Despite the fact its title is enough to make normal eyes glaze over, the regional spatial strategy is the most important issue facing the North-East today. But not everyone thinks it will be good for the region. Nick Morrison reports.

IT was one of the many objections levelled at the campaign to create an elected regional assembly: that the new body would focus on Tyne and Wear and Teesside at the expense of everyone else. It was an objection, along with many others, that ultimately proved successful, as voters rejected the proposed assembly by a majority of nearly four to one.

But now those fears have returned, and it is not an elected assembly, but an unelected one, which is responsible.

The object of concern is the regional spatial strategy (RSS) - an unglamorous name which has perhaps allowed its implications to slip by unnoticed. For it is the RSS which will determine the face of the North-East for a generation. By setting out where industry can go, where new houses can be built, and which roads should be improved, it will have more impact on the region than almost any other single policy.

The RSS was drawn up by the North East Assembly, the unelected body created in 1999 as the first step towards regional devolution. Had last November's referendum produced a yes vote, the assembly would have made way for an elected version. As it is: it is carry on regardless.

After publishing the strategy within days of the no vote, the North East Assembly will agree a final version next week, before submitting it to the Government for consideration.

But already it is clear that one of the most contentious issues is the concentration on Tyne and Wear and Teesside - dubbed the two city regions - in the years to 2021. Equally clearly, the strategy's authors see no reason to change their minds.

This division is most clearly illustrated in house building plans over the next 16 years. The Government expects the overall population in the North-East to remain the same, but the assembly is keen to reverse the trend which has seen people leave the city regions to live in the surrounding areas. The result is that the city regions will see a net increase in the number of homes, while other areas will see a net decrease.

"If your population goes down, everything else goes with it, and industries are not going to come here," says Olive Brown, leader of Wear Valley District Council. "No council should preside over decline but that is what is happening.

"We're being squeezed between the two large conurbations, between Tyneside and Teesside. I realise that they need help, but I do think it is going to be to the detriment of the people in the middle. I really am frightened that we're going to suffer."

If the supply of new houses is restricted, the price of existing homes will rise, beyond the reach of many young, economically active people and reinforcing the trend towards holiday and retirement homes.

The shortage of affordable housing is a key concern for employers. Kevin Maw, managing director of plastic mouldings manufacturer Renham and Wade, which employs 42 people in Middleton in Teesdale, near Barnard Castle, says many of their staff already struggle to afford good housing.

"People already feel conditioned to the fact that we're second class citizens here in any case, but they seem to be blanking out almost the entire County Durham population," he says.

"There is going to be a huge migration of skills even further from the rural areas, and they're going to become old people's communities. Just when people think support can't get any worse, it does."

The disagreement leaves the local authorities in an awkward position. Leaders of all eight councils in County Durham also sit on the North East Assembly, the body which drew up the strategy. And as members of the assembly, although they have to be seen to be standing up for their own areas, they have also bought into the idea of regional government. Even if it means they lose out.

Alex Watson, leader of Derwentside District Council, says the growth of Tyne and Wear and Teesside has been identified as a priority by the Government and the assembly has to accept that. He acknowledges there is no chance of reaching agreement next week.

'There is a strong case to place the city regions at the heart of the drive to promote economic growth, and there is nothing we can do about that," he says. "The rural areas have a serious problem. They're just as important as the cities, although we recognise there is a need to focus on the city regions."

Malcolm Bowes, assistant director of the North East Assembly and responsible for the RSS, is unapologetic about the focus on Tyne and Wear and Teesside. It is only by concentrating new homes in these areas, he says, that the trend of inner city decline can be reversed.

"The main drivers of a better North-East are the two city regions. Most people live in those areas, most people work in those areas, and if you are going to have a successful North-East then those two areas need to be successful," he says.

"If the two conurbations are doing well, there will be knock-on effects elsewhere. There are a lot of positives in this for Durham.

"The idea that Durham is seen as second class is entirely wrong. I can see why people are saying they would like a stable population: there is nothing wrong with being aspirational, but we have to look at the regional picture."

He says the strategy provides a framework for development, which is vital to give inward investors the certainty of knowing where industrial development can take place, and which land is set aside for housing. But not everyone is convinced that such a strategy is necessary.

John Elliott, chairman of Bishop Auckland water cooler manufacturer Ebac, says the North-East economy will only do well when the UK economy does well, and only the Government can bring about economic change.

"If we're going to deal with the North-South divide, which is a real issue, there is only one organisation that is going to do that and it sits in Westminster," he says. "Westminster can shift jobs here tomorrow; the regional assembly isn't going to do that."

And Mr Elliott, who led the campaign against an elected assembly, believes planning issues should be settled at a more local level, and has a more market-led solution to the problem of where to build houses.

"They should build the houses where people want to buy them. Why not let the people who are going to live in them choose? That is how we buy everything else. Real democracies let people decide where to buy houses, they don't tell them," he says.

But this only highlights what many people see as the democratic gap in the strategy: what is the North East Assembly, that it is able to determine how the region should develop, when voters overwhelmingly rejected the idea of regional government? Tomorrow, The Northern Echo looks at how the North-East voted against an assembly, but got one anyway.

* Tomorrow: Why the referendum was a vote FOR a regional assembly.