George Osborne has set out the price to the regions of securing devolution as he declares new powers will come “only to those cities who choose to have a directly elected metro-wide mayor”.
In his first speech since the General Election the Chancellor told an audience in Manchester that cities across the North will be handed powers on transport, job creation and health cash only if they give up their reluctance to bring in a new layer of city leadership.
While cities such as Sheffield and Leeds have previously been handed only limited devolution, the Chancellor’s speech means they once again have the chance to be handed the far more significant devolution powers seen in Greater Manchester.
“As I said when we first set out plans for a Northern Powerhouse, we need fundamental change - and this is the once in a lifetime opportunity to deliver it,” Mr Osborne said.
“Within 40 miles of Manchester, you have Leeds, Sheffield and Liverpool, Lancashire, Cheshire and Yorkshire – a belt of cities and towns that contains ten million people – more than Tokyo, New York or London.
“Bring those cities together, connect Liverpool to Hull, the North West to Yorkshire and the North East – and the whole will be greater than the parts.”
New legislation will be introduced in this month’s Queen’s Speech to pave the way for devolution deals.
Mr Osborne said: “With these new powers for cities must come new city-wide elected mayors who work with local councils.
“I will not impose this model on anyone. But nor will I settle for less.
“London has a mayor. Greater Manchester has agreed to have a mayor as part of our Northern Powerhouse - and this new law will make that happen.
“My door now is open to any other major city who wants to take this bold step into the future.”
Mr Osborne added: “I’m not interested in any more half-way house deals. We will transfer major powers only to those cities who choose to have a directly elected metro-wide mayor.
“For there’s a reason why almost every major world city has an elected mayor. It’s a proven model that works around the globe.
“It’s a powerful point of accountability. A person vested with the authority of direct election.
“It makes the devolution of multi-billion pound budgets, and powers from policing to housing possible.
“Having a powerful elected mayor will give Greater Manchester – and other cities too, I hope – a powerful new voice in our national life.”
There was also a promise not to overlook the many parts of the north which do not have the potential for new city leaders.
Mr Osborne said: “We can’t build a northern powerhouse with just the big cities of the north. Half the economy of the north of England is outside its big cities.
“So we’ll empower the towns and great counties of the north too, by extending a form of the City Deals programme we ran in the last parliament to cover counties and towns too.”
The Chancellor also revealed he would be bringing former Goldman Sachs banker Jim O’Neill into the Treasury tasked with leading on devolution.
The overall devolution focus has been welcomed in some parts of Yorkshire.
Chris Hearld, KPMG’s north region chair and Leeds office senior partner, said: “We live in one of the world’s most centralised economies and our national as well as regional prosperity stands to benefit from addressing this.
“Decisions about spending designed to drive economic growth here in Yorkshire and improve the lives of our citizens are better made here at the point of impact than in London.
“There is an element of groundhog day about today’s announcement though. The government is digging its heels in about elected mayors, which were roundly rejected in a series of city referendums in 2012. The electorate in nine of ten cities voted against introducing a mayor. Of course Manchester subsequently agreed to this and has reaped the benefit of further devolution as a result, and is referenced by the Chancellor as the blueprint.”