Devolution deals reached between UK government and two north east regions

Both deals provide for the appointment of a directly-elected mayor who will chair a combined authority and exercise strategic planning and housing powers.

The North East Devolution Agreement (NEDA) (15-page / 333 KB PDF) proposes the transfer of powers for housing, planning, transport, employment and skills, business and investment to the North East Combined Authority (NECA) and a mayor for the North East.

Elections for the appointment of the new mayor would take place in 2017 under the NEDA. The mayor would chair both the NECA and a new North East Land Commission set up to release brownfield and publicly-held land for development, and would take responsibility for the creation of a planning development framework for the region. The deal also provides for the devolution of compulsory purchase powers to the mayor, to be exercised with the consent of the relevant authorities.

The NECA, which includes Durham County Council (CC), Gateshead Council, Newcastle City Council, Northumberland CC, South Tyneside Council and Sunderland City Council, would set up and control an investment fund under the deal. The fund, to which the government has proposed to allocate £30 million a year until 2046, would cover "all budgets for devolved functions" and would be used to "deliver a 15-year programme … of transformational long-term investment".

A second agreement would see the creation of a Tees Valley Combined Authority (TVCA), covering the administrative areas of Darlington Borough Council (BC), Hartlepool BC, Redcar and Cleveland Council and Stockton-on-Tees BC.

As with the NEDA, the Tees Valley Devolution Deal (13-page / 335 KB PDF) provides for the direct election of a mayor for Tees Valley in 2017. The new mayor would be able to create new mayoral development corporations (MDCs) and would chair a land commission to consider which strategic sites and publicly-held land should vest in a MDC.

The government has committed to allocate £15m annually for 30 years to a Tees Valley Investment Fund, which would be controlled by the TVCA and used towards "transformational investment in the region".

The agreements are the third and fourth devolution deals to be brought forward under the government's plans for the creation of a 'northern powerhouse' in the north of England. The first such agreement was made with the Greater Manchester Combined Authority in November 2014 and an agreement in principle for the Sheffield City Region was reached last month.

Planning expert Ben Mansell of Pinsent Masons, the law firm behind Out-Law.com, said: "George Osborne stated that the two new agreements have provided the devolution agenda with ‘unstoppable momentum’. It is certainly a step in the right direction and the two further deals mark almost a year to the day since the Greater Manchester devolution deal was agreed."

"As with the Greater Manchester and Sheffield  agreements, the two north east devolution deals will transfer powers such as planning, transport and housing. This will provide much-needed impetus for investment into the region. The 'northern powerhouse', with devolution as one of its central themes, is starting to take shape. However, it will be some time yet until the full benefits are felt and the imbalances within the national economy are addressed," Mansell said.

The deals are subject to local consultation and ratification by the individual councils involved and the enactment of the Cities and Local Government Devolution Bill, which is currently making its way through parliament.