Warning over delay to tackle South Yorkshire's low pay crisis

Hourly pay is 10 per cent below the UK average in the Sheffield City Region area with workers earning £11.03 before tax.

The Resolution Foundation found some of the gap was down to the concentration of low paid jobs in the area.

However, even on a like-for-like basis, Sheffield City Region worker earn 6.5 per cent less, equivalent to a £1,750 a year pay penalty compared to other parts of the region.

The Resolution Foundation pointed to low productivity levels as one of the main reasons for the pay gap.

Its report out today argues plans to give the area more powers overs its own affairs, through the Sheffield City Region devolution deal struck with the Government, in areas such as transport and housing could play a key role in tackling the major issues fuelling low pay.

But the election of a new city region mayor, a key part of the deal, was postponed last week amid tensions between South Yorkshire councils and following a legal ruling which questioned the devolution process.

Stephen Clarke, policy analyst at the Resolution Foundation, said: “Sheffield City Region is at a crossroads.

“There is a real risk that no devolution deal plays out and its status as Britain’s low pay capital continues.

“Unless the current legal and political issues can be resolved, the area risks losing out on extra powers over crucial policies like housing and transport, not to mention much needed strong economic leadership to strengthen the region’s economy.”

The Resolution Foundation report shows there are also marked differences in pay within the Sheffield City Region with Sheffield workers earning £1.32 per hour more than their neighbours and the city’s residents being paid 97p per hour extra.

It suggests the creation of a low pay commission to look at why the area has become so dependent on low-paid industries and how productivity can be improved,

The report also recommends action to try and keep more graduates in the area.

Research suggests 11.3 per cent of graduates who came from outside the area to attend university in the city region stay compared to 13.5 per cent in Greater Manchester.

Amid the ongoing wrangling over devolution in Yorkshire, Leeds City Council leader Judith Blake last night argued the Government should take its share of the blame for difficulties reaching agreement.

The Sheffield City Region deal has so far been the only devolution agreement reached in Yorkshire and its future looks uncertain.

A new attempt is now underway to secure a single devolution deal for the whole of Yorkshire.

In a speech on English devolution, Coun Blake said the Government had pursued an “inflexible and often opaque” process.

She complained that the Government’s approach devolution was “top down” with the Treasury deciding what powers and money should be transferred from Whitehall.

Coun Blake, speaking in her role as chairman of the Core Cities group of councils, also expressed concern that the arrival of Theresa May in Downing Street had led to a “shift away” from the Northern Powerhouse idea championed by former Chancellor George Osborne.