Will the North East's devolution deal be a golden egg or a half-baked bronze egg?

Kate Thick says the North East has a huge opportunity - but there are many problems to overcome

George Osborne visits Nifco's factory in Eaglescliffe
George Osborne

Is devolution for the North East a golden egg or a poisoned chalice, I asked Labour peer Jeremy Beecham. He smiled slowly, raising an eyebrow.

Thom Brooks was so right in his column on June 26 when he said the devil is in the details.

The motivation for a Northern powerhouse is financial as the government looks for spending cuts and ways to boost the economy but, without doubt, Cameron and Osborne want to boost Tory footholds in the north.

Devolution and wresting concessions seem to be in fashion from Europe all the way down to Cornwall. We have asymmetric devolution across regions and nations.

The UK is one of the most centralised and economically unbalanced countries in Europe and our local governments are toothless; bizarre afflictions methinks for a rich, tiny country.

Our chancellor said after the election that the old model of running everything from London was broken and cities can apply for greater control as long as they accept an elected mayor.

We are not just talking about cities however. Cornwall, one of our most rural counties, wants greater powers to shape its own economy. So there will be ‘moor mayors’ as well as ‘metro mayors’? Osborne invited “towns and great counties” to take on a form of the City Deals programme which would not require an elected mayor.

What terms are nailed down is crucial. The question is whether a bad deal is better than no deal at all; whether a growing appetite for devolution would lead to disarray rather than prosperity.

For example, quality and efficiency in health and social care is already a postcode lottery. A report from Quality Watch says it is worrying that the UK performs worse than most countries on more than half of the 27 healthcare indicators analysed. The UK’s total health expenditure as a proportion of GDP is one of the lowest of all the countries analysed, lower than countries such as France and Germany. The UK can and should do better.

As councils continue to face cuts to their coffers, gaining control of budgets for health and social care, housing, transport, education, policing and the like should be welcomed. Our councils must rise to the challenge.

Public investment in infrastructure is more than twice as high per person in London as in the North East where the average income is a quarter less.

A national newspaper at the weekend reported Osborne’s pledge to build a “northern powerhouse” has been condemned as cynical pre-election spin as it emerged that the £13bn committed to build it includes routine spending on potholes and maintenance for the A1. Local politicians and business leaders claim the funds on offer will prove too little for any major infrastructure improvements.

Besides the finances, what a management headache as different areas of the country will no doubt want to negotiate their own model of autonomy. What or whom is going to make this all hang together? Jeremy thinks it should be pulled together by a senior minister, aided by restored Government Offices in the regions; so far, relevant government departments and agencies are not communicating.

I share Jeremy’s and Thom’s scepticism regarding the imposition of a regional mayor. Why that much power in one pair of hands? Is a mayor any better at negotiating or any more accountable than a committee? How can one mayor represent the diverse interests from Berwick to Barnard Castle? Jeremy is highly amused at the thought of Newcastle and Sunderland sharing a mayor!

This week’s budget will be interesting as Osborne’s rhetoric on devolving power has to mesh with another $13bn in budget cuts including transport, local government and innovation.

The Institute for Public Policy North said the government must commit new money, particularly for infrastructure, for the north – which gets a smaller slice of the pie anyway - or the exercise is pointless.

Presumably we are just at the beginning of these critical negotiations. As we await formal proposals from our combined authority, let us hope the public is allowed a say and that in-fighting, politicking, and insufficient scrutiny and transparency do not scotch this huge opportunity.

It will take great team-work from politicians of all stripes, council leaders and civic organisations or we will end up with a half-baked bronze egg.


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