County settles for ‘thin gruel’ after failing to reach deal with city on elected mayor - missing out on £1 billion funding pot

Leicestershire County Council has settled for a ‘level two county deal’ after potentially missing out on top tier funding of over £1 billion due to disagreement.

In February, the authority became one of the first of nine councils invited to negotiate a county, or devolution, deal with the Government – part of its bid to ‘level up’ the nation.

It was initially hoped the deal might bring more than £1 billion into Leicestershire. However, as more details emerged, it became clear that the top tier of funding – a level three bid – could only be secured if the Leicester City Council, Leicestershire County Council and potentially Rutland County Council applied jointly.They would also need to elect one mayor to oversee the funding for all three areas. Leicester would not accept this, with city mayor Sir Peter Soulsby calling the idea ‘daft’.

Leader of the county council Nick Rushton confirmed the three authorities had signed up for a level two deal which is not expected to deliver the same amount of investment as a level three bid.The top funding pot included £25 million per year for 30 years, and £50 million per year for five years. The money could have been used for major infrastructure projects including transport.The level three County Deal would also have given the area a third pot of funding - the Brownfield Regeneration Fund - of nearly £24 million over three years.Without a level three agreement, the county council cannot set up its proposed ‘Better Care Fund’ – a scheme to pool up to £200million from clinical commissioning groups, local authorities and the NHS to create more joined up care. It will also affect planned improvements to road infrastructure, broadband provision and bus funding.

The decision comes as Leicestershire County Council warned of its ‘dire’ financial situation, with its budget gap expected to exceed £100 million in the next four years. Tough decisions will need to be made and all frontline services are in the firing line, it has said.Speaking in the council chamber, leader Cllr Rushton explained the deal was not available since they could not agree on a directly elected mayor, and level 2 was ‘the next best thing’.He added: “I’ve been told by all the Conservative MPs in Leicestershire, plus the odd Labour MP, ‘get your foot in the door’. If we’re not in the door with some sort of devolution deal, we’ll never get anything anyway.“So although it’s described as thin gruel, in my view thin gruel is better than no gruel at all and at least we’ve made a start.” The council will need to wait for the Levelling Up White Paper to pass through Parliament and gain assent before they know exactly what a level two bid will mean for them.”

City mayor Sir Peter has also previously denounced the £1 billion figure as ‘pure illusion’ as the Government ‘hasn’t promised a single penny’.

He said: “Why on earth would we want another mayor across the whole of the county? It’s just one of the daftest ideas I’ve heard in a very long time. The county has a county council with a leader and the city has a mayor.”