A DEAL to unlock millions of pounds to spend on tackling some of the region’s biggest transport problems has been tabled by Yorkshire councillors.
If approved by Chancellor George Osborne, the deal would see around £1.6 billion invested in a wide range of schemes including improvements to the York outer ring road, the East Leeds Orbital Road and the Wakefield Eastern relief road.
The “earn back” agreement would see the Treasury then pay money back to the region as the projects help the Yorkshire economy grow.
Only Manchester and Cambridge have agreed similar deals before.
The idea is an attempt to end the deadlock over how ambitious plans for better transport in West Yorkshire and York should be funded.
A change by the Government to council tax rules last year torpedoed a plan to use levies on local authorities, and ultimately taxpayers, to raise a significant share of the money.
Peter Box, chairman of the new West Yorkshire Combined Authority which will oversee the transport fund, said the original proposals had been put before senior Ministers including Deputy Prime Minister Nick Clegg and Local Government Secretary Eric Pickles.
“They confirmed that the proposals we put forward about the transport fund were acceptable to them.
“Clearly things have changed and we are seeking to work with Ministers to find an alternative mechanism.”
Earlier this year, Deputy Prime Minister Nick Clegg told The Yorkshire Post he was confident a way to pay for the transport fund would be found.
A plan to grow the area’s economy was submitted to the Government earlier this week in an effort to win a share of its £2bn-a-year local growth fund.
Improving transport links is described as the “lynchpin” of the plan which aims to create 62,000 jobs by 2021, grow the economy by £5.2bn and save the taxpayer £675m in benefits.
Council leaders hope when the Government allocates local growth money to the Leeds City Region later this year it will include a sum to help bridge the gap in the transport fund.
Leeds City Council leader Keith Wakefield said: “We will be seeking a meeting with the Treasury, with George Osborne and Danny Alexander, to find a solution to the transport fund issue.
“We are hoping for a signficant amount of money for our strategic economic plan with some of that to cover transport.”
Greater Manchester was the first part of the country to agree an “earn back” deal with the Treasury, allowing it to receive a share of the higher tax revenues generated for the Government by economic growth.
While the model is seen as a good way for areas to be rewarded for growing their economies there was a feeling among many in local government that the Treasury would be reluctant to repeat the exercise with other parts of the country.
However, the Chancellor announced in last month’s Budget the Government’s support for a “gain share” agreement with Cambridge which could earn the city up to £500m over the next 15 to 20 years.
That announcement has given encouragement to officials in West Yorkshire that an earn back-type deal could be done to help support the area’s transport fund.
Discussions are ongoing with the final agreement likely to hinge on the degree of financial risk involved in the deal for both sides.