Thousands of jobs have been predicted as the North East is handed control of both adult training and the EU funds needed to create the jobs of the future.
Business Secretary Vince Cable has named the region as a trial area to see if handing employers control over how adult education cash is handed out will mean a new era of skilled Northern engineers.
The local enterprise partnership will be in charge of adult education cash normally controlled out of Whitehall.
In a sign of how powerful the partnership is now becoming, it will also take charge of £461m of European Union regeneration funding, with officials predicting thousands of jobs as a result. Partnership members, including council and business leaders, will work jointly with the Skills Funding Agency and could be setting out which courses are suitable for cash by September. It means colleges would have to start providing schemes tailored around offshore engineering or electric vehicles, for example.
Last night Lord Adonis, who led the recent North East Independent Economic Review, said: "Our work highlighted the importance of matching current and future skills provision to demand in the labour market.
“As an area with a diverse and growing private sector economy that faces skills shortages in a number of sectors, this new-found opportunity is a major step forward.
“I'm delighted that the leadership of the North East in this debate is being recognised with this additional form of devolution, which is a major fillip for the combined authority and local enterprise partnership. I look forward to seeing this brave new approach realise its target of more and better jobs in the future.”
The move represents a major victory for the NEvolution campaign, in which North East newspapers united to call for more decision-making powers to be moved out of Whitehall. The partnership is chaired by accountant Paul Woolston, with former Treasury official Ed Twiddy in charge of day to day work for the increasingly influential, though still unelected, organisation.
Andrew Hodgson, the board member who leads on skills development alongside fellow board member Anne Isherwood of Sunderland College said: “It’s great news that the ideas we put forward to government for the skills funding model are now being driven forward, and that the North East LEP is one of only three in the country to pilot this innovative skills funding model. Effective skills and training programmes tailored to fit our area’s key sectors, for all ages of workers, answer the immediate needs of employers as well as the future demands of our local economy.”
The EU cash is the latest round of a fund which was previously handed out by the regional development agency One North East.
The North East allocation of ï¿½461m EU structural funding was the third largest in the UK, behind London and Cornwall.