26.01.17
Sheffield’s botched ‘unlawful’ devo consultation likely to cost £500k
The Sheffield City Region Combined Authority (SCRCA) has revealed that it is liable to take a financial hit of around half a million pounds due to its failed devolution consultation.
Last December the High Court upheld Derbyshire County Council’s (DCC’s) application for a judicial review of the consultation, ruling that the SCRCA’s attempts to assert powers over Chesterfield were unlawful as residents had not been directly questioned about Chesterfield’s involvement in the deal.
In addition to legal costs surrounding the ruling, the SCRCA must now pay for a second consultation to progress with the devolution proposals in a likely cost of over £104,000 to the authority.
A ‘Devolution update’ paper to be presented to the combined authority next week revealed: “The outcome of the Judicial Review means that the Sheffield City Region is liable to pay for 85% (plus VAT) of DCC legal costs associated with the case.
“At this stage these costs are not known, but the Combined Authority has taken a provision for costs totalling over £200,000 to meet this liability. In defending its position, the Combined Authority has also incurred costs of £131,000 to-date on its own legal counsel and associated activity. We anticipate that further costs of circa £50,000 may also accrue.”
The SCRCA has admitted that the costs were “not planned” for in its 2016-17 budget and will now have to be covered from resources “re-directed from other priorities”.
The authority’s economic development budget next year will also take a hit due to the costs posed by undertaking the further consultation necessary in order to proceed with the proposals.
The SCRCA confirmed that last year’s failed consultation cost the authority £104,000 and it is likely that a broader consultation will “cost more than this”.
The SCRCA has accepted that the High Court’s ruling effectively means that its planned mayoral election cannot be held this year, with the authority now looking to hold its inaugural election in May 2018.
It is now seeking to amend its original mayoral order to Parliament in order to make the new Sheffield City Region mayor’s first term lasts for a reduced four-year period.
Despite the damaging effects of the botched consultation, the SCRCA has expressed its confidence that the £900m devolution deal still poses a “significant financial opportunity” for the region.
The Combined Authority said that the benefits to the city-region of taking forward the deal will include an additional £900m of funding for economic development, the ability to retain 100% of all its business rate growth and wider borrowing powers for the region.
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