Squeezed councils' pain is worthwhile, Clegg insists

In a speech to key figures from England's eight major cities outside London – including Sheffield and Leeds – the Deputy Prime Minister will accept they have "different views" from Ministers on the budget cuts, which the Government insists can be made without endangering front line services.

Speaking at the Core Cities Conference in Sheffield, Mr Clegg will appeal to delegates – including council executives and figures from the private sector – to "lift our sights beyond the immediate challenges" and focus on the positives of getting more power devolved to them from Whitehall.

"We have done everything we can to make your settlement as fair as possible," he is expected to say. "And don't forget, Labour planned for 44bn of cuts but wouldn't tell us where they would fall.

"But, that aside, I recognise how hard this is. Don't forget, I'm an MP in one of the Core Cities. I know people in this room feel short-changed, just like councils up and down the country feel short-changed."

As MP for Sheffield Hallam, Mr Clegg will be on home turf and will focus on freedom for local government. He is acutely conscious of the concerns over levels of cuts to council budgets, having warned before the election that areas like South Yorkshire would be vulnerable to social unrest if savage cuts were imposed without widespread support.

The Core Cities group also includes Birmingham, Manchester, Liverpool, Newcastle, Nottingham and Bristol, and aims to ensure the cities exert their influence.

Today's seminar, entitled Our Cites, Our Future, is aimed at focusing on how English cities can deliver economic recovery and growth in the future.

Mr Clegg will seek to ease some of the tensions between the

Government and local councils caused by the cuts as he says: "Yes we can have different views on the financial settlement. Yes we can and should have the debate over public service reform.

"But what I hope we can also do is lift our sights beyond the immediate challenges, beyond the fiscal crisis, to the bigger question: how do we rebuild our economy, our country, to make our cities the powerhouses we all need you to be?

"That is the bigger prize we seek. The cuts are necessary but not sufficient step. We need growth that lasts – rebalancing our economy, making the most of all our businesses and our industries, and turning a page on the over reliance on wheeling and dealing in the City of London."

He will accuse Labour of having hoarded power in Whitehall whereas the coalition wants to devolve it to local areas, and promise more control for local communities over how money is spent.