Agenda item

The above report will be published on a supplemental agenda in accordance with the provisions of the Local Government (Access to Information) Act 1985

The Cabinet considered a report of the Chief Executive which provided a summary of the discussions with Government and the LA6 Councils relating to devolution in County Durham; and information relating the opportunities and impact of a devolution deal on County Durham.

 

The report covered consideration of a County devolution deal option and also a devolution deal for the North East Region covering Durham, Gateshead, Northumberland, North Tyneside, Newcastle, South Tyneside and Sunderland local authority areas.

 

The report also provided details of the ‘minded to’ deal that had been announced by the Secretary of State; and explained the legislative process that underpins the delivery of the LA7 deal, including a Governance Review, Governance Scheme and consultation (for copy of report, see file of minutes).

 

Councillor A Hopgood, Leader of the Council informed Cabinet that several questions had been received from Members and these would be taken in the order they were received.

 

Councillor C Hunt

It’s been stated in the press that Durham will be missing out on transport money in this devolution deal.  Please can the Cabinet Member explain what money will be available to Durham and how it compares to a County deal.

 

The Leader of the Council thanks Councillor Hunt for the question and provided the following response:

 

‘The simple fact is that Durham is protecting and enhancing its position relating to long term transport funding and it is not the case that the County is missing out on transport money as has been suggested.

 

The approach to transport funding for level 3 devolution deals is different between Mayoral Combined Authority deals and County deals. For Mayoral Combined Authority deals the Government has allocated £5.7bn under the City Region Sustainable Transport programme however this funding is not available in County deals.

 

In the LA7 deal a total of £563m transport funding is identified under the CRSTS and this lasts until 2027. With the exception of £147m funding which is unallocated the remainder will be allocated across the seven local authorities for local investment. In Durham this amount will be £86m for the period until 2027. The £147m was negotiated by the LA6 authorities prior to Durham joining the deal and as such is available to them until 2027. After that date and for the remaining 27 years of the LA7 deal, Durham will have access to any similar transport funds that the Government allocates to the North East Mayoral Combined Authority.

 

A County deal would not include CRSTS funding and would only include the local transport funding for the County as identified above. This is borne out by the fact that the three recently announced County deals in Cornwall, Norfolk and Suffolk did not include CRSTS.

 

In other words if Durham were to pursue a County deal then it would in fact miss out on the ability to access long term CRSTS funding, however in stark contrast by being a member of the North East Mayoral Combined Authority the County is in a much better position and is able to access long term regional transport funding for 27 years out of the 30 year deal.’

 

Councillor J Quinn

Can Cabinet please explain how transport funding will work in the new devolved authority?  What stays the same, what changes and what’s new?  How would I progress a bid for capital spending for the Leamside line into Ferryhill?

 

The Leader of the Council thanked Councillor Quinn for the question.

 

‘I refer Cllr Quinn to the reply on funding that has been given in relation to a question from Cllr.Hunt.

 

In addition, in a new NEMCA the Mayor and Cabinet will take over the responsibilities of the Joint Transport Committee that currently covers regional transport priorities for the LA7 area and includes members from each local authority.  It is anticipated that the current arrangements for the delivery of local transport services and maintenance will be carried out by the County Council under similar arrangements that the Council has with the Joint Transport Committee.

 

The scheme at appendix 5 provides the powers for business as usual in local transport services to be maintained in the new NEMCA arrangements.

 

Local members will still be able to raise and support transport infrastructure projects.  It is worth noting that the regionally significant Leamside Line is referenced on four occasions in the minded to deal and is also included in the regional transport strategy adopted by the region in 2021.’

 

Councillor J Blakey

 

Would Cabinet please confirm that under this deal the seven council leaders and the elected mayor will each have equal 1/8th votes in decision making?

 

The Leader of the Council thanked Councillor Blakey for the question and provided the following response.

 

‘The information contained in the scheme, which is at Appendix 5 in the Cabinet report, confirms that there are 8 full (and equal) voting members of the Cabinet.  The 8 are the elected Mayor and the representatives of each of the seven North East constituent member authorities.

 

The Mayor will chair the Cabinet however the chair has no additional casting vote.’

 

Councillor E Adam

a) What are the cost comparisons of an elected County Deal Leader/Mayor’s Cabinet and NEMCA?

b) What are the estimated allowances for an elected Mayor and their Deputy Mayor; 10 cabinet members and a Political Advisor?

c) What additional increases in Council tax will our residents be expected to pay for the NEMCA precept?

d) What additional increases in business rates will Businesses contribute to fund NEMCA infrastructure investment?

e) How and when will the Renumeration panel be appointed?

 

The Leader of the Council thanked Councillor Adam for his questions and provided the following responses.

 

a)           What are the cost comparisons of an elected County Deal Leader/Mayor’s Cabinet and NEMCA?

 

‘During discussions and also in making comparisons between a county and LA7 deal there was no detailed work undertaken for the costs of running the devolution deal in either scenario.  This was not a material consideration in making a comparison between types of deal as historically with devolution deals the running costs of the Mayoral Combined Authority or the additional costs to the County Council would be met from the revenue funding provided by Government in the deal itself. Paragraph 42 of the ‘minded to’ deal explains how the running costs of the NEMCA will work.  ‘The costs of the North East Mayoral Combined Authority will be met from the overall resources of the authority, including any new resources secured by the combined authority following the agreement of this deal. To support the combined authority in its early stages, the government will provide £1 million in capacity funding in 2023/24 and 2024/25, once the establishing legislation is made and the Assurance Framework confirmed with government. Any future capacity funding will be subject to spending reviews, in line with arrangements for other devolution deals.’ Although a county deal was not concluded the recently announced County deals in Cornwall. Norfolk and Suffolk contain similar wording.’

 

b)           What are the estimated allowances for an elected Mayor and their Deputy Mayor; 10 cabinet members and a Political Advisor?

 

‘At this stage, no estimates have been produced for these costs and this will evolve as the detailed implementation work develops over the coming months and annual budgets for the new combined authority are established. This is in line with arrangements in other devolution deals that have been agreed.

 

We understand that in all cases the salaries of the Mayors and associated running costs for their office are matters of public record and this same level of transparency will take place in the North East.’

 

c)            What additional increases in Council tax will our residents be expected to pay for the NEMCA precept?

 

‘As I have covered earlier the overall running costs of the NEMCA will be met from the revenue funding provided by Government in the devolution deal.

 

I would not expect there to be any additional increases in council tax for any residents within the LA7 region through a mayoral precept for the reasons I have previously stated - in that all costs can be met from the revenue funding provided by Government.’

 

d)           What additional increases in business rates will Businesses contribute to fund NEMCA infrastructure investment?

 

‘Ultimately any decision to increase business rates in an area will be one for the Mayor and new Combined Authority – there is no automatic assumption that business rates will be increased and it is important to note that the investment fund and other funding streams provide funds for infrastructure investment.

 

As set out in the Scheme, The Mayor will have the “power” to raise a business rate supplement to fund infrastructure. Should the Mayor wish to seek such a supplement then the approval of the Cabinet of the North East Mayoral Combined Authority is required and the Mayor is required to consult and ballot the business community on the matter.’

 

e)           How and when will the Renumeration panel be appointed?

 

‘Decisions on how the Independent Remuneration Panel will be appointed have not yet been taken, however it is likely that the implementation process will see some shadow governance arrangements being put in place. If this is the case, then those shadow arrangements (which will involve all seven councils) will enable the panel to be appointed so that the NEMCA can consider the Panel’s report and findings in relation to any remuneration matters.’

 

Councillor D Sutton-Lloyd

Would we have access to the Trailblazer scheme if we went for a County Deal?

 

The Leader of the Council thanked Councillor Sutton-Lloyd for the question and provided the following response

 

‘The trailblazer status was not included in County deal discussions.  This initiative first announced in the Chancellor’s Autumn budget, is focused on the larger Mayoral Combined Authorities and only two; Greater Manchester and the West Midlands were identified as trailblazers.  Trailblazer status was not offered in any County Deal discussions and is not included in any of the three recently announced County deals in Cornwall, Norfolk or Suffolk.

 

The ‘minded to’ deal at appendix 3 in the Cabinet report confirms at paragraph 11 that ‘’the Government and North East will commence negotiations on trailblazer provisions which deepen and enhance the powers in this Deal in early 2023, drawing on the arrangements in Greater Manchester and West Midlands when concluded, with a view to these powers being in place as soon as possible after the first election in May 2024.’

 

Councillor P Jopling

Could you confirm that had we gone for a County only deal, this would require the creation single elected Mayor for County Durham.

 

As a unitary authority this person I believe would have had control of the entire council budget and not just devolved powers.

 

Would that mean that potentially they would be able to anything they wish, so for example a County only mayor could have even moved us to monthly bin collection with no way for elected councillors being able to stop them?

 

The Leader of the Council thanked Councillor Jopling for the question and provided the following response.

 

‘The Cabinet report is clear that a county devolution deal at level 3 requires an elected Mayor (or Leader) for the County Council.  This was confirmed to the Council, in writing, by the Secretary of State.

 

The elected Mayor would have responsibility for all of the executive functions of the Council, in other words those decisions and responsibilities that are currently discharged by the Council’s Leader and Cabinet.  It is for the Mayor to decide how to discharge this responsibility and this could be by taking direct personal responsibility for all executive decisions or alternatively the Mayor could appoint a cabinet of their own choosing with specific portfolio responsibilities.

 

The Mayor could not do anything they like as there are some functions that are the Council’s responsibility.  It is however, true to say that the Mayor’s powers in relation to executive decisions would be significant and would require the abolition of the current leader/cabinet arrangements.  The Mayor would also have the responsibility of overseeing the delivery of the devolution deal.  This is a key different between a County Deal and a regional deal.  In a regional deal there are no changes at all to Durham County Council’s decision making processes.  An elected Mayor is a governance model that is untested within a large unitary county council and places so many risks upon the County Council.  It is therefore one that the leadership cannot support.’

 

In Moving the report Councillor A Hopgood, Leader of the Council informed Cabinet that while there were many differing views on devolution, what was clear was that more and more deals were being rolled out across the country and doing nothing means Durham would be left behind other parts of the country.  This was not something that could be allowed to happen.

 

The report set out a clear rationale for taking forward a wider Regional LA7 deal which brought more opportunity for increased investment, wider default powers and a significant voice with national government for the county and the region going forward.  A regional deal kept control of existing Council services at a local level and did not require any changes to the way the council was set up.  A county deal requirement for a directly elected mayor in a unitary Council like Durham would mean control of all local services and devolution being under the control of one person.  This was an untested approach and was not the case in any other type of devolution.

 

Durham already worked with colleagues in the region on many cross-cutting issues, most recently during Covid, to help to coordinate a consistent response in local communities.

 

Durham also worked together on strategic transport issues across the LA7 area through the joint transport committee which brought together all seven councils on transport matters.  A devolution deal across the region would allow Durham to work even more closely together on the main transport issues affecting local communities and the wider region.  Being part of a wider regional deal allowed Durham to have access to future additional transport funding and this opportunity was not available in a county deal.

 

The regional devolution deal would be one of the biggest ever agreed serving a population of 2 million people across the region.  The investment fund was also significant at £48m per annum totalling £1.4bn over the life of the deal.  The deal would also see adult education budgets totalling £1.8bn and significant Regional Transport Funding and investment for housing and regeneration allocated to the region.

 

It was expected that the deal would create 24,000 extra jobs, deliver 70,000 courses per year to give people the skills to get good jobs and leverage in £5bn of private sector investment.

 

The regional LA7 deal had the backing of business community leaders and key stakeholders in County Durham and across the region.

 

In Seconding the report Councillor R Bell, Deputy Leader and Portfolio Holder for Finance echoed many of the Leader’s comments.

 

In discussions with three Secretaries of State the message had always been that to achieve big investment money Durham would need to join with others in a regional authority.  The preference for a regional deal was confirmed in a letter from Simon Clark on 7 October who reiterated the view that Durham joining the wider north east deal was likely to result in a more generous share settlement than if Durham secured their own mayoral county deal.

 

The report set out clearly the reasons why a regional LA7 deal was preferred.  It provided more opportunity for investment, deeper devolved powers and speedy access to even more devolved powers through Trailblazer status which was normally only afforded to those areas who had already demonstrated their credentials.

 

Councillor A Shield, Portfolio Holder for Equality and Inclusion, Councillor J Shuttleworth, Portfolio Holder for Rural Communities and Highways, Councillor E Scott. Portfolio Holder for Economy and Partnerships, Councillor J Rowlandson, Portfolio Holder for Resources, Investment and Assets, Councillor S McDonnell, Portfolio Holder for Digital, Customer Services and Procurement, Councillor M Wilkes, Portfolio Holder for Neighbourhoods and Climate Change, Councillor C Hood, Portfolio Holder for Adult and Health Services and Councillor T Henderson, Portfolio Holder for Children and Young People’s Services all spoke in support of the proposed LA7 devolution deal.

 

Resolved:

That the recommendations in the report be approved.