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Exclusive: Treasury asks combined authorities to rethink boundaries

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Doubts have been cast over two of the most advanced combined authority bids after the Treasury asked councils in Derbyshire and Nottinghamshire to consider joining forces.

Civil servants in Whitehall have even requested the 19 authorities in the two counties explore getting Leicestershire’s nine councils, which have launched their own separate bid to form a combined authority, involved.

Chancellor George Osborne visited Derby on 1 June calling for devolution bids and said powers would not be passed down by “imposing solutions on people, or dictating a specific approach”.

However, Nottinghamshire CC’s leader Alan Rhodes (Lab) told LGC the Treasury had within the past 10 days questioned the need for two combined authorities for Derby and Derbyshire, and Nottingham and Nottinghamshire.

“It’s very difficult to get to the nub of the issue from the government,” said Cllr Rhodes. “They are setting us a challenge as to why we have gone for two combined authorities and whether one would be a better option… They are not saying we are too small and it’s not do-able.”

Anne Western (Lab), leader of Derbyshire CC, said it was “understandable” the government had questions.

“Central government simply asked Nottinghamshire and Derbyshire councils why we proposed two combined authorities to get a better idea of how this would work further down the line if we wanted further devolved powers and responsibilities,” she said, and added local leaders were set to discuss the issues with ministers next week.

Analysis of Office for National Statistics Data by LGC showed the counties of Nottinghamshire and Derbyshire contribute almost as much to the national economy as the councils involved in the Sheffield City Region Combined Authority, of which four Derbyshire districts are non-constituent members. The Sheffield City Region already has a first-stage devolution deal and it is now in talks with the government about getting a more comprehensive package of powers.

If Derbyshire, Nottinghamshire, and Leicestershire were to submit a joint bid the three areas combined would have a bigger gross value added (GVA) output than Greater Manchester.

LGC reported in December that the Department for Communities & Local Government and Department for Business Innovation & Skills had expressed a preference for a single combined authority covering Derbyshire and Nottinghamshire, the same footprint as the D2N2 Local Enterprise Partnership. However, ministers recognised it was “neither achievable nor practical in the short/medium term” and that having two combined authorities would be “better than having none”.

Cllr Rhodes reiterated getting Derbyshire’s and Nottinghamshire’s councils to form a single combined authority would be a “challenge”. The issue of whether to adopt an elected mayor, which the Treasury has also asked leaders to consider, could also prove to be a barrier, he said.

Cllr Rhodes added there was a “frustration” about the “lack of clarity” from the government on the issue as leaders were getting different responses from one week to the next.

Despite that, Cllr Rhodes said at this stage it would be “short-sighted” to rule out any options on both the elected mayor issue and a joint combined authority bid.

“It feels like one step forward and two steps back sometimes,” he said. “But these are massive changes to local and central government so it’s always going to be slightly difficult.”

Cllr Rhodes said responses to the Treasury’s questions would be submitted by the 4 September deadline for significant devolution deals.

Leicestershire CC Nick Rushton (Con) said he was aware the Treasury had asked councils in Derbyshire and Nottinghamshire to consider involving Leicestershire’s local authorities in a joint combined authority bid. However, he thought it would not be possible to submit one by 4 September deadline.

Cllr Rushton added he had been told by communities secretary Greg Clark and education secretary Nicky Morgan, who is MP for Loughborough in Leicestershire, to “carry on” with their individual bid.

“We have been encouraged by that,” said Cllr Rushton. “If in the longer term the Treasury are looking for regional things like the northern powerhouse then we [Leicestershire, Derbyshire and Nottinghamshire] can come together. There’s no reason at all why we can’t all work together but at the moment we should stick with what we have got because it is hard work to get everybody on board.”

A Treasury spokeswoman told LGC: “We are talking to numerous areas across England who are submitting plans to be part of radical devolution deals. As the chancellor has consistently said, the government is in no way dictating a set approach and we are clear that it’s ultimately for local leaders in each area to decide what works best for them.”

*This story was updated at 4pm on 29 July 2015 to include a comment from the Treasury and Derbyshire leader Anne Western.

Picture taken by DncnH

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