Member Article

Disappointment at Sunderland Council decision

I was disappointed at the news reported in The Journal last week that Sunderland Council had put on hold the proposed Combined Authority of the seven councils in the North East that have become known as the LA7.

I am sure I’m not the only one disappointed, and I’m including in that the leaders of the other six councils.

I was then confused by a statement in The Journal on Monday that Sunderland seems to have changed its mind and the seven councils have agreed to progress the CA application. This is better news if it’s true but it’s clear the collaboration is fragile – which is not what the region needs right now.

The Combined Authority proposal came about because the Government wished to encourage economic growth in the region, which would not be achievable by one council. This is based on the premise that city regions, like Newcastle and Sunderland, are the economic engines for the wider regions and that all should share in the benefits. The Government offered devolved funding and decision-making to encourage local authorities to combine.

The seven local councils – Newcastle, Gateshead, Northumberland, North Tyneside, South Tyneside, Durham and Sunderland – carried out substantial consultation and determined collectively that the formation of the CA was desirable. That consultation progressed to a resolution now being consulted upon to be presented to Parliament in the spring for a determination as to whether a CA should be authorised. This also linked in with the North East Local Economic Partnership (NELEP), formed by the seven local councils and seven private sector members with a private sector chairman, which is run on business lines to drive economic growth.

The key point for a Combined Authority is that it would have the governance to take decisions in the best interest of the region, especially when it comes to major infrastructure and transport, economic development and job creation.

In last week’s Journal report, it said that Sunderland (backed by South Tyneside) feared the CA would be too powerful and costly. I find that interesting as we know that at least one other proposed Combined Authority, that of West Yorkshire, is keen to draw down funding and powers from central Government and will be established at ‘nil cost’. Personally, I cannot see how the North East Combined Authority would have to operate differently? The concern is that without the full collaboration of the seven councils, the NELEP will not be able to operate as effectively, reducing the potential for economic growth in the region.

The NELEP has submitted to Government its draft Strategic Economic Plan that can be viewed at www.nelep.co.uk/agenda-for-growth . This is in effect a bid for funding from the Coalition’s £2bn a year Single Pot Fund.

This will be in addition to other funding earmarked for the region, including circa £460m of European Regional Development Fund and European Social Fund support for the period 2014-2020.

It’s all designed to improve our lot and create jobs. But companies do not just need funding and new infrastructure to operate, they need confidence and they need certainty. The withdrawal of Sunderland from the Combined Authority plan seems to have been reversed but what sort of message does it send to anyone considering investing in the region?

This was posted in Bdaily's Members' News section by JK Property Consultants .