Osborne strikes devolution deal for elected South Yorkshire mayor

Council leaders have agreed to the major change in the way the area is run in return for powers and control over money moving from Whitehall to the region.

The Sheffield City Region devolution deal covers South Yorkshire and its neighbours in Nottinghamshire and Derbyshire and will see the elected mayor chair the existing combined authority which brings togethers the area’s council leaders.

They will wield new powers in areas such as transport which could see London-style franchised buses introduced.

A so-called ‘gainshare’ agreement will see the city region rewarded for generating economic growth with up to £30 million of extra money every year for the next 30 years.

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In future, decisions will be taken locally over how college and traning money is spent so that what young people learn matches more closely the needs of firms and in the way the unemployed are helped back into work.

Barnsley Council leader Sir Stephen Houghton, chairman 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.” Ministers have repeatedly made clear that their offer to devolve more powers to a local level was dependent on areas agreeing to have elected mayors.

In response, council leaders have insisted they would only agree to the move in return for a significant devolution deal and the mayor would take powers from Government rather than away from local councils.

Manchester councils reached a devolution deal last year involving the creation of an elected mayor and the Conservative Government extended the offer to other areas following the General Election.

Ministers were presented with 38 devolution proposals from across the country last month and the Sheffield City Region deal is the first to be agreed although councils will have the chance to debate the deal before it is finally approved.

Sources in local government across Yorkshire have spoken of an increase in the pace of devolution discussions in the build up to the Conservatives’ annual get-together which starts in Manchester this weekend.

Mr Osborne is likely to hold up the Sheffield City Region deal as evidence that he can do business with Labour dominated areas and the timing of the agreement is likely to trigger criticism from some quarters of the Labour Party.

The Chancellor said: “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.”