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North East £1.8bn Settlement & Finances
This week in North East Mayoral Combined Authority:
Integrated Settlement: A £1.8 Billion Boost for the North East, But What Does it Mean for You?
The North East Mayoral Combined Authority (MSA) is set to receive a significant £1.8 billion funding boost through the new Integrated Settlement. This funding model consolidates multiple government grants into a single, flexible pot, aiming to give the region greater control over how money is spent to achieve better outcomes for residents. The MSA has been recognised as an 'Established Mayoral Strategic Authority', a testament to its track record of delivery and good governance.
This settlement is structured around six key themes: Transport and local infrastructure, Adult skills and employment support, Housing and strategic planning, Economic development and regeneration, Environment and climate change, and Health, wellbeing and public service reform. While the majority of the funding, £1.3 billion, is allocated to transport and local infrastructure, the flexibility within the settlement allows for funds to be moved between programmes and even pillars, with certain conditions.
The success of this settlement will be measured against an Integrated Settlement Outcomes Framework (ISOF), which sets high-level targets. Progress will be reviewed every six months. For residents, this could mean faster progress on key projects like the Leamside line, improved bus services, and more accessible adult skills programmes. However, the framework also means increased accountability for the MSA to demonstrate tangible results.
The Audit and Standards Committee reviewed the draft Statement of Accounts for the 2025/26 financial year, revealing a strong financial position with a revenue budget surplus of £20.3 million, significantly exceeding the budgeted £1.4 million. This surplus is largely due to higher-than-expected treasury management income from increased interest rates. The committee also reviewed the draft Annual Governance Statement, which confirmed adequate compliance with good governance principles, though areas for continued development were noted, including formalising performance management and improving corporate forecasting.
- Why it matters: This Integrated Settlement represents a major shift in how the North East is funded. It promises greater local control and flexibility, which could lead to more targeted and effective services. For vulnerable groups, this means the potential for better access to skills training, improved transport links to jobs, and support for housing needs. The focus on outcomes means the MSA will be held accountable for delivering real-world improvements.
- What's next: The MSA will be working closely with government to track progress against the ISOF. The Audit and Standards Committee will continue to scrutinise financial performance and governance arrangements.
You can find more details in the Audit and Standards Committee meeting agenda.
Draft Statement of Accounts Reveals Strong Financial Position, But Questions Remain on Reserves
The North East Mayoral Combined Authority (MSA) has reported a robust financial position in its draft Statement of Accounts for the year ending 31 March 2026. The authority achieved a revenue budget surplus of £20.3 million, far exceeding the budgeted £1.4 million. This surplus is primarily attributed to higher-than-anticipated treasury management income, driven by increased interest rates and cash balances.
The accounts show total income of over £650 million, with government grants and contributions making up 72%. Expenditure totalled £627 million, with significant spending on adult skills funds (£90 million), bus services (£50 million), and transport delivery grants to Nexus, Durham, and Northumberland (£87 million).
Usable reserves stand at just over £501 million, though a substantial portion is earmarked for future capital projects. The net assets and total reserves are reported at £643 million. The committee engaged in detailed discussions about the reserves, expenditure breakdown by pillar, and the distinction between integrated settlement spending and day-to-day operational costs.
- Why it matters: A strong financial position is crucial for the MSA's ability to deliver on its promises. The surplus provides a buffer and potential for future investment. However, understanding how reserves are managed and ensuring that spending aligns with strategic goals is vital for public trust and effective service delivery, especially for those who rely on these services.
- What's next: The draft accounts are now open for public inspection until 11 August 2026. The external audit is scheduled to begin in September, with the final audited accounts expected in January 2027.
You can find more details in the Audit and Standards Committee meeting agenda.
Annual Governance Statement Confirms Adequate Controls, But Focus on Future Improvements
The North East Mayoral Combined Authority's (MSA) draft Annual Governance Statement for 2025/26 has confirmed that the authority's governance arrangements are adequate and operating effectively. The statement outlines improvements made during the year and identifies areas for future development.
Key areas for continued development include formalising performance management arrangements, enhancing the corporate forecasting process, and addressing quoracy issues that have affected both the Audit and Standards Committee and the Overview and Scrutiny Committee. Significant progress has been made in strengthening the risk management programme, with a refresh of the Risk Management Framework and the implementation of new IT risk software planned.
- Why it matters: Strong governance is the bedrock of effective local government. It ensures that decisions are made transparently, resources are used wisely, and that the authority is accountable to its residents. For vulnerable groups, good governance means that services are delivered fairly and efficiently, and that their needs are considered in all decision-making processes.
- What's next: The MSA will continue to embed its enhanced risk management programme and address the identified areas for development.
You can find more details in the Audit and Standards Committee meeting agenda.
Other Matters
External Audit Strategy Outlined
The external auditors, Forvis Mazars LLP, presented their Audit Strategy Memorandum for the year ending 31 March 2026. The audit will focus on significant risks including management override of controls, revenue recognition (specifically grant income), and the valuation of the net defined benefit pension liability. Materiality for the group consolidated financial statements has been set at 2% of Gross Revenue Expenditure. The Value for Money (VFM) work will assess the Authority's arrangements for economy, efficiency, and effectiveness.
- Why it matters: The external audit provides an independent check on the MSA's financial reporting and governance. This ensures that public money is being managed responsibly and that the authority is operating efficiently.
- What's next: The external audit fieldwork will commence in August.
You can find more details in the Audit and Standards Committee meeting agenda.
Internal Audit Plan Confirmed
An update on the 2025/26 Internal Audit Plan confirmed that all planned activity is complete, with only a few final reports awaiting management responses. The Chief Internal Auditor provided a Reasonable Assurance
opinion for 2025/26, indicating that the MSA's governance, risk management, and control frameworks are generally sound and operating effectively, despite the organisation still embedding new arrangements. The proposed three-year Strategic Internal Audit Plan for 2026/27 to 2028/29 was also reviewed and approved, focusing on areas that mitigate strategic risks and core organisational functions.
- Why it matters: Internal audit plays a critical role in providing assurance on the effectiveness of internal controls and risk management. This helps to prevent fraud, error, and inefficiency, ensuring that public funds are protected.
- What's next: The internal audit team will continue to implement the approved three-year plan.
You can find more details in the Audit and Standards Committee meeting agenda.
Overview and Scrutiny Committee's Annual Report Reviewed
The Overview and Scrutiny Committee's Annual Report for 2025/26 was presented, detailing the committee's work in scrutinising decisions, monitoring programmes, and contributing to policy development. Key areas of scrutiny included the North East Mayor's priorities, inward investment, and carbon reduction targets. The report noted that no decisions were called in during the year, but quoracy issues were encountered.
- Why it matters: The Overview and Scrutiny Committee acts as a vital check and balance within local government, ensuring that the executive decisions are well-considered and in the public interest. This scrutiny is essential for holding the MSA accountable and ensuring services meet the needs of all residents.
- What's next: The Audit and Standards Committee will consider opportunities for collaborative working with the Overview and Scrutiny Committee.
You can find more details in the Audit and Standards Committee meeting agenda.
Work Programme for 2026/27 Agreed
The proposed work programme for the Audit and Standards Committee for the 2026/27 municipal year was agreed. The programme includes core business items such as updates on the Integrated Settlement, draft statements of accounts, annual governance statements, and external and internal audit reports.
- Why it matters: A clear work programme ensures that the committee focuses its attention on the most important issues, providing effective oversight and assurance.
- What's next: The committee will follow its agreed work programme throughout the year.
You can find more details in the Audit and Standards Committee meeting agenda.
NECA: Annual Review & Future Plans
This week in North East Mayoral Combined Authority:
Council Gears Up for Annual Performance Review and Work Programme Planning
The North East Mayoral Combined Authority's Overview and Scrutiny Committee met on Tuesday, July 7th, 2026, to review the North East Mayor and Chief Executive's annual performance report and to shape the committee's work for the coming year. A key item on the agenda was the appointment of a Vice Chair for the committee.
Delivering for the North East: A Year in Review
The committee received the annual performance report from the North East Mayor, Kim McGuinness, and Chief Executive, Dr Henry Kippin. This report provides a crucial insight into the MSA's achievements over the past year and outlines its priorities for the future, as detailed in the Corporate Plan 2026-30. The report highlights the MSA's five core missions: Home of real opportunity,
A North East we are proud to call home,
Home to a growing and vibrant economy for all,
Home of the green energy revolution,
and A welcoming home to global trade.
The report details progress made since May 2024 across these ambitious missions. This includes efforts to boost job creation, drive housing development, improve transport infrastructure, and tackle persistent issues like child poverty and the promotion of green energy. The MSA's Performance Management Framework, which tracks progress across these key areas, was also discussed.
This annual review is vital for ensuring that the MSA's work directly benefits the people of the North East. For vulnerable groups, such as low-income families and those facing unemployment, the success of these missions can translate into tangible improvements in their daily lives, from better job prospects to more affordable and sustainable living conditions.
You can find more details in the Overview and Scrutiny Committee meeting agenda.
Shaping the Year Ahead: The Committee's Work Programme
A significant part of the meeting was dedicated to determining the Overview and Scrutiny Committee's work programme for the upcoming year. This involves identifying key areas where the committee will focus its attention to hold the MSA to account and ensure effective service delivery.
Potential topics for scrutiny include:
- Bus Reform: Examining the progress and impact of changes to bus services across the region.
- Transport Integration: Looking at how different transport modes are working together to create a seamless network.
- Economic Inactivity: Investigating barriers to employment and strategies for getting more people into work.
- High Streets: Assessing the health and future of town centres and local retail areas.
- Spatial Development Strategy: Reviewing plans for how land will be used across the region for housing, employment, and infrastructure.
- Mayoral Development Zones: Scrutinising the development and impact of these designated areas for economic growth.
- Child Poverty: Examining initiatives aimed at reducing poverty among children in the North East.
- The Region's Energy Plan: Assessing progress and future plans for renewable energy and energy efficiency.
The committee will have the flexibility to adapt its programme as new issues arise, ensuring it remains responsive to the needs of the region. This process is fundamental to how local government works, allowing elected representatives to question decisions, challenge assumptions, and ensure that public services are meeting the needs of all residents.
The meeting also covered standard procedural matters, including apologies for absence, declarations of interest, and the confirmation of previous minutes. The appointment of a Vice Chair for the municipal year 2026/27 was also on the agenda.
NE Mayoral Cabinet: Cost of living, new roles
This week in North East Mayoral Combined Authority:
Cost of Living Crisis Remains Top Priority as Cabinet Pushes for Government Action
The North East Mayoral Combined Authority's Cabinet met on Tuesday, June 9th, 2026, with a clear focus on addressing the ongoing cost of living crisis and its disproportionate impact on the region. Mayor Kim McGuinness presided over the meeting, which saw a significant reshuffling of Cabinet members and portfolios.
The Cabinet agreed to prioritise lobbying the UK Government for continued funding for the national bus fare cap and to accelerate the delivery of the Warm Homes Plan. These initiatives are seen as crucial for alleviating the financial pressures faced by residents, particularly those in the North East who are already struggling with deprivation and lower car ownership.
The report highlighted that the region's vulnerability is exacerbated by rising energy costs, partly due to global conflicts. Hard-up households in the North East are less likely to have savings and spend a higher proportion of their income on essentials like food and heating, forcing difficult choices. The existing high rate of child poverty in the region further compounds these challenges.
While acknowledging the success of initiatives like the Mayor's Fares
scheme, which has saved residents an estimated £70 million, and the Warm Homes Plan supporting over a thousand households, the Cabinet stressed that demand is expected to soar as winter approaches. They are advocating for:
- Continued Government Funding for the National Bus Fare Cap: This is vital to maintain the current £2.50 adult and £1 under-22s cap on bus journeys, preventing a significant increase in travel costs for families.
- Devolution of a Radical Retrofit Scheme: This would empower the region to implement large-scale energy efficiency improvements in homes, directly reducing energy bills and tackling fuel poverty.
The Cabinet also discussed the need for more devolved powers and investment from the national government to effectively address these issues locally. The devolution of 16-19 skills funding was specifically mentioned as a way to intervene early and prevent young people from becoming NEET (Not in Education, Employment, or Training).
The meeting underscored the commitment to working collaboratively across the region and with the government to find solutions and ensure that funds are spent effectively for the benefit of the people of the North East.
You can find more details in the Cabinet meeting agenda.
New Cabinet Members Appointed and Key Roles Confirmed
The Cabinet meeting also saw the formal appointment of new Cabinet members and the confirmation of key roles for the upcoming municipal year. Mayor Kim McGuinness welcomed the new team, emphasizing the need to set aside political differences and focus on delivering for the region.
Councillor Karen Clark was appointed as Deputy Mayor and will also lead the Finance and Investment portfolio. Other portfolio allocations include:
- Transport: Councillor Colin Ferguson (Labour)
- Home of Real Opportunity (Skills, Child Poverty): Councillor Chris Eynon (Labour)
- North East, We're Proud to Call Home (Social/Affordable Homes, Cultural Investment): Councillor Nick Allen (Labour)
- Home to a Growing and Vibrant Economy (Local Growth Plan, Business Support): Councillor Glen Sanderson (Conservative)
- Home of the Green Energy Revolution (Offshore Investment, EV Industry Support): Councillor Paul Mackings (Reform UK)
- Welcome Home to Global Trade (Inward Investment, Global Business Engagement): Councillor Andrew Husband (Reform UK)
The Cabinet also agreed to extend the appointments of Dave Willis OBE as independent chair of the Audit and Standards Committee and the independent person for the standards regime. Further appointments were made to Transport for the North's Board, and a recruitment exercise will be undertaken for new members of the Business Advisory Council.
The report on these appointments can be found in the Cabinet meeting agenda.
Annual Performance Report Highlights Successes and Future Ambitions
The Cabinet reviewed the North East Mayoral Strategic Authority's Annual Performance Report for 2025/26, showcasing significant achievements across the region. Key highlights include:
- Creation of approximately 1,900 new jobs and safeguarding of 600 jobs.
- Support for over 3,000 households with the cost of living and child poverty initiatives.
- £70 million saved by the public through the
Mayor's Fares
initiative, covering over 100 million bus journeys. - Launch of a Northern Music Export Office and a small venues fund to support the region's creative talent.
- First-ever fare reduction on the Tyne and Wear Metro.
The report, structured around the MSA's five core missions, demonstrates strong collaboration across local authorities and sectors. While celebrating these successes, the Cabinet acknowledged that there is still much to do, with ongoing projects like the Crown Works film studios and the delivery of the Gateshead Quays arena being crucial for future economic growth and job creation.
The full Annual Performance Report is available in the Cabinet meeting agenda.
Other Matters
- Scrutiny and Audit Reports: The Cabinet noted the annual reports from the Overview and Scrutiny Committee and the Audit and Standards Committee. These reports highlighted the committees' work in scrutinising decisions, reviewing financial affairs, and ensuring good governance. The Audit and Standards Committee Chair, Dave Willis, emphasized the importance of member attendance and encouraged participation in their upcoming skills survey.
- Governance Update: The Cabinet approved recommendations for allowances to be paid to members of the Overview and Scrutiny Committee and the Audit and Standards Committee, aiming to improve attendance and engagement.
- Risk Management Framework: The Cabinet reviewed and approved updates to the MSA's Risk Management Framework, including a clearer risk scoring scale, a standardised taxonomy of risk categories, and a risk appetite scale. This aims to improve the identification, assessment, and management of risks, enabling more informed decision-making.
- Strategic Risk Review: The Cabinet reviewed the MSA's strategic risks, noting updates to the organisational capacity and sustainability risk, and refining the focus of the delivery of integrated settlement and securing powers and funding risks.
You can find more information on these items in the Cabinet meeting agenda.
Audit and Standards Committee - Tuesday, 14th July, 2026 10.00 am
The Audit and Standards Committee of North East Mayoral Combined Authority Council met on Tuesday 14 July 2026. The meeting focused on the Integrated Settlement, a new funding model for established Mayoral Strategic Authorities, and reviewed the draft Statement of Accounts for the 2025/26 financial year. The committee also considered the draft Annual Governance Statement, external and internal audit reports, and the proposed work programme for the upcoming year.
Overview and Scrutiny Committee - Tuesday, 7th July, 2026 10.00 am
The Overview and Scrutiny Committee met to review the North East Mayoral Strategic Authority's (MSA) Annual Performance Report and to discuss its work programme for the upcoming year. Key discussions included the MSA's progress against its five core missions: delivering opportunities, improving the region as a place to live, fostering economic growth, advancing the green energy revolution, and enhancing global trade. The committee also considered its work programme for the next year, identifying key areas for scrutiny.
Cabinet - Tuesday, 9th June, 2026 2.00 pm
The Cabinet of the North East Mayoral Strategic Authority met on Tuesday 9 June 2026 to discuss a range of important issues, including appointments to committees, annual reports from scrutiny and audit committees, and the ongoing cost of living crisis. Key decisions included the approval of allowances for members of the Overview and Scrutiny and Audit and Standards Committees, and the agreement to prioritise pushing for continued government funding for the national bus fare cap and accelerating the Warm Homes Plan.
Audit and Standards Committee - Tuesday, 24th March, 2026 10.00 am
The Audit and Standards Committee of North East Mayoral Combined Authority Council met on Tuesday 24 March 2026 to review the strategic internal audit plan, assess the effectiveness of the committee's arrangements, and discuss the authority's risk management framework. The meeting also covered updates on the integrated settlement, accounting policies, and the work programme for the upcoming year.
Overview and Scrutiny Committee - Friday, 20th March, 2026 10.00 am
Published material is available for this meeting (for example minutes, a reports pack, a transcript, or recorded decisions), but the written overview is not ready yet.
Cabinet - Tuesday, 17th March, 2026 2.00 pm
The Cabinet of the North East Mayoral Combined Authority met on Tuesday, 17 March 2026, to discuss a range of significant issues including the future of bus services in the region, plans for transforming the transport network, and strategies for boosting green jobs and the visitor economy. The meeting also covered proposals for the region's culture, creative industries, and sport sectors, as well as budget monitoring and the development of innovation districts.
Cabinet - Tuesday, 21st July, 2026 2.00 pm
The Cabinet of the North East Mayoral Strategic Authority is scheduled to convene on Tuesday 21 July 2026. The meeting's agenda includes discussions on the region's housing strategy, transport investment, financial outturns, and governance frameworks.
Overview and Scrutiny Committee - Tuesday, 8th September, 2026 10.00 am
We do not yet have any information about the planned agenda for this meeting.
Audit and Standards Committee - Tuesday, 15th September, 2026 10.00 am
We do not yet have any information about the planned agenda for this meeting.
Key decisions
Appointments to Cabinet, Committees and other bodies Key
Cabinet · 9 Jun 2026
North East energy accelerator programme delivery Key
Chief Executive · 9 Jun 2026
2025/26 Outturn and 2026/27 Budget Reporting Update Key
Cabinet · Expected 21 Jul 2026 (in 2 days)
Code of Corporate Governance and associated updates Key
Cabinet · Expected 21 Jul 2026 (in 2 days)
Delivering the Mayor’s Local Transport Plan Key
Cabinet · Expected 21 Jul 2026 (in 2 days)
Proud to Call North East Home: Unlocking Housing Delivery at Scale Key
Cabinet · Expected 21 Jul 2026 (in 2 days)
North East MSA Office Accommodation Key
Designated Officers · Expected 14 Aug 2026 (in 26 days)