“HISTORIC” devolution deals worth £1.35bn to the North-East and the Tees Valley over the next 30 years will be signed today, prompting the Chancellor to hail the “unstoppable momentum” of the Northern Powerhouse.

After months of tense talks with the region’s council chiefs, George Osborne and Northern Powerhouse Minister James Wharton will put pen to paper on twin deals in Gateshead and Stockton later today.

The agreements will mean the neighbouring areas gaining powers over employment and skills, transport and planning and new mayors, first elected in 2017, allowed to raise business rates to boost infrastructure.

The North-East will get £30m a year for the next 30 years and the Tees Valley £15m, enabling both combined authorities to create investment funds worth £900m and £450m respectively over the next three decades.

The new mayors will not control the police or fire brigade, as in Manchester, and critics say the deals are too little, too late, particularly given the body blow of the Redcar steelworks closure.

But the Chancellor said the “historic” deals demonstrated the “unstoppable momentum” of devolution and the Northern Powerhouse.

He praised North-East leaders as having worked incredibly hard to reach this point and said as a result the area would gain “significant new powers and investment”. On the Tees Valley, Mr Osborne hailed the deal as “brilliant news” and “unthinkable even just a few years ago”.

Mr Wharton said the North-East deal would enable the area to lead the way and compete nationally and internationally and on the Tees Valley the Stockton South MP added: “It means local people will have a direct say over the support available to boost jobs and skills and to encourage new businesses to start, grow and prosper.

“We have listened to local people and are devolving significant resources and powers from the banks of the Thames back home to where they belong on the banks of the Tees. As a proud Teessider, I very much look forward to seeing how we use this deal to make our ambitions a reality.”

Devolution deals had been expected for some time and pressure had been growing to reach agreements as soon as possible, following the examples of Greater Manchester and Sheffield.

But there have been deep divisions, including over the elected mayors. North-East leaders believe they have successfully limited the mayor’s powers and won significant victories over health and social care.

The deals depend on winning the support of each council involved and public consultation has been promised.

Councillor Simon Henig, leader of Durham County Council and chair of the North East Combined Authority, said: “Today’s signing of this proposed agreement marks the start of a new way of working in the North-East.

“With devolved powers and responsibilities over both our urban and rural economies, transport, skills and investment and the creation of the new health commission, this brings new opportunities to make a difference to the lives of local people.

“Not only does this demonstrate the level of our ambition, it also underlines the key role the North-East has to play in re-balancing the national economy.

“We welcome the opportunities which devolution presents and we will now begin further consultation with our partners, residents, businesses, trade unions and the voluntary and community sector so that everyone can be part of this process as we move forward.”

Councillor Sue Jeffrey, leader of Redcar and Cleveland Borough Council and chair of the Tees Valley Shadow Combined Authority, said: “I’m pleased that the Government has put a devolution deal on the table and if it is agreed by all the Tees Valley councils, there is no doubt it will enable us to do more locally to strengthen our economy and secure a more sustainable future for the Tees Valley.

“Over the coming months we will be speaking to local residents and businesses about what the proposals mean for them. But we must not lose sight of the fact that while this is good news, there is still an immediate need to focus on actions to help the shock to our borough and our people which has been caused by the current crisis at SSI.”

Darlington Borough Council leader Bill Dixon said: "This marks a significant step in a process which in time will bring key decision making powers and budgetary control to the Tees Valley. I am particularly pleased to see the commitment from Government to strategic transport improvement which will benefit the Tees Valley."

However, Stockton North MP Alex Cunningham said: "Local people haven’t elected for an elected mayor.

“I understand why local councillors want the additional spending powers that are being offered as part of the deal. I hope that it’s real money that is being offered and it doesn’t end up being a pig in a poke, with the elected mayor getting the blame for the Government funding cuts.”

Meanwhile, supporters of two rival devolution proposals for Yorkshire are due to meet Government ministers on Monday (October 26) to thrash out a deal.

A proposed Greater Yorkshire authority has the support of council leaders in Hull, East Riding, North Yorkshire and York, although Hull also also submitted its own bid. But the five West Yorkshire councils are backing a rival Leeds City Region plan, pairing up West Yorkshire with York, Selby, Hambleton and Craven.

North Yorkshire County Council leader Carl Les said North Yorkshire's leaders were firmly opposed to the county being carved up in this way, as it could mean North Yorkshire Police being under the control of both an elected mayor in Leeds or Wakefield and North Yorkshire's Police and Crime Commissioner.

In an open letter to the people of the North-East, the six leaders and one elected mayor of the seven councils in the North East Combined Authority set out their vision for devolution. It is printed in full below:

TODAY marks the beginning of a new opportunity for the North-East.

The signing of a proposed devolution agreement between the North East Combined Authority and government brings with it the promise of new powers, funding and responsibilities.

It represents a new way of working that will enable us to drive the region forward.

Important decisions regarding transport, investment, jobs, skills, housing and business support will be made right here by people – accountable to local communities – with local knowledge and understanding about our issues and needs.

We have high ambitions and this is our chance to improve our economy, attract investment, enable businesses to thrive and residents to prosper and to share in the region’s success.

The proposal includes a new North East Investment Fund, worth up to £1.5bn, to support our region to compete in international markets and help to boost economic growth. As part of this, we have agreed with government an additional £30m a year over 30 years, as a long-term commitment to economic growth.

This level of investment in our region is very welcome and it will enable us to unlock our potential and secure future growth.

We will not only create new jobs but, through devolved responsibilities for post-16 training and employment support, we will ensure people have the skills that employers need, now and in the future.

And through new devolved transport responsibilities we will work to improve our region’s road, rail and public transport networks.

We will build more new homes for our communities and, through the creation of a new

Health Commission, we will explore the potential for improving and integrating health services so that we reduce health inequalities and improve the quality of people’s lives.

The signing of the proposed devolution agreement today is a significant event and follows a great deal of talks and negotiations over recent months, during which we have kept a clear focus on the region’s priorities.

Today is the first step in the region’s devolution journey, paving the way for opportunities for further devolved powers and responsibilities to the North-East.

Final agreement is subject to the government’s spending review and parliamentary approval, the agreement of the seven local councils which make up the combined authority and public consultation.

This is important because, through earlier public consultation, the views of our partners and stakeholders have played an important role.

We want this to continue so that everyone can be part of this process as we move forward. 

In particular we want to work with business leaders to ensure their voices are heard – they have a crucial role to play.

Over the coming weeks we will be holding a series of consultation events so that we can get the views of residents, the business community, trade unions and the voluntary and community sector.

There is no doubt that we have taken a bold step in what will be an important journey for the North-East.

The proposed agreement we have successfully negotiated demonstrates not only the scale of our ambition but also the crucial role the North-East has to play in re-balancing the national economy.

We will continue to work together with residents, businesses, trade unions, and the voluntary and community sector to seize the opportunities that devolution offers.

Cllr Simon Henig, Chair of the North East Combined Authority and Leader of Durham County Council
Cllr Mick Henry, Vice Chair of the North East Combined Authority and Leader of Gateshead Council
Mayor Norma Redfearn, Vice Chair of the North East Combined Authority and Elected Mayor of North Tyneside
Cllr Nick Forbes, Leader of Newcastle City Council
Cllr Grant Davey, Leader of Northumberland County Council
Cllr Iain Malcolm, Leader of South Tyneside Council
Cllr Paul Watson, Leader of Sunderland City Council