Forging ahead or falling behind? Devolution and the future of living standards in the Sheffield City Region

Published on Incomes and Inequality

This report outlines some of the key living standards facing the Sheffield City Region. Worryingly the delay to devolution means that local leaders will have fewer powers than their counterparts elsewhere to address these.

As a result it is important for the current impasse in the devolution process to be resolved. Assuming that that the shape of devolution is finalised in the relatively near future it should provide local leaders with new opportunities to take decisions that improve the lives of residents in the region. If this is to happen then both local and national political leaders need to focus on raising productivity and pay and improving the employment prospects for particular group.

  • The impetus behind devolution was flagging even before the December High Court ruling that a consultation on Chesterfield’s inclusion in the combined authority was unlawful. It is now clear that the mayoral elections planned for May 2017 will not go ahead. The failure to progress on devolution is a missed opportunity for a region crying out for economic leadership.
  • It is important that local politicians get devolution back on track. The exact form it should take is debateable but the devolution agreement signed with the government in October 2015 provides an indication of the powers that local leaders could demand. More important though than receiving these new powers is to have a strategy for wielding them effectively.
  • The evidence is that local economic strategy needs to focus on the problem of low pay. Partly the problem is that the region has too many low paying firms. To address this local leaders need to attract more high-paying firms to the region – raising the student retention rate should be a priority.
  • However, this is only part of the solution. Retail, manufacturing, and food and drink are large sectors where productivity is significantly below the national average. Regional leaders should create a Sheffield Low Pay Commission to echo the national body. This Commission should examine low pay and productivity in the retail and leisure sectors in particular, and should explore how both existing funding and programmes, and new funding, can help encourage in-work progression. In addition to this there should be further support for firms and employees that wish to raise skills.