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Sealing the Deal for Newcastle

July 5, 2012

Nick Forbes, leader of Newcastle City Council, explains that Newcastle’s City Deal signals that our region can reap the rewards of local ingenuity and a positive dialogue with the Government.

When I first became Leader of Newcastle Council, I wrote an article in this newspaper making a commitment to work constructively with the government.  I disagree fundamentally with their policies on health and the economy, public spending and education.  But to walk away from dialogue and negotiation would be a failure to stand up for the interests of Newcastle. 

Over the last few months I have had a chance to put that commitment to the test.  Last November the Government announced that it wanted to do deals with the eight largest cities outside London, to remove barriers to growth and devolve more powers to local level.  I took our case to the heart of Whitehall, speaking directly to a special meeting of Cabinet ministers led by Nick Clegg.  And, with the support of the Cities Minister, Greg Clark, we are finally in a position to seal that deal.

From the start I have been clear that our priority had to be to use this opportunity to help us create a working city.  We’d need to demand more investment from government.  But we should also look at what we can do ourselves.  We’ll need local ingenuity to get ourselves out of recession, to buck the trend of an economy doubly-damaged by instability in Europe and cuts in the UK.  I wanted to see proposals that would generate an immediate boost in confidence in the short-term, help us build recovery in the medium-term, and in the longer term create the economy we need for the next generation.

So Mick Henry, the Leader of Gateshead, and I put forward a proposal to retain more of the tax revenues generated within Newcastle and Gateshead, and reinvest them locally.  Government agreed this in principle, but then restricted it to only a small number of cities.  Then they implied that it would only be available to cities that voted for an elected mayor.  But the people of Newcastle rejected that proposal in a referendum.

Now we have been able to put forward an irresistible case based on the strength of our commitment, and the growth potential our city could demonstrate.  And as a result we have now secured a special funding arrangement, worth at least £300 million over the next 25 years, allowing us to initiate a £90 million investment programme to generate over 13,000 more jobs in the city.  With the opportunities this will create for the private sector investing alongside us, we should see over £1 billion of investment – transforming the city centre for future generations.  Alongside this we have secured additional support from government to help bring a further £500 million in private investment in the marine and offshore sector on the banks of the Tyne.

We also needed to make progress on the barriers to job creation that could delay recovery.  As the government makes savage cuts to welfare benefits, we need to secure the help people need to get work, and the skills that our economy will need in the future.  To make that happen we have secured a stronger local role, allowing us to improve services and channel more resources to support skills and jobs.

We have secured greater support from government to invest alongside our Future Homes Fund, delivering new houses on brownfield sites in the city.  And we need faster progress to unblock our most significant transport bottleneck, the A1 Western Bypass.  The Journal and Chronicle have been campaigning for improvements for many years, and played a vital role in keeping the pressure on government.  By working together, we now have this firmly at the top of the government’s priority list for investment from 2014.

Looking to the longer-term, we’ve also established a special national status for Newcastle in actions to improve the environment and tackle climate change: helping us to improve energy efficiency, and lead the country in new low carbon technologies.

This is the beginning of our fightback against recession, but there’s more to do.  We are about to begin a new conversation about our city’s future needs and the challenges it might face in the coming four year. It’s easy to get gloomy about the scale of the task ahead, but this Deal gives us not only resources but a vision for the road ahead – more private sector investment in our city, more jobs and more control over our own destiny.

Our Council’s Cabinet will be discussing these issues at a special open Cabinet meeting on 11th July.  We will need to move quickly to deliver our priorities, ensuring we have a sound business case for every investment we make.  We’ll also want to keep up the pressure on government for a next round of city deals.  Given its accessibility by car and public transport, a stronger city centre economy will have benefits to firms and residents from across a much wider area.  And other parts of our Deal will directly benefit the whole region.  For example, we will be working together to ensure that firms’ skill needs are met, whilst we have a commitment from Government to more actively promote the North East’s offshore manufacturing sector.

I want to see the next round of deals to be still more ambitious.  The North East’s Council Leaders are now working together more closely than ever alongside our Local Enterprise Partnership. The Government has committed that – as we strengthen those arrangements – they will devolve more funding, powers and responsibilities to the North East as a whole.

So, let’s stand up for the region, and against government, whenever we need to.  But also work with government, doing deals from a position of strength, whenever we can.

Our region can no longer afford to take a back seat and watch the world go by – hoping for handouts because were poor and deserving. We have to take the initiative and create our own solutions – like our trailblazing approach to local finance. By being innovative and showing a willingness to help ourselves we are far more likely to be heard.

I am proud to stand up for Newcastle and the North East, and committed to securing the powers and resources we need for a better future.

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