NEW Government finance powers will pave the way for a combined council authority stretching from Northumberland to County Durham.

Newcastle Council yesterday unveiled its £92m city deal which will see Government support to create 13,000 jobs.

The deal comes with a series of conditions including a promise from Newcastle and Gateshead to consider a North East Combined Authority with a statutory basis.

Such a move would then be used by cities minister Greg Clark to hand over more funding powers.

Transport minister Theresa Villiers made clear during a visit to the region yesterday that a combined authority would pave the way for multi-billion- pound transport decisions to be devolved down to council level.

Any move to a combined authority would be dependent upon support from Sunderland and South Tyneside. It is thought Sunderland will consider a bid for its own city deal in the next wave of Government announcements, and that this too would be dependent upon creating a combined authority.

Informal talks on the issue have already started between the seven North East councils, with broad support in principle to the plans.

Last night South Tyneside leader Iain Malcolm said he would welcome the moves, which he said would not involve a watering down of an individual council’s powers.

He said: “I do not agree with a lot of what this Government is doing, but on this I think their plans will be welcomed across the region.

“It is wrong to think jobs and skills and transport are issues which do not cross boundaries. The transport issues facing Newcastle face us as well, and yes, we do have to start working now on the same structures which other city regions have adopted.”

As part of the eight city deals announced yesterday, Leeds and Sheffield confirmed they will each form combined authorities, bringing their existing local authorities together so they can make more strategic decisions about how money is spent.

It follows the example already in place in Manchester.

Speaking at the Newcastle launch, council leader Nick Forbes said land behind St James’ Park would soon be the site of the long-awaited Science Central office block. Claiming the city deal handed Newcastle control of its own economy, Mr Forbes added: “We take very seriously our responsibilities for creating the right climate for jobs, and are delighted in this vote of confidence.

“Our top priority has always been to make Newcastle a working city – and the creation of up to 13,000 jobs will go a long way to achieving that. These jobs will improve the lives of thousands of families and give many young people the chance to start their careers.”

Cities Minister Greg Clark is due in Newcastle today. In a statement released by the Department for Communities and Local Government he said: “This innovative deal is a fantastic step forward for Newcastle and Gateshead.

“When we said ‘make us an offer’ the city really stepped up to the challenge and will now reap the benefits of having new financial powers and investment opportunities handed down from Government.

“Today’s deal will bring thousands of jobs to Newcastle and make the city centre one of the most attractive places in the country to invest in.”

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