Friday 12 December 2014

This document sets out the terms of an agreement between Government and the
leaders of the Sheffield City Region to devolve a range of powers and
responsibilities to the Sheffield City Region Combined Authority and Local
Enterprise Partnership. Building on the City Deal, agreed in 2012, and the
Growth Deal, agreed in July 2014, this Devolution Deal marks another step in the
transfer of resources and powers from central Government to the Sheffield City
Region.
This agreement will enable Sheffield City Region to accelerate the delivery of its
Strategic Economic Plan and to strengthen its position as a centre for advanced
manufacturing and engineering.

Summary of the deal

Skills
Sheffield City Region will work with Government to deliver an integrated skills
and training system across the local area, driven by the needs of the economy
and led by the private sector, giving local businesses the skilled labour they need
to grow.
• Sheffield City Region will have devolved responsibilities in relation to adult
skills funding and provision. The LEP and Combined Authority will form a
joint venture partnership with the Skills Funding Agency, which will be
responsible for re- commissioning provision so that a new, forward looking
system is in place by 2017. This arrangement will cover:
− The Adult Skills Budget (other than participation funding for
apprenticeships and traineeships)
− The Apprenticeship Grant for Employers (AGE)
• Through an enhanced version of its existing Skills Bank, Sheffield City
Region will play a central role in enabling businesses, especially SMEs, to
take up and invest in apprenticeships. Working within Government’s
reform agenda for apprenticeships in which funding will be routed directly
to employers, the Deal will enable businesses to either liaise with the SCR
Skills Bank or directly with Government
• Sheffield City Region will work in partnership with the National Careers
Service on the ‘Inspiration’ agenda to coordinate employer-education
activity more effectively, building on the existing Enterprise Advisors pilot.

Employment
The Department for Work and Pensions (DWP) will continue to work closely with
Sheffield City Region to ensure their work joins up with the local skills and
training offer.
• DWP will consult with Sheffield City region about the possibility of joint
commissioning for the next phase of the Work Programme beginning in 2017.
• DWP will enter into discussions with Sheffield City Region over a public
sector reform pilot from 2015 bringing together JCP, SCR local authorities
and other bodies to improve outcomes for ESA claimants.

Business support
Sheffield City Region will get a more flexible and responsive business support
system, in which the LEP has more power to meet the needs of local businesses.

• Sheffield City Region will align national and local business support through
the LEP’s growth hub, so that businesses get a joined up service which
meets their needs. The Government will work with SCR to develop a
devolved approach to the delivery of business support from 2017 onwards,
subject to the outcome of future spending reviews
• UKTI will become principle partner with Sheffield City Region’s Export
Centre of Expertise and work closely with the LEP to encourage more
businesses to export.
• Government and Sheffield City Region will work towards a solution that will
allow the Yorkshire JEREMIE to continue on an interim basis.

Transport
Sheffield City Region will be supported in playing a key role in developing
transport to meet the needs of a growing economy.

• Government will explore options to give Sheffield City Region more control
over the delivery of local transport schemes, particularly in preparation for
HS2.
• Government will work with Network Rail to ensure that the appropriate
infrastructure works are undertaken to support introduction of the Tram
Train service utilising Sheffield’s new vehicles on delivery.
• Sheffield City Region will enjoy improved liaison with Highways Agency and
Network Rail, ensuring that investment decisions are properly informed of
local economic priorities.

Housing
Sheffield City Region will work with Government to increase house building and
maximise the economic returns from public sector land assets.

• The Local Authorities within Sheffield City Region will form a Joint Assets
Board with the Homes and Communities Agency to influence asset
disposals in a way that supports the local economy.

Future devolution
Through this Deal Government and Sheffield City Region will embark on a new
relationship. This first phase of this is underpinned by the skills, business
support, transport and housing initiatives set out in this document. Future phases
will involve Government and Sheffield City Region continuing to work together on
transferring further resources, powers and policy levers to local level, whilst also
strengthening the City Region’s governance and capacity to deliver.

As part of this, Sheffield City Region will consider different options for improving
local governance and accountability. In response to any further agreements on
local governance, Government will consider what further powers and funding
could be devolved to Sheffield City Region over time, potentially including greater
control over the levers of local growth and public services, as well as fiscal
powers, such as a payment by results mechanism. Any further agreements will
be subject to further discussions at local and national level.

1. Skills

Sheffield City Region will work with Government to deliver an integrated skills
and training system across the local area, driven by the needs of the economy
and led by the private sector, giving local businesses the skilled labour they need
to grow.

This deal builds on the Sheffield City Region City Deal ‘Skills Made Easy’
programme (£23.8m of skills funding over 3 years, signed in 2012), and recent
Growth Deal (£21.7m of skills funding over 6 years to support a ‘Skills Bank’,
beginning in 2015/2016) to establish a joint venture partnership of SCR and BIS,
SFA and DWP. This will have devolved responsibilities for the Adult Skills Budget
and Apprenticeship Grant for Employers. In addition, the Partnership will secure
closer alignment of their Adult Community Learning Budget to local priorities.
The SCR will secure its future labour supply focusing on STEM subjects and high
quality careers guidance.

Sheffield City Region and central government agrees to:

Establish a Joint Venture Partnership between SCR, SFA and DWP which will
start operating from January 2015:

• It will re-shape and re-structure the Further Education (FE) provision
within Sheffield City Region so that a new, forward looking FE system is in
place by 2017. This means ensuring that the system is financially resilient;
that governing bodies of institutions should enjoy the confidence of the
SCR business community; and that there should be specialisation of
provision to meet SCR needs and ensure pockets of excellence across
the city region in key areas
• It will develop proposals for how funding from within the BIS Adult Skills
Budget (ASB) (other than participation funding for apprenticeships and
traineeships) works across city region. This could include, for example,
examining how local variations in funding practices might be used to
manage the risk associated with provision which either has significantly
higher start up or ongoing costs, or where there is a demand risk quality
• In addition, the Partnership will secure closer alignment of their Adult
Community Learning Budget to local priorities.
• Within the partnership, SCR will provide leadership in establishing the preeminence
of the employer voice in shaping systems and provision and in
setting local priorities for skills and employment and the strategies that
would deliver these. Government will not expect to question judgments
about local priorities made by SCR and business leaders, but does have a
responsibility for ensuring that spending outcomes are consistent with
statutory duties to support learners’ entitlements
• The Combined Authority would exercise management functions in support
of the LEP in implementing SCR’s skills and employment strategies,
represent the democratic mandate of local leaders and provide
accountability in terms of performance, finance and statutory obligations.
• The partnership will start work in January 2015 and run throughout the
2015 Spending Review so that it can start to deliver a revised offer from
2017. (It will also engage with DFE/EFA as a key funder of the system).
Pilot the use of the Skills Bank as the mechanism for facilitating apprenticeship
brokerage activities for SMEs from April 2015:
• Building on the Sheffield City Region ‘Skills Made Easy’ programme and
Skills Bank, the City Region will have responsibilities over apprenticeship
brokerage activities targeted at SMEs
• To improve incentives in the skills market immediately, the SCR will
assume responsibility for the Apprenticeship Grant for Employers (AGE)
which will enable the Combined Authority to vary the level of financial
support available to different types of learner, sizes of business and subject
areas in apprenticeships. The total size of the AGE grant is £85 million
across England and it pays £1,500 per qualifying apprentice. Government
will work with SCR to calculate an appropriate share of this budget to be
devolved, and this funding will be under full SCR control from 2015. This
devolution of the AGE reflects the key role that local authorities and
business leaders can play in identifying the businesses with potential to
take up apprenticeships for the first time, and in aggregating local demand
for apprentices especially among small businesses
• AGE grant will both allow SCR to incentivise and flex skills programmes as
well as bolstering local brokerage and business development infrastructure
that has been so successful in realising latent employer demand for
training.
• The Skills Bank will be fully integrated with existing national resources to
drive up apprenticeships in the local area.
• The Skills Bank will lead on delivering skills deals for local businesses,
including apprenticeships, and working within Government’s employer led
reform agenda.
Give Sheffield City Region greater influence over the provision of careers advice
for younger people in the local area by:
• Building on the existing local Enterprise Adviser Pilot, Sheffield City
Region will work jointly with the National Careers Service on the
‘Inspiration’ agenda to coordinate employer-education activity more
effectively, and to give young people in schools a comprehensive
understanding of the world of work and the different jobs and pathways
that are available to them. SCR will work to increase the number of
employers in the City Region that are actively engaged with education.
• The Government commits to working with SCR and to facilitate the
involvement of sector leaders in the planned SCR Skills Challenge. Under
this, SCR will agree with a small number of leading edge schools and
colleges in the City Region that they will work with employers and
undertake systems-wide leadership that drives up attainment in STEM
subjects and English, that develops a distinctive technical curriculum
based on the Technical Awards at 14-16 and achievement of Tech Levels
and the Technical Baccalaureate post-16.
• Ofsted agrees to an annual dialogue with the LEP that will inform its
schedule of institutional and thematic inspections in the City Region
through knowledge of the local context.

As a result of this deal, Sheffield City Region will commit to:

• Growing the levels of employer co-investment and leadership in skills;
• Raising the skills levels of the existing workforce and those entering the
labour market, including young people;
• Reducing levels of unemployment, particularly amongst the hardest to help
and the pressure on the public purse associated with this;
• Improving the attainment and job-readiness of the workforce of the future;
• Aligning local resources and programmes; and
• Developing inclusive partnership arrangements with the business
community, he, fe, private sector training and employment partners and
trades unions.

2. Employment

The Department for Work and Pensions (DWP) will continue to work closely with
Sheffield City Region to ensure their work joins up with the local skills and
training offer.

Give Sheffield City Region more tools to help people into employment

• DWP will consult with Sheffield City region about the possibility of joint
commissioning for the next phase of the Work Programme beginning in
2017.
• DWP will enter into discussions with Sheffield City Region over a public
sector reform pilot from 2015 bringing together JCP, SCR local authorities
and other bodies to improve outcomes for ESA claimants.

As a result of this deal, Sheffield City Region will commit to:

• Reducing levels of unemployment, particularly amongst the hardest to
help and the pressure on the public purse associated with this; and
• Aligning local resources and programmes.

3. Business support

Sheffield City Region LEP will take on the central role in supporting businesses in
the area, working alongside Government to provide the best possible services to
local firms. Sheffield City Region will offer a comprehensive suite of services that
will be tailored to the bespoke needs of businesses. The SCR will be an
‘exemplar’ for Growth Hubs, showing the potential for Hubs to: Serve the
interests of small and medium-sized businesses, rather than the contractual
targets of providers; operate on a pan-City Region footprint – therefore ending
the postcode lottery of support; and combine private sector leadership with
strong, stable democratic structures.

Sheffield City Region and central government agree to:

Develop Sheffield City Region’s Growth

• Working within the scope of existing contracts (2015/16 and 2016/17),
Sheffield City Region will be a Trailblazer for aligning Growth
Accelerator/Manufacturing Advisory Service and other national services
with local business support through SCR’s growth hub, so that businesses
get a joined up service which meets their needs. This will include colocation,
referrals, marketing, diagnostics, evaluation, customer acquisition
and the simplification of local and national business support. The
Government will work with SCR to develop a devolved approach to the
delivery of business support from 2017 onwards. What is ultimately
devolved will reflect the decisions taken in the next spending review on the
shape of – and level of spending on – business support schemes.
• To accelerate the development of the Growth Hub as an exemplar,
Sheffield City Region will be given the flexibility to spend up to £4m of
existing Local Growth Fund allocation on business support in 2015/16.

Integrate local UKTI export services with Sheffield City Region’s Export Centre of
Expertise

• Sheffield City Region will establish an Export Centre of Expertise (ECE)
that brings together support from local Chambers of Commerce,
universities, and other partners, so that businesses receive a joined up
and objective service that tailors support to their needs. UKTI will be the
principal partner in the ECE. UKTI will co-locate its Sheffield City Regionbased
trade-focused staff with the ECE, agree a joint marketing and
customer acquisition strategy for the Sheffield City Region, collaborate to
deliver a common diagnostic and support package, and above all,
contribute to a simplified export growth journey. This will involve:

o The UKTI trade services provider for the SCR to become the
principal service delivery partner within the ECE, alongside other
delivery organisations such as the Chambers of Commerce and
universities;
o Co-location of some UKTI national specialist resources and events
for engineering and manufacturing businesses – building on the
SCR’s status as a national centre for advanced manufacturing and
research;
o ‘Early adopter’ status for targeting high growth potential businesses
with concentrated and responsive export growth support;
o A commitment, with clear milestones and timescales, to jointly
evaluate and review the ECE delivery model before 1 April 2017.
• The Sheffield City Region is committed to driving growth, much of which
will come from increasing the level of international trade from the City
Region in line with the Government’s target of achieving exports worth £1
trillion by 2020.

Extend the Yorkshire JEREMIE fund

Government has agreed the reuse of legacy funding to allow the Finance
Yorkshire JEREMIE to extend its operation into 2015, releasing more funding for
growing businesses in Sheffield City Region and the rest of Yorkshire.

As a result of this deal, Sheffield City Region will commit to:

• Invest £83.5m in the Growth Hub and associated Centres of Expertise
from its ESIF allocation, when this becomes available.
• Deliver the most ambitious, business-led Growth Hub in the country. This
will include a near-total removal of internal boundaries within the City
Region, so that every growing business in the SCR gets the support it
needs to thrive.
• Deliver on targets to generate through our Growth Hub 33,000 new jobs
and at least £780m of private sector investment, alongside 2150 new
exporters and 6000 new businesses, by 2024.
• Provide genuine strategic private sector leadership of the Hub via the
Business Growth Board.
• Act as an exemplar, using innovative evaluation techniques to ensure
Government is able to make evidence-based decisions about how the
business support landscape could be improved in other areas and deliver
better outcomes for the country as a whole.
• Act as an exemplar for a new, mature approach to partnership working
with Government by sharing best practice in real time via a fully integrated
Hub that combines the best of local and national business support, and
thereby delivers real value for money by eliminating duplication and waste.

4. Transport

Sheffield City Region will work with Government to wield greater influence over
the future shape of transport investments in the area. Transport plays a vital role
in catalysing and supporting economic growth, and Sheffield City Region has
already demonstrated its capacity to deliver through its City Deal and Growth
Deal. This Devolution Deal will extend Sheffield City Region’s influence over local
roads, railways, trams and buses, including more strategic long-term decisions.

Sheffield City Region and central government agrees to:

Explore options for giving Sheffield City Region more control over local transport
schemes

• Government, in consultation with Sheffield City Region, commits to
exploring options to give Sheffield City Region more control over the
planning and delivery of local transport schemes, particularly in
preparation for HS2. This could include changes to the way that Transport
and Works Act Orders are granted, if practical proposals for improving and
speeding up the process are identified.

Work together to improve local bus services

• Government supports Sheffield City Region’s commitment to improve local
bus services, sharing an ambition to deliver a sustainable, more integrated
and affordable network, supporting people to access jobs and training.
This ambition includes delivering an optimised network which minimises
bus congestion and pollution, integrates with other public transport modes,
and is designed around people’s travel patterns. It should be supported by
a readily understood and affordable smart ticketing scheme. This must be
sustainable in the longer term both to tax payers and operators, and
through technology deliver a better and more dynamic user-operator
relationship utilising smart ticketing, real time information and a unified
Customer Relationship Management (CRM) system.
• Sheffield City Region’s preferred approach is to deliver this by building on
existing partnership agreement model.
• Government supports Sheffield City Region’s commitment to meet this
vision and will work with them on:

o The ability to work with partnership operators to introduce a
coordinated, efficient and integrated bus network;
o A simplified single ticket range, attractively priced commercial fare
structure, offered to customers (including the young, those entering
training and work, and adults) through either an inter-operable or
multi-operator ticket scheme on a single Smart platform;
o Transforming the customer relationship, through the use of
coordinated and integrated smart ticketing, real-time technology
and a shared CRM.
o The ability to ensure that operators outside of the partnerships
arrangement participate in the arrangements described above. This
could be through licence conditions or other existing legislative or
regulatory powers.

• This will be achieved within existing legislation, for example through an
enhanced partnership model. HMG will support Sheffield in these
objectives and will support Sheffield to make the above arrangements
work.

Work together to ensure the timely introduction of the Tram Train service

• Government will work with Network Rail to ensure that the appropriate
infrastructure works are undertaken to support introduction of the Tram
Train service utilising Sheffield’s new vehicles on delivery.

Give Sheffield City Region a greater voice in strategic transport decisions

Highways

• Government will work with the Highways Agency to improve liaison with
Sheffield City Region, including through the development of the Transport
for the North initiative, and work on joint highways issues in particular:

o A commitment to improve SCR engagement on strategic highways
to facilitate the delivery of national and local economic priorities, in
particular SCR to work with HA to trial different approaches to the
Route Strategies process to secure greater engagement from local
partners
o Working together to address shared air quality issues around the
M1

o The development of an MOU with the Highways Agency.
Rail

• Sheffield City Region will be actively engaged by Network Rail at the right
levels as part of its Long-Term Planning Process for the national rail
network, and the Transport for the North initiative, ensuring that planning
and investment decisions are properly informed of local economic
priorities.

As a result of this deal, Sheffield City Region will commit to:
• Update and develop its existing Assurance and Accountability Framework
to ensure that it is fit for purpose
• Complete the development of the SCR IIP that will set out investment
priorities that will be funded through future funding
• Maximise the potential of partnership agreements to work with operators
to ensure that it maximises the full potential of the bus offer in the
Sheffield City Region.

5. Housing

Sheffield City Region will work with Government to increase house building and
maximise the economic returns from public sector land assets.

Sheffield City Region and central government agree to:

Form a Joint Assets Board to collaborate on disposing of public sector assets

• The Local Authorities within Sheffield City Region will form a Joint Assets
Board with the Homes and Communities Agency to influence asset
disposals in a way that supports the local economy. The Board’s primary
aim will be to achieve a more integrated approach to how the public sector
uses its assets in Sheffield City Region, to support growth and deliver better
value for public money
• It is not intended that the Homes and Communities Agency or Local
Authorities would delegate ownership decisions on their existing assets to
the Property Board. Formal decisions on specific assets s affecting them
will remain with the party who owns the interest in question.
Work together to accelerate housing delivery in Sheffield City Region
• Sheffield City Region and the Homes and Communities Agency will
continue to work with to identify housing investment priorities and
timeframes across the Sheffield City Region to provide a framework for
increased public and private investor confidence and for maximising value
from national and local public sector land assets. As part of this, Sheffield
City Region will publish a pipeline of potential priority schemes and seek
public and private investment partners.
• Government will explore the potential for better supporting priority
medium-sized developments in the Sheffield City Region that may
currently not be eligible for funding but have a viable business case. As
part of this, Government will engage with SCR about the existing financial
transaction programme design in order to better understand opportunities
to support viable medium sized developments, in a way that is fiscally
neutral.

As a result of this deal, Sheffield City Region will commit to:
• Build on the Government-endorsed Sheffield City Region Investment Fund
framework to develop clear processes for prioritising housing investment
across the SCR.
• Work with local partners and potential investors to build a pipeline of
investable and deliverable housing investment schemes which are aligned
to local and national priorities – initially focussed on the delivery of 7,000
to 10,000 new homes over a five year period.
• Consider the use of local public assets as part of a balanced portfolio of
public land and property under the control of the joint public assets
decision making board, with this approach initially piloted at specific
locations in the SCR.

6. Governance

Sheffield City Region has taken bold steps in securing effective and
accountable governance arrangements. The SCR was the first to submit plans
for its Combined Authority under the Coalition Government, which was
established in April 2014. The diversity of our governance arrangements also
makes SCR’s Combined Authority unique as its membership includes unitary
authorities, two tier authorities, an elected mayor and a private sector
representative, the Chair of the LEP. The Combined Authority enables decisions
on economic growth and development to be taken in an open and transparent
way in one place for the whole of the SCR.

The voice of the private sector is integral to our governance arrangements. The
SCR model combines the best of private sector commerciality and expertise and
public sector capacity, transparency and accountability. In practice, this means
we have a strong, well regarded and high performing private sector led LEP that
is underpinned by the Combined Authority. These arrangements function highly
effectively, as evidenced by the bold and ambitious nature of our SEP and
Growth Deal.

Sheffield City Region recognises that local power must be matched by local
democratic accountability, and shaped to what the area needs to deliver its
ambitions. As set out in the City Growth Commission’s recent report, the key to
devolution will be ensuring that the quality and scale of governance is sufficient
to manage the associated financial and policy risks sought. Sheffield City Region
supports this principle and believes that existing arrangements should evolve
commensurate with broader responsibilities, in a way that best delivers both
growth and accountability.

In addition to these over-arching commitments, Sheffield City Region will also
improve its accountability arrangements in the specific policy areas highlighted in
this paper. This includes:

• Developing genuine partnerships arrangements with Government on skills
and business support that protect national policy priorities, while also
helping to test and establish better approaches to delivering economic
growth
• Giving employers greater influence over the key levers of economic growth
• Updating and developing Sheffield City Region’s existing Assurance and
Accountability Framework to ensure that it is fit for purpose.
Separately, Government will work with SCR to assess their proposal to become
an IB for European Funding. This will include consideration of the processes for
project selection and responsibility for any liabilities arising from project selection.

Future devolution

Through this Deal Government and Sheffield City Region will embark on a new
relationship. This first phase of this is underpinned by the skills, business
support, transport and housing initiatives set out in this document. Future phases
will involve Government and Sheffield City Region continuing to work together on
transferring further resources, powers and policy levers to local level, whilst also
strengthening the City Region’s governance and capacity to deliver.
As part of this, Sheffield City Region will consider different options for improving
local governance and accountability. In response to any further agreements on
local governance, Government will consider what further powers and funding
could be devolved to Sheffield City Region over time, potentially including greater
control over the levers of local growth and public services, as well as fiscal
powers, such as a payment by results mechanism. Any further agreements will
be subject to further discussions at local and national level.