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May 2015

TEES VALLEY GOVERNANCE REVIEW BUILDING ON STRENGTH

The Borough Councils of Darlington, Hartlepool, Middlesbrough, Redcar & Cleveland and Stockton-on-Tees, in partnership with Tees Valley Unlimited, the Local Enterprise Partnership, present this governance review and draft Scheme (appendix 1) to the Secretary of State so that s/he may carry out due process leading to the creation of a Combined Authority for the Tees Valley. All five Borough Councils, at their meetings between 4th and 26th March 2015, supported the proposal to create a Combined Authority for the Tees Valley and agreed the draft Scheme to be presented to the Secretary of State, which is now formally published with the Governance Review. This review addresses the conditions as set out in the Local Democracy, Economic Development and Construction Act 2009, namely the four statutory tests, and our proposal reflects the identities and interests of local communities and secures effective and convenient local government. We look forward to working with Government, businesses and our communities to bring about a Combined Authority and a better economic future for the Tees Valley.

Cllr Bill Dixon, Leader Darlington Borough Council

Cllr Christopher Akers-Belcher, Leader Hartlepool Borough Council

Ray Mallon, Elected Mayor Middlesbrough Council

Cllr Mary Lanigan, Leader Redcar & Cleveland Borough Council

Cllr Bob Cook, Leader Stockton-on-Tees Borough Council

Sandy Anderson, Chair Tees Valley Local Enterprise Partnership

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Contents

Section Introduction Page 2 1 Welcome to the Tees Valley 3 2 The Tees Valley – A Functional Economic Area 7 3 Ambition for the Tees Valley 12 4 The Tees Valley Governance Review

- options appraisal - conclusions

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5 What will the Combined Authority look like? 26 6 Conclusions and meeting the four ‘statutory tests’ 31

Appendix 1 – The Tees Valley Scheme 33 Appendix 2 – Economic Analysis 44 Appendix 3 – Legal and Financial Options Analysis 53 Appendix 4 – Consultation Report 71

Introduction

In accordance with Section 108 of the Local Democracy, Economic Development and Construction Act 2009 a governance review in relation to a potential combined authority must address the effectiveness and efficiency of: (a) transport within the area covered by the review and (b) arrangements to promote economic development and regeneration within the review area. The purpose of this review, therefore, is to: a. Determine whether the area covered by the local authorities in the Tees

Valley (Darlington, Hartlepool, Middlesbrough, Redcar & Cleveland and Stockton-on-Tees) can properly be seen as constituting a functional economic area for the purposes under consideration in the review.

b. Determine whether the existing governance arrangements for economic

development, regeneration and transport in the area are effective or would benefit from changes, specifically, whether the establishment of a Combined Authority is likely to improve the following (the “four statutory tests”)

the exercise of statutory functions relating to transport in the area,

the effectiveness and efficiency of transport in the area,

the exercise of statutory functions relating to economic development and regeneration in the area, and

economic conditions in the area c. Examine the various options available, and d. Consider the feedback from consultation carried out in December 2014 and

January 2015 across the Tees Valley, to have regard to the identities and interests of local communities.

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1. Welcome to the Tees Valley 1.1 Tees Valley represents one of the most significant integrated industrial

economies in the UK, with England’s second largest port, and producing some 30% of the UK’s process output. With a positive balance of trade and GVA worth £11.4 billion to the UK economy, the area is a key ingredient in rebalancing the UK economy. The five constituent Councils are already signed up with private sector partners in the LEP to create 25,000 new jobs by 2022. We can, as a Combined Authority, accelerate this growth and exceed it. This submission demonstrates how this will be achieved.

1.2 Voluntary collaboration has worked very well to date, but the Tees Valley councils and the LEP have much greater ambition and chose to undertake a review of governance arrangements in order to help identify improvements that would bring about accelerated economic growth. They have concluded that a Tees Valley Combined Authority would do this by;

providing greater certainty for businesses to attract more inward investment

speeding up decision-making

improving transport infrastructure and skills

a stronger role in marketing and promoting the Tees Valley as a place to do business

greater transparency and accountability, and

getting ready for devolution, 1.3 Situated in the North East of England and nestled between North Yorkshire

and County Durham, the Tees Valley covers an area of 304 square miles with a population of 665,000. It is made up of the Boroughs of Darlington, Hartlepool, Middlesbrough, Redcar & Cleveland and Stockton-on-Tees, whose residents have strong identities with both their Borough and the wider Tees Valley area. Four of the Boroughs are led by a Council Leader and one, Middlesbrough, has a directly elected Mayor.

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The Tees Valley

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1.4 Although the Tees Valley’s industrial heritage dates back to the Industrial

Revolution with the birth of the railways, iron and steel, and shipping on the River Tees, its recent history is one of cooperation and collaboration between the five Boroughs for a modern and diversified economy.

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1.11 TVU, as the Local Enterprise Partnership, operates with a Leadership Board which is well established (it was formed in 2008, prior to LEP status) and has strong private and public sector representation. The Board plays a vital role in setting the future direction of Tees Valley activities. It comprises eight business sector representatives alongside the five Borough Councils’ Leaders / elected Mayor.

1.12 At TVU there are a number of advisory groups which inform and assist the

board in specialist matters, such as transport and infrastructure, business growth, low carbon, skills, and area development. Each group is led by a private sector Leadership Board member; ensuring the Board is well informed on all matters relating to the delivery of key strategies which sit within the Strategic Economic Plan. This hands-on approach by the private sector works exceptionally well and ensures Tees Valley Unlimited stays at the forefront of industry led initiatives, and that strategies reflect the needs of businesses in the Tees Valley.

1.13 The Council Leaders and elected Mayor play a vital role in ensuring that the

focus and direction of Tees Valley strategies and investments are in touch with the needs of local residents. Together with local councillors, Members of Parliament and Members of the European Parliament, they form a crucial link to the people in the Tees Valley, ensuring the Tees Valley’s needs are centre stage and their identities and interests are protected. Together with business leaders an effective and high achieving voluntary partnership exists, but now there is an imperative to go further faster to realise the great potential in the local economy. This Governance Review, and the Scheme as attached at appendix 1, is presented to the Secretary of State on behalf of all five Borough Councils with the full support of the LEP, making a clear case for change.

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2. The Tees Valley - A Functional Economic Area 2.1 As a long recognised, ambitious, functioning economic area, the Tees Valley

owes its place in history to the great railway pioneers, the steel makers, the shipbuilders, the innovators. That spirit is alive and well and binds public and private sector together in seizing opportunities for growth.

2.2 This ambition is recognised and supported by government in the creation of

the Tees Valley LEP and City Deal; it is recognised by the Tees Valley Councils and business by coming together as a City Region for economic growth; and it is recognised widely by partners and communities who are proud of their common history and strong economic identity and look forward to a bright future.

2.3 This significant, shared, industrial history – iron and steel, chemicals, mining,

shipping, still forms a significant part of the area’s economy and identity but is part of an increasingly diverse and innovative economic base.

2.4 Today, the Tees Valley has a significant industrial cluster, with chemicals,

process industries and steel contributing to UKplc and a positive balance of trade for the area. These are globally significant industries where markets stretch out across the world. Increasingly the Tees Valley is becoming a centre for the latest cutting edge industrial design and technology. The Centre for Process Industries for example, (CPI) is one of the earliest and strongest Catapults, Government recognised drivers of research and innovation in key industrial sectors

2.5 The economic profile of the Tees Valley has evolved significantly in recent

decades, with the following major sectors driving the economy in terms of numbers employed: retail and wholesale; health and social work; finance, real estate and business services; manufacturing; education; construction; transport and communications; hotels and catering.

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Employment and Travel to Work

2.7 This self containment is a great strength as well as a challenge. With globally

significant industries, this region needs to ensure it secures a labour pool of sufficient size and skills to support transition and growth. For that, skills development of our population and excellent transport networks within the region and connecting to other centres of populations is an imperative. This presents a key challenge for the Combined Authority

Distinctive Sectors 2.8 The Tees Valley has unique strengths in large scale production and

processing industries. It is one of the largest industrial areas in the UK with process, energy and industrial technology plants of world scale. The area also has emerging strengths in new, innovative technologies such as subsea, biologics, energy from waste, and digital industry. The Tees Valley Business Compass was established in 2014 as part of the national growth hub network, recognising the need for co-ordinated business support activity at the Tees Valley level and working with local and national providers.

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2.9 A more detailed economic analysis, including the Tees Valley’s key business

sectors and supply chains, is set out in appendix 2. Growth in these key sectors and their supply chain would be a priority for the Combined Authority.

Connectivity – Road 2.10 The Tees Valley comprises a number of commercial centres, all of which are

interdependent, so good interconnectivity is vital across all transport modes. The Tees Valley has a number of locally and nationally significant transport assets, with major highways such as the A1(M), A66, A19, A174 and A1053 providing fast links within the sub-region as well as to the North East region and the rest of the country. These routes, along with other key road links within the urban centres, form the strategic road network, which is critical in supporting key housing and employment sites across Tees Valley.

2.11 The network, however, has significant weaknesses and pinch points

which need to be addressed by the Combined Authority, including the upgrading of the A19 north – south corridor to Motorway standard, a new Tees crossing to alleviate the pressure on the current Tees flyover pinch point, and east – west connectivity between the A1, A19 and Teesport.

Connectivity – Rail 2.12 Local rail services are currently provided by Northern Rail and whilst they

provide connectivity between some centres of economic activity within the Tees Valley, many services are slow, and connectivity beyond the Tees Valley remains inadequate.

2.13 Connections on the East Coast Mainline (ECML), with its direct link from

Darlington to London and Scotland, and the Transpennine rail routes to Leeds and Manchester are vital for the area. Darlington acts as a critical rail “gateway” into and out of Tees Valley, with over 360,000 annual trips to London stations and is the main interchange hub for national and inter-regional rail connections. Grand Central services provide key connectivity to London from Hartlepool and Eaglescliffe, and a new franchise ‘Inter City Trains’ will see the introduction of direct services between Middlesbrough and London.

2.14 Although journey times to London and Edinburgh are good, services within

the North on both the east – west and north – south axes are wholly inadequate. Electrification to Middlesbrough and Teesport, the remodelling of Darlington Station to improve line configuration for connections across the Tees Valley and to make the station HS2 ready, and the full programme of rail loading gauge improvements to allow transportation of the largest containers by rail to and from Teesport, will remain top priorities for the Combined Authority.

Connectivity – Sea

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2.15 With good deep water access, Teesport handled over 37 million tonnes of

cargo in 2013. It is one of the largest exporting ports by tonnage in England, exporting 20m tonnes,18% of England’s total cargo, including substantial liquid bulk exports and imports. Teesport is an international asset which supports the area’s key sectors that rely upon the international transport of goods. Growth of port centric warehousing, with the presence of Tesco and Asda distribution centres, has already contributed significantly to the local economy and has further potential to grow substantially.

2.16 However, the Northern Gateway is a long-term project to increase

capacity so that it can cater for increasing ship sizes and ensure that Tees Valley can compete successfully with other UK and European ports. This will be a key priority for the Combined Authority.

Connectivity – Air 2.17 Durham Tees Valley Airport plays a key role in contributing to the

competitiveness and prosperity of the Tees Valley, particularly through its regular services to the Amsterdam Schiphol hub and to Aberdeen, important routes for Tees Valley businesses, particularly in the oil and gas sectors.

2.18 A key challenge for the Tees Valley Combined Authority is the

sustainability of the Airport long-term. In recent years, a number of passenger airlines in the low cost and leisure sectors have pulled back from smaller regional airports including Durham Tees Valley and the challenge exists to target growth as a business focused airport, offering niche aviation services.

Governance 2.19 The current governance arrangements reflect the Tees Valley as a functional

economic area. As well as the LEP Board, as set out above, this is supported by the following examples of regular collaborative working:

Tees Valley Leaders and elected Mayor

Tees Valley Chief Executives

Tees Valley Directors of Place, Resources, and People

Other Member and Officer joint working 2.20 These arrangements have been in place for many years and ensure that the

community leadership role of the individual councils, reflecting local community identities and interests, is firmly represented at the Tees Valley level.

Conclusion

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2.21 The information in this section and appendix 2 demonstrates that Tees Valley

is a strong and growing functional economic area supported by effective

governance arrangements which have served us well. The growth potential for

this region is huge, the drive and ambition of local authorities and private

business is clear, and now what is required is the governance form and

devolution deal that can realise the opportunities Tees Valley offers. More

detail on the ambition for Tees Valley is presented in the next section

The Tees Valley – A Functional Economic Area

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3. Ambition for the Tees Valley 3.1 The Tees Valley’s ambition is to contribute to the UK’s economic growth by

creating 25,000 new jobs and over £1bn of investment between 2012 and 2022. The Strategic Economic Plan identifies infrastructure constraints as barriers to growth in key sectors. Sustainable growth hinges on Northern cities and city regions unlocking the potential of economic assets by forging better links between economies across the North – by road, rail and freight – and thus boosting business competitiveness, attracting foreign direct investment and opening up labour markets to access more and better job opportunities.

3.2 The Tees Valley boasts many competitive advantages. It is home to major

industries that export products and services across the globe, a skilled workforce, supported by colleges, universities and national knowledge centres, and a major port, airport and direct rail routes to some key locations. However, the area faces challenges which must be addressed to secure future growth. Energy intensive industries face growing global competition. They need to be supported to find ways to remain competitive by investing in industrial carbon capture and storage and in waste industrial heat schemes.

3.3 The priority for the Combined Authority will be to deliver the ambition for the

region, and the creation of 25,000 new jobs by 2022. A good start has been made, but accelerating growth is now key.

3.4 Tees Valley Councils and businesses are highly ambitious for the area. The

aim, as set out in the Tees Valley Statement of Ambition 2012 (Tees Valley Unlimited Statement of Ambition), is to become a high-value, low-carbon, diverse and inclusive economy. To get there, there are six priorities: 1. Develop and nurture an innovation culture and positive environment for

business growth. 2. Secure the transformation of the Tees Valley into a Low Carbon High

Value economy. 3. Secure improved skills levels to address future demand in growth

sectors and in existing industries. 4. Secure additional capacity on the East Coast Main Line rail route and

improve rail services to major northern cities and within Tees Valley. 5. Improve air, road, port, land and property infrastructure to enable

economic growth. 6. Create and retain wealth by establishing the Tees Valley as a preferred

location to live in, work and visit. 3.5 These six priorities are grouped under four objectives within the Tees Valley

Strategic Economic Plan.

1. Support Innovation and Sector Development 2. Develop the Workforce 3. Develop and Provide Infrastructure 4. Attract and Retain Wealth

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3.6 The future vision Tees Valley City Deal sees the area with a thriving, more

balanced economy with integrated supply chains that are resilient to economic shocks. A range of skilled job opportunities will be available to local residents and commuters into the Tees Valley and training providers will meet the skills needs of employers in a proactive and responsive way. There will be:

a critical mass of sustainable super sectors in petrochemicals, advanced manufacturing, and new renewable energy with integrated SME supply chains using digital enablement;

integrated activities between companies leading to the development of new business opportunities, and secure carbon reductions in those industries;

research and development that will be commercialised into new products and processes, including the test bed for new and emerging green technologies creating wealth within the UK;

large waste to energy plants turning waste into low carbon products that fuel cars, create energy and produce chemicals that are the building blocks of everyday products such as plastics, paint and textiles;

low carbon investments as the location of choice where efficiencies are exploited, manufactured and exported;

new and complementary activities including subsea and other forms of advanced manufacturing;

rapid growth in the industrial sectors to drive diversification in the rest of the economy; and,

growing and thriving digital and creative industries and strong supporting sectors, such as businesses and professional services and logistics.

Future Jobs Growth

3.7 The Tees Valley Strategic Economic Plan Tees Valley Unlimited Strategic Economic Plan sets ambitious targets for growth in the local economy. Its stated ambitions and plans are to create 25,000 net new jobs (a 10% increase) in the Tees Valley over the next decade, bringing with it over £1bn of GVA benefits, closing the gap between national employment rates and matching the private sector employment rate in Manchester, Birmingham and Leeds.

3.8 The Strategic Economic Plan, European Structural and Investment Funds

Strategy and agreed City Deal, alongside associated investment, will support the delivery of this headline target. However, there is a real need to accelerate growth in the Tees Valley, and the right governance must be in place to help deliver this.

3.9 Tees Valley Unlimited commissioned independent experts Ekosgen to assess

if and how the target figure of creating 25,000 net new jobs over the next decade could be achieved.

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3.10 The table below has been agreed by all five Tees Valley local authorities as building upon the area’s competitive advantages in order to drive jobs growth.

Net Job Creation

2012-2022

Employment

Low Carbon +2,500

Advanced Manufacturing +2,500

Construction Other Manufacturing -5,000

Tourism and retail +4,000

Finance and Business Services (ex digital) +8,000

Logistics +2,000

Digital/Creative +2,000

Higher Education +1,000

Health (Care) +4,000

Other public services +4,000

Total +25,000

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4. The Tees Valley Governance Review 4.1 This section sets out how the review has been carried out; what conclusions

the Councils and the LEP have come to; and what difference it will make. 4.2 It is vital that ‘form follows function’. Just as collaboration in the Tees Valley

has evolved since the 1990s, from the Joint Strategy Unit, through Tees Valley Regeneration, to Tees Valley Unlimited, the ambitions of councils and business in the Tees Valley have grown too. The ‘form’ needs to evolve further to enable greater ambitions to be realised.

How the Governance Review was carried out 4.3 This governance review is the culmination of considerable work in the Tees

Valley. It builds on the work that led to the Tees Valley’s Statement of Ambition which was agreed in 2012; the Tees Valley City Deal in 2013; the Strategic Economic Plan in 2014.

4.4 This report has been prepared by the Tees Valley Unlimited Governance

Group on behalf of the LEP Board and the five Borough Councils in the Tees Valley.

4.5 The Governance Group is led by the Chief Executive of Redcar & Cleveland

Council and involves senior representation from all five Boroughs and Tees Valley Unlimited, covering professional areas of regeneration, legal, finance and policy. It reports to the Tees Valley Leaders and Mayor, and to the LEP Board.

4.6 The report is the culmination of a review undertaken of governance

arrangements in the Tees Valley in accordance with Section 108 of the Local Democracy, Economic Development and Construction Act 2009 (the 2009 Act).

Options Appraisal 4.7 An Options Appraisal was undertaken in 2014 to help identify the best

governance model that would drive and enhance the delivery of the vision and the 25,000 new jobs.

4.8 The options analysis looked at four potential models overall:

• Enhancement of the status quo (enhancements to current arrangements with Tees Valley Unlimited)

• Joint committee • Combined Authority; and • Company models

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4.9 We tested which model would be most effective in

providing greater certainty for businesses to attract more inward investment

speeding up decision-making

improving transport infrastructure and skills

a stronger role in marketing and promoting the Tees Valley as a place to do business

greater transparency and accountability, and

getting ready for devolution,

And also considered

• Capability to enhance economic development including transport powers • Operational efficiency and effectiveness • Local authority governance • Public sector financial management • Engaging with the private sector

What are the conclusions that the Councils and the LEP have come to? In our view, of those examined, there is only one model that meets our ambitions – a Combined Authority. 4.10 The option of an Economic Prosperity Board was considered and rejected as

this would not include transport powers and responsibilities which are considered critical to accelerating economic growth.

4.11 The Tees Valley already operates as a functional economic area, and

councils and businesses, working together, have a functioning and well-resourced partnership through which they operate: Tees Valley Unlimited, the Local Enterprise Partnership.

4.12 However, the Councils and the LEP concluded that the status quo does not

deliver the kinds of improvements to ‘form’ needed. The joint committee could be implemented quickly but would lack permanency and could not receive new powers in the way a Combined Authority could. A company model could not recover VAT, there would be issues around Corporation Tax and the company’s autonomy. The Combined Authority option offers more effective, speedy and transparent decision-making; the ability to receive devolved powers and resources, including transport powers of an Integrated Transport Authority (ITA), and the longer-term commitment (as it is set up by Act of Parliament) that would give business further confidence to invest in the area’s economic future whilst remaining within democratic control. The full detail of the Options Appraisal is set out in appendix 3.

4.13 Councils and the LEP have therefore concluded that the creation of a

Combined Authority is necessary to improve governance and accelerate economic growth as set out below.

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Governance 4.14 Councils and businesses alike want to modernise the governance

arrangements so that they do not hold the area back in economic terms. Decision-making in the Tees Valley is a key component of this.

4.15 The Combined Authority proposal will make the current arrangements more

responsive to economic growth opportunities, not least because plans will combine long-term stability and the statutory powers of Combined Authority business in a seamless operation with the LEP.

4.16 Although the Tees Valley has a long history of partnership working, across all

five Boroughs and with business, the arrangement is essentially voluntary. The LEP cannot own assets, employ its own staff, borrow etc. Key decisions have to be made, effectively, six times – by each of the five Borough Councils and the LEP Board. Moving to a Combined Authority would:

provide business with the certainty of a clear process for agreeing Tees Valley priorities, a legally-based partnership, and binding Authority decisions, which would support long-term business investment decisions

ensure the consideration of the views of business in a proper, democratically accountable governance structure, and provide for a clear, transparent and understood process for making hard choices

speed up decision-making by making the decision once (by the Combined Authority), not six times (five councils and the LEP)

continue to represent the functional economic area of the Tees Valley, but with the certainty that comes with cementing the democratic / business relationship

achieve a non-bureaucratic, seamless operation of the LEP and the Combined Authority going forward

be cost effective – there would be limited additional cost across the Tees Valley to deliver more effective decision-making and delivery of strategy, and the marginal costs would be dwarfed by the potential gains

manage risk, hold funds and assets, and employ staff

allow proper scrutiny of what is done as a partnership in the spirit of openness, transparency and accountability, and

crucially, allow the Tees Valley to compete with city-regions internationally which already enjoy devolved powers and freedoms

receive additional devolved powers and resources 4.17 The Combined Authority working closely with the LEP, will therefore focus on

the following areas: Inward Investment 4.18 The Tees Valley Councils have pooled inward investment capacity. A

Combined Authority would provide improved profile and reinforce a single

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conversation with business and Government to support inward investment opportunities and to increase global competitiveness. The Combined Authority will also enable the Tees Valley to better align other decisions, for example on skills and transport infrastructure investment, thereby creating greater focus and influence leading to increased private sector investment.

4.19 This would be complemented by the Combined Authority delivering a stronger

role in marketing the Tees Valley as a great place to invest, live, work and play.

World Class Industry in the Tees Valley Transport Infrastructure 4.20 Tees Valley transport infrastructure needs improvement. The ambition of

councils and business is to bring resources together to focus on the big issues that will make a difference to the Tees Valley’s economic future. These ambitions include:

a second crossing over the River Tees

upgrading north-south and east-west road and rail corridors

tackling the pinch-points on the Tees Valley’s key road routes, and

a better secondary road network

the electrification of rail

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resolving East Coast Mainline infrastructure issues at the Tees Valley’s key gateway station

rail loading gauge improvements for container traffic

Northern Gateway project for Teesport

sustainability of Durham Tees Valley Airport

much better bus network 4.21 There is currently an over-reliance on the A19 Tees Flyover, which frequently

results in heavy congestion, slowing down the flow of people, goods and services within the Tees Valley as well as between the Tees Valley and other regions. This route is of wider importance too, providing connections between much of the North East and Yorkshire, the Midlands, and the south. A second crossing, closer to the mouth of the Tees, will greatly speed up flows to boost the Tees Valley economy and reduce the likelihood of congestion on the existing A19 crossing, thus boosting the economic prospects of the rest of the north.

4.22 Addressing network resilience and road congestion hot spots through the

Combined Authority will enhance existing employment sites as well as future employment and housing site development. There is significant congestion on localised sections of the trunk and primary road network, particularly at peak times, affecting access to jobs, education, health, leisure and retail. These would be tackled through the deployment of ITA powers through the Combined Authority.

4.23 Maintaining network resilience is also vital for the area, including the

maintenance of links into existing key employment sites. 4.24 Better sustainable transport connectivity to employment, including improved

transport information, is essential to allow local people to access the 25,000 new jobs to be created through the Strategic Economic Plan. The area has significant rural areas which are currently poorly served by public transport, and many such areas are home to communities with low rates of car ownership. This means that a job created in the Tees Valley is not, currently, a job opportunity for all, as a significant number are excluded simply because of lack of transport access.

4.25 Long-distance rail connectivity provides vital business links, which is why the

Tees Valley is keen to see the electrification of the Trans-Pennine route to Middlesbrough and Teesport and beyond.

4.26 Retention and enhancement of direct, long distance rail connectivity – such as

the vital routes to London, Leeds and Manchester – are essential to the future economic growth of Tees Valley. The Combined Authority’s engagement in the North East Business Unit and Rail North will support this.

4.27 The rail infrastructure leads to slow journey times within the Tees Valley and

to neighbouring areas. For example the journey time by direct train from Middlesbrough to Newcastle is typically 1 hour 20 minutes, for a distance of

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38 miles. The same journey by car can typically be completed in under one hour.

4.28 Access to Darlington station, which is vital for national connections, from

elsewhere in the Tees Valley can be restricted and slow (as local passenger trains have to cross the mainline) preventing the opportunity for timetable enhancements or service improvements. Enhanced rail freight through Teesport will boost the growth of container traffic. The Northern Gateway project, increasing capacity at the port, is a vital project for the competitiveness of the region.

4.29 Bus transport requires improvement and coordination. A Combined Authority

would build on the Tees Valley Bus Network Initiative, with a joint approach to scheme development. It would also enhance the Quality Partnership Scheme, coordinated across the whole Tees Valley.

4.30 The sustainability of Durham Tees Valley Airport is critical for the region.

Devolved powers are required to ensure a level playing-field and increase aviation growth, for example in relation to Air Passenger Duty and airport infrastructure, given the proximity to Scottish Airports.

4.31 The Combined Authority would consider key transport infrastructure decisions

in the wider context of economic growth ensuring that priorities are aligned. It would allow the Tees Valley to prioritise resources, including additional business rates generated through the Enterprise Zone, as well as a transport levy, to commission projects to unlock transport potential to accelerate job creation.

The Future of Rail?

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Strategic Transport in the Tees Valley

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Skills 4.32 The Tees Valley economy has sectors which will expand, requiring a highly

skilled workforce going forwards. The current skills base is too weak to meet present and future demands for skilled workers. The Tees Valley faces skills challenges in relation to the changing age profile of the population, high levels of youth unemployment and NEETs, a scarcity of higher level skills, underperformance in education, and poor quality and inconsistent labour market information. The Combined Authority will influence, direct, coordinate and commission with businesses, schools and colleges, other training providers, funding agencies and national policy makers to meet the area’s specific requirements and deliver better outcomes.

4.33 It is predicted that there will be a fall in the number of young people entering

the labour market in the next ten years. Those aged over 55 are the group most likely to leave the workforce during the lifetime of the SEP, taking their skills and experience with them. The replacement demand in the Tees Valley between 2010 and 2020 could be as high as 120,000 people across all occupations. This replacement demand, together with the ambition of creating an additional 25,000 jobs poses a significant skills challenge for the area. The Combined Authority would plan for this transition, influencing and coordinating across skills funders and providers, alongside business.

4.34 The Tees Valley has high levels of youth unemployment and young people

who are not in education, employment or training (NEET), typically about double national rates. Barriers need to be reduced which hold back young people from being consistently involved in education, employment and training opportunities. Existing and new initiatives involving councils, businesses, trainers and others across the Tees Valley need to be coordinated and expanded on an industrial scale; the Combined Authority would do this, using powers of influence over skills funding.

4.35 There is a shortage of higher level skills. To be on a par with the national

average in high level skills by 2022 the following are needed: 26,500 more workers achieving a level 2 qualification or equivalent; 39,900 more workers achieving a level 3 qualification and 53,200 more workers achieving a level 4 qualification. Much of the predicted job growth is concentrated in the higher skills occupations, with the hardest to fill vacancies in the professional, technical and skilled trades. Current estimates suggest that over the next ten years 22,000 people in Professional Occupations and 10,000 Managers and Directors, (most likely to be educated to Level 3 or 4), will leave the workforce, along with 12,000 people in Associate Professional and Technical roles (who are likely to be Level 3 educated), and a further 12,000 people in Skilled Trades. The Combined Authority would coordinate with funders and providers to plan for increasing higher level skills, ensuring they are tailored to Tees Valley’s business needs.

4.36 There is underperformance of Tees Valley schools. The area faces a

particular challenge in relation to the literacy, numeracy and communication skills generally, the level of participation and achievement in areas that are at

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a premium in the area of science, technology, engineering, mathematics and modern foreign languages. Supporting employers to get into schools to help raise aspirations, the Combined Authority would tackle these challenges as a priority.

4.37 The area suffers from poor quality and inconsistent labour market information

and careers advice. From extensive engagement with employers, schools, local authorities, training providers and other stakeholders, it is evident that there is an inconsistency in the quality of careers information, advice and guidance, particularly for young people. Pockets of good practice exist such as the ‘Foundation for Jobs’ approach in Darlington and Redcar & Cleveland, but it is not available across the whole area. Young people should be able to experience the world of work and understand the job opportunities in the area no matter where they live.

4.38 A Combined Authority would drive the skills agenda, ensuring a more

coordinated and influencing approach towards skills funding and provision, negotiating with existing partners (e.g. SFA), so that rules around skills funding can be refined and adapted to support more appropriate apprenticeship and other provision in the Tees Valley. FE colleges tell the LEP that the cap on the number of hours for which apprenticeships are funded is inadequate for the technical skills needed in the Tees Valley economy. A strong voice is needed through the Combined Authority to deliver the benefits of a more flexible approach, tailored to the Tees Valley’s needs, which in turn will support UKplc.

4.39 The Combined Authority will deliver a schools improvement programme

across the Tees Valley and develop business, schools and skills provider engagement.

Devolution 4.40 The Tees Valley have been pressing for devolution for over a decade –

arguing for example, that combining capital funding in one pot with multi year flexibility would enable the region to flex and respond to opportunities from inward investors, and ensure barriers like infrastructure can be tackled in the right order for business. We have shown what we can do with the Growing Places Fund. We look forward to a negotiation on options that accelerate delivery of the ambition for 25,000 new jobs in the Tees Valley and to feed into the economic performance of UKplc.

4.41 The Tees Valley is also ready to negotiate devolution in relation to wider

determinants of economic performance – health, care, employment training, strategic planning and housing – as well as transport and skills identified above.

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The Conclusion – the difference a Combined Authority would make 4.42 This section clearly demonstrates what difference a Combined Authority

would make in relation to the Tees Valley’s ambitions, as demonstrated by the projects and influence it would have in relation to transport, inward investment and skills – all contributing to economic growth. The options analysis and Governance Review concluded that the most efficient and effective governance model to deliver accelerated growth is a Combined Authority, and that formed the basis of the consultation described in the next section.

Consultation 4.43 The draft Governance Review, and the outcome of the Options Appraisal,

were used to inform widespread consultation on proposals to create a Combined Authority for the Tees Valley which took place in December 2014 and January 2015. The full consultation report is attached at Appendix 4.

4.44 The consultation process comprised:

• widespread media coverage • on-line survey • dissemination of detailed information through websites and publications • presentation and debate at key partnership meetings, and • political debate at Scrutiny and Council meetings

4.45 As a result of the broad communication strategy developed, there was

widespread coverage of the proposals at both a Tees Valley and local level. 4.46 Consultation arrangements were operated across all five councils and via

Tees Valley Unlimited. Each organisation utilised their web-sites as the main, but not only, mechanism for consultation.

4.47 In addition to the online consultation a wide range of organisations and

individuals were contacted directly, both through consideration at various partnership meetings and fora, and targeted requests for views. This approach encompassed local businesses, MPs, neighbouring authorities, the voluntary and community sector, Housing Associations, Trades Unions, schools and colleges, universities, LEPs and the North East Combined Authority, the North East Chamber of Commerce, ports and the airport. This was considered important to ensure that the response to the consultation, and awareness of the Tees Valley’s ambitions, were maximised.

4.48 As a result of this approach, there have been numerous letters of support

provided from a broad range of individuals, organisations and representative bodies.

4.49 A total of 1,911 responses were received. The majority were from local

residents (1,638). 74.46% of all respondents agreed that it was important for the five councils to work together with business, whilst 17.89% disagreed. 64.77% of all respondents agreed that the Tees Valley should strengthen its

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partnership approach through a new Combined Authority, whilst 26.91% disagreed.

4.50 The consultation results, in conjunction with an outline and draft Scheme have

been considered and agreed by each of the five Borough’s Cabinets / Finance & Policy Committee, and then by meetings of each Borough’s Full Council. This process ran through February and March 2015 with the final Council agreeing to the submission of the Scheme on 26th March 2015. Each Council demonstrated widespread enthusiasm and cross party support for this proposal.

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5. What will the Combined Authority look like? Practically, how will it work and make a difference?

5.1 In the transition to a Combined Authority, some important factors have been

considered, namely:

how it would work seamlessly with the LEP

how much extra it might cost

how it would be scrutinised

how it would reflect the identities and interest of local communities

how it would support effective and convenient local government How the Combined Authority would work seamlessly with the LEP 5.2 It is important that future governance arrangements preserve the excellent

relationships, delivery and working arrangements that exist currently within the Tees Valley LEP. Both the 5 Councils and the business community have worked hard to build an effective team ethos underpinned by common goals, hard work and mutual respect.

5.3 This governance review is about building on that existing strength, preserving

what works well and making it even more effective. To this end it is intended that the TV LEP and the new TV Combined Authority work seamlessly together with a common vision, joint agenda, joint meetings and a shared team.

5.4 The local Councils already pool their resources to fund their shared Tees

Valley Unlimited team which supports the LEP. This costs over £2m per year and would continue to support the LEP and the Combined Authority in a seamless way.

5.5 The meetings of the LEP Leadership board and the Combined Authority

would be held together with a two part agenda. The Council leaders would continue to give advice and participate in decisions on LEP matters. The business leaders would give advice on Combined Authority matters, as co-opted members, but only the local authority leaders would vote on Combined Authority decisions, ensuring democratic accountability.

5.6 The LEP would continue to be chaired by a business leader. The chair of the

Combined Authority would rotate between the five Borough Councils on an annual basis. This is a tried and tested arrangement in the Tees Valley and works well. Each leader/elected Mayor would act as a spokesperson for a specific theme.

5.7 It is proposed to create a Transport Committee to oversee the delivery of the

Tees Valley Transport plan once agreed by the Combined Authority. 5.8 To retain unity of purpose across work done by local authorities individually

and the work of the Combined Authority, joint decision-making on a few key strategies would be put in place. The constitution of the Combined Authority

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would set out that decisions would be taken in accordance with the following framework agreed by the Combined Authority and formally by each local authority individually:

Statement of Ambition: the strategy in accordance with which TVU and the Combined Authority will work

Investment Plan

Medium-Term Financial Plan, including local authority financial contributions

Annual Business Plan

Tees Valley Local Transport Plan How much extra would the Combined Authority cost? 5.9 The five councils already fund Tees Valley Unlimited with a core revenue

budget of £2.1m per annum, and 31 members of staff. It is anticipated that there would be a small additional cost associated with the setting up and operation of the Combined Authority but this would be dwarfed by the potential benefits and resources attracted through inward investment.

5.10 The bulk of the work to be undertaken by a Combined Authority would be

carried out by existing staff that are already employed through Tees Valley Unlimited. This would, however, be complemented by the local authorities’ existing officer capacity, particularly to support scrutiny.

How will the combined Authority reflect the Identities and Interests of Local Communities? 5.11 The Tees Valley Combined Authority would be:

consistent with a functional economic geography, reflecting the movement of people, goods and services. This is evidenced in section 2 of this document

consistent with existing governance structures across the area, which represent the views and interests of local communities

reflective of a shared economic history and cultural identity

coterminous with the existing LEP

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Strong Community Spirit in the Tees Valley How would the Combined Authority help to secure Effective and Convenient Local Government? 5.12 The five Boroughs already work closely together and have done so for many

years. Since local government reorganisation in the 1990s, when the five Boroughs secured unitary status from the former Cleveland and County Durham areas, Darlington, Hartlepool, Middlesbrough, Redcar & Cleveland and Stockton have worked successfully together through Tees Valley Unlimited and its predecessor bodies. The creation of a Combined Authority in the Tees Valley would cement collaborative working for economic growth.

5.13 The Combined Authority would be supported by existing governance

structures, including:

Tees Valley LEP

Tees Valley Leaders and Elected Mayor

Tees Valley Chief Executives

Tees Valley Directors of Place, People, Resources 5.14 Meetings of the Combined Authority would be transparent, held in public, in

the same way as Council meetings are. This adds visibility to existing arrangements, where LEP business is carried out in private.

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5.15 Currently, important decisions require approval by the LEP and the five Borough councils, each operating their own governance, in their own cycles – requiring all six to make the same decision. Under the Combined Authority, efficiency would be enhanced by a single meeting, called swiftly if required, speeding up decision-making by many weeks.

5.16 Working at the Tees Valley level supports strategic economic growth which is

necessary, especially in times of austerity, to generate incomes for local people (through job creation and skills development) and councils (as a strong economy supports the generation of business rates and council tax receipts). The Combined Authority, by creating better conditions for economic growth, will therefore complement and enhance delivery of local services by the five Borough councils. It will attract more resources, which will be deployed using governance arrangements where the LEP and Combined Authority meet as one, where the collective resources of the five councils are deployed for greatest effect.

5.17 The Combined Authority would build on existing collaboration with the

neighbouring North East Combined Authority, recognising common challenges and opportunities in some areas, as well as with Yorkshire to the south, and authorities across the wider UK on key issues such as rail.

How will the Combined Authority’s work be Scrutinised? 5.18 The intended scrutiny arrangements build on good practice of engaging

elected Members in policy formulation upstream of decisions being taken, and address the anticipated requirements of forthcoming CLG guidance.

5.19 A Scrutiny Panel is proposed, comprising three Councillors from each of the

Tees Valley constituent councils. This is consistent with a number of Combined Authorities already set up. Membership of the Scrutiny Panel must be politically proportionate.

5.20 The quorum of the Combined Authority Scrutiny Committee is proposed to be

seven, which must include representatives of three out of the five Tees Valley Authorities.

5.21 The work programme of the Scrutiny Panel is intended to encompass

upstream work: reviewing, informing and shaping policy and decisions and the direction of the Combined Authority. This would help to ensure that any decisions which are made by the Combined Authority are in line with its agreed policies.

5.22 The support necessary to run the Combined Authority Scrutiny Committee

arrangements would be provided by the Authority of the Chair, and would rotate annually between the Tees Valley Councils in the same way.

5.23 It is intended that by operating the support in this way that the Scrutiny

arrangements can be run at little or no extra cost to the Combined Authority,

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with the support work being absorbed into the relevant Authority’s day to day work.

Community Identity founded in History and Heritage

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6. Conclusions – The Case for Change & the Four Statutory Tests 6.1 This document describes the great strength and enormous potential of the

Tees Valley economy and how a new Combined Authority would accelerate growth by building on the successful joint working of the long standing partnership between the five local Councils and the LEP. The Governance Review concludes that the Tess Valley Combined Authority would do this by;

providing greater certainty for businesses to attract more inward investment

speeding up decision-making

improving transport infrastructure and skills

a stronger role in marketing and promoting the Tees Valley as a place to do business

greater transparency and accountability, and

getting ready for devolution, 6.3 This view has the democratic endorsement of the five Tees Valley Councils

and widespread support from the business community, local residents and partners from the Tees Valley locality and further afield.

6.4 This review has met the conditions set out in the 2009 Act including the four

statutory tests and is now presented to the Secretary of State for his/her approval and the ensuing parliamentary process.

6.5 The Tees Valley looks forward to an ongoing dialogue with Government about

devolved powers and resources in the context of the wider national debate. Devolution would enable Tees Valley to remove barriers to growth and seize opportunities for inward investment to fulfil its true potential as an economic powerhouse of global significance.

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Celebrating Tees Valley

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Appendix 1

Draft Final Scheme for the Establishment of a Combined Authority for the Tees Valley

Background The findings of the Review of governance arrangements relating to transport, economic development and skills pursuant to Section 108 of the Local Democracy Economic Development and Construction Act 2009 (LDEDC) and Section 82 of the Local Transport Act 2008, are that a Combined Authority (CA) shall be created both as the best option for the area going forward because it would be likely to improve:

the exercise of statutory functions relating to economic development and transport in the area;

the effectiveness and efficiency of transport in the area; and

economic conditions in the area. This document is the proposed Final Scheme prepared by the five Tees Valley Authorities (the ‘Constituent Councils’) pursuant to the LDEDC for approval by the Secretary of State by which it is proposed a CA be created. Establishment of Authority

1. A Combined Authority for the Tees Valley shall be established pursuant to Section 103 of the Local Democracy Economic Development and Construction Act 2009 (LDEDC). It is intended that this shall come into existence at the earliest possible time.

Area

2. The area of the CA shall be the whole area of each of the five Constituent Councils namely:

Darlington Borough Council

Hartlepool Borough Council

Middlesbrough Council

Redcar & Cleveland Borough Council

Stockton-on-Tees Borough Council

3. The evidence suggests that the Tees Valley represents a self-contained functional economic market area (FEMA) in its own right and that there would likely be an improvement in economic prosperity should a CA for the area of the Tees Valley be established.

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Name

4. The name of the CA shall be the Tees Valley Combined Authority. Membership

5. The CA shall consist of a total of five Members comprised as set out below:-

6. Each of the five Constituent Councils shall appoint one of its elected members as a Member of the CA. All appointments shall be for a one year term.

7. The CA will be as efficient and effective as possible. One means of achieving this is to make the business and meetings of both the LEP and the CA seamless. The intention is to join the meetings together, supported by a single officer team (TVU staff), with a single agenda.

8. Representatives of the business community comprising the members from

Tees Valley Unlimited Board (the ‘LEP’) shall also become non-voting board members of the CA, to be appointed for a term of three years.

9. This model brings to decisions the expertise of business in the Tees Valley, and ensures through the CA that the local authorities are accountable for the money that is being spent. Business members would effectively be expert non-executive directors of the CA.

10. In the event that any of the LEP members referred to above cease to be a

LEP board member, they shall also automatically cease to be a CA board member.

11. The LEP board members shall also have a right to resign in their own right from the CA board by providing reasonable notice of the same.

12. The Constituent Councils shall each appoint another of its elected members

to act as a substitute Member of the CA in the absence of the Member appointed in accordance with the terms above.

13. A council may at any time terminate the appointment of a local authority Member or a substitute Member appointed by it to the CA.

14. Where a local authority Member or substitute Member of the CA ceases (for whatever reason) to be a Member of the council that appointed them, the Member shall cease to be a Member of the CA and the relevant council shall appoint a replacement as soon as practicable.

15. No remuneration shall be payable by the CA to its members other than standard allowances for travel and subsistence.

16. Intention - Recognising that membership of the CA cannot be determined by reference to a particular office of an appointing council, it is nevertheless the

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intention that the most appropriate membership for the CA would be the five Leaders or the Directly Elected Mayors of the Constituent Councils, as appropriate.

17. The Chair and Vice Chair of the CA shall be appointed annually for a one year term from amongst the representative Members of the Constituent Councils, with the intention that the positions shall rotate between the Constituent Councils on an annual basis.

Voting

18. The following voting arrangements will be applied: a) Un-weighted voting based on one member one vote, with no casting vote

for the Chair or Vice Chair.

b) Five representative Members and/or nominated substitutes represent a quorum.

c) Decision-making shall be structured to ensure that issues of critical

importance to the Boroughs, such as those which placed costs or risks on the Borough Councils, are taken only by Leaders and the Directly Elected Mayor for Middlesbrough.

d) The constitution of the CA shall set out that decisions will be taken in accordance with the following framework agreed by the CA, and formally approved by each local authority individually:

Statement of Ambition: the strategy in accordance with which the LEP and the CA will work

Investment Plan

Annual rolling LEP / CA Medium-Term (3-4 year) Financial Plan, including local authority financial contributions

Annual Business Plan

Local Transport Plan

e) The CA shall not have the power to incur expenditure on behalf of other authorities, nor the power to place additional risks on other authorities over and above expenditure and risk that is a result of what is agreed by each authority and covered by the Combined Authority constitution, including the investment, business and financial plans.

f) Beyond the above, each matter arising at a meeting of the CA shall be determined by a majority of the votes of the Members present and voting; each representative Member or substitute Member acting in that Member’s place shall have one vote and no Member has a casting vote.

g) If a vote on any matter referred to at (f) above is tied, it shall be deemed

not to have been carried.

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Executive Arrangements

19. Executive Arrangements (within the meaning of the Local Government Act 2000) shall not apply to the CA. However, the discharge of the functions of the CA will be subject to the scrutiny arrangements set out in this scheme.

Scrutiny arrangements

20. The CA shall appoint one scrutiny committee which shall comprise three members appointed to it by each of the Constituent Councils. In order to achieve this, it is intended to request the Secretary of State to apply Section 9JA of the Local Government Act 2000 to the CA as it does to a committee system local authority but with these amendments.

The Combined Authority shall appoint one scrutiny committee under s9JA(1); and

The Secretary of State will be requested to make regulations under s9JA(2)(b) with respect to its functions composition and procedure.

Functions of the Combined Authority

21. A great strength of the area has been its ability to demonstrate its unity of purpose in securing a more prosperous economic future. The five local authorities of the Tees Valley, working together with business as the LEP, have firmly established the sub-region on the national stage. An obvious example of unity is the Statement of Ambition with its clear explanation of the policies to be pursued in achieving sustainable prosperity.

22. The partnership is robust. It is a matter of great credit acknowledged by the Government, Business Representative Organisations such as Confederation of British Industries, Chamber of Commerce, Federation of Small Businesses, the Manufacturers’ Organisation for Britain (EEF), and Institute of Directors and neighbouring areas that the grasping of opportunities to help implement economic strategy has only been possible because of the area’s local authorities’ steadfast ability to work together and in concert with the private sector. There is a focussed and proactive approach to growth which is pursued at the sub-regional level. This approach has led to a successful Enterprise Zone and numerous Regional Growth Fund (RGF) awards for local companies.

23. Building on the strengths of the partnership, new arrangements and powers would:

provide business with the certainty of a clear process for agreeing Tees Valley priorities, a legally-based partnership, and binding Authority decisions, which would support long-term business investment decisions

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ensure the consideration of the views of business in a proper, democratically accountable governance structure, and provide for a clear, transparent and understood process for making hard choices

speed up decision-making by making the decision once (by the Combined Authority), not six times (five councils and the LEP)

continue to represent the functional economic area of the Tees Valley, but with the certainty that comes with cementing the democratic / business relationship

achieve a non-bureaucratic, seamless operation of the LEP and the Combined Authority going forward

be cost effective – there would be limited additional cost across the Tees Valley to deliver more effective decision-making and delivery of strategy, and the marginal costs would be dwarfed by the potential gains

manage risk, hold funds and assets, and employ staff

allow proper scrutiny of what is done as a partnership in the spirit of openness, transparency and accountability, and

crucially, allow the Tees Valley to compete with city-regions internationally which already enjoy devolved powers and freedoms

receive additional devolved powers and resources

not re-create the former Cleveland County Council. A Combined Authority would not do this - it would assist decision-making on matters of jointly agreed priorities of economic development, skills and transport across the five Boroughs.

Transport Functions

24. In the application of s101 of the Local Government Act 1972 any other

transport functions delegated to the CA from time to time by the constituent Councils shall be functions of the CA.

25. This shall include the full range of powers available to an Integrated Transport Authority.

26. The Power of Wellbeing under chapter 3 of the LTA 2008 will apply to the CA by virtue of that Act.

27. The CA will have ancillary general powers pursuant to section 113A of the LDEDC 2009.

28. Specific transport functions for the CA shall include to:

a) Develop and approve the Tees Valley Local Transport Plan

b) Develop and approve the Rail Strategy

c) Develop and approve the Transport and Infrastructure Strategy including transport topics of significant importance e.g. Rail, Strategic road network and Airports.

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d) Manage and develop the successful on-going strategic relationship with the Highways Agency, and other Government departments and agencies (i.e. DfT, Network rail, rail franchise holders)

e) Deliver modelling and analytical support for scheme and strategy schemes

in relation to economic development.

f) Approve and submit bids for funding for Tees Valley level transport schemes.

g) Develop, approve and implement in collaboration with the Local Authorities

capital project procurement for transport schemes at a Tees Valley level.

h) Represent those Authorities comprising the CA at a regional, pan-northern and national level to secure more investment in infrastructure.

i) To approve the Rail Strategy and the Transport and Infrastructure Strategy.

j) To approve and submit bids for transport scheme funding.

k) To approve the procurement of Tees Valley level transport schemes. Economic Development Functions and Inward Investment

29. By virtue of sections 99 and 102A of the Local Transport Act 2008, the CA will have broad well-being powers to promote economic prosperity, which can be exercised together with general ancillary powers granted by section 113A of the LDEDC Act 2009 (as amended by the Localism Act 2011).

30. It is proposed that the CA will be focussed on strategic economic development issues which shall include a remit to:

a. Prepare, monitor and review the Tees Valley-level economic

strategy (Statement of Ambition, Investment Plan, Business Plan, Action Plans etc) for approval by each of the Member Authorities

b. Undertake economic assessment, research and provide an

evidence base for economic strategy at the Tees Valley level and at the Borough level.

c. Prepare and submit policy responses to consultations that

impact on the economy of the Tees Valley

d. Develop and manage interventions, projects and programmes which respond to the economic strategy of the Tees Valley

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e. Prepare and submit funding bids for interventions, projects and programmes which respond to economic strategy at a Tees Valley level.

f. Be responsible for ensuring that core business advisory services

are available to SMEs across the Tees Valley, with additional business support services being delivered, in consultation with the Local Authorities, to meet each Borough’s individual sector priorities.

g. To approve the Tees Valley-level economic strategy (comprising e.g. the Statement of Ambition, Investment Plan, Business Plan, Action Plans etc).

h. To approve the submission of responses to consultations.

i. To approve the submission of funding bids.

31. The Tees Valley Councils have pooled inward investment capacity. A Combined Authority would provide improved profile and reinforce a single conversation with business and Government to support inward investment opportunities and to increase global competitiveness. The Combined Authority will also enable the Tees Valley to better align other decisions, for example on skills and transport infrastructure investment, thereby creating greater focus and influence leading to increased private sector investment.

32. This would be complemented by the Combined Authority delivering a stronger role in marketing the Tees Valley as a great place to invest, live, work and play.

33. The primary focus of the CA will be to manage a significant programme of investment in transport and economic infrastructure, and to influence and align with government investment, in order to boost economic growth. The related interventions will have differential spatial impacts across the CA area but should aid delivery of key growth projects in the emerging and future local plans of Constituent Councils. Having regard to the duty to co-operate, effective alignment between decision making on transport and decisions on other areas of policy such as economic development, employment and skills initiatives, business investment and low carbon strategies will be a key aim.

Incidental Provisions

34. The CA shall exercise any function of the Secretary of State delegated to the CA by order of the Secretary of State pursuant to Section 86 of the LTA 2008 and Section 104(1) (b) of the LDEDCA 2009. Such functions shall be exercised subject to any condition imposed by the order.

35. The CA shall also have the following terms of reference and delegated powers in relation to Employment and Skills:

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a. Take a lead role in relation to Employment and Skills policy initiatives.

b. Lead on activities to drive the TVU Employment Skills Advisory

Group.

c. Lead activities to develop the Tees Valley Employment, Learning and Skills Framework and encourage implementation across the five Local Authority areas.

d. Influence high level content of the DWP Work Programme and

FE provision.

e. Develop links and Employment and Skills policy alignment with 14-19 activities.

f. Influence DWP prime provider performance through attending

regular reviews and ensuring that TVU priorities are fed through to delivery programmes, and on a borough level depending on need.

g. Engage with DWP providers/employers on the ground to

facilitate closer working between partners and create additional/sustainable job opportunities across the Tees Valley.

h. Provide intelligence to providers (including primary and

secondary schools) on future skills and labour market requirements, aligned to the growth plan whilst working with colleagues and other learning providers to develop a more labour market focus to their delivery, share emerging markets and skills sector knowledge

i. Work with partners to join up the employer offer across Tees

Valley and link with similar regional/local aims to provide dedicated access points for employers (via websites and key contacts).

j. Coordinate the production of Tees Valley materials and

resources to support and develop aspirations and choice, working closely with all partners.

k. Co-ordinate a sub-regional network of key partners/providers to

manage co-ordinated employer support for multiple vacancies etc.

l. Work with employers, Sector Skills Councils etc to

develop/facilitate sector focussed training opportunities linked to areas of future growth in the labour market.

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m. Ensure that employment and worklessness initiatives are effectively targeted at those farthest from the labour market.

n. Ensure that local and national initiatives are coordinated into a coherent programme of support for young people, adult learners and employers

o. Work with partners/key employers to develop more structured opportunities for unemployed people to access jobs.

36. The CA shall also have the following terms of reference and delegated

powers in relation to Business Investment:

a. Undertake business engagement and support including SMEs in consultation with the Local Authorities.

b. Develop and approve a strategy and action plans for work of Tees

Valley level significance in relation to:

o Investment by both UK and foreign owned companies o Relocation into the Tees Valley from another UK source o Investment for the first time by non-UK companies o Exporting by Tees Valley companies o Supply chain development

c. Take responsibility for enquiry and client handling, liaising with clients

and public and private sector partners across the Tees Valley; Site allocation, site briefs, identifying business synergies.

d. Identify existing and emerging opportunities, defining marketing targets

by industry sectors/sector analysis and developing strategy.

e. Undertake marketing to attract Tees Valley level opportunities into the Tees Valley.

37. The CA shall also have the following terms of reference and delegated

powers in relation to Low Carbon

a. Undertake project and financial management of studies linked to the Low Carbon Strategy.

b. Liaise with Government departments and agencies to address

barriers to investment.

c. Coordinate consultation responses to a range of related consultations from Government, including National Planning Statements and energy policy, as well as EU legislation.

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d. Provide support to industry to develop low carbon infrastructure such as Carbon Capture and Storage, district hearing, energy hubs, novel waste technologies and energy from waste plants.

e. Assist in the preparation of funding bids for industry projects for

national and European funds and the Green Investment Bank.

f. Further developing relationships with NEPIC, CPI and other groups such as PICCSI and other relationships to assist in the delivery of key projects.

g. Help to develop and articulate Tees Valley’s offer as one of the

largest integrated low carbon networks in Europe.

h. Examine new delivery vehicles for the key projects.

Funding

38. It is envisaged that there will be a small additional delivery cost over and above those associated with the delivery of those functions by the LEP and the Constituent Councils. The potential benefits of Combined Authority status, however, will significantly outweigh any such minor cost increase.

39. The running costs of the CA, unless mutually agreed to be amended, shall be apportioned as follows: DARLINGTON 15.8% HARTLEPOOL 14.7% MIDDLESBROUGH 20.9% REDCAR & CLEVELAND 21.0% STOCKTON-ON-TEES 27.7%

40. The revenue expenditure and funding of the CA shall be agreed on an annual basis as determined at paragraph 18(d) above.

41. Any additional expenditure in excess of that determined at paragraph 18(d) should be apportioned at the time of approval.

42. The CA will have the power to access other sources of funding as they

become available.

Sub structures

43. The CA will act as a strategic decision making body. Therefore in order to fulfil the significant range of operational duties, powers and functions transferred, the Constituent Councils may put in place appropriate arrangements to ensure fit for purpose sub structures.

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44. The Constitution of the CA is to include the ability to create the following sub-committees/panels:

transport committee

an investment panel Tees Valley Unlimited Local Enterprise Partnership (LEP)

45. The Review sets out the importance of a strong LEP which effectively brings together the private and public sector in driving the economic prosperity of the Tees Valley.

46. By ensuring a non-bureaucratic seamless operation with the LEP, for example by integrating CA and LEP meetings, decisions taken by the CA will more fully reflect business views. These views, both in terms of shaping prioritisation and scheme design, will ensure that any public investment is targeted to maximise local business benefit which is key to economic growth.

Devolution

47. Devolution would enable Tees Valley to remove barriers to growth and seize opportunities for inward investment to fulfil its true potential as an economic powerhouse of global significance. Combining capital funding in one pot with multi year flexibility would enable the region to flex and respond to opportunities from inward investors, and ensure barriers like infrastructure can be tackled in the right order for business. The CA envisages an ongoing dialogue with Government about devolved powers and resources in the context of the wider national debate.

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Appendix 2

ECONOMIC ANALYSIS, SECTORS, SUPPLY CHAINS AND OPPORTUNITIES

FOR GROWTH

The Tees Valley Economy Over the past 50 years, the economy has moved from heavy industry towards advanced manufacturing. Today, the business base is shifting once again, with growing expertise in advanced manufacturing, low carbon, logistics and digital and creative industries. For many years the labour market was dominated by a small number of large employers; ICI and British Steel collectively employed over 80,000 people in the late 1960s/70s. In line with national trends, technological advances and international competition have reduced the need for large workforces in such industries, which for decades had provided the bulk of employment - they became more capital intensive, rather than labour intensive. By the 1980s, employment in chemicals had fallen to just over 20,000 and employment in steel manufacturing had fallen to just below 19,000 and this trend has continued. Although the Tees Valley has retained its strengths in production, between 1971 and 2004 over 93,000 manufacturing jobs were lost in the Tees Valley and communities continue to feel the effects of this economic restructuring. Manufacturing job contraction has, in part, been off-set by growth in service sectors, but there have not been the same levels of service sector growth experienced elsewhere, and the Tees Valley has been over-reliant on employment growth in the public sector. Whilst private sector employment has risen over the past two years, there is still a long way to go to build up economic resilience.

Public sector jobs

Total jobs

Private sector jobs

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This economic restructuring has fundamentally changed the profile of the economy and labour market. Today, although Tees Valley GVA per hour worked is 90% of the UK average and above that of the East and West Midlands, Yorkshire and Humber, the GVA per head is poor (at 73.5% of the national average), due in large part to a low employment rate and relatively older population profile. The Tees Valley economy supports just 285,000 jobs, serving a working age population of 421,000. Furthermore, the employment rate is 4.3% below the national average, meaning that to close this gap and achieve national levels of employment there would need to be an additional 18,000 jobs:

This is particularly acute with claimant count unemployment in Tees Valley at 4.1% compared to 2.1% nationally, and youth employment at 7.4%, both double the national average. There are high numbers of people with significant barriers to work – only 27.2%of residents are qualified to NVQ level 4 compared to 35.2% nationally – while businesses that need to acquire skilled workers can struggle to recruit and grow. Businesses, particularly the 14,500 SME base, face hurdles which keep rates of enterprise, growth and commercialisation in Tees Valley low. Yet the Tees Valley economy makes a significant contribution to the UK economy (with GVA of more than £11bn) and is part of the only region in England with a consistently positive balance of trade in goods. Over a fifth of this contribution is through production and Tees Valley comprises 50% of the UK’s petrochemicals GDP. There is a strong

Tees Valley

Source: ONS, APS

Great Britain

46

advanced manufacturing sector with expertise across automotive, subsea, renewable energy and engineering design. Such expertise has emerged because Tees Valley is one of the largest industrial areas in the UK with process, energy and industrial technology plants of world scale. The long history of chemical production on Teesside continues today with 60% of the UK’s chemical exports being produced in the Tees Valley. Although Key Sectors face challenges of remaining competitive against global competition and the need to reduce the impact of CO2, there are significant opportunities. The advanced manufacturing heritage and expertise of the Tees Valley makes the area ideally placed to capitalise upon moves towards a low carbon economy, supporting businesses to develop new technologies, export new products and access new supply chains. The Tees Valley is at the vanguard of export-led growth and has seen significant investment in sectors such as subsea, biologics, automotive, oil and gas, digital and creative. These together with transport and logistics, business ICT, finance, business services and healthcare, have real growth potential. Tees Valley’s business base is critical to supplying key UK industries, particularly automotive, oil and gas and aerospace. The Tees Valley has experienced private sector growth, with a net increase of over 11,000 private sector jobs since 2011, and a skilled workforce, excellent connectivity and leading knowledge centres are nationally-recognised. Furthermore, the Tees Valley has a quality of place that attracts people to live, work and visit, but more needs to be done to unlock potential.

Sectors and Supply Chain

Tees Valley is an area of cutting edge innovation that contributes over £11 billion to the national economy. It is a major hub for process industries and advanced manufacturing; benefitting from recent major investment in innovative new technologies, such as subsea, biologics and energy from waste. Additionally, the area’s vibrant and rapidly expanding digital and creative cluster supports growth across both manufacturing and the wider service sectors. These sectors are examined in more detail below and are detailed in full in the Tees Valley Strategic Economic Plan.

Advanced manufacturing Tees Valley has recognised strengths in advanced manufacturing, with a cluster of multinational corporations and innovative SMEs developing high level expertise in manufacturing, design and research and development. The Tees Valley is in the vanguard of the UK’s drive for export-led growth and advanced manufacturing, with key strengths and opportunities as follows:

Process engineering – Tees Valley firms, including Darchem-Esterline, Jacobs Engineering Heerema, Tata Tubes, Hertel and Wilton Engineering Group currently supply national and international companies like Airbus, Boeing, Honda and Jaguar Land Rover;

47

Offshore / subsea engineering – the area’s proximity to North Sea infrastructure has enabled the development of a significant subsea engineering cluster at Hartlepool, Teesport and Darlington (including Deep Ocean, JDR Cables, Modus, Reef Subsea, Global Marine Energy. This has real growth potential linked to the development of offshore wind farms and oil and gas projects; and,

Automotive and rail – A growing supply chain of SMEs and larger businesses supply major Tier 1 and Tier 2 automotive manufacturers, including Cummins (next generation of diesel engines), Mitsubishi Chemical Corporation (chemicals for electric vehicle batteries), Caterpillar (cranes and trucks) and Nifco, Elring Klinger, TMD Friction and others supplying parts to manufacturers such as Nissan and Jaguar Land Rover. Additionally, a number of firms, such as Henry Williams, supply the rail industry and there are significant potential supply chain opportunities arising from the nearby Hitachi intercity train facility.

Process industries The Tees Valley has a critical mass of process and chemical firms with over 9,000 people directly involved in the Tees Valley. Many thousands more are employed in the sector through its supply chains:

Petrochemicals – Wilton International is the largest integrated chemicals cluster in the UK, and the second largest in Western Europe.

Polymers - First manufactured at Wilton International, polymers are a key part of the chemical sector in the area. Downstream users include the likes of Nifco, who produce parts for major car manufacturers across the globe;

Energy, including Nuclear – the Tees Valley is home to the Hartlepool nuclear power station and major energy and power plants, such as the Wilton 10 biomass power station, along with significant oil and gas infrastructure, including the BP CATS pipeline. 3.4GW of electricity is produced for the grid, with a further 2.6GW proposed.

Pharmaceuticals and Industrial Biotechnology – the Tees Valley is home to a cluster of firms centred around the operations of Johnson Matthey, Fujifilm Diosynth Biotechnologies, and key SMEs in the sector (including Fine Organics, Cambridge Research Biochemicals and Hart Biologicals). Darlington will soon be home to the Centre for Process Innovation’s National Biologics Manufacturing Centre, offering major opportunities to grow a cluster of leading biologics firms in the Tees Valley.

Steel primary production and secondary processing – the blast furnace at Redcar produces 25% of total UK steel. SSI has a major presence in Tees Valley and the supply chain supporting this sector is wide.

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Low carbon economy The Tees Valley sits at the centre of the UK’s move towards a high value, low carbon economy having attracted significant investment over recent years and developed a reputation for greening excellence:

Waste processing – the Tees Valley is leading the way on bioindustries and energy from waste, with projects underway from major global companies including Air Products, Ineos Bio, SembCorp and SITA.

Renewable Energy – the Tees Valley is recognised as a Centre of Offshore Renewable Engineering (CORE) as industry leaders including Heerema, TAG Energy Solutions and JDR Cables and a growing cluster of leading SMEs are hosted here.

Hydrogen – the Tees Valley produces around 50% of the UK’s hydrogen and already has an established hydrogen pipe network. There is a significant opportunity to produce green hydrogen in the Tees Valley which is capable of supplying the increasing demand for hydrogen fuel cells.

Digital / Creative Digital / creative is a growing Key Sector within the Tees Valley, with over 9,000 people employed. Significant growth has occurred in the digital and engineering design industries:

Digital - The number of digital businesses in the Tees Valley has increased by more than any other LEP area between 2013 and 2014. Over 300 innovative digital firms have been created in recent years, supplying services to the likes of Nickelodeon, Pearson, Superdry, Google and Sony Playstation. The digital sector is not just focussed on gaming and animation as there are a number of growing firms, such as Cleveland Process Designs, providing innovative technology solutions from shutdown, maintenance and plant simulation software for the oil and gas and process industries to financial modelling for the energy sectors.

Engineering design and technical services – Over 5,000 people are employed in engineering design and architecture, particularly focused upon the advanced manufacturing, process and low-carbon industries. Tees Valley has some of the highest levels of knowledge-intensive business services in the country and a host of SMEs in engineering design and technical services win work across the world.

Culture, arts and heritage – the Tees Valley has a growing culture, arts and heritage sector employing over 4,000 people, with firms ranging from established creative businesses to sole traders. This sector presents a massive opportunity to both create and capture wealth.

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Visitor Economy - Currently, visitor numbers are dominated by day visitors (64%), but the number of overnight stays is increasing (from 20% in 2008 to 36% in 2010) and there are excellent opportunities to create an offer that is more attractive to overnight visitors.

Information Communication Technology - There are a number of leading ICT firms based in Tees Valley, such as Onyx, and data centres, including the world’s greenest data centre at Wynyard run by HP. Such businesses provide solutions to a global network of clients, while Tees Valley’s engineering design cluster – including the likes of Phusion, AMEC and Foster Wheeler – depend heavily upon reliable ICT solutions to develop and grow their businesses.

Professional and Business Services 45,000 people (17% of total employment) are employed, at all levels, across the professional, business, financial and legal services sectors in the Tees Valley and over 7,500 people have jobs in contact centre and business process outsourcing activities. There is also a cluster of major legal, business and financial services. Transport and Logistics The changing face of retail has led to further development of the logistics market, with the Tees Valley now home to major distribution centres of Asda and Tesco, based around Teesport, Aldi at Darlington and Clipper/George at Asda based at Wynyard. Teesport’s port-centric model offers the choice for distributors to go straight from A to B rather than goods being transported to the logistics ‘golden triangle’ in the Midlands for onward distribution. Retail and Leisure Wholesale, retail and related service industries continue to be a key source of employment in the Tees Valley, employing some 56,000 people. The recession has had a marked impact on high streets and many branded stores and local outlets have ceased trading, with around 3,000 jobs lost since 2012. A number of town centres have experienced, or are undergoing considerable investment to improve the leisure, shopping and cultural experience.

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Town Centre Street Market Health and Social Care The health and social care sector in the Tees Valley employs 49,000 people, or 19% of the workforce, and employment has increased by over 10% since 2009. 90% of jobs are currently in the public sector but there are over 350 private sector businesses forming part of the sector. The Centre for Process Innovation (CPI) has announced that the new National Biologics Manufacturing Centre will be located in Darlington from 2015, providing major opportunities in this area for Tees Valley. Public Sector In 2013, 61,000 people were employed across the public sector, which was 24% of all employment in the Tees Valley. This rate was down from 28% of total employment in 2010 but still 5% higher than the average for England. Public sector employment in Tees Valley fell by 15% or over 11,000 jobs between 2010 and 2013, with private sector employment picking up by 4.5% or over 10,000 over the same period. However, being home to a number of government agencies and departments, including the Department for Education, Disclosure and Barring Service and Student Finance England (all in Darlington), there is scope for further public sector relocation to build on the developing hub in Darlington, where DfE are locating.

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The Tees Valley – Open for Business

52

53

Appendix 3

Legal and Financial Options Analysis The five local authorities of the Tees Valley, working together with businesses as the Local Enterprise Partnership (LEP), provide great unity of purpose and is firmly established in the sub-region and on the national stage. The partnership is robust and hugely ambitious for the Tees Valley and its communities. The economy has grown and will continue to grow with councils and business working together. The pace at which change is occurring, however, warrants an appraisal of options to help strengthen decision-making and cement the partnership. In particular:

I. the partnership needs to offer communities and businesses certainty and improve competitiveness/delivery.

II. there needs to be proper scrutiny, openness, transparency and accountability. III. there needs to be speed and agility to move quickly to take advantage of

opportunities around new powers and resources as they arise IV. more money is being secured and it must be spent in line with agreed

priorities. V. businesses need to continue to be actively involved

The Tees Valley wants to continue to be a big player. It has always been ahead of the competition, innovative, collaborative and creative and wants to remain in the premier league and have the ability to accelerate growth, now and in the future. It is with these objectives in mind that an options appraisal has been undertaken to determine the most appropriate governance model going forward. Evaluation Criteria Using the above objectives 11 evaluation criteria (A-K) were determined to assess the most suitable of 4 key governance options.

I. Enhancement of the Status Quo (enhancement to current arrangements with Tees Valley Unlimited)

II. Joint Committee III. Combined Authority IV. Company Models

The option of an Economic Prosperity Board was considered and rejected as this would not include transport responsibilities, considered to be fundamental to improving the Tees Valley’s economic outlook. The evaluation criteria fall into the following main categories:

I. Operational Efficiency and Effectiveness – which considers how each of the 4 options enables our ability to be fleet of foot and to spend wisely on priorities.

II. Enhancing Economic Development – which in particular considers how the

partnership between business and councils can be cemented going forward to bring greater certainty and improved delivery and competitiveness.

54

III. Local Authority Governance and Public Sector Financial Management – which

places particular emphasis on scrutiny, transparency, openness and accountability.

IV. Engaging the Private Sector – which considers how each model would best include and involve business through seamless working.

V. Preparation for devolution – assessing which governance model is most likely

to give Government the confidence it requires to devolve further powers and resources.

Further details of the evaluation criteria are provided below. The table that follows provides a summary of the assessment of each of the 4 governance models against the evaluation criteria. Operational Efficiency and Effectiveness

A. Decision-Making:

How do the options allow for collective decisions to be made in an efficient manner including decisions regarding: the use of collective funds such as Growing Places Fund, Local

Growth Fund, EU Structural Funds, etc.;

the use of funds generated collectively by the LEP as a consequence of activities such as Business Rates uplift from the Enterprise Zone and any transport levies;

the use of funds allocated by the local authorities and other bodies; access of new powers and resources as opportunities arise through

greater devolution from Government?

Do each of the options allow decisions to be made in one place by elected Leaders who are responsible for strategic direction and underwriting risk?

B. Operational matters:

How will each of the options handle operational matters efficiently and effectively such as:

holding funds; owning assets (land, property financial instruments); make funding agreements of joint venture agreements?

How will each of the options take on responsibility for strategic direction of transport planning?

55

How will each of the options take on responsibility for funding of major transport schemes, leading to better decision making in relation to transport issues?

C. Efficiency and Cost:

Are the options an efficient use of public sector funds?

How will the cost of running the options compare?

What facility do they have to levy constituent Councils for expenses and liabilities which are reasonably attributable to the exercise of functions relating to transport?

D. Practical Pitfalls or Benefits:

Are there any other practical pitfalls or benefits of the options such as VAT, Corporation Tax, Procurement, Pensions, etc.?

Enhancing Economic Development

E. Ability to deliver:

How will each model reflect the functional economic area or ‘real economy’ of the Tees Valley Region?

How will each formalise links between decision making in relation to economic development (including inward investment, skills and spatial planning) and transport, ensuring decisions are made that secure maximum economic and social benefit?

How will each be prepared, monitored and reviewed?

How will each develop and manage interventions, projects and programmes which respond to the economic strategy of the Tees Valley?

How will responsibility for ensuring that core business advisory services are available to SMEs across the TV region be undertaken?

How will each enhance a coordinated sub-regional approach to attracting inward investment?

F Long-term commitment:

To what extent will each option produce a commitment to the delivery of a long-term strategy?

Local Authority Governance and Public Sector Financial Management

G. Influence of Councils:

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To what extent do each of the options allow Councils (as the democratically elected bodies and principal funders) to influence the overall direction and key decisions?

H Democratic Accountability:

To what extent does each of the options allow Councils (as the democratically elected bodies and principal funders) to scrutinise the work and hold the decision-makers to account?

I. Public Sector Protection:

To what extent does each of the models enable Councils to ensure that public money is used appropriately/in accordance with their fiduciary duty?

J. Public Transparency:

To what extent do each allow the public to be aware of the decisions made?

Engaging the Private Sector

K. Influence of Private Sector:

To what extent can the private sector (Board Members), influence decisions?

Preparing for Devolution L. Devolution

• To what extent does each model provide the reassurance needed by government that devolution of powers and resources would deliver greater economic prospects?

CONCLUSION Although the Tees Valley authorities and businesses have worked well together through the LEP and the status quo would be an easy option, it does not provide the clarity of responsibility and accountability now required, it does not offer speedy decision-making, and it does not provide certainty. A Joint Committee could be established relatively quickly. Decision-making would be more transparent than with existing arrangements and it would be more fleet of foot, however it still lacks the certainty required to facilitate business confidence. A company model would be complex to establish, it would be more costly, would not be able to recover VAT and there would be issues around Corporation Tax, the company’s autonomy and its ability to reflect the identities and interests of local communities. A Combined Authority model will allow for speedy decision-making alongside effective scrutiny, transparency, accountability and openness. It provides the level of certainty required

57

and builds on existing arrangements which spends money wisely against priorities. It provides the ability to receive new powers and resources as part of the devolution agenda, and the longer-term commitment would give businesses further confidence in the area’s economic aspirations; whilst at the same time remaining within democratic control.

58

Criterion Enhanced Status Quo Joint Committee Combined Authority Company

Operational

Efficiency &

Effectiveness

A. Decision-

Making

Although the current model

does allow for some clarity

of responsibility and

accountability for decision-

making, decisions would

need to be taken at

individual local authority

level. The local authorities

have or are moving to

different political and

constitutional arrangements

and each would need to

provide certainty regarding

an effective method of

collective decision-making

through the TVU Leadership

Board in order to minimise

the risk of decisions being

challenged or, more

importantly, not being

implemented by/on behalf of

one or more of the

authorities. Whilst TVU has

an officer delegation

scheme this would need to

be reviewed in light of City

Deal and TVU’s developing

A joint committee could be

established to discharge all

of the functions which are

the subject of the

arrangements on behalf of

the five Local Authorities.

The joint committee could

arrange for the discharge

of any of its functions by a

sub-committee of the joint

committee or an Officer of

one of the Authorities with

appropriate delegations.

Collective decisions may

not be made in one place

without ratification by the

individual authorities. Local

Government legislative

requirements regarding the

call-in and scrutiny of

executive decisions would

potentially apply, decisions

could therefore be

overturned

Final binding decisions could

be made by simple majority

on matters relating to its

functions and within its

delegated powers. A bigger

majority (eg 2/3) could be

required for key issues such

as setting the annual budget

or any transport levy.

Collective decisions will be

made in one place, by

elected Leaders who are

responsible for strategic

direction and underwriting

any risks.

In line with current national

policy, the Combined

Authority model would allow

for decisions to be made

locally on any new powers

and resources devolved from

Government.

A Transport Committee could

be formed, involving relevant

Decisions would be final

and binding within the

framework of the Board’s

functions. Voting rights

and the weight to be

given to different Board

members’ votes in certain

situations would be

matters for the local

authorities to determine.

Collective decisions will

be made in one place by

the Board (subject to

voting rights).

Government appears less

likely to devolve further

powers and resources to

this option.

59

Criterion Enhanced Status Quo Joint Committee Combined Authority Company

responsibilities in any event.

This model would not allow

for collective decisions to be

made all in one place.

Government appears less

likely to devolve further

powers and resources to

this option.

Government appears less

likely to devolve further

powers and resources to

this option.

portfolio-holders / Committee

chairs from each of the

Borough councils, to aid

decision-making.

B. Operational

Matters

TVU is not a legal entity and

agreement amongst the

local authorities would

therefore be particularly

important as regards the

body (or bodies) which

would hold funds, assets

and land, as well as let or

enter into contracts, and

enter into funding or joint

venture agreements,

together with the

arrangements for making

investment decisions and

sharing profits and risks.

The current arrangement

does not include

The joint committee would

not be a legal entity in its

own right. Agreement

would therefore be

required as to which

Authorities would hold

funds/be the accountable

body; enter into

agreements or let

contracts; own land; be a

party to funding or joint

venture arrangements.

The joint committee, or a

sub-committee, could

make investment

decisions, however these

decisions may need to be

ratified by each local

A Combined Authority would

be a vehicle which could be

as flexible as TVU/Local

Authorities need it to be. It

would be a body corporate

which could hold funds; own

assets; manage projects or

arrange for others to do so by

agreement; let contracts for

development; make funding

or joint venture agreements;

enter into other contracts,

such as agreements with

transport operators and (if

empowered to do so)

manage skills contracts on

behalf of DWP.

As a legal “person” a

Company could hold

funds; own assets;

manage projects or agree

with others that they do

so; let development

contracts; enter into joint

venture or funding

arrangements, and other

contracts (such as with

transport operators); and

subject to any necessary

powers, manage DWP

skills contracts.

Existing legislation does

not permit companies to

take on responsibilities for

60

Criterion Enhanced Status Quo Joint Committee Combined Authority Company

responsibility for strategic

transport planning nor

funding of major transport

schemes.

authority. Projects could

be managed for the joint

committee by or on behalf

of one or more of the Local

Authorities. The

Authorities would have to

agree how profits and

losses/risks would be

shared.

A Joint Committee can

take on responsibility for

strategic transport but

funding of major schemes

would remain with each

local authority.

A Combined Authority can

take strategic transport

responsibilities and funding of

major transport schemes

strategic transport and

funding.

C. Efficiency and

Cost

Enhancing the current joint

arrangements should not

put the local authorities to

any additional cost. It

involves developing existing

resources and operational

structures and it should lead

to less bureaucracy and the

potential for delay, and

create efficiencies.

A joint committee would

need to be administered.

Existing Officers/resources

could be utilised for this

purpose, in the same way

that other existing joint

committees are serviced.

There would be minimal

additional administration

costs and these would be

shared. Decision making

A Combined Authority would

be a separate entity. It would

need to produce separate

accounts, have its own

constitution and be

separately administered.

Statutory roles could however

be provided by one of the

constituent local authorities

via a Service Level

Agreement. It is not

A company would be a

separate entity, would

need its own financial

arrangements,

shareholder agreements,

etc. Costs of set up

would be significant.

Staff from constituent

local authorities would not

be able to provide the

required support; ongoing

61

Criterion Enhanced Status Quo Joint Committee Combined Authority Company

It does not provide the

facility to levy for transport

responsibilities.

arrangements for the joint

committee would be more

transparent than the

existing joint arrangements

for TVU and there would

be less risk of delays

arising from having to refer

matters to individual

Authorities for

agreement/ratification.

However, legislative

requirements relating to

call-in and scrutiny of

executive decisions could

impact upon the efficiency

of the decision-making

process.

There would be no facility

to levy for transport

facilities

anticipated that ongoing

costs will be significantly

higher than the current

arrangements.

It would have the power to

levy its constituent councils in

respect of the expenses and

liabilities of the CA which are

reasonably attributable to the

exercise of its functions

relating to transport.

costs are also likely to be

higher than current

arrangements.

A company could not levy

for transport

responsibilities.

D. Practical

matters

TVU currently recovers VAT

on its non-business

transactions through

Stockton Council.

Enhancing the status quo

will not affect this. For

A joint committee would

not impact upon TVU’s

existing VAT position; nor

would it affect the present

position regarding

procurement or the

The Combined Authority

would be a local authority for

VAT purposes; it would be a

single, sub-regional (but legal

entity) for procurement

purposes and could enter into

The Company may not be

able to recover VAT on

the goods and services it

procures and it might be

required to account for

VAT on the services it

62

Criterion Enhanced Status Quo Joint Committee Combined Authority Company

procurement purposes there

would continue to be a

(lead) local authority

requirement, for and on

behalf of all the constituent

Councils. Similarly there is

a (lead) employing authority

for staff. No additional

TUPE or LGPS implications

are envisaged by enhancing

the current arrangements.

employer/employee

arrangements for TVU,

and the related terms and

conditions of employment.

contracts; it would not be

liable for corporation tax; it

would have power to employ

staff and to determine the

terms and conditions on

which they were appointed,

although TUPE would apply

to staff whose functions were

transferred to the Combined

Authority; the Combined

Authority would need to enter

into an Admission Agreement

for the purposes of the

LGPS. The Local

Democracy and Economic

Development Act 2009

provides the powers to

establish a Combined

Authority. Assenting

resolutions would be required

from each constituent

authority in order to exercise

those powers. The

Combined Authority would be

a vehicle which could, in the

future, take on additional

functions (local authority and

provides. The Company

would constitute a single,

sub-regional body for

procurement purposes

and it could enter into

contracts. In order to

avoid the requirement to

procure the new company

arrangements under EU

procurement rules, it

would need to be

established as a local

authority controlled

company and the

company would have to

operate on behalf of the

authorities and not

autonomously. This

would have to be

demonstrated in the

Company’s governance

and operational

arrangements. Such a

Company would also then

be caught by the statutory

provisions regulating

companies in which local

63

Criterion Enhanced Status Quo Joint Committee Combined Authority Company

Secretary of State) provided

they can be shown to enable

the Combined Authority to

fulfil its purposes. The

Authority would have to

appoint a Head of Paid

Service; Section 15, officer

and a Monitoring Officer.

Officers could, however, be

seconded (part-time) from the

Councils to fulfil those roles.

authorities have an

interest eg as regards

capital finance.

Company profits or

surpluses would be liable

to corporation tax. It

could employ staff. TUPE

potentially could apply to

staff whose functions

were transferred to the

Company. The Company

would have to enter into

an Admission Agreement

for Local authority

pension purposes.

Enhancing

Economic

Development

E. Ability to Deliver

Enhanced arrangements will

be more operationally

efficient and effective than

the current arrangements.

However the drawbacks of

the existing model remain.

The Joint Committee

model moves governance

positively from the current

arrangements but still does

not provide the level of

certainty needed to ensure

that decisions are made to

secure the maximum

economic and social

benefit.

The Secretary of State has

acknowledged that in some

cases a Combined Authority

model would be an

appropriate means of

securing improvements in

relation to the exercise of

statutory functions relating to

transport, economic

development and

regeneration; the

effectiveness and efficiency

A company model may be

able to deliver functions

effectively.

64

Criterion Enhanced Status Quo Joint Committee Combined Authority Company

of transport and the

economic conditions of an

area. A number of proposals

have been developed on this

basis.

Reflects the functional

economic area or ‘real

economy’ of the Tees Valley

region.

Formalise links between

decision making in relation to

economic development

(including inward investment,

skills and spatial planning)

and transport, ensuring

decisions are made that

secure maximum economic

and social benefit.

F. Long-Term

Commitment

Currently, the joint

agreement enables an

authority to withdraw from

the arrangements by giving

at least 15 months’ notice.

Greater long-term

commitment may be

A local authority can

withdraw from a joint

committee at any time, or

choose not to appoint

members to it. A linked

agreement would be

required in order to

The Combined Authority is a

statutory body that has been

created by an Order of

Parliament. Government is

clearly satisfied with the

robustness of the Combined

Authority model in a number

A Company could be

wound up in accordance

with company law

requirements provided

there was agreement

amongst the local

authorities and a Board

65

Criterion Enhanced Status Quo Joint Committee Combined Authority Company

required in the form of an

extended “lock-in”

agreement linked for

instance, to the life of City

Deal and any other relevant

initiatives or funding

streams. It is not however,

as robust as a Combined

Authority Model.

establish “locked in”

arrangements and provide

some certainty of

continuity and security.

This would not, however,

be as robust as the

Combined Authority model,

and it would probably be

easier to “wind up” the joint

committee arrangements

than it would be if a

Company had been

established.

of cases as five (to date)

Combined Authorities have

been approved. The

Combined Authority could

only be dissolved if a majority

of the constituent Councils

agreed and the Secretary of

State made the required

statutory order.

In time, and by local

resolution, partners may

choose to transfer additional

powers to the TVCA. This

could either be through a

further Governance Review

and the publication of a

scheme and statutory order

or by virtue of Section 107 of

the Local Government Act

1972. In all cases, the

transfer of such powers

would require a full Council

Decision from each of the

constituent and non-

constituent local authorities.

decision to take steps to

do so. The local

authorities previously did

this in respect of TVR.

Conversely the authorities

could agree to bind

themselves into the

arrangements for the

longer term if such a

commitment was

considered to be

required.

It is not therefore as

robust as a Combined

Authority.

66

Criterion Enhanced Status Quo Joint Committee Combined Authority Company

Local Authority

Governance and

Public Sector

Financial

Management

G. Influence of

Councils

The joint arrangements

would be strengthened, as

would the Councils’

influence over the delivery

of their strategic vision and

operational plans.

A joint committee would be

composed of local

authority members. Any

non-elected members

would not have voting

rights.

The Combined Authority

model is comprised of a

majority of members from the

Constituent Councils. Non-

elected members only have

voting rights with the elected

members’ consent.

Decisions will be made in one

place, by elected Leaders

who are responsible for the

strategic direction, and

underwriting any risks, of the

Combined Authority

The composition of the

Board and the nature of

Board members’ voting

rights are matters for the

establishing local

authorities to determine.

Unless it was proposed to

undertake to procure the

new company structure in

accordance with EC

procurement rules, the

Company would have to

be local authority

controlled in any event.

H. Democratic

Accountability

TVU; the operation of the

joint agreement and the

delivery of the joint

arrangements could

continue to be scrutinised by

the local authorities

themselves and would

continue to be subject to the

audit process.

Scrutiny and audit

arrangements would apply

to a joint committee.

The exercise of the

Combined Authority’s

functions would be

scrutinised by its non-

executive members and the

Combined Authority itself

could be scrutinised by the

constituent councils jointly. A

politically proportionate panel

comprising 3 members from

each authority could

undertake an effective

Local authority members

on the Company Board

would have control of the

Company’s affairs. The

local authorities could

scrutinise the Company’s

activities and

performance.

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Criterion Enhanced Status Quo Joint Committee Combined Authority Company

scrutiny function

I. Public Sector

Protection

There would continue to be

lead local authority financial

administration, responsibility

and accountability.

Accounting practices,

financial procedures and

Internal Audit/Audit

Committee oversight would

also continue through the

lead authority as would the

relevant Head of Paid

Service and Monitoring

Officer responsibilities.

The same arrangements

as for the current TVU joint

agreement could apply as

regards:-

Financial administration

and accountability.

Accounting practices.

Financial procedures.

Internal audit/Audit

Committee oversight.

Statutory Officer

responsibilities.

The Combined Authority

could second a section 151

Officer from the constituent

councils; it must have

arrangements for the proper

administration of its financial

affairs; it must keep a general

fund and must have annual

accounts which must be

externally audited. It could

also have an Audit

Committee comprised of a

majority of members who are

not members of the

Combined Authority.

Unless the Company

obtain designated body

status (by statutory

order), it could not obtain

administrative,

professional and technical

services from the

Councils. It would

therefore have to buy in,

or employ staff, to provide

company secretarial and

legal advice; general legal

advice;

finance/accountancy;

human resources; and

audit services. There

would accordingly be

potentially increased

costs associated with this.

J. Public

Transparency

Currently under the joint

agreement meetings of the

Leadership Board are not

public meetings for the

purposes of Access to

The proceedings, meetings

and decisions of a joint

committee would be

accessible publicly, save

where exempt or

There would be public access

to all non-exempt/non-

confidential information

relating to the Combined

Authority, its meetings and

Public access to non-

exempt, non-confidential

company information,

Board meetings and

decisions would be

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Criterion Enhanced Status Quo Joint Committee Combined Authority Company

Information legislation, but

can be opened to the public

if, and to the extent that the

Board determines. This

would need to be reviewed,

as would arrangements

regarding the public

availability of agendas,

minutes and decisions of

meetings, if greater public

transparency was to be

required/introduced.

confidential information

was involved. They would

be as transparent as they

would be in a Combined

Authority model of

governance, and more so

than the present TVU

arrangements and the

arrangements under a

Company model.

decisions and the meetings

and decisions of its

Committees.

The openness of Local

Government Bodies

regulations (allowing for the

reporting and commentating

on public meetings) would

apply automatically to the

Combined Authority Model,

but would not apply to other

models.

matters for the constituent

Councils to establish.

Access to information

legislative requirements

and related rights would

not automatically apply.

However the provisions

relating to local authority

controlled/regulated

companies confer on the

public rights of inspection

of minutes of general

meetings of such

companies.

Engaging the

Private Sector

K. Private Sector

Influence

The Leadership Board has

non-elected member

representatives. This

includes the Chair. All have

a vote, save where the

business concerns any

recommendations the effect

of which is that any of the

Councils should not

exercise their functions in

any manner.

A joint committee could co-

opt non-elected members,

but they would not have

the right to vote. Decisions

could, however, be agreed

to be made by consensus,

with the backstop that

where a formal vote was

required only elected

members could vote.

The Combined Authority

would consist of

representative Members

appointed by each of the

Authority’s non-elected

persons (business

representatives could be co-

opted).

The LEP would continue and

arrangements could be made

to ensure the two

Private sector

representatives could be

Board members, with

voting rights. This would

be written into the

Company documentation.

It would not require

elected member

agreement post

establishment of the

Company.

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Criterion Enhanced Status Quo Joint Committee Combined Authority Company

organisations work

seamlessly together.

L. Preparing for

Devolution

Government policy currently

suggests that powers and

funding would not be

devolved to individual local

authorities.

As ‘enhanced status quo’. A Combined Authority

appears to be Government’s

preferred option for the

devolution of powers and

resources. It provides

democratic accountability and

permanency, supported by

business expertise

channelled through the LEP.

The CA would cover the

range of strategic economic,

transport, skills and

regeneration functions to

deliver greatest impact from

devolution, complemented by

local service provision by

each of the councils.

As ‘enhanced status quo’.

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71

Appendix 4

Proposal for a Tees Valley Combined Authority

Consultation Report

February 2015

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1. Introduction The five councils have been working together to investigate the potential of a Combined Authority for the Tees Valley. As part of this work they have sought the views of a range of stakeholders across the area on the proposal including the proposed priorities for the Combined Authority. Detail on the consultation process and the responses received will be set out over the following sections:

Consultation Process

Summary of responses

Responses (detailed)

Conclusions

Consultation Timeline As advised by DCLG the consultation has been modelled on that undertaken by the seven councils to the north of the Tees Valley in the development of the North East Combined Authority. This approach was taken into account to enhance response rates through the Tees Valley consultation. This has been effective and a better response rate has been achieved with 1,911 responses received to our consultation compared to the North East Combined Authority total of 650 stakeholders (including over 450 residents). 2. Consultation Process Consultation on the proposal for a Tees Valley Combined Authority ran between 10th December 2014 and 31st January 2015 (consultation timeline attached). Within this time a range of methods were used to promote access to the consultation in a variety of ways across the five authorities including but not limited to:

Online survey;

Reports/presentations to a variety of committees/partnerships/groups;

Letters to businesses/organisations/groups providing the link to the online survey;

Dedicated webpage on each council website and the Tees Valley Unlimited (TVU) website which linked through to the online survey;

Press releases;

Articles in council magazines. The following information was made available on the websites of each of the 5 councils and Tees Valley Unlimited:

Consultation document

Online survey

Frequently Asked Questions (FAQs)

Draft Governance Review

Background report that went to the councils cabinet/committee

Press releases

Video

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Links were also provided from the online survey to the consultation document (included as appendix B) and FAQs so that those completing the survey could access them easily to ensure they have the information available to understand the basis for the consultation. A range of organisations, groups and individuals have been contacted directly during the consultation period including:

Association of North East Councils (ANEC)

Businesses and Business Organisations

Colleges / Schools

Durham Tees Valley Airport

Elected Members

Government Departments and Agencies

Members of Parliament and House of Lords representatives

North East Local Enterprise Partnership / North East Combined Authority

North Yorkshire County Council

York, North Yorkshire and East Riding Local Enterprise Partnership

Parish and Town Councils

Ports

Regional and Sub Regional Newspaper Editors

Residents

Trade Unions

Universities Other partners

3. Summary of Responses

In total 1,911 responses were received to the consultation. 74.46% agreed that the partnership approach was important. 64.77% agreed that the Tees Valley should strengthen its partnership approach through a new Combined Authority. 86.39% agreed that Economic Development was an important area of economic growth for the Tees Valley. 90.59% agreed that Employment and Skills were an important area of economic growth for the Tees Valley. 89.55% agreed that Business Investment was an important area of economic growth for the Tees Valley. 89.09% agreed that Transport and Infrastructure was an important area of economic growth for the Tees Valley. 68.14% agreed that Low Carbon was an important area of economic growth for the Tees Valley.

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4. Responses (detailed) In total 1,911 accessed the survey. It should be noted that not all of those who looked at the survey answered every question and therefore a number have been identified who skipped each question. The number of responses received was significantly higher than that achieved by the other North East authorities when they consulted on their proposal for a North East Combined Authority. In total 650 stakeholders (including over 450 residents) participated in their local consultation exercise. Question 1 We asked… Please tell us who you are (choose 1) The response was…

Number Percentage

Resident 1,638 85.98%

Elected Member 28 1.47%

Business 94 4.93%

Education Provider 27 1.42%

Trade Union 6 0.31%

VCS 39 2.05%

Housing Association 7 0.37%

Other 66 3.46%

TOTAL 1,905 100%

6 skipped this question. ‘Others’ include the following:

Local Healthwatch representative

English Heritage

NHS Foundation Trust

Individuals who work in the Tees Valley

Employees from the 5 Local Authorities in the Tees Valley

Parish Councils

North Yorkshire County Council

Member of Parliament

Partner Organisation

NHS staff

Business owner

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Individuals who identified as being from more than one group e.g. resident and business owner

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Question 2 We asked… The five Tees Valley local Councils are committed to working together with business to create more jobs, support businesses to flourish and attract new investment into the Tees Valley. Do you think that this partnership approach is important? The response was…

Agree 74.46% (1,382)

Disagree 17.89% (332)

Don’t Know 7.65% (142)

Agree Disagree Don’t know

Resident 1,153 307 131

Elected Member 22 5 0

Business 84 5 4

Education Provider 25 0 2

Trade Union 5 1 0

VCS 32 2 3

Housing Association 3 2 2

Other 56 7 0

Skipped Q1 2 3 0

TOTAL 1,382 332 142

55 skipped this question.

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Question 3 We asked… Do you think that we should strengthen the way the five councils work together through a new Combined Authority, cementing our partnership in law, speeding up decision-making, and being ready to accept new powers and resources from Government on these key issues? The response was…

Agree 64.77% (1,184)

Disagree 26.91% (492)

Don’t Know 8.32% (152)

Agreed Disagreed Don’t know

Resident 982 463 130

Elected Member 15 6 2

Business 78 7 5

Education Provider 20 3 3

Trade Union 6 0 0

VCS 26 3 7

Housing Association 3 2 1

Other 52 5 4

Skipped Q1 2 3 0

TOTAL 1,184 492 152

83 skipped this question.

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Question 4 We asked… Please say whether you agree or disagree with the importance of each of the five areas of economic growth for the Tees Valley area (220 skipped this question): Economic Development (i.e. understanding our economy and having the right strategies in place to meet Tees Valley economic needs, to secure new resources to create more jobs) The response was…

Agree 86.39% (1,460)

Disagree 8.70% (147)

Don’t Know 4.91% (83)

Agreed Disagreed Don’t know

Resident 1,239 134 78

Elected Member 19 3 0

Business 84 0 2

Education Provider 24 1 0

Trade Union 5 0 0

VCS 28 1 3

Housing Association 4 2 0

Other 55 4 0

Skipped Q1 2 2 0

TOTAL 1,460 147 83

Employment and Skills

(i.e. making sure there are local jobs for local people and that local people have the skills they need to do those jobs) The response was…

Agree 90.59% (1,530)

Disagree 6.10% (103)

Don’t Know 3.32% (56)

Agreed Disagreed Don’t know

Resident 1,304 93 53

Elected Member 20 2 0

Business 84 0 2

Education Provider 24 1 0

Trade Union 5 0 0

VCS 31 0 1

Housing Association 4 2 0

Other 56 3 0

Skipped Q1 2 2 56

TOTAL 1,530 103 56

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Business Investment (i.e. attracting new, and keeping and growing existing, local businesses) The response was…

Agree 89.55% (1,499)

Disagree 6.27% (105)

Don’t Know 4.18% (70)

Agreed Disagreed Don’t know

Resident 1,277 95 65

Elected Member 20 2 0

Business 83 0 2

Education Provider 25 0 0

Trade Union 5 0 0

VCS 29 1 2

Housing Association 4 2 0

Other 54 3 1

Skipped Q1 2 2 0

TOTAL 1,499 105 70

Transport and Infrastructure across the Tees Valley and beyond (i.e. helping ensure that travel by road, rail, air and sea are fit for current and future purposes in order to keep the economy moving) The response was…

Agree 89.09% (1,494)

Disagree 7.51% (126)

Don’t Know 3.40% (57)

Agreed Disagreed Don’t know

Resident 1,272 115 53

Elected Member 20 2 0

Business 84 0 2

Education Provider 23 1 0

Trade Union 5 0 0

VCS 30 1 1

Housing Association 4 2 0

Other 54 3 1

Skipped Q1 2 2 0

TOTAL 1,494 126 57

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Low Carbon (i.e. maintaining and growing the local economy whilst using less energy, limiting the effects of energy use on the local environment and growing low carbon businesses) The response was…

Agree 68.14% (1,140)

Disagree 17.33% (290)

Don’t Know 14.52% (243)

Agreed Disagreed Don’t know

Resident 963 254 218

Elected Member 17 5 0

Business 62 10 14

Education Provider 18 4 3

Trade Union 5 0 0

VCS 22 5 4

Housing Association 3 2 1

Other 49 7 3

Skipped Q1 1 3 0

TOTAL 1,140 290 243

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Question 5 We asked… Please use the box below to make any additional comments. The response was… In total 750 chose to provide additional comments whilst 1,161 skipped this question. That means that less than 40% of the total respondents chose to answer this question. The additional comments provided covered a range of topics and included both positive and negative views. In addition some raised questions about the detail of the Combined Authority. A number of concerns were anticipated in advance of the consultation and were included within the Frequently Asked Questions. Unfortunately this has not stopped people raising those concerns in their additional comments. The following section provides a summary of the main themes that came through from the additional comments provided. This reflects just a flavour of the comments received:

Many comments were supportive of the development of a Combined Authority for the Tees Valley as they felt it would put the area into a better position to attract funding and investment.

Some were concerned about the Combined Authority being a recreation of the old Cleveland County and felt that their Local Authority should either remain autonomous or would be better placed with another area e.g. North Yorkshire or County Durham.

However, there were also a number of comments in support of the Local Authorities going even further and becoming a single authority or combining other functions such as education support services or health and social care.

Many felt that working together in partnership would give the area a stronger voice and take it out of the shadow of the other North East local authorities so that the Tees Valley would not lose out to places like Newcastle.

But there were others who felt that the Tees Valley should join the rest of the local councils in the north east as part of the North East Combined Authority.

A number raised concerns about how equally funding and resources would be spread across the 5 local authority areas and also between the urban centres / principal towns and the rest of the area.

Some comments were made on the proposed scrutiny arrangements. These included the need to include business representatives in the proposed

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membership and queried whether the Chair should be from the “opposition party” due to the complexity of local politics within the Tees Valley.

There were a number of comments about the potential cost of the Combined Authority and particularly concerns that this may have implications for residents through increasing Council Tax bills. Some felt that there should be an aim to make the new structure cheaper and that there was a need for greater transparency about what the Combined Authority would cost.

Concern was raised about the Combined Authority being an added layer of local bureaucracy or that there would be duplication with existing arrangements. This links to other comments which questioned whether the change would result in redundancies within Local Authorities. Some were against this whilst other felt that jobs should be reduced where there was duplication.

Many welcomed the potential opportunities for the Tees Valley that could come from the devolution of further powers from central government. However, some were wary about such additional powers including concern that if this included setting local tax revenues the area may lose out to the South East.

Some queried how local people, businesses and groups (e.g. Residents Associations, the VCS and Parish Councils) would be involved in the shaping of policy for the Combined Authority. This included queries around future consultation arrangements.

A range of comments were also received on what should be priorities for the Combined Authority. These included:

Transport and access - particularly in reference to rural and peripheral areas within the Tees Valley. One respondent felt that there should be one Tees Valley Transport Plan with Borough chapters to ensure a strategic approach to transport issues.

Durham Tees Valley Airport - Improving and developing the airport was identified by a number of respondents.

Training and skills - Whilst many noted that this should include young people it was also felt that there should be opportunities for all ages, particularly around re-training. Workplace skills for graduates was also highlighted.

5. Other responses to the consultation In addition to those completing the online survey a number of letters of support were received from local partners, including:

- Association of North East Councils - Cleveland Police & Crime Commissioner and Cleveland Police - North East Chamber of Commerce (NECC)

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- North East Combined Authority (NECA) - PD Ports - Tees Valley Unlimited - UNISON (Northern Region)

6. Conclusion The results of the consultation demonstrate that there is broad support for the proposal to develop a Combined Authority for the Tees Valley. Almost two thirds of those who responded to the consultation (64.77%) agreed that the 5 councils should strengthen the way that they work together through a new Combined Authority, cementing the partnership in law, speeding up decision-making and being ready to accept new powers and resources from Government. Consultation Timeline

When? What?

W/C 24th Nov Explanation of Combined Authority proposals set up and made public on all council websites & TVU website.

10th Dec Consultation opened – council websites (except Middlesbrough) updated with consultation details and link to online survey.

10th Dec – 23rd Jan Promotion of consultation through press releases to local media & inclusion in council magazines. Letters sent out to consultees by identified lead organisation.

17th Dec Consultation went live in Middlesbrough (following Call-In period), website updated with consultation details and link to survey.

31st Jan Online consultation closed.

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The Tees Valley – Live Work Play