The plans under the Cities Devolution Bill will help to implement the vision of a so-called northern powerhouse that Mr Osborne has previously outlined as a way to rebalance the UK economy.
Manchester is the first city set to benefit from extra powers, with plans for an elected “metro mayor” for the whole of the Greater Manchester region, which takes in several council areas.
What is devolution?
Devolution is the statutory granting of powers from the central government to government at a subnational level. It is a form of decentralisation. Devolved territories have the power to make legislation relevant to the area.
In other words, parliament devolves some of its powers – like education or health – to cities or local authorities.
The Scottish Parliament, the National Assembly for Wales, the Northern Ireland Assembly and the Greater London Authority already have some devolved powers.
Why is parliament devolving some of its powers?
After the referendum on Scottish independence in 2014, much attention has focused on the prospects for devolution of power and additional funding to local areas in England.
Immediately after that referendum, Prime Minister David Cameron said the question of “English votes for English laws” had become a political priority.
What powers will be devolved?
The current devolution settlements are complex and are all different.
Scotland, Wales and Northern Ireland have control of:
health and social care
education and training
local government and housing
agriculture, forestry and fisheries
the environment and planning
tourism, sport and heritage
economic development and internal transport
However parliament in Westminster remains in control of:
international relations and defence
nationality and immigration
the UK tax system
What local authorities will gain more powers?
Manchester will be the first local authority to take control of its transport budget, a housing fund, strategic planning and NHS spending. In 2014 the government also announced that negotiations would begin with both Leeds and Sheffield City Regions regarding further devolution.
Other cities open to devolution include Birmingham, Bristol, Cardiff, Glasgow, Liverpool, Newcastle and Nottingham.