The North of Tyne region has agreed a landmark deal which secures a raft of new powers, millions of pounds in investment and will see the introduction of an elected mayor for the first time.

Newcastle, North Tyneside and Northumberland will set up a breakaway authority which will be given significant resources to boost employment, education, housing and trade.

Worth an initial £600m over 30 years, the Treasury estimate the deal will create 10,000 jobs and attract £2.1bn in private investment.

It represents the culmination of months of discussions which began after talks for an authority including Durham, Gateshead, Sunderland and South Tyneside collapsed.

Once the deal has been formally ratified, the North of Tyne Combined Authority (NTCA) will be launched in summer 2018 with mayoral elections to take place the following May.

The new authority will oversee programmes to create jobs in the digital economy, drive up standards in schools, force through housing development and take full control of the £23m a year Adult Education budget to promote skills in the region.

An explanation of what all that actually means can be read here.

Arguably the biggest change to North East governance in decades, the announcement represents a significant win for the government’s Northern Powerhouse agenda and raises big questions about the future of the rest of the region.

Councillor Nick Forbes, the leader of Newcastle City Council, said: “It’s a really important deal to drive forward our region’s economic prospects, the prospects for more jobs and the prospects for more homes.

“And it’s the first step on a really important devolution journey which we’re just about to embark on.”

Councillor Peter Jackson, who led the Conservative takeover of Northumberland County Council in May, said the deal represented a bi-partisan triumph that would allow the North of Tyne to Brexit-proof the economy.

He said: “For too long this region has been divided, with too many voices and forces pulling in different directions.

“That’s been obvious to me for a long, long time and now it’s time for us to stop looking backwards and plot a way forward.

“We need to plan for a post-Brexit world and lead the new digital revolution.

“Now we have our own decision making powers and we don’t need to run to central government only to be rebuffed.”

Norma Redfearn, the Mayor of North Tyneside, said it was time local councils put aside their differences and started working together more closely.

She said: “We are elected to do the best for our residents.

“We need to rise above negativity and look for positive things we can do to benefit the region.

“It makes sense for us to work together.

“People don’t care about boundaries between council areas in their life - they just care about getting good jobs and looking after their families.

“We all have very similar needs.”

(Image: Newcastle Chronicle)

Other stand out features of the agreement include a government pilot scheme to boost the rural economy, the ability of the new mayor to issue compulsory purchase orders to speed up house building and assistance for the region’s burgeoning digital start-up sector.

The area will also undergo an “Education Improvement Challenge”, similar to the programme which is credited with driving up school standards in London, and is the first place outside the capital to carry out the process.

Negotiations over a combined authority for all seven North East councils collapsed last year due to internal divisions on the amount of funding being offered by government and the government’s insistence on the adoption of an elected mayor.

Coun Forbes said the sort of arrangement that will see the creation of the NTCA has been shown to work across the country over the past few years.

He said: “This is completely new money and new powers coming directly from government to us.

“Last time we had this debate it was entirely theoretical but now we can see these arrangements across the country, driving the economic agenda and getting investment.

“Plus, we can now see that areas who have committed to devolution and have elected mayors get preferential treatment when it comes to bidding for government funds.

“We won’t be handing powers over to a strong executive mayor, we’ll be working collaboratively and I hope people will welcome that grown up approach.

“This will give us a real voice and means we will get our fair share.”

Brexit looms over this deal as it looms over everything else in British politics and the three leaders said they want to “shape government policy on Brexit”.

The deal includes a commitment for a closer working relationship between the Department for International Trade and NTCA to protect the region’s crucial export market.

With North of Tyne pressing ahead with devolution - and a similar set-up already firmly in place on Teesside - the future of the four south of the Tyne authorities is unclear.

When talks for a combined authority for the entire region collapsed in 2016, the northern part of the region continued discussions with government for a bespoke deal.

The seven councils were kept loosely hanging together via the North East Combined Authority, a watered down body primarily concerned with transport.

But the North of Tyne councils are due to leave NECA in mid-2018 and transport is set to become the domain of a new Joint Committee with representation from all seven councils.

Coun Forbes said he still believes a devolved body for the whole of the North East is possible: “This is an inclusive deal that was negotiated with three councils but I’d be delighted if other parts of the North East joined eventually.”

There is also a hope that this deal is just the first power transfer and more will follow before the May 2019 mayoral elections.

Both Liverpool and Teesside received commitments for further devolution in this week’s Budget and the leader’s say they will be pushing government for more over the coming years.