The North East’s £3 billion devolution deal is back on track following reassurances from the Chancellor according to the North East’s leading Think Tank.
The North East will continue to receive millions of pounds worth of funding after Britain leaves the European Union, the Chancellor has pledged today, opening the way to deliver on the North East’s promised devolution deal which will bring £3 billion of spending power to the region.
Chancellor Philip Hammond said he wants to give people “reassurance… stability and certainty” by honouring EU funding worth more than £30 million a year to the UK.
In July, Councillor Paul Watson, chairman of NECA and leader of Sunderland City Council, said: “It is important to make clear that we have not resigned one inch from the devolution agenda, but at this time given the Brexit vote and the uncertainty around who will be the new prime minister and chancellor we need assurances before we commit.”
Newcastle City Council leader Nick Forbes said at the time He added: “The referendum result has turned the world on its head, the reason why EU funding is so significant for this region is that we have done far better out of the EU than we have out of central government in terms of investment.”
The government has now pledged to fill the shortfall with public money until at least 2020, which based on the projections that Brexit will take two years, means the UK government will make up a two-year shortfall in EU funding for the North East.
The money will come from Britain’s £8.5billion net contribution to the European Union, which it will cease to pay upon its exit from the EU.
Mr Hammond said: “The UK will continue to have the all of the rights, obligations and benefits that membership brings, including receiving European funding, up until the point we leave the EU.
“We recognise that many organisations across the UK which are in receipt of EU funding, or expect to start receiving funding, want reassurance about the flow of funding they will receive.
“That’s why I am confirming that structural and investment funds projects signed before the Autumn Statement and Horizon research funding granted before we leave the EU will be guaranteed by the Treasury after we leave.”
Chairman of Policy North Stephen Purvis said “This is really welcome news for our region. The Government has now delivered on the reassurances that Council Leaders have been asking for. We now need the region’s Council Leaders’ to deliver on their promise of devolution to bring more jobs and investment to our region. Manchester and Liverpool are already racing ahead and the North East really is being left behind.
With these assurances from the Chancellor now in place, we cannot afford to waste a minute in delivering on devolution. The longer things drag out, we risk losing not just the £3 billion in new spending power that devolution brings, but missing out on new jobs and investment.”
The North East devolution deal will see the region handed powers over areas such as social care, regional development and transport.
The North East Combined Authority would also be given £900m in investment funding over 30 years. The deal would give the region influence over an additional £2bn in devolved Government spending.