Local authorities have got less than seven weeks to get devolution bids in to the government, the Treasury has said.
Announcing the much-anticipated comprehensive spending review this afternoon, the Treasury said the government would look at “transforming the approach to local government financing” through devolution.
A document accompanying the announcement said: “City regions that want to agree a devolution deal in return for a mayor by the spending review will need to submit formal, fiscally neutral proposals and an agreed geography to the Treasury by 4 September 2015.”
It also revealed the chancellor has “asked all relevant secretaries of state to proactively consider what they can devolve to local areas and where they can facilitate integration between public services”.
The conclusions of the spending review will be outlined on 25 November, the document said.
Chancellor George Osborne said in his July Budget that “significant” devolution deals would need to be signed off ahead of the spending review.
The Treasury document confirmed the government would be open to proposals for the devlution of health and social care budgets, as seen in Greater Manchester and Cornwall, with a view to negotiating “devolution deals that suit their area and benefit local communities”.
Government departments are being asked to draw up plans to help to deliver £20bn cuts over the next four years. As a part of that process, the Treasury is asking each department to model two scenarios of 25% and 40% savings by 2019-20. A similar approach was used in 2010.
The spending review document also reinforced a commitment to the Local Growth Fund and the Troubled Families programme.
The government wants to take “further action” to ensure departments and agencies work closer together in a bid to stop processes and services across the public sector being duplicated.
Public sector land for the construction of 150,000 homes by 2020 will also need to be released and each department will be asked to set out how it plans to contribute to that target.
The government will consult on proposed cuts over the course of the summer.
Picture taken by Crispin Semmens