THE North-East is about to gain powers from Whitehall as part of Government plans to stop regional economies withering away.

Ministers have shortlisted bids from the Tees Valley and Sunderland to take greater control of tax and spending, regeneration projects, transport and skills training budgets.

Deputy Prime Minister Nick Clegg said the proposed City Deals would “free regions from the Whitehall leash” and place powers in the hands of local decision-makers.

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More than 22,000 jobs could be created and saved in the Tees Valley if its bid to develop a “super cluster” of energy and chemicals companies is approved, business leaders claimed.

Local enterprise partnership Tees Valley Unlimited (TVU) is one of 20 areas hoping to agree a City Deal. TVU reckoned it could also help the creation of 9,500 apprenticeships a year by 2022.

Sunderland wants to use tax revenues from a new manufacturing park to revitalise the city centre and create thousands of jobs.

Council and business leaders must now agree detailed proposals with civil servants before November’s deadline.

The Northern Echo understands that the Tees Valley will get the go ahead even earlier if it can convince ministers it is ready to put its plans into action.

Winning City Deal status will not mean there is more money available, but it will give greater powers locally to decide how Government cash is spent, at a time when councils are being forced to make cuts. Last July, Newcastle and Leeds were among eight English areas given City Deals in the first wave of the scheme.

In a speech last night, Mr Clegg warned that the economy was losing out on £41bn a year because successive Tory and Labour governments had “choked off northern cities’ potential” in favour of London.

Mr Clegg, added: “These deals help cities and their wider areas make once-in-ageneration changes that will be felt by everyone across their region.

“Letting go of power and money does not come naturally to Whitehall. Over time, the economic importance of other parts of the country has been devastatingly downplayed, as the economic elite have narrowed the debate towards a London-centric view.

“Rather than let our industries and communities wither, we need to free-up cities outside London that have their own unique selling points.”

North East Chamber of Commerce director of policy Ross Smith said: “The North- East is a huge asset for the UK economy, but has the potential to deliver far greater economic returns.

These deals will give two more parts of the region the chance to demonstrate that.”

Minister for Cities, Greg Clark, said: “For years this area has had to put up with London laying down the law about how things should be done locally These city deals are a revolution in that relationship.

Who could be better than the people and businesses of the North-East to know what the area needs to achieve all it that is capable of?

“The Government should be there to support local ambition and that is what I will do in these negotiations.”