A new City Region Sustainable Transport Settlement with government will give the North East control of up to £563 million to help shape and improve local rail services across the region, as well as the ability to introduce bus franchising.

This is part of a new ‘landmark’ devolution deal has been signed in North East England today by Levelling Up Secretary Michael Gove and eight local leaders in the region.

The devolution deal will transfer new powers to local leaders in the North East to deliver skills, transport and housing, supported by £1.4 billion of funding. The Levelling Up Secretary, the Mayor of North Tyne and representatives from all seven local authorities covering the region signed the deal in an historic ceremony at the Baltic Centre for Contemporary Art in Gateshead.

In the deal, the government guarantees the new North East Mayoral Combined Authority (MCA) more than £1.4 billion over the next 30 years which will enable the new Mayor and the councils to plan for the long term, with certainty, and unlock the benefits of devolution for 2 million people living in the area. This will complement the leadership of the Mayor of Tees Valley, which has already revived Teesside International Airport, created a new freeport and established a free school with leading educationalists.

The signing continues the government’s devolution revolution with England moving closer to being 50% covered by bespoke regional devolution deals. What’s more, the new agreement reaffirms the government’s commitment in the Levelling Up white paper to offer a devolution deal to any area that wants one by 2030.

A local consultation on the deal is now open and if approved, people across Northumberland, Newcastle, North Tyneside, Gateshead, South Tyneside, Sunderland, and County Durham will be given the power to elect directly a Mayor of the North East. This person can act as a local champion who can help attract investment to the area and act as a powerful local voice in discussions with central government and other bodies.

The historic deal will also give the Mayoral Combined Authority control over the multi-million pound Adult Education budget, so local leaders, colleges and training providers can work together to arm local people with the skills needed to drive local growth. It will also give control to the region of over half a billion pounds to upgrade public transport through a new City Region Sustainable Transport Settlement and provide immediate support to build new affordable homes on brownfield sites.

Levelling Up Secretary Michael Gove said: “I am proud to sign this historic devolution deal for the North East today, which will give local leaders the flexibility and freedom they need to tackle the most pressing issues affecting the day-to-day lives of people in the area.

“Levelling up the North East remains an absolute priority for the government, and I look forward to working closely with local leaders to unlock fresh opportunities that create tangible benefits for people right across the region.”

As well as transport, proposed deal sets out the government’s plans to devolve more power to the North East through:

• Education and skills: The deal provides the region with powers to better improve local skills through full devolution of the Adult Education budget and a greater say over the Local Skills Improvement Plan, which brings together local businesses, colleges, and training providers to identify the skills needed to support local growth.
• Housing and regeneration: The North East will receive £17.4 million to support and accelerate the building of new homes on brownfield land, as well as £20 million to level up and kick start regeneration, delivering new affordable homes and green economic growth across the region.
• Local leadership: From 2024, the North East will have a directly elected mayor who can champion the area, help drive investment to the region, and can represent local people in conversations with national government.

Building on existing collaboration across the region and with central government, the new North East Mayoral Combined Authority will replace the existing North of Tyne MCA and Mayor, as well as the non-mayoral North East Combined Authority. This will bring the region together and provide a more strategic economic geography, which encompasses the whole Tyne and Wear region, as well as Northumberland and Durham. These changes are subject to the statutory processes, including local consultation and Parliamentary approval. The deal is being published today to allow necessary governance steps to proceed and will be signed in in the early new year.

The North East deal means that government has now made devolution agreements with areas representing over 7 million people since the Levelling Up White Paper was published in February and agreed devolution deals with 8 of the 11 areas that were prioritised for devolution.