Devolution: English counties tell George Osborne they must be involved in plans to devolve powers

English counties must be at the forefront of George Osborne’s devolution plans and not be ignored in favour of major cities, as they need new powers to help drive economic growth, a leading think-tank has said.

Counties represent half of England’s population and two-fifths of the economy, but there is concern they could be left behind as the Chancellor pushes to devolve powers to urban areas in his Northern Powerhouse plans.

A major report by the Institute for Public Policy Research (IPPR) says counties could become a driving force behind national economic growth and there is a “strong case” for giving them extra powers, but they risk “being cut off” from the benefits of devolution.

The Empowering Counties report says the Chancellor’s “one size fits all” approach to installing elected mayors in devolved regions “makes little sense” for counties.

The report’s authors have called on the Government to accept that county devolution requires a different approach to cities.

Ed Cox, the director of IPPR North, said: “Counties need devolution every bit as much as the big cities and with the right support and empowerment, there is a massive opportunity to unleash their economic potential.

“Devolution deals can drive economic development, but the process needs far more understanding and flexibility from government to work for the counties, who have different needs and organisational structures.

More than 20 of the 38 devolution bids being considered by the Treasury have been put forward by counties. Tensions have already emerged in, Yorkshire, where a number of rival city and regional bids have been submitted.

The IPPR report says devolving significant new powers, giving counties power over their economic potential, could boost the national economy and help rural areas overcome the challenge of low wages, large numbers of benefit claimants and a mismatch in skills.

But it adds: “While there may be clear advantages of directly elected mayors in city regions, those same advantages are not as immediately clear for counties.”

County council leaders have welcomed the report. The County Councils Network, which represents 37 councils and unitary authorities, estimates that new powers could enable counties to contribute £100bn more to the economy.

A spokesman for the Department for Communities and Local Government said the report “completely misunderstands” the devolution programme.

“We have been absolutely clear that we will hand as much power as possible to places that bring forward strong proposals and it is for local leaders to decide what works best for their local area,” he said.

“And we’re making huge progress including agreeing a historic devolution deal for Cornwall ensuring new powers to control local services, bringing jobs and prosperity to the area.”

Cheshire, home to George Osborne’s Tatton constituency, is one of the most productive local economies in the UK despite having no major metropolitan centre.

The IPPR report says a combined authority for Cheshire would allow “for increased joined-up and strategic thinking around infrastructure, skills, housing and public assets”.

Yet there are no proposals from within Cheshire to create an elected mayor and it has been argued that a combined authority alone would bring the county together.