The Government must give the green light to a new regional power base in 2014 or see the North East drowned out by Scotland and London, ministers are being told.
As seven council leaders await Government sign off on plans for a combined authority, the man lined up as its first chairman has warned of an increasingly difficult future for the region if it does not get the go-ahead.
Durham County Council leader Simon Henig says a new law merging some of the powers carried out by councils up to Northumberland would give the region the best possible chance of returning to growth.
The local authorities are in talks with Government to copy a £1bn combined authority based in Manchester in which they would be handed new powers to grow the economy.
While all local services and elections would remain unchanged, behind the scenes the seven councils would legally merge their roles in areas such as skills and transport, alongside the ability to borrow to invest in regeneration projects.
Whitehall is currently considering support for the plans, set to be agreed in April, though ministers such as Communities Secretary Eric Pickles are said to be mindful of creating an unwanted extra tier of local government, the type already rejected by the region in the 2004 North East Assembly referendum.
Now, speaking to the Journal, Mr Henig has said the economic consequences of remaining a region without a powerful voice would be disastrous.
The Labour leader warned of the North East losing out to a London undergoing an economic recovery, and a Scotland set to gain more powers.
He said: “The danger is we are stuck between two areas that in different ways are self confident and taking up more and more resources. The recovery is in the South East at the moment, and whatever happens in Scotland, it will be more powerful.
“Whatever happens in Scotland it will come out of it more positive. Even if it is a no vote, that could even make it worse for the North East, you have to look at what concessions will be offered to Scotland over the next year.
“And if they go independent, Alex Salmond has already spoken of cutting corporation tax. There are worries that Scotland will try to attract businesses across the border.”
Mr Henig adds: “Then there is London and the South East, where the gap between there and here in the North East has widened – it gets worse, and we have a strong Scotland ahead of us.
“We face a difficult future to make sure we do not lose out between the two, and we all have to work together to tackle that. We can’t just be arguing with each other while the rest get stronger.”
Mr Henig said that businesses and interested groups in the North East had to play their role in convincing Government to give the go ahead.
“The region has answered the question ‘Does it need its own Alex Salmond?’. It has already rejected a regional assembly back in 2004, so now we have to come up with a new arrangement.
“We can’t get away from that fact. My personal view is, it is too early to re-open the North East Assembly debate. It may be that if we are successful with this, we bring people together, we can start to think about it again in the future, but not yet, the time is just not right for that and it would just be a distraction for that.”
A Government consultation on a new combined authority will be decided on in the New Year.
Simon Henig talks to Adrian Pearson about the challenges being faced by the region and how a combined authority could help, J2, page 17.