North East mayor Kim McGuinness has written to new Chancellor John Healey with a list of demands aimed at reversing "decades of industrial change and underinvestment" in the region. In her letter, she calls for a "fundamental shift" in power away from London.
Demands include place-based deal and faster devolution
Ms McGuinness sat next to the Chancellor at last week's National Economic Council meeting at No 10 North in Manchester. She told the Local Democracy Reporting Service that opening the Manchester office had "real substance behind making sure that the whole centre of power isn't any longer in London".
The letter calls for a "place-based participation deal" for the North East combining employment support, 16–19 education, careers services, and relevant health and growth funding. It also demands a review of the relationship between mayors and arm's-length bodies like Homes England, with a "devolution by default" presumption, faster devolution of housing retrofit funding and powers, and firmer rules requiring a dedicated percentage of supply chain investment from new offshore wind farms to be made directly in the North East.
Mayor: 'once-in-a-generation opportunity'
The Labour mayor said: "This is a once-in-a-generation opportunity to redesign the relationship between Whitehall and places. But fiscal devolution must not simply allow already prosperous areas to retain more of the growth they generate; it must provide a fair funding settlement that recognises need, supports catch-up growth and ensures no part of the country is left behind.
"The North East is well placed to drive growth, but we are starting from a different position to many parts of the country after decades of industrial change and underinvestment. A truly devolved funding model must recognise those realities and give regions like mine the long-term certainty needed to unlock investment, build homes, create good jobs and improve opportunity."
Council leader warns of 'cap in hand' risk
However, Newcastle City Council leader Colin Ferguson cautioned that putting more resources into mayors' hands risks simply "changing who we need to go cap in hand to" instead of "allowing us to get on with the job". The Liberal Democrat called for cash-strapped councils to be given back more direct funding, with Newcastle having slashed its annual budget by more than £400 million since 2010 amid long-running cuts.
Coun Fergsuon said: "He [Mr Burnham] talks a good game about devolution, but that needs to not just go to southern places like Manchester. We need to talk about councils like Newcastle and the meaningful devolution of powers and fiscal responsibility going to local communities." He added: "Not to say we have a quarrel with anybody in Whitehall or at the Helix [where the North East mayoral authority is based], but if you tell us that things will now be the mayor's responsibility then we still have to go to her instead of the Government."
Mayor's response on local government funding
Ms McGuinness replied that she would "absolutely support more funding going into local government" and had "not seen anything in a plan that displaces local government funding to strategic authorities or to mayors". She said: "I do think there is an argument for certain powers in the right places to go directly to local councils as well. Devolution means more than one thing. Of course we want to see more brought to the region so we can think at a strategic level about how we improve things right across the North East for the most people so they can feel it the most. But there are definitely decisions that can and should lie with local authorities."
