Sheffield City Region mayor Dan Jarvis wants to use the money for a stimulus package worth up to £860 million to revitalise the local economy and transform the region.
In what the Labour mayor describes as a 'New Deal for South Yorkshire’, hundreds of millions will be invested into schemes to protect, create and attract thousands of jobs, train workers and apprentices, back businesses to locate and grow in the region, and transform infrastructure.
And while £360m will come from next year's mayoral authority budget, he is proposing to borrow against the value of his 30-year 'gainshare' fund agreed as part of last year's devolution deal to pay for the rest.
Rather than £30m a year being given to the Sheffield City Region for the next three decades, he would enter into talks with the Treasury about borrowing £500m to spend from 2022 onwards.
This would be spent on £300m of investment in our places, including infrastructure and transport and £200m of funding for jobs and skills in South Yorkshire.
It is thought to be the first time a northern metro mayor has tried to borrow money in response to the current economic crisis, though others such as Ben Houchen have borrowed to pay for taking Teesside Airport into public ownership.
Mr Jarvis said: “Extraordinary times call for extraordinary measures. Despite the challenges COVID throws at us, our plan sends a crystal-clear message of ambition and confidence: that South Yorkshire is open for business and ready to prosper.
"The Government may not be willing to back our region, but local leaders and I will not stand by and let our potential be squandered.
“That’s why we’re rewriting the rule book, using powers and resources secured from Westminster, to invest in our people, our businesses and our towns and high streets.
"This is the power of devolution: it means we can deliver on the priorities of our people: jobs, apprenticeships, better buses, new flood defences, stronger transport links and revitalised high streets and town centres.
“We working to create a stronger, greener, fairer South Yorkshire for all – delivering not just recovery, but renewal. Not just a bigger economy, but a better one.
"We know South Yorkshire’s people and industry rightly have enormous pride in our story so far. We’re reinforcing our reputation as the heartland of British industry and innovation, and we’re making our region an even better place to live, work and invest.
“We’ve started to transform South Yorkshire and we believe that our best days lie ahead of us. That’s why we’re creating the South Yorkshire Renewal Fund – a comprehensive plan to unlock the potential of our people, businesses and places, so everyone can have a stake in our future prosperity. We will deliver a New Deal for South Yorkshire.”
A report setting out the plans says that if the mayoral authority decides to spend the £30m evenly over the next 30 years, taking into account inflation the £900m would only be worth £672m.
The figure of £500m is the most it could borrow against the £900m deal but the investment plans are based on getting this amount "so as not to potentially limit the outcome of this process".
The report, to be discussed later this month, says: "The majority of other mayoral combined authorities have agreed borrowing powers and caps with Government to deliver their priorities, following the completion of their Devolution Deals. In each of these areas, their respective investments strategies have a different look and feel relative to their individual circumstances.
"From a South Yorkshire perspective, it will be important to agree a borrowing cap that enables an ambitious programme to be delivered. However, this must also be affordable.
"What the authority can afford to borrow is shaped by its revenue resource; therefore, the more revenue that is committed to other investments, the less we can allocate to repay the costs of servicing the debt of the capital programme."
At the moment, mayoral authorities can only borrow for capital transport projects and securing broader powers will require secondary legislation and the consent of all four South Yorkshire councils.
It will also require another mayoral combined authority to pursue similar powers, otherwise Sheffield City Region will be forced to seek a 'hybrid bill' in Parliament which will take much longer.
Elsewhere in the report the toll taken on South Yorkshire by the pandemic is laid bare. A total of 3,425 people have died within 28 days of a positive test, equating to 2.7 per cent of all national deaths, despite only having 2.1 per cent of the country’s population.
In South Yorkshire, the claimant count is higher for 16-24 year-olds than the overall rate. In Barnsley, Doncaster and Rotherham, the youth claimant count is between nine per cent and 10 per cent, some of the highest rates in the country.
The first year of the plan, using the mayor's own budget, would see £214m on transport and the environment, £68m on housing, infrastructure and planning, £37m on education, skills and employment; and £21m on business growth and recovery.
The South Yorkshire Renewal Fund will be considered for approval by the Sheffield City Region Mayoral Combined Authority at its meeting on Monday 22 March.