Osborne: Cities must handle their own affairs

George Osborne. Picture: Ross Parry Agency
George Osborne. Picture: Ross Parry Agency
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WEST Yorkshire must reopen the debate on metro mayors, a key city leader today says, as the Chancellor appoints Jim O’Neill, Goldman Sachs’s former chief economist, to a government devolution role.

Mr O’Neill will receive a peerage but no salary as he enters the Treasury tasked with delivering on the next phase of the Government’s devolution agenda.

Julie Dore, leader of Sheffield City Council which is among those signing the declaration

Julie Dore, leader of Sheffield City Council which is among those signing the declaration

Making his first major speech of the new Parliament, George Osborne today promised “radical devolution” for cities to allow them to grow their local economies, but only for those which agree to introduce new London-style metro mayors.

Keith Wakefield, the former leader of Leeds City Council, said it was clear the Chancellor has picked his preferred method of devolution.

“We must now reopen the debate in Leeds and the North on wether we want a metro mayor,” Mr Wakefield said. “We thought we had answered this conclusively with a referendum on an elected mayor in 2012, but now we are back to looking at it again.
“We need to know what is on offered from government, but equally we are going to have to speak to the people and businesses in Leeds and see if they have changed their minds. It is time to have that debate again.”

Q&A: What is the Northern Powerhouse?

Last October Mr O’Neill presented a government-backed report urging city regions to back new metro mayors as the way forward for economic growth.

Announcing the move, Mr Osborne said: “I’m very pleased to announce that the Prime Minister has appointed him to my department as the Commercial Secretary to the Treasury – right in the heart of government, in the department that historically fought tooth and nail to stop giving up power, we have a brilliant new Minister to help make devolution and the Northern Powerhouse happen.

“And he’ll work to deliver the big infrastructure investments and links to emerging economies our country needs.”

Plans announced today for a Cities Devolution Bill will help to implement the so-called northern powerhouse vision Mr Osborne has previously outlined as a way to rebalance the UK economy.

His speech will explain that cities will be given power over local transport, housing, planning, policing and public health.

“The old model of trying to run everything in our country from the centre of London is broken,” Mr Osborne is expected to say.

“It’s led to an unbalanced economy. It’s made people feel remote from the decisions that affect their lives. It’s not good for our prosperity or our democracy.”

He will address places outside London: “I say to these cities: it is time for you to take control of your own affairs.”

In the last budget Mr Osborne announced a deal allowing councils in Greater Manchester, Cheshire East and Cambridge to keep revenues generated from additional business rates as their local economies grow.

He has previously said devolution must go hand-in-hand with the establishment of an elected mayor.

Today he is expected to reiterate that, saying people must have a “single pointy of accountability”.

Manchester is the first city set to benefit from extra powers, with plans for an elected “metro mayor” for the whole of the Greater Manchester region.

Describing the new law as a “bold step”, Mr Osborne will say he is open to approaches from other cities wishing to follow the same route.

The leaders of Sheffield and Leeds councils today claimed putting key powers in local hands could add the equivalent of the Danish economy to UK plc.

They were among the leaders and mayors of 10 cities launching a “devolution declaration” calling on all parties in the new Parliament to ensure that transferring decision-making and control over public spending from Whitehall to cities remains a priority.

The group, known as the Core Cities, points to research suggesting that devolution could add £222 billion and more than one million jobs to the UK economy by 2030.

A letter from the Core Cities leaders says: “With more freedom to invest in infrastructure, skills, trade and innovation, cities across the UK will boost their nation’s economies.

“Devolution will deliver better public services, recognising the different needs of communities and managing reductions in public spending in a joined up way.”

Powers and money have already been given to South and West Yorkshire and the Humber but there is considerable appetite in the region to go further.

Greater Manchester has agreed the most substantial devolution deal so far which incorporates more control over the NHS but will also involve the creation of an elected mayor.