Council leaders defend devolution deal over '˜austerity' claims

The research shows that cuts in welfare and council funding have cost the Sheffield City Region alone more than £1bn in income since 2010.

Academics behind the research have pointed out that the loss is bigger than the £900m promised to the area over the next 30 years as part of the devolution deal struck with then Chancellor George Osborne last year.

But council leaders have criticised the researchers for connecting the issues, pointing out the Government’s spending cuts were going ahead regardless of whether the area agreed a devolution deal or not.

Sir Steve Houghton, chairman of the Sheffield City Region Combined Authority and leader of Barnsley Council, said: “The austerity and budget cuts we’re facing have nothing to do with devolution.

“They are part of the Government’s approach to tackling the state of the national public finances - an approach that local leaders have challenged the Government on and opposed consistently.

“With the full localisation of business rates to take place in 2020 the pressure on welfare and public services will be even greater in the Sheffield City Region if we do not increase our business base.

“The extra investment from the devolution deal will help us do that and mitigate potentially further damaging cuts to council budgets. In this sense the deal will help reduce austerity not increase it.”

The draft devolution deal agreed last year will see the Sheffield City Region take over powers from the Government in areas such as transport, skills and business support.

It will also be given more freedom over how it spends the money it receives from Whitehall and will be given an extra £30m a year for 30 years to invest in projects that help grow the local economy.

If it goes ahead, the deal will also see the election of a new Sheffield City Region mayor in May 2017.

Publishing their report today, the researchers from Sheffield and Middlesex universities argued that devolution was “being used to implement further austerity cuts on the Sheffield City Region”.

Dr David Etherington, one of the report’s authors from Middlesex University, said: “A harsh welfare regime where benefit sanctions have been used on a large scale combined with ‘work first’ policies is reinforcing exclusion from a labour market characterised by low paid and poor quality work.

“Accessing sustainable employment represents a significant challenge for disadvantaged groups.”

Their study argues that policies set out by the Sheffield City Region do not do enough to address the needs of “disadvantaged groups”.

It criticises the devolution process for focusing on handing over the management of Government programmes covering skills and employment rather than giving genuine local control over how they are designed and delivered.

Strains have emerged over the Sheffield City Region devolution deal in recent weeks.

Confusion over whether Theresa May supports the elected mayors put in place in devolution deals agreed by her predecessor’s administration have led to calls for the agreement to be reviewed.

Tensions between South Yorkshire councils over the HS2 high speed rail project and the location of the route and stations have also led to questions over whether the deal will go ahead in its current form.

Council leaders are expected to take the final decision on whether to press ahead by the end of October.

Discussions continue between councils in North, West and East Yorkshire over how other parts of the region could agree devolution deals with the Government.