In his first speech since the Conservative Party won a majority in the general election , Osborne announced that this week's Queen's speech would include a new City Devolution Bill, which would "pave the way for ... cities ... to take greater control and responsibility over all the key things that make a city work, from transport and housing to skills, and key public services like health and social care".
The chancellor said the legislation would set the legal framework for cities to implement devolution deals, but that any transfer of powers under the Bill "has to involve a city-wide elected executive mayor". He said elected mayors would provide people with "a single point of accountability: someone they elect, who takes the decisions and carries the can".
The proposed legislation follows the Greater Manchester Agreement, made between the UK Treasury and the Greater Manchester Combined Authority (GMCA) in November 2014. That agreement provided for the devolution of powers over planning, housing, transport, skills, policing and the health and social care budget to the GMCA accompanied by the transition to a directly-elected mayor in early 2017. The devolution agreement means that the Greater Manchester Mayor would be able to exercise the new powers autonomously, subject to scrutiny by the GMCA.
In his speech this month the chancellor said Greater Manchester's mayor would give the region "a powerful new voice in our national life" and "a new, elected champion to represent it and promote it to the rest of the world". He said that outside Greater Manchester it would now be "up to local people and their elected representatives on councils to decide" whether to elect a mayor and proceed towards a devolution deal, but confirmed that "we will transfer major powers only to those cities who choose to have a directly-elected mayor".
In the same speech, the chancellor said the government would extend "a form of the City Deals programme we ran in the last parliament to cover counties and towns too". He also announced that the bids would be invited to create more Enterprise Zones across England.
Planning expert Melanie Grimshaw of Pinsent Masons, the law firm behind Out-Law.com, said: "The government is looking to replicate the London mayoral model in other key city regions throughout the UK, including in what the government has called the 'northern powerhouse' of England. Devolution will give city regions the freedom to make strategic planning decisions, as well as to make spending priorities based on a region's needs. "
Mike Pocock of Pinsent Masons added: "Greater Manchester is leading the way for the northern powerhouse and will be drawing up a statutory spatial framework for Greater Manchester. It will be interesting to see if the elected mayor will get planning call-in powers for strategically important planning applications from 2017 onwards. It has worked for London so there is no reason in principle why it can't work for the city regions".
Osborne said the City Devolution Bill would be taken through parliament by the newly-appointed minister for the 'Northern Powerhouse' James Wharton by the end of 2015.