George Osborne
Chancellor George Osborne has hailed the 'historic' devolution deal for SheffieldGetty

The Sheffield City Region is poised to get access to £900m over the next 30 years as part of a devolution deal that will enable the area to have greater control over how public money is spent. It also clears the path for a 2017 vote for a directly elected mayor whose remit will include transport budgets and strategic planning.

The agreement is part of the government's "northern powerhouse" programme and the second of its kind alongside Greater Manchester, which will gain full control of its health spending in 2016. The aim of the initiative is to "rebalance the country's economy" and "for economic growth in the north to be at least as high as the rest of the country, to complement and act as a balance to the economic weight of London."

Sheffield City Region was one of 38 cities, towns and regions which submitted proposals to the government for greater say in how public money is spent in its area. The arrangement is "subject to a programme of consultation and engagement with residents and businesses over the coming months".

"Sheffield is forging ahead in the Northern Powerhouse, which this historic deal proves is taking shape," chancellor George Osborne said. "It has the power to change the shape of local government in the region in a way that would have been unthinkable even just a few years ago."

Direct access to government money (£30m per year over 30 years) will allow Sheffield to add to its growth and invest in local manufacturing and innovation. "For too long Whitehall has been in control of major decisions affecting local places on important issues such as transport, skills, regeneration and infrastructure improvements," Chairman of the Sheffield City Region Local Enterprise Partnership, James Newman said. "This deal goes some way to redressing this imbalance.

"It also means that the local private sector continues to play a leading role in making decisions which impact business growth, alongside combined authority political leaders and the new city region mayor. This deal will enable local leaders to accelerate delivery of the jobs and new businesses that our local economy needs to grow."

Chairman of the Sheffield City Region Combined Authority (SCRCA), Sir Stephen Houghton said: "This proposal marks the next step on our devolution journey and will enable local leaders to make bigger and better local decisions over skills, business growth and infrastructure. Over the coming months we will be speaking to local residents, businesses and partners about what this means for economic growth in their city region."

Significantly for the Tories, the deal will likely be used as evidence that they can win support for their plans from Labour local government leaders in what are traditionally, Labour heartlands.