Lord Scriven said mayor Dan Jarvis’ ‘New Deal’ could see the region spend years paying for infrastructure that was obsolete - as happened after the Games in 1991 when costs spiralled from £169m to £658m.
He also took a swipe at plans to spend £358m this year, saying there was no new money and it was simply the sum of mayoral funding in 30 different pots “re-badged and re-announced.”
Promoting the cash as a massive £860m ‘economic stimulus’ was a ’typical’ headline grabbing stunt to boost Labour ahead of elections in May, he claimed.
“The mayor wants to go on a borrowing bonanza, which we have seen before in South Yorkshire. We promised the earth on the World Student Games and it became a 30-year battle to service debt on infrastructure that was obsolete.
“How Dan Jarvis and his four Labour council leader colleagues can determine what the economy needs over that time period goes beyond even Mystic Meg’s abilities.
“This is a typical political announcement that tries to grab headlines but you realise it is candy floss the second you touch it.”
The Mayoral Combined Authority, led by Mr Jarvis and the four South Yorkshire Labour council leaders, meets to approve its plans on Monday.
It proposes to spend £358m this year on projects including support for jobs, boosting businesses, improving transport, flood defences and green issues.
It wants to borrow £500m next year from government and pay it off using 28 years of £18m-a-year funding agreed as part of the devolution deal.
A mayoral report states it must be spent on ‘capital projects’ which includes buildings, equipment or transport schemes.
And the plan must be approved by the Treasury.
Mr Jarvis said the move was necessary claiming government ‘may not be willing to back our region but local leaders and I will not stand by and let our potential be squandered’.
But Simon Jeffrey, of think tank Centre for Cities, said that claim was was ironic since the combined authority was also stating its funding could enable ‘record levels of investment this year’.
He also noted Mr Jarvis could have applied for the £500m at least two years earlier if the devolution deal hadn’t been held up by the One Yorkshire campaign he had championed.
A spokeswoman for Mr Jarvis said £30m of this year’s funding was new.
And on borrowing £500m she said: “We would always have regard to the key principles of affordability, prudence and sustainability before deciding to borrow a significant sum of money, and we would certainly not borrow in advance of need…
“The mayor and leaders have indicated that they wish to borrow up to £500million, of which a proportion (£200million) will be used to support jobs and skills. This can be done in a variety of ways and the region has already been successful in delivering capital skills projects – including contributing to the development or upgrading of equipment for the University Technical Colleges in Sheffield and Doncaster and the National Centre for Food Excellence, as examples.
“If we did choose to borrow in the future, we would almost certainly seek to take advantage of what are historically low interest rates and lock ourselves in to a fixed rate deal in order to protect ourselves from exposure to rising rates in the future.”
And she insisted the announcement wasn’t a headline grabbing move by Labour.
“The mayor and South Yorkshire leaders are working to ensure that the region not only recovers from the pandemic but can renew and build a stronger, greener, fairer South Yorkshire.
“The plan will make a difference to people’s lives and deliver on the priorities that matter to them: protecting and creating jobs and apprenticeships, building flood defences, improving buses and revitalising high streets…
“At this stage, we are seeking authority to negotiate with MHCLG and HM Treasury what an appropriate borrowing cap should be, and as ever we will comply with the key principles of the Prudential Code, i.e. affordability, prudence and sustainability.
“Whatever we ultimately decide to do, we would have to report back to the MCA, as well as the Audit and Standards Committee, on anything which affected the treasury management strategy. We report at least three times a year.
“The New Deal sets out how we will use every pound secured from government combined with our own devolved powers and resources to improve people’s lives and make South Yorkshire an even better place to live, work and invest.
“To date the Government have failed to provide South Yorkshire with the transformational level of investment and devolution that is required to overcome the seismic challenge posed by COVID.
“Extraordinary times call for extraordinary measures. That’s why the mayor and leaders have developed an ambitious plan to stimulate the South Yorkshire economy. We will continue to lobby government to ensure the region has the resources it needs to thrive.
“The mayor has worked hard to get devolution deal over the line and, working with the leaders, they are getting on with the job of delivering recovery and renewal for people and businesses in the region.”
The South Yorkshire Renewal Fund will be considered for approval by the Sheffield City Region Mayoral Combined Authority at its meeting on Monday 22 March.
The Combined Authority also has a Renewal Action Plan and and a long term Strategic Economic Plan.