Regional economic policy must be revamped if the North East is to get a fair deal in the wake of the Scottish independence vote, a national research director has said.
Dr Angus Armstrong, director of macroeconomic research at the National Institute of Economic and Social Research, said the Treasury does not prioritise the North East and politicians must form a strong and unified voice to correct the imbalance.
At a debate on how September’s vote will impact on the region, regional leaders also heard of a “growing realisation” Scotland may not lower corporation tax, allaying fears the country would suck business from its neighbours.
It comes as all seven North East councils, from Durham to Northumberland, agree a Combined Authority which will allow it to bid for more Government funding.
Dr Armstrong said regional policy is not a priority for the Treasury when it calculates how to spend Government cash and the North should look to reconsider a regional assembly to be heard above its southern counterparts and in Europe.
He said: “I used to work for the Treasury during the crisis and regional policy does not register. I hate that that is the case, but I really don’t think it is part of Treasury policy. I think the whole concept of regional policy needs to be re-thought.”
He added: “People in the South East underestimate the extent to which power is centralised, so, although they have a feeling there is something of an imbalance, that imbalance is greater than that feeling would suggest.
“The reason I say that is because of the financial crisis. The only reason they could support the City of London is because of the taxpayers of the rest of England.
“When it goes wrong we pay, it is quite remarkable and I find it amazing that places outside of the South East don’t have more to say about that. I do think the degree of imbalance is extremely significant.”
Pat Ritchie, chief executive of Newcastle City Council, said the region’s airports and universities could lose out due to a possible relaxation in border controls which might see students flock to Scottish universities.
She added there were fears changes to the Air Passenger Duty tax could see carriers opt to begin routes from Scottish airports.
Ms Ritchie, however, said there was an opportunity for the region to export goods to the country and, with Edinburgh closer to the region than London, collaborate with Scottish national leaders.
She said: “We should and can be confident in our strengths. This is a region which exports more than any other region and it is already used to working with different markets.
“Whilst not wanting to marginalise what is an important debate, we should not get too hung up on what Scotland might or might not do.
“We need to really develop the strongest possible economic offer that we can for the North East and collaborate as local authorities and businesses and be confident.”
Professor David Bell, professor of economics at the University of Stirling, also spoke at the debate, organised by the Institute for Public Policy Research (IPPR), and said Scots are keenly aware of the need to collaborate with the North.
“I don’t think that the North East is particularly disadvantaged because for Scotland to get anywhere with these negotiations there would have to be a cluster of compromises, and it would make no sense to have poor relations with its near neighbours.”
He added the North East faced being drowned out by the South East but there was a “growing realisation” that Scotland could not drive down corporation tax as it risked becoming a tax haven for businesses.
He said: “I go to talk about independence on a regional basis and the elephant in the room is the lack of political impetus, particularly in the North East.
“It is just not there and it isn’t part of the issue.
“If Scotland votes yes or if it votes no and gets more powers, you will have a heavily asymmetrical system in England which cannot continue to be stable.”
Source – Newcastle Journal, 28 March 2014
A Government minister has blamed the Tyne and Wear fire service for making front-line cuts.
Service chiefs want to close the Sunderland Central station and merge crews at Gosforth and Wallsend to cover an £8.8m drop in government funding.
But fire minister Brandon Lewis implied the fire service should save money by using a government training college almost 240 miles away.
He said: “This body has had a cut of a couple of per cent in spending power for each of the past couple of years and has built up its reserves. It has been able to spend that on extra training facilities when the Government already have a training facility.”
He said it was up to Tyne and Wear Fire and Rescue Authority to manage its own funds based on “local risk” and suggested digging into its £30m reserve to cover the cost. But the service hit back, saying his comments “do not fully reflect the picture” and that spending its reserves would create a financial “cliff edge” as faced by the US government last year.
Chief fire officer Tom Capeling said: “The authority is not spending reserves on extra training facilities. Our training centre was opened 18 years ago and we continue to send some officers to the south for specialist training.
“If reserves were used to meet the projected gap then over £16.8m would be required over the next three years. This would create a cliff edge that would need to be addressed in the year after.
“We would either be living in hope that ‘something would turn up’ in the meantime – imprudent and unlikely given the comments made about further cuts in future – or we would need to lose a lot of staff very quickly, as opposed to the measured and managed approach we are proposing to take.”
He said it would cost too much money to send all 866 of its firefighters for regular training in Gloucestershire and would keep them away from duty for too long.
The service expects to lose £12.9m by April 2017 and claims it is “disproportionately” hurt by the cuts because its council tax takings are lower.
Newcastle MP Chi Onwurah, who had asked Mr Lewis about the closure of Gosfirth Fire Station, said: “I don’t see how a fire service can lose almost a quarter of its funding without impacting front line services.
“Mr Lewis’s response was wholly inadequate and took no responsibility for the risks his policies pose, whilst trying to distract us with comments on training.”
But Dave Turner, of the Fire Brigades Union, said fire chiefs’ chosen plan was “nonsensical” and that their £30m reserve “could and should be used.”
He said: “Any comment from the government that put all the onus on local authorities is disingenuous at best, but the fire authority shouldn’t be making these cuts.”
Source – Newcastle Journal, 07 March 2014
A new super council will be formed on April 1, allowing the North East to compete for millions of pounds in Government funding.
After months of internal rows and territorial battles, the North East’s seven council leaders have secured Government backing to form a Combined Authority.
The move means, for example, that decisions over major transport and jobs investment in Northumberland or Newcastle must be made only after the views of the other council leaders have been taken into account.
There will be no changes to local councils, with voters still electing their local councillor and the same group collecting bins and looking after those in care.
> But we won’t get to vote in matters directly involving this super council ?
But behind the scenes the North East Combined Authority will be seen as the lead voice for the region in Whitehall.
The seven leaders, and their chief executives, will share decision making over skills, transport and investment, have the chance to secure control over any devolved Government budgets and a say in how the region bids for the £2bn Government Growth Fund.
> And no doubt they’ll also share an extra wad in their pay packets.
Cities minister Mr Clark has told MPs he thinks it is “a huge advance in the North East” and called for council leaders, MPs and other jobs groups to come together to formally discuss with him the next steps for the region.
> And will we – those most affected by any decisions – have any input ?
Former regional minister Nick Brown recently secured a series of regular meetings with the cities minister amid concerns the region’s case was not being heard in parliament.
Last night he told The Journal: “If we want access to the money we have to comply with the Government’s preferred structures, and it is very important that members of parliament are involved and can represent their constituents.”
The combined authority sees Durham County Council, Gateshead Council, Newcastle City Council, North Tyneside Council, South Tyneside Council, Northumberland County Council and Sunderland City Council form a legally binding structure with the power to borrow cash and the responsibility to share risk.
Simon Henig, the Durham council leader set to chair the combined authority, said: “Working together is the best way to promote jobs and growth and to secure devolution of funding, powers and responsibilities from Government.
“We share ambitious plans for the future of our area and we are determined to work together to deliver them.
“We are therefore delighted to receive today’s news from Cabinet Office and look forward to the necessary formalities being progressed so that we can launch on April 1 this year. This is an important and exciting moment in our history and we are ready now to deliver on our ambitious plans.”
Hopes of forming a combined authority had appeared slim earlier this year when Sunderland Council had halted the process amid concerns that Newcastle would hold too much influence.
Ministers, civil servants and council officials put pressure on Sunderland to drop its objections, but it was only once leader Paul Watson secured a stronger negotiating hand on the leaders’ board that it could go ahead.
There were then further delays when Sunderland decided to hold out for a multi-million pound investment package from the Government for Wearside before going ahead.
This Sunderland City Deal, set to see some £50m spent on a new business park based around Nissan, is now in the final stage of negotiations.
> So it’s all decided, signed, sealed and delivered. You had no input, it doesn’t appear you’ll ever get the chance for meaningful input… but then, this is all about the really important people, like councillors and businessmen. Business as usual, in fact.
Source – Newcastle Journal, 06 March 2014
RENTS for 18,000 council tenants in South Tyneside are to rise by an average of £5.50 a week, it has been revealed.
However, there was better news for residents in the borough as South Tyneside Council boss, Coun Ed Malcolm, revealed that Council Tax bills are to be frozen for the fourth consecutive year.
The details emerged from the local authority’s budget plans for the coming 12 months in which it needs to find another £18m worth of savings.
That is made up of a £9m reduction in Government funding and another £9m in other areas – particularly services for the young and elderly.
Savings need to be identified out of a revenue budget – made up from government funding and Council Tax payments – of £148m for 2014/15.
Despite the pressures, the council is committed to spending almost £5m improving borough highways and footpaths.
It is pushing ahead with selling off council buildings which are regarded as being “surplus to requirement” – with profits re-invested in capital programmes.
As a result of a Council Tax freeze, the owner of an average Band C property in the borough will pay an estimated £1,290 for the year from April.
Meanwhile, council rents will increase by 6.8 per cent, which is in line with Government guidelines.
That would mean the average weekly borough rent, which currently stands at £78.34 over a 48-week period, rising by about £5.50 – which still represents the lowest level in Tyne and Wear.
It’s estimated the hike will add an additional £4.7m to the council’s coffers.
Coun Malcolm, the council’s lead member for resources and innovation, today pledged that “no one would suffer” as a result of the budget proposals he has overseen.
There was also a commitment that job losses at the council will be less than in previous years – with more than 1,000 posts shed since 2010.
He said: “Even though we have had £18m of budget cuts to find this year, I’m confident that this budget will mean we can still provide services to anyone who wants them, anyone who needs them.
“No one will suffer because of this budget. As a Labour council, we remain committed to social justice.
“The key message is that is that we are continuing to get funding reductions, we’ve got nine per cent less core funding and we still have the standstill financial pressures on top.
“We’re going to be freezing Council Tax for the fourth consecutive year and that means we will have the third lowest in the North East, and we remain committed to our ambitious regeneration of the borough.
“We face £18m worth of savings in the year ahead. The days of salami-slicing budgets are over.
“We’ve looked at integration, working with partners in the private sector, the public sector and the voluntary sector on Adult and Social Care.
“The council has a lot of buildings which have passed their sell-by-date and I think we can work more efficiently by redesigning the town hall and have the majority of staff transferred there.
“Then we have the community hubs which will provide a majority of services under one roof.”
Coun Malcolm added: “There will still be job implications but we will endeavour to keep away from compulsory redundancies.
“Because we are redesigning services there will be redundancies but we envisage there will be less than in previous years. We are also putting substantial investment in highways and pathways and increasing amount of money going to Community Area Forums by £50,000.”
Merv Butler, branch secretary of Unison South Tyneside, said: “Jobs-wise, next year we are hearing that there will be a little bit of respite in terms of a large number of job losses.
“But there are still going to be job losses in the area of business support and the merger of some other services together.”
Source – Shields Gazette 05 Feb 2014