City deals are not the solution for 2020 says FSB

Following the Government’s announcement that it had concluded a ‘devolution deal’ with leaders of South Yorkshire Councils covering the Sheffield City Region, the Federation of Small Businesses (FSB) has expressed deep concern that a localised deal between George Osborne and local council leaders does not match up to the promises made in relation to the vision for a Northern Powerhouse.

Devolution for English regions was promised in the aftermath of the Scottish referendum, when the Prime Minister is on record as saying the additional powers given to the Scottish Parliament would have to be matched by similar powers for the English Regions. Doing local deals with cities such as Sheffield and Manchester delivers very little by way of devolutionary powers and does not meet the expectations of local businesses.

Gordon Millward, regional chairman of the FSB, said: “This is bad news for the north. This backroom deal has delivered an arrangement which breaks up Yorkshire and does nothing to suggest an empowerment of the northern economy. Rather than giving power to the regions, it appears to be more of a ‘divide and conquer’ policy to ensure decision-making powers remain firmly in Whitehall.

“The political climate reflects a rapacious appetite for decisions about the north to be made in the north. This top down arrangement between Westminster politicians and the local council hierarchy will not deliver the solutions for 2020 and beyond.

“We need a devolution settlement which transcends the boundaries of local councils and is based on fulfilling the vision of building a genuine northern powerhouse, about which much rhetoric has been expressed but little action has been undertaken.

“Recent analysis by Sheffield Political Economy Research Institute reveals that London is set to receive more public funding than all the other English regions combined. Infrastructure investment in London is about to reach £5,305 per head of population, compared with just £851 per head in Yorkshire and Humberside. City deals will have no means of correcting this colossal imbalance in regional investment.

“A powerhouse needs direction and orchestration and we do not see the potential of that being forthcoming from northern councils acting independently in their own local interests, competing for the scraps thrown down by a London-centric political elite.”

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