The former leader of Newcastle City Council is to help decide how £2bn in taxpayers’ cash is distributed across the country.
Lord Shipley, a Liberal Democrat peer who led the authority from 2006 to 2010, will join Tory peer Lord Heseltine to oversee Local Growth Deals, a flagship Government scheme to create jobs in the private sector.
But the appointment could mean he finds himself thrust into a row between local authorities in the North East, which are at loggerheads over plans for a new combined authority.
Seven local councils in the region had drawn up plans to merge some of their functions and create a new body, following in the footsteps of councils in the Greater Manchester area which have similar arrangements. The move was prompted partly by Government warnings that the authorities would be far more likely to receive funding if they worked together.
Lord Shipley was appointed by Nick Clegg, the Deputy Prime Minster, and Greg Clark, the Minister for the Cities. Mr Clark is also the Minister who has been pushing North East councils to form a joint authority.
Along with Lord Heseltine, he will advise Ministers in the merits of bids for funding drawn up Local Enterprise Partnerships. These are agencies run jointly by councils and the business community.
The cash will come from a £2bn Local Growth Fund created by the Government to support the creation of private sector jobs.
The fund is designed to be a “single pot” of money for replacing an array of different schemes - including “city deals” - which areas applied to in the past.
Local Enterprise Partnerships have been told they must demonstrate how their plans will use local authority assets and creating a long-term strategy to put growth at the heart of everything councils do.
Lord Heseltine and Lord Shipley will advise ministers on individual proposals brought forward by the LEPs, and will challenge the LEPs themselves to prod uce the best possible proposals.
Lord Shipley said: “Following on from the success of the City Deals, I am delighted to be involved in the next exciting chapter of the Government’s decentralisation agenda.”
Mr Clegg said: “This is another step forward in handing more power from Whitehall to local people. I am delighted that Lord Heseltine and Lord Shipley have agreed to bring their expertise and enthusiasm to bear on Local Growth Deals.”
And Mr Clark said: “As we work towards the completion of the second phase of City Deals, these local Growth Deals will take the Government vision for local growth to the next level, and the huge experience of Lord Heseltine and Lord Shipley will be vital to that.
“As the economy turns the corner, Local Growth Deals will ensure not only that every part of the country can take advantage of the recovery, but has the opportunity to be right there in the driving seat.”