Business rates for retailers in the Northeast and Tees Valley will be set by local mayors from 2017 under two devolution deals signed by chancellor George Osborne, worth a combined £1.3bn.
Source: Gareth Milner
Osborne and Treasury ministers visited the region on October 23 to finalise the deals, which promise to give extra powers to the North East Combined Authority and Tees Valley Combined Authority.
In return, the two regions have agreed to be run by directly elected mayors from 2017. The mayors will have the power to raise business rates, provided they have the support of the local business community, to invest in new infrastructure.
The additional amount each mayor can raise through the tax will be capped at £30m and the deals will require support from each of the local councils within the regions.
As part of its deal, the Northeast, which includes County Durham, Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside and Sunderland, will receive £30m of funding a year over the next 30 years.
Tees Valley, which includes Darlington, Hartlepool, Middlesbrough, Redcar & Cleveland and Stockton-on-Tees, will receive £15m a year over the same period.
The deals have been welcomed by business groups, including North East Chamber of Commerce, Confederation of British Industry, Federation of Small Businesses and manufacturing association EEF, who said greater local control will “improve conditions to deliver economic growth and jobs”.
The deals are part of the government’s Northern powerhouse plan and follow similar agreements signed with Greater Manchester and Sheffield.