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Future devo deals to be 'less materially advantageous' than Sheffield's

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The Sheffield City Region Combined Authority has secured a commitment from ministers that any subsequent devolution agreements elsewhere will be “less materially advantageous” to the participants, it has claimed.

The city region’s leaders also say they have been given the opportunity to “explore” the devolution of any powers subsequently granted to other areas which it had not secured agreement to include in its deal.

The claims are contained in a letter sent to George Osborne almost three weeks ago, several days after Sheffield City Region’s devolution deal, including an elected mayor, was announced ahead of the Conservative Party conference earlier this month. The deal was the first to be announced following the 4 September deadline for areas to submit their devolution bids to the government.

In the letter, combined authority chair Sir Stephen Houghton (Lab) and local enterprise partnership chair James Newman outlined a number of conditions that had been agreed upon in their negotiations with the Treasury’s commercial secretary Lord O’Neill.

Cllr Houghton, who is also leader of Barnsley MBC, and Mr Newman wrote: “This deal, because of its timing, secures ‘first mover advantage’ for the Sheffield City Region and that any subsequent devolution deals with other parts of the country will be less materially advantageous.”

They added: “If in the future proposals that had been put forward by the Sheffield City Region, but were rejected by government, are granted to other areas [these] will automatically be explored with the city region.”

Sheffield’s devolution deal was agreed and announced on 2 October ahead of the Conservative party conference. It stipulated that the government will provide £30m of annual funding over 30 years, subject to the combined authority satisfying five-yearly gateway assessments, which will be used to boost economic growth.

The deal for the north east last week includes exactly the same amount of funding over the same period, although the government said this sum was “guaranteed”, while the Tees Valley’s funding pot amounts to £450m over three decades. It has since emerged that both pots of funding will also be subject to assessments every five years.

The deals also put the combined authorities at the centre of reviews into education and skills provision in their areas, while they will take on responsibility for business support services from 2017. These elements are included in the Sheffield City Region’s deal, as well as Greater Manchester’s.

The Sheffield City Region is home to about 1.3m people and contributes £22.6bn to the national economy, whereas the North East’s population is larger (about 1.9m people) and has an economic output worth almost £34bn. About 665,000 people live in the Tees Valley which contributes about £11.5bn to the economy.

The letter, which is due to be presented to a meeting of the combined authority today, also said that “any future responsibilities devolved to the mayor” would be subject to consultation with members.

Cllr Houghton and Mr Newman said the deal was of “landmark significance”.

They also welcomed the Mr Osborne’s announcement on business rates reforms, which includes giving areas with directly elected mayors the power to increase precepts, albeit capped.

“This further reflects the devolution of powers from Whitehall to local areas, giving them the powers they need to grow their economies,” said Cllr Houghton and Mr Newman. “In particular given the commitment within our deal document to wider discussions on business rate localisation and we would be delighted to pilot these arrangements in the city region.”

LGC understands that any powers and controls in addition to the Sheffield City Region’s current deal would still need to be negotiated.


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Readers' comments (1)

  • Surely Sheffield don't mean this? Would it put all the rest of the country in a 'less materially advantageous' position than Sheffiield CR? But why and how is that decided or by whom? It seems that the only way of getting the same deal as Sheffield CR would be to become part of it...

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