A bitter dispute between two regional bodies over the salary of a new job creation tsar has led to complete deadlock over a key leadership position.
The Journal understands the North East Local Enterprise Partnership (NELEP) wants to offer an Australian trade envoy £150,000-a-year to be the regeneration body’s next Chief Executive.
The LEP wants to parachute in a highly-qualified foreign trade commissioner as the region grapples with an unemployment rate soaring above the national average.
But the North East Combined Authority (NECA) strongly opposes such a hefty salary coming out of the public purse.
Crisis talks will now be held on Monday, months after the position was advertised.
The rift exposes a power struggle between the public and private sector leaderships of the region at a highly-political juncture.
It is believed the new LEP chief’s salary, if agreed on, would outstrip that of predecessor Ed Twiddy, a former Treasury official, and would see the LEP chief paid more than most North East council chief executives.
The Journal understand the LEP believes the £150,000 figure is ‘market rate’ and in line with the candidate’s skillset.
Resentment is building among NECA members, many of whom were excluded from the recruitment process, and the authority also has reservations about the Australian’s lack of experience in UK government.
The NECA board also wants the position to be jointly accountable to the authority.
The role was originally advertised in September as Executive Director but the proposal now is to appoint the candidate as Chief Executive. The average salary for a LEP chief is believed to be around £120,000, and this is the figure that both groups were settled on, initially.
The Journal also understands the row was further aggravated when Dave Smith, the current chief executive of Sunderland City Council, who is himself paid £175,000, was put forward for the role by NECA to act as LEP director on an interim basis, and this was promptly rejected by the business-led board.
Now, a meeting will be held on Monday to resolve the issue with both parties now keen to bring the candidate to the region.
A North East LEP spokesman said: “The North East LEP will be discussing delivery of the strategic economic plan next Monday where the local authority leaders and elected mayor will be present as board members providing their input.
“The appointment of the new chief executive will be discussed. Their role is central to driving the successful delivery of the economic plan and substantial investment of over £1bn through the LEP into the local economy.
“We are working hard to appoint an exceptional chief executive with proven experience and leadership, to ensure that we are able to meet and overcome the economic challenges of the North East and bring long term, sustainable growth.
“Making sure that we get this appointment right for the North East is a priority and we are currently in talks with a preferred candidate.
“We have taken external expert advice on the market rate before beginning the recruitment process and this position is advertised at the market rate for such a post.
“It is a high salary and that’s why we are working so hard to appoint the right person, an outstanding leader who will head the delivery of such an important programme of economic investment for the North East.”
Councillor Simon Henig, chairman of the North East Combined Authority, said: “We are working with the North East LEP to appoint a chief executive with proven experience and leadership to ensure that we are able to meet our economic challenges and bring long term, sustainable growth.
“Making sure we get this appointment right is a priority and the process is ongoing.”
A row also broke out between members of the combined authority’s leadership board. The group was unable to pass their first budget in its entirety after Sunderland City Council leader Paul Watson opposes two key parts - £64m grant to Nexus and how small the £70,000 fund for encouraging inward investment is.
The North East Chamber of Commerce has now written a letter to Coun Henig.
A statement released by NECC says: “NECC has written to Councillor Simon Henig in his capacity as chair of the North East Combined Authority expressing concern and disappointment at the outcome of their most recent board meeting. The letter refers to public disagreements on key issues and urges the members of the board to show far stronger and clearer unity, leadership and direction in order to support economic growth.”