News story

Chancellor hails historic deal for Sheffield

New devolution deal with civic leaders from South Yorkshire sees the most fundamental shake-up of local government for a generation.

The Northern Powerhouse takes another major step forward today (Friday 2 October) as Sheffield City Region agrees a historic devolution deal with the government.

Chancellor George Osborne today signs a deal with civic leaders from South Yorkshire that will see it vote for a new, directly-elected Mayor, in what he will hail as the most fundamental shake-up of local government for a generation.

Sheffield City Region is one of 38 towns, cities, counties and regions which submitted ambitious proposals to Westminster to take control of how public money is spent in their area.

As part of the deal, the Sheffield City Region Mayor will be elected for the first time in 2017 by voters across South Yorkshire.

The Mayor will oversee a range of powers devolved from government including responsibility over transport budgets; franchised bus services and strategic planning while the deal also includes additional devolved powers for the area’s Combined Authority.

This includes a new gain share deal within an envelope of £30 million a year for 30 years – giving Sheffield the power to use new funding to boost local growth and invest in local manufacturing and innovation.

The deal is a significant development in the Chancellor’s plans to take power out of Whitehall and hand it back to local people, coming after areas across England were asked to come forward with their proposals before the Spending Review.

As well as allowing civic leaders in Sheffield to have control over major budgets, it will also enable the Sheffield City Region to strengthen its position as a world class centre for advanced manufacturing and engineering.

The deal for the Sheffield City Region requires support from each of the local councils within the Sheffield City Region and is subject to a programme of consultation and engagement with residents and businesses over the coming months.

The devolution deal underlines the government’s commitment building a Northern Powerhouse to help rebalance the economy and ending the old model of running everything out of London.

Chancellor George Osborne said:

Sheffield is forging ahead in the Northern Powerhouse, which this historic deal proves is taking shape.

I want to thank the civic leaders of South Yorkshire who have worked with me to embrace this opportunity.

It has the power to change the shape of local government in the region in a way that would have been unthinkable even just a few years ago.

For local people, it will mean the decisions that affect them being taken locally.

Manchester is not a one-off – far from it. In becoming the second great northern city to sign up to managing its own affairs with this ambitious agreement, Sheffield City Region is playing a vital part in helping to build the Northern Powerhouse.

Communities Secretary Greg Clark said:

Devolving power from Whitehall to town halls is essential for rebalancing the economy and creating the Northern Powerhouse.

Today’s deal is fantastic news for Sheffield, ensuring local leaders have direct control over the city’s future to drive local economic growth, attract investment from leading businesses and create thousands of new skilled jobs for years to come.

Councillor Sir Stephen Houghton, Chair of the Sheffield City Region Combined Authority, said:

This proposal marks the next step on our devolution journey and will enable local leaders to make bigger and better local decisions over skills, business growth and infrastructure.

Over the coming months we will be speaking to local residents, businesses and partners about what this means for economic growth in their City Region.

James Newman, Chairman of the Sheffield City Region LEP, said:

For too long Whitehall has been in control of major decisions affecting local places on important issues such as transport, skills, regeneration and infrastructure improvements. This deal goes some way to redressing this imbalance.

It also means that the local private sector continues to play a leading role in making decisions which impact business growth, alongside combined authority political leaders and the new city region mayor.

This deal will enable local leaders to accelerate delivery of the jobs and new businesses that our local economy needs to grow.

This positions Sheffield City Region at the front of the Northern Powerhouse pack and strengthens our position as a world class centre for modern manufacturing and engineering technology.

The deal is focused on the issues that businesses and local leaders have identified as being crucial to speeding up economic growth in Sheffield City Region.

Of the 38 nationally submitted proposals this deal is the first to be done - reflecting the confidence of the Chancellor in the economic prospects for the Sheffield City Region which has transformed itself over the last ten years, the strength of our economic partnership, the support of our private sector and the quality of our bid into government.

The new Mayor will act as Chair to the Sheffield City Region Combined Authority and will exercise a range of powers devolved from central government including:

  • Responsibility over the region’s transport budget, with a multi-year settlement to be agreed at the Spending Review
  • Responsibility for franchised bus services, which will support the Combined Authority’s delivery of smart and integrated ticketing across its councils
  • Responsibility for an identified Key Route Network of local authority roads that will be collaboratively managed and maintained at the city region level by the Combined Authority on behalf of the Mayor
  • Powers over strategic planning

The Sheffield City Region Combined Authority, working with the Mayor, will also receive the following powers:

  • Control of a new gain share deal, like that agreed with Greater Manchester and other areas, within an envelope of £30 million a year for 30 years – giving Sheffield the power to boost local growth and invest in local manufacturing and innovation
  • Responsibility for chairing an area-based review of 16+ skills provision and devolved 19+ adult skills funding from 2018/19
  • Joint responsibility with government to co-design employment support for the harder-to-help claimants, many of whom are currently referred to the Work Programme and Work Choice
  • More effective joint working with UKTI to boost trade and investment, and responsibility to work with government to develop and implement a devolved approach to the delivery of national business support programmes from 2017

In addition:

  • To support the development of the area’s Advanced Manufacturing Innovation District, the government will offer the Sheffield City Region expert advice and support to ensure they are able to put forward a City Region led proposal to undertake a Science and Innovation audit
  • The Sheffield City Region will work with HM Government to achieve their ambitions for a national Institute for Infrastructure within Doncaster
  • The government will work with the Sheffield City Region Combined Authority to agree specific funding flexibilities to a Spending Review timetable. The joint ambition will be to give Sheffield City Region Combined Authority a single pot to invest in its economic growth

Further powers may be agreed over time and included in future legislation.

Image by Neil Turner on Flickr. Used under creative commons.