Budget 2024: North East mayor hails 'biggest transfer of powers' in a generation

The North East’s mayor has hailed the “biggest transfer of powers and resources” to the region in a generation, after a major funding change announced in Rachel Reeves’ Budget.

The Chancellor confirmed on Wednesday that the North East Combined Authority (NECA) will be given a single funding settlement from 2026 – giving local leaders far greater freedom over how to spend its money, rather than cash being ringfenced by the Government for specific areas. The shift, which will be rolled out a year earlier in Greater Manchester and the West Midlands, has been a key priority for Labour mayor Kim McGuinness, who said that it would now pave the way for "the biggest devolution deal in North East history”.

Ms McGuinness also claimed that the Government had “saved” a £25 million investment in the Crown Works film studio project in Sunderland, though it is unclear whether it had been under genuine threat as Labour sought to make savings to cover what it has alleged is a £22 billion black hole in the public finances.

That funding to help regenerate land on the banks of the Wear was “confirmed” by Ms Reeves in the Commons, though it had been previously announced under the former Conservative administration and then formally allocated by NECA this summer. Paul Edgeworth, from Sunderland's Liberal Democrats, accused Labour of "pulling the wool over people's eyes" by reannouncing the investment.

One North East project that was scrapped, however, is the dualling of the A1 in Northumberland. The long-debated project to upgrade the single carriageway route from Morpeth to Ellingham was branded “unfunded and unaffordable”.

Ms Reeves’ Budget, the first ever delivered by a female Chancellor, will raise taxes by £40 billion and confirmed a National Living Wage increase of 6.7% to £12.21 from next April, as well as the increase in the bus fare cap from £2 to £3.

Responding to the announcements, Ms McGuinness said: “Today’s Budget confirmed the biggest transfer of powers and resources from Westminster to the North East in a generation. The Chancellor has listened to my calls to back our region with a new integrated settlement, which means we as local leaders can invest in the priorities that matter to people in the North East. The Government is backing our plans to create manufacturing jobs in the North East, with investment in our car industry and potential in electric vehicles.

“I’m pleased the Treasury has listened to my calls to save the £25m investment in the Crown Works Studios, so we can unlock 8,000 jobs and build a creative powerhouse on the banks of the River Wear. That means jobs for people in a range of industries, from hairdressers, electricians, make-up artists, to set designers and script writers.

“Taken with new powers to help people back into work, the Budget means new jobs, new training, new homes and new opportunities for people in the North East. The first Labour Budget in 14 years will unravel Tory decay, give us the tools to tackle child poverty and put us on course to make the North East the home of real opportunity."

The Chancellor promised £1.4 billion to rebuild schools and £650 million for local transport projects, as well as a £1 billion uplift in funding for special educational needs and disabilities provision (SEND) and a “significant real terms funding increase” for local councils. Zoë Billingham, director of the IPPR North think tank, said the help for local authorities was “reassuring” but that they would need “longer term commitments in the future”.

Karen Kilgour, the Labour leader of Newcastle City Council, added: “Today’s Budget is a good start. I welcome the significant extra investment for the NHS, for schools, children with special educational needs, social care, roads, and social and affordable housing which Newcastle and the rest of the country is crying out for. I also applaud the rise in the National Living Wage for the lowest paid because everyone deserves fair pay for their work - far too many workers are still struggling just to get by.”

But Dominic McDonough, a Conservative councillor in Sunderland, branded the Chancellor’s announcements a “disaster”. He said: “If you’re a business owner it will cost you more to hire people, more to expand and more to invest. A recipe for disaster, job losses and lower growth.”

While Ms Reeves announced there would be no increase to national insurance, VAT, or income tax, she confirmed plans to hike employers’ national insurance contributions and increase capital gains tax.

Join our Breaking News and Top Stories WhatsApp community

Join our Breaking News and Top Stories WhatsApp community for all the latest news direct to your phone.

To join you need to have WhatsApp on your device. All you need to do is choose which community you want to join, click on the link and press 'join community'.

No one will be able to see who is signed up and no one can send messages except the ChronicleLive team.

We also treat our community members to special offers, promotions, and adverts from us and our partners.

If you don't like our community, you can check out any time you like. To leave our community click on the name at the top of your screen and choose 'exit group'.

If you’re curious, you can read our privacy notice.

CLICK HERE TO JOIN