Members of the North East Combined Authority Leadership Board have confirmed their support for the proposed devolution agreement for the area, which includes the establishment of an elected mayor.

It means that more key decisions regarding transport, the economy and skills will be made in the region.

Cllr Simon Henig, chair of the North East Combined Authority, said: “We feel that we are now in a position to move to the next stage of the devolution process, which will be the creation of a mayoral combined authority for the North East.

“Through this process we have built some very positive relationships, particularly with the business sector, and I believe there has been a real meeting of minds in terms of the priorities for our region, in terms of investment and particularly around transport.

“There is still work to do in terms of continuing dialogue with Government but this decision will enable important decisions affecting our region to be made locally instead of in London.”

A report to Leadership Board set out the potential benefits of the devolution agreement, which include:

• Long-term certainty of funding and regional control over where money is allocated so that investment priorities can be more effectively met;

• Greater control over spending on adult skills and employment support programmes, including distribution of European funding;

• Local control of approximately £1.5 billion over the next five years – including £1,042 million of existing funding where there would be greater local control and flexibility over how it is spent and £475 million of new funding;

• Access to regulatory powers to support housing, neighbourhood and health outcomes;

• The opportunity to shape health and social care integration;

• The opportunity to create a fully integrated transport system, bringing together responsibility for rail, local highways, Metro, buses and ferries;

• Devolution of business support and greater responsibility for securing inward investment;

• The establishment of a North East Land Board to identify land for new homes; and

• The potential to consider further opportunities for devolution in the future.

Under the proposed agreement the elected mayor would be part of a Cabinet – made up of the leaders of the councils which form the combined authority.

The Cabinet would be responsible for making decisions on behalf of the combined authority.

Today’s decision means that voters will be asked to elect the first North East mayor in May 2017. The initial mayoral term of office will be for three years with subsequent terms of office being four years.

In March members of the Leadership Board deferred their decision in relation to the devolution proposals so that further clarification and commitment could be sought from Government in relation to a number of outstanding issues.

Today’s report sets out the Government’s response to these issues and outlines the next steps, including a legal order, to be laid in May, to deal with the creation of a mayoral authority to be followed by a second order, to be laid in October setting out the powers and responsibilities which will be devolved.

Prior to the second order a Governance Review must also be completed and a draft Scheme will be developed, this will include a period of consultation starting in the summer.

At the point of seeking formal consent to the first order, the government would be required to make an additional order to remove any non-consenting authorities and therefore changing the combined authority boundary.