the post with an elected mayor or sharing chief executives between different local authorities.
“I think this is an exciting option for which local people will have the final say,” said the peer.
The coalition has ordered mayoral polls to take place in Birmingham, Bradford, Bristol, Coventry, Leeds, Leicester, Liverpool, Manchester, Newcastle, Nottingham, Sheffield and Wakefield.
But it has decided against a poll in Sunderland – which has a bigger population than Newcastle – because local people voted against an elected mayor in a poll in October 2001.