Power is being devolved to cities “hand-picked” by Government ministers while the “ambition” of the North East is sidelined, it is claimed today.
Deputy Prime Minister Nick Clegg has announced devolution deals will be drawn up for Leeds and Sheffield in time for the Autumn Statement.
The shock disclosure - made at the Northern Futures Summit in Leeds - came just days after Chancellor George Osborne signed the historic £1bn deal for Manchester, and has been described as a “huge snub” to the region.
But the Lib Dem leader has refused to say when or how power would be devolved to the North East.
He instead stressed the Regional and Local Growth Fund cash via Local Enterprise Partnerships and said Newcastle City Council could be “innovative” with £92m City Deals cash agreed in 2012.
The Deputy Prime Minister and Sheffield Hallam MP said: “Remember, in the North East you have already had the City Deal for Newcastle and in fact the City Deal had a particularly innovative component to it, which was the tax increment finance.
“It has allowed those city centre developments to happen in Newcastle. It allows for borrowing by the local authority to happen in anticipation of the business rate revenues derived from the capital investment in the city centre, then you have had the Growth Deals after that.
“So, it’s not as if nothing has happened. The idea that we are starting from year zero is just simply not the case.”
He added: “The debate here, which has included people from the North East and Newcastle, is what do we do next and I don’t think it is a bad thing to let places like Manchester or Leeds or Sheffield get cracking with what I call a ‘third generation deal’ because they are in a position to do so.
“If Newcastle or Birmingham or Bristol want to come forward with ideas about how they also do so then brilliant. From my point of view, the more the merrier.”
Regional leaders, however, say the Coalition’s approach to devolution is “disappointing” and minsters are ignoring a growing desire for more control as other parts of the North look ahead.
Simon Henig, chairman of the North East Combined Authority, said: “The public overwhelmingly supports the devolution of powers away from Westminster and Whitehall to more local decision-making, but it is increasingly unclear who in government is leading this process. Is it George Osborne, William Hague (who chairs the Cabinet Committee) or Nick Clegg?
“George Osborne explicitly links additional powers for Manchester with the imposition of an elected mayor, while Nick Clegg has now specified two other cities, both of which happen to have Liberal Democrat MPs, one of which is himself, without linking them to elected mayors.
“It is vital that the government speaks with one voice, and is prepared to listen to all areas, including the North East. True devolution means a dispersal of power throughout England, not just to a small number of hand-picked cities.”
“It would be a huge snub to the North East if an internal Coalition deal ensured power given to Leeds and Sheffield alongside Manchester while Newcastle doesn’t.
“We have proven with our handling of the City Deal that we are ready and willing to take on more powers and responsibility.
“The current Government talks the talk but seems unable to deliver. If the Government thinks that because the region rejected an assembly ten years ago that there is no appetite for devolution then they are sorely mistaken.”
The Northern Futures Conference saw representatives from businesses, universities and public bodies set out nine innovative ideas to revive the region.
Bill MacLeod, senior partner at PwC in Newcastle said the demands decentralisation puts on the skills and capacity of local organisations, must be a factor. He said businesses also need more freedom to create wealth and jobs if the Government is to get the most out of devolution.
He said: “The UK regions all have an important role to play in driving growth for the whole of the UK, and getting the right investment in our transport systems will better connect people and jobs, which is crucial if we want to rebalance the national economy.
“But this isn’t just about political devolution, it’s about giving responsibility to businesses, local enterprise partnerships and the wider business community to invest in what will make a difference to our marketplace.”